Annual Report

GROWING
amid global disruption
ANNUAL REPORT 2021

AFT Pharmaceuticals is a growing
multinational pharmaceutical
business with a broad range
of products, both those it has
developed itself and in-licensed
from third parties.
AFT’s products cover all major
pharmaceutical distribution
channels: over the counter,
prescription, and hospital.
Historically, AFT’s home markets
have been Australia, New Zealand,
and Asia. However, the company is
out licensing its own products to
licensees and distributors to sell in
an increasing number of countries
around the world.
The company’s intensive Research
and Development program forms
the basis of its international sales
strategy.
For more information, visit our website
www.aftpharm.com
CONTENTS
At a Glance 4-5
Chairman & CEO’s Report 6-10
Business Focus:
- Regional Performance
11-13
- Maxigesic 14-17
- Research & Development 18-19
Sustainability
20-23
People Health & Safety
24-29
Directors 30-31
Management
32-33
Non-GAAP Financial Information
34
Auditors Report 37-39
Financial Statements 40-73
Statutory Disclosures 74-86
Directory 86-87
This report provides a
summary review of AFT’s
operational and financial
performance for the year to
31 March 2021 and should be read
in conjunction with the company's
financial statements on pages
40 to 73 of this report.
The information provided in this
report has been compiled in accordance
with relevant law, rules and corporate
governance recommendations for investor
reporting. Financial information has been
prepared in accordance with appropriate
accounting standards and has been audited by
Deloitte.
Throughout this report we have focused on what
we believe matters most to our stakeholders and our
business. We have endeavoured to ensure all information
is accurate through internal verification and other approval
processes.
3
2

AFT SNAPSHOT
Revenue: $68.30m up
11%
Operating profit
$7.90m
Growth Drivers
- Over the counter sales
- New products
- Broad product range
- Antibiotic sales
Revenue: $30.50m up
1%
Operating profit
$4.0m
**
Growth Drivers
- Antibiotic sales
- New products
Revenue: $4.40m down
10%
Operating profit
$1.50m
Growth Drivers
- Transition to higher
margin hospital and
prescription products
Revenue: $9.90m up
9%
Operating profit
$1.40m
Growth Drivers
- New launches
$61.4m
$4.9m
$9.1m
$30.1m
$68.3m
$4.4m
$9.9m
$30.5m
Australia
New Zealand
Rest of the World
Asia
AUSTRALIANEW ZEALANDASIAINTERNATIONAL
AFT SNAPSHOT
FY21 FINANCIAL HIGHLIGHTS
Total revenue
$
113.1m
Operating profit
$
10.8m
Profit after tax
$
7.8m
Total assets
$
104.7m
Up 7% from $105.6 million despite disruptions of
Covid-19
Down 5% on an underlying basis* from $11.4 million
amid Covid-19 disruption
Profit after tax on an underlying basis* more than
double the prior year's result
Up 20.2% from $87.1 million following inventory
increases to ensure supply security
*AFT has used the non-GAAP measures of underlying operating profit and underlying profit after tax and when discussing financial
performance in this document. Definitions and reconciliations can be found on page 34 of this report.
**Excluding Head Office costs
FY21 OPERATIONAL HIGHLIGHTS
REVENUE BY MARKET FY2021
AN ENDURING RECORD OF GROWTH
REVENUE BY MARKET FY2020
*Excludes head office costs.
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
4
5

FOCUS ON FUTURE GROWTH
CONTINUES
“We can
look through
the current
turmoil and we
remain confident
that we can continue
to build on our long
record of growth
”
CHAIRMAN AND CEO’S REPORT
Dear shareholders,
The 2021 financial year has been one of the more challenging in AFT Pharmaceutical’s history as
business conditions tightened around the world in the wake of the pandemic. Nevertheless, as
we report another year of record revenue and a more than doubling in underlying earnings, we
can look back on the year with a sense of achievement.
We have delivered these improved financial results
in the face of multiple Covid-19 supply disruptions,
delays to product launches, to regulatory approvals
and to manufacturing audits around the world.
Negotiations on licensing and distribution
agreements have taken longer than we planned,
while lockdowns, travel restrictions and
government-imposed limits to medicine supply
have disrupted sales through our Over the Counter,
Hospital and Prescription channels.
We have dealt with the immediate challenges by
adapting AFT’s operations. We have launched
new products that directly address the new health
challenges we face, including hand sanitisers and
face masks.
We have increased inventories to manage supply
disruptions, particularly in those products where
we have seen a surge in Covid-19 related demand,
including antibiotics, vitamins and our pain
management medicines.
We have diversified our manufacturing base.
Maxigesic tablet manufacturing, for instance, now
has more geographic diversification with production
in India and China and with a European site also
close to becoming available. We have also re-
engineered our business to engage more online with
our stakeholders around the world, in addition to
dealing with them face-to-face.
But importantly, we have still retained our focus
on the long-term. We are repurposing existing
medicines, leveraging our network of international
partnerships and then drawing on our years of
experience working with regulators, suppliers and
distributors to bring these medicines to market.
Over the last year, on multiple counts, we have
continued to execute on this strategy. Consequently,
we can look through the current turmoil and we
remain confident that we can continue to build on
our long, and uninterrupted, record of growth.
FINANCIAL PERFORMANCE
Our results demonstrate resilience, with group
operating revenue for the year to 31 March 2021,
growing 7% to $113.1 million from $105.6 million in
the prior financial year.
All our regions were disrupted by the pandemic.
Our largest market Australia grew by 11%, but below
what we see as the country’s long-term potential.
Our Rest of the World segment, which is principally
focused on the commercialisation of Maxigesic,
grew by 8%. Revenue in our Asian business fell by
10% largely due to its transition to higher-margin
hospital products, while growth in New Zealand, up
1%, was hampered by Covid-19 restrictions.
Further detail on the performance of the regions is
covered on page 11 of this report.
However importantly, underlying profit after
tax more than doubled to $7.8 million from an
underlying $2.9 million in the prior year, with the
David Flacks Chairman (left)
Dr Hartley Atkinson Founder & CEO
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
6
7

CHAIRMAN AND CEO’S REPORT
ProductMaxigesic tabletsMaxigesic IVMaxigesic oral solution
Territories31 March
2021*
31 March
2020
31 March
2021*
31 March
2020
31 March
2021*
31 March
2020
Licensed125+125+100+80100+100+
Registered4944213--
Sold in43283---
*Post balance date we licensed Maxigesic IV in the US and six countries of Latin America.
increase due principally to significant financing
cost savings achieved from the debt restructuring
in early 2020. The prior year’s reported net profit
of $12.7 million benefited from a $9.8 million non-
recurring gain related to AFT taking full control of
the Pascomer dermatological medicine intellectual
property.
Gross profit grew by 1% to $48.8 million from $48.3
million in the prior year, with revenue growth offset
by a margin decline of 2.6 percentage points to 43%
primarily due to Covid-19 impacts. Licence income
(at a 100% margin) was lower while we endured
higher costs due to a weakening of the Australian
and New Zealand dollars through the earlier months
of the pandemic.
Additionally, freight costs, in particular, rose as we
made more use of air freight to build up stock levels
to ensure continuity of supply. Over the longer term
we expect expenses as a proportion of total revenue
to continue to reduce as revenue from the Rest of
the World grows.
Selling and distribution expenses were steady
at 24% of operating revenue. General and
administration expenses declined to $7.8 million
from $9.1 million due primarily to lower legal fees.
Underlying operating profit (adjusted for the $9.8
million non-recurring gain in FY2020) declined
marginally to $10.8 million from $11.4 million in the
prior year.
MAXIGESIC AND NEW PRODUCTS
The potential of our Australian business and
the continued commercialisation of Maxigesic
around the world represent the largest immediate
opportunities for the company.
We have made very good progress with Maxigesic
in terms of advancing licensing and registrations
particularly when our achievements are considered
alongside the travel bans and lockdowns.
During the 2021 financial year we increased the
number of territories where the tablet form of
the medication is sold by 15 to 43 with launches
in Canada, Eastern Europe, Germany, and Mexico
(among others). The intravenous form has been
licensed in more than 20 territories since the start of
the 2021 financial year.
Shortly after the end of the financial year we
achieved the important milestone of licensing
Maxigesic IV in the US, a deal that has the potential
to deliver milestone payments of up to US$18.8
million as well as a share of future profits.
Further detail on our Maxigesic commercialisation
programme is covered in page 14 of this report.
Meanwhile, we expect new product launches in
Australasia across our seven core therapeutic
areas of Eye care, Dermatology, Pain (including
further Maxigesic line extensions), Hospital,
Allergy, Gastrointestinal and Medicated vitamins,
to drive growth in the coming year.
RESEARCH AND DEVELOPMENT
Research development and innovation are the
engines of our future growth.
We have achieved some significant research and
development milestones. We completed our final
Maxigesic IV study of 225 patients in the US and
New Zealand despite Covid-19 shutting down many
hospitals and restricting patient enrolment. This
research was recently published in the significant
medical journal Biomedicine & Pharmacotherapy.
We have rapidly innovated to deliver products that
meet the new public health requirements including
our long-lasting hand sanitiser Crystawash® Extend.
Trials of our orphan drug, Pascomer, a topical
treatment for facial angiofibromas in tuberous
sclerosis complex, have progressed (although there
were some delays in the opening months of the
pandemic).
We have initiated the development of the first dose
form for our NasoSURF drug delivery device and
expect to start clinical studies during this financial
year. Development of NasoSURF has significant
potential to increase the number of drugs used in
100+ patented device.
Meanwhile, AFT continues to carefully run its
research and development budgets and to
investigate other sources of funding such as
international research grants, including grants
from the USA. Further detail on our research and
development initiatives are covered on page 18 of
this report.
BALANCE SHEET
AFT remains well funded following the $12 million
capital raise last year.
We had initially anticipated using the new equity to
reduce more debt. However, as the ongoing nature
of border restrictions became more apparent we
took the prudent approach of building inventory
levels which with the benefit of hindsight has proven
to be an important strategic decision.
As a direct result, total assets increased to $105.0
million from $87.1 million, due primarily to a $10.9
million increase in inventories to $33.7 million. Net
debt has fallen to $35.2 million from the $37.1 million
at last year end and we have sufficient headroom in
our facilities.
This proactive approach to inventories, which was
adopted early in the pandemic, has protected us
to some extent against the risk of stock-outs due
to shipping and manufacturing delays. We expect
to maintain significant safety stock until we see the
supply risks retreating.
GOVERNANCE
Reflecting the growing importance of international
markets to the future of AFT, the resignation of
Nate Hukill after our former major shareholder CRG
completed its planned sell down, and the planned
retirement of Jim Burns at the next annual meeting,
we appointed two new directors.
Anita Baldauf joined the Board in November 2020
and brings to the company broad international
experience in the fast-moving consumer goods
sector and corporate finance. Then, in early 2021,
US-based Dr Ted Witek joined the Board as a
non-executive director, strengthening the Board's
experience with North American pharmaceutical
regulators and markets.
Shareholders will have an opportunity to vote on
both directors at our annual meeting in August.
“We have always seen
best-practice governance
as fundamental to driving
improvements in shareholder
value. Meanwhile, as a
healthcare company,
environmental and social
outcomes naturally resonate
with us
”
MAXIGESIC COMMERCIALISATION PROGRESS
125+
Countries in
which Maxigesic
tablets are
licensed
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
8
9

CHAIRMAN AND CEO’S REPORT
David Flacks
CHAIRMAN
Dr Hartley Atkinson
FOUNDER & CEO
SUSTAINABILITY
AFT recognises the growing focus investors and
its broader community place on improving the
company’s environmental, social and governance
(ESG) performance.
We have always seen best-practice governance as
fundamental to driving improvements in shareholder
value. Meanwhile, as a healthcare company
environmental and social outcomes naturally
resonate with us.
In the last year we took steps towards formalising
these programmes into an ESG framework to
account for and to assist reporting on progress
towards planned improvements. Our programme is
set out on page 20 of this report and it will further
be developed in the coming years.
PEOPLE
The response of the AFT team to the challenges of
Covid-19 has been inspiring. As an essential business
we worked right through all lockdowns with social
distancing and personal protective equipment in
place. Moreover, we did all of this while managing
our multiple stakeholders across many different time
zones. Over the last year the lights have frequently
been on at our offices all around the world well into
the night.
AFT’s success is ultimately thanks to the efforts of
our people. On behalf of shareholders and the Board
we thank Senior Management and the broader
team for their efforts. Directors have also worked
tirelessly for the company and we would particularly
like to thank Jim Burns for his contributions and
insights in the six years he has been with the
company.
OUTLOOK
We are encouraged by the progress global health
authorities are making in key markets with their
vaccination programmes and we have seen some
positive signs in the US, Western Europe and China.
However, we are taking nothing for granted.
We continue to monitor the economic and financial
effects of the pandemic and we are particularly
attuned to the impact on sales, prices and supply
interruptions and we will continue to take steps to
mitigate these risks.
We are still pursuing plans to assess the potential
for a divided policy but first need to reduce our net
debt down to the targeted $25 million - $30 million.
The achievement of this goal will depend upon our
earnings progress and the reduction of inventory as
the pandemic effects subside.
Nevertheless, we are confident the changes we have
made in the business, our continued innovation,
and our strong network of relationships around the
world position AFT for continued success.
The outlook for the 2022 financial year is subject
to some uncertainty. However, we expect, and are
targeting, continued growth. Our best estimate is
for operating profit to range between $18 million
and $23 million.
We look forward to providing a further update at
our annual meeting in August, if not before.
REGIONAL PERFORMANCE
AUSTRALIA
Strong growth blunted by Covid-19
Sales in Australia grew by 11% to $68.3 million from
$61.4 million in the prior year, but not as fast as we
planned, principally to the disruptions of Covid-19.
Australian revenue now represents 60% of Group
Operating Revenue. Operating profits rose to $7.9
million from $7.3 million.
The OTC channel has been hindered by the Covid-19
lockdowns and restrictions but has grown at 9%
and is generating 62% of total Australian revenue.
We have introduced hand sanitizer and face masks
to assist with the Covid-19 response and these have
made a valuable contribution to sales.
Maxigesic sales were impacted by Covid-19
restrictions. However, the brand has extended its
market share lead of the paracetamol-ibuprofen
combination section of the pain management
market.
Our eyecare range continued to deliver good
growth, benefiting from the recently introduced
products including Novatears and its line extension
Novatears Omega3 and Optisoothe.
We have moved from number 3 to number 2
position in the lubricating eyecare category in
Australia and have maintained the number 1 selling
SKU.
The Hospital channel grew 13%, benefiting from
antibiotic sales in response to Covid-19, while the
Prescription channel grew at 21% with the launch of
new products. However, some prescription products,
such as penicillin, were significantly down due to the
decline in GP visits during Covid-19 restrictions.
Our significant program of new products has been
delayed by Covid-19 however, we expect them
to extend our long-standing record of growth in
this market. We have also recently increased our
salesforce to further support this planned growth.
REGIONAL
SUCCESS
UNDERPINS LONG
TERM GROWTH
“Sales in Australia grew
by 11% to $68.3 million
from $61.4 million in the
prior year
”
1 MILLION
packs sold in
a single year
Maxigesic
reaches
11
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
10

REGIONAL PERFORMANCE
NEW ZEALAND
Hospital sales growth offset by Covid-19 disruptions
Sales in New Zealand grew a modest 1% to $30.5
million from $30.1 million and represented 27%
of Group Operating Revenue. Operating profit,
excluding head office costs, of $4.0 million was also
level with the same period a year ago.
This is a good result given the significant impact
of the Covid-19 restrictions. The end of the prior
year saw strong sales of a range of Covid-19 related
products, in particular Vitamin C Lipo-Sachets and
antibiotics, and this together with the subsequent
Covid-19 restrictions impacted sales.
The OTC channel was the most impacted by
Covid-19, with sales falling 3% to $16.8 million from
$17.4 million. The record-breaking sales of Vitamin C
Lipo-Sachets at the back end of the prior year, with
the Covid-19 stockpiling, together with significantly
lower sales of products such as the Crystaderm
antiseptic cream with the lower GP visits through
the lock downs have driven this result.
The Hospital channel grew at 20% to $4.8 million
from $4.0 million with strong sales of antibiotics.
The Prescription channel grew at 2% to $8.9 million
from $8.7 million. This reflects the recovery in the
second half of the year, following the fall in the
first half of the year due to restrictions on GP visits
through the Covid-19 lock downs and government
restrictions preventing pharmacists from dispensing
more than 30 days of medicine through this period.
1
IQVIA data for sales to New Zealand pharmacies for the first quarter of the calendar 2021 IQVIA NZ Pharmacy data to Q1 2021 year showed that Vitamin C Lipo-
Sachets® reached the #1 selling product - number of sachets sold - in the liposomal Vitamin C category.
#1
IN NEW ZEALAND
Liposomal
Vitamin C
pharmacies
1
ASIA
Transition to prescription and hospital products lifts profitability
REST OF THE WORLD
Maxigesic commercialisation continues to build
The transition of the Asian business to better
margin Hospital and Prescription products saw a
modest reduction in sales, but strong improvements
in profitability. Sales in Asia declined 10% to $4.4
million from $4.9 million and generated 4% of Group
Operating Revenue. However, operating profits rose
strongly to $1.5 million from $0.1 million.
The OTC channel benefitted from pandemic
stockpiling of Maxigesic in Singapore.
We have launched a T-Mall flagship store to drive
ecommerce sales into the Chinese market and
additionally build brand recognition ahead of China
in-market launches. Early-stage sales have been
positive, but it is a long-term project albeit with
significant potential.
With sales commencing from China and in the near
future, South Korea, we have amended this segment
to be named as Asia, as opposed to Southeast Asia,
to reflect the expanded geography.
Sales in the rest of the world have grown benefitting
from sales from existing markets as well as launch
orders shipped to the new markets of Mexico,
Germany, Belgium, Luxembourg, Ireland and
Switzerland.
However, the gains have been restricted by the
ongoing impacts of Covid-19. We suffered supply
disruptions in India where manufacturing of
Maxigesic tablets is currently undertaken, while the
lockdowns impacted retail demand.
Overall sales to the rest of the world grew 8% to
$9.9 million from $9.1 million and represented 9% of
Group Operating Revenue. Sales of products and
royalties grew 47% to $7.8 million from $5.3 million,
with licence income lower at $2.1 million from $3.8
million.
We have made good progress diversifying the
manufacturing base, with the addition of a
manufacturing plant in China and soon another
in Europe. These sites will assist to mitigate these
disruptions during the current financial year.
With the vaccination roll out we are starting to see a
recovery in key markets.
Operating profit of $ 1.4 million is lower than the
normalised $4.2 last year, reflecting the lower
licence income and the prior year benefit of the
one-off $1.7 million contributions from joint venture
partners resulting from successful development
results.
The prior year’s operating profit of $14.0 million
also included the non-recurring gain on acquisition
of the joint venture Dermatology Specialty Limited
Partnership (DSLP) of $9.8 million.
REGIONAL PERFORMANCE
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
12
13

BUILDING
MAXIGESIC
PARTNERSHIPS
AROUND THE
WORLD
In the last 12 months we have
licensed Maxigesic IV in 31 new
countries and Maxigesic tablets
in four new countries, despite
Covid-19 lockdowns
The Maxigesic family of medicines offers clinicians
and healthcare providers a strong proposition. It is
an effective alternative for the treatment of post-
operative and mild to moderate pain and it also
avoids the side effects of traditional opioid-based
analgesics that have fuelled an unprecedented cycle
of addiction and abuse around the world. The tablet
version of the medicine has now been licensed in
more than 125 countries and we are progressively
licensing the other dose forms of the medicine to a
variety of partners worldwide.
The focus of our efforts over the last year has been
the intravenous form of the medicine Maxigesic
IV. Since our last annual report we have signed
13 separate licensing agreements expanding the
reach of Maxigesic IV by 31 countries, tablets and
other oral dose forms by four new countries. We
are delighted with the achievement especially since
all of the agreements were negotiated and struck
remotely as physical travel has been limited by
Covid-19.
MAXIGESIC COMMERCIALISATION MAXIGESIC COMMERCIALISATION
AFT’s new director in Europe
Eddie Townsley (pictured) joins the team to support AFT in Europe. By the end of the
financial year AFT had secured partners in 23 out of the 27 EU member states for the
tablet form of the medication. Meanwhile, we had secured Maxigesic IV partners in 22
member states. With such coverage and our expectation of growing demand for the
medicine from the region, we decided to establish a representative office and appointed
Eddie as the local director of AFT Pharmaceuticals Europe.
Eddie is an experienced pharma executive. As Managing Director of Ireland's
JED Pharma, the distributor of Maxigesic IV in Ireland, he knows the product
well and understands the potential for the medicine across the EU.
A BEACHHEAD IN THE
WORLD’S LARGEST
PHARMACEUTICAL MARKET
Maxigesic IV licensed in the US, Combogesic tablets launched in
Canada and poised for regulatory approval in the US
AFT made its first sale of Maxigesic tablets under
the Combogesic brand in Canada in December
2020, the first sale in North America and one that
we hope will be the start of a broader move across
the continent.
While this sale is a significant step in its own
right, it is the progress we have made in the last
year putting in place the foundations to take the
medicine across Canada’s southern border that
really sets the company up for sustained growth in
the region.
The first milestone was passed in the middle
of November, when the US Food and Drug
Administration said the only significant barrier to
the company obtaining registration of the tablet
form of the medication in that market was a
Good Manufacturing Practice (GMP) audit of the
company’s manufacturing facilities. The audit, which
was due to take place in 2020, was delayed because
of Covid-19 travel bans and is now due to take place
when circumstances allow.
Then in April we signed an exclusive Licence and
Distribution Agreement with Hikma Pharmaceuticals
USA for the commercialisation of Maxigesic IV,
marking the first agreement of the Maxigesic family
of medicines into the US market.
Under the terms of the licence agreement, Hikma
will have exclusive rights for the sales, marketing,
and distribution of Maxigesic IV in the US. In return
AFT will be entitled to upfront, regulatory, and
commercial milestone payments of up to US$18.8
million as well as a profit share from in market
product sales.
The potential for Maxigesic in the US is significant.
Early in 2020 the independent market research firm
Delveinsight estimated Maxigesic had the potential
to generate sales of US$291 million by 2028 and a
total of more than US$440 million of revenue if the
company successfully commercialises the medicine
in the US as well as Japan and the top five European
countries (France Germany, Italy, Spain and the UK).
While there is still some water to go under the
bridge, including regulatory approvals and further
licensing and distribution agreements, the report,
and the progress we made with Hikma in the US is
encouraging.
Hikma has a strong and respected US hospital
market presence. It is the third largest US supplier
of generic injectable medicines by volume, with a
growing portfolio of over 100 products. Today one
in every six injectable generic medicines used in US
hospitals is a Hikma product.
A MARCH OF
AGREEMENTS
Maxigesic agreements struck
since March 2020
June 2020
•
EverPharm (Maxigesic IV - Germany, Austria, Italy
and France).
July 2020
•
Medochemie - (Maxigesic IV - Bulgaria, Cyprus,
the Czech Republic, Hungary, Romania and
Slovakia)
November 2020
•
DKSH (Maxigesic IV – Hong Kong)
• Edge Pharmaceuticals (Maxigesic IV - United
Kingdom)
• Jed Pharma (Maxigesic IV – Ireland)
• Alliance Pharma (Maxigesic IV – Thailand)
• Acino (Maxigesic tablets – Ecuador)
• Elpen Pharmaceuticals (Maxigesic tablets -
Greece)
• Excel Healthcare Laboratories (Maxigesic tablets
– Pakistan)
March 2021
•
Aguettant (Maxigesic IV - Spain UK, Finland,
Norway, Denmark, Sweden, Iceland, Portugal,
and the Netherlands).
• Mercarpharm (All Oral dose forms and Maxigesic
IV - Poland.)
• Vianex (Maxigesic IV - Greece)
April 2021
•
Hikma (Maxigesic/Combogesic IV – USA)
May 2021
•
Pharma Bavaria (Maxigesic IV – Bolivia, Chile,
Columbia, Ecuador, Peru, Uruguay)
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
14
15

Launched
LaunchPending
Available
Ireland–Tabletslaunched
IV licensed
United Kingdom–Tabletslaunched
IV licensed
Belgium,Luxembourg-Tabletslaunching2021
IV licensingnegoaons underway
France-Tabletslaunching2021
IV Licensed
Spain&Portugal–Tabletslaunched
IV licensed
Nordics–Tabletslaunched
IV licensed
EasternEurope&Balkans
-Tablets launched
EasternEuropeIV- Licensed
Iraq –Kurdistanlaunched
Australia–No.#1Para-Ib uCombo.
Growingmarketshare
-MaxigesicIV launched
UnitedArab Emirates–
Tabletsalesstrong
Italy–Tabletsalesgrowing
IV Licensed
Greece–OralsandIV
licensed
Germany–OralsLaunched2020
IV Licensed
Switzerland–Tabletslicensed2019
Brazil– licensing
negoaonsunderway
Columbia,Peru,Chile-
distributorappointedOrals
Mexico –Tabletslaunched2021
IV Licensed
USA-IV Licensed
Canada-Tabletslaunched2021
CACM–Tabletslaunched
IV licensed
Singapore&Brunei–Tabletslaunched
Russia–Oralslicensed
China-licensing negoaonsunderway
Taiwan–TabletsLicensed
Korea–IV licensed
Japan-licensing
discussions
areunderway
Indonesia-distributor appointedfor IV
Pakistan-
distributor
appointed
forIV
Malaysia –Tabletslaunched
Philippines–AFTtosellpost
registraonvia distributor
MAXIGESI CGLOBALUPDATE
[OralDoseForms&IV]
Vietnam–distributor appointedfor IV andOrals
Austria–IV licensed
Netherlands–IV licensed
Poland–IVand oralslicensed
NZ –Maxigesic,MaxigesicPE,
MaxigesicIVlaunche
d
When saving
save with colour match
RGB
Launched
LaunchPending
Available
Ireland–Tablets launched
IV licensed
UnitedKingdom–Tablets launched
IV licensed
Belgium,Luxembourg-Tablets launching 2021
IV licensing negoaons underway
France-Tabletslaunching2021
IV Licensed
Spain&Portugal–Tablets launched
IV licensed
Nordics–Tabletslaunched
IV licensed
EasternEurope&Balkans
-Tablets launched
EasternEuropeIV-Licensed
Iraq–Kurdistanlaunched
Australia–No.#1Para-IbuCombo.
Growingmarketshare
-MaxigesicIVlaunched
UnitedArabEmirates–
Tablet sales strong
Italy–Tablet sales growing
IV Licensed
Greece –Orals and IV
licensed
Germany–Orals Launched 2020
IV Licensed
Switzerland–Tablets licensed2019
Brazil–licensing
negoaonsunderway
Columbia,Peru,Chile-
distributorappointedOrals
Mexico–Tablets launched 2021
IVLicensed
USA-IV Licensed
Canada-Tablets launched2021
CACM–Tablets launched
IV licensed
Singapore&Brunei –Tabletslaunched
Russia –Orals licensed
China-licensingnegoaonsunderway
Taiwan–Tablets Licensed
Korea–IV licensed
Japan-licensing
discussions
areunderway
Indonesia-distributorappointedforIV
Pakistan-
distributor
appointed
for IV
Malaysia–Tablets launched
Philippines–AFT to sell post
registraon via distributor
MAXIGESI CGLOBALUPDATE
[Oral Dose Forms & IV]
Vietnam
Thailand - IV licensed
–distributorappointedforIVand Orals
Austria –IV licensed
Netherlands –IV licensed
Poland –IV and orals licensed
NZ–Maxigesic , Maxigesic PE,
MaxigesicIVlaunched
When saving
save with colour match
RGB
Launched
LaunchPending
Available
Ireland–Tablets launched
IV licensed
UnitedKingdom–Tablets launched
IV licensed
Belgium,Luxembourg-Tablets launching 2021
IV licensing negoaons underway
France-Tabletslaunching2021
IV Licensed
Spain&Portugal–Tablets launched
IV licensed
Nordics–Tabletslaunched
IV licensed
EasternEurope&Balkans
-Tablets launched
EasternEuropeIV-Licensed
Iraq–Kurdistanlaunched
Australia–No.#1Para-IbuCombo.
Growingmarketshare
-MaxigesicIVlaunched
UnitedArabEmirates–
Tablet sales strong
Italy–Tablet sales growing
IV Licensed
Greece –Orals and IV
licensed
Germany–Orals Launched 2020
IV Licensed
Switzerland–Tablets licensed2019
Brazil–licensing
negoaonsunderway
Columbia,Peru,Chile-
distributorappointedOrals
Mexico–Tablets launched 2021
IVLicensed
USA-IV Licensed
Canada-Tablets launched2021
CACM–Tablets launched
IV licensed
Singapore&Brunei –Tabletslaunched
Russia –Orals licensed
China-licensingnegoaonsunderway
Taiwan–Tablets Licensed
Korea–IV licensed
Japan-licensing
discussions
areunderway
Indonesia-distributorappointedforIV
Pakistan-
distributor
appointed
for IV
Malaysia–Tablets launched
Philippines–AFT to sell post
registraon via distributor
MAXIGESI CGLOBALUPDATE
[Oral Dose Forms & IV]
Vietnam
Thailand - IV licensed
–distributorappointedforIVand Orals
Austria –IV licensed
Netherlands –IV licensed
Poland –IV and orals licensed
NZ–Maxigesic , Maxigesic PE,
MaxigesicIVlaunched
1
2
3
4
New Zealand, Auckland OFFICE
Australia, Sydney OFFICE
Kuala Lumpur OFFICE
Singapore OFFICE
LAUNCHED
LAUNCH
PENDING
AVAILABLE
1
2
3
4
MAXIGESIC
reaching across the globe
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
16
17

INNOVATION, RESEARCH AND DEVELOPMENT
LAYING THE FOUNDATIONS
FOR AFT’S FUTURE
GROWTH
Pascomer validation trials
progress
Easing the burden of the new
normal
NasoSURF development
Crystawash® Extend overcomes
shortcomings of alcohol-based sanitisers.
Partnership with SETEK provides strong
foundation for growth.
At the heart of AFT’s growth and success is: a record of innovation to develop new products that deliver
real improvements in health outcomes; research to validate the medical benefits of new products; and
a deep understanding of – and expertise navigating - the regulatory and commercial hurdles faced in
bringing new products to market.
We have extended this record in the current year bringing new over the counter products to market and
continuing to develop novel prescription products and medical devices that we believe over the longer
term will make a real difference to the quality of life to people around the world.
Despite the challenges of Covid-19 AFT has opened
all of the 17 sites in the Phase IIb clinical trial
evaluating Pascomer, a topical treatment for facial
angiofibromas (FAs) in tuberous sclerosis complex
(TSC).
The study, which is aimed at determining the
optimal dose at which the drug shows biological
activity with minimal side-effects, and enrolment is
due to be completed in 2021. This is a tremendous
achievement given the challenges of the global
lockdowns and the social distancing required even
when free movement was allowed.
We have many eager participants in the studies
and the collective efforts of our team made these
significant milestones possible during an extremely
challenging time.
While the study is not yet completed, our faith in the
treatment was further validated with the signing in
March of a new commercialisation and development
agreement for Pascomer, covering the 27 countries
within the European Union as well as Switzerland,
Norway and the United Kingdom.
FA’s are a symptom of Tuberous Sclerosis Complex
(TSC), a genetic disease, estimated to affect one in
6,000,
4,5
people, or an estimated 50,000 patients
across Europe
6
. It can cause adverse effects on
appearance and in serious cases, impair breathing
and vision.
Pascomer’s efficacy has been demonstrated as an
inhibitor of inflammatory signalling in TSC, but in the
US and Europe the active ingredient is only available
as an oral agent, which has been associated with
significant systemic toxicity. The topical formulation
has the potential overcome the limitations of oral
therapy and help thousands of people living with
FAs due to TSC. a
Hand sanitisation is becoming the new normal
as Covid-19 ushers in new standards of personal
hygiene. However, traditional alcohol-based
sanitisers offer little protection unless they are
applied regularly during the day. The reason? They
offer no lasting protection and are challenged every
time a new (and potentially infected) surface is
touched.
Recognising this deficiency - and the potential for
skin inflammation that comes with the repeated
use of alcohol-based sanitisers - we developed
Crystawash® Extend, which coats hands with an
invisible, waterproof, biostatic layer that ruptures
the membranes of germs upon contact.
The result is effective hand sanitisation and
protection against contact of multiple germ-
infected surfaces, and this has been validated by
independent tests which showed Crystawash Extend
killing over 99% of germs on contact over a 24-hour
period
1,2,3

Despite the very welcome advent of several
Covid-19 vaccines, we see no let-up in demand for
effective hand sanitiser. Our view was validated
earlier this year when we signed agreements to
distribute Crystawash® Extend in the United Arab
Emirates, Kuwait, Oman and Kenya.
Our NasoSURF nasal
drug delivery device has
continued to advance
during the year. Traditional
nebulisers work by
converting medication into
a mist that patients inhale
into their lungs. However,
NasoSURF, a handheld
ultrasonic nasal mesh
nebuliser, is targeted for
use with medicines aimed
at a patient’s sinus areas.
We have initiated the
development of the first
medicinal dose form to be
used in the device and we expect the first clinical
studies to commence in this financial year.
AFT continues to work closely on the development
of medicinal cannabis products and sees its efforts
coming to fruition in a broad range of applications.
Pivotal to the success of the programme is the
agreement we struck this year with SETEK.
Significant development work continues with close
co-operation between AFT and SETEK. We only
plan to make announcements once key development
and regulatory milestones are achieved.
1
AFT Pharmaceuticals/AsureQuality Laboratory Services, New Zealand microbiological effectiveness study evaluating residual killing activity against transient
microbial skin flora on synthetic skin (test organisms: S.Aureus NZRM 147/ATCC 6538 and E.Coli NZRM 2577/ATCC 8739).
2
Time Kill Test conducted by Eurofins BioPharma Product Testing, Australia; Protocol: TMD-110, EN 13727; Test organisms: S.Aureus ATCC 6538, E.Coli NCTC
10538, P.aeruginosa ATCC 15442, and E. hirae ATCC 10541
3
Virucidal Test by Carrier Method conducted by Eurofins BioPharma Product Testing, Australia; Protocol: TMCV 006, ASTM E1053; Test organisms: Murine
hepatitis virus (MHV1) ATCC/VR-261.
4
Au KS, Williams AT, Roach ES, Batchelor L, Sparagana SP, Delgado MR, et al. Genotype/phenotype correlation in 325 individuals referred for a diagnosis of
tuberous sclerosis complex in the United States. Genet Med. 2007 Feb;9(2):88 -100
4
Dabora SL, Jozwiak S, Franz DN, Roberts PS, Nieto A, Chung J, et al. Mutational analysis in a cohort of 224 tuberous sclerosis patients indicates increased
severity of TSC2, compared with TSC1, disease in multiple organs. Am J Hum Genet. 2001;68(1):64 -80.
6
Tuberous Sclerosis Alliance: https://www.tsalliance.org.
HOUR
24
Working to meet untapped
cannabis medicine demand
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
18
19

SUSTAINABILITY
WORKING TO IMPROVE YOUR
HEALTH
BENCHMARKING AFT’S
SUSTAINABILITY PERFORMANCE
A company built on integrity and a clear purpose
AFT Pharmaceuticals is built on integrity and a
clear purpose of working to improve the health of
its customers. It is a mission that has at its heart a
commitment to sustainability, the maintenance of
corporate governance practices that are aligned
with best practice, the highest ethical standards
and a determination to contribute positively to
environmental and social outcomes.
Last year we committed to work to progressively
develop and incorporate into our governance
framework a strategy to account for and to report
on progress towards improvements in material and
relevant environmental and social outcomes.
This year we have continued on that journey
with a formal assessment of our environmental,
social and governance performance against our
pharmaceutical industry peers and the guidance
of the NZX. The results - detailed on opposite
page - has identified clear opportunities for AFT to
continue to build on in the coming years.
We meanwhile continue to map our business and
community initiatives onto the United Nation’s
Sustainable Development Goals to show how
our efforts fit within a large and robust vision for
positive global change.
AFT has over the last year benchmarked its environmental social and governance performance against our
peers, the NZX Corporate Governance Code and Guidance and Standard & Poor’s assessment of material
issues for the pharmaceutical sector. The review has demonstrated that the company has made significant
progress on a broad range of fronts. It has also identified opportunities for further progress.
• Supply Chain
packaging
• Product waste
through
donations
Environmental
• Product
Innovation and
R&D
• Product quality
and safety
• Customer
health and
wellbeing
• Aordability
and access to
medicines
• Diversity and
Inclusion
• Health and
safety
(Domestic)
Charitable
contributions
Community
initiatives
• Modern slavery
Social
• Corporate
Governance
Statement
• Ethics
• Whistleblowing
• Tax
transparency
• Relationships
with regulators
and regulation
• Climate change
and AFT’s
carbon
footprint.
• Consumer and
social trends
• Sustainability
framework and
reporting
Governance
Activity Underway
Still to be
considered
THE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS
How AFT is helping to drive the UN's vision for positive change
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
20
21

SOCIAL
ENVIRONMENT
REDUCING OUR ENVIRONMENTAL
FOOTPRINT
DIVERSITY ACCOUNTABILITY AND
INCLUSION
Improving the sustainability of
our packaging
AFT has made significant progress on its goals
to improve the sustainability of its packaging. In
2020 we joined the Australian Packaging Covenant
Organisation (APCO), which partners with
government and industry to reduce the harmful
impact of packaging on the environment. It achieves
this by promoting sustainable design and recycling
initiatives, waste to landfill reduction activities and
circular economy projects.
In 2021 APCO assessed AFT as ‘Advanced’ in
reducing our packaging’s environment footprint.
The rating represented a substantial step up in
performance on the prior year when APCO gave
us a ‘Getting Started’ rating. This progress reflects,
among other things:
▲ Our processes in place for continuous
improvement in our packaging sustainability
▲ Our review of our packaging processes against
sustainable packaging guidelines
▲ Our commitments to reducing packaging
weight, optimising material efficiency;
incorporating recycled material into our
products and to making more than 50% of our
packaging recoverable
▲ Our determination to reducing consumption of
business-to business packaging.
▲ APCO’s report is available here
www.investors.aftpharm.com/Investors/
Assessing our carbon footprint
AFT operates in an industry where the impact of
its activities on the climate are more limited than
sectors of the economy such as transport, energy
production and farming. However, we still recognise
understanding climate risk is key to our long-term
strategy and building resilience in the business.
The Government has signalled its support for the
global Task Force on Climate Related Financial
Disclosures (TCFD) recommendation that listed
issuers, banks, general insurers, asset managers
publicly disclose their climate related financial
risks. The Government has now indicated that it
expects formal reporting for the 2022 – 2023 year.
AFT is supportive of the move and is committed to
implementing the TCFD reporting framework.
Environmental
RESPONSIBLE
CONSUMPTION AND
PRODUCTION
● We actively manage the risks associated with the
sale and distribution of pharmaceutical products.
●
Our critical suppliers are risk assessed against our
risk management frameworks
● We have a comprehensive sustainable packaging
strategy
● We only test our products on animals when we
are required to do so by regulators. 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.
UN SUSTAINABLE DEVELOPMENT GOALS
Social
Embracing difference drives
better business performance
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 2021 AFT’s
94 employees came from 32 different cultural
backgrounds and 24 birth countries, with a gender
split of 61% women and 39% men and an age spread
of employees ranging from 23 years to 78 years
(average age of 43 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 and this continued to show that
AFT continues to attract and retain a highly
diverse workforce
▲ 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 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 a formal
managers’ training programme provided by 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 2021 (as detailed above). In
addition, it is intended that AFT’s gender diversity
be benchmarked against peers.
Bruna Keller dos Santos Digital Marketing and Product Manager, with a 100%
recyclable cardboard shipper for Maxigesic tablets.
Under 30 15%
30-44 38%
45 and over 47%
Employees by Age Diversity
(%, as at 31 March 2021)
Female 61%
Male 39%
Employees by Gender Diversity
(%, as at 31 March 2021)

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
22
23

SOCIALSOCIAL
Meeting the challenge of
Covid-19
AFT’s team has stepped up in extraordinary ways to
the challenges of Covid-19.
As an essential business we worked right through
all lockdowns with social distancing and personal
protective equipment in place.
At the heart of the change was our determination to
protect our people.
The lockdowns and the subsequent travel
restrictions across Australia and the rest of the
world have put immense demands on our staff and
supply chains, limiting face-to-face meetings and
travel to meet suppliers, our distributors, and our
customers.
Most of our team have readily adapted to remote
working, a move that has been facilitated by the fact
we operate a highly mobile workforce.
We maintained close contact across all our teams
with weekly management meetings, weekly Covid-19
updates through March and April for all employees
and strongly encouraged managers to have daily
interactions with all of their reports, especially the
sales reps, who found themselves at home without
social interaction. This was to ensure employees felt
cared for and not isolated and abandoned in such
times. We also offered counselling.
It is a testament to the adaptability and resilience
of AFT people. Despite the challenges the entire
team has continued to focus and deliver on the
company’s mission to drive improvements in global
health outcomes and shareholder value.
Separately we have completed a new Maxigesic
IV licensing deals around the world without
having to meet our licensing partners. All of this
has demanded a heightened focus on health and
wellbeing, and 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 programme 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.
“The health and well-being
of our people amid the
challenges of the pandemic
have been paramount.
”
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 medicines that are backed
by clinical evidence and deliver improved health
outcomes.
● Our Maxigesic pain relief medicine offers a
therapeutic alternative to addictive opiates,
while we have actively lobbied for the removal of
pseudoephedrine from sale, recognising the role it
plays in the amphetamine epidemic.
● We actively manage health and safety risks of our
people and strive for a working environment that
promotes health and wellbeing, while minimising the
potential for risk, personal ill health, or damage.
● 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 the risks associated with the
sale and distribution of pharmaceutical products.
UN SUSTAINABLE DEVELOPMENT GOALS
•
New Zealand 32%
•
Australia 32%
•
UK 6%
•
South Africa 5%
•
China 3%
•
Switzerland 2%
•
Phillipines 2%
•
Malaysia 2%
•
Italy 1%
•
Korea 1%
•
Singapore 1%
•
Canada 1%
•
Brazil 1%
•
Malta 1%
•
Romania 1%
•
Austria 1%
•
Macedonia 1%
•
Poland 1%
•
Germany 1%
•
Iraq 1%
•
Iran 1%
•
India 1%
Employees by Birth Country Diversity
(%, as at 31 March 2021)
GENDER
EQUALITY
● Our product ranges across the spectrum of the
population from juvenile to old age
● 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 regularly benchmark AFT’s diversity standpoint,
status and objectives against appropriate external
comparators.
● We strive to ensure that all employees and
contractors receive equal and fair treatment in
all aspects of the company’s employment and
practices.
● 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.
UN SUSTAINABLE DEVELOPMENT GOALS
DECENT WORK
AND ECONOMIC
GROWTH
● We have grown revenue and earnings over two
decades creating jobs and new opportunities for our
people.
● 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.
● We are reviewing all our suppliers to ensure
compliance with Australia’s Modern Slavery Act.
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 2021 and 31 March 2020 are set out in the table below:
FemaleMale
2021202020212020
Directors225%214%675%686%
Officers
1
436%436%764%764%
workforce5761%5260%3739%3440%
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.
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
24
25

SOCIALSOCIAL
Promoting responsible antibiotic
use
Antibiotic resistance, according to the World Health
Organisation (WHO), is one of the top ten biggest
global threats to humanity and is the focus of health
authorities around the world.
In New Zealand the Capital Coast District Health
Board (CCDHB) is leading health board around
the country to build awareness of the threat and
encourage practices to prevent the over prescription
of the medicines, the chief cause of microbial
resistance.
AFT, which provides a range of prescription
antibiotics to health authorities across Australasia
and Asia, this year provided financial support to
the CCDHB’s efforts during the 2020 Antibiotic
Awareness week in November 2020. Under WHO’s
global banner ‘United to Preserve Antimicrobials’
the campaign held stalls and education campaigns
to highlight the correct use of antibiotics.
The campaign reached out to clinicians as well
as the general public and six other district health
boards, to drive awareness of the critical issue.
Amid the campaign CCDHB Clinical Leader for
Infection Services Dr Michelle Balm (left) spoke to
the Whanganui DHB on antimicrobial stewardship
and was supported in taking the message to staff by
the Director General of Health Dr Ashley Bloomfield
(right).
The funds provided by AFT assisted with the
printing and sharing of resources, the development
and production of promotional products and the
creation of prize packs.
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.
UN SUSTAINABLE DEVELOPMENT GOALS
“The funds provided by AFT
assisted with the printing
and sharing of resources, the
development and production
of promotional products and
the creation of prize packs
”
Easing weary eyes amid the West
Australian bushfires
While the 2020/21 summer fire season was not as
serious as the fires that devastated the East Coast
of Australia in the 2019/20 season, fires continued
to wreak havoc across the country. Building on
traditions established in prior years, AFT continued
to support fire fighters. This year we provided fire
fighters at the Murdoch Fire Station in Perth with
the donation of Hylo Fresh and Hylo Forte eye drops
and Nova Tears. The drops helped relieve the eye
irritation that came with the long hours among the
smoke and heat.
International assistance
constrained by the pandemic
AFT each year seeks to contribute to reducing
health inequalities in developing nations. With the
support of charities, we help to deliver healthcare
that developed nations take for granted.
Our efforts in the past years have been directed
through four charities: the AusViet Charity
Foundation, the Eyes4Everest, the Carmelite
nuns in East Timor and the Wesleyan Mission to
Bougainville, where we have donated medicines
to support the efforts of the clinicians working
to improve the lot of people in these developing
nations. Sadly Covid-19 has hampered travel to these
regions and constrained our efforts.
“AFT each year seeks to
contribute to reducing health
inequalities in developing
nations
”
REDUCED
INEQUALITIES
● We support to provide healthcare in developing
nations, although our activities have been
constrained in the past year due to Covid-19 travel
restrictions.
● We are developing medicines for rare diseases,
designated with ‘orphan’ status by the US Food and
Drug Administration.
● We donate product to charities.
UN SUSTAINABLE DEVELOPMENT GOALS
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
26
27

SOCIALGOVERNANCE
DRIVING BEST
PRACTICE
GOVERNANCE
STANDARDS
The Board and management of AFT
Pharmaceuticals Limited (AFT or the Company)
are committed to ensuring that AFT maintains
corporate governance practices in line with
best practice and adheres to the highest ethical
standards.
The Board has had regard to the NZX Listing
Rules and a number of corporate governance
recommendations when establishing its governance
framework, including the Third and Fourth Editions
of the Australian Securities Exchange (ASX)
Corporate Governance Council Principles and
Recommendations (notwithstanding AFT is not
required to follow these recommendations due to its
ASX Foreign Exempt Listing) and the current NZX
Corporate Governance Code (NZX Code).
The NZX Listing Rules require AFT to formally
report its compliance against the recommendations
contained in the NZX Code. How AFT has
implemented these recommendations is set out in
AFT’s Corporate Governance Statement. Except to
the extent outlined in the Corporate Governance
Statement, the Board considers that AFT’s
corporate governance structures, practices and
processes have followed all of the recommendations
in the NZX Code in the financial year to 31 March
2021.
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.
Stock Exchange Listings
AFT is listed on the NZX Main Board and on the
Australian stock exchange (ASX) as an ASX Foreign
Exempt Listing. As an ASX Foreign Exempt Listing,
AFT needs to comply with the NZX Listing Rules
(other than as waived by NZX) but does not need
to comply with the vast majority of the ASX Listing
Rule obligations.
AFT is incorporated in New Zealand.
PEACE JUSTICE
AND STRONG
INSTITUTIONS
PARTNERSHIPS
FOR THE GOALS
● We strive to deliver corporate governance practices
that are aligned with best practice, the highest
ethical standards.
● We work closely with national health regulators
around the world to obtain approvals of our
products.
● We have more than 20 global partnerships to bring
our pharmaceuticals to market.
UN SUSTAINABLE DEVELOPMENT GOALS
Manufacturing audits by night
A key challenge both during the lockdown - and
since - has been completing Good Manufacturing
Practice (GMP) audits of new manufacturing
partners.
Normally, we would conduct audits in person.
However, as we had many audits which had been
scheduled with various licensing partners, the
pandemic has forced us to adapt to undertaking live
remote audits.
Remote audits, which have also been adopted by
the various International health authorities, involved
comprehensive planning by the auditor, AFT and the
auditee, a process that typically ranges from one to
five days.
Our first experience with remote auditing was with
the Russian Health Authorities in mid-July 2020.
This involved off-line review of documentation,
virtual tours of the manufacturing facility provided
through pre-recorded videos and online interviews
with the responsible personnel at the manufacturing
site.
AFT provided all the technical support required in
setting up the connection between the auditors
and the auditee, working across multiple time zones
and often saw our team working late into the night.
We also managed the online upload of documents,
setting up of the Zoom meetings and providing the
additional training and support to the auditees.
The audit was a complete success and led to
the formal Russian GMP certification of our
manufacturer, ultimately leading us to the
submission of the Paracetamol 500mg/Ibuprofen
150mg dossier in Russia.
Virtual auditing has allowed AFT to successfully
qualify a number of our manufacturers during the
year of the global pandemic and we continue to
adapt to the situations as it comes.
Once travelling resumes, on-site audits will take
precedence. However, this temporary solution has
allowed us to continue with global supply and
registration of our innovative products to help
people during the difficult times we face.
AFT staff amid a virtual audit
“A key challenge both during
the lockdown - and since -
has been completing Good
Manufacturing Practice (GMP)
audits of new manufacturing
partners
”
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.
UN SUSTAINABLE DEVELOPMENT GOALS
Governance
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
28
29

David FlacksDr Hartley AtkinsonMarree AtkinsonAnita Baldauf Jon Lamb
INDEPENDENT DIRECTOR
Appointed 4 September 2012
Dr Ted Witek
INDEPENDENT DIRECTOR
Appointed 23 December2020
Dr James (Jim) Burns
IINDEPENDENT DIRECTOR
Appointed 17 September 2015
INDEPENDENT DIRECTOR
Appointed 4 September 2012
Doug was a New Zealand
physician and academic. He
joined a major international
pharmaceutical company,
Boehringer Ingelheim, working
in their US subsidiary, becoming
their Head of Medical Research
and Regulatory Affairs, the
interface with FDA, playing a
major role in steering 10 drugs
through the FDA to the US and
global markets. He moved to
Head Office in Germany, being
responsible for those same
functions for worldwide drug
development. He chaired the
company’s International Medical
Committee overseeing the
medical aspects of all drugs in
development globally, and their
Internal Labeling Committee
for the drugs on the worldwide
market.
He was the medical parent
of Spiriva, a drug for Chronic
Obstructive Pulmonary Disease
(COPD) one of the major
global killers. The drug last
year sold $5 billion. He now
consults internationally on new
drugs in development, and for
pharmaceutical
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 and on the
following pages.
DIRECTORS
David has a number of
governance roles and has
been chair of AFT since the
IPO in 2015. He is chair of the
Suncorp New Zealand group
of companies and Harmoney
Corp. He is also a director of
Todd Corporation and a number
of environmentally focused pro
bono organisations.
He is a former chair of the NZ
Markets DisciplinaryTribunal and
the NZX Regulatory Governance
Committee 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
INDEPENDENT DIRECTOR
Appointed 4 November 2020
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.
Anita joins AFT with a broad
and international experience in
FMCG and Corporate Finance.
Her 22 year career at Nestlé
and l’Oréal (Laboratoires
innéov), mostly as CFO in
multiple developed and
developing countries, gave her
a rich expertise in finance and
investor relation, compliance
and governance, international
business as well as people
development, and value based
leadership.
Anita is impassioned about
driving impact, particularly
in the area of Wellbeing and
mental health. She is an EHF
Fellow, where she is advising
and supporting New Zealand
and international start-ups
and impact ventures as they
navigate through the challenges
of exponential change, rapid
growth, and their aim for impact
and sustainability.
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).
Te d served Boehringer
Ingelheim Pharmaceuticals
for nearly 25 years where he
held various pharmacology
and clinical research positions,
including Director of Respiratory
and Immunology Clinical
Research leading to his roles
as President and CEO of
Boehringer Ingelheim’s Canadian
and Portugese operations. He
led the Global Operating Team
for Spiriva serving as Co-Chair
of the Global Alliance with
Pfizer.
Ted also was Chief Scientific
Officer & Senior Vice President,
Corporate Partnerships, at
Innoviva (Formerly Theravance,
Inc.). He also served on the
Board of Directors of Canada’s
Research-Based Pharmaceutical
Companies (Rx&D) including
Chair of the Health Technology
Assessment and Public Relations
Committee. He was appointed
to the Ontario Health Innovation
Council and advisor to the
Design for Health Program at
OCAD University. He is currently
an Adjunct Professor & Senior
Fellow at the University of
Toronto’s School of Public
Health & Leslie Dan Faculty of
Pharmacy. He serves as Director
of the DrPH program. Dr. Witek
is the author of more than 100
scientific papers as well as
several chapters and books.
Ted holds a Doctor of Public
Health from Columbia University
and a Master of Public Health
from Yale University and an
MBA from Henley Management
College in the UK.
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. Jim currently serves
as Chairman and President of
Phenomics Health, a precision
medicine company focused on
neuropsychiatric, cardiovascular,
and pain disorders. He
previously served as Chairman
of the Board, Executive
Chairman and Chief Executive
Officer of Assurex Health,
acquired by Myriad Genetics in
2016; President & CEO of cancer
drug development company
CASI Pharmaceuticals; President
of MedPointe Pharmaceuticals,
a specialty pharmaceutical
company; President & CEO of
biotechnology company Osiris
Therapeutics; General Partner
of Healthcare Ventures; Group
President of Becton Dickinson, a
global medical device company;
and Partner at Booz & Company,
an international strategy
consulting firm.
Jim is a Board Leadership Fellow
of the National Association of
Corporate Directors (NACD)
and Chairman of Mobility
Health. 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.
Dr John Douglas
(Doug) Wilson
DIRECTORS AND MANAGEMENT TEAM
AFT PHARMACEUTICALS
ANNUAL REPORT 2021
30
31

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 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 2021
32
33

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
CONSOLIDATED
FINANCIAL
STATEMENTS
CONTENTS
Independent Auditor’s Report 37-39
Consolidated Income Statement 40
Consolidated Statement of
Comprehensive Income
41
Consolidated Statement of
Changes in Equity
42
Consolidated Balance Sheet
43
Consolidated Statement of Cash Flows
44
Notes to the Financial Statements
46-73
Non-GAAP financial information:
AFT has used non-GAAP measures when discussing financial performance in this document including
underlying profit after tax and underlying operating profit. The directors and management believe that
these measures provide useful information as they are used internally to evaluate performance of business
units, to establish operational goals and to allocate capital.
Definitions:
Underlying profit after tax:
Profit after tax less significant one-off non-recurring gain.
Underlying operating profit:
Operating profit less significant one-off non-recurring gain.
Non-GAAP measures are not prepared in accordance with NZ IFRS (New Zealand International Financial
Reporting Standards) and are not uniformly defined, therefore the non-GAAP measures reported in this
document may not be comparable with those that other companies report and should not be viewed in
isolation or considered as a substitute for measures reported by AFT Pharmaceuticals in accordance with
NZ IFRS.
The non-GAAP measures are not subject to audit or review.
GAAP to Non-GAAP Reconciliation:
Year Ended 31 March
20212020
NZ$000’s$’000$’000
Underlying profit after tax 7,7822,908
Add back/(subtract):
Gain on derecognition of equity accounted investment and
recognition of net assets acquired at fair value in a step acquisition
1
-9,784
Profit after tax7,78212,692
Underlying operating profit10,708 11,422
Add back/(subtract):
Gain on derecognition of equity accounted investment and
recognition of net assets acquired at fair value in a step acquisition
1
-9,784
Operating profit10,70821,206
1
On 5 July 2019 AFT took full control of the Pascomer dermatological medicine intellectual property and booked a one-off
non-cash non-recurring gain in profit as part of the transaction.
34
35

AFT PHARMACEUTICALS
ANNUAL REPORT 2021


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 2021, 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
40 to 73, present fairly, in all material respects, the consolidated financial
position of the Group as at 31 March 2021, 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 International Code of Ethics for Assurance Practitioners (including
International Independence Standards) (New Zealand) issued by the New
Zealand Auditing and Assurance Standards Board and the International Ethics
Standards Board for Accountants’ International Code of Ethics for Professional
Accountants (including International Independence Standards), 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.
37
36

AFT PHARMACEUTICALS
ANNUAL REPORT 2021


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 inten
d 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
consoli
dated 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 infl
uence 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 a
t:
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
24 May 2021



This audit report relates to the consolidated financial statements of AFT Pharmaceuticals Limited (the ‘Company’)
for the year ended 31 March 2021 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 24 May 2021 to confirm the
information included in the audited consolidated financial statements presented on this website.


Key audit matter How our audit addressed the key audit matter
Recoverability of the Pascomer IP
As disclosed in note 11, the Group has intellectual
property with a carrying value of $12.5m in relation
to the Pascomer product at 31 March 2021.
The recoverability of the intellectual property
associated with the Pascomer product depends upon
successful clinical trials and product registration in
the United States and in Europe. The recoverable
amount of the intellectual property associated with
the Pascomer product is determined based on fair
value less costs of disposal, using a risk-adjusted net
present value model (excluding any terminal value),
which takes into account the inherent uncertainties
of both the successful conclusion of the clinical trials
and registration. The net present value models also
include significant unobservable inputs, including
forecast financial performance, discount rate and
growth rates.
We identified this as a key audit matter because of
the significance of the intellectual property to the
Group’s consolidated financial statements and the
judgment involved in determining the recoverable
amount of the Pascomer IP.

We evaluated the Group’s assessment for the Pascomer IP.
In performing our procedures to address the key audit
matter, we:

a) Assessed the design and implementation of relevant
controls;
b) Performed corroborative inquiry with management in
relation to the key judgments made in the assessment
of the future profitability of the Pascomer Intellectual
Property;
c) Assessed the assumptions made by the Group on
successful completion of clinical trials and successful
registration by understanding the mi
lestones achieved
to date, the progress in completing the remaining
milestones against the plan and the impact of Covid-
19;
d) Compared the forecast performance with the
approved 2022 financial year budget that included the
achievement of milestones;
e) Challenged the inputs used in the cash flow forecasts
and performed sensitivity analysis of the assumptions
used by utilising our knowledge of the Group and
market data;
f) Assessed the independence, objectivity and
competence of the valuer;
g) Involved our internal valuation specialists in assessing
the discount rate and valuation methodology for
reasonableness in comparison to independent market
data;
h) Considered whether events or transactions that
occurred after the balance sheet date but before the
reporting date affect the conclusions reached on the
carrying value of the asset and associated disclosure;
and
i) Tested the risk-adjusted net present value model for
its arithmetic accuracy.
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
39
38

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
20212020
Note$’000$’000
Revenue4113,105105,597
Cost of sales(64,364)(57,332)
Gross profit 48,74148,265
 
Other income5626535
Selling and distribution expenses(27,438)(26,203)
General and administrative expenses(7,784)(9,111)
Research and development expenses(3,437)(1,984)
Gain on derecognition of equity accounted investment and
recognition of net assets acquired at fair value in a step acquisition
-9,784
Equity accounted loss of joint venture entity -(80)
Operating profit 10,70821,206
 
Finance income422
Interest costs(3,441)(6,958)
Other finance (costs)/gain6616(1,393)
Profit before tax 7,88712,877
 
Tax expense12(105)(185)
Profit after tax attributable to owners of the parent 7,7 8 212,692
 
 
Earnings per share
Basic and diluted ($)17$0.07$0.12
The accompanying Notes form an integral part of the Financial Statements.
CONSOLIDATED INCOME STATEMENT
For the Year Ended 31 March 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2021
20212020
Note$’000$’000
Profit after tax 7,7 8 212,692
 
Other comprehensive income 
Items that may be subsequently reclassified to profit and loss: 
Foreign exchange difference on translation of foreign operations29(79)
Other comprehensive income / (loss) for the year, net of tax 29(79)
 
Total comprehensive income 7,81112,613
The accompanying Notes form an integral part of the Financial Statements.
40
41

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2021
RedeemableForeign 
preferenceSharecurrency 
SharesharesoptionstranslationRetainedTotal
capitalreservereservereserveearningsequity
Note$’000$’000$’000$’000$’000$’000
Balance 31 March 2019 63,7431,241682431(61,006)5,091
 
Profit after tax - - - -12,69212,692
Other comprehensive income - - -(79) -(79)
Total comprehensive income  - - -(79)12,69212,613
Preference dividends
accumulated -428 - - -428
Issue of share capital3 - - - -3
Movement in share options
reserve - -81 -33114
Preference dividends paid or
accumulated - - - -(994)(994)
Balance 31 March 2020 63,7461,669763352(49,275)17,255
 
Profit after tax - - - -7,7 8 27,7 8 2
Other comprehensive income - - -29 -29
Total comprehensive income  - - -297,7 8 27,811
Conversion of preference
shares161,669(1,669) - - - -
Issue of share capital1612,389 - - - -12,389
Capital raising expenses16(723) - - - -(723)
Movement in share options
reserve116 -(489) -41744
Preference dividends paid - - - -(188)(188)
Balance 31 March 2021 77,197 -274381(41,264)36,588
The accompanying Notes form an integral part of the Financial Statements.
CONSOLIDATED BALANCE SHEET
For the year ended 31 March 2021
20212020
Note $’000$’000
ASSETS
 
Current assets
 
Inventories933,65422,734
Trade and other receivables831,03925,969
Cash and cash equivalents
3,2096,119
Derivative assets22 -514
Total current assets67,90255,336
Non-current assets
 
Property, plant and equipment10305315
Intangible assets1132,72026,984
Right of use assets103,4813,712
Deferred income tax assets12724705
Total non-current assets37,23031,716
Total assets 105,13287,052
 
LIABILITIES 
Current liabilities 
Trade and other payables1421,32918,292
Provisions154,4614,195
Lease liabilities
614506
Current income tax liability
-109
Derivative liabilities22537 -
Interest bearing liabilities135,1612,000
Total current liabilities32,10225,102
 
Non-current liabilities 
Lease liabilities
3,2423,495
Interest bearing liabilities1333,20041,200
Total non-current liabilities36,44244,695
Total liabilities 68,54469,797
 
EQUITY 
Share capital1677,19763,746
Retained earnings/(losses)
(41,264)(49,275)
Share options reserve19274763
Redeemable preference shares reserve
-1,669
Foreign currency translation reserve
381352
Total equity 36,58817,255
Total liabilities and equity 105,13287,052
The accompanying Notes form an integral part of the Financial Statements.
On behalf of the Board
24 May 2021
42
43

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2021
20212020
 $’000$’000
CASH FLOWS FROM OPERATING ACTIVITIES 
Receipts from customers109,82399,165
Payments to suppliers and employees(108,903)(84,064)
Tax paid(170)(223)
Net cash generated from operating activities 75014,878
 
CASH FLOWS FROM INVESTING ACTIVITIES 
Purchases of property, plant and equipment(93)(92)
Purchase of intangible assets(6,138)(6,470)
Net cash used in investing activities (6,231)(6,562)
 
CASH FLOWS FROM FINANCING ACTIVITIES 
Proceeds from issue of share capital12,3963
Bank Overdraft1,638 -
Capital raising cost paid(723) -
Dividends paid(188)(566)
Payment for lease liabilities(630)(535)
New borrowings -58,200
Borrowings repaid(6,500)(60,320)
Interest received422
Interest paid on lease liabilities(295)(299)
Interest costs paid on borrowings(3,180)(5,601)
Finance costs paid -(22)
Net cash (used in)/generated from financing activities 2,522(9,118)
 
Net decrease in cash(2,959)(802)
Impact of foreign exchange on cash and cash equivalents495
Opening cash and cash equivalents6,1196,916
Closing cash and cash equivalents 3,2096,119
The accompanying Notes form an integral part of the Financial Statements.
RECONCILIATION OF PROFIT AFTER TAX WITH NET CASH FLOW FROM
OPERATING ACTIVITIES
For the year ended 31 March 2021
20212020
 $’000$’000
Profit after tax7,7 8 212,692
 
Non-cash items 
Depreciation103122
Depreciation ROU assets716692
Amortisation285286
Impact of foreign exchange on cash and cash equivalents495
Share options expense44114
Interest on lease liabilities295299
Interest and finance expense3,1556,681
Unrealised (gain)/loss on foreign currency movements(58)2,486
Provision for tax19223
Interest received(4)(22)
Share of loss of JV entity -80
Gain on derecognition of equity accounted investment and
recognition of net assets acquired at fair value in a step
acquisition -(9,784)
 
Movement in working capital 
(Increase)/decrease in inventories(10,920)2,425
Increase in trade and other receivables and derivative assets(4,556)(7,297)
Increase in trade and other payables, provisions and derivative
liabilities3,8405,876
Net cash generated from operating activities 75014,878
The accompanying Notes form an integral part of the Financial Statements.
44
45

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 March 2021
1. REPORTING ENTITY
AFT Pharmaceuticals Ltd (the “Company” or “Parent”) together with its subsidiaries (the “Group”) is
a pharmaceutical distributor and developer of pharmaceutical intellectual property. The Company is a
company that is incorporated and domiciled in New Zealand, it is registered under the Companies Act 1993.
The address of the Company’s registered office is 129 Hurstmere Road, Takapuna, New Zealand.
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 were approved for issue by the Board of Directors on 24 May 2021.
2. BASIS OF PREPARATION AND PRINCIPLES OF CONSOLIDATION
Statement of compliance
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 the Group consolidated financial statements are prepared and presented for the Parent and
its subsidiaries, separate financial statements for the Company are not required to be prepared under the
Companies Act 1993.
The consolidated financial statements of the Group have been prepared in accordance with Generally
Accepted Accounting Practice in New Zealand (NZ GAAP). The Group is a for-profit entity for the purposes
of complying with NZ GAAP. The consolidated financial statements comply with New Zealand equivalents
to International Financial Reporting Standards (NZ IFRS), other New Zealand accounting standards
and authoritative notices that are applicable to entities that apply NZ IFRS. The consolidated financial
statements also comply with International Financial Reporting Standards (IFRS), and interpretations issued
by the IFRS Interpretations Committee (IFRIC) applicable to companies reporting under IFRS.
Basis of accounting
These consolidated financial statements have been prepared under the historical cost convention, as
modified by the revaluation of financial assets and liabilities (including derivative instruments) at fair value
through profit or loss and/or other comprehensive income.
Functional and presentation currency
The consolidated financial statements are presented in New Zealand dollars (NZD), which is the Company’s
functional currency rounded to the nearest thousand dollars unless otherwise stated. Items included in the
financial statements of each of the subsidiaries are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”).
Foreign currency transactions and balances
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.
Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Group
as at the balance date and the results of all subsidiaries for the year then ended.
Intercompany 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.
New accounting standards and amendments effective during the year
All mandatory amendments have been adopted in the current year. None had a material impact on these
financial statements.
New and revised standards in issue but not yet effective
There are a number of standards, amendments and interpretations which have been approved but are not
yet effective. The Group expects to adopt these when they become mandatory. None are expected to result
in a material impact on the Group’s financial statements.
Critical accounting estimates and judgements
In applying the Group’s accounting policies, the directors are required to make judgements (other than
those involving estimations) that have a significant impact on the amounts recognised and to make
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods.
Significant estimates are disclosed in each of the applicable notes to the financial statements and are
designated with an
symbol.
Significant accounting policies
Accounting policies are disclosed in each of the applicable notes to the financial statements and are
designated with an
symbol.
All mandatory amendments have been adopted in the current year. None had a material impact on these
financial statements.
Goods and Services Tax (GST)
The income statement and the statement of comprehensive income have been prepared so that all
components are stated exclusive of New Zealand, Australian and Malaysian GST. 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.
3. SIGNIFICANT TRANSACTIONS AND EVENTS IN THE FINANCIAL YEAR
No significant transactions and events occurred during the year.
46
47

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
NOTES TO THE FINANCIAL STATEMENTS (Continued)
For the year ended 31 March 2021
4. REVENUE FROM OPERATIONS
20212020
$’000$’000
Sale of goods110,736101,416
Royalty income244356
Licensing Income2,1253,825
Total revenue from operations113,105105,597
Revenue comprises the fair value for:
• The sale of goods, excluding Goods and Services Tax 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.
• Licensing income, which is recognised when the Group has completed substantially all of its
obligations under the licensing agreement and through until the expected finalisation of the event.
The Group’s obligations are the provision of territorial rights to its intellectual property and the
provision and support of the documentation required to enable registration of the product in the
territory.
5. SEGMENT REPORTING
Operating Segments
 Australia
New
ZealandAsia
Rest of
WorldTotal
$’000$’000$’000$’000$’000
31 March 2021 
Revenue - Sale of goods68,26630,5264,4117, 5 33110,736
Revenue - Royalties - - -244244
Revenue - Licensing - - -2,1252,125
Total revenue68,26630,5264,4119,902113,105
Other income - 193 -433626
Depreciation - ROU assets424292 - -716
Depreciation - Other25801 -106
Amortisation -285 - -285
Operating profit7, 91 9(69)1,4501,40810,708
Finance income -4 - -4
Interest expense - Loans(656)(2,409)(81) -(3,146)
Interest expense - ROU liabilities(91)(204) - -(295)
Other finance gains/(losses)417411(212) -616
Profit / (loss) before tax7, 5 8 9(2,267)1,1571,4088,887
Income tax (32)(73)--(105)
Profit / (loss) after tax7, 557(2,340)1,1571,4087,782
Total assets39,52252,9842012,496105,022
ROU assets9602,521 - -3,481
Property plant and equipment462572 -305
Pascomer IP - - -12,50012,500
Other intangible assets -0 -20,33720,337
Total liabilities5,85260,8311,861 -68,544
Capital expenditure2765 - -92
48
49

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
Operating Segments
 Australia
New
ZealandAsia
Rest of
WorldTotal
$’000$’000$’000$’000$’000
31 March 2020 
Revenue - Sale of goods61,42830,1084,9304,950101,416
Revenue - Royalties - - -356356
Revenue - Licensing - - -3,8253,825
Total revenue61,42830,1084,9309,131105,597
Other income - - -535535
Depreciation - ROU assets409283 - -692
Depreciation - Other30884 -122
Amortisation -286 - -286
Gain on derecognition of equity
accounted investment and recognition of
net assets acquired at fair value in a step
acquisition
- - -9,7849,784
Equity accounted loss of joint venture
entity - - -(80)(80)
Operating profit7, 2 7 8(205)9314,04021,206
Finance income -22 - -22
Interest expense - Loans(965)(5,626)(68) -(6,659)
Interest expense - ROU liabilities(83)(216) - -(299)
Other finance gains/ (losses)(973)(547)127 -(1,393)
Profit / (loss) before tax5,257(6,572)15214,04012,877
Income tax -(185)--(185)
Profit / (loss) after tax5,257(6,757)15214,04012,692
Total assets25,16334,8733226,98487,052
ROU assets9732,739 - -3,712
Other property plant and equipment402714 -315
Pascomer IP - - -12,50012,500
Other intangible assets - - -14,48414,484
Total liabilities7, 8 9 261,8978 -69,797
Capital expenditure20675 -92
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker (CODM). For the purposes of NZ IFRS 8, the CODM is a group comprising the
Board of Directors, together with the Chief Executive Officer, the Chief of Staff, the Chief Financial Officer
and the Director of International Business Development. This has been determined on the basis that it is this
group that determines the allocation of the resources to segments and assesses their performance.
The Group has four operating segments based on geographical locations reportable under NZ IFRS 8,
as described below, which are the Group’s strategic groupings of business units. The following summary
describes the operations in each of the Group’s reporting segments:
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
• New Zealand – Includes the Head Office function for the Group, supplier relationships and procurement
of all stock for the Group, all regulatory activity, governance, all marketing activity and all finance
activity. The sales and distribution activity principally relate to the New Zealand market.
• Australia – Includes the sales and distribution activity relating to the Australian market.
• Asia – Includes the sales and distribution activity relating to the Southeast Asian market (Brunei, China,
Hong Kong, Malaysia, Philippines, Singapore and Vietnam).
• Rest of World – Includes the out-licensing of IP developments to markets in which the Group does not
have a presence and the export of products to export markets. The costs of research and development
and new market development activity not specific to the other segments are expensed to this segment.
• Major Customers – Revenues from one customer of the Australian segment (being a licensed
wholesaler) represents approximately NZ$30.3m (2020: NZ$24.4m) and from one customer of the
New Zealand segment (also being a licensed wholesaler) represents approximately NZ$15.6m (2020:
NZ$15.2m) of the Group’s total revenues.
Finance income comprises interest income that is recognised on a time-proportion basis using the
effective interest method.
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.
50
51

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
6. NET OPERATING PROFIT
20212,020
Note$’000$’000
Profit before tax7,88712,877
After charging the following specific expenses 
Finished goods materials63,52156,626
Inventory write off843706
Audit fees and review of financial statements7353240
Short term rental expenses - premises13250
Share options expense 45114
 
Short term employee emoluments
(1)
 
Selling and distribution expenses7,3146,525
General and administration expenses2,4992,162
Research and development expenses1,8991,613
  11,71210,300
Research and development expenses 
Business development74333
New market development1,4411,651
  1,5151,984
Depreciation 
Plant and machinery8292
Furniture and fittings1824
Vehicles36
ROU equipment5654
ROU vehicles327319
ROU buildings333319
  819814
Amortisation 
Patents156142
Software1734
Development costs4040
Registration costs7270
  285286
Finance costs 
Interest on borrowings3,1466,659
Interest on ROU liabilities295299
Foreign exchange losses/(gains)(239)2,127
Derivative losses/(gains)(360)(756)
Other financing costs/(gains)(17)22
  2,8258,351
1
This includes contributions recognised as an expense for defined
contributions 569361
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
7. FEES PAID TO AUDITORS
20212020
$’000$’000
Audit of financial statements  
Audit of annual financial statements (NZ)198208
Audit of annual financial statements (AU)117
Review of interim financial statements3832
Review of Callaghan claim 1212
Total fees for audit and review services353252
 
Other services 
Tax due diligence services - Deloitte414
Total fees paid to Deloitte357266
8. TRADE AND OTHER RECEIVABLES
20212020
$’000$’000
Trade receivables34,97326,861
Provision for bad debt -(32)
Less provision for customer rebates(5,746)(4,202)
Prepayments and sundry debtors1,8123,342
Total trade and other receivables31,03925,969
1-30 Days
31-60
Days61-90 Days90+ DaysTotal
Ageing of overdue trade debtors$’000$’000$’000$’000$’000
31 March 20215,3001831062655,854
31 March 20202,8293781714803,858
All balances are expected to be settled within the next 12 months.
The expected credit loss (ECL) allowance provision has been determined as follows:
Current+1 Month>+1 MonthTotal
As at 31 March 2021 $’000$’000$’000$’000
Expected loss rate**0.03%* -
Gross carrying amount29,1195,30055434,973
Expected credit loss allowance
provision
---
-
Short term loss allowance provision
---
-
Long term loss allowance provision - - -  -
Current+1 Month>+1 MonthTotal
As at 31 March 2020 $’000$’000$’000$’000
Expected loss rate**0.03%* -
Gross carrying amount23,0032,8291,02926,861
Expected credit loss allowance
provision
--32
32
Short term loss allowance provision
---
-
Long term loss allowance provision - - 32  32
*Expected credit losses are negligible.
The average credit period on sale of goods is 41 days (2020: 46 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 EC
L
52
53

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
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.
The Group does not expect any significant expected credit losses due to the nature of the distribution
and regulatory licensing structure of the industry.
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 (2020: nil).
9. INVENTORIES
20212020
$’000$’000
Inventory on hand34,12423,692
Provision for obsolescence(470)(958)
Total inventories33,65422,734
Inventory on hand comprises pharmaceutical goods ready for resale.
The value of inventory is transferred to cost of sales in the income statement when sold.
In order to reduce supply chain risks, the Group purchases from multiple manufacturing sites across
different geographies for its main products such as Maxigesic. During the period, the Group increased
average stock holdings to between five and six months as an additional safeguard to mitigate against the
supply chain risks associated with the pandemic.
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.
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
10. PROPERTY, PLANT & EQUIPMENT
Plant and
machinery
Furniture
and
fixturesVehicles
ROU
Buildings
ROU
Vehicles
ROU
equipmentTotal
$’000$’000$’000$’000$’000$’000$’000
(a) Cost       
Balance 1 April 2019972434174 - - -1,580
Additions884 -3,4727071864,457
Disposals(37)(5) - -(15) -(57)
Balance at 31 March 20201,0234331743,4726921865,980
Additions912 -544265479
Disposals - - -(7)(109)(3) -
Balance at 31 March 20211,1144351743,5191,0091886,459
 
(b) Depreciation       
Balance 1 April 2019(806)(273)(144) - - -(1,223)
Additions(92)(24)(6)(319)(319)(54)(814)
Disposals282 - -54 -84
Balance at 31 March 2020(870)(295)(150)(319)(265)(54)(1,953)
Additions(82)(18)(3)(333)(327)(56)(819)
Disposals - - -71093 -
Balance at 31 March 2021(952)(313)(153)(645)(483)(107)(2,772)
 
(c) Carrying amounts       
Balance at 31 March 2020153138243,1534271324,027
Balance at 31 March 2021162122212,874526813,786
54
55

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
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.
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
Lease accounting
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. This expense is presented
within general and adminstrative expenses in the consolidated income statement.
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.
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.
56
57

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
11. INTANGIBLE ASSETS
Pascomer
IPTrademarks
Capitalised
registration
Capitalised
developmentPatentsSoftwareTotal
$’000$’000$’000$’000$’000$’000$’000
(a) Cost 
Balance at
1 April 2019 -8051,4303,9172,7225329,406
Additions -1939035,84029217,229
Additions
from business
combinations12,500 - - - - -12,500
Disposals -(262)(436) - - -(698)
Balance at
31 March 202012,5007361,8979,7573,01453328,437
Additions -732,7282,994226 -6,021
Disposals - - - - - - -
Balance at
31 March 202112,5008094,62512,7513,24053334,458
 
(b) Amortisation 
Balance at
1 April 2019 - - -(22)(680)(465)(1,167)
Amortisation - -(70)(40)(142)(34)(286)
Disposals - - - - - - -
Balance at
31 March 2020 - -(70)(62)(822)(499)(1,453)
Amortisation - -(72)(40)(156)(17)(285)
Disposals - - - - - - -
Balance at
31 March 2021 - -(142)(102)(978)(516)(1,738)
 
(c) Carrying
amounts 
Balance at
31 March 202012,5007361,8279,6952,1923426,984
Balance at
31 March 202112,5008094,48312,6492,2621732,720
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
Pascomer IP
The Group acquired the remaining 50% of Dermatology Specialties Limited Partner (“DSLP”) and its
general partner DSGP Limited, from its joint venture partner Tardimed Sciences on 5 July 2019 and
these have been fully consolidated from this date. DSLP was originally formed 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.
As a result of the transaction, the Group retained the rights to the intellectual property, future product
sales and royalties.
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.
Taking into account the inherent uncertainties of both the successful conclusion of clinical trials and
the successful registration with orphan status, the Group has recognised the Pascomer intellectual
property at its fair value of $12.5m in the prior year.
During the period, the Group has assessed the progress of Pascomer and identified that the clinical
trials have been progressing positively and other than for the slow down resulting from Covid19, the
Group remains confident of a successful outcome.
The Group has assessed the recoverability of Pascomer’s carrying value ($12.5m) by engaging an
independent registered valuer, Edison Investment Research Limited, in March 2021. The recoverable
amount of Pascomer is determined based on the fair value less costs of disposal methodology, using
a risk-adjusted net present value (NPV) based on a series of assumptions on the development and
marketing of the product per below.
a) The period used for the discounted cash flow are broken down for two indications the drug is
aiming to treat, Angiofibromas (AF) and Port Wine Stain (PWS).
• 7 years (USA) and 10 years (Europe) for AF
• 15 years for PWS
b) The discount rate used 12.5%
c) For AF in TSF the addressable market has been taken as 74.5% of 6,000 patients in the USA
and 11,000 in Europe.
d) Growth rates are modelled using a second order differential equation based on current
penetration, distance from peak penetration, and the listed rate constant with peak
penetration of 20% for AF in TSF and 1.7% in the USA and 3.4% in Europe for PWS.
e) For PWS the addressable market has been taken as 1.3 million patients in the USA and 2.0
million in Europe. It is assumed there is no growth in the patient base and a peak penetration
of 1.7% in the USA and 3.4% in Europe.
This valuation methodology uses significant inputs which are not based on observable market data,
and therefore this valuation technique is classified as level 3 of the fair value hierarchy.
Subject to the successful clinical trials and registration in the US and Europe, the valuation indicates
sufficient headroom such that a reasonably possible change to the key assumptions is unlikely to
result in an impairment of the Pascomer intellectual property.
58
59

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
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.
Development and registration projects are regularly reviewed throughout the year by a staff committee
comprising the CEO, CFO, Head of Drug Development and Financial Controller. The status of each
project is measured against the requirements of NZ IAS 38 and the relevant costs incurred during
the financial year are capitalised where projects meet those criteria. The criteria considered in this
assessment are:
a) the technical feasibility of completing the intangible asset so that it will be available for use or
sale.
b) the Group’s intention to complete the intangible asset and use or sell it.
c) the Group’s ability to use or sell the intangible asset.
d) how the intangible asset will generate probable future economic benefits. Among other things,
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 which is usually between 5 and 10 years, and software over 3 to 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 it’s recoverable amount if the asset’s carrying amount
is greater than it’s estimated recoverable amount.
Impairment
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.
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
12. INCOME TAX
20212020
$’000$’000
a) Tax expense 
Profit before tax7,88712,877
 
Tax calculated at domestic tax rates applicable2,2083,606
Adjustment due to different tax rates of subsidiaries
operating in different jurisdictions 3,8181,251
Tax on income not assessable -(2,697)
Tax on expenses not deductible(241)39
Tax on losses recognised(5,804)(2,199)
Non-resident withholding tax124185
Tax expense105185
 
Comprising 
Current tax124185
Deferred tax (19) -
 
20212020
 $’000$’000
b) Deferred tax balance 
Deferred tax asset724705
Deferred tax asset724705
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
2021, the Group recognised deferred tax assets on temporary differences totalling $724k (2020 $705k) 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.
The movement in deferred tax is:
Provisions
Recognised
TotalTotal
Tax losses 
$’000$’000$’000
31-Mar-19229476705
Movements(439) -(439)
Recognition of losses -439439
31-Mar-20(210)915705
Movements19 -19
Recognition of losses ---
31-Mar-21(191)915724
60
61

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
The amount of tax loss carried forward that is available for future utilization is $24,220,598 (FY2020:
$44,078,210)
 $’000
c) Imputation and franking credit available to use  
NZD  -
AUD 322
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.
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
13. INTEREST BEARING LIABILITIES
20212020
$’000$’000
Current lease liabilities614506
Non-current lease liabilities3,2423,495
BNZ overdraft1,661 -
BNZ Term loans current portion3,5002,000
BNZ Term loans non-current portion33,20041,200
Total42,21747,201
20212020
$’000$’000
Opening balance of CRG loan at 1 April -41,750
Capitalised interest -1,006
Repayment of principal -(45,320)
Loss on FX translation -2,564
Closing balance at 31 March - -
 
Opening balance of BNZ loan at 1 April43,200 -
BNZ loans drawn down -58,200
Repayment of principal(6,500)(15,000)
Closing balance at 31 March36,70043,200
The CRG loan facilities were repaid in full on 31 March 2020.
In March 2020, the Group entered a loan agreement with BNZ for $43.2m. The BNZ loans have a
general security over the assets of the Group together with a group guarantee. The new facility
includes a progressive part reduction in principal over the three-year term. The loan attracts an
effective interest rate of 8.48%, which is lower than the interest rates charged on the repaid CRG loan,
resulting in a reduction of interest costs during the period.
The loan is partially supported by a guarantee from NZ ECO. This guarantee is reduced by the
progressive principal repayments and is expected to be released by the end of the three years.
All covenants relating to the BNZ facility have been complied with during the year.
Borrowings are initially recognised at fair value plus transaction costs incurred. Borrowings are subse-
quently 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 settle-
ment of the liability for at least 12 months after the balance sheet date. Borrowing costs are expensed over
the term of the borrowing.
Cash and cash equivalents include 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. Bank overdrafts
are shown within borrowings in current liabilities on the balance sheet.
62
63

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
14. TRADE AND OTHER PAYABLES
20212020
$’000$’000
Trade payables14,7038,622
GST payable1,7441,467
Employee entitlements1,414919
Other payables and accruals3,4687,284
Total21,32918,292
The trade payables amount represents 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.
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.
15. PROVISIONS
20212020
$’000$’000
Opening balance of supplier rebates at 1 April4,1951,270
Provision utilised(4,195)(1,270)
Additional provisions required4,4614,195
Closing balance of supplier rebates at 31 March4,4614,195
Supplier rebates are based on profit sharing arrangements with suppliers which are estimated on
achieving expected set margin targets and are expected to be utilised within the next 12 months. These
are included as an expense in cost of sales.
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
16. SHARE CAPITAL
Ordinary shares and redeemable preference shares are classified as equity.
2021202020212020
SharesShares$’000$’000
Ordinary share capital104,583,87597,309,01980,35957,0 61
Less capital raising costs - -(3,162)(2,439)
Redeemable preference shares -3,330,000 -9,124
Total104,583,875100,639,01977,19763,746
2021202020212020
$NZ000’sSharesShares$’000$’000
Share capital at beginning of the year100,639,019100,639,01963,74663,743
Issue of ordinary shares for conversion of
redeemable preference shares605,856-1,669-
Issue of ordinary shares for exercised
share options139,000-116-
Issue of ordinary shares for new share
capital3,200,000-11,6663
Total104,583,875100,639,01977,19763,746
During the period, all 3,300,000 redeemable preference shares issued on 24 March 2017 were converted by the holders
into 3,300,000 ordinary shares with an additional 605,856 ordinary shares being issued in respect of accumulated
dividends on the redeemable preference shares. CRG converted their preference shares on 20 May 2020 and Atkinson
Family Trust converted their preference shares on 7 August 2020. The preference shares did not carry any right to vote
except at meetings of an interest group of holders of redeemable shares.
17. EARNINGS PER SHARE
20212020
$’000$’000
Earnings used in the calculation of basic and diluted earnings per share  
Profit after tax7,7 8 212,692
Less redeemable preference shares dividend(188)(994)
Earnings for the purpose of basic earnings per share7,59411,698
Effect of dilutive potential ordinary shares
Share options vested but not yet exercised288301
Earnings for the purpose of diluted earnings per share7,30611,397
Weighted average number of ordinary shares for the 
purposes of basic and diluted earnings per share103,296,56297,309,019
 
Earnings per share
Basic and diluted ($)$0.07$0.12
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.
64
65

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
18. DIVIDENDS PER SHARE
No dividends have been declared to the ordinary shareholders during the current or prior year.
The redeemable preference shares issued on 24 March 2017 attracted a dividend rate of 9.4% per annum,
or 25.8 cents per share per annum and fell due on a quarterly basis. During the period all holders of
redeemable preference shares converted their preference shares into ordinary shares. Dividends up to the
date of conversion were $187,574 (including withholding tax) and were paid.
19. STAFF SHARE OPTIONS
Staff share options are exercisable at the price of $2.80 each, being the issue price of a share at the time
of the Company’s initial listing on NZX and ASX. The vesting period is generally up to four years from date
of issue however this varies according to various performance criteria. Other than in limited circumstances
options are forfeited if an employee leaves the group before the options vest. The options are valued at fair
value as calculated independently using the Black Scholes model.
Movements in the number of share options outstanding and their related weighted average exercise
prices are as follows
20212020
 AverageOptionsAverageOptions
exercise price exercise price
 $ per share $ per share 
Balance at beginning of year2.801,157,164 2.801,200,644
Issued2.80- 2.80 -
Forfeited2.80- 2.80 -
Exercised2.80(140,000)2.80(1,000)
Lapsed0.00(552,164)0.00(42,480)
Balance at end of year2.80465,000 2.801,157,164
Weighted average share price for options exercised during the period $2.37 (2020: $3.49)
Of the 465,000 outstanding options, 232,500 are currently exercisable (2020: 697,164)
Share options outstanding at the end of the year have the following expiry dates, exercise dates and
exercise prices
20212020
Expiry
month
Exercisable
month
Exercise
price
 
 
 
 
April-2020December 20172.80 -124,968
April-2020December 20182.80 -547,196
June-2022March 20192.80 25,00025,000
June-2022March 20202.80 220,000 -
June-2022March 20222.80 100,000 -
June-2022Various2.80 120,000460,000
Total share options outstanding  465,0001,157,164
The weighted average remaining contractual life of options outstanding at the end of the period was 1.2 years (2020:
1.5 years)
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
20212020
Share options reserve  $’000$’000
Balance at beginning of year(763)(682)
Current year amortisation(44)(114)
Transferred to ordinary share
capital1161
Options lapsed transferred to retained earnings41732
Balance at end of year  (274)(763)
140,000 share options were exercised during the reporting period. The options outstanding at 31 March 2021 had
a weighted average exercise price of $2.80 and a remaining average contractual life of 1.2 years. No options were
granted during the year.
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, 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 using the Black Scholes model.
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.
66
67

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
20. CONTINGENT LIABILITIES
In December 2019, the Company renewed its guarantee of AFT Pharmaceuticals (AU) Pty Limited for its
five-year lease extension contract with Investec Limited for the premises occupied in Sydney, Australia. A
deposit of AUD$84,000 is held with NAB bank as security for this lease.
The Group has provided a guarantee to Robt Jones Investment Holdings Ltd of $100,000 as security over
the leased office premises at 129 Hurstmere Road, Takapuna. Auckland. The Group placed NZD$75,000 on
term deposit with BNZ bank as security for a guarantee issued by BNZ in favour of the NZX.
The Company has received notice of a potential claim from a former contractor in South East Asia.
The Group’s lawyers have advised that they do not consider that the claim has merit, and they have
recommended that it be contested. No provision has been made in these financial statements as the
Group’s management does not consider that there is any probable loss.
21. COMMITMENTS
(a) Capital Commitments
The Group has no capital commitments at 31 March 2021 (2020: nil).
(b) Lease Commitments
Payments for leases with a term less than 12 months or a low value are charged in the income statement
on a straight-line basis over the term of the lease. The maturities of the outstanding lease payment were
as follows
20212020
$’000$’000
Maturing within one year871777
Maturing in one to five years2,1772, 274
Maturing after five years2,1432,518
Total5,1915,569
The Group accounts for leases in accordance with NZ IFRS 16.
(c) Other Commitments
The Group has previously entered into contracts to complete clinical trials overseas. The contracts
required payments to be made progressively when those stages or milestones are achieved. All amounts
due under the contracts were paid during the current year. Amount due at 31 March 2021: nil (2020:
$1.65m).
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
22. FINANCIAL RISK MANAGEMENT
(a) Managing financial risk
The Group’s activities expose it to various financial risks as detailed below.
• Market risk
Management is of the opinion that the Group’s exposure to market risk at balance date is defined as:
Risk Factor
Description
DescriptionSensitivity
Currency riskExposure to changes in foreign exchange rates
on assets and liabilities of subsidiaries, and USD
denominated borrowings
As below
Interest rate riskExposure to changes in interest rates on borrowingsAs below
Other price riskNo commodity securities are bought, sold or tradedNil
• Foreign exchange risk
The Group benefits from the use of derivative financial instruments to manage foreign currency exposures.
The fair value of forward exchange contracts is calculated by reference to current forward exchange rates
at year end and the contract exchange rates, considered level 2 of the fair value hierarchy.
The Group purchases goods and services from overseas suppliers in a number of currencies, primarily
AUD, USD, EUR and GBP which exposes the Group to foreign currency risk. The Group manages foreign
currency risk through use of derivative arrangements, in particular forward exchange contracts. The
exposure is monitored on a regular basis based on Group foreign exchange policies. Future revenues from
markets outside Australasia will be denominated primarily in USD and EUR which will provide a natural
hedge against these costs.
In the current year net foreign exchange gains totalled $599k (2020: $1,371k loss). The balance of gains/
losses are derived from the restatement of monetary balances at the spot rate on the year-end balance
date of 31 March 2021.
In total, the Group had financial assets and liabilities denominated in the following currencies:
FY 2021FY 2020
AssetsCurrencyLiabilitiesAssetsCurrencyLiabilities
NZD$’000 NZD$’000NZD$’000NZD$’000
18,568 AUD54,10113,743AUD21,797
1,436 USD3,1762,618USD378
336 MYR3271MYR91
593 SGD181,204SGD21
2,552 EUR3,484745EUR1,418
4 GBP982GBP-
68
69

AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
The following forward foreign exchange contracts were held at the end of the 2021 financial year:
Forward Foreign Exchange Contracts
Buy currency
Buy currency
amount ‘000
Sell amountBuy amountFair value
NZD$’000NZD$’000NZD$’000
EUR4,4307,6947,466(227)
GBP35969470713
USD4,9007, 2417,0 2 5(216)
Sell currencySell currency Buy amountSell amountFair value
amount $’000NZD$’000NZD$’000NZD$’000
AUD12,45013,46913,576(107)
Total liability as at 31 March 2021 (537)
All contracts mature within one year from 31 March 2020.
The following forward foreign exchange contracts were held at the end of the 2020 financial year:
Forward Foreign Exchange Contracts
Buy currency
Buy currency
amount ‘000
Sell amountBuy amountFair value
NZD$’000NZD$’000NZD$’000
EUR4,1957,2967,7 1 8422
GBP18135737114
USD10015516914
Sell currencySell currency Buy amountSell amountFair value
amount $’000NZD$’00031-Mar-20NZD$’000
AUD1,2501,3481,28464
Total asset as at 31 March 2020  514
• Interest rate risk
Borrowings are at a mixture of floating base rates plus a margin determined by the group’s performance
against covenant adherence levels, which exposes the Group to fair value interest rate risk. There are no
specific derivative arrangements to manage this risk.
• Credit risk
Financial instruments, which potentially subject the Group to credit risk, principally consist of accounts
receivable. Regular monitoring is undertaken to ensure that the credit exposure remains within the Group’s
normal terms of trade.
The Group has one significant concentration of credit risk at 31 March 2021 with the largest debtor being
AU$11.5m (2020: AU$5.9m). There has been no past experience of default and no indications of default in
relation to this debtor.
The Group’s cash and short-term deposits are placed with high credit quality financial institutions.
Accordingly, the Group has no significant concentration of credit risk other than bank deposits, with 2.2% of
total assets at the Bank of New Zealand (2020: 4.1%), 0.9% at NAB Bank (2020: 2.2%). The carrying value of
financial assets represents the maximum exposure to credit risk.
• Liquidity risk
Liquidity risk is the risk that the Group may encounter difficulty in raising funds at short notice to meet
its commitments and arises from the need to borrow funds for working capital. The directors monitor the
risk on a regular basis and actively manage the cash available to ensure the net exposure to liquidity risk is
minimised.
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
The liquidity/maturity profile of the liabilities is as follows:
< 1 year1-2 years2-5 years> 5 yearsTOTAL
31 March 2021$’000$’000$’000$’000$’000
Trade and other payables(21,329) - - -(21,329)
Borrowings(7,773)(33,841) - -(41,614)
Derivative instruments (outbound)(29,098) - - -(29,098)
Derivative instruments (inbound)28,561 - - -28,561
Total(29,639)(33,841) - -(63,480)
31 March 2020$’000$’000$’000$’000$’000
Trade and other payables(18,292) - - -(18,292)
Borrowings(5,037)(7,200)(43,138) -(55,375)
Derivative instruments (outbound)(9,092) - - -(9,092)
Derivative instruments (inbound)9,606 - - -9,606
Total(22,815)(7,200)(43,138) -(73,153)
(b) Fair Values
The carrying value of financial assets and liabilities (trade receivables and trade payables) approximates
their fair value. Trade receivables are valued net of provision and trade payables are valued at their original
amounts by contract.
23. MANAGEMENT OF CAPITAL
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern so that it can continue to provide returns to its shareholders and to maintain a strong capital base
to support the development of its business. The Group meets these objectives through a mix of equity
capital and borrowings. The level and mix of capital is determined by the Group’s internal Corporate
Governance Policies.
Under the BNZ facility, there is a covenant requirement that the facility, comprising an overdraft and letter
of credit facility, must not exceed the total of 70% of acceptable debtors plus 50% of acceptable stock.
Additional covenants include a requirement for a minimum principle and interest cover ratio, a minimum net
leverage ratio and a maximum Capex and R&D ratio. Covenant reporting is required on a quarterly basis.
The Group was compliant with all BNZ covenants during the year.
70
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AFT PHARMACEUTICALS
ANNUAL REPORT 2021
FINANCIAL STATEMENTS 2020-2021
24. INVESTMENT IN SUBSIDIARIES
Interest held
20212020Country of
%%incorporation
Principal activities
AFT Pharmaceuticals (AU) Pty Ltd100%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 Limited65%65%New ZealandNo activity
AFT Limited Partner Limited100%100%New Zealand
Sole partner in Dermatology
Specialties LP
Dermatology Specialties Limited
Partnership
100%100%New ZealandNo activity
DSGP Limited100%100%New Zealand
General partner of Dermatology
Specialties LP
AFT Dermatology Limited100%100%New ZealandDistribution of pharmaceuticals
AFT Pharmaceuticals (EUR) Limited100%-Ireland
Distribution of pharmaceuticals in
Europe
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.
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.
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
25. SIGNIFICANT EVENTS AFTER BALANCE SHEET DATE
On 28 April 2021, the Group announced that it had licensed Maxigesic IV in the US. The agreement with
Hikma, the US’ third largest supplier of generic injectable medications by volume, will see AFT benefit from
upfront, regulatory and commercial milestone payments worth up to US$18.8 million and a profit share from
in-market product sales.
On 7 May 2021, the Group signed an amended agreement with BNZ. A new $5 million Business Finance
Scheme Loan has been entered into and one of the working capital loans has been reduced by $5 million.
The new loan is five-year interest only loan at a fixed rate of 2.30%. The existing BNZ facilities maturity date
has been extended to 27 April 2023.
There were no other significant events after balance sheet date.
26. RELATED PARTIES
The Group had related party relationships with the following entities:
Related partyNature of relationship
CRG (Capital Royalty
Group)
AFT Non-Executive Director, Nate Hukill, is President and Chairman of CRG, the
Group that provided the loan that was repaid by the Group on 31 March 2020.
CRG ceased to be shareholder of AFT on 15 June 2020.
Nate Hukill resigned as a director of AFT on 23 June 2020.
Atkinson Family Trust
AFT Chief Executive Officer, Hartley Atkinson, is a Trustee / Discretionary
Beneficiary of Atkinson Family Trust.
AFT Chief of Staff, Marree Atkinson, is a Discretionary Beneficiary of Atkinson
Family Trust
The following transactions were carried out with these related parties:
20212020
$’000$’000
a) Interest expense   
CRG  -5,648
b) Dividends on redeemable preference shares  
CRG108775
Atkinson Family Trust  80219
Key management compensation20212020
$’000$’000
Directors fees 376295
Executive salaries1,1901,083
Short term benefits293233
Options expense1442
Key management compensation1,8731,653
Key management includes external directors, the Chief Executive Officer, the Chief of Staff, the Chief
Financial Officer and the Director of International Business Development. These positions are mainly
responsible for the planning, controlling and directing the activities of the business.
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended 31 March 2021
72
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AFT PHARMACEUTICALS
ANNUAL REPORT 2021
STATUTORY DISCLOSURES
Corporate Governance
The Board and management of AFT Pharmaceuticals Limited (AFT or the Company) are committed to
ensuring that AFT maintains corporate governance practices in line with best practice and adheres to the
highest ethical standards.
The Board has had regard to the NZX Listing Rules and a number of corporate governance
recommendations when establishing its governance framework, including the Third and Fourth Editions of
the Australian Securities Exchange (ASX) Corporate Governance Council Principles and Recommendations
(notwithstanding AFT is not required to follow these recommendations because of its ASX Foreign Exempt
Listing) and the current NZX Corporate Governance Code (NZX Code).
The NZX Listing Rules require AFT to formally report its compliance against the recommendations
contained in the NZX Code. How AFT has implemented these recommendations is set out in AFT’s
Corporate Governance Statement. Except to the extent outlined in the Corporate Governance Statement,
the Board considers that AFT’s corporate governance structures, practices and processes have followed all
of the recommendations in the NZX Code in the financial year to 31 March 2021.
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.
Stock Exchange Listings
AFT is listed on the NZX Main Board and on the Australian stock exchange (ASX) as an ASX Foreign
Exempt Listing. As an ASX Foreign Exempt Listing, AFT needs to comply with the NZX Listing Rules
(other than as waived by NZX) but does not need to comply with the vast majority of the ASX Listing Rule
obligations.
AFT is incorporated in New Zealand.
Statutory Disclosures
Non-executive Director Remuneration
AFT’s shareholders have approved a total cap of $575,000 per annum for Non-executive Directors’ fees, for
the purposes of the NZX Listing Rules. This annual fee pool has not been increased since it was approved
by shareholders in 2015. With the return of the Company to profitability in the financial year ended 31
March 2019 and having held directors’ fees at the same level since AFT listed in 2015, the Board undertook
a review of non-executive directors’ fees during the financial year ended 31 March 2020 to ensure that the
Company is offering appropriate levels of remuneration to both existing and prospective directors. Because
of the effects of Covid-19, any decision to alter directors’ fees was placed on hold and re-evaluated during
the financial year ended 31 March 2021. As a result of that re-evaluation, an increase to the non-executive
directors’ fees was approved and took effect on 1 September 2020.
Additional information about the remuneration payable to directors is set out in AFT’s Corporate
Governance Statement, which is located on the investor centre of the Company’s website.
The current approved fixed annual fees payable to non-executive directors are detailed below:
Position
Fees per annum
(paid in NZD except
where stated)
Board of DirectorsChair$105,000
Non-Executive Director$55,000
1
Audit and Risk CommitteeCommittee Chair$20,000
Committee Member$5,000
2
Remuneration and Nominations CommitteeCommittee Chair$7,500
Committee Member
3
$5,000
2
Regulatory and Product Development Oversight
Committee
Committee Chair$15,000
Committee Member
3
$5,000
1
Fee payable to non-United States (US) based directors. US based directors receive USD$55,000.
2
Fee payable to non-US based directors. US based directors receive USD$5,000.
3
Payable only to non-executive directors who are members of the Committee.
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AFT PHARMACEUTICALS
ANNUAL REPORT 2021
STATUTORY DISCLOSURES
Non-executive directors received the following directors’ fees, remuneration and other benefits from the
Company in the financial year ended 31 March 2021:
Remuneration and value of other benefits received in the financial year ended 31 March 2021
2
Name of DirectorNon-executive
directors’ Board
fees
Audit
and Risk
Committee
fees
Remuneration
and Nominations
Committee fees
Regulatory
and Product
Development
Oversight
Committee fees
Shares
and other
payments or
benefits
1
Total
remuneration
Anita Baldauf
4
$22,917----$22,917
Jim Burns
2
$76,501$7,286$7,286--$91,073
David Flacks
$100,000
(Chairman)
$5,000---$105,000
Nate Hukill
3
------
Jon Lamb$48,750
$14,792
(Chairman)
$7,500
(Chairman)
--$71,042
Doug Wilson$48,750--
$11,667
(Chairman)
-$60,417
Ted Witek
2
,
5
20,036----20,036
Total$316,954$ 2 7,07 8$14,786$11,667-$370,485
1
In addition to Directors’ fees, AFT meets costs incurred by non-executive Directors that are incidental to the performance of their duties.
This includes paying the costs of Directors’ travel. As these costs are incurred by AFT to enable Directors to perform their duties, no value
is attributable to them as benefits to Directors for the purposes of this table.
2
Fees disclosed in NZD. Jim Burns and Ted Witek receive fees paid in USD. These fees have been converted into NZD in the above table,
calculated at an exchange rate of 1: 0.686.
3
Nate Hukill agreed not to receive any Directors’ fees during the financial year ended 31 March 2021. Nate resigned as a Director on
22 June 2020.
4
Anita Baldauf was appointed as a director on 4 November 2020.
5
Ted Witek was appointed as a director on 23 December 2020.
Statutory Disclosures (Continued)
Executive Director Remuneration
The executive directors, Hartley Atkinson and Marree Atkinson, receive remuneration and other benefits in
their respective executive roles as Chief Executive Officer and Chief of Staff and, accordingly, do not receive
directors’ fees. Their remuneration packages are set by the Board to reflect the scope and complexity of
each role, with reference to comparative market data.
During the financial year ended 31 March 2021, Hartley Atkinson and Marree Atkinson’s remuneration
comprised a fixed cash component and an at-risk short-term incentive based on achievement of specified
key performance indicators (refer below). Neither executive director was issued any form of long-term
incentive during the financial period.
The table below sets out the total remuneration and value of other benefits earned by, or paid to, each
executive director of AFT during, and in respect of, the financial year ended 31 March 2021:
Base salaryTaxable
benefits
SubtotalPay
STI
forperformance
LT I
3
Subtotal
Total
remuneration
Hartley Atkinson$506,108–$506,108$195,382
1
–$195,382$701,490
Marree Atkinson$125,071–$125,071$11,790
2
–$11,790$136,861
1
The short-term incentive (STI) stated was earned in FY2020 and paid in FY2021. Hartley Atkinson earned a short-term incentive for
FY2021 of $262,271
from a full potential of $330,000. This will be paid in FY2022.
2
The short-term incentive stated was earned in FY2020 and paid in FY2021. Marree Atkinson earned a short-term incentive for FY2021
of $10,761. This will be paid in FY2022.
³
Neither executive director was issued any form of long-term incentive during the financial period.
[Hartley Atkinson’s STI component for the period was based on achievement of key performance indicators
relating to:
• Company revenue and profit targets
• Key innovative product development; and
• Key product registration and licensing.
Marree Atkinson’s STI component for the period was based on achievement of key performance indicators
relating to:
• Company revenue and profit targets
• Human resources objectives; and
• Overhead cost savings.
Similar criteria will be applied for assessing the performance of the executive directors in respect of the
financial year ending 31 March 2022.] [Drafting note: please review and update.]
Statutory Disclosures (Continued)
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