AFT FY2020 Results annoucement

Market and Media release 20 May 2020

AUDITED FINANCIAL RESULTS FOR THE YEAR TO 31 MARCH 2020
AFT Pharmaceuticals breaks through $100 million
revenue and posts record earnings
Highlights
• Revenue increases 24% to $105.6 million with strong growth in all markets and in
all sales channels
• Operating profit – including a $9.8 million non-recurring gain – rises to $21.2
million, the top end of guidance
1
, from $6.1 million in the prior year
• Net profit after tax rises to $12.7 million from a loss of $2.4 million
• Operating cash flow rises to $14.9 million from the prior year’s $1.1 million
• Momentum continues to build in the Maxigesic pain relief portfolio:
o Maxigesic now licensed in 125 territories and registered in 44 territories up
from 42 last year
o Maxigesic tablets selling in 28 countries up from 20 last year; ten new
territories poised to begin sales in the current financial year
o Maxigesic Intravenous (IV) registered in three markets as at 31 March 2020
with a further 18 added since
• $43.2 million debt facility refinanced with Bank of New Zealand on significantly
lower interest rates
• Operating profits for the year to 31 March 2021 are expected to rise to between
$14.0 million - $18.0 million from the underlying operating profit of $11.4 million for
this FY2020 year



1
On 10 March 2020 AFT reiterated its guidance for an operating profit for the 12 months to 31 March 2020 of $18.8
million to $21.8 million which included the $9.8m non-recurring gain, and indicated the final result would be at the
top end of this range.

AFT Pharmaceuticals (NZX:AFT, ASX:AFP) today reports a strong lift in revenue and
earnings following sales growth and cost control in its diversified Australasian
medicines business and growing international sales of its patented Maxigesic pain
relief drug.
Revenue for the year to 31 March 2020 increased 24% to $105.6 million from $85.1
million in the prior financial year, with revenue growing strongly in Australia (up 22%),
New Zealand (up 12%) and Asia (up 130%). The international business, which is focused
primarily on the commercialisation of Maxigesic was up 55%.
Operating profit rose to $21.1 million, building on last year’s $6.1 million operating profit
by $15.0 million. The result included a non-cash $9.8 million non-recurring gain related
to AFT taking full control of the Pascomer dermatological medicine
2
intellectual
property.
Excluding the one-off gain, the underlying operating profit of $11.4 million represented
an 86% improvement on the prior year’s result and reflects continued sales growth,
the return to more normalised research and development spending and careful
management of costs throughout the business. Net profit after tax rose to $12.7 million
from a loss of $2.4 million in the same period a year ago, demonstrating the operating
leverage present in our business
AFT Pharmaceuticals Chairman David Flacks said: “The Board is delighted to report on
an outstanding year. For the first time we broke through $100 million sales and
delivered record earnings.
“Momentum has continued to build across our business in the last financial year. Our
Australasian business continues to grow strongly extending a two-decade record of
growth.
“Maxigesic continues to achieve key commercialisation milestones in international
markets, with sales commencing in eight new countries in the past year. New dose
forms of the medicine such as the intravenous formulation - Maxigesic IV - are also
establishing a pipeline of opportunities that extend well into the future.
“Meanwhile, our South East Asia business moved into profit this year on the back of
sales more than doubling in that region. Combined, these developments have driven
strong improvements in operating earnings and cashflow and are setting the
company up for continued growth.”
AFT Pharmaceuticals Founder and Managing Director Dr Hartley Atkinson said: “All of
AFT’s operating divisions are performing well. We have achieved this growth while
again maintaining tight control on costs. And, as foreshadowed last year, we
delivered on the promised strong improvement in operating earnings.
“An important element in our success was our foresight in ramping up stock levels on
a number of our key products ahead of the COVID19 pandemic arriving in Australasia.

2
The gain, as announced to the NZX and ASX on 4 November 2019, follows from the acquisition of the joint venture
Dermatology Specialty Limited Partnership (DSLP) and arises from the recognition at acquisition of the Pascomer IP
assets at their assessed fair value of $12.5 million.

These actions have significantly helped the company to navigate the initial impact of
the virus in its Australian and New Zealand markets.
“We have also in-licensed a significant number of new products for our Australasian
business and we expect them to make a strong contribution over the next few years,
complementing the expected growth from our international business.”



Summary Financial Results

Year Ended 31 March
2020 2019
$'000 $'000
Revenue 105,597 85,127
Cost of Sales 57,332 44,397
Gross Profit 48,265 40,730
Other Income 535 2,237
Selling and distribution expenses (26,203) (26,540)
General and administrative expenses (9,111) (7,202)
Research and development expenses (1,984) (2,588)

Gain on acquisition of previously equity accounted
joint venture entity
9,784 (521)
Operating Profit 21,206 6,116


Underlying Operating Profit
Adjusted for the $9,784 non-recurring gain on acquisition


11,422


6,116

COVID19
We have seen unprecedented changes to our business in the wake of the COVID19
pandemic.
We have seen strong increases in sales for a number of our products including
analgesics (Maxigesic), cold & flu medications (MaxigesicPE & Maxiclear), vitamins
(Vitamin C Liposachets) and hospital antibiotics.
We have also begun to introduce some new products such as Crystawash (hand
sanitiser), aimed at the post COVID19 environment to take advantage of changes we
are seeing in consumer behaviour. These trends are likely to be enhanced by either
the fear of, or actual cases of, reinfection across Australia and New Zealand.

A key challenge has been to maintain supply to our customers. Several competitors,
particularly those in Australia, have frequently sold out of key products, enabling us to
step in and offer an alternative.
In addition to the protective benefits that have come from pre-emptively increasing
stock levels, our traditional reliance on sea freight has protected us from shortages in
capacity and price increases in air freight that have followed in the wake of the
pandemic.
As an essential business, we were able to operate throughout the Level 4 and 3
lockdown with a skeleton staff and the remainder were all fully operational using
remote access. As we have always operated a highly mobile workforce, the move to
remote working has not represented a major challenge to our staff nor systems.
Company sales in the first month of the new financial year are significantly ahead of
the prior year, despite the sluggish retail environment. Sales in our Australian business
have performed better than New Zealand as our team has still been able to visit some
customers.
Against these gains, in excess of $1 million of export orders, including launch orders for
10 countries, were held up by the Indian Government restriction on the export of any
products containing paracetamol. The export ban, which was imposed early in the
crisis, has since been lifted. The sales have been deferred to the new financial year.
Fortunately, the ban did not impact local Maxigesic supplies as we also source the
product from China and our manufacturing sites in that country have performed
admirably throughout the pandemic.
Finally, some of our development work has been delayed by Covid19, including a
study on Maxigesic IV specific to the registration of the product in the US and other
studies related to our Pascomer treatment. Our NasoSURF nasal drug delivery device
also saw delays to production and deployment.
AFT has not taken any government COVID19 related subsidies.
Whilst it is difficult to forecast with certainty the ongoing impacts from the pandemic,
we have, to date, navigated it relatively well. Importantly, as we have seen over the
more than two decades that AFT has been in existence, pharmaceutical products sell
well in both good and bad economic times.
BALANCE SHEET
As at 31 March 2020, AFT retained a cash balance of $6.1 million, in line with the $6.9
million cash held a year ago. Total assets rose to $87.1 million from $63.6 million a year
earlier and have increased primarily due to the acquisition of the Pascomer assets at
their assessed fair value of $12.5 million and the company capitalising research and
development expenditure
At the end of the financial year we refinanced CRG’s loans with a three-year $43.2
million facility from Bank of New Zealand (BNZ). As at 31 March 2020 borrowings stood
at $43.2 million against the $41.8 million at the same time a year ago.

The new BNZ facilities are at significantly more attractive terms and interest rates than
the previous CRG loans such that we anticipate significant finance cost savings in the
current and subsequent financial years.
In the 2020 financial year AFT used most of its $14.9 million operating cash flow to fund
research and development and financing costs. In the current year, in addition to
continuing to invest in the business the company will also be using cashflows to reduce
debt.
RPS CONVERSION
CRG has given notice to AFT to convert all 2,600,000 redeemable preference shares
in AFT (RPS) held by CRG. In accordance with the terms of the RPS, on 20 May 2020
the 2,600,000 RPS held by CRG converted into 2,600,000 ordinary shares in AFT and AFT
issued a further 468,030 ordinary shares in AFT to CRG in respect of the accumulated
dividends on those RPS. Following this conversion, 730,000 RPS remain on issue.

OUTLOOK
“We see significant potential for our products in both global and local markets. The
timing is always difficult to forecast with certainty, but we are seeing pleasing progress
with strong local sales growth and accelerating momentum in international markets,”
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.
“Similar to last year, we have again progressed further down the pathway to
realisation of this goal. But there is still a lot of work to do to reach our true potential
and fully reward our shareholders.
“Despite all the present challenges, including the COVID19 pandemic, we are looking
to the remainder of the 2021 financial year with confidence. We are targeting
continuing positive cashflow and an operating profit of between $14.0 million - $18.0
million.
- Released for and on behalf of AFT Pharmaceuticals limited by Chief Financial Officer
Malcolm Tubby
For more 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.

FY2020 MANAGEMENT DISCUSSION AND ANALYSIS
The following discussion covers the performance across key segments and reviews
progress in AFT’s product development portfolio over the year to 31 March 2020.
AFT group revenue for the year to 31 March 2020 increased 24% to $105.6 million from
$85.1 million in the prior financial year.
Operating profit rose strongly to $21.1 million from the prior year’s $6.1 million. This result
included a $9.8 million non-recurring gain on acquisition of the joint venture
Dermatology Specialty Limited Partnership (DSLP). The gain arose from the recognition
at acquisition of the Pascomer IP assets at their assessed fair value of $12.5 million.
Amid the strong revenue gains, operating costs, which exclude financing charges,
rose by just 1% to $37.3 million from $36.9 million in the prior year. Selling and distribution
expenses were held flat at $26.2 million from $26.5 million for the prior year as the
company continues to drive operating efficiencies in this area of the business.
General and administration expenses rose to $9.1 million from $7.2 million primarily due
to legal fees incurred on competitor challenges to our marketing claims
We have also received notice of a potential claim from a former contractor in South
East Asia which, in the event that it were to proceed, we would defend vigorously.
Research and development expenses reduced to $2.0 million from $2.6 million for the
prior year following the successful conclusion of a number of clinical trials on our
Maxigesic pain relief products.
Net profit after tax attributable to shareholders rose to $12.7 million from a loss of $2.4
million in the prior year.
AUSTRALIA
Sales in Australia increased 22% to $61.4 million from $50.3 million in the prior year.
Operating profits rose strongly from $5.3 million to $7.3 million.
The main OTC channel grew 25% to $39.0 million with particularly strong growth in eye
care and natural medicines. Maxigesic continued to gain market share in its
combined paracetamol – ibuprofen category extending its market share lead over its
key competitor to 14.5 percentage points at year end
3
. Our focus in the current year
is to build on this market leadership position.

3
iRi weekly share 29 March 2020

Sales to the hospital channel grew 16% lifted by the continued growth of new hospital
products, such as our antibiotic Piptaz. This product, with others we are introducing,
should continue to drive growth in the hospital channel in the 2021 financial year.
Our Australian prescription channel is small, offering an outlet for niche products. This
grew 23% to $6.3 million with the introduction of a new product.
We expect our significant in-licensing program to strengthen our key therapeutic
areas and extend AFT’s long-standing record of growth across the Tasman.
NEW ZEALAND
New Zealand revenue grew by 12% to $30.1 million from $26.8 million in the prior year.
Operating profit, excluding head office costs, rose to $5.3 million from $5.1 million in
the prior year. Including head office costs, which are carried for the benefit of all
territories, the segment posted an operating loss of $0.2 million. The result was weaker
than the prior year’s operating profit of $0.5 million and reflected the costs of
supporting a larger business and costs from an increasing number of patents in
particular.
The New Zealand OTC channel grew 24% to $17.4 million with strong growth in the
pain, eyecare, natural medicine and allergy categories. Newly launched products in
digestive health also helped.
A key success in the second half of the year was Vitamin C Liposachets. Early in the
year we increased stocks in anticipation of the COVID-19 pandemic. As a direct result
in March we sold twenty-one times the prior March’s sales.
The New Zealand government appears set to finally follow Australia’s lead in the
rescheduling of codeine-based products to prescription-only during 2020. We will be
able to use our previous experience in Australia to take advantage of marketing
opportunities for Maxigesic and other analgesics from this shift.
The hospital category declined by 8% to $4.0 million, while the prescription channel
grew 2% to $8.7 million.
SOUTHEAST ASIA
Southeast Asia revenue grew by 130% to $4.9 million from $2.1 million in the prior year.
Operating profit grew by $0.4 million to $0.1 million from the $0.3 million loss for the prior
year.
The hospital channel grew 175% with the launch of two new products in Singapore
and Malaysia. Revenues in the OTC channel were steady in the period as the initial
Maxigesic launch sales to Hong Kong and Malaysian distributors occurred in the prior
financial year.
We saw sales improve in the second half of the financial year and the distributors have
placed further orders. The South East Asian prescription channel grew to $0.7 million.
Following this significant uplift in South East Asian revenues this year, primarily in
Hospital and Prescription, we expect revenue this to level off for the coming year and

we expect the operating profit to continue to grow with operational efficiency cost
savings.
INTERNATIONAL
The international division is primarily focused on the out-licensing, registration and
enabling the sale (via licensees or distributors) of the Maxigesic range of pain relief
products. It grew revenue by 55% to $9.1 million from $5.9 million in the prior year. This
result included, in April 2019, our first sales milestone payment in the European Union
of €500k on the Maxigesic tablet form. We are confident of achieving further milestone
payments providing an additional source of revenue.
Operating profit rose to $14.0 million from a $0.6 million profit in the prior year reflecting
the growth in licence income, the return to more normalised research and
development spend levels and the $9.8 million non-recurring gain on the acquisition
of the Pascomer joint venture Dermatology Specialty Limited Partnership (DSLP).

Product

Maxigesic Tablets


Maxigesic IV

Maxigesic oral
solution
Territories 2020 2019 2020 2019 2020 2019
Licensed 125+ 125+ 80 68 122 122
Registered 44 42 3 - - -
Sold in 28 20 - - - -

We have now out-licensed Maxigesic in its various forms in more than 125 territories.
We added several new territories for the tablet form, including Canada, Chile,
Columbia, Cyprus, Germany, Peru and Switzerland. The US is the biggest outstanding
territory, but we have decided to achieve registration before pursuing a licensing
agreement.
Maxigesic IV licensing deals have been struck in twelve new territories, including
Canada, Central America, the Commonwealth of Independent States, Indonesia
and Pakistan.
Further discussions are ongoing for Maxigesic IV in key EU, US and Japanese markets
which have been somewhat delayed since the COVID19 pandemic, but nevertheless
are expected to be concluded within the current financial year.
MAXIGESIC REGISTRATIONS
The registration of our products in each territory is the next and most consequential
step towards commercialisation of our intellectual property. We have a significant
pipeline of opportunities available.

Registrations for the tablet form now stand at 44, up from 42 in the same period a year
ago with a significant number of new regulatory filings currently underway. We expect
to progress registration of Maxigesic in the US, the EU and Japan this financial year.
The first Maxigesic IV registrations have been achieved in Australia, New Zealand and
the UAE. The Australian registration of Maxigesic IV enables registration in other
territories such as the Middle East and Southeast Asia.
Registrations of Maxigesic IV are expected to accelerate during the current financial
year. The first registrations in 17 EU nations have been achieved in late April with US
FDA filing planned for this calendar year.
Registration work for the oral liquid form of Maxigesic in 23 regulated markets
continues but will still take some time. The registration of children’s medicines are
always challenging from a regulatory perspective.
We are still aiming in the 2020 calendar 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 tablet dose form is now for sale in 28 countries, up from 20 in the same
period last year. The timing of launches is always difficult to predict given hurdles
ranging from regulatory issues to matters specific to licensees or distributors.
We launched in Spain and Portugal and the Nordic countries in the last financial year.
With launches pending in Belgium, Luxembourg, France and Germany we will soon
have coverage across Western Europe.
We intended to deliver launch orders to a further 10 countries late in the 2020 financial
year, but these shipments were delayed by the Indian Government’s paracetamol
export ban. They will now be included in the 2021 financial year.
We are meanwhile starting to increase the product range in many countries with the
la unch of MaxigesicPE during this last financial year in UAE. Opening orders for
Maxigesic IV will be shipped to Australia, New Zealand and UAE.
PRODUCT DEVELOPMENT
Development of the Maxigesic dose forms outlined at the time of our 2015 IPO have
been largely completed. Maxigesic IV is the most significant line extension, with
independent market research pointing to a significant global market”
An additional study specific to US registration requirements for the product should
have been completed, but it has been delayed due to COVID19 impacting
enrolment in New Zealand and the US. However, it is still expected to be completed
by the end of July 2020. Meanwhile, further development work continues on the dry
stick sachet and cold and flu forms of Maxigesic.
Our NasoSURF nasal drug delivery device has undergone some redesign following
human factor studies in the US last year. Production and development work which
was based in China has been delayed due to the impact of COVID19.

We are now targeting a type IIa medical device filing with the FDA during this financial
year which is later than originally planned. Market research in the US and UK identified
our first targeted indication for the device has the potential to deliver AFT a significant
income stream.
We have completed extensive initial development work on Pascomer utilising
proprietary technology owned by AFT Pharmaceuticals. The technology has enabled
development of a formulation that keeps the active ingredient, Rapamycin, stable at
room temperature. This was a technically challenging achievement as Rapamycin is
readily oxidised.
The drug is a treatment for Facial Angiofibromas in Tuberous Sclerosis; a market which
could potentially be worth as much as US$300 million in the US. An extensive preclinical
study program has been completed and an Investigational New Drug (IND)
application opened with the US FDA.
Our first multi-centre international clinical study is underway but has been partially
delayed due to COVID19. Enrolments are restarting in May. Pascomer has been out-
licensed in North America to Timber Pharmaceuticals LLC, which has also agreed to
meet the ongoing costs of the clinical development program.
In 2019 we also signed a memorandum of understanding with New Zealand medicinal
cannabis company SETEK to work together in the research, development and
commercialisation of medicinal cannabis products.
/ENDS

---

Working to improve yourhealth
INVESTOR PRESENTATION M AY2020
FINANCIAL YEAR 2020 RESULTS

INVESTOR
PRESENTATION
MAY 2020
ImportantNotice
2
This presentation has been prepared by AFT Pharmaceuticals Limited (“AFT”), to provide a general overview of the
performance of AFTfor the financial year ended 31 March 2020. It is not prepared for any other purpose and must not be
provided to any person other than the intended recipient.This presentation should be read in conjunction with AFT’s
annual report, market releases and other periodic and continuous disclosure announcements, which are available at
www.nzx.comand www.asx.com.au.
All amounts are disclosed in New Zealand dollars (NZ$) unless otherwise indicated. All references to FY20XX appearing in
this presentation are to the financial year ending 31 March20XX, unless otherwise indicated.
This presentation is not a recommendation, offer or invitation to acquire AFT’s securitiesor other form of financial advice
or disclosure document. While reasonable care has been taken in compiling this presentation, none of AFT nor its
subsidiaries, directors, employees, agents or advisers (to the maximum extent permitted by law) gives any warranty or
representation (express or implied) of the accuracy, completeness or reliability of the information contained in it nor takes
any responsibility for it. The information in this presentation has not been and will not be independently verified or
audited.
This presentation may contain certain forward-looking statements and comments about future events, including with respect
to the financial condition, results, operations and business of A F T. These statements are based on management’s current
expectations, which may involve significant elements of subjective judgement and assumptions as to future events which
may or may not be correct,and the actual events or results may differ materially and adversely from these statements.
Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon
(and is not) an indication of future performance.

INVESTOR
PRESENTATION
May 2020
Introduction to AFT
3
•AFT Pharmaceuticals develops, licenses, and sells a range of medical products globally.
•In Australasia, our product line now extends to over 125 prescription and non-prescription
products. Maxigesicis a key growth driver in international markets.
•We have offices in Singapore, Kuala Lumpur, Sydney and Auckland (our HQ).
•We export or license our products to more than 125 countries
•Listed on the NZX (NZX.AFT) with a secondary listing on the ASX (ASX.AFP)
•Market capitalisation of ~NZ$400 million
-
20
40
60
80
100
120
'05'06'07'08'09'10'11'12'13'14'15'16'17'18'19'20
$ m
10 year Operating Revenue CAGR of 14%

INVESTOR
PRESENTATION
MAY 2020
FY 2020Highlights
40%
Increase in no. countries Maxigesic soldinto
4
28
24%
Increase in operating revenue to
NZ$105.6m
87%
Increase in normalisedoperating profit
1
to
NZ$11.4m
$13.8m
Increase in operating cashflowto
NZ$14.9m
229%
Increase in normalized net profit after tax to
NZ$5.3m
239%
Increase in shareholders equity to
NZ$17.3m
1
Operating Profit of $21.2m less non recurring gain of $9.8m

61.4
30.1
9.1
4.9
-
10.0
20.0
30.0
40.0
50.0
60.0
$ m
INVESTOR
PRESENTATION
MAY 2020
RevenueGrowthin Home and International Markets
5
50.3
26.8
5.9
2.1
-
10.0
20.0
30.0
40.0
50.0
$ m
22% 12% 55% 130%
AustraliaNew ZealandRest of WorldSoutheast Asia
FY2019 FY2020 FY2019 FY2020
4.7%
8.6%
28.5%
58.2%
2.5%
6.9%
31.5%
59.1%
•Continued growth in established markets of Australia and NZ
•Significant growth in Southeast Asia and Rest of World starting to come through post
registration and distribution agreements

NZ$000'sFY2019FY2020
Australia50,304 59.1%61,428 58.2%
YoY growth12.6%22.1%
New Zealand26,796 31.5%30,108 28.5%
YoY growth5.4%12.4%
Rest of World5,885 6.9%9,131 8.6%
YoY growth63.4%55.2%
Southeast Asia2,142 2.5%4,930 4.7%
YoY growth66.5%130.2%
Group85,127 100%105,597 100%
YoY growth13.5%24.0%
INVESTOR
PRESENTATION
MAY 2020
Financial performance - Revenue by region and
channel
6
10%
26%
64%
Over-the-counterHospitalPrescription
29%
13%
58%
16%
8%
76%
14%
84%
2%
16%
24%
60%

INVESTOR
PRESENTATION
MAY 2020
7
Abbreviated Consolidated Income Statement
•Operating leverage starting to show as revenue continues to grow. Expenses largely
falling as a % of revenue.
NZ$'000's year ended 31 March2020 % of 2019% of
revenuerevenue
Revenue105,597 85,127
Gross Profit48,265 45.7%40,730 47.8%
Underlying Operating Expenses and Other Income(36,843) 34.9%(34,614)40.7%
Underlying Operating Profit11,422 10.8%6,116 7.2%
Non-recurring Gain9,784 -
Operating Profit21,206 6,116
Financing expenses and income(8,329) (8,375)
Tax Expense(185) (168)
Net Profit /(Loss) after tax12,692 (2,427)

INVESTOR
PRESENTATION
MAY 2020
Abbreviated BalanceSheet
8
NZ$'000's year ended 31 March
2020 2019
Current assets49,217 44,345
Cash6,119 6,916
Non-current assets31,716 12,334
Total assets87,052 63,595
Current liabilities23,102 16,754
Current interest bearing liabilities2,000 41,750
Non-current liabilities3,495 -
Non-current interest bearing liabilities41,200 -
Total liabilities69,797 58,504
Total equity17,255 5,091
Total liabilities and equity87,052 63,595
•Replaced short term debt with longer term debt at more commercial rates
•Significant increase in shareholders equity

INVESTOR
PRESENTATION
MAY 2020
Abbreviated Cashflow
9
•Significant increase in operating cashflow
NZ$'000's year ended 31 March2020 2019
Net cash from operating activities14,878
1,067
Net cash used in investing activities(6,562)
(4,884)
Net cash (used) / generated from financing activities(9,117) 3,723
Net increase / (decrease) in cash(801) (94)
Impact of foreign exchange on cash and cash equivalents4 240
Opening cash and cash equivalents6,916 6,770
Closing cash and cash equivalents6,119 6,916

INVESTOR
PRESENTATION
MAY 2020
Normalised Operating Profit progress
NZ$ million
10
•Investment phase over FY15-18 showing large payback
•Operating profit for FY21 expected to be in the range of NZ$14-18m
(15)
(10)
(5)
-
5
10
15
20
'10
'11
'12
'13
'14
'15
'16
'17
'18
'19
'20
'21
$6m
$11m
$14m - $18m

INVESTOR
PRESENTATION
MAY 2020
Maxigesic IV registrations successfully completed – 21
countries (18 European, Australia, New Zealand, UAE)
Maxigesic Oral Liquid registration underway in
Europe, Australia and New Zealand
Maxigesic Hot Drink Sachets registration
underwayDecember 2019
Maxigesic Rapid formulation completed successfully .
First filing in 2020/21 calendar year
Maxigesic Cold & Flu formulation completed
successfully. First filing to occur mid 2020
Pascomer first large global multicenter studywell
underway– US, AU, NZ, Europe
NasoSURF pilot scale batches completed
.
Engineering batches to be completed August
2020
New Products build Revenue Pipeline
11

Maxigesic around the world
Italy – RX
Launched April 15
Ireland – OTC
Launched July 18
UAE – OTC
Launched Jan 15
CACM- OTC
Launched July 18
Singapore/Malaysia
OTC launched June 18
Also sold in Brunei
Australia – OTC
Launched Feb 14
New Zealand – OTC
Launched Oct 09
Spain - OTC
Launched April 19
Nordics – RX – 3 countries
Launched – 19
Israel – OTC
Launched Oct 17
Germany – RX
Launch pending – 20
France - RX
Launch pending –20
Portugal - OTC
Launched April 19
Eastern Europe (11 nations) - OTC
Launches pending 20
Albania - OTC
Launch pending 20
Belgium/Luxembourg – RX
Launch pending 20

INVESTOR
PRESENTATION
MAY 2020
Progress in global rollout of Maxigesic
ProductMaxigesicTabletsMaxigesicIVMaxigesic oralsolution
Territories202020192020201920202019
Licensed125+125+8068122122
Registered44423---
Soldin2820----
14

INVESTOR
PRESENTATION
MAY 2020
Maxigesic Countries sold andordered
15
•Expecting a more than tripling of the number of countries Maxigesic is sold in over the
next 2 years
0
20
40
60
80
100
120
140
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
2
3
4
7
9
20
43
66
125

INVESTOR
PRESENTATION
MAY 2020
Outlook
Further drive InternationalSales
- Keep acceleratingcountries launchedin
- Launchnew line extensions [MaxigesicIV]
Extend InternationalLicensing
- Finalizelicensing agreement discussions in China, Japan, LATAM and
USA
- Progress additional new territories added in
FY2020: Canada, Chile, Columbia, Cyprus
Germany, Indonesia, Pakistan, Peru and
Switzerland
Drive Increased UpfrontPayments
- Maxigesic IV licensing agreements
- Larger territories such as USA, Japan,China
DriveLocal ANZ Sales
- Drive Maxigesic sales in AU &NZ
- New OTC launches in AU &NZ
- New Covid19 related product launches
ImprovedFinancialsin FY21
- Guidance Operating Profit for FY21 in range of NZ$14–18m, an
expected growth of 23-58% over FY20
- Additional cashflow will be used to retire further debt
16

Working to improve yourhealth

---

Results for announcement to the market
AFT Pharmaceuticals Limited
Reporting Period 12 months to 31 March 2020
Previous Reporting Period 12 months to 31 March 2019
Currency NZ$
Amount (000s) Percentage change
Revenue from continuing
operations
$105,597 Up 24%
Total Revenue $105,597 Up 24%
Net profit/(loss) from continuing
operations
$12,692 Up 623%
Total net profit/(loss) $12,692 Up 623%
Interim/Final Dividend
Quoted Equity Securities:
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
Unquoted Equity Securities:
Amount per Unquoted
Redeemable Preference Share
3.2c for each payment
Imputed Amount per Unquoted
Redeemable Preference Share
3.2c for each payment
Record Dates 14 September 2019, 14 December 2019, and 14 March 2020
Dividend Payment Dates 30 September 2019, 31 December 2019, and 31 March 2020
Current period Prior comparable period
Net tangible assets per Quoted
Equity Security
($0.10) ($0.03)
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 31 March 2020. These financial statements and the
full year results commentary dated 20 May 2020 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).

AFT Pharmaceuticals Limited, Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969

The unquoted Redeemable Preference Shares issued on 24
March 2017 attract a dividend rate of 9.4% per annum, or
25.8 cents per share per annum. For the 30 September
2019, 31 December 2019 and 31 March 2020 quarter ends,
50% of the dividend was paid in cash and included in the
above table. For the 30 June 2019 quarter end no cash
dividends were paid. The remaining 50% of dividends net of
withholding taxes for the 30 September 2019, 31 December
2019 and 31 March 2020 quarter ends together with 100% of
the dividends net of withholding taxes for the 30 June 2019
quarter end 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

20 May 2020

Audited financial statements accompany this announcement.

---

Growing
Developing
Succeeding
ANNUAL REPORT 2020

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.
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 over 125 countries around the world.
For more information about the company, visit our website www.aftpharm.com.
Contents

At a Glance
4-5
Chairman & CEO’s Report 6-11
Business Focus:
- Australasia
14-15
- Maxigesic 16-18
- Research & Development 19
Directors
20-21
Management
22-23
Sustainability
24-27
People Health & Safety
28-29
Auditors Report
31-33
Financial Statements 34-72
Statutory Disclosures 74-84
Directory 85
About AFT Pharmaceuticals
This annual report is dated 20 May 2020
Signed on behalf of the Board of AFT Pharmaceuticals Limited by:
David Flacks Dr Hartley Atkinson
CHAIRMAN FOUNDER & CEO

The Full Annual Report and Governance Statement is available online at investors.aftpharm.com
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
23

At a glance
Financial
Results
AUSTRALIA
Revenue: $61.4m up
22%
Operating profit
$7.3m
Growth drivers
• OTC channel growth
particularly in eyecare
and natural medicines
• Maxigesic extending
its market share
• New antibiotics in the
hospital channel
• New prescription
products
SOUTHEAST ASIA
Revenue: $4.9m up
130%
Operating profit
$0.1m
Growth drivers
• OTC channel growth
particularly in eyecare
and natural medicines
• Maxigesic extending
its market share
• New antibiotics in the
hospital channel
• New prescription
products
INTERNATIONAL
Revenue: $9.1m up
55%
Operating profit
$14m
Growth drivers
• Maxigesic growth
• Milestone payments in
Europe
• Launches of
Maxigesic in 8 new
countries
• One off gain on
acquisition of
Pascomer assets
NEW ZEALAND
Revenue: $30.1m up
12%
Operating profit
$5.3m*
*Excluding head office costs
Growth drivers
• OTC growth
particularly in pain,
eyecare, natural and
allergy medicines
• Vitamin C Liposachets
$
21.2m
$
14.9m
$
12.7m
$
105.6m
TOTAL OPERATING
PROFIT
Up from $6.1m
OPERATING CASH FLOW
Up from $1.1m
PROFIT
AFTER TAX
Up from ($2.4m)
TOTAL REVENUE
Up from $85.1m
2019-20202019-20202019-20202019-2020
28.5 %
4.7%
8.6%
58.2%
31.5%
2.5%
6.9%
59.1%
Overall revenue by market FY2019 (percentage)
Australia
New Zealand
Southeast Asia
Rest of the World
AT A GLANCE
Overall revenue by market FY2020 (percentage)
An enduring record of growth
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
45

Growth at home and momentum in
international markets
Dear shareholders,
The Board is delighted to report on what has been an outstanding
year, even in the face of the challenges and disruptions caused by
the Covid-19 pandemic. For the first time, we broke through $100
million sales and delivered record earnings.
Momentum has continued to build across our business. All of AFT’s
operating divisions are performing well. Our Australasian business
continues to grow strongly extending a two-decade record of
growth.
Our core Maxigesic pain relief medicine continues to achieve
key commercialisation milestones in international markets, with
sales commencing in eight new countries in the past year. New
dose forms of the medicine such as the intravenous formulation -
Maxigesic IV - are also establishing a pipeline of opportunities that
extend well into the future.
Meanwhile, our Southeast Asia business moved into profit this year
on the back of sales more than doubling in that region. Combined
these developments have driven strong improvements in operating
earnings and cashflow and are setting the company up for
continued growth.
Chairman and
CEO’s report
“Our core Maxigesic pain relief
medicine continues to achieve key
commercialisation milestones in
international markets”
CHAIRMAN AND CEO’S REPORT
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
67

Financial results
Revenue for the year to 31 March 2020 increased
24% to $105.6 million from $85.1 million in the
prior financial year, with revenue growing strongly
in Australia (up 22%), New Zealand (up 12%)
and Southeast Asia (up 130%). The international
business, which is focused primarily on the
commercialisation of Maxigesic was up 55%.
Operating profit rose to $21.2 million, building on
last year’s $6.1 million operating profit by $15.0
million. The result included a non-cash $9.8 million
non-recurring gain related to AFT taking full
control of the Pascomer dermatological medicine
intellectual property.
Excluding the one-off gain, the underlying
operating profit of $11.4 million represented an
86% improvement on the prior year’s result and
reflects continued sales growth, the return to more
normalised research and development spending
and careful management of costs throughout the
business.
Net profit after tax rose to $12.7 million from a
loss of $2.4 million in the same period a year
ago, demonstrating the operating leverage of our
business.
Covid-19 response
We have seen unprecedented changes to our
business in the wake of the Covid-19 pandemic. An
important element in our success was our foresight
in ramping up stock levels on a number of our key
products. This foresight has significantly helped the
company to navigate the initial economic impact of
the virus in its Australian and New Zealand markets.
We have seen strong increases in sales for a number
of our products including analgesics (Maxigesic),
cold & flu medications (MaxigesicPE & Maxiclear),
vitamins (Vitamin C Liposachets) and hospital
antibiotics.
Company sales in the first month of the new
financial year are significantly ahead of the prior
year, despite the sluggish retail environment. Sales
in our Australian business have fared better than
New Zealand as our team has still been able to visit
some customers.
We have also begun to introduce some new
products such as Crystawash (hand sanitiser), aimed
at the post Covid-19 environment to take advantage
of changes we are seeing in consumer behaviour.
These trends are likely to be enhanced by either
the fear of, or actual cases of, reinfection across
Australia and New Zealand.
A key challenge has been to maintain supply to our
customers. Several competitors, particularly those in
Australia, have frequently sold out of key products,
enabling us to step in and offer an alternative.
In addition to the benefits that have come from
pre-emptively increasing stock levels ahead of the
pandemic, our traditional reliance on sea freight has
protected us from shortages in capacity and price
increases in air freight that have followed in the
wake of the pandemic.
As an essential business, we were able to operate
throughout the Level 4 lockdown with a skeleton
staff and the remainder were all fully operational
using remote access. As we have always operated
a highly mobile workforce, the move to remote
working has not represented a major challenge to
our staff nor systems.
Against these gains, in excess of $1 million of
export orders, including launch orders for 10
countries, were held up by the Indian Government
restriction on the export of any products containing
paracetamol. The export ban, which was imposed
early in the crisis, has since been lifted. The sales
have been deferred to the new financial year.
Fortunately, the ban did not impact local Maxigesic
supplies as we also source the product from China
and our manufacturing sites in that country have
performed admirably throughout the pandemic.
Finally, some of our development work has been
delayed, including a study on Maxigesic IV specific
to the registration of the product in the US and
other studies related to our Pascomer treatment.
Our NasoSURF nasal drug delivery device also saw
delays to production and deployment.
AFT did not take any government Covid-19 related
subsidies.
CHAIRMAN AND CEO’S REPORT
Australia
Sales in Australia increased 22% to $61.4 million
from $50.3 million in the prior year benefiting from
growth in the three sales channels, over the counter,
hospital, and prescription. Operating profits rose
strongly from $5.3 million to $7.3 million.
Maxigesic continued to gain market share in its
combined paracetamol – ibuprofen category,
extending its market share lead over its key
competitor. Our focus in the current year is to build
on this market leadership position.
Hospital and prescription sales both benefited
from the introduction of new products. We expect
our significant in-licensing program to strengthen
our key therapeutic areas and extend AFT’s long-
standing record of growth across the Tasman.
New Zealand
New Zealand revenue grew by 12% to $30.1 million
from $26.8 million in the prior year, lifted by growth
in the OTC channel and a small boost from the
prescription channel, offset by the hospital channel.
A key success in the second half of the year was
the OTC Vitamin C Liposachets product. Early in
the year we increased stocks in anticipation of
the Covid-19 pandemic. As a direct result we sold
twenty-one times the prior March’s sales.
Operating profit, excluding head office costs, rose
to $5.3 million from $5.1 million in the prior year.
Including head office costs, which are carried for
the benefit of all territories, the segment posted
an operating loss of $0.2 million. The result was
weaker than the prior year’s operating profit of $0.5
million and reflected the costs of supporting a larger
business and rising patent costs.
Southeast Asia
Southeast Asia revenue grew by 130% to $4.9
million from $2.1 million in the prior year lifted
by strong growth in the hospital channel. It also
reflected modest growth in the prescription channel
and
steady revenues in the OTC channel as the
initial Maxigesic launch sales to Hong Kong and
Malaysian distributors occurred in the prior financial
year.
International
The international division is primarily focussed on
the out-licensing, registration and enabling the sale
(via licensees) of the Maxigesic range of pain relief
products. It grew revenue by 55% to $9.1 million
from $5.9 million in the prior year.
This result, in April 2019, included our first sales
milestone payment in the European Union of €500k
on the Maxigesic® tablet form. We are confident of
receiving further milestone payments,providing an
additional source of revenue.
Operating profit rose to $14.0 million from a $0.6
million profit in the prior year. The result reflected
the growth in license income, the return to more
normalised research and development spend
levels and the $9.8 million non-recurring gain
on the acquisition of the Pascomer joint venture
Dermatology Specialty Limited Partnership (DSLP).
We have now out-licensed Maxigesic in its various
forms in more than 125 territories. We added new
territories for the tablet form, including Canada,
Germany, Switzerland and several territories in
South America. The US is the biggest outstanding
territory, but we have decided to hold off licensing
in this country until we achieve registration.
Maxigesic IV licensing deals have been struck in
twelve new territories, while further discussions
are ongoing for Maxigesic IV in key EU, US and
Japanese markets which have been somewhat
delayed since the Covid-19 pandemic, but
nevertheless are expected to be concluded within
the current financial year.
“AFT continues to be
supported by a committed,
loyal and diverse team in New
Zealand, Australia and around
the world”
“The US is the biggest
outstanding territory, but
we have decided to seek
registration before pursuing a
licensing agreement”
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
89

Research and development
Research and development, which is fundamental
to the company building on our record of growth,
continues even though we have come through the
intensive research and development programme we
set out at the time of our IPO.
The focus in the 2020 financial year was on
the Maxigesic IV dose form extension and US
registration of the product. We are also continuing
product development on Pascomer with our partner
Timber as well as ongoing work on the NasoSURF
nasal drug delivery device. Although Covid-19 has
caused some setback to this work, we are pleased
with the progress we have made.
In 2019 we also signed a memorandum of
understanding with medicinal cannabis
company SETEK to work together in the research,
development and commercialisation of medicinal
cannabis products.
Balance sheet
As at 31 March 2020, AFT retained a cash balance
of $6.1 million, in line with the $6.9 million cash
held a year ago. Total assets rose to $87.1 million
from $63.6 million a year earlier and have increased
primarily due to the acquisition of the Pascomer
assets at their assessed fair value of $12.5 million,
and the inclusion of “right-of-use assets” as required
by NZ IFRS 16 being primarily our leased offices and
the company capitalising research and development
expenditure
At the end of the financial year we refinanced CRG’s
loans with a $43.2 million facility from Bank of New
Zealand (BNZ). As at 31 March 2020, borrowings
stood at $43.2 million against $41.8 million at the
same time a year ago.
The new BNZ facilities are at significantly more
attractive terms and interest rates than the previous
CRG loans such that we anticipate significant
finance cost savings in the current and subsequent
financial years.
In the 2020 financial year AFT’s has used most of its
$14.9 million operating cash flow to fund research
and development and financing costs. In the current
year, in addition to continuing to invest in the
business, the company will also be using cashflows
to reduce debt.
People
AFT continues to be supported by a committed,
loyal and diverse team in New Zealand, Australia
and around the world. They have always risen to the
challenges they have faced, but those of the last few
months have been unprecedented.
Although their movements have been restricted,
they have overcome numerous hurdles to deliver
what has been an outstanding performance. On
behalf of the board and shareholders we thank them
for their contribution and continuing commitment to
the company.
CHAIRMAN AND CEO’S REPORT
Maxigesic registrations
Registrations for the tablet form now stand at
44, up from 42 in the same period a year ago
with a significant number of new regulatory
filings currently underway. We expect to progress
registration of Maxigesic tablets in the US, the EU
and Japan this financial year.
The first Maxigesic IV registrations, have been
achieved in Australia, New Zealand and the UAE.
The Australian registration of Maxigesic IV enables
registration in other territories such as the Middle
East and Southeast Asia. Registrations of the form
are expected to accelerate during the current
financial year. The first registrations in 17 EU
nations have been achieved in late April with US
FDA filing planned for this calendar year.
Registration work for the oral liquid form of
Maxigesic in 23 regulated markets continues
but will still take some time. The registration of
children’s medicines are always challenging from a
regulatory perspective.
Maxigesic sales
Maxigesic in its tablet dose form is now for sale in
28 countries, up from 20 in the same period last
year. We will soon have coverage across Western
Europe. We intended to deliver launch orders to a
further 10-countries late in the 2020 financial year,
but these shipments were delayed by the Indian
Government’s paracetamol export ban. They will
now be included in the 2021 financial year.
We are meanwhile starting to increase the product
range in many countries with the launch of
MaxigesicPE during this last financial year in UAE.
Opening orders for Maxigesic IV will be shipped to
Australia, New Zealand and UAE.
“Maxigesic in its tablet dose
form is now for sale in 28
countries, up from 20 in the
same period last year.”
Outlook
We see significant potential for our products in
both global and local markets. The timing is always
difficult to forecast with certainty, but we are seeing
pleasing progress with strong local sales growth and
accelerating momentum in international markets.
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.
Similar to last year, we have again progressed
further down the pathway to realisation of this goal,
but there is still a lot of work to do to reach our true
potential and fully reward our shareholders.
Despite all the present challenges, including the
Covid-19 pandemic, we are looking to the 2021
financial year with confidence. We are targeting
continuing positive cashflow and an operating profit
of between $14.0 million to $18.0 million.
David Flacks Dr Hartley Atkinson
CHAIRMAN FOUNDER & CEO
ProductMaxigesic tabletsMaxigesic IVMaxigesic oral solution
Territories202020192020201920202019
Licensed125+125+8068122122
Registered44423---
Sold in28**20----
*Figures as at 31 March
** Orders processed for a further 10 countries but delayed in India due to government export restriction related to
Covid-19
$
61.4m
22
%
AUSTRALIAN SALES INCREASED
Up from
$
50.3m
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
1011

Launched
Launch Pending
Available
Ireland – launched
United Kingdom – launched
Belgium, Luxembourg - launch pending Q2 2020
France - launch pending 2020
Spain & Portugal - launched April 2019
Nordics – launched
Eastern Europe & Balkans
– launches pending 2020
Iraq – Kurdistan launched
Australia – No. #1 Para-Ibu Combo.
Growing market share
United Arab Emirates -
sales growth still strong
Italy - successful launch and
sales growing still
Germany - Rx launch pending Q2 2020
OTC licensed Feb 2020
Switzerland - licensed March 2019Brazil - licensing
negotiations
underway
Columbia, Peru, Chile -
distributor appointed
Mexico - launch
pending 2020
IV licensed - to launch 2021
Licensing
discussions
started for USA
Canada distributor appointed
CACM - launched &
licensed
New Zealand –
increasing sales
and codeine
rescheduling
confirmed.
Maxigesic PE
launched
Singapore & Brunei –
launched including OTC
Licensed in Russia
Hong Kong launched 2019
China - licensing negotiations underway
Licensed in Taiwan
Korea – licensing
negotiations underway
IV licensed

Japan - licensing
discussions
are underway
Indonesia -
distributor appointed
for Maxigesic IV
Pakistan -
distributor
appointed
for Maxigesic IV
Malaysia – launched
Philippines – distributor
to be appointed
MAXIGESIC GLOBAL UPDATE
[primarily oral dose forms]
Vietnam - distributor
appointed for
Maxigesic IV
and orals
Launched
Launch Pending
Available
Ireland – launched
United Kingdom – launched
Belgium, Luxembourg - launch pending Q2 2020
France - launch pending 2020
Spain & Portugal - launched April 2019
Nordics – launched
Eastern Europe & Balkans
– launches pending 2020
Iraq – Kurdistan launched
Australia – No. #1 Para-Ibu Combo.
Growing market share
United Arab Emirates -
sales growth still strong
Italy - successful launch and
sales growing still
Germany - Rx launch pending Q2 2020
OTC licensed Feb 2020
Switzerland - licensed March 2019Brazil - licensing
negotiations
underway
Columbia, Peru, Chile -
distributor appointed
Mexico - launch
pending 2020
IV licensed - to launch 2021
Licensing
discussions
started for USA
Canada distributor appointed
CACM - launched &
licensed
New Zealand –
increasing sales
and codeine
rescheduling
confirmed.
Maxigesic PE
launched
Singapore & Brunei –
launched including OTC
Licensed in Russia
Hong Kong launched 2019
China - licensing negotiations underway
Licensed in Taiwan
Korea – licensing
negotiations underway
IV licensed

Japan - licensing
discussions
are underway
Indonesia -
distributor appointed
for Maxigesic IV
Pakistan -
distributor
appointed
for Maxigesic IV
Malaysia – launched
Philippines – distributor
to be appointed
MAXIGESIC GLOBAL UPDATE
[primarily oral dose forms]
Vietnam - distributor
appointed for
Maxigesic IV
and orals
MAXIGESIC - reaching out to
a population of
720m
LAUNCHED
LAUNCH
PENDING
AVAILABLE
1
2
3
4
1
2
3
4
New Zealand, Auckland OFFICE
Australia, Sydney OFFICE
Kuala Lumpur OFFICE
Singapore OFFICE
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
1213

Australasia the
launch pad for
AFT’s global ambitions
Bringing in the best medicines from around the world
Our Australasian business is the foundation from
which we have been successfully building out our
reach across the globe. Combined our Australian
and New Zealand business grew revenues by 18%
over the last year, to $91.5 million from $77.1 million
in the prior year and this builds on more than two
decades of steady growth.
Via our wholesale partners we reach out to 6,500
pharmacies in Australia, and a further 1,000 outlets
in New Zealand. Our partners also sell our products
into hospitals and healthcare practices across both
countries. AFT meanwhile provides field support
and marketing of the products to build consumer
awareness.
The majority of the products we sell are in-licensed
from our partners offshore, and in every case, are
supported by a body of clinical research data on
their therapeutic efficacy.
We are constantly on the lookout for new medicines
to add to the portfolio. In the last year alone, we
added further new products to the OTC portfolio
taking the total to 56. We achieve this by combining
new research data and reviewing the portfolios of
our global partners to identify unexploited market
niches.
The successful introduction of our Liposachet
Vitamin C supplement and Diarelieve, a diarrhoea
palliative treatment, are typical of the innovations
we seek to bring to the portfolio. Both are already
making a valuable contribution to the group.
Over the counter medicines
Our over-the-counter medicine portfolio, which
grew revenue by 25% over the last year, to
$56.4 million from $45.2 million in the prior year,
encompasses more than 125 separate products. In
the pharmacy market our portfolio is led by four key
over-the-counter categories: eyecare; pain relief;
allergy and supplements.
AFT’s eyecare brands include the HYLO; NovaTears
and Optisoothe ranges. Combined they make
AFT a leader in eyecare in the Australian market.
Our HYLO-FORTE® eye lubricant has achieved the
number one position in the eye lubricants category
and is frequently among the top-selling products
(by value) in Australian pharmacies.
Meanwhile, last year’s launch of the revolutionary
non-aqueous, preservative-free eye lubricant
NOVATEARS® has further strengthened our category
leadership. NOVATEARS® is now among the top 30
selling products in the eye lubricant category.
In the analgesics category our patented pain-relief
medicine Maxigesic occupies the number one
position in the paracetamol/ibuprofen combination
market on both sides of the Tasman. It is benefiting
from the growth that has followed from, among
other things, the rescheduling of codeine-based
analgesics from OTC markets to prescription. In
the 12 months after Australia rescheduled codeine
containing medicines in 2018, sales of Maxigesic
tablets increased by more than 50% and growth
continues.
The allergy segment is led by Allersoothe and
Loraclear, while the supplement categories are led
by Vitamin C, particularly our recently launched
Vitamin C Liposachet product in New Zealand and
iron supplements in Australia. Our other categories
include first aid, skin care and antifungal treatments.
BUSINESS FOCUS - AUSTRALASIA
Hospital distribution
The hospital portfolio, which grew revenue by 14%
to $50.2 million from $44.2 million in the prior year,
includes a range of generic injectable antibiotics
including Piptaz-AFT, Ceftriaxone-AFT and
Cefazolin-AFT.
Meanwhile, the approval of Maxigesic IV®, the
intravenous form of our patented analgesic
platform, by the Australian Therapeutic Goods
Administration opens a new frontier of growth for
the medicine in hospital markets.
The prescription business is smaller but makes a
valuable contribution to the overall business. In the
last year it generated $15.0 million up 10% from the
prior year’s $13.7 million
$
91.5m
Australasian revenue up 18%
7,500
Pharmacy and health outlets
we reach across Australasia
Building immunity
Our Vitamin-C Liposachet product, in the 2020
financial year, has grown to become one of our
more important product lines in New Zealand.
As the Covid-19 pandemic grew, sales of the
product In March 2020 were more than three
times the sales of the prior year.
Bringing relief to children
Diarrhoea disproportionately affects children.
But until we introduced Diarelieve, a product we
in-licensed to the New Zealand market, there
was no medicine that offered children (and their
parents) relief.
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
1415

US$
440m
125+28
SALES POTENTIAL
of Maxigesic IV in
Western Europe,
Japan and the US
Source: Delveinsight
COUNTRIES
in which Maxigesic
tablets and Maxigesic IV
are licensed for sale
TERRITORIES
selling Maxigesic tablets
in the last financial year,
up from 17 in 2019
Amid growing global sales for the tablet form of our
patented Maxigesic pain relief medicine, we this year
achieved approval of intravenous form, Maxigesic
IV, by Australia’s Therapeutic Goods Administration
(TGA).
The TGA’s approval is the first foreign regulatory
approval of Maxigesic IV, the only intravenous form
of an Ibuprofen/paracetamol combination in the
world, and it opens new opportunities to grow
demand for the Maxigesic family of pain relief
medicines.
Maxigesic IV has been developed as a line extension
to Maxigesic tablets, for mild to moderate post-
operative pain relief in hospitals where patients
cannot take oral pain relief. We are now working
with regulatory authorities around the world –
including Japan, the US and Europe to extend the
reach of the product into new markets.
The TGA approval of Maxigesic IV immediately
cleared the way for regulatory filings in a number of
other territories including, but not limited to, Mexico,
South East Asia, Korea and the Middle East. All of
these regions rely upon registration by key global
reference regulators such as the TGA.
At the end of the 2020 financial year it was
registered in New Zealand, Australia and the UAE.
First sales of Maxigesic IV in these territories are
due in the current financial year. AFT continues
to see strong potential for the entire Maxigesic
family of pain relief medicines. Earlier this year the
independent market research firm Delveinsight
estimated Maxigesic had the potential to generate
more than US$440 million of revenue in the US,
Japan and the top five European countries (France
Germany, Italy, Spain and the UK) by 2028.
Delivering on this potential requires AFT to
overcome a number of hurdles, notably including
regulatory approval for Maxigesic IV in key
territories including the US and Europe. While
we are not able to commit to timelines set out in
the study, it has pointed to the significant latent
potential of the Maxigesic medicine platform.
Meanwhile, the Delveinsight research takes no
account of other territories in which Maxigesic in
all dose forms is already licensed, including many
countries in Eastern Europe, the Middle East, Asia,
the Commonwealth of Independent States and
Central and South America.
Maxigesic tablets are now selling in 28 countries up
from 20 at the same time a year ago and a further
10 countries are ready to begin selling the tablet
form of the medicine in the new financial year. The
medicine in various dose forms has been licensed
with partners for more than 125 territories. The
tablet form has been registered in 44 territories up
from 42, at the same time last year.
Maxigesic global roll-out builds
momentum
Extending the therapeutic applications of the patented
pain relief medicine
Maxigesic commercialisation milestones*

April 2019: Maxigesic IV® licensed in Mexico; tablets licensed in Switzerland and Cyprus

June 2019: Maxigesic tablets and oral liquid licensed in Colombia, Peru and Chile

July 2019: Maxigesic IV® approved Australia’s Therapeutic Goods Administration (TGA).

November 2019: Maxigesic tablets licensed in Germany, Pakistan and Vietnam

November 2019: Maxigesic tablets and other forms licensed in Canada

November 2019: Maxigesic IV® licensed in Indonesia.

February 2020: Maxigesic IV® licensed in 21 new countries across the Commonwealth of
Independent States and central America.
*Year to 31 March 2020.
BUSINESS FOCUS-MAXIGESIC
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
1617

Successful launches of Maxigesic tablets in Spain
and Portugal and the Nordic countries late last
year position AFT Pharmaceuticals to be selling the
medicine across Western Europe this year.
The launches on the Iberian Peninsula and
Scandinavia, respectively in August and September
2019 set the stage for launches in Belgium,
Luxembourg, Germany and France in the current
financial year. All are targeting the successes we
have seen in Ireland and Italy, where our medicine
is becoming a core therapeutic agent for the
treatment of pain.
In the Nordic region (Sweden, Norway, Finland,
Denmark) the medicine is marketed under the
Dolerin brand by our partner Karo Pharma,
following a licensing deal in 2017. The product,
which is already seeing strong demand, is sold as a
prescription-only medicine.
However, over time, as the region gains familiarity
with the medicine, we expect it to be made available
for over the counter sales. The Nordics represent an
attractive market and an estimated market value for
analgesics of about SEK1.4 billion per year.
1
In Spain and Portugal the medicine trades under
the Dolostop Plus brand and it is marketed as an
over the counter medicine by AFT’s partner the
Barcelona-based Kern Pharma. The launch in August
was supported by an extensive advertising, social
media and sampling campaign.
As a result of these efforts we have seen strong
orders and these markets making a modest, but
fast-growing contribution to total sales.
Launches in Germany, Belgium and Luxembourg
and France have been delayed due to supply
disruptions caused by, among other things, the
Covid-19 Pandemic, but are now slated for the
current financial year.
In Germany, the medicine is named Duoval. It will
be sold over by prescription and it is marketed
by EVER Valinject. In Belgium and Luxembourg
Maxigesic will be sold both by prescription and
Maxigesic
reaching across
Western Europe
Spain, Portugal and the
Nordics set the stage for
launches in 2020
Building
new growth
opportunities
New dose forms of
Maxigesic and Pascomer in
focus
over the counter under the Combophen brand by
Therabel, while in France it is a prescription product
marketed by Laboratoires Expanscience S.A under
the Cetafen® brand.
Meanwhile we are already making sales in Italy
under the prescription-only Tachefene brand
marketed by Rome-based Angelini. In Ireland the
medicine is sold under the Easolief Duo brand and
marketed by Clonmel Healthcare. Both territories
have made a strong contribution to sales in the
current financial year.
Spanish launch advertising
BUSINESS FOCUS-MAXIGESICRESEARCH & DEVELOPMENT
Development of the Maxigesic dose forms outlined
at the time of our 2015 IPO have been largely
completed. Maxigesic IV is the most significant
line extension. A study specific to US registration
requirements for the product should have been
completed, but it has been delayed due to Covid-19
impacting enrolment in New Zealand and the US.
However, it is still expected to be completed by the
end of July 2020. Meanwhile, further development
work continues on the dry stick sachet and cold and
flu forms of Maxigesic.
Our NasoSURF nasal drug delivery device has
undergone some redesign following human factor
studies in the USA last year. Production and
development work which was based in China has
been delayed due to the impact of Covid-19. We are
now targeting a type IIa medical device filing with
the FDA during this financial year which is later than
originally planned. Market research in the US and UK
identified our first targeted indication for the device
has the potential to deliver AFT a significant income
stream.
be worth US$300+ million in the US.
As part of the deal with AFT, Timber will cover
all clinical trial costs on the medication. AFT
will receive signing and, provided development
proceeds successfully, staged development and
registration milestone payments, potential sales
milestone payments in excess of US$10 million and
ongoing sales-royalty payments.
AFT’s two planned clinical studies in 120 patients
with the first having started in eight study centres
around the world, including the world-renowned
Mayo Clinic in Rochester, Minnesota in the US.
Research centres in Australia, Spain, the UK and
New Zealand are also taking part in the trial. The
study enrolments were delayed by Covid-19 but
have restarted in May and results are due in 2021.
Rapamycin is normally easily oxidised and typically
has limited stability in topical formulations. However
AFT has developed a formulation that uses a
proprietary dermal delivery technology that has
overcome these stability issues.
AFT is running the clinical study program in
conjunction with Timber, which will cover both trial
costs and direct AFT staff costs.
As part of the agreement, AFT has also taken
100% control of the original partnership set up for
development of Pascomer, DSLP. This has resulted in
a one-off non-cash gain of $9.8 million in the 2020
financial year reflecting a new accounting treatment
of the subsidiary.
Pascomer combats a
debilitating and rare disease
Potential breakthrough treatment for Facial
Angiofibromas in Tuberous Sclerosis moves into
clinical trials
Our orphan drug Pascomer moved a step closer to
commercialisation in the 2020 financial year with an
out-licensing and development agreement with US-
based Timber Pharmaceuticals for the US, Canada &
Mexico.
Pascomer (active ingredient, Rapamycin) is a topical
treatment for Facial Angiofibromas in Tuberous
Sclerosis, a disfiguring condition that affects
patients from childhood. In the US alone 30,000
patients suffer from the condition. A clinically
proven treatment for the disease could potentially
1
Source: Karo Pharma 2018 Annual Report
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
1918

/ David Flacks/ Dr Hartley Atkinson/ Marree Atkinson/ Nathan (Nate) Hukill/ Jon Lamb
INDEPENDENT DIRECTOR
Appointed 4 September 2012
/ Dr James (Jim) Burns
IINDEPENDENT DIRECTOR
Appointed 17 September 2015
/ Dr John Douglas (Doug) Wilson
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 a consultant to
the Ryman Healthcare clinical
governance committee.
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.
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.
DIRECTORS AND MANAGEMENT TEAM
Directors
David has a number of
governance roles and has
been chair of AFT since the
IPO in 2015. He is chair of
the Regulatory Governance
Committee of the NZX, chair
of the Suncorp NZ group of
companies and Harmoney Corp.
He is also a director of a number
of environmentally focused pro
bono organisations.
He is a former chair of the NZX
Markets Disciplinary Tribunal
and a former member of the
Takeovers Panel. He is also a
director of boutique corporate
law firm Flacks & Wong.
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.
FOUNDER, EXECUTIVE DIRECTOR
AND CHIEF EXECUTIVE OFFICER
Appointed 4 September 1997
EXECUTIVE DIRECTOR AND CHIEF
OF STAFF
Appointed 4 September 2012
NON-EXECUTIVE DIRECTOR
Appointed 14 May 2014
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.
CHAIRMAN AND INDEPENDENT
DIRECTOR
Appointed 22 June 2015
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.
Nate is the President and
Chairman of CRG, a US-based
investment management firm
focused on the healthcare
industry. Nate oversees all
aspects of the investment
process, including investment
sourcing, due diligence, portfolio
construction and portfolio
management. Nate 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
investor at Salomon Smith
Barney where he managed a
portfolio of approximately $800
million.
Nate holds a Bachelor of Science
in business administration from
the University of Colorado and
an M.B.A. from the Darden
Graduate School of Business at
the University of Virginia.
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).
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 companymCASI
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) and a Director
of Vermillion (NASDAQ). 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.
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
2021

/ 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
R OW.
/ 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.

/ Scott Crawford
GENERAL MANAGER – PROMOTED
PRODUCTS AUSTRALASIA
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.
/ 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).
DIRECTORS AND MANAGEMENT TEAM
Management
team
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
2223

Best practice
governance
and driving
sustainability
United Nations Sustainable Development
Goals provide a blueprint for positive
change
AFT is strongly committed to ensuring we
maintain corporate governance practices in line
with best practice, that we adhere to the highest
ethical standards and we contribute positively to
environmental and social outcomes.
In line with this commitment, AFT has determined it
will work to progressively develop and incorporate
into its governance framework a strategy to account
for, and report on, progress towards improvements
in material and relevant environmental and social
factors.
Last year, we began to look at how our business
and our community initiatives aligned with the
UN sustainable development goals (SDGs), which
represent a larger and robust vision for positive
change. As part of this programme we found that
our activities were strongly correlated with 8 of the
17 sustainable development goals.
Our next steps are to develop strategies to enhance
our environmental and social footprint and report
against them. In the current financial year this
may include: engaging with internal and external
stakeholders to identify and prioritise material
environmental, social and governance (ESG) issues
and making a start on building a fit for purpose ESG
strategy including targets and actions.
INDUSTRY, INNOVATION AND
INFRASTRUCTURE
• We innovate to deliver new medicines and
new forms of delivery including our NasoSurf
delivery technology
• We identify health needs among the
populations we serve and through research and
partnerships bring new products to consumers
meet those needs.
REDUCED INEQUALITIES
• We support to provide healthcare in developing
nations including the provision of medicine to
combat scabies in Bougainville and improve
eyecare health in Nepal
• We make our medicines available for rare
diseases, designated with ‘orphan’ status by the
US Food and Drug Administration.
• See Sustainability (Page 27)
SUSTAINABLE CITIES AND
COMMUNITIES
• We work with government agencies to make
medicines available to under-privileged groups
• We have worked to support the communities
in which we operate through initiatives such as
the donation of product to fire fighters in New
South Wales
RESPONSIBLE CONSUMPTION
AND PRODUCTION
• We donate product that would otherwise be
wasted to charities
• We work with suppliers within regulatory
guidelines to reduce packaging, or use
environmentally friendly packaging, wherever
possible while improving the integrity of the
product.
• We maintain a Regulatory and Product
Development Oversight committee to oversee
our regulatory risk management framework, the
progress and costs of key clinical and product
development projects and the company’s
product labelling system.
PARTNERSHIPS FOR THE GOALS
• We have more than 20 global partnerships to
bring our pharmaceuticals to market
• All our critical suppliers have been risk assessed
• We have a humane animal testing policy that
addresses the 3R principles of animal research
referring to the reduction, refinement, and
replacement in the use of laboratory animals.
GOOD HEALTH AND WELL BEING
• Many of AFT’s medicines are on the World
Health Organisation’s model list of essential
medicines.
• We are committed to the development and
commercialisation of products that are backed
by clinical evidence
• We actively promote health and wellbeing in
the community with initiatives such as ‘Kiwis
thinking about health’ and ‘Aussies thinking
about health’ online education and advocacy
programmes
• We actively manage health and safety risks
of our people and actively promote a working
environment that promotes health and
wellbeing, while minimising the potential for
risk, personal ill health, or damage.
• We actively manage the risks associated with
the sale and distribution of pharmaceutical
products.
GENDER INEQUALITY
• Our product ranges across the spectrum of the
population from juvenile to age specific
• We have a diversity and inclusion policy and
actively monitor gender and cultural diversity
metrics across the company to ensure a
workplace that is free from victimisation and
harassment
• We strive to ensure that all employees and
contractors receive equal and fair treatment
in all aspects of the company’s employment
policies and practices
• We regularly benchmark AFT’s diversity
standpoint, status and objectives against
appropriate external comparators
• We seek to raise employee awareness of
workplace diversity by designing, delivering,
and measuring the effectiveness of
programmes that promote workforce diversity,
and gender equity.
• See People Health & Safety (Page 29)
DECENT WORK AND ECONOMIC
GROWTH
• We have grown revenue and earnings
consistently over two decades
• After a period of investment in the development
of our intellectual property we are now
delivering sustainable earnings that are driving
increases in shareholder value and giving us
new resources to support growth.
• Our products are diversified across a broad
range of customers including hospitals,
prescriptions and general over the counter
medicines.
• We are committed to upskilling our staff to
ensure AFT can meet the challenges in the
competitive international pharmaceuticals
sector.
• We promote a workplace culture that
emphasises accountability of its leaders to
cultivate a culture of inclusion in which the
strengths of every individual are recognised and
valued;
• See People Health & Safety (Page 29)
COMMITTED TO SUSTAINABILITYCOMMITTED TO SUSTAINABILITY
Keeping pace with governance
trends
AFT’s Corporate Governance Statement and
governance charters and policies can be found
on the investor centre of the Company’s website:
investors.aftpharm.com/Investors/. AFT’s
corporate governance charters and policies have
been approved by the Board and are regularly
reviewed by the Board and amended (as
appropriate) to reflect developments in corporate
governance practices. Further governance
disclosures are covered in the statutory
information section on page 76.
“We identify health needs
among the populations we
serve and through research
and partnerships bring new
products to consumers meet
those needs”
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
2425

A drive to get people talking about
their health has delivered a substantial
boost to charities on both sides of the
Tasman
We last year launched a trans-Tasman online
presence (facebook and websites) dedicated
to creating and sharing health and wellness
information. The facebook pages - ‘Kiwis thinking
about health’ and ‘Aussies thinking about health’
- each week deliver content to page followers
covering topics as diverse as healthy eating,
strategies to stay safe during the Covid-19
pandemic, healthy sleeping habits and alternatives
to salt.
The sites also played a key role in a fund-raising
drive that saw a total of more than $120,000
donated to three New Zealand charities and
three Australian charities. Over much of 2019
AFT donated a dollar from each Maxigesic® pack
purchased from participating pharmacies in
Australia and New Zealand to customers’ choice of
one of three charities.
The New Zealand charities were Heart Kids, LifeLine
and Look Good Feel Better, while in Australia AFT
supported the Starlight Children’s Foundation,
the Ovarian Cancer Research Foundation or the
Prostate Cancer Foundation of Australia. The New
Zealand campaign raised $10,000 for the chosen
charities while, the Australian campaign raised
nearly $115,000
Nicola Tuck, partnership executive at Starlight
Children’s Foundation, says the donation will enable
her organisation to further its mission ‘to brighten
the lives of seriously ill and hospitalised children and
young people’.
Every minute of every day, a child is admitted to
hospital in Australia and every month children
and their families make over 15,000 visits to the
organisation’s Starlight Express Rooms, medical-
free havens for sick kids filled with fun, enjoyable
activities.
Meanwhile as the needs of hospitals change during
the Covid-19 pandemic, Starlight is finding creative
new ways to keep seriously ill children and young
people connected through its programs including
through the use of technology and connecting
virtually.
“On top of looking after a sick child, there are
many challenges including having to split up the
family where Mum is with the child and Dad is
looking after the siblings. It is even more critical
now that there is a positive distraction and we can
help by introducing play, fun and laughter into this
environment,” Tuck says.
The devastating Australian bush fires tore through
communities in Queensland and New South Wales
in the summer of 2019 and 2020. But AFT was able
to support the fire fighters in the Forster area of
New South Wales with Hylo Fresh eye drops to help
relieve the eye irritation that came with the long
hours among the smoke and heat.
Relief: Forster firefighters receive Hylo Fresh drop
Talking about
health and
wellbeing
AFT’s online presence helps
trans-Tasman charities
Partnerships
Helping to protect
communities
Reduced Inequalities
Reaching out to developing
nations
AFT each year seeks to make a contribution to
reducing health inequalities in developing nations.
With the support of charities, we help to deliver
healthcare that developed nations take for granted.
Our effort in the last year was directed through
four charities: the AusViet Charity Foundation, the
Eyes4Everest, the Carmelite nuns in East Timor and
the Wesleyan Mission to Bougainville.
Ausviet: a rolling medical clinic
AFT and the AusViet Charity Foundation entered
their second year of collaboration. Building on the
work in Tra Cu (150km south of Ho Chi Minh City)
in 2018, the charity in August of 2019 visited Phu
Tho, which is located in the northern highlands of
Vietnam.
AFT provided 500 boxes of Hylofresh, 300 tubes
of Candacort Cream, 200 tubes of Crystaderm
Antiseptic Cream , 200 boxes of Cromofresh Allegey
Eye Drops, 5,000 Allersoothe tablets, 12,000 ferro
tablets, 5,000 lax tablets.
Key achievements included:
• more than 950 medical assessments on both
adults and children
• 482 dental treatments for children
• 141 physiotherapy treatments
• 119 optometry treatments.
• 45 ultrasounds.
• 100 blood tests
• 3400 prescriptions
These services and were carried out by qualified
Australian health professionals in collaboration with
local Vietnamese health workers and volunteers.
Raising hands: Michelle Yates at one of the health centres in
Bougainville
COMMITTED TO SUSTAINABILITY
Relief at the top of the world
Eyes4Everest, is a charity that delivers eyecare for
Himalayan communities. It was founded in 2013
by Sydney optometrist Shaun Chang, who after
trekking near Everest in Nepal in 2013 was moved
by his discovery that people in the region were not
getting even the most basic eyecare.
In 2019 it examined 478 patients in the Everest and
Annapurna regions of Nepal, distributed 99 sets of
glasses. AFT has contributed to the work with the
donation of 50 boxes HyLo Forte drops meeting a
critical need for a population which suffers from a
high prevalence of dry eye syndrome.
Dry eyes: treating a Nepalese man with Hylo Forte
“We support to provide
healthcare in developing
nations including the provision
of medicine to combat scabies
in Bougainville and improve
eyecare health in Nepal”
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
2627

The Covid-19 pandemic has tested the mettle of our
people and they have shown themselves not to be
wanting. Amid a growing realisation that the virus
would spread globally we moved quickly to protect
our people.
A skeleton staff was maintained at all our offices
and most of our people moved to remote working.
As we have always operated a highly mobile
workforce, the move did not represent a major
challenge to our staff nor systems.
Despite these constraints the team worked together
well to manage supply to our international licensees
and the flow of product to our home markets – this
included working to overcome constraints such
as the Indian Government’s ban on the export of
products containing paracetamol.
The way we have worked through the Covid-19 crisis
and prospered reflects a commitment by all people
working in the company to provide a working
environment that promotes health and wellbeing,
while minimising the potential for risk, personal
injury, ill health or damage.
In addition to the specific actions taken to support
the health and wellbeing of our staff during the
Covid-19 pandemic we continued to develop a
wellness program to support our staff. This included
management training on harassment, bullying and
discrimination; providing employees with free flu
vaccinations; providing staff with an employee assist
programme; as well as providing employees with
optional physical and mental health assessments.
AFT’s people
rise to a
challenge
Proving their worth in a
crisis
AFT’S Luke Houghton and three other AFT team members raised
$1,000 for Heart Kids New Zealand with the 360 heart stopper ice
challenge.
AFT promotes a workplace culture that emphasises
accountability of its leaders to cultivate a culture
of inclusion in which the strengths of every
individual are recognised and valued. We know that
building diversity will deliver enhanced business
performance.
AFT is proud to have a workforce consisting
of many individuals with diverse skills, values,
backgrounds, ethnicities and experiences. In the
financial year to 31 March 2020 AFT’s 86 employees
came from 29 different cultural backgrounds and
birthplaces, with a gender split of 58% women and
42% men and an age spread of employees ranging
from 20 years to 75 years (average age 42 years
old).
During the year we took the following steps to
continue to develop and maintain a diverse and
inclusive working environment:
• We undertook an annual merits-based
remuneration review, which provided visibility
to management in relation to parity of working
conditions and pay across its workforce. The
review did not highlight any material pay disparity
based on gender, taking into account experience
and accountabilities of comparable roles.
• We continued to actively monitor and review
gender and cultural diversity metrics on
a quarterly basis across the business by
department and geography.
• We reviewed the reasons for any significant
deviations from company averages and targets
to seek to understand whether any unconscious
bias was occurring at the recruitment and/or
promotion stage. It was noted that in the few
cases where gender disparities were identified
within teams, there tended to be a much higher
applicant rate of that gender when recruiting new
members to those teams. This factor is taken into
consideration when making future hires, aiming to
correct the imbalance over time, where possible.
• We continued to educate managers on the
importance of creating a diverse and inclusive
environment and providing awareness of
the potential for unconscious bias in people
management processes. We have implemented
a formal managers’ training programme from an
external company for maintaining our current
diversity of culture, age and gender across
departments.
• We continued to provide refresher training to all
staff annually on the importance of AFT’s Code of
Culture and Ethics. This training is also included in
the induction programme for all new staff.
In the year ahead the Company will continue to
monitor and benchmark against the same diversity
and inclusion objectives adopted in respect of the
year ended 31 March 2020 (as detailed above). In
addition, it is intended that AFT’s gender diversity
be benchmarked against peers.
Gender Composition of AFT’s Workforce
The respective numbers and proportions of men and women at various levels within the AFT workforce as
at 31 March 2020 and 31 March 2019 are set out in the table below:
FemaleMale
2020201920202019
Directors114%114%686%686%
Officers
1
436%440%764%660%
Overall
workforce
5260%4858%3440%3542%
1
Officers are considered to be the CEO and his direct reports. Note that CEO, Hartley Atkinson, and Chief of Staff, Marree Atkinson are
included in both the number of directors and officers reported.
•
New Zealand
•
Australia
•
South Africa
•
China
•
Switzerland
•
Scotland
•
England
•
Phillipines
•
Malaysia
•
Canada

•
Malta
•
Romania
•
Korea
•
Singapore
•
Iraq
•
Austria
•
Iran
•
India
•
Macedonia
Under 30 21%
30-44 35%
45 and over 44%
Employees by Age Diversity
(%, as at 31 March 2020)
Employees by Birth Country Diversity
(%, as at 31 March 2020)
Female 60%
Male 40%
Employees by Gender Diversity
(%, as at 31 March 2020)

PEOPLE, HEALTH & SAFETYPEOPLE, HEALTH & SAFETY
Diversity accountability
and inclusion
Good health and
wellbeing
AFT PHARMACEUTICALS
ANNUAL REPORT 2020
2829

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
3031
AFT PHARMACEUTICALS
Consolidated
Financial
Statements
For the Year Ended 31 March 2020
Contents

Independent Auditor’s Report
31-33
Consolidated Income Statement 34
Consolidated Statement of
Comprehensive Income
35
Consolidated Statement of
Changes in Equity
36
Consolidated Balance Sheet
37
Consolidated Statement of Cash Flows
38
Notes to the Financial Statements
39-72




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 2020, 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 34 to 72,
present fairly, in all material respects, the consolidated financial position of the Group as
at 31 March 2020, 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.
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.

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
3233




Key audit matter How our audit addressed the key audit matter
Derecognition of equity accounted investment and
recognition of net assets acquired at fair value
As disclosed in note 2 and the related accounting policies set
out in note 6(c) and 6(i), the Group has acquired the
remaining 50% of the shares in Dermatology Specialties

Limited Partnership and DSGP Limited on 5 July 2019.
As a result of this transaction the company derecognised the
investment in joint venture entity of $2.3 million ($3.0 million
as at 31 March 2019) and recognised capitalised intellectual
property ($12.
5 million), trademarks ($0.1 million) and
inventory ($0.3 million) at their fair values. The Group
recognised a gain of $9.8 million from the derecognition of the
previously held investment in the joint venture and the
recognition of the net assets acquire
d.
Significant judgment and assumptions are required in
assessing the fair value of the acquired assets.

We consider this to be a key audit matter because of the size
and significance of the transaction to the current year results
and the level of judgment
involved in considering the fair
value of the acquired assets.


In performing our procedures to address the key audit
matter, we:
a)
Assessed the design and implementation of relevant
controls.
b) Read the sale and purchase agreement to
understand key terms and conditions
c) Analysed the term sheet between the parties
involved.
d) Assessed the Group’s accounting paper regarding
the transaction against the step-acquisition
requirements under NZ IFRS 3 Business
Combinations.
e) Re-performed the actual steps by reconciling to
source documentation and obtained an
understanding on how the fair value of the acquired
assets were determined.
f) Challenged the Group’s assumptions underpinning
both the fair value of the assets acquired and the
purchase price allocation to the individual account
balances through detailed review procedures and
including the involvement of our internal valuation
experts.
g) Assessed the quantitative and qualitative
disclosures made against the requirements of the
accounting standard.
h) Assessed the carrying value of the intellectual
property at balance date by reviewing the
impairment assessment prepared by the Group and
challenging the assumptions used, including the
potential impact of COVID-19 .
Revenue recognition – Licensing
The Group has different types of revenue streams: revenue
from the sale of goods, from royalties and from licensing
income as disclosed in notes 7 and 24 and the related
accounting policies as set out in note 6(e). Licensing income
includes upfront payment
s, regulatory and commercial
milestone payments.
The Group has recorded total licensing income of $3.8m (FY19
-
$1.2m) as disclosed in note 7 and 24.
Licensing income is recognised when the company has
completed substantially all its obligations under the
licensing
agreement and through until the expected finalisation of the
event. The key judgments are:

• whether performance obligations are satisfied over time
or at a point in time; and
• estimated time of meeting the regulatory milestones.
We consider this to be a key audit matter because of the
increasing significance of this revenue stream and the level of
judgment involved in determining the timing of recognition of
revenue from licensing income.



We have assessed the design, implementation and operating
effectiveness of relevant controls that ensure revenue from
licensing income is appropriately recognised.
We have also assessed the accounting memoranda, policies
and methods for revenue recognition, including compliance
with the financial reporting framework.
For a sample of licencing agreements, we:
• obtained and assessed the agreements for the
appropriate revenue recognition methodology

• t
ested individual milestone revenue entries to verify
that each revenue entry is recorded in the
appropriate period (based on when the milestone
was achieved) for the appropriate amount and,
where applicable, that the related cash receipt is
valid.

• considered the performance obligations and the
timing of the revenue recognition are in line with
the Group’s accounting policies and applicable
accounting standards.





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.
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
20 May 2020






This audit report relates to the consolidated financial statements of AFT Pharmaceuticals Limited (the ‘Company’) for the year
ended 31 March 2020 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 20 May 2020 to confirm the information included in the
audited consolidated financial statements presented on this website.

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
3435
Consolidated Statement of Comprehensive Income
For the Year Ended 31 March 2020
2020 2019
$NZ000’s $000 $000
Profit/(loss) after tax 12,692 (2,427)

Other comprehensive income

Items that may be transferred to profit and loss:
Foreign exchange difference on translation of foreign operations
(79) 101

Other comprehensive income/(loss) for the year, net of tax (79) (101)

Total comprehensive income/(loss) for the year attributable
to owners of the parent 12,613 (2,326)
Consolidated Income Statement
For the Year Ended 31 March 2020
2020 2019
$NZ000’s Note $000 $000
Revenue 7 105,597 85,127
Cost of sales (57,332) (44,397)
Gross Profit 48,265 40,730

Other income
8 535 2,237
Selling and distribution expenses
9(a) (26,203) (26,540)
General and administration expenses
9(a) (9,111) (7,202)
Research and development expenses
9(a) (1,984) (2,588)
Gain on derecognition of equity accounted investment and
recognition of net assets acquired at fair value in a step acquisition
2 9,784 -
Equity accounted loss of joint venture entity
16(b) (80) (521)
Operating profit 21,206 6,116

Finance income 22 42
Interest expense
9(a) (6,958) (5,394)
Other finance costs
9(a) (1,393) (3,023)
Profit/(Loss) before tax
9(a) 12,877 (2,259)
Tax expense
10(a) (185) (168)
Profit/(loss) after tax attributable to owners of the parent 12,692 (2,427)

Basic and diluted profit/(loss) per share
28 0.12 (0.03)

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
3637
Consolidated Statement of Changes in Equity
For the Year Ended 31 March 2020
Balance as at 31 March 2018 63,743 483 430 330 (57,644) 7,342

Profit/(loss) after tax - - - - (2,427) (2,427)
Other comprehensive income - - - 101 - 101
Total comprehensive income - - - 101 (2,427) (2,326)

Preference dividends accumulated
29 - 758 - - - 758
Movement in share options reserve - - 252 - - 252
Preference dividends paid or - - - - (935) (935)
accumulated
29
Balance as at 31 March 2019 63,743 1,241 682 431 (61,006) 5,091

Profit/(loss) after tax - - - - 12,692 12,692
Other comprehensive income - - - (79) - (79)
Total comprehensive income - - - (79) 12,692 12,613
Preference dividends accumulated
29 - 428 - - - 428
Issued share capital
20 3 - - - - 3
Movement in share options reserve - - 81 - 33 114
Preference dividends paid or
accumulated
29 - - - - (994) (994)

Balance as at 31 March 2020 63,746 1,669 763 352 (49,275) 17,255
Share
capital
Share
options
reserve
Redeemable
preference
share
reserve
Foreign
currency
translation
reserve
Retained
earnings
Total
equity
$NZ000’sNote
Consolidated Balance Sheet
For the Year Ended 31 March 2020
$NZ000’s Note 2020 2019
ASSETS
Current assets
Inventories
11 22,734 25,158
Trade and other receivables
12 25,969 19,187
Cash and cash equivalents
13 6,119 6,916
Derivative assets
23 514 -
Total current assets 55,336 51,261
Non-current assets
Property, plant and equipment
14 315 357
Intangible assets
15 26,984 8,239
Deferred income tax assets
10(b) 705 705
Right-of-use assets
14 3,712 -
Investment in joint venture entity
16(b) - 3,033
Total non-current assets 31,716 12,334
Total assets 87,052 63,595
LIABILITES
Current liabilities
Trade and other payables
17 18,292 15,098
Provisions
18 4,195 1,270
Current income tax liability 109 145
Derivative liabilities
23 - 241
Lease liabilities 506 -
Interest bearing liabilities
19 2,000 41,750
Total current liabilities 25,102 58,504
Non-current liabilities
Lease liabilities 3,495 -
Interest bearing liabilities
19 41,200 -
Total non-current liabilities 44,695 -
Total liabilities 69,797 58,504
EQUITY
Share capital
20 63,746 63,743
Retained earnings (49,275) (61,006)
Share options reserve
22(b) 763 682
Redeemable preference shares reserve 1,669 1,241
Foreign currency translation reserve 352 431
Total equity 17,255 5,091
Total liabilities and equity 87,052 63,595
For and on behalf of the Board who authorised these financial statements for issue on 20 May 2020.
Hartley Atkinson
Managing Director and Chief Executive Officer
David Flacks
Chairman

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
3839
Consolidated Statement of Cash Flows
For the Year Ended 31 March 2020
$NZ000’s Note 2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 99,165 84,131
Payments to suppliers and employees (84,064) (82,915)
Tax (paid) (223) (149)
Net cash generated from operating activities
21 14,878 1,067


CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (92) (140)
Purchase of intangible assets (6,470) (3,325)
Investment in joint venture - (1,419)
Net cash used in investing activities (6,562) (4,884)


CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of staff share options 3 -
Dividends paid (566) (134)
Payment for lease liabilities (535) -
New borrowings
19 58,200 7,417
Borrowings repaid
19 (60,320) -
Interest received 22 42
Interest paid on lease liabilities (299) -
Interest costs paid on borrowings (5,601) (3,602)
Finance costs paid (22) -
Net cash (used in)/generated from financing activities (9,118) 3,723

Net increase/(decrease) in cash (802) (94)
Impact of foreign exchange on cash and cash equivalents 5 240
Opening cash and cash equivalents 6,916 6,770
Closing cash and cash equivalents 6,119 6,916
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2020
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 consolidated 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 an FMC reporting entity under the Financial Markets Conduct Act 2013, and is listed on
both the NZX and ASX.
These consolidated 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 consolidated 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 consolidated financial statements are authorised for issue on 20 May 2020 by the Directors.
1. (b) GOING CONCERN
On 31 March 2020 the Group repaid the CRG loan and refinanced with a three year loan from Bank of New
Zealand (BNZ). The BNZ loan at 31 March 2020 was $43.2m ($41.8m at 31 March 2019 - CRG) and the cash
balance at 31 March 2020 was $6.1m ($6.9m at 31 March 2019).
The Group generated an operating profit for the year ended 31 March 2020 of $21.2m ($6.1m for the year
ended 31 March 2019) and a net operating cash inflow for the year ended 31 March 2020 of $14.9m ($1.1m
for the year ended 31 March 2019).
Under the terms of the BNZ loan, $10m is repayable over the three-year term, with $2m repayable in the
first year. The Directors have a reasonable expectation that the Group will be in a position to repay this $2m
on or before 31 March 2021 from positive operating cash flows, the significant saving in interest costs 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 Group, like every other organization and individual, is impacted by the global Covid19 pandemic.
Pharmaceuticals are classified as an essential service and the Group has continued to operate through
this situation. The initial impact on the Group overall has been favourable with an increase in demand
for specific products such as Analgesics (e.g. Maxigesic), Vitamin C Liposachets, Cold and Flu products
and Antibiotics. In the local Australasian market, the Group has a broad product portfolio across many
therapeutic areas which are largely unaffected in a sales sense by Covid19 pandemics since the associated
medical conditions continue and regardless require treatment. The Group where possible has multiple
manufacturing sites for its main products such as Maxigesic and these also feature different geographies to
lessen country risk.
However, Covid19 is an evolving issue worldwide and the Directors continue to monitor the full economic
and financial impacts to the Group.
Potential areas of impact are sales volumes and prices, supply timing/interruption and pricing, with the
resulting stock levels and cash flow timings. Average stock holdings are five months which is conservative in
comparison with a number of competitors.

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
4041
The forecasts and sensitivities have been reviewed in light of Covid19 and the Directors are satisfied that
these remain in compliance with applicable debt covenants and, as a consequence the going concern
assumption is appropriate.
2. SIGNIFICANT TRANSACTIONS AND EVENTS FOR THE CURRENT PERIOD
The joint venture, Dermatology Specialties Limited Partner (“DSLP”), was originally formed in June 2015
for the development and commercialisation of the product, Pascomer, which uses the active ingredient
Rapamycin for the topical treatment of indications commencing with facial angiofibromas in tuberous
sclerosis. DSLP has been equity accounted prior to acquisition with the investment at 31 March 2019 being
carried at $3.0m and at acquisition date being carried at $3.0m.
The Group acquired the remaining 50% of DSLP and its general partner DSGP Limited, from its joint venture
partner Tardimed Sciences LLC on 5 July 2019 and these have been fully consolidated from this date.
As a result of the transaction, the Group retained the rights to the intellectual property, future product sales
and royalties. Timber Pharmaceuticals LLC (“Timber”), of which Tardimed Sciences LLC is the shareholder,
acquired the North-American distribution rights. This transaction did not require any cash payment by the
Group.
The Group also entered into an out-license agreement with Timber, under which the Group has received
revenues from the upfront milestone and expects to receive future revenues from development, registration
and commercial milestones as well as product sales and royalties.
The Group engaged external independent valuers to assist in determining the fair value of the Pascomer
intellectual property. Taking into account the inherent uncertainties of both the successful conclusion of
clinical trials and the successful registration with orphan status, the Group has determined the provisional
fair value of the Pascomer intellectual property to be $12.5m.
The following provisional fair values have been recognised in these consolidated financial statements in
respect of DSLP:
Intangible asset – Pascomer IP $12.5m
Inventory $0.3m
Trade marks $0.1m
Gain on derecognition of equity accounted investment and $9.8m
recognition of net assets acquired at fair value in a step acquisition
As a result of this transaction, intangible assets have increased by $12.5m. The remaining increase in
intangible assets relate to capitalised registration and development costs, patents and trademarks acquired
which are not connected with the transaction described above.
The clinical trials have been progressing positively and other than for the a slow down resulting from
Covid19, as discussed above, the Group remains confident of a successful outcome and have accordingly
retained the provisional fair value.
3. ADOPTION OF NEW AND REVISED STANDARDS
NZ IFRS 16: LEASES
General impact of the new NZ IFRS 16
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 supersedes the previous
lease guidance including NZ IAS 17 Leases and the related interpretations when it became effective for
accounting periods beginning on or after 1 January 2019. The date of initial application of NZ IFRS 16 for the
Group was 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. For the adoption
of NZ IFRS 16 the Group has used practical expedients NZ IFRS 16 C3 to not reassess whether a contract
is, or contains, a lease at the date of initial application. Also it made use of the practical expedient to not
make any adjustment on transition for leases for which the underlying assets if of low value. The weighted
average incremental borrowing rate is 7.27%.
Impact of the new NZ IFRS 16 definition of a lease
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 right-of-use asset is
controlled by the customer. Control is considered to exist if the customer has, throughout the period of use
– The right to obtain substantially all of the economic benefits from the use of an identified right-of-use
asset; and
– The right to direct the use of that asset.
Impact on Lessee Accounting
NZ IFRS 16 changes how the Group accounts for leases previously classified as operating leases under NZ
IAS 17, which were off-balance sheet.
At transition date, the Group recorded right-of-use assets of $4,119k (at balance date $3,712k) and lease
liabilities of $4,260k (at balance date $4,001), with the previously held lease incentive of $141k written off
against the right-of-use assets. There was no impact on retained earnings.
On initial application of NZ IFRS 16, for all leases (except as noted below), the Group has:
a) Recognised right-of-use assets and lease liabilities in the consolidated balance sheet, initially measured
at the present value of the future lease payments;
b) Recognised depreciation of right-of-use assets and interest on lease liabilities in the consolidated income
statement;
c) Separated the total amount of cash paid into a principal portion and interest, both presented within
financing activities in the consolidated statement of cash flows.
Lease incentives (e.g. rent-free period) have been recognised as part of the measurement of the
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 March 2020

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
4243
right-of-use assets 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.
At initial application of NZ IFRS 16, the Group applied the practical expedient and rely on its assessment
whether leases are onerous immediately before the date of initial application as an alternative to performing
an impairment review.
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 has opted to recognise a lease expense on a straight-line basis
as permitted by NZ IFRS 16. This expense is presented within general and administrative expenses in the
consolidated income statement.
The table below shows the amount of adjustment for each consolidated financial statement line item
affected by the application of NZ IFRS 16 for the current reporting period.

$NZ000’s 2020
Impact on Income Statement

increase in depreciation expense 692
Increase in finance costs 299
Decrease in other expenses (834)
Decrease in profit for the year 157
Impact on earnings per share
Basic -
Diluted -
(i) The application of NZ IFRS 16 to leases previously classified as operating leases under NZ IAS 17 resulted
in the recognition of right-of-use assets and lease liabilities. It resulted in a decrease in “general and
administrative expenses” and an increase in interest expense.
(ii) Lease incentive assets previously recognised with respect to operating leases have been derecognised
and the amount factored into the measurement of the right-of-use assets.
The application of NZ IFRS 16 has an impact on the consolidated statement of cash flows of the Group.
Under NZ IFRS 16:
• Payments for short-term leases and leases of low-value assets and variable leases payments not
included in the measurement of the lease liability within the operating activities have been included in
payments to suppliers and employees
• Cash paid for the interest portion of lease liability are included as part of financing activities
• Cash payments for the principal portion of lease liability are included as part of financing activities.
Under NZ IAS 17, all lease payments for operating leases were presented as part of cash flows from
operating activities. Consequently, the net cash generated by operating activities has increased by
$834,000 and net cash used in financing activities has increased by the same amount.
The Group has examined its current borrowing structure and taken into account both current and forecast
economic conditions, costs of capital and a premium for its risk profile. This has resulted in differing
Incremental borrowing rates (IBR) for premises and other leases, and different rates in New Zealand and
Australia, as per the following table:

New Zealand – Buildings - 7.00%
New Zealand – Vehicles and equipment – 8.00%
Australia – Buildings – 7.30%
Australia – Vehicles and equipment – 8.50%
These IBR were used by the Group to calculate the lease liability at the date of initial application. The Group
used different rates due to the difference in nature of the assets and their geographic location.
The Group has used the practical expedient of applying a single discount rate to a portfolio of assets in
each country where it holds right-of-use assets. In determining the discount rate to use, the Group reviewed
publicly available rates for Government bonds, BNZ Swap rates and Treasury risk free discount rates and
then applied an adjustment to these rates to allow for a company specific credit risk. The Group does not
consider any of its leases to be onerous.
At 31 March 2019, The Group disclosed lease commitments of $3,243,000. As at 1 April 2019, the value of
leases discounted at the incremental borrowing rate at the date of initial application was $4,260,000. The
IFRS inclusion of likely future lease renewals has impacted due to a longer lease being envisaged.
The differences between the operating lease commitment of $3,243,000 and the recorded liability of
$4,260,000 is:
NZ$000’s
Operating lease commitments at 31 March 2019 3,243
Short term leases not included in lease liabilities -
Extension option reasonably expected to be exercised 2,837
Gross lease liabilities at 1 April 2019 6,080
Effect of discounting (1,820)
Lease liability at 1 April 2019 4,260
4. NEW ACCOUNTING POLICIES
The Group as lessee
The following accounting policy has been adopted since 1 April 2019.
The Group assesses whether a contract is or contains a lease at inception of the contract. The Group
recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements
in which it is the lessee, except for short term leases (leases less than 12 months duration), and leases of
low value assets. For these leases the group recognises the lease payments as an operating expense on a
straight-line basis over the term of the lease.
The lease liability is initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily
determined the Group uses its incremental borrowing rate.
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 March 2020

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
4445
The lease liability is presented as a separate line in the consolidated balance sheet.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the
lease liability (using the effective interest rate method) and by reducing the carrying amount to reflect the
lease payments made.
The Group re-measures the lease liability (and makes a corresponding adjustment to the related right-of-
use asset) whenever:
• The lease term has changed or there is a change in the assessment of exercise of a purchase option, in
which case the lease liability is re-measured by discounting the revised lease payments using a revised
discount rate
• The lease payments change due to changes in an index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease liability is re-measured by discounting the revised
lease payments using the initial discount rate (unless the lease payments change due to a change in a
floating interest rate, in which case a revised discount rate is used)
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in
which case the lease liability is re-measured by discounting the revised lease payments using a revised
discount rate.
The Group did not make any such adjustments during the periods presented.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease
payments made at or before the commencement day and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site
on which it is located or restore the underlying asset to the condition required by the terms and conditions
of the lease, a provision is recognised and measured under NZ IAS 37. The costs are included in the related
right-of-use asset.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying
asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects
that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the
useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the balance sheet.
The Group applies NZ IAS 36 to determine whether a right-of-use asset is impaired and accounts for any
identified impairment loss as described in the “property, plant and equipment” policy in the consolidated
financial statements dated 31 March 2020.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease
liability and the right-of-use asset. The related payments are recognised as an expense in the period in
which the event or condition that triggers those payments occurs and are included in the line “general and
administrative expenses” in the income statement.
5. NEW AND REVISED NZ IFRS STANDARDS IN ISSUE BUT NOT YET EFFECTIVE
At the date of authorisation of these financial statements, there are no new and revised NZ IFRS Standards
that have been issued that affect the Group.
NZ IFRS 17 (a new standard for Insurance contracts) is not expected to impact the Group in this or future
accounting periods.
6. 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 (NZ IFRS), and interpretations
issued by the NZ IFRS Interpretations Committee (NZ 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.
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.
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.
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 March 2020

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
4647
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 consolidated 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 note 15), licensing income and the
appropriateness of the intangible asset - Pascomer IP valuation (refer note 2) are considered critical
estimates and judgements.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the consolidated 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 and international growth grants 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.
• International growth grant
International growth grant income is recognised when eligible international growth 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 & 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
consolidated 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 & equipment and depreciation rates:
Category Depreciation rate (%)
Plant and Machinery 21% to 80%
Furniture and fittings 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 consolidated 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:
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 March 2020

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
4849
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 and the Pascomer IP are considered to have indefinite useful lives while they continue
to protect revenue streams. They 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.
(j) Goods & 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 previous 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 consolidated 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
Short term operating leases excluded from the scope of NZ IFRS 16 are charged in the consolidated income
statement on a straight line basis over the term of the lease. Refer to notes 3 and 4.
(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 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
over the term of the borrowing.
(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.
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 March 2020

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
5051
(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 22(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 cashflows 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.
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.
7. REVENUE FROM OPERATIONS
2020 2019
Sale of goods 101,416 83,649
Royalty income 356 255
Licensing income 3,825 1,223
Total revenue 105,597 85,127

8. OTHER INCOME
2020 2019
International growth and research and development grants 393 378
Other income 142 1,859
Total other income 535 2,237
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 March 2020

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
5253
9(a). NET OPERATING PROFIT
$NZ000’s Note 2020 2019
Profit/(loss) before tax 12,877 (2,259)
After charging the following specific expenses:
Finished goods material component of cost of goods sold 56,626 43,272
Inventory write off 706 1,125
Audit fees and review of financial statements
9(b) 240 156
Rental expenses 50 580
Operating leases - motor vehicles and equipment - 463
Share options expense 114 252
Short term employee emoluments:
1

Selling and distribution expenses 6,525 7,184
General and administration expenses 2,162 1,929
Research and development expenses 1,613 1,540
10,300 10,653
Research and development expenses
Product development 333 914
New market development 1,651 1,674
1,984 2,588
Depreciation:
Plant and machinery 92 82
Furniture and fittings 24 25
Vehicles 6 8
ROU equipment 54 -
ROU vehicles 319 -
ROU buildings 319 -
814 115
Amortisation
Patents 142 128
Software 34 54
Development costs 40 22
Registration costs 70 -
286 204
Finance costs:
Interest on borrowings 6,659 5,394
Interest on lease liabilities 299 -
Foreign exchange losses/(gains) 2,127 2,624
Derivative losses/(gains) (756) 417
Other financing costs/(gains) 22 (18)
8,351 8,417

1
This includes contributions recognised as an expense for defined contributions 361 343
9(b). FEES PAID TO AUDITORS
$NZ000’s 2020 2019
Audit of financial statements
Audit of annual financial statements 208 131
Review of interim financial statements 32 25
Total fees for audit and review services 240 156
Other services
Tax due diligence services - Deloitte 14 19
Other services - 15
Total fees paid to Deloitte 254 190
10. INCOME TAX
$NZ000’s 2020 2019
(a) Tax expense
Profit/(Loss) before tax 12,877 (2,259)

Tax calculated at domestic tax rates applicable 3,606 (633)
Adjustment due to different tax rates of subsidiaries operating
in different jurisdictions 1,251 3
Tax on income not assessable (2,697) -
Tax on expenses not deductible 39 82
Tax on losses recognised (2,199) 546
Non resident withholding tax 185 170
Tax expense/(benefit) 185 168

Comprising:
Current tax 185 171
Deferred tax - (3)
$NZ000’s 2020 2019
(b) Deferred tax balance
Deferred tax asset 705 705
Deferred tax asset 705 705
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 20209, the Group recognised deferred tax assets on temporary differences
totalling $705,000 (2019 $705,000) since it was foreseeable that temporary differences could be offset
against future taxable profits. On the basis of the approved business plans of subsidiaries, The Group
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.
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 March 2020

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
5455
The movement in deferred tax is :
Provisions Recognised Total
$NZ000’s Tax losses
31 March 2018 708 - 708
Movements (479) - (479)
Recognition of losses - 476 476
31 March 2019 229 476 705
Movements (439) - (439)
Recognition of losses - 439 439
31 March 2020 (210) 915 705
The amount of tax loss carried forward that is available for future utilization is $44,078,210
(FY2019: $54,734,235)
$000’s
c) Imputation and franking credits available for use
NZD -
AUD 322
11. INVENTORIES
$NZ000’s 2020 2019
Finished goods 23,692 25,805
Provision for obsolescence (958) (647)
22,734 25,158
Finished goods comprises pharmaceutical goods ready for resale.
The value of inventory is transferred to cost of sales in the income statement when sold.
12. TRADE AND OTHER RECEIVABLES
$NZ000’s 2020 2019
Trade receivables 26,861 20,775
Provision for bad debt (32) (31)
Less provision for customer rebates (4,202) (4,466)
Prepayments & sundry debtors 3,342 2,909
25,969 19,187
Ageing of overdue trade debtors
$NZ000’s 1-30 Days 31-60 Days 61-90 Days 90+ Days Total
31 March 2020 2,829 378 171 480 3,858
31 March 2019 3,272 - 6 370 3,648
All balances are expected to be settled within the next 12 months.
The expected credit loss (ECL) allowance provision has been determined as follows:
As at 31 March 2020
$NZ000’s Current +1 Month >1 Month Total
Expected loss rate * * 0.03%
Gross Carrying Amount 23,003* 2,829* 1,029* 26,861
Expected credit loss allowance provision 32
Short term loss allowance provision -
Long term loss allowance provision 32
*Expected credit losses are negligible.
The average credit period on sale of goods is 46 days (2019: 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 (2019: nil).
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 March 2020

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
5657
13. CASH AND CASH EQUIVALENTS
$NZ000’s 2020 2019
Cash at bank 6,095 6,897
Cash on hand 24 19
Total cash 6,119 6,916
Cash at bank earns, on average, less than 1% of interest.
14. PROPERTY PLANT & EQUIPMENT
Furniture
Plant and and ROU ROU ROU
machinery fixtures Vehicles buildings vehicles equipment Total
$NZ000’s
(a) Cost
Balance at 31 March 2018 841 426 201 - - - 1,468
Additions 131 9 - - - - 140
Disposals - (1) (27) - - - (28)
Balance 31 March 2019 972 434 174 - - - 1,580
Additions 88 4 - 3,472 707 186 4,457
Disposals (37) (5) - - (15) - (57)
Balance at 31 March 2020 1,023 433 174 3,472 692 186 5,980

(b) Depreciation
Balance at 31 March 2018 (724) (248) (166) - - - (1,138)
Annual charges (82) (25) (8) - - - (115)
Disposals - - 30 - - - 30
Balance 31 March 2019 (806) (273) (144) - - - (1,223)
Annual charges (92) (24) (6) (319) (319) (54) (814)
Disposals 28 2 - - 54 - 84
Balance at 31 March 2020 (870) (295) (150) (319) (265) (54) (1,953)

(c) Carrying amounts
Balance at 31 March 2019 166 161 30 - - - 357
Balance at 31 March 2020 153 138 24 3,153 427 132 4,027
15. INTANGIBLE ASSETS
Key estimates and assumptions
Pascomer IP and Trademarks are assessed annually for impairment by estimating the future cash flows, with
key assumptions being forecast earnings and any capital expenditure requirements. The forecast financial
information is based on independent market data, together with past experience and future expectations of
performance. The major inputs and assumptions used in performing an impairment assessment that require
judgement include revenue forecasts, operating cost projections, patient numbers, market size and market
share, discount rates, and growth rates. The Group engaged external valuers during the year to assist in
determining the fair value of the Pascomer IP (see note 2).


Pascomer Capitalised Capitalised
IP Trademarks registration development Patents Software Total
$NZ000’s
(a) Cost
Balance at 31 March 2018 - 694 - 2,465 2,407 515 6,081
Additions - 111 1,430 1,452 315 17 3,325
Disposals - - - - - - -
Balance 31 March 2019 - 805 1,430 3,917 2,722 532 9,406
Additions 193 903 5,840 292 1 7,229
Additions from business
combinations 12,500 - - - - - 12,500
Disposals - (262) (436) - - - (698)
Balance at 31 March 2020 12,500 736 1,897 9,757 3,014 533 28,437


(b) Amortisation
Balance at 31 March 2018 - - - - (552) (411) (963)
Amortisation - - - (22) (128) (54) (204)
Disposals - - - - - - -
Balance 31 March 2019 - - - (22) (680) (465) (1,167)
Amortisation (70) (40) (142) (34) (286)
Disposals - - - - -
Balance at 31 March 2020 - - (70) (62) (822) (499) (1,453)


(c) Carrying amounts
Balance at 31 March 2019 - 805 1,430 3,895 2,042 67 8,239
Balance at 31 March 2020 12,500 736 1,827 9,695 2,192 34 26,984
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 March 2020

AFT PHARMACEUTICALS
ANNUAL REPORT 2020
5859
16(a). INVESTMENT IN SUBSIDIARIES

Interest held Country
2020 2019 of Principal
% % incorporation activities
AFT Pharmaceuticals (AU) Pty Ltd 100% 100% Australia Distribution of
pharmaceuticals in Australia
AFT Pharmaceuticals Singapore Pte Ltd 100% 100% Singapore Registration of
pharmaceuticals in Singapore
AFT Pharmaceuticals (S.E. Asia) Sdn Bhd 100% 100% Malaysia Registration of
pharmaceuticals in Malaysia
AFT Orphan Pharmaceuticals Limited 65% 65% New Zealand No activity
AFT Limited Partner Limited 100% 100% New Zealand Sole partner in
Dermatology Specialties LP
Dermatology Specialties Limited Partnership 100% 50% New Zealand No activity
DSGP Limited 100% 50% New Zealand General Partner of
Dermatology Specialties LP
AFT Dermatology Limited 100% 100% New Zealand Distribution of pharmaceuticals
All subsidiaries have a balance date of 31 March.
16(b). INVESTMENT IN JOINT VENTURE PARTNERSHIP

$NZ000’s 2020 2019
Interest in joint venture company at cost - 5,764
Accumulated Equity accounted earnings / (losses) of joint venture partnership - (2,731)
Net equity investment in joint venture partnership - 3,033
The joint venture partnership of the Group and its activities are as follows:

$NZ000’s 2020 2019
Interest Interest
held held
Dermatology Specialties LP (incorporated in New Zealand) 100% 50%
Principal activities: Development and distribution of pharmaceuticals

$NZ000’s 2020 2019
Balance at start of year 3,033 2,135
Investment during the year - 1,419
Share of current year loss (80) (521)
Derecognition on acquisition of controlling interest (2,953) -
Balance at end of year - 3,033

The following table summarises the financial information relating to the Group’s DSLP activity and
represents 100% of the DSLP net assets, revenues and net profits.
$NZ000’s 2020 201
Extracts from DSLP balance sheet
Current assets N/A 352
Non-current assets N/A 2,214
Current liabilities N/A (96)
Non-current liabilities N/A -
Net Assets N/A 2,470
Extracts from DSLP income statement
Revenue N/A -
Net loss after taxation N/A (1,042)

The DSLP entity is included in the consolidated group for FY 2020 and did not have any contingent
liabilities or capital commitments at the prior year balance date.
17. 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 2020 2019
Trade payables 8,622 6,673
GST payable 1,467 884
Employee entitlements 919 1,299
Other payables and accruals 7,284 6,242
18,292 15,098
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 March 2020