AFT reports record revenue and earnings
AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com
23 MAY 2024
FINANCIAL RESULTS FOR THE TWELVE MONTHS TO 31 MARCH 2024
AFT reports record revenue and earnings
AFT Pharmaceuticals (NZX:AFT, ASX:AFP) today reports financial results for the twelve
months to the end of March 2024 delivering record profits and strong growth led by
sales of over-the-counter medicines in Australasia and rising demand for its medicines
in International markets.
The company has achieved this result while reducing debt and continuing to
significantly invest for the future with the expansion of its product development
portfolio, its presence in new markets such as the UK and North America and its
support for a strong programme of new product launches.
HIGHLIGHTS
1
• Full-year operating revenue up 25% to $195.4 million, lifted by 20% growth in
product sales and royalties across all channels and territories and $8.5 million
of licensing income.
• Sales in International and Asian markets (excluding licensing income) rise 70%.
• Record EBITDA
2
of $26 .2 million up 22% and Operating Profit of $24.2 million up
23%.
• Net profit after tax increases 46% to $15.6 million.
• Net debt of $16.2 million down from $29.9 million at the end of FY23.
• Dividend declared of 1.6 cents per share, (1.1 cents declared FY23).
• Maxigesic
®
IV launched in the US in February 2024 following FDA approval.
Advancing plans for the launch of the antiseptic cream Crystaderm
®
this
calendar year in China, the world’s second largest healthcare market.
• Near term rolling twelve-month stretch revenue target of $200 million in
touching distance and now focused on $300 million target.
• FY 25 guidance for operating profit of $22 million to $25 million.
Chair David Flacks said: "Today's announcement underscores the strengths of AFT’s
approach to international expansion and sustainable growth. We've benefited from
growing demand for our products in both our home markets and further afield,
1
All comparisons are to FY 23 and all figures are in New Zealand dollars unless otherwise stated.
2
EBITDA is a non-GAAP measure of financial performance. It is defined and reconciled to AFT’s
standard profit measure under New Zealand GAAP of Net Profit After Tax in the Annual Report
2
reaping the rewards of careful and consistent investment into research and
development and the product pipeline.
“With the recent launch of the intravenous form of our Maxigesic
®
pain relief medicine
in the US and the impending US launch of the line extension, the rapid dissolving tablet
Maxigesic Rapid, our proprietary products are now positioned in a significant number
of the world's major healthcare markets.
“This achievement marks a significant milestone in our journey towards becoming a
truly global pharmaceutical company and it is a major achievement for an
Australasian company."
Co-Founder and Managing Director Dr Hartley Atkinson said: "Over the last year we
have enjoyed strong topline growth across all territories, especially in our International
and Asian businesses, extending the company’s decades long record for consistent
growth.
“We have meanwhile positioned the company to build on that record with
investments for the future. These growth projects have included the establishment of
new business hubs in the US, Canada, further investment in the UK and Europe and
setting up in South Africa. We have extended our existing products to new territories,
signed 122
32
new in-licensing agreements for markets around the world, and
expanded our product development pipeline.
“We continue to see considerable potential in all of the markets we operate in , and
we are pleased with the progress we have made capitalising on it . We are looking to
the years ahead with confidence.”
FINANCIAL RESULTS
Revenue from the sale of existing products, new products and product royalties grew
by 20% to $186.9 million from $155.8 million, with the company’s family of Maxigesic
pain relief medicines and the Australian over the counter (OTC) business making the
strongest contribution.
Growth has also been supported by ongoing investment in product marketing
including the launch of Maxigesic tablets and the intravenous dose forms in the UK
(marketed as Combogesic
®
) and our E-commerce platforms.
Total revenue, which included licensing income of $8.5 million, rose 25% to $195.4
million from $156.6 million in the prior year. The majority of the licensing income came
from a milestone payment of circa $6 million from the US licensee Hikma
Pharmaceuticals following the launch of Maxigesic IV in February.
Operating profit rose 23% to $24.2 million from $19.7 million in the prior year. The result
was in line with guidance issued in February 2024, but lower than our initial guidance
of $22 million to $24 million which excluded the Hikma license income, due principally
to slower than expected Australian sales from newly launched products and our
3
Count includes one product in one territory.
3
decision to accelerate our investment into important growth projects utilizing
proceeds of the Maxigesic IV milestone payment.
Meanwhile, we saw what we believe is a short-term reduction of margins in Australasia
due to some overstocking and subsequent price discounting of some key high margin
lines, stronger sales of lower margin products plus some stock write offs including some
one off’s dating back to the pandemic.
EBITDA of $26.2 million was 22% higher than the $21.4 million in the prior period, while
net profit after tax increased 46% to $15.6 million from $10.7 million.
INTERNATIONAL EXPANSION
AFT has significantly expanded its international operations with the establishment of
business operations in a number of countries: US, Canada, UK, Europe through its
subsidiary based in Ireland, Singapore and Hong Kong. Additionally, we are setting up
AFT Pharmaceuticals South Africa. A number of product licenses have been acquired
in the UK and European markets in order to accelerate future sales growth. For
example, in Europe, AFT Pharmaceuticals Europe successfully bid for six product
licenses from an insolvent company in Germany.
AFT is on track to offer the world’s largest range of combination paracetamol and
ibuprofen products globally. Maxigesic is now sold or ordered in 73 countries up from
61 in March 2023.
The launch of Maxigesic IV in the US, the world’s largest market for pain relief
medicines, was the most significant of the year. It delivered AFT and our development
partner Hyloris Pharmaceuticals a US$6 million milestone payment that we share 65:35.
The launch is also expected to deliver an ongoing and growing stream of payments
from our profit share agreement.
AFT has assumed more control of the programme to commercialise Maxigesic in the
US, Canada, and the UK, in addition to Australasia, Singapore and Hong Kong which
together with Europe and South Africa, offers beachheads to launch our proprietary
medicines as well as medicines we have in -licensed.
We are finalising our US strategy for Maxigesic Rapid with a focus on AFT
Pharmaceuticals USA securing distributors for specific market channels. We are also
advancing plans for launch of the recently approved, Maxigesic IV in Canada
through the newly formed AFT Pharmaceuticals Canada. We offer a total of ten
different Maxigesic line extensions: Tablets, Oral Liquid, Rapid Dissolve Tablet,
Day/Night Tablet, Oral Liquid, Hot Drink, Dry Stick, PE version, Cold/Flu & Sinus Pain Kit
and Intravenous and these will be launched in target markets.
Finally, following regulatory approval for the sale of our Crystaderm antiseptic cream
in China late last year, we have continued planning for the launch this year in the
world’s second largest pharmaceutical market.
4
RESEARCH AND DEVELOPMENT
Research and development expenditure in this financial year was steady at $12
million.
In the short term we continue to work on launching our already available pipeline into
more markets: additional Maxigesic line extensions such as the Maxigesic IV US launch;
Crystaderm antiseptic cream; Kiwisoothe
®
tablets and sachets; Micolette
®
micro
enema; ZoRub
®
Osteo and HP analgesic creams. Commercialization of these
products will help to drive short to medium term sales and offset ongoing R&D
expenditure. Development work on this latter group of products has been funded
from existing cash-flows.
Our research and development pipeline now extends to seven projects. Four projects
in the pipeline exited the development phase and moved to commercialisation and
we added three new projects over the year. The new projects include treatments for
Burning Mouth Syndrome and Vulva Lichen Sclerosis, in collaboration with our
Maxigesic IV development partner Hyloris Pharmaceuticals
Last month we also announced we had extended our collaboration with Massey
Ventures and the Gillies McIndoe institute, adding the development of a treatment
for Keloid scars to the existing strawberry birthmark medicine project. These additions
bring our pre-commercialization R&D pipeline to a total of seven projects, some with
multiple indications. This pipeline offers opportunities to significantly drive our global
expansion as well as growth in our Australasian markets.
We continue to work to finalise one further agreement for a commercially significant
late-stage R&D project which would require a large clinical study.
BALANCE SHEET
AFT has significantly strengthened its balance sheet. Net debt at the end of the year
was $16.2 million, markedly lower than the $30.6 million at the end of September 2023
and the $29.9 million at the same time a year ago, and ahead of target of one-times
EBITDA.
We continue to target inventory reductions over time which to date have been
somewhat delayed by ongoing shipping disruptions, such as those in the Red Sea
area. As highlighted above, we have also prioritised growth investments over debt
reduction, and we still have additional unused debt facilities available.
Consequently, the Board has declared a full year dividend of 1.6 cents per share up
on the 1.1 cents per share of the prior year. The dividend has a record date of 20 June
2024 and a payment date of 4 July 2024.
OUTLOOK
Dr Atkinson said AFT is expecting growth for the coming financial year to continue and
is targeting operating profit – excluding any license payments – to range between $22
million to $25 million driven by better quality earnings from trading.
5
“The ongoing roll out of Maxigesic and its line extensions, the planned launch of 61
new products over the next 24 months in Australasia, coupled with numerous new
launches and increasing rates of growth in other markets around the world, position
the company well for this coming financial year and beyond,” Dr Atkinson said.
“Our goal of $200 million in annual revenue on a moving annual total is now close and
we are now focusing on the next target of $300 million annual revenue with margins
trending back to historical averages. We look forward to providing an update to
shareholders at our annual meeting in August.”
Further detail on the performance of AFT’s individual markets is contained in our
annual report also released to the NZX and ASX today and available at the following
link: https://investors.aftpharm.com/Investors/
Released for and on behalf of AFT Pharmaceuticals Limited by Malcolm Tubby, Chief
Financial Officer.
For more information:
Investors Media
Dr Hartley Atkinson Richard Inder
Managing Director The Project
AFT Pharmaceuticals Tel: +64 21 645 643
Tel: +64 9488 0232
About AFT Pharmaceuticals
AFT is a growing multinational pharmaceutical company that develops, markets, and
distributes a broad portfolio of pharmaceutical products across a wide range of
therapeutic categories which are distributed across all major pharmaceutical
distribution channels: over the counter (OTC), prescription and hospital. Our product
portfolio comprises both proprietary and in-licensed products, and includes patented,
branded, and generic drugs. Our business model is to develop and in-license products
for sale by our own dedicated sales teams in our home markets of Australia and New
Zealand and to out-license / distribute our products to local licensees and distributors
to over 125 countries around the world. For more information about the company, visit
our website: www.aftpharm.com
.
---
INVESTOR
PRESENTATION
FINANCIAL RESULTS
12 MONTHS TO 31 MARCH 2024
Dr Hartley Atkinson
Co-Founder and Managing Director
Malcolm Tubby
Chief Financial Officer
Important Notice
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH2
This presentation has been prepared by AFT Pharmaceuticals Limited (“AFT”), to provide a general overview of the performance of AFT for the year to 30 March 2024. It is not
prepared for any other purpose and must not be provided to any person other than the intended recipient.
This presentation should be read in conjunction with AFT’s interim financial statements, market releases and other periodic and continuous disclosure announcements, which are
available at www.nzx.com and www.asx.com.au.
All amounts are disclosed in New Zealand dollars (NZ$) unless otherwise indicated.
All references to financial years appearing in this presentation are for the period ending 31 March, unless otherwise indicated. This presentation is not a recommendation, offer or
invitation to acquire AFT’s securities or other form of financial advice or disclosure document.
While reasonable care has been taken in compiling this presentation, none of AFT nor its subsidiaries, directors, employees, agents or advisers (to the maximum extent permitted by
law) gives any warranty or representation (express or implied) of the accuracy, completeness or reliability of the information contained in it nor takes any responsibility for it.
The information in this presentation has not been and will not be independently verified or audited. This presentation may contain certain forward-looking statements and comments
about future events, including with respect to the financial condition, results, operations and business of AFT.
These statements are based on management’s current expectations, which may involve significant elements of subjective judgement and assumptions as to future events which may
or may not be correct, and the actual events or results may differ materially and adversely from these statements. Past performance information given in this presentation is given for
illustrative purposes only and should not be relied upon (and is not) an indication of future performance.
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH33
Dr Hartley Atkinson
Co-Founder and Managing Director
Malcolm Tubby
Chief Financial Officer
Presenting Today
Record Revenue, Earnings and Lower Debt Whilst Investing for Growth
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH4
HIGHLIGHTS
•Full-year operating revenue up 25% to $195.4 million, extending a decades long record of revenue growth
•International and Asian market revenue (excluding licensing income of $8.5 million) rises 70% to $30 million; Australasian markets up 14%;
•EBITDA
1
rises 22% to $26.2 million; operating profit rises 23% to $24.2 million, both at a record. The impact of revenue growth on earnings diluted by
investments for the future including an expansion of the R&D portfolio and new product support in Australasia
•Net debt down 45% to $16.2 million and now ahead of 1x EBITDA target; dividend declared of 1.6 cents per share against 1.1 cents for FY23
•Forecasting strong growth and margin improvement; with $300 million rolling revenue target now in focus
4
$49.0
$56.0
$64.0
$69.0
$80.0
$85.0
$106.0
$113.1
$65.8
$83.6
$49.0
$56.0
$64.0
$69.0
$80.0
$85.0
$106.0
$113.1
$90.8
$111.8
$130.3
$156.6
$195.4
$-
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
$180.0
$200.0
FY2014FY2015FY2016FY2017FY2018FY2019FY2020FY2021FY2022FY 2023FY 2024
$NZM
OPERATING REVENUE - 10YR CAGR OF 14.8%
1
EBITDA is a non-GAAP measure of financial performance and is defined and reconciled to NZ GAAP on page 23 of this presentation.
-$10.1
$6.1
$11.4
$10.7
$20.4
$19.7
$24.2
-$15.0
-$5.0
$5.0
$15.0
$25.0
$35.0
FY2018FY2019FY2020*FY 2021FY2022FY2023FY 2024
AFT GROUP OPERATING PROFIT
Operating profit ex license incomeLicense income
Australia: Sales Growth Led by OTC Markets
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH
•Revenue rises 15% to $108.2 million; driven by OTC channel growth; AFT’s liposomal vitamins and Maxigesic are the
leaders in their respective segments; GP Field Force bedded down
•Operating profits down to $15.5 million from $19.3 million following increased marketing spend on product launches.
Margins impacted by discounting and a change in mix, but we expect a normalisation in the coming year.
5
65.0%
9.6%
25.4%
70.3%
8.0%
21.7%
AUSTRALIA CHANNEL
OTCPrescriptionHospital
$61.4
$68.3
$76.7
$36.0
$42.7
$58.1
$65.5
$94.1
$108.2
$-
$20.0
$40.0
$60.0
$80.0
$100.0
FY2020FY2021FY2022FY2023 FY 2024
$NZM
AUSTRALIAN REVENUE
FY23
FY24
New Zealand: Growth in OTC
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH
•Revenue rises 11% to $48.7 million, with the OTC channel leading growth, hospital and prescription channels more
subdued.
•Operating profit was $7.3 million compared to $8.1 million in the prior year. In part this reflects the increased marketing
spend associated with product launches and brand support for Maxigesic. Margins expected to normalise.
6
$30.1
$30.5
$35.1
$21.3
$22.7
$22.9
$26.0
$44.2
$48.7
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
$50.0
FY2020 FY2021 FY 2022 FY2023 FY 2024
$NZM
NEW ZEALAND REVENUE
52.3%
33.6%
14.1%
55.1%
31.3%
13.6%
NEW ZEALAND CHANNEL
OTCPrescriptionHospital
FY23
FY24
Driving Australasian Growth With New Products
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH
•A full portfolio of product launches for our Australasian business, with 61
targeted for FY25 to FY26
•DuringFY24 we launched 18 new products across Australasia including:
•Extending Ferro Range
•Ferrocare Pregnancy Multivitamins
•Ferro-MR Tablets
•Ferro-MR + Vit C Tablets
•Ferro-Malt Tablets
•Extending Preservative Free Eye Drop Range
•DorzolaTim Preservative Free Eye Drops
•Extending Hospital injectable products
•5 new injectables
7
BREAKING THE BAD OF PSEUDOEPHEDRINE
•Deploying a pioneering technology designed to combat diversion to
manufacture methamphetamine.
•Matrix technology reduces the amount of pseudoephedrine that
can be extracted from the medicines.
•Approved for in Australia, seeking New Zealand approval
•Seeing strong interest from pharmacists concerned about in store
robberies
Asia: Maxigesic IV Drives Growth; Supported by OTC and Online
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH
•Operating revenue grew 57% to $10.7 million from $6.8 million, with growth driven by the hospital channel and strong
demand for Maxigesic I V, particularly in Korea. Chinese cross border e-commerce (CBEC) initiatives also contribute
•Operating profit up 177% to $2.5 million from $0.9 million. Expect continuing growth supported by the launch of Crystaderm
antiseptic cream in China and further penetration of OTC markets and continued online growth
•.
•Operating profit rose to $2.5 million from $0.9 million.
$3.7
8
14.7%
5.9%
79.4%
23.9%
8.2%
67.9%
ASIA CHANNEL
OTCPrescriptionHospital
$4.9
$4.4
$5.5
$3.6
$5.4
$3.2
$5.3
$6.8
$10.7
$-
$2.0
$4.0
$6.0
$8.0
$10.0
FY2020 FY2021 FY 2022 FY2023 FY 2024
$NZM
ASIAN REVENUE
FY23
FY24
9
International: An Expanding Portfolio in New Markets
•Revenue from product sales and royalties in the international business grew by
78% to $19.3 million, primarily due to growing momentum in Maxigesic sales (in
various dose forms)
•Operating profit rises to $8.6 million from $0.3 million lifted by milestone payments
following the launch of Maxigesic IV in the US.
9
$9.1
$9.9
$13.1
$4.7
$12.8
$7.0
$15.0
$11.7
$27.8
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
FY2020 FY2021 FY 2022 FY2023 FY 2024
$NZM
INTERNATIONAL REVENUE
2
3
4
7
9
20
28
43
46
61
73
0
10
20
30
40
50
60
70
80
FY2014FY2015FY2016FY2017FY2018FY2019FY2020FY2021FY2022FY2023FY 2024
COUNTRIES
COUNTRIES WHERE MAXIGESIC IS SOLD AND ORDERED
AFT’s Global Reach
Our medicines are now available in more than 70 countries around the world
$6.3
$7.0
$9.1
$10.4
$5.6
$5.0
$11.9
$12.0
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
FY 2021FY 2022FY 2023FY 2024
NZ$M
RESEARCH AND DEVELOPMENT EXPENSES*
Commercialized Research and Development investment
Several projects have exited development during the year, and in the commercialization and revenue generating phase
PROJECTS NOW IN COMMERCIALISATION
•Maxigesic – nine dose forms now in market and protected by patents.
•Tablets
•Oral liquid
•Rapid Dissolving Tablet (Patent 2039).
•Intravenous (Patent 2035)
•Crystaderm, antibacterial and anti-acne cream, a unique and proprietary
formulation
•Micolette micro-enema for bowel obstruction
•Kiwisoothe tablets and sachets for gut discomfort and constipation
•Capsaicin cream in two strengths for Osteoarthritis (low) and Neuropathic
pain (high)
11
*Expensed and capitalised
12
Investing in a Strong Research and Development Pipeline
AFT’s positive cashflows have positioned the company well to undertake and secure research and
development projects either alone or in partnership with others
.
PROJECT PATENTPARTNERSHIP AND APPLICATION
DERMATOLOGY
Pascomer2040/2044
1
Facial angiofibromas / Port Wine Stains
Strawberry Birthmarks 2041Gillies McIndoe and Massey Ventures
Keloid Scars topical treatment2044
1
Gillies McIndoe and Massey Ventures
Vulvar Lichen Sclerosis TBCHyloris Pharmaceuticals
EYECARE
Antibiotic Eye Drop2037 and
2044
1
For drug resistant infections:
- Conjunctivitis, Keratitis, Post Kpro prophylaxis
PAIN
Burning Mouth SyndromeTBCHyloris Pharmaceuticals
DRUG DELIVERY
NasoSURF for conscious sedation 2036
OTHER
Novel new medicine (confidential)2037Late-stage development under negotiation
1. Patent pending.
Year to 31 March
2024
$000
Revenue
%
2023
$000
Revenue
%
FY
∆%
Revenue195,411156,64125%
Gross profit88,27245%72,98347%
Operating expenses and other income(64,037)33%(53,314)34%
Operating profit24,23519,66923%
Finance expenses and other income(2,216)(3,870)
Ta x(6,410)(5,145)
Profit after tax15,60910,65447%
Revenue from product sales and
royalties
186,872155,76820%
Gross profit from product sales and
royalties
79,73343%72,11046%11%
Record Operating Profit
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH
•Strong growth in revenue supported by
licensing income and sales in international
markets.
•Gross profit margin on product sales and
royalties reflects:
•Australasian discounting of some high
margin products; and
•Product mix
•Expect margins to recover in the coming
year
•Operating profit also diluted by investment in
new product promotion and development
projects.
13
Year to 31 March
2024
$000
2023
$000
FY
∆%
Current assets (excluding cash) 93,68789,851
Cash12,0404,749154%
Non current assets 59,53053,463
Total assets 165,257148,06312%
Current liabilities (excluding interest-bearing liabilities) 46,06837,317
Non current liabilities (excluding interest-bearing liabilities)3,1942,820
Interest bearing liabilities (current and non-current)28,20034,658
Total liabilities 77,46274,7954%
Total equity 87,79573,26820%
AFT is Well Funded with Net Debt below EBITDA
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH
•Reduction in net debt, now at $16.2 million,
down from $29.9 million at the end of FY23
•Net debt now below target of 1X EBITDA
•Continue to target a reduction in working
capital with inventory reductions for existing
products
•But balancing this against continuing risks of
supply interruption due to supply chain
bottlenecks
14
Year to 31 March
2024
$000
2023
$000
FY
∆%
Net cash from operating activities 28,86111,629148%
Net cash used in investing activities (9,527)(9,177)4%
Net cash (used)/generated from financing activities (10,633)(6,978)52%
Net increase/(decrease) in cash8,701(4,526)
Impact of foreign exchange on cash and cash equivalents 48(123)
Opening cash and cash equivalents 3,2917,940
Closing cash and cash equivalents 12,0403,291266%
Cashflow Supported by Strong Growth and Maxigesic IV Milestone Payment
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH
•Strong growth in operating cashflows supported by
Maxigesic IV licensing income of $6 million and
revenue growth
•Investment cash outflows remains elevated with
investment in new projects
•Increase in financing cash outflows follows
increased debt repayments and the maiden
dividend.
•Cash and cash equivalents increase delivering AFT
flexibility
15
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH
Outlook: Positioned to Drive Continued Growth in Revenue and Earnings
•AFT is expecting growth for the coming financial year(s) to continue
•We are targeting operating profit – excluding any license payments – to range between $22 million to $25 million driven
by better quality earnings from trading.
•AFT is well positioned to build on its long record of growth supported by:
•The ongoing roll out of Maxigesic and its line extensions
•Additional R&D products now being commercialized
•The planned launch of 61 new products over the next 24 months in Australasia and a margins trending back to
historical averages
•Numerous new launches and increasing rates of growth in other markets around the world including AFT
companies.
•A robust product development pipeline
•Our goal of $200 million in annual revenue on a moving annual total is now close and now turning to the next target of
$300 million annual revenue.
16
QUESTIONS
APPENDIX
Appendix 1: Sustainability- Founded on a Social Goal of Improving Health
AFT PHARMACEUTICALS WORKING TO IMPROVE YOUR HEALTH19
DELIVERING OUR FIRST CLIMATE ASSESSMENT
•Continue the evolution of our sustainability framework
•We completed our first climate risk assessment, and our first
disclosure required under the Aotearoa New Zealand Climate
Standards
•We determined that climate change does not represent a
material risk to our business
•Established targets for Scope 1 and 2 emissions
consistent with limiting global warming to a 1.5-degree
increase
•Developing our emissions reduction plan
•Reviewed our materiality assessment that we use to set our
priorities
•Continuing to evolve the measures and targets we use to
assess progress on our sustainability agenda
AFT’S GREEN HOUSE GAS EMISSIONS
AFT was founded over 25 years ago by Dr Hartley and Marree Atkinson. Since then, AFT has remained an Atkinson-family
controlled business and has grown organically into Australia and internationally
The 2015 IPO raised funds to pursue a more aggressive (and loss-making) R&D-led growth strategy. AFT has now returned to
profitability as intended, as the company was prior to IPO and its growth and global reach is now accelerating
Appendix 2: History of AFT Pharmaceuticals
19972004200520092013201420152020
AFT founded by
Dr Hartley and
Marree Atkinson
Development of
Maxigesic
commences
First sales into
Australia
Maxigesic registered
in New Zealand and
sales commence
Maxigesic
registered in
Australia
AFT launches the sale
of products into the
SE Asian market
$33m IPO to fund new
R&D development
programmes for
Maxigesic and other
proprietary products
2019
AFT returns to profitability
following a significant
investment period funded
by the 2015 IPO
In FY20 AFT delivers
over $100m of revenue
and operating profit
growth of 87%
Maxigesic sales
commence in
Australia
20
2024
Revenue reaches ~$200m,
AFT products are sold in
>70 countries and it sets a
target for $300m
Appendix 3: Australasian Product Portfolio
AFT has the #1 selling product (Maxigesic) in the Australian para-ibu
1
combo pain relief. AFT’s portfolio includes a
combination of over 150 proprietary, branded and generic products which address the following therapeutic areas:
PainMaxigesic, ParaOsteo, ZoRub OA/HP, Fenpaed,
Combolieve Day/Night
EyecareHylo, Novatears, CromoFresh,
Opti-soothe Wipes/Mask, VitAPOS
VitaminsFerro-liquid, FerroTab, Ferro-F, Ferro-sachets,
Lipo VitC, Lipo VitD, CalciTab
AllergyLoraclear, Histaclear, Fexaclear, Levoclear,
Allersoothe, Lorapaed, Becloclear, Steroclear
GastrointestinalGastrosoothe/Forte, LaxTab, Micolette,
Nausicalm, DiaRelieve
DermatologyCrystaderm, Crystasoothe, Topiderm range, Decazol,
MycoNail
HospitalMaxigesic IV, Injectables
1
Paracetamol and Ibuprofen
21
Appendix 4: AFT Global Product Portfolio
AFT is building the global presence of its proprietary and patented products through its network of licensees and distributors.
It continues the development of its portfolio of repurposed medicines: Maxigesic
1
, Pascomer, NasoSURF, and Crystaderm
Pain
Maxigesic oral dose forms
-Tablets
-Solution
-Hot drink sachet
-Rapid tablets
-Cold and Flu
-Day& Night
ZoRub Osteo and HP
Hospital
Maxigesic IV (intravenous)
NasoSurf – nasal nebuliser drug delivery
Dermatology
Crystaderm – selected territories
GastroenterologyKiwisoothe
Micolette
1
Paracetamol and Ibuprofen
22
Appendix 5: Extending the Reach of the Maxigesic Portfolio
AFT has the #1 selling product (Maxigesic) in the Australian para-ibu
1
combo pain relief and is building the presence
of the business internationally, through the adoption of existing products and the launch of new dose forms
1
Paracetamol and Ibuprofen
23
Product
Maxigesic TabletMaxigesic IVMaxigesic OralMaxigesic sachet
Territories31March
2024
31 March
2023
31March
2024
31 March
2023
31March
2024
31 March
2023
31March
2024
31 March
2023
Licensed100+100+100+100+100+100+100+100+
Registered6966504314222
Soldin605536211122
AFT’s standard profit measure prepared under New Zealand GAAP is net profit after tax.
AFT has used the non-GAAP profit measure of EBITDA when discussing financial performance in this document. AFT directors and management believe that this
measure provides useful information as it is used internally to evaluate performance of business units, to establish operational goals and to allocate resources.
Non-GAAP profit measures are not prepared in accordance with NZ IFRS (New Zealand International Financial Reporting Standards) and are not uniformly defined,
therefore the non-GAAP profit 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 in accordance with NZ IFRS.
Appendix 6: GAAP to Non-GAAP Reconciliation
24
Year to 31 March
2024
$000
2023
$000
Net profit after tax attributable to owners of the parent15,60910,654
Less: Finance Income (66)(13)
Add back: Interest costs 3.6862,873
Add back: Other finance loss/(gain)(1,404)1,010
Add back: Depreciation 1,003808
Add back: Amortisation 1,010916
Add back: Income tax expense/(benefit)6,4105,145
EBITDA26,24821,393
FOR MORE INFORMATION
Dr Hartley Atkinson
Managing Director
Malcolm Tubby
Chief Financial Officer
AFT Pharmaceuticals Limited
Level 1, 129 Hurstmere Road
Takapuna, Auckland 0622
New Zealand
www.aftpharm.com
---
AFT Pharmaceuticals Limited, Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969
Results for announcement to the market
AFT Pharmaceuticals Limited
Reporting Period 12 months to 31 March 2024
Previous Reporting Period 12 months to 31 March 2023
Currency NZ$
Amount
(000s)
Percentage change
Revenue from continuing operations $195,411 Up 25%
Total Revenue $195,411 Up 25%
Net profit/(loss) from continuing operations $15,609 Up 46%
Total net profit/(loss) $15,609 Up 46%
Interim/Final Dividend
Quoted Equity Securities:
Amount per Quoted Equity Security $0.01100000
Imputed amount per Quoted Equity Security No imputation
Record Date 19/06/2023
Dividend Payment Date 04/07/2023
Current period Prior comparable period
Net tangible assets per Quoted Equity
Security
$0.33 $0.26
A brief explanation of any
of the figures above
necessary to enable the
figures to be understood
Accompanying this announcement are the Group’s audited
consolidated financial statements for the twelve months ended 31
March 2024. These financial statements and the full year results
commentary dated 23 May 2024 provide the balance of
information requirements in accordance with NZX Listing Rules
and Appendix 2.
Pursuant to ASX listing rule 1.15.3 AFT Pharmaceuticals Limited
confirms that it continues to comply with the rules of its home
exchange (NZX Main Board).
Authority for this announcement
Name of person
authorised to make this
announcement
Malcolm Tubby
Contact person for this announcement
Malcolm Tubby, Chief Financial Officer,
AFT Pharmaceuticals Ltd
Contact phone number +64 9 488 0232
Contact email address Malcolm.tubby@aftpharm.com
Date of release through MAP
23 May 2024
Audited financial statements accompany this announcement.
---
2024
ANNUAL
REPORT
“AFT is a growing multinational
pharmaceutical company that
develops, markets, and distributes
a broad portfolio of pharmaceutical
products across a wide range
of therapeutic categories.”
Contents
FY24 Financial and Strategic Highlights 04
Chair and Managing Director’s Report 06
Business Focus:
- Regional Performance 10
- Research and Development 14
AFT’s Global Reach 16
Sustainability 18
Reconciliation of EBITDA to GAAP 39
Governance 41
- An Experienced and Skilled Board 42
- Our Senior Management Team 44
- Corporate Governance Statement 46
Remuneration 62
Consolidated Financial Statements 69
- Independent Auditor’s Report 70
- Consolidated Income Statement 73
- Consolidated Statement of Comprehensive Income 74
- Consolidated Statement of Changes in Equity 75
- Consolidated Balance Sheet 76
- Consolidated Statement of Cash Flows 77
- Reconciliation of Profit After Tax
with Net Cash Flow From Operating Activities 78
- Notes to the Financial Statements 79
- Statutory Disclosures 104
Appendix 1 – Climate Resilience 108
Appendix 2 – The Material Sustainability
Matters Definitions 121
Directory and Financial Calendar 123
This report provides a summary review of AFT’s operational
and financial performance for the year to 31 March 2024.
It should be read in conjunction with the company's financial
statements on pages 69 to 103 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 Limited. 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.
2 | WORKING TO IMPROVE YOUR HEALTH
Investing for the future –
we have extended our reach around
the world, expanded our product
range, and added new medicines to
a research and development portfolio
that promises better health outcomes.
We have delivered, and continue to
focus on, long-term sustainable growth.
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 3
Record Revenue and Earnings
Strong Global Growth
$
195.4m
Total revenue up 25% lifted by growth across all territories
and $8.5 million of licensing income
$
26.2m
EBITDA
1
reaches record
up 22% from $21.4 million
$
15.6m
Net profit after tax
increases 46% from $10.7 million
$
16.2m
Net debt
2
down 45% from $29.9 million,
now below EBITDA gearing target
1.6
cents per share
Dividend per share
increases on FY23
OUR STRATEGIC ACHIEVEMENTS
Launched
our products
in 12 new
countries
taking the
total to
73
Launched
Maxigesic IV
®
and now poised
to launch
Maxigesic Rapid
®
in the US
GAINED
REGULATORY
APPROVAL
to sell antiseptic
Crystaderm
®
in China’s
domestic market
ESTABLISHED
NEW
BUSINESS
HUBS
in the
UK, Canada,
and the US
Our research and
development
portfolio extends to
7 PROJECTS
– after four projects
commercialised
and 3 new
projects added
Assessed our
carbon footprint
against the
new Aotearoa
New Zealand
Climate standards
and further evolved
our sustainability
strategy
1 EBITDA is a non-GAAP measure of financial performance. It is defined and reconciled to AFT’s standard profit measure
under New Zealand GAAP of Net Profit After Tax on page 39 of this report.
2 Net debt is net interest bearing liabilities less cash and cash equivalents.
FINANCIAL AND STRATEGIC HIGHLIGHTS
4 | WORKING TO IMPROVE YOUR HEALTH
Extending Our Record of Growth in Revenue and Earnings
AUSTRALIA
Revenue:
$108.2 million
up 15%
Operating profit
$15.5 million
down 20%
Key growth drivers:
OTC medicines across all seven
therapeutic categories, with
investment for growth diluting
earnings.
NEW ZEALAND
Revenue:
$48.7 million
up 11%
Operating profit
$7.3 million
down 10%
Key growth drivers:
Strong growth across
all channels, with earnings
diluted by investments for
growth
ASIA
Revenue:
$10.7 million
up 57%
Operating profit
$2.5 million
up 177%
Key drivers:
Growth in the
hospital channel
INTERNATIONAL
Revenue:
$27.8 million
up 138%
Operating profit
$8.5 million
up from $0.3 million
Key drivers:
Strong growth in Maxigesic
sales and $8.5 million of
licensing income.
A Growing Contribution From Our Global Operations
New Zealand 28%
Australia 61%
Asia 4%
International 7%
New Zealand 25%
Australia 55%
Asia 6%
International 14%
FY23 RevenueFY24 Revenue
$200
$180
$160
$140
$120
$100
$80
$60
$40
$20
$-
NZ$ MILLION
AFT Pharmaceuticals Revenue
2014 20152016 2017 2018 2019 2020 2021 202220232024
$40
$49
$56
$69
$64
$85
$69
$80
$85
$106
$56
$113
$130
$195
$157
FULL FINANCIAL YEARFIRST HALF FINANCIAL YEARSECOND HALF FINANCIAL YEAR
FINANCIAL AND STRATEGIC HIGHLIGHTS
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 5
Record Profits and Strong Cashflows
Investing For the Future
Dear Shareholders,
AFT Pharmaceuticals has delivered another
stand out result for shareholders.
We have generated record profits for the March
financial year on the back of strong topline growth
across all territories, especially in our International
and Asian businesses, extending the company’s
decades long record for consistent expansion.
We have meanwhile positioned the company
to build on that record with investments for the
future. These growth projects have included the
establishment of new business hubs in the US,
Canada, South Africa and further investment in
the UK and Europe. We have extended our existing
products to new territories, signed 122 new in-licensing
agreements for markets around the world, and
expanded our product development pipeline.
We continue to see considerable potential in all
of the markets we operate, and we are pleased
with the progress we have made capitalising on it.
Financial Results
Revenue from the sale of existing products,
new products and product royalties grew by 20%
to $186.9 million from $155.8 million, with the
company’s family of Maxigesic pain relief medicines
and the Australian over the counter (OTC) business
making the strongest contribution.
Growth has also been supported by ongoing
investment in product marketing including the
launch of the Maxigesic tablets and intravenous
(marketed as Combogesic®) dose forms in the
UK and our E-commerce platforms.
Total revenue, which included licensing income
of $8.5 million, rose 25% to $195.4 million from
$156.6 million in the prior year. The majority of
the licensing income came from a milestone
payment of circa $6 million from the US licensee
Hikma Pharmaceuticals following the launch of
Maxigesic IV in February.
Operating profit rose 23% to $24.2 million from
$19.7 million in the prior year. The result was in
line with guidance issued in February 2024, but
lower than our initial guidance of $22 million to
$24 million which excluded the Hikma license
income, due principally to slower than expected
Australian sales from newly launched products
and our decision to accelerate our investment into
important growth projects utilizing proceeds
of the Maxigesic IV milestone payment.
Meanwhile, we saw what we believe is a short-term
reduction of margins in Australasia due to some
overstocking and subsequent price discounting of
some key high margin lines, stronger sales of lower
margin products plus some stock write offs including
some one off’s dating back to the pandemic.
EBITDA of $26.2 million was 22% higher than the
$21.4 million in the prior period, while net profit after
tax increased 46% to $15.6 million from $10.7 million.
NZ$ MILLION
AFT Operating Profit*
FY2018FY2019FY2020*FY2021FY2022FY2023FY2024
$35
$25
$15
$5
$0
-$5
-$15
OPERATING PROFIT (EX LICENSE INCOME) LICENSE INCOME
Moreover, we achieved this result while reducing
debt and continuing to significantly invest for
the future with the expansion of our product
development portfolio, our presence in new markets
such as the UK and North America and support for
a strong programme of new product launches.
The result underscores the strengths of AFT’s
approach to international expansion and
sustainable growth. We’ve benefited from growing
demand for our products in both our home markets
and further afield, reaping the rewards of careful
and consistent investment into research and
development and the product pipeline.
With the recent launch of the intravenous form of
our Maxigesic® pain relief medicine in the US and the
impending US launch of the line extension, the rapid
dissolving tablet Maxigesic Rapid, our proprietary
products are now positioned in a significant number
of the world’s major healthcare markets.
This achievement marks a significant milestone
in our journey towards becoming a truly global
pharmaceutical company and it is a major
achievement for a New Zealand company.
* Operating Profit excluding non-recurring gain of $9.8m related
to the valuation of the Pascomer intellectual property
-$10.1
$6.1
$11.4
$10.7
$20.4
$19.7
$24.2
CHAIR AND MANAGING DIRECTOR’S REPORT
6 | WORKING TO IMPROVE YOUR HEALTH
Dr Hartley Atkinson | Co-Founder and Managing Director David Flacks | Chairman
“We’ve benefited from growing demand for our products
in both our home markets and further afield, reaping
the rewards of careful and consistent investment
into research and development and the product pipeline.”
CHAIR AND MANAGING DIRECTOR’S REPORT
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 7
International Expansion
AFT has significantly expanded its international
operations with the establishment of business
operations in the US, Canada, UK, Europe (through
our subsidiary based in Ireland), Singapore and
Hong Kong. Additionally, we are setting up a new
subsidiary AFT Pharmaceuticals South Africa.
A number of product licenses have been acquired
in the UK and European markets in order to
accelerate future sales growth. For example, in
Europe, AFT Pharmaceuticals Europe successfully
bid for six product licenses from an insolvent
company in Germany.
AFT is on track to offer the world’s largest range
of combination paracetamol and ibuprofen
products globally. Maxigesic is now sold or
ordered in 73 countries up from 61 in March 2023.
The launch of Maxigesic IV in the US, the world’s
largest market for pain relief medicines, was the
most significant of the year. It delivered AFT and
our development partner Hyloris Pharmaceuticals
a US$6 million milestone payment that we share
65:35. The launch is also expected to deliver
an ongoing and growing stream of payments
from our profit share agreement.
AFT’s entities are commercialising Maxigesic
tablets in the US, Australasia, and the UK, along
with Maxigesic IV in Canada, Australasia the UK,
Hong Kong, Singapore and Malaysia.
We are meanwhile using our hubs in Canada,
UK, Hong Kong, Singapore, Malaysia and Europe
to beach head selected medicines we have
in-licensed.
We are finalising our US strategy for Maxigesic
Rapid with a focus on AFT Pharmaceuticals USA
securing distributors for specific market channels.
We are also advancing plans for launch of the
recently approved, Maxigesic IV in Canada through
the newly formed AFT Pharmaceuticals Canada.
We offer a total of ten different Maxigesic line
extensions: Tablets, Oral Liquid, Rapid Dissolve
Tablet, Day/Night Tablet, Oral Liquid, Hot Drink,
Dry Stick, PE version, Cold/Flu & Sinus Pain Kit
and Intravenous and these will be launched
in target markets.
Finally, following regulatory approval for the sale of
our Crystaderm antiseptic cream in China late last
year, we are planning for the launch this year in the
world’s second largest pharmaceutical market.
Research And Development
Research and development expenditure in this
financial year was steady at $12 million. In the
short term we continue to work on launching
our already available pipeline into more markets:
additional Maxigesic line extensions such as the
Maxigesic IV US launch; Crystaderm antiseptic
cream; Kiwisoothe tablets and sachets; Micolette
micro enema; ZoRub Osteo and HP analgesic
creams. Commercialization of these products
will help to drive short to medium term sales and
offset ongoing expenditure. Extensive work on this
latter group of products has been funded from
existing cash-flows.
Our research and development pipeline now
extends to seven projects. Four projects in the
pipeline exited the development phase and
moved to commercialisation and we added three
new projects over the year. The new projects
include treatments for Burning Mouth Syndrome
and Vulva Lichen Sclerosis, in collaboration with
our Maxigesic IV development partner Hyloris
Pharmaceuticals.
Last month we also announced we had extended our
collaboration with Massey Ventures and the Gillies
McIndoe institute, adding the development of a
treatment for Keloid scars to the existing strawberry
birthmark medicine project. These additions bring
our pre-commercialization R&D pipeline to a total
of seven projects, some with multiple indications.
This pipeline offers opportunities to significantly
drive our global expansion as well as growth in our
Australasian markets.
We continue to work to finalise one further
agreement for a commercially significant
late-stage R&D project which would require
a large clinical study.
“The research and development pipeline
offers opportunities to significantly drive
our global expansion as well as growth
in our Australasian markets.”
CHAIR AND MANAGING DIRECTOR’S REPORT
8 | WORKING TO IMPROVE YOUR HEALTH
Balance Sheet
AFT has significantly strengthened its balance
sheet. Net debt at the end of the year was
$16.2 million, markedly lower than the $30.6 million
at the end of September 2023 and the $29.9 million
at the same time a year ago, and ahead of target
of our one-times EBITDA.
We continue to target inventory reductions over
time which to date have been somewhat delayed
by ongoing shipping disruptions, such as those in
the Red Sea area. As highlighted above, we have
also prioritised growth investments over debt
reduction and we have additional unused debt
facilities available.
Consequently, the Board has declared a full year
dividend of 1.6 cents per share up 49% on the
1.1 cents per share of the prior year. The dividend
has a record date of 26 June 2024 and a payment
date of 4 July 2024.
Governance and Sustainability
We have continued to advance AFT’s governance
and sustainability framework. The most significant
development this year has been the steps we have
taken to measure our carbon emissions; understand
our climate-related risks; and release our first
disclosure against the Aotearoa New Zealand
Climate Standards (see pages 35 and 36 and
appendix 1 on pages 108 to 120 of this report).
This investigation has shown that, based on our
first disclosure and current information that climate
change does not represent a material risk to our
business, and we are well prepared to refine and
implement strategies to manage climate-related
risks and opportunities. The process has seen
refinements to our governance framework. Notably,
it enhances oversight of sustainability, including
climate-related risks and opportunities within the
Board Charter and our reporting to stakeholders
on sustainability matters.
In line with best governance practice this year
we also reviewed our assessment of the material
sustainability risks to the business and engaged
with internal and external stakeholders to review
our approach. This review (see pages 22 and 23)
showed the framework remained broadly appropriate.
Finally as we highlighted at the half year, Andrew Lane
joined the Board as a new Independent Director,
bringing to the company more than 30 years’
experience of leadership in the global pharmaceuticals
industry with expertise across a broad range
of disciplines. Andrew replaced long-serving
Independent Director Jon Lamb who retired after
11 years as a Director. Once again, we thank Jon
for his long and valuable service to the company.
Outlook
AFT is expecting growth for the coming financial
year to continue and is targeting operating profit –
excluding any license payments – to range between
$22 million to $25 million driven by better quality
earnings from trading.
The ongoing roll out of Maxigesic and its line
extensions, the planned launch of 61 new products
over the next 24 months in Australasia, coupled
with numerous new launches and increasing rates
of growth in other markets around the world,
position the company well for this coming financial
year and beyond.
Our goal of $200 million in annual revenue on a
moving annual total is now close and we are now
focusing on the next target of $300 million annual
revenue with margins trending back to historical
averages. We thank shareholders for their ongoing
support, and we look forward to providing an
update to you at our annual meeting in August.
David Flacks Dr Hartley Atkinson
Chair Managing Director
CHAIR AND MANAGING DIRECTOR’S REPORT
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 9
Australia
NEW PRODUCT LAUNCHES FUELLING GROWTH
Revenue in Australia grew 15% led by a mixture of
organic and new product growth to $108.2 million
from $94.1 million in the prior year.
Growth came from the OTC channel which was up
24% with the company seeing good demand across
all its seven therapeutic categories, despite the
easing of pandemic pressures and public concern
about the virus saw an associated reduction in
demand for pain and cold and flu medicines and
supplements such as liposomal vitamins. AFT
reached the position of the top selling liposomal
vitamins in the Australian market. The hospital
channel and prescription channels were flat.
Australian operating profit was down to $15.5
million from $19.3 million in the prior year. The
result in part reflects the increased marketing
spend associated with product launches through
the year. As highlighted earlier, margins were
impacted by some price discounting in some
key high margin lines, growth in lower margin
lines and some stock write offs.
We expect continued growth in the coming year
both through organic growth in our existing
product lines and an increased contribution from
products launched during the year.
During the year we launched 18 products and are
on track to launch a further 61 by the end of the
2026 financial year.
Revenue:
$108.2m
up 15% on the
prior year
Products:
85+
across seven
therapeutic
categories
Distribution:
6,800
pharmacies
NZ$ MILLION
Australian Revenue
$100
$80
$60
$40
$20
$-
202220232024
$76.7
$94.1
$108.2
REGIONAL PERFORMANCE
10 | WORKING TO IMPROVE YOUR HEALTH
New Zealand
GROWTH ACROSS ALL CHANNELS
New Zealand revenue was up 11% to $48.7 million
from $44.0 million. Growth was driven by the OTC
channel, where revenue grew by 16% to $26.8
million. The prescription and hospital channels
grew by 3% and 7% respectively.
In all three channels growth was led by demand
for the company’s existing and new products albeit
with a similar post pandemic reduction in sales of
cold & flu products and liposomal vitamins which
was also observed in Australia.
Operating profit was $7.3 million compared to $8.1
million in the prior year. In part, as with Australia this
reflects the increased marketing spend associated
with product launches. A key marketing initiative
was our decision to sponsor the One New Zealand
Warriors as the team’s official pain relief partner.
In addition margins eased largely reflecting a bigger
contribution from the lower-margin products
and some stock write offs.
New product launches will also support growth
in this market.
Revenue:
$48.7m
up 11% on the
prior year
Products:
150+
across seven
therapeutic
categories
Distribution:
900
pharmacies
New Zealand Revenue
$50
$40
$30
$20
$10
$-
202220232024
NZ$ MILLION
Absorbing the Hits
Maxigesic is now the official
pain relief partner of the
One New Zealand Warriors
- an agreement that will lift
the profile of our brand on
both sides of the Tasman.
Maxigesic will feature on the
front of the playing shorts
for all five of the club’s teams
this season in the NRL, New
South Wales Cup, Jersey
Flegg Cup (under-21), SG Ball
Cup (under-19) and Harold
Matthews Cup (under-17).
Maxigesic will also be the
presenting partner for a
‘Big Hit of the Week’ video
feature as well as the
weekly injury report. By
bringing Maxigesic and the
One New Zealand Warriors
together, we’re doing all we
can to help the Kiwis fly,
both at home and away,
in the 2024 season.
$35.1
$44.0
$48.7
REGIONAL PERFORMANCE
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 11
Asia
LAUNCHING IN CHINA’S DOMESTIC MARKET
Our Asian business’ operating revenue grew 57%
to $10.7 million from $6.8 million. Operating profit
rose to $2.5 million from $0.9 million.
Growth was driven by the hospital channel with
the largest contribution coming from strong
demand for Maxigesic IV in the Korean market
and the OTC channel along with our successful
cross border e-commerce initiatives.
Following regulatory approval late last year, for the
sale of our Crystaderm antiseptic cream in China,
we are preparing for the launch this year which
has also featured the addition of two new
manufacturing sites to allow for potential product
demand. We believe the local sales channels in
China offer more potential than the CBEC channel.
Revenue:
$10.7m
up 57% on the
prior year
Sales hubs:
Singapore and
Hong Kong
NZ$ MILLION
Asian Revenue
$10
$8
$6
$4
$2
$-
202220232024
$5.5
$6.8
$10.7
REGIONAL PERFORMANCE
12 | WORKING TO IMPROVE YOUR HEALTH
International
BUILDING OUR PRESENCE IN THE NORTHERN HEMISPHERE
Revenue from product sales and royalties
in the international business grew by 78%
to $19.3 million from $10.7 million, primarily due
to growing momentum in Maxigesic sales
(in various dose forms).
Total international operating revenue rose 138%
to $27.8 million from $11.5 million as we benefited
from $8.5 million of licensing income including the
$6 million milestone payment from the launch of
Maxigesic IV in the US and a milestone payment
from our licensee in Italy, the market outside
Australasia in which Maxigesic has been available
for the longest period of time.
Operating profit, including licensing income, grew
from $0.3 million to a profit of $8.5 million. AFT also
significantly invested in the launches of Maxigesic
tablets and IV in the UK market and further multiple
investments in the new business hubs.
Maxigesic in various dose forms is now sold in
73 countries up from 61 at the same time a year
ago. In addition to the launch of Maxigesic IV in
the US, we launched IV and tablets in Belgium,
numerous eastern European countries, Kenya,
Oman, Singapore and South Africa. Sales of
Maxigesic IV in the US since it was launched in
February have developed in line with expectations,
but the key is gaining hospital formulary listings
which always takes some time. We are finalising our
US strategy for Maxigesic Rapid with a focus on
securing and finalising agreements with distributors
for specific market channels and are advancing
plans for launch of the recently approved,
Maxigesic IV in Canada through the newly formed
AFT Pharmaceuticals Canada.
Our new UK operation is now well established with
the launch of Combogesic tablets and IV making
a meaningful contribution to group sales. The UK
business has identified a total of 40 of our own
and licensed products as suitable candidates for
that market. Changes in the UK market will also
assist speed to regulatory approval.
We have also acquired a number of licenses for
the UK market which will shorten the regulatory
approval timeline and resultant launch timings.
Additionally, products are being in-licensed for
Canada and South Africa.
AFT Pharmaceuticals UK launching Combogesic IV
Revenue:
$27.8m
up 138% on the
prior year
Operating profit:
$8.5m
Countries where
Maxigesic sold:
73
NZ$ MILLION
International Revenue
202220232024
$30
$25
$20
$15
$10
$5
$-
$13.1
$11.7
$27.8
REGIONAL PERFORMANCE
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 13
Our research and development portfolio is the
growth engine of AFT’s future.
It now extends to seven projects across therapeutic
areas that range from pain and eyecare through
to dermatology as well as a drug delivery device.
The three new projects we have announced
this year build on existing and successful
development partnerships.
EXTENDING OUR PARTNERSHIP
WITH HYLORIS
With our Maxigesic IV development partner
Hyloris Phamaceuticals we have agreed to develop
treatments for Burning Mouth Syndrome and Vulva
Lichen Sclerosus (VLS). The agreements seek to
combine Hyloris’s strong internal R&D capabilities
and AFT’s clinical trial management capabilities.
VLS is a chronic, distressing, inflammatory disease
that has limited approved current treatments and
yet has an enormous impact on quality of life.
With Hyloris we are developing a medicine as a
user-friendly product for patients experiencing the
discomfort, itching, and pain associated with the
ailment. It also targets an extended duration of
action and a convenient application method that
ensures simplicity and compliance in patients with
the disease.
Burning mouth syndrome (BMS) is characterized
by burning pain in a normal-appearing oral mucosa
lasting at least four to six months. AFT and Hyloris
will co-invest for the development of the medicine
for the purpose of registration, approval, and
commercialisation.
Hyloris is a Belgian specialty biopharma company
focused on innovating, reinventing, and optimizing
existing medications to address important
healthcare needs and deliver relevant improvements
for patients, healthcare professionals and payors.
Laying The Foundations For The Future
LOCAL PARTNERSHIPS
Massey Ventures, the commercialization company
of Massey University, and the Gillies McIndoe
Research Institute, a New Zealand charitable
research foundation and AFT are extending their
partnership to develop a topical treatment for
keloid and hypertrophic scarring. The new project
builds on the success of our partnership to develop
a topical treatment for strawberry birthmarks.
Keloids are thickened scars that extend the
boundaries of an injury and can often be itchy and
painful. The scars can arise from any type of injury
– from a shaving cut or piercing to a severe burn –
and often become disfiguring. The cause of keloids
is not fully understood and there are no truly
effective treatment options available to patients.
AFT, Massey, and the Gillies McIndoe Institute will
focus on the development of currently confidential
medicines to create the first effective topical
treatment of keloids and other scars. A non-
invasive topical medicine would be a valuable
treatment option for this condition. It also offers an
attractive global commercial opportunity.
The strawberry birthmark project continues to
make progress. We are seeking to exploit the
synergistic action of two well-known medicines
in the treatment of the birthmarks. We are aiming
to submit an Investigational New Drug (IND)
application to the United States Food and Drug
Administration this calendar year.
The Gilles McIndoe Institute.
Additionally, we have completed diligence and are
negotiating a further collaboration for a potentially
significant late-stage R&D project. This project
if concluded will require a clinical study with a
significant number of patients around the world.
RESEARCH AND DEVELOPMENT
14 | WORKING TO IMPROVE YOUR HEALTH
A Strong Research and Development Pipeline
AFT’s positive cashflows have positioned the company well
to undertake and secure research and development projects either
alone or in partnership with others.
PROJECT PATENTPARTNERSHIP AND APPLICATION
DERMATOLOGY
Pascomer2040/2044
1
Facial angiofibromas / Port Wine Stains
Strawberry Birthmarks 2041Gillies McIndoe and Massey Ventures
Keloid Scars topical treatment2044
1
Gillies McIndoe and Massey Ventures
Vulvar Lichen Sclerosis TBCHyloris Pharmaceuticals
EYECARE
Antibiotic Eye Drop2037 and 2044
1
For drug resistant infections: Conjunctivitis,
Keratitis, Post Kpro prophylaxis
PAIN
Burning Mouth SyndromeTBCHyloris Pharmaceuticals
DRUG DELIVERY
NasoSURF
for conscious sedation
2036
OTHER
Novel new medicine
(confidential)
2037Late-stage development under negotiation
1 Patent pending
RESEARCH AND DEVELOPMENT
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 15
AFT’s Global Reach
Our medicines are now available in more than 70 countries around the world
AFT medicine launched
AFT medicine launch pending
AFT New Zealand
Head office
AFT Australia
AFT Singapore/
Malaysia
AFT South Africa
AFT USA
AFT UKAFT EuropeAFT CanadaAFT Hong Kong
16 | WORKING TO IMPROVE YOUR HEALTH
AFT medicine launched
AFT medicine launch pending
AFT New Zealand
Head office
AFT Australia
AFT Singapore/
Malaysia
AFT South Africa
AFT USA
AFT UKAFT EuropeAFT CanadaAFT Hong Kong
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 17
SUSTAINABILITY
Working to Improve Your Health
AFT Pharmaceuticals has delivered a decades-long
record of sales growth built on integrity and a clear
purpose of working to improve the health of our
customers and the communities we serve.
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 and high ethical standards, and
a determination to contribute positively to
environmental and social outcomes.
We understand accounting for and managing ESG
considerations is critical to our long-term ability
to create value and improve the health of the
customers and communities we serve.
We established a formal sustainability framework in
2022 following the completion of an analysis of the
material issues to the business. Since then we have
evolved the framework to ensure we work towards
the opportunities it identifies, manage the risks to
our business, and ensure we are creating shared
value with our stakeholders. We have revised our
materiality assessment in FY24 (see pages 22 and
23), and made subsequent refinements to our focus
areas, measures, and reporting.
The most significant development of our framework
this year has been the steps we have taken to
measure our carbon emissions; understand our
climate-related risks; and release our first disclosure
against the Aotearoa New Zealand Climate Standards.
This process has also seen refinements to our
governance framework. Notably, it enhances
oversight of sustainability, including climate-
related risks and opportunities within the
Board Charter and our reporting to stakeholders
on sustainability matters.
It has also seen the formation of a standing
management-led working group, the Climate
Governance Working Group, which is charged with
assessing and managing the company’s climate-
related risks and opportunities and updating the
Board quarterly on its activities. An overview of our
climate reporting is covered on pages 35 and 36
of this report and the full report against the
Aotearoa New Zealand Climate Standards
is covered on pages 108 to 120.
Finally, we have reformatted this sustainability
report to prioritise disclosure of those areas that
matter most to the company and its stakeholders.
This has also included, for the first time, the
embedding of our governance statement within
this report and the creation of a separate
remuneration section. The goal of the remuneration
section is to show how we align the remuneration
of our people with the interests of our stakeholders.
As we have indicated in prior reports, we see this
programme as a journey rather than a destination
that will continue into new financial years.
SUSTAINABILITY
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 19
AFT’s Sustainability Framework
Our Mission: Working to Improve Your Health
AFT’s sustainability framework is aligned with
its commitment to operating sustainably and
enhancing the health and wellbeing of the people
and communities in the markets we serve.
It sets out our material ESG issues and identifies
what we see are the six priorities for the business.
The priority areas demonstrate where we believe
we can create the most value for our business,
investors, and other stakeholders.
Underneath each of the six priorities, we have
identified areas of focus, which set out what
we will do to deliver on our priorities.
We have detailed the metrics we use to measure
our performance.
In some of these areas, we have established
targets. We expect to evolve and refine these
measures and targets in line with the evolution
of our ESG framework.
The development of the framework and our
performance against it is led by the CFO and
overseen by the Board. As in previous years,
we aim to fit our business and community
initiatives onto the United Nations’ Sustainable
Development Goals.
SOCIALGOVERNANCEGOVERNANCE
PRIORITIES
1. Working to improve
health and well being
2. Best practice
corporate governance
3. Ethical and sustainable
value chains
AREAS OF FOCUS
Better health and wellbeing
for patients and communities
Performance measures:
• Product reach and breadth
of therapeutic applications
• Product portfolio expansion
• Contributions to communities
Best quality and safety
systems for manufacturing
and distributing medicines
Performance measures:
• Compliance with best practice
standards in medicine
manufacture
• Our pharmacovigilance
practices and relationships with
our regulators
• Monitoring for counterfeit
medicines
• Product recalls
Innovation in response to need
Performance measures:
• Investment in research and
development
• Product development portfolio
• Compliance with clinical trial
standards
Complying with all relevant
legal and listing requirements
Performance measures:
• Regulatory and Governance
Code compliance
• Training and education
ESG reporting and transparency
Performance measures:
• Policy adherence by the Board
and Management
• Governance of climate risk
ESG performance in our
value chain
Performance measures:
• Compliance with our Supplier
Code of Conduct and our
Modern Slavery commitments
• Supplier visits
Ethical marketing and sales
practices
Performance measures:
• Compliance with our
Code of Culture and Ethics
and our Anti-bribery and
Corruption Policy
• Compliance with regulatory
advertising codes.
UN Sustainable Development Goals
The UN sustainable development goals are a
collection of 17 interlinked global goals designed
to be a blueprint to achieve a better and more
sustainable future for all. The United Nations General
Assembly established these goals in 2015. At AFT
we believe we can contribute to six of the goals.
More information on the goals can be found here:
https://sdgs.un.org/goals
SUSTAINABILITY
20 | WORKING TO IMPROVE YOUR HEALTH
Good Health and Wellbeing
Ensure healthy lives and promote
well-being for all at all ages.
Gender Equality
Achieve gender equality and empower
all women and girls.
Decent Work and Economic Growth
Promote sustained, inclusive, and sustainable
economic growth, full and productive
employment, and decent work for all.
SOCIALENVIRONMENTENVIRONMENT
PRIORITIES
4. Supporting and developing
our people
5. Understanding our climate
risks and taking action
6. Waste
minimisation
AREAS OF FOCUS
Developing our people
Performance measures:
• Training
• Staff turnover
• Wellbeing support
Diversity and inclusion
Performance measures:
• Compliance with our Code
of Culture and Ethics
• Compliance with our
Employment Policy suite
• Remunerating fairly and
transparently
• Monitoring gender, culture
identity, nationality to ensure
diversity.
• Living wage, parental leave,
and pay parity commitments
Health and safety
Performance measures:
• Health and Safety Policy
compliance
• Supplier Code of Conduct
compliance
• Lost time to injury reporting
Undertaking a climate
risk assessment
Performance measures:
• Reporting against the Aotearoa
New Zealand Climate Standards
Working with suppliers
to take action
Performance measures:
• Reporting against the Aotearoa
New Zealand Climate Standards
Improving our consumer
packaging
Performance measures:
• Continuous improvements in
reducing packaging weight
• Introducing recycled material
into our packaging
• Making more of our
packaging recoverable
Reducing waste in the supply
chain
Performance measures:
• Reducing packaging
consumption
• Reducing material towards
landfill
Changes to the Framework in FY24
After completing the materiality assessment
review in FY24 (see pages 22 and 23) and a review
of our framework, we have updated it to include
reporting on:
• Clinical Trial standards
• Aotearoa New Zealand Climate Standards
• Compliance with sales and marketing codes
Reduced Inequalities
Reduce inequality within and among
countries.
Responsible Production and Consumption
Ensure sustainable consumption
and production patterns.
Climate Action
Take urgent action to combat
climate change and its impacts.
SUSTAINABILITY
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 21
Materiality: How We Set Our Priorities
AFT has built its Sustainability Framework
and ESG reporting programme on a robust process
of assessing what is material to the company.
As a publicly listed company, ‘material’ matters
are those that a reasonable person would
consider impacting the company’s valuation or
the sustainability of our operations. In line with
best practice ESG standards, we also considered
those topics that reflect AFT’s most significant
contribution to, and impacts on, the economy,
environment, and people.
To develop and review our materiality assessment,
we use the support of an independent consultancy.
We reviewed materiality topics in the global
and pharmaceutical industry against our
business operations.
We also reviewed media, stakeholder, and investor
commentary on AFT business. This enabled the
creation of a list of potential material topics.
From there, we interviewed external stakeholders
and investors on their perceptions of materiality
and the relative significance of these topics.
Management then reviewed this feedback; the
topics; and their relative importance to business
strategy and value creation. The assessment was
then presented to the Board for input and approval.
AFT used the NZX ESG Guidance Note to inform
this approach.
AFT first reported on materiality in its FY22 Annual
Report. This materiality assessment was reviewed
internally in FY23, and in FY24, we reviewed it
internally and externally.
SUSTAINABILITY
22 | WORKING TO IMPROVE YOUR HEALTH
100
90
80
70
60
50
40
Business Priorities
Ethical & sustainable supply chains
(including environmental and labour standards)
Product quality &
safety of medicines
Consumer/patient good health
Product Innovation R&D
Employee Health, Safety & Wellbeing
Access to medicines
Workforce: Diversity & Inclusion
Attraction & Retention
Climate change
Packaging: Consumer
& supply chain
Ethical business practices (including anti-bribery and
corruption, sales and marketing practices, lobbying)
Corporate Governance, compliance & transparency
Stakeholders Priorities
Environmental Social Governance
40 50 60 70 80 90 100
ESG Matters Material to AFT’s Business
FY24 Materiality Assessment
As a pharmaceutical business, social materiality
topics remain the most significant to AFT’s
ability to create value for shareholders and the
communities we serve.
Since FY23, we have made the following changes:
• We have raised the stakeholder significance of
Climate Change, given that the New Zealand
Aotearoa Climate Standards are now in force.
As such, there will be more external interest in
AFT’s climate change reporting than previously.
• Corporate governance has been further elevated
in significance, reflecting this topic’s importance
to the business and investors.
• In addition, we have reviewed the definitions of
the material topics. The updated definitions are
provided in Appendix 2 on page 121 and 122 of
this report and on the company’s website.
External stakeholders raised additional topics with
us for consideration, which are either covered by
existing topic definitions or are being monitored
for future significance to the business.
Stakeholder
topic interest
Our response
New pharmaceutical
technologies; providing
alternatives to opioids
and water use.
These are covered in
existing material topics
(see appendix 2 on
pages 121 and 122
for definitions)
Antimicrobial
resistance;
misinformation about
pharmaceutical
products; and
biodiversity.
These are monitored
by the company
SUSTAINABILITY
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 23
Patients & Customers
They are the focus of the
company’s efforts: to improve
healthcare outcomes.
Employees
AFT is its people; their well-being
is fundamental to successful
execution of our strategy.
Investors & Lenders
Investors and lenders support
our business financially.
Healthcare Providers
They are crucial in spreading
sustainable healthcare practices
that align with the company’s
health improvement goals.
Regulators
We work with them to ensure
compliance with health, safety,
and other sustainability standards
and support our work to provide
health solutions.
Suppliers, Distributors & Vendors
They produce our products,
take them to market and help
us to operate our business. We
work with them to ensure ethical
sourcing and environmental
stewardship.
Local Communities
Engagement with communities
helps to align company operations
with local health needs, enhancing
our social license.
Government Agencies
We work with them to support
public health policy initiatives.
Media
It plays a role in communicating
the company’s health initiatives
to the public.
Our Stakeholders
AFT considers the interests of a broad range of stakeholders. We recognise that
this is pivotal to operating a sustainable business and creating long-term value.
Our
Stakeholders
Patients
& Customers
Healthcare
Providers
Employees
Regulators
Suppliers,
Distributors
& Vendors
Investors
& Lenders
Local
Communities
Government
Agencies
Media
SUSTAINABILITY
24 | WORKING TO IMPROVE YOUR HEALTH
PRIORITY 1:
Working to Improve Health and Wellbeing
CASE STUDY:
Prudent Pseudoephedrine Distribution
AFT is in the process of deploying a pioneering
technology designed to combat the illegal use
of medicines containing pseudoephedrine in the
production of methamphetamine.
The cutting-edge matrix technology, which AFT
has licensed for use in Australia and New Zealand
significantly reduces the amount of pseudoephedrine
that can be extracted from medicines containing
the decongestant.
This technology further demonstrates our
commitment to ensure the safety of medicinal
products and to address public health and safety
concerns related to medicines.
The technology is currently used by two AFT products
to be soon launched in Australia - Ibuprofen 200mg
+ Pseudoephedrine 30mg and Paracetamol 500mg
+ Pseudoephedrine 30mg soft gel capsules – both
recommended to help ease the pain and congestion
associated with colds and flus. We are also seeking
approval to sell the medicines in New Zealand.
Research shows that as little of 8.3% of the
pseudoephedrine contained in medicines using
the matrix technology can be extracted. This is
a sharp reduction on the 78% of pseudoephedrine
that can be extracted from standard tablet forms
containing the decongestant.
These medicines have already attracted significant
interest from pharmacists in Australia who see
the technology as a deterrent against raids
and the illegal use of medicines containing
the decongestant.
Indeed, in recent submissions to the Misuse of
Drugs (Pseudoephedrine) Amendment Bill, which
will see the return of pseudoephedrine containing
medicines return to New Zealand OTC markets, the
Pharmaceutical Society of New Zealand noted the
concern among the profession about the potential
of stocking these medicines to raise the threat
to pharmacies.
FOCUS AREA:
Better Health and Wellbeing
for Patients and Communities
Improving the health of our customers is the
reason we exist, we work to research, develop,
commercialise, and distribute medicines
and other healthcare products that deliver
healthcare improvements.
Performance:
• We expanded our portfolio of medicines.
• We are targeting the launch of 61 new products
FY25-FY26
• We contributed to causes and people that
promote the health and wellbeing in the
communities in which we operate.
Extending our Reach With New and
Innovative Medicines
Our portfolio of 150 plus medicines spans our
seven core therapeutic categories of pain, eyecare,
vitamins, allergy, gastrointestinal medications,
dermatology, and hospital products.
The portfolio is also continuing to expand with the
launch of 18 new products in FY24 and a further
61 products planned by the end of FY26.
Our products have been sold in 73 countries, up
from 61 at the same time a year ago and we have
licensees for our products in more than
100 countries worldwide.
Access to Medicines
We recognise access to medicines is an important
issue. We work hard to ensure a continuous and
uninterrupted supply of our critical products to our
customers and markets by holding significant stock
holdings as opposed to a just-in-time
delivery schedule.
SUSTAINABILITY
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 25
Using Promotion for Good
AFT regularly leverages its promotional budget to
deliver profile and goodwill to deserving charities.
Last year in New Zealand we worked with one of
our largest customers, Chemist Warehouse, to raise
$500,000 for charities sponsored by New Zealand
Super Rugby Franchises. We contributed 5% of the
sale proceeds of Maxigesic tablets sold through
Chemist Warehouse over the promotional period
($15,000). These funds were then distributed
among the charities:
The Blues Charitable Trust, which provides
leadership coaching to build confidence and
courage in youths to reach their full potential.
LifeFlight, which supports an emergency air
ambulance service, run out of Wellington.
Gumboot Friday, which
funds free counselling
sessions for the young
people of Aotearoa.
I Am Hope, which
supports the youth
struggling with
depression with coaching
and guidelines to learn
life skills.
Southern Charity hospital trust provides free
healthcare services to those in Southern NZ who
do not have access through traditional channels.
This philanthropic works follows on work in the
prior year to support causes as diverse as the
Liptember Foundation, which raises funds and
awareness for women’s mental health, the Gotcha
4 Life foundation, which aims to reduce the rate
of suicide in men across Australia.
AFT supported the August 2023 Wesleyan
Medicine Mission to Bougainville led by Dr.
Amanda Mitchell and Michelle Yates, alongside
the Wesleyan Methodist Church of Bougainville.
We provided packs of scabies lotion and vitamins,
which were crucial in addressing the urgent health
needs of up to 60,000 displaced individuals due
to the volcanic eruption of Mount Bagana in July
2023 and flooding during the same period. We also
sponsored the excess baggage needed to transport
these vital resources. The partnership reflected
our determination to support community-led
health initiatives.
FOCUS AREA:
Innovation in Response
to Need
Performance:
• Research and Development expenditure was
steady at $12 million.
• Our product development portfolio increased
to nine key research and development programs
with the addition of 4 new projects over the
last year.
• All clinical trials are conducted within
international codes and standards.
We work to create innovative medical solutions
in areas of high unmet need, creating future value
for the business. We achieve this by leveraging our
global partnerships and by developing our own
intellectual property.
In the past year alone, we spent $12 million on
research and development, a figure that is in line
with the spending in the prior year. These resources
have been devoted to advancing our research and
development portfolio towards commercialisation.
Wesleyan Medicine Mission to Bougainville
SUSTAINABILITY
26 | WORKING TO IMPROVE YOUR HEALTH
Meeting International Clinical
Trial Standards
AFT is committed to ensuring all its clinical trials
are conducted in a manner that not only respects
the participants but also produces reliable,
meaningful, and internationally accepted data,
thereby contributing to the advancement of medical
knowledge and the development of new treatments.
All our trials are conducted within the International
Council for Harmonisation of Technical
Requirements for Pharmaceuticals for Human
Use (ICH) guidelines and specifically the ICH
E6 and E8 standards.
These standards cover the ethical and scientific
quality of designing, conducting, recording, and
reporting trials that involve human subjects. They
also provide for a unified standard to facilitate the
mutual acceptance of clinical data by regulatory
authorities in the core ICH regions, which include the
European Union, Japan, and the United States, and
are recognized globally by many countries including
New Zealand, Australia, and many countries in Asia.
In these countries these standards are overseen
and administered by independent regional
oversight bodies such as the US Food and Drug
Administration. Meanwhile, wherever we conduct
clinical research, it is always overseen by ethical
research oversight bodies.
ICH E6:
Good Clinical Practice (GCP)
The ICH E6 guideline provides a unified standard
to facilitate the mutual acceptance of clinical data
by regulatory authorities in the ICH regions,
which include the European Union, Japan,
and the United States.
ICH E8:
General Considerations for Clinical Trials
The ICH E8 guideline provides general
considerations for the conduct of clinical trials,
emphasising the importance of scientific quality
in the design, conduct, recording, and reporting
of clinical trials. It aims to ensure that clinical trials
are ethically justifiable and scientifically sound.
SUSTAINABILITY
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 27
Good Manufacturing Practice
Regulators Enforcing Manufacturing Standards
Good Manufacturing Practices (GMP), is a
baseline requirement we and international
regulators, impose on all suppliers of medicines.
It plays a crucial role in ensuring the quality
of pharmaceutical products, focusing on
minimising risks inherent in pharmaceutical
production that cannot be eliminated through
testing the final product.
GMP practices are primarily specified by the
International Council for Harmonisation of
Technical Requirements for Pharmaceuticals for
Human Use (ICH) (see page 11). They cover all
aspects of production, from the raw materials,
facilities, and equipment to the training
and personal hygiene of staff.
While GMP does not specifically target
environmental matters, it can also indirectly
contribute to environmental safety through the
efficient use of resources and the reduction of
waste production, as the practices encourage
the efficient and responsible use of raw
materials and energy.
GMP standards are enforced by national regulatory
food and drug regulators. These agencies conduct
regular inspections and audits of pharmaceutical
manufacturing facilities to ensure compliance,
and where breaches of process are found, they
have a range of enforcement actions at their
disposal that range from fines to mandating
a cessation of production.
FOCUS AREA:
Best Practice Quality and
Safety Systems for Manufacturing
and Distributing Medicines
Performance:
• No products were sold into markets without
meeting regulatory requirements.
• No notifications of concern in relation
to counterfeit medicines.
• No product recalls.
• External regulators routinely conduct Good
Manufacturing Practice site inspections on
our pharmaceutical manufacturing sites. None
of the inspections have revealed any matters
of concern for medicines that we are selling.
Delivering Safe and Quality Medicines
Medicine safety and quality are at the foundations
of our business, our financial well-being, and our
corporate reputation.
We also understand that the multiple national
regulators that approve our products for sale, as
well as our customers and sales and distribution
partners, will accept nothing less.
Whenever we take a new medicine to market or
in-license a product we must meet the stringent
regulatory requirements set and administered by
national food and medicine regulators. Registration
of a medicine requires independent analysis and
approval of the therapeutic claims we make by
relevant regulators and the evidence and research
we have undertaken to make those claims.
Registration also requires AFT to file and update
safety information with regulators and maintain
product traceability information. It also requires
compliance with Good Manufacturing Practice
(GMP) to ensure our products are consistently
produced, controlled, and shipped according
to nationally mandated quality standards.
We are dedicated to managing and complying with
regulatory process and overseeing our research
and development processes.
We and our licensees monitor the markets in
which we operate for counterfeits or copies of our
medicines. Meanwhile, anti-tamper devices in our
packaging such as seals, and blister packs protect
us against product interference, and we continually
review new technologies and practices to ensure
we evolve with the industry.
We operate a Board-level committee,
the Regulatory and Product Development
Oversight Committee, which oversees our
regulatory and product risk management
framework. The committee charter is available
on the investor section of our website.
We have over the last year maintained our strong
record for product safety and quality. No products
have been sold into the market without meeting
regulatory requirements, we have received no
notifications of concern in relation to counterfeits,
nor have we issued any product recalls.
SUSTAINABILITY
28 | WORKING TO IMPROVE YOUR HEALTH
PRIORITY 2:
Best Practice Corporate Governance
The Board and Management of AFT are committed
to ensuring that the company maintains corporate
governance practices in line with best practice
and adheres to the highest ethical standards.
FOCUS AREA:
Complying With all Relevant
Legal and Listing Requirements
FOCUS AREA:
ESG Reporting
and Transparency
Performance:
• We have reviewed all key governance policies
and received management confirmation of
compliance.
• No issues of concern or policy breaches have
been notified to the Board in relation to our
Code of Culture and Ethics, Modern Slavery,
Securities Trading, Conflicts of Interest,
Whistleblowing and Market Disclosure Policies.
• We have complied with the new Aotearoa
New Zealand Climate Standards.
The AFT Board has this year continued to evolve
AFT’s corporate governance framework to ensure
it is aligned with advances in global and regional
expectations and regulations.
Key developments in our governance framework
over the last year have included the further evolution
of our sustainability framework. This has seen:
• The integration of the oversight and
management of climate-related risks and
opportunities into Board and company policy
and procedures. This has included:
• The formation of a standing management-led
committee the ‘Climate Governance Working
Group’ that assesses and manages climate
related risks and opportunities and reports
to the Board on these matters quarterly;
• The completion of AFT’s first Climate Change
Related Disclosure Report in compliance with
the new Aotearoa New Zealand Climate
Standards. A summary of the disclosure
is included in this section and the detailed
disclosure are in appendix 1 on pages 108
to 120 of this report.
• A review of the analysis of material ESG matters
to the business and further refinement of the
measures we use to assess our performance on
key issues (see pages 22 and 23 of this report)
• The incorporation of new NZX guidelines for
the disclosure of remuneration practices
(see pages 62 to 67 of this report)
Details on these initiatives are also covered
in the company’s corporate governance statement
on pages 46 to 61 of this report.
AFT’s governance charters and policies can be found
in the Investor Centre on the Company’s website.
SUSTAINABILITY
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 29
PRIORITY 3:
Ethical and Sustainable Value Chains
AFT is committed to operating an ethical and
sustainable supply chain. Our supply chains
are extensive and sometimes complex, with a
high proportion of products sourced from large
and reputable pharmaceutical companies and
manufacturers based in regions including Europe,
North America, India, and Asia. Due to the extent
of these networks, it is critical to provide
appropriate governance and oversight of them.
FOCUS AREA:
ESG Performance of Our
Value Chain
Performance:
• Our key product suppliers have confirmed their
compliance with our Supplier Code of Conduct
and our Modern Slavery Policy.
• The visits we have made to suppliers during the
year have not revealed any instances of concern
related to ESG performance in our value chain.
AFT has put in place a broad range of measures
related to our commitments to ethical and
sustainable value chains. At the heart of these
measures is a comprehensive system of monitoring
and control across AFT, the companies that it
controls and its supply chain.
Specifically, the Board Charter requires the
Board to review and ratify group systems of
internal compliance and control to determine the
effectiveness of those systems. The Board also
operates an Audit and Risk Committee (ARC) to
assist with its responsibilities and commitments.
The ARC, among other things, is charged with
assisting the board in overseeing management’s
implementation of the Company’s risk management
framework and that management has appropriate
processes for identifying, responding to, and
regularly reporting on risks (including Modern
Slavery and climate-related risks) and that those
processes are operating effectively.
We also have a range of internal policies and codes
that set standards for Directors, employees,
consultants, contractors, interns, and secondees
of AFT Pharmaceuticals and our related companies
that are focused on the management of these risks.
They notably include:
• A Code of Culture and Ethics.
• A Modern Slavery Policy to address potential
Modern Slavery risks in our business and in our
supply chain.
• An Anti-Bribery and Anti-Corruption policy.
• A Whistle Blowing Policy.
We operate a Supplier Code of Conduct that
among other things, requires attestation to our
Modern Slavery Policy (see above), compliance
with applicable, national, and international laws
and international labour standards, and strong
environmental practices. It also requires suppliers
to observe and model ethical business practices;
and establish and follow effective policies and
procedures to promote workplace health and safety.
Our key suppliers have attested compliance
with our Supplier Code of Conduct and Modern
Slavery policy.
In addition, ahead of engaging new suppliers we
undertake due diligence to ensure we select and
collaborate with those that align with our values
and the way we do business. We also periodically
visit key manufacturing sites, and none of these
visits have revealed any instances of concern.
All manufacturers of our medicines are required to
operate under GMP requirements (see page 28).
For further detail on our approach, please see
our Governance Statement on pages 46 to 61
of this report and the governance section
of our website.
SUSTAINABILITY
30 | WORKING TO IMPROVE YOUR HEALTH
FOCUS AREA:
Ethical Marketing
and Sales Practices
AFT is committed to following ethical sales and
marketing practices in all the markets where it
operates and licenses its products. We understand
this commitment is vital to maintaining trust in our
business.
Performance:
• No notification of breaches of regulatory
advertising codes in any of the markets where
our products were sold.
The sale and marketing of our products is regulated
in all the markets where we sell our products
or where we out-license them to third parties.
In Australia, our largest market, the marketing, and
advertising of pharmaceutical consumer products
is largely governed by the Therapeutic Goods
Advertising Code. For prescription medicines we
observe the Medicines Australia Code of Conduct.
Both regimes are overseen by the regulator, the
Therapeutic Goods Administration.
Similarly, in New Zealand, our practices align with
the Therapeutic and Health Advertising Code.
In both markets we regularly engage third parties
to ensure compliance and have processes in place
to ensure compliance with broader regulations.
Beyond these regions, we are committed to
complying with local codes. Licensees’ adherence
to relevant legal frameworks and sales and
marketing codes form part of our contractual
engagement with them.
SUSTAINABILITY
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 31
PRIORITY 4:
Supporting and Developing Our People
AFT is committed to ensuring equal opportunity
for all its people regardless of race, nationality,
gender, sexual orientation, age, religion, or physical
ability. We are also committed to developing our
people through education, training and providing
workplace flexibility, including flexible work hours
to accommodate employee needs.
FOCUS AREA:
Diversity
and Inclusion
Performance:
• Strong gender, age, cultural diversity across
AFT’s workforce
• We have a loyal and stable workforce.
• Annual internal review reveals no gender
remuneration disparities.
• All staff and contractors are paid at least the
living wage.
We recognise that building a culture of diversity,
accountability, and fair reward will deliver improved
business performance and help to ensure we
can attract and retain highly skilled people.
These commitments are underpinned by Board-
level policies including a Code of Culture and
Ethics, Diversity & Inclusion, Remuneration and
Whistleblowing, all of which are available on the
investor section of our website.
We are proud of the diversity we have achieved
at AFT and believe it is one of our core strengths.
As at the end of March 2024 we had 110 employees
up from 100 in the prior year.
Our workforce continues to reflect the diversity of
New Zealand and Australia and the other markets
where we operate. At the end of March 2024 the
team hailed from 35 different cultural identities
and 24 birth countries, with a gender split of
63% women and 37% men and an age spread of
employees ranging from 22 years to more than
72 years (average age of 43.5 years old).
SUSTAINABILITY
32 | WORKING TO IMPROVE YOUR HEALTH
Gender Composition of AFT’s Workforce
The respective numbers and proportions of men
and women at various levels within the AFT
workforce as of 31 March 2024 and 31 March 2023
are set out in the table below:
FemaleMale
2024¹2023¹2024¹2023¹
Directors 233%233%467%467%
Officers² 450%450%450%450%
Workforce6963%6461%4137%3639%
1 Figures at the end of the relevant financial year.
2 Officers are considered to be the Managing Director
and his direct reports. Managing Director Hartley Atkinson
and Chief of Staff Marree Atkinson are included in both
the number of directors and the number of officers.
Our success on these diversity measures reflects our
determination to promote a culture that is free from
discrimination, harassment, and victimisation. It also
reflects our focus on emphasising the accountability
of AFT Pharmaceuticals’ leaders to cultivate a
culture of inclusion in which the strengths of every
individual are recognised and valued.
These efforts are supported by an ongoing
programme to educate our team on the importance
of creating a diverse and inclusive environment
and providing awareness of the potential for
unconscious bias in people management processes.
Our team is also supported by continuous
workplace policy development.
Last year we updated our maternity policy requiring
AFT to match government contributions in all the
territories where we operate. We also introduced a
Family Violence policy to provide time and support to
any employees associated with violence in the home.
We monitor the diversity of our workforce. Given
that we are an internationally focussed business,
we aim to ensure that our workforce continues to
benefit from this broad range of perspectives and
backgrounds, and we report quarterly to the board
on the number of employees and the spread of
gender, age, birth country, and cultural identity.
Remuneration and Gender Pay Equity
We strive to ensure all employees and contractors
receive equal and fair treatment in all aspects of
the company’s employment policies and practices
and that they are incentivised towards the success
of the company.
We hire the ‘best person’ for the job, regardless of
gender, age, and culture, and incentivise our people
in a way that is aligned with the long-term success
of the company.
To ensure we deliver on these commitments we
undertake an annual merits-based remuneration
review, which provides visibility to management in
relation to the parity of working conditions and pay
across the workforce. This review also considered
deviations from company averages and targets
to understand whether any unconscious bias is
occurring in recruitment or promotion.
We are comfortable that we have achieved gender
pay equity through a series of reviews detailed in
previous reports, but it is clear that in some teams
there is over-representation of one gender over the
other. However, this reflects the higher applicant rate
of those genders when recruiting new members to
teams. This factor is taken into consideration when
making future hires, with the aim to improve the
balance over time, where possible.
We are meanwhile committed to paying the living
wage at a minimum but reflecting nature of our
business and the capabilities and skills of our
people, the vast majority receive remuneration
well above this level.
Further detail is covered in the remuneration
section on pages 62 to 67 of this report.
FOCUS AREA:
Developing
Our People
We continue to upskill our people recognising
the role it plays in maintaining our competitive
advantage and building the company’s reputation
as a great place to work.
In addition to the formal induction processes into
our company culture and policies, we support
our staff in pursuing development of skills in
their chosen fields. AFT pays for all professional
membership fees such as pharmacists, accountants,
and lawyers to ensure their continued education
and professional memberships are maintained.
SUSTAINABILITY
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 33
Building Culture
We take our share of responsibility for keeping
the beach in front of our Takapuna Auckland
office clean and free from plastic pollution. AFT
staff volunteers have spent several sessions
over the year picking up rubbish on the beach
and disposing of it responsibly. This is an
ongoing initiative driven by the AFT Social
Committee, which not only supports our local
area but also builds awareness and stewardship
of our environment.
FOCUS AREA:
Health
and Safety
AFT has a Health and Safety Policy and both
the Board and management are committed to
promoting a safe and healthy working environment
for everyone working in or interacting with
AFT’s business.
Performance:
Health and Safety
indicator Target 2024
1
2023
1
Lost time to injuries ZeroAchievedAchieved
Total recordable injuries ZeroAchieved Achieved
1 Year to the end of March
The Health and Safety Policy requires AFT people
to endeavour to take all practicable steps to
provide a working environment that promotes
health and wellbeing, while minimising the potential
for risk, personal injury, ill health, or damage.
AFT operates an employee-led Health and Safety
Committee, and it meets regularly to monitor and
manage health and safety risks, including hazards,
within the business. We assist employee health
by providing flu vaccinations and train our people
in first aid and responses to emergencies such as
cardiac arrests.
We undertake monthly audits of health and safety
practices and performance, and the outcomes
of these audits are reported to the Board. We have
a strong record in health and safety as evidenced
by our performance against health and safety
targets above.
Health and safety in our supply chain is covered
through standards laid out in the Supplier Code
of Conduct.
SUSTAINABILITY
34 | WORKING TO IMPROVE YOUR HEALTH
PRIORITY 5:
Understanding Our Climate-Related Risks
and Taking Action
We are committed to understanding and
transparently communicating to our stakeholders
the implications of climate change on our
business. We are also committed to ensuring the
measures we are taking to mitigate the material
risks, leverage the opportunities presented and
reduce our environmental footprint are robust,
and evidence based.
FOCUS AREA:
Undertaking a Climate-Risk
Assessment
Performance:
• We completed our first climate risk assessment,
and our first disclosure required under the
Aotearoa New Zealand Climate Standards
(see pages 108 to 120 of this report).
• We measured our greenhouse gas (GHG)
emissions, identified the physical and transitional
impacts of climate change and the material risks
and opportunities to our business.
• We determined that climate change represents
a relatively low risk to the sustainability
of our operations.
Assessing Our Climate Risk
In completing this climate risk assessment, and in
compliance with the new Aotearoa New Zealand
Climate Standards, we have reviewed and refined
our governance structures, and leveraged external
expertise to ensure we have the capability to
understand the risks and opportunities of climate
change and take action. We have also measured
our emissions and undertaken a rigorous analysis
on the impact of climate change on our operations
under various global warming scenarios.
Based on our first disclosure and our current
information, Climate Change does not represent
a material risk to our business.
The most significant physical risks to the business
are the potential for extreme weather to disrupt
manufacturing and distribution. Meanwhile our
transition to a low carbon future could be hampered
by a lag in the development of technology that would
allow that transition and similarly, a misalignment
in medical and climate change regulation.
Nevertheless, we believe we are now well prepared
to refine and implement our strategy to manage
climate related risks and opportunities.
SUSTAINABILITY
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 35
AFT Greenhouse Gas Emissions
The first step in AFT’s transition towards a low carbon business model has been to establish a
baseline measure of our greenhouse gas emissions. Our Scope 1 and 2 emissions are disclosed
below and in appendix 1 on pages 108 to 120 and we are in the process of measuring our
Scope 3 emissions, which will be disclosed in the FY25 disclosure.
Our emissions inventory covers the period 1st April 2023 to 31st March 2024, and has
undergone independent assurance from Toitū Envirocare to ensure accuracy and completeness.
Category
(ISO 14064-1:2018)
Scopes
(ISO 14064-1:2006)2024
Category 1: Direct emissions (tCO
2
e)Scope 1331.76
Category 2: Indirect emissions from imported energy
(location-based method*) (tCO
2
e)Scope 218.57
Total direct emissions (tCO
2
e)331.76
Total indirect emissions* (tCO
2
e)18.57
Total gross emissions* (tCO
2
e)350.33
Category 1 direct removals (tCO
2
e)0.00
Purchased emission reductions (tCO
2
e)0.00
Total net emissions (tCO
2
e)350.33
*Emissions are reported using a location-based methodology.
FOCUS AREA:
Working With Suppliers
Committed to Climate Action
We are committed to mitigating the risks and
taking advantage of the opportunities of climate
change and aligning our business model with a
future that’s climate resilient.
Performance:
• We have formed a standing management
committee, the Climate Governance Working
Group to assess and manage climate related
risks and opportunities for the company.
• Climate change matters are included in strategic
planning processes, and we are positioned to
take action that is founded on robust evidence
and an understanding of what matters most
to our stakeholders.
• We have established science-aligned targets
for our Scope 1 and 2 emissions, consistent with
limiting global warming to 1.5 degrees Celsius.
• We are now developing our emissions reduction
plan, which will provide a roadmap to achieve
our emissions targets.
Building Internal Capability
At the heart of our strategy to mitigate the
risks of climate change and act is our Climate
Governance Working Group, which is a standing
senior management committee that meets
quarterly and is led by our Chief Executive and
Chief Financial Officer. Its tasks include assigning
responsibilities, integrating climate risks into
our strategy, operationalising initiatives, and
monitoring progress. The Board reviews the climate
strategies advanced by this group during an
annual strategic planning session and bi-annually
revises the risk register. Through this process we
expect to continue to evolve strategies and ensure
adaptation to climate challenges in a way that
aligns closely with broader executive and
Board-level strategic reviews.
SUSTAINABILITY
36 | WORKING TO IMPROVE YOUR HEALTH
PRIORITY 6:
Waste Minimisation
AFT is working to minimise the waste it generates.
Our immediate approach towards this vision and
to make a meaningful difference is to take a life-
cycle approach to packaging from manufacture
to disposal, with a keen focus on supply-chain,
distribution, consumer, and hospital packaging.
FOCUS AREA:
Improving our Consumer
Packaging
FOCUS AREA:
Reducing Waste
in the Supply Chain
AFT is a member of 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.
Our latest APCO assessment recognises AFT as
‘advanced’ in its efforts against the organisation’s
goals. This is the same overall rating as the prior
year, but we made significant advances.
We achieved the majority of the packaging
goals we set in the prior year covering strategies
to increase the sustainability and recoverability
of our packaging, recycle waste at our warehouses
and offices, and the development of strategies
to eliminate problematic materials in the
supply chain.
Our report covers primary packaging (the material
that contacts the medicine), secondary packaging
(encompasses the primary packaging) and the
outer packaging.
Primary packaging is regulated according to strict
pharmacopeial standards and consequently we
have taken the position that most of our products
cannot be manufactured from recycled material.
For example, the glass material used to pack
pharmaceutical products, especially those for
parenteral administration must be made of specialist
glass with high a hydrolytic resistance. However,
we work hard to improve the recoverability
of our secondary and outer packaging.
The latest APCO report will be available
on our website when finalised.
SUSTAINABILITY
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 37
Performance:
Governance and Strategy
Achievements: AFT has integrated sustainable
packaging strategies into its procurement
processes. We are aiming to achieve the APCO
2025 goals where permissible:
Nearly 100% of our packaging is now reusable,
recyclable, or compostable.
Design and Procurement
Achievements: 99% of all our packaging was
reviewed against sustainability principles, in line
with the prior year. We also achieved an increase
in the amount of packaging marked with the
recycling logo from 7% to 15%.
Recycled Content
Achievements: We maintained our efforts to use
recycled materials in packaging. Packaging with
recycled material was 24% compared to the
31% in the prior year. We are working with suppliers
to better define the detailed componentry
of the primary packaging from recycled verses
non recycled.
Recoverability
Achievements: We advanced our efforts in
recycling with 97% of packaging materials designed
to be recyclable, steady on the prior year’s result of
98.7%. We also maintained strong partnerships with
third-party logistics for material reuse.
Disposal Labelling
Achievements: We enhanced consumer guidance
by doubling the disposal labelling on packaging
to 15% (by weight) from 7% last year and
we expect this number to continue to increase.
We have recycling labels on 59% of our secondary
and tertiary packaging up from 23% in the
prior year.
On-site Waste
Achievements: We improved waste management
on-site, with 99% of waste now recyclable.
Problematic Materials
Achievements: We identified and addressed the
use of problematic materials like PET and PVC,
which currently constitute 10% of our packaging.
Alongside Australian guideline we are working with
our suppliers and regulators to try and reduce PET
and PVC over the next five years.
SUSTAINABILITY
38 | WORKING TO IMPROVE YOUR HEALTH
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 39
Reconciliation of EBITDA to GAAP
AFT’s standard profit measure prepared under New Zealand GAAP is net profit after
tax. AFT has used the non-GAAP profit measure of EBITDA when discussing financial
performance in this document. AFT directors and management believe that this measure
provides useful information as it is used internally to evaluate performance of business
units, to establish operational goals and to allocate resources.
Non-GAAP profit measures are not prepared in accordance with NZ IFRS (New Zealand
International Financial Reporting Standards) and are not uniformly defined, therefore the
non-GAAP profit 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 in accordance with NZ IFRS.
GAAP to Non-GAAP reconciliation
NZ$’000’s
Year ended 31 March20242023
Net profit after tax attributable to owners of the parent15,60910,654
Less: Finance income(66)(13)
Add back: Interest costs3,6862,873
Add back: Other finance loss/(gain)(1,404)1,010
Add back: Depreciation1,003808
Add back: Amortisation1,010916
Add back: Income tax expense/(benefit)6,4105,145
EBITDA26,24821,393
GOVERNANCE
An Experienced and Skilled Board
AFT has an experienced and balanced Board with a diverse range of skills. It comprises an Independent
Chairman, three other Non-Executive Independent Directors 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 above and on the following pages.
David Flacks
CHAIRMAN
Appointed 22 June 2015
David has a number of
governance roles and has
been chair of AFT since the
company’s initial public offer in
2015. David is also chair of the
Suncorp New Zealand group of
companies. He is a director of
Todd Corporation, and a number
of environmentally focused
pro bono organisations. He is a
former chair of the NZX Markets
Disciplinary Tribunal and a
former member of the Takeovers
Panel. He is also a director of
boutique corporate law firm
Flacks & Wong. David was for
many years a senior corporate
partner at Bell Gully and was
general counsel and company
secretary of Carter Holt
Harvey during the 1990s.
He is a law graduate from
Cambridge University.
Dr Hartley Atkinson
CHIEF EXECUTIVE OFFICER,
EXECUTIVE DIRECTOR,
AND CO-FOUNDER
Appointed 4 September 1997
Hartley founded AFT in 1997.
Before founding AFT, Hartley
worked at Swiss multinational
pharmaceutical company,
Roche, for eight years where
he held positions as Sales &
Marketing Director, Medical
Director, Product Manager
and Medical Manager. Prior
to that Hartley was a Drug
Information Pharmacist and
Researcher at the Department
of Clinical Pharmacology,
Christchurch Hospital. Hartley
is the author of more than
30 scientific publications and
his 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.
Marree Atkinson
CHIEF OF STAFF,
EXECUTIVE DIRECTOR,
AND CO-FOUNDER
Appointed 4 September 2012
Marree has been involved in
all aspects of AFT’s business
since its establishment in
1997, including roles in sales,
regulatory affairs, customer
services and logistics. Marree’s
role as Chief of Staff sees her
involved in the day-today
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.
GOVERNANCE
42 | WORKING TO IMPROVE YOUR HEALTH
Anita Baldauf
INDEPENDENT
DIRECTOR
Appointed 4 November 2020
Anita brings to AFT 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 relations,
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 a Fellow of the Edmund
Hillary Fellowship, 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.
Andrew Lane
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Appointed 28 September 2023
Andrew has more than 30 years’
experience of leadership in the
global pharmaceuticals industry
with expertise across a broad
range of disciplines including
finance, manufacturing, sales,
marketing, and strategy. Most
recently he was Global President
of Abbott Laboratories Pharma
Division where he led a multi-
billion-dollar operation that
had 30 manufacturing plants,
12 Innovation and Development
sites and 40,000 staff covering
more than 100 countries. Before
that he was Vice President of
Takeda, Asia Pacific, where
he managed the company’s
operations in 12 countries, which
included three factories and
2,000 staff. He has also held
senior roles with multi-national
pharmaceutical companies
Nycomed, DKSH, Novartis, and
Sandoz.
Dr Ted Witek
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Appointed 23 December 2020
Ted 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 Portuguese
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, an
advisor to the Design for Health
Program at OCAD University.
He is currently a 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. Ted is the author of more
than 100 scientific papers as well
as several chapters and books.
GOVERNANCE
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 43
Our Senior Management Team
Malcolm Tubby
CHIEF FINANCIAL
OFFICER
Malcolm is a qualified Chartered
Accountant in the United
Kingdom, Australia, and
New Zealand with a wealth of
senior corporate governance
expertise, 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 with AFT since
its foundation.
Ioana Stanescu
CHIEF SCIENTIFIC
OFFICER
Ioana has overall responsibility
for AFT’s research and
development. She has over
25 years’ experience in the
pharmaceutical industry,
including positions as Vice
President Quality Assurance &
Regulatory Affairs and Head of
Vaccine Business Area at FIT
Biotech Limited, and a WHO
adviser within Central and
Eastern Europe. She has also
coordinated several European
Union funded research grants
and was selected as an Expert
by the European Health
Committee – Council of Europe
to participate in a research study
in 1999.
Vladimir Ilievski
REGULATORY
AFFAIRS MANAGER
Vladimir holds a Masters 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 in 2006, Vladimir worked
for Douglas Pharmaceuticals in
various roles including as Quality
Control and Quality Assurance
Analyst and as a Regulatory and
Senior Regulatory Associate.
Vladimir has responsibility
for product registrations
in countries in Australasia,
Asia, the Middle East,
and the United Kingdom.
GOVERNANCE
44 | WORKING TO IMPROVE YOUR HEALTH
Louise Clayton
DIRECTOR
INTERNATIONAL BUSINESS
Louise joined AFT in 2017
and is responsible for Global
International Business
Development, Alliance
Management and Marketing.
Louise has over 20 years’
experience in driving
international brands within
sales, brand marketing,
product sourcing, new product
development, and new market
expansion. Her core focus is
global expansion, brand growth
and alliance management
through strong partnerships with
Licensees, Distributors, and our
AFT affiliates.
Scott Crawford
GENERAL MANAGER
PROMOTED PRODUCTS
Scott joined AFT in 2013 and is
responsible for the Promoted
Products Sales in Australia and
New Zealand across all retail
channels including Primary
Care, Pharmacy, Supermarkets,
Petrol, and Convenience. His
role as General Manager of
Promoted Products involves
the coaching and development
of account managers, field
supervisors and trade marketing
across ANZ. 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, Ferrero Confectionery,
Smiths Snackfoods and National
Foods.
Murray Keith
GROUP MARKETING MANAGER
Murray joined AFT
Pharmaceuticals in 2011 and
has since been responsible
for managing our marketing
function, with a primary focus on
the Australian and New Zealand
markets. His extensive marketing
career prior to joining AFT
includes a range of roles working
across a number of blue-chip
brands and companies, including
Nestlé, Lion Nathan, Bay of
Plenty Rugby, Nestlé Purina,
New Zealand Lotteries and
Fonterra Brands.
GOVERNANCE
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 45
Corporate Governance Statement
The Board and management of AFT
Pharmaceuticals Limited (‘AFT’ or ‘the Company’)
are committed to ensuring that the Company
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 NZX Corporate Governance Code as dated
1 April 2023 (‘NZX Code’); and
• the Third and Fourth Editions of the ASX
Corporate Governance Council’s Corporate
Governance Principles and Recommendations
(notwithstanding AFT is not required to follow
these recommendations owing to its ASX
Foreign Exempt Listing).
The NZX Listing Rules require AFT to formally
report its compliance against the recommendations
contained in the NZX Code dated 1 April 2023 and
it sets out in this Corporate Governance Statement
how it has implemented the recommendations
in the current version of the NZX Code.
Except to the extent outlined in this Corporate
Governance Statement, the Board considers
that AFT’s corporate governance structures,
practices and processes have followed all the
recommendations in the NZX Code in the financial
year ended 31 March 2024.
For ease of reference, relevant sub-headings
in this Corporate Governance Statement
include a reference to the primary relevant
recommendation(s) in the NZX Code to which the
disclosures under that sub-heading relate. This
is a general guide only, and disclosures under a
particular sub-heading are not limited solely to the
recommendation(s) referred to in that sub-heading.
AFT’s governance charters and policies can be
found in the Investor Centre on the Company’s
website (https://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.
This Corporate Governance Statement was
approved by the Board on 21 May 2024
and is current as at that date.
Stock Exchange Listings
AFT is incorporated in New Zealand and is listed
on the NZX Main Board and on the Australian
Securities 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.
GOVERNANCE
46 | WORKING TO IMPROVE YOUR HEALTH
SHAREHOLDERS
AFT PHARMACEUTICALS BOARD
Audit and Risk
Committee
Regulatory and
Product Development
Oversight Committee
Remuneration
and Nominations
Committee
MANAGING DIRECTOR
SENIOR MANAGEMENT TEAM
AFT PHARMACEUTICALS PEOPLE
Overview of AFT’s Governance Structure
The AFT Board of Directors has been appointed by
shareholders to protect and enhance the long-term
value of AFT and to act in the best interests of AFT
and its shareholders.
The Board is the ultimate decision-making
body of the Company and is responsible for the
corporate governance of the Company. The role
and responsibilities of the Board are set out in the
Board Charter, which can be found in the Investor
Centre on the Company’s website.
The Board currently comprises a Non-Executive
Chair, three other Non-Executive Directors,
and two Executive Directors, as detailed in the
Investor Centre on the Company’s website
and page 42 and 43 of this report.
The Board has established three standing Board
Committees to assist in the execution of the
Board’s responsibilities:
• Audit and Risk Committee;
• Remuneration and Nominations Committee; and
• Regulatory and Product Development Oversight
Committee.
GOVERNANCE
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 47
PRINCIPLE 1:
Ethical Standards
“Directors should set high standards of ethical behaviour, model this
behaviour and hold management accountable for these standards being
followed throughout the organisation.”
Code of Culture and Ethics
(Recommendation 1.1)
The Board recognises that high ethical standards
and behaviours are central to good corporate
governance. It has implemented a Code of Culture
and Ethics (‘the Ethics Code’) to guide the behaviour
of its Directors, Senior Managers, and Employees.
The Ethics Code establishes the framework by
which Directors and staff of AFT are expected
to conduct their professional lives by facilitating
behaviour and decision-making that meets AFT’s
business goals and is consistent with AFT’s values,
policies, and legal obligations.
The Ethics Code is available to staff on AFT’s
intranet and forms part of the induction process
for new employees. Existing staff receive refresher
courses at least once every three years. Regular
reminders are provided to staff about the
application of the Ethics Code.
The Ethics Code addresses:
• AFT’s values and commitments to establishing
an inclusive culture;
• conflicts of interest;
• receipt of gifts;
• corporate opportunities;
• confidentiality;
• behaviours and responsibilities;
• proper use of AFT property and information;
• compliance with laws and AFT policies;
• reporting issues regarding breaches of the Ethics
Code, legal obligations, or other AFT policies; and
• additional Director responsibilities.
AFT encourages staff to report any concerns they
have about compliance with the Ethics Code, AFT
policies, or legal obligations. It achieves this with
staff-wide communications and has established a
designated email address, that is directed to the
personal emails of all Non-Executive Independent
Directors, for staff to confidentially raise any
concerns they may have.
The Board holds six-monthly reviews of the Ethics
Code and expects any incidents arising under the
Ethics Code to be brought to Directors’ attention
immediately. AFT’s process for managing any breach
of the Ethics Code is detailed in the Ethics Code.
In addition, AFT has implemented the following
stand-alone policies to support the application of
the Ethics Code and define the process for raising
concerns about actual, suspected, or anticipated
wrongdoings within the AFT group of companies:
• Diversity and Inclusion Policy;
• Anti-Bribery and Anti-Corruption Policy;
• Whistleblowing Policy;
• Conflicts of Interest Policy;
• Modern Slavery Policy; and
• Supplier Code of Conduct.
The Ethics Code and the policies listed above are
available in the Investor Centre on the Company’s
website.
Securities Trading Policy
(Recommendation 1.2)
The Company is committed to ensuring that its
people comply with legal requirements not to
trade AFT securities while in possession of inside
information. AFT’s Securities Trading Policy
accordingly applies to all Directors, Officers,
Employees, and Contractors of AFT and its
subsidiaries.
The Securities Trading Policy seeks to ensure that
those subject to the Policy do not trade in AFT
securities if they hold undisclosed price-sensitive
information. The Policy sets out additional rules,
which includes the requirement to seek Company
consent before trading and prescribes certain
black-out periods during which trading in the
Company’s securities is prohibited.
Compliance with the Securities Trading Policy is
monitored through the consent process, through
education and periodic reminders and via
notification by AFT’s share registrar when any Director
or Senior Manager trades in AFT securities.
All trading by Directors and Senior Managers
(as defined by the Financial Markets Conduct
Act 2013) is required to be disclosed to NZX
and in AFT’s Interests’ Register.
AFT’s Securities Trading Policy is available in the
Investor Centre on the Company’s website.
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48 | WORKING TO IMPROVE YOUR HEALTH
PRINCIPLE 2:
Board Composition and Performance
“To ensure an effective board, there should be a balance of independence,
skills, knowledge, experience and perspectives.”
Role of the Board
(Recommendation 2.1)
The business and affairs of the Company are
managed under the direction of the Board of
Directors. At a general level, the Board is elected
by shareholders to:
• provide leadership to the Company;
• build sustainable value for shareholders;
• establish the Company’s values and objectives;
• develop major strategies for achieving the
Company’s objectives;
• manage financial and non-financial risks
including those associated with sustainability
and climate;
• determine the overall policy framework within
which the business and Company are operated;
and
• monitor management’s performance and
remuneration with respect to these matters.
The Board has adopted a Board Charter that
regulates internal Board procedure and describes
the Board’s specific roles and responsibilities. The
Board delegates management of the day-to-day
affairs and responsibilities of the Company to the
management team under the leadership of the
Chief Executive Officer (‘CEO’), to deliver on the
strategic direction and goals determined by the
Board. The Chief Executive Officer has, in some
cases, formally delegated certain authorities
to his direct reports within set limits.
The Board regularly monitors and reviews
management’s performance in the execution
of its delegated responsibilities and the
appropriateness of its delegated authority policy.
Board Membership, Size, and Composition
(Recommendation 2.2, 2.3)
The size of the Board is determined by the
Board from time to time, in accordance with the
limitations prescribed in the NZX Listing Rules
and in accordance with the provisions of AFT’s
Constitution and the Board Charter.
As at 31 March 2024 the Board comprised
six Directors:
Director Role
David Flacks Non-Executive Director
and Chair
Anita Baldauf Non-Executive Director
Andrew LaneNon-Executive Director
Dr Ted WitekNon-Executive Director
Hartley AtkinsonExecutive Director
and Chief Executive Officer
Marree AtkinsonExecutive Director
and Chief of Staff
The average tenure of Non-Executive Directors
at the date of this report is 4 years. A biography
of each Director, their qualifications and relevant
experience can be found on page 42 and 43
of this report and in the Investor Centre on
the Company’s website.
The Board has delegated to the Remuneration
and Nominations Committee the responsibility
for identifying and recommending Director
candidates for the approval of the Board. When
recommending candidates, the Committee
takes into account factors it deems appropriate,
including the diversity of background, experience,
and qualifications of the candidates.
When appointing Directors, the Board undertakes
appropriate background checks. Newly appointed
Directors are required to enter into letters of
appointment, setting out the terms of their
appointments.
As AFT operates in specialised markets, the Board
believes that it is important to have Directors with
a broad range of experience and skills, gained both
locally and internationally, that are appropriate
to meet its objectives.
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AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 49
Board Capability
The Board has developed (and periodically reviews
and updates) a comprehensive skills matrix to
inform Board succession planning and considers
each Director’s experience against identified
industry specific and broader governance-related
skills. Industry-specific skills identified as being
particularly relevant include:
• global pharmaceutical industry experience;
• pharmaceutical regulatory and ethics experience;
• R&D product development for drugs and
devices;
• commercial operations experience –
both domestic and international; and
• pharmaceutical sales and marketing.
A summary of the board’s assessment of its
aggregate capability against these criteria is set out
below, with an assessment of 100% representing
very high Board capability. The Board arrived at
these assessments by calculating the aggregate
scores of the three most highly skilled Directors in
each of these domains.
This approach recognises that a diversity of skills is
important to delivering best practice governance
and that it is unrealistic and unnecessary for all
Directors to be highly skilled in each of the relevant
domains. It also balances these considerations
against the need to ensure a diversity of well-
informed perspectives is brought to bear on any
issue brought before the Board.
Board Skills Specific to AFT Pharmaceuticals
Global pharmaceutical industry
Pharmaceutical regulatory and ethics
Pharmaceutical manufacturing & quality
R&D product development - drugs
R&D product development - device
Sales & marketing
Operations - domestic
Operations - international
People
Public company director experience/governance
Business building / entrepreneurship
Legal and regulatory
Executive leadership and strategy
Risk and compliance
Capital management
Environmental and Social (inc Climate)
Generic Board Skills
Board capability
Board capability
0% 20% 40% 60% 80% 100%
0% 20% 40% 60% 80% 100%
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50 | WORKING TO IMPROVE YOUR HEALTH
Board Appointment, Training,
and Evaluation
(Recommendation 2.6, 2.7)
The procedure for the appointment and removal of
Directors is ultimately governed by the Company’s
Constitution and relevant NZX Listing Rules.
A person may be appointed as a Director
by the Board or by appointment at a meeting
of shareholders.
A Director appointed by the Board must not hold
office (without standing for re-election) past the
next Annual Shareholders Meeting following their
appointment. Directors are otherwise subject
to the rotation requirements set out in the
NZX Listing Rules.
At the end of September Jon Lamb retired from
the Board and was replaced by Andrew Lane.
Additionally, in accordance with the rotation
requirements of the NZX Listing Rules,
Executive Director Marree Atkinson, was re-elected
to the Board at the Company’s 2023 Annual
Shareholders Meeting.
At the time of appointment, each Director receives
a copy of AFT’s Corporate Governance Manual
(comprising all AFT’s core governance documents)
and is introduced to the business through a
specifically tailored induction programme.
All Directors are regularly updated on relevant
industry and Company issues and undertake
training to remain current on how to best perform
their duties as Directors of AFT.
During the Board’s annual evaluation process,
training needs are considered to assist Directors
to remain upskilled on the business and industry
and legislative developments. All Directors have
access to Senior Management to discuss issues or
obtain information on specific areas or items to be
considered at a Board meeting or other areas they
consider appropriate.
The Board, Board committees and each Director
have the right to seek Independent professional
advice at AFT’s expense to assist them in carrying
out their responsibilities. During the financial year
ended 31 March 2024, the Board undertook a
review of its own and its committees’ composition
and performance to ensure they are effectively
governing AFT and monitoring AFT’s performance
in the interests of shareholders.
Independence of Directors
(Recommendation 2.4, 2.8, 2.9, 2.10)
A majority of AFT’s Directors are Independent.
The factors the Company takes into account when
assessing the independence of its Directors are set
out in the NZX Code and the Board Charter and
include factors such as the Director’s professional
and personal relationships with the Company and
its subsidiaries and the Director’s length of tenure
as applicable.
Generally, a Director is considered to be
Independent if that Director is not an employee
of AFT and does not have any direct or indirect
interest, position, association, tenure, or
relationship that could reasonably influence,
or be perceived to influence, in a material way,
the Director’s capacity to:
• bring an independent view to decisions in
relation to AFT;
• act in AFT’s best interests; and
• represent the interests of AFT’s shareholders
generally.
The Board has determined, based on information
provided by Directors regarding their interests
and the criteria specified in the Board Charter, and
for the purposes of the NZX listing rules that at 31
March 2024 (and the date of this Annual Report),
each of David Flacks, Anita Baldauf, Andrew Lane,
and Dr Ted Witek is an Independent Director.
The Board has also determined that Hartley
Atkinson and Marree Atkinson are not Independent
Directors owing to also being executives of the
Company; and, in Hartley Atkinson’s case, he is
also a trustee of a substantial product holder of
the Company, and each of Hartley and Marree
is a discretionary beneficiary of that substantial
product holder.
The Board will review any determination it makes
on a Director’s independence on becoming aware
of any new information that may affect that
Director’s independence.
For this purpose, Directors are required to
ensure they immediately advise AFT of any new
or changed relationship that may affect their
independence or result in a conflict of interest.
The Board supports the separation of the role of
Chairman and Chief Executive Officer. The current
Chairman has been elected by the Board from the
Independent Directors, in accordance with the
terms of the Board Charter. The Chairman’s role
is to manage and provide leadership to the Board
and to facilitate the Board’s interface with the
Chief Executive Officer.
0% 20% 40% 60% 80% 100%
0% 20% 40% 60% 80% 100%
GOVERNANCE
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 51
Conflicts of Interest
The Board is conscious of its obligations to ensure
that Directors avoid conflicts of interest (both real
and perceived) between their duty to AFT and
their own interests. The Board Charter and the
Conflicts of Interest Policy outline the Board’s
policy on conflicts of interest. AFT maintains
an Interests’ Register in which relevant disclosures
of interest and securities dealings by the Directors
are recorded.
Directors interests disclosures are carried
in the Statutory Information Section on page 104
of this report.
Company Secretary
The Company Secretary, Malcolm Tubby, is
responsible for supporting the effectiveness of the
Board by ensuring that its policies and procedures
are followed and for coordinating the completion
and dispatch of the Board agendas and papers.
The Company Secretary is accountable to the
Board, via the Chairman, on all governance matters.
Diversity and Inclusion
(Recommendation 2.5)
The Board recognises that building diversity across
AFT will deliver enhanced business performance.
AFT has adopted a Diversity and Inclusion Policy
and is committed to achieving diversity in the skills,
attributes and experience of its Board members,
management, and staff across a broad range
of criteria (including, but not limited to, culture,
gender, and age).
AFT is proud to have a workforce consisting
of many individuals with diverse skills, values,
backgrounds, ages, genders, and ethnicities,
and experiences. The Company works to ensure
that its selection processes for recruitment and
employee development opportunities are free
from bias and are based on merit.
The Board as a whole is responsible for overseeing
and implementing the Diversity and Inclusion
Policy but has delegated to the Remuneration
and Nominations Committee the responsibility
to develop and to recommend measurable
objectives to the Board that are designed
to adhere to the Policy.
AFT’s Diversity and Inclusion Policy is implemented
by promoting the following principles:
• reviewing progress against measurable diversity
objectives and initiatives developed by AFT to
deliver outcomes consistent with the Policy;
• promoting a working environment free from
discrimination, harassment, and victimisation;
• emphasising the accountability of AFT’s leaders
to cultivate a culture of inclusion in which the
strengths of every individual are recognised
and valued;
• raising employee awareness of workplace
diversity by designing, delivering, and measuring
the effectiveness of programmes that promote
workforce diversity, inclusion, and gender equity;
• striving to ensure that all employees and
contractors receive equal and fair treatment in all
aspects of the Company’s employment policies
and practices;
• promoting a culture that empowers employees
to act in accordance with the Policy; and
• regularly benchmarking AFT’s diversity
standpoint, status, and objectives against
appropriate external comparators.
The Board has conducted its annual assessment of
its diversity objectives and the Company’s progress
towards achieving these objectives in respect of
the financial year ended 31 March 2024.
The steps AFT took during the year to develop
and maintain a diverse and inclusive working
environment and fair remuneration, including
gender pay gap reporting, are detailed on page 33
of this report. In accordance with the NZX listing
rules it also lists on those pages the gender
composition of the Directors and Officers at
balance date alongside the gender composition
of its workforce.
In the year ahead (the financial year ending
31 March 2025) the Company will continue to
monitor and benchmark against the diversity
and inclusion objectives agreed by the Board
for the financial year ended 31 March 2025.
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52 | WORKING TO IMPROVE YOUR HEALTH
PRINCIPLE 3:
Board Committees
“The Board should use committees where this will enhance its
effectiveness in key areas, while still retaining Board responsibility.”
The Board uses committees to deal with issues
requiring detailed consideration, thereby enhancing
the efficiency and effectiveness of the Board.
However, the Board retains ultimate responsibility
for the functions of its committees and determines
each committee’s roles and responsibilities.
The current committees of the Board are:
• Audit and Risk Committee;
• Remuneration and Nominations Committee; and
• Regulatory and Product Development Oversight
Committee.
Details of the roles and responsibilities of these
committees are described in their respective
charters and summarised below. The committee
charters are available in the Investor Centre
on the Company’s website.
From time to time the Board may constitute an ad-
hoc committee to deal with a particular issue that
requires specialised knowledge and experience.
Proceedings of each committee meeting are
reported back to the Board to allow other Directors
to question committee members and to keep
apprised on matters being considered by each
committee.
Audit and Risk Committee
(Recommendation 3.1, 3.2)
The primary function of the Audit and Risk
Committee is to assist the Board in fulfilling its
oversight responsibilities relating to the Company’s
risk management and internal control framework,
the integrity of its financial and non-financial
reporting (including reports on sustainability,
corporate social responsibility, and environmental
activities) and the Company’s auditing processes
and activities.
Under the Audit and Risk Committee Charter,
the Committee must be comprised of a minimum
of three members who are each Non-Executive
Directors, a majority of whom are Independent
Directors and at least one Director with an
accounting or financial background. Further,
the Chairman of the Committee is required to be
Independent and not be the Chairman of the Board.
Employees are not permitted to attend meetings of
the Audit and Risk Committee without an invitation.
The Chairman of the Committee should not have a
long-standing association with AFT’s external audit
firm as a current, or retired, audit partner or senior
manager at the firm.
The current members of the Committee are Andrew
Lane (Chairman), David Flacks and Anita Baldauf.
All members are Independent, Non-Executive
Directors. Andrew Lane and Anita Baldauf are
considered to have a financial background for
the purposes of the NZX Listing Rules.
The Audit and Risk Committee held four formal
Committee meetings during the financial year
ended 31 March 2024.
Remuneration and Nominations
Committee
(Recommendation 3.3, 3.4)
The Remuneration and Nominations Committee’s
role is to oversee remuneration policies and
practices at AFT, oversee management succession
planning, consider the composition of the Board,
and recommend candidates to fill Board vacancies
as and when they arise.
The Committee is also tasked with annually
monitoring and evaluating the Company’s
performance with respect to its Diversity
and Inclusion Policy.
Under the Remuneration and Nominations
Committee Charter, the Committee must be
comprised of a minimum of three members,
a majority of whom are Independent Directors.
Management of the Company are not permitted
to attend the Remuneration and Nomination
Committee unless invited.
The Chairman of the Committee is required to
be Independent. The current members of the
Committee are Andrew Lane (Chairman),
David Flacks and Ted Witek.
The Remuneration and Nominations Committee
held three meetings during the financial year ended
31 March 2024 and carried out other functions
via circular resolution.
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AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 53
Regulatory and Product Development
Oversight Committee
(Recommendation 3.5)
The Regulatory and Product Development
Oversight Committee’s role is to, at least bi-
annually, review the Company’s regulatory risk
management framework relating to product
development; oversee the Company’s strategy
relating to key clinical and product development
projects and monitor the Company’s compliance
framework against applicable regulations
regarding the sale and distribution of
pharmaceutical products.
Committee members also meet frequently on
an informal basis to discuss regulatory and new
product development matters. The functioning
of the Committee complements the monthly
monitoring undertaken by the Board on the status
of new product development and filings.
Under the Regulatory and Product Development
Oversight Committee Charter, the Committee must
be comprised of a minimum of three members. The
current members of the Committee are Ted Witek
(Chairman), Hartley Atkinson, and Marree Atkinson.
The Regulatory and Product Development
Oversight Committee met twice during the
financial year ended 31 March 2024.
Board and Committee Attendance
(Recommendation 3.5)
The Board met for nine regularly scheduled
meetings during the financial year ending 31 March
2024. There were also separate meetings of the
Board Committees during the year. In addition,
the Board and management met during the year
to undertake strategic planning.
Director
Board
Audit
and risk committee
Remuneration and
nomination committee
Regulatory and New Product Development
Oversight Committee¹
Dr Hartley Atkinson 9/9––2/2
Marree Atkinson8/9––1/2
Anita Baldauf8/94/4––
David Flacks 9/94/43/3–
Andrew Lane²5/52/21/1–
Dr Ted Witek9/9–3/32/2
Jon Lamb²5/52/22/2–
1 Committee members also met frequently through-out the year
on an informal basis to discuss regulatory and new product
development matters.
2 Jon Lamb retired from the Board on 28 September 2023,
and he was replaced on the same day by Andrew Lane.
Takeover Response Guidelines
(Recommendation 3.6)
AFT’s Independent Directors have received legal
advice on their Directors’ duties, and the process
to be followed, in the event of a takeover offer.
The Board has formally adopted this advice as the
protocols to be applied in the event of a takeover
offer. Any takeover of AFT shares would require
the support of the Atkinson Family Trust, which
at present holds approximately 69% of the shares
on issue.
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54 | WORKING TO IMPROVE YOUR HEALTH
PRINCIPLE 4:
Reporting and Disclosure
“The Board should demand integrity in financial and non-financial reporting,
and in the timeliness and balance of corporate disclosures.”
AFT is committed to the promotion of investor
confidence by ensuring that the trading of Company
shares takes place in an efficient, competitive, and
informed market. The Board is tasked with ensuring
the integrity of financial and non-financial reporting
to shareholders and other stakeholders.
Market Disclosure Policy
(Recommendation 4.1)
AFT’s Market Disclosure Policy establishes the
Company’s procedures for meeting the continuous
disclosure requirements of both the NZX Main
Board and the ASX. A copy of the Market
Disclosure Policy is available in the Investor Centre
on the Company’s website. In addition to the
procedures set out in that Policy, Directors and
Management consider at each meeting whether
there are any issues that require disclosure
to the market.
Governance Policies on the Company’s
(Recommendation 4.2)
AFT’s governance charters and policies can be
found in the Investor Centre on the Company’s
website.
Financial and Non-Financial Reporting
(Recommendation 4.3, 4.4)
The Board is responsible for ensuring the integrity
of its financial and non-financial reporting. AFT is
committed to providing shareholders and other
stakeholders with a balanced and, clear, objective,
understandable and easily accessible assessment
of its performance, business model, strategic
objectives, and its progress against them.
To achieve these goals the Company reports a range
of financial and non-financial information at each
results announcement and in its full-year reports.
Reporting Oversight
The Audit and Risk Committee closely monitors
financial and other reporting risks in relation to
the preparation of the financial statements and
accompanying non-financial information.
With the assistance of management, the Audit and
Risk Committee works to ensure that the financial
statements and accompanying non-financial
information are founded on a sound system of risk
management and internal control and that the
system is operating effectively in relation to financial
reporting and other material risks.
As part of this process, the CEO and Chief Financial
Officer are required to state in writing to the Board
that, to the best of their knowledge, the Company’s
financial reports and accompanying non-financial
statements:
• present a true and fair view of the Company’s
financial condition and operational performance;
• are in accordance with the relevant accounting
standards; and
• are founded on a sound system of risk
management and internal controls that are
operating effectively.
• The Board receives copies of all material
announcements made to the NZX and ASX.
Non-Financial Environmental Social
and Governance (‘ESG’) Reporting
(Recommendation 4.4)
Over recent years AFT has been evolving its
strategies to incorporate the ESG factors that are
material to the Company’s ability, and commitment,
to creating value long-term. It has also taken steps
to report its progress against those strategies in
a way that is aligned with the Company’s broader
reporting standards and commitments.
The Company has aligned its ESG reporting to the
United Nations Sustainable Development Goals,
which reflect the most urgent global environmental,
political, and economic challenges.
AFT has completed and regularly reviews its
systematic and robust assessment of the ESG issues
that are material to the Company and continues
to evolve the breadth and depth of measures against
which it can assess the Company’s performance
in managing these issues.
For the first time this year, the Company has issued
a climate statement (on pages 108 to 120 of this
report) made in accordance with the new
Aotearoa New Zealand Climate Standards.
These disclosures are overseen by the Board.
Further detail is covered in the sustainability
section of this report.
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AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 55
PRINCIPLE 5:
Remuneration
“The remuneration of Directors and executives should be transparent,
fair and reasonable.”
AFT is committed to remunerating its Non-Executive
Directors, Executive Directors, and employees
fairly, transparently, and reasonably. The policies,
procedures and outcomes on these commitments
are detailed in the Company’s remuneration report
on pages 62 to 67 of this report.
Director Remuneration and Senior
Executive Remuneration
(Recommendations 5.1, 5.2, 5.3)
Please see pages 62 to 67 of this report for
Non-Executive Director and Executive Director
and Senior Executive remuneration governance
and the relevant disclosures.
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56 | WORKING TO IMPROVE YOUR HEALTH
PRINCIPLE 6:
Risk Management
“Directors should have a sound understanding of the material risks faced
by the issuer and how to manage them.
The Board should regularly verify that the issuer
has appropriate processes that identify and
manage potential and material risks.”
Risk Management Framework
(Recommendation 6.1)
Like other businesses, AFT manages a range
of risks that have the potential to impact its
performance, operations, reputation, and
customers’ safety. While some risks can never
be eliminated, AFT works hard to identify their
significance and manage them.
AFT has designed and implemented a risk
framework for the oversight and management of
financial and non-financial business risks, as well
as related internal compliance systems that are
designed to:
• optimise the return to, and protect the interests
of its stakeholders;
• safeguard the Company’s assets and maintain
its reputation and social licence to operate;
• improve the Company’s financial and operating
performance;
• fulfil the Company’s strategic objectives; and
• manage the risks associated with the sale and
distribution of pharmaceutical products.
The Board has ultimate responsibility for AFT’s risk
management and internal control system, setting
the ‘tone at the top’ with regards to risk culture
and reviews the risk management framework and
risk register at least twice a year.
The Audit and Risk Committee and Regulatory
and Product Development Oversight Committee,
under delegation from the Board, assists the Board
in discharging its responsibilities.
The Audit and Risk Committee monitors
compliance with the overarching risk and
compliance framework, while the Regulatory
and Product Development Oversight
Committee oversees the Company’s regulatory
risk management framework regarding the
development, quality assurance and sale and
distribution of pharmaceutical products.
The Audit and Risk Committee, in conjunction with
management, regularly reports to the Board on
the effectiveness of the Company’s management
of its material business risks and whether the risk
management framework and systems of internal
compliance and control are operating effectively
and efficiently in all material respects.
The Audit and Risk Committee conducts six-
monthly reviews of AFT’s risk management
framework and principal risks register and
satisfies itself that AFT’s approach to risk is
sound. Information regarding AFT’s internal audit
functions can be found under the section headed
“Internal Audit Function” below.
GOVERNANCE
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 57
Principal Risks
(Recommendation 6.2)
AFT’s current principal risks and their mitigations are summarised below. AFT’s risk management
framework has positioned AFT well to respond to the challenges the Company faces. Further detail
is included in the sustainability section of this report.
RiskAFT mitigates this risk by:
Regulatory
Approval
Delay or failure
in the
development,
manufacture,
commercialisation,
or regulatory
approval process
for AFT products.
–adopting a low risk and low-cost development programme;
–using multiple manufacturing sites for our key products and
maintaining close working relationships with our suppliers;
–engaging both in-house and external regulatory experts in our
key markets; and
–monitoring regulatory timetables and maintaining regular dialogue
with licensees to anticipate and manage delays proactively,
where necessary.
Competition
Competition of
pharmaceutical
products and
devices.
–product innovation;
–diversification of our product portfolio; and
–maintaining a broad range of distribution channels, partners, and
geographies.
Intellectual
Property
Intellectual
Property (IP)
infringement
and protection
for AFT products.
–taking actions to protect our IP, including filing patent applications,
and entry into confidentiality agreements with licensees, suppliers,
and employees to protect trade secrets;
–undertaking extensive “freedom to operate” reviews before we make
our IP applications to ensure that they do not infringe any other IP
and are protectable; and
–regularly monitoring pharmaceutical patent registrations.
Third Parties
Reliance on third
parties for the
manufacture,
distribution, and
licensing of AFT
products
–using multiple manufacturers where possible for our key products;
–operating an inventory policy of holding a minimum of three months’
inventory to minimise interruption of supply;
–being selective in our choice of distribution and licensing partners
and having performance obligations in our commercial agreements.
–requiring all suppliers to attest to compliance with our Supplier
Code of Conduct and our Modern Slavery Policy, which together
require third party suppliers to foster and encourage respect for
Human & Labour Rights, Ethical Business Practices, Environmental
Responsibility, Product and Service Quality and Safety. They also
require suppliers to report on any ethical sourcing risks, including
Modern Slavery risks, in their supply chains.
Product Liability
Product liability
and risks
associated with
marketing drugs
and conducting
clinical trials.
–having adopted compliance and regulatory systems to monitor our
compliance with applicable laws and regulations;
–manufacturing products in compliance with Good Manufacturing
Practice and other relevant regulatory requirements, including
supplying products for use only with approved Certificates of Analysis;
–maintaining and regularly reviewing a register of known adverse events;
–focusing on novel dose forms, combinations, and delivery systems
of approved drugs, meaning clinical trial risks are relatively low;
–contracting out clinical trials to specialists;
–implementing a comprehensive product, clinical trial, and
contamination insurance programme; and
–ensuring that product labelling declares reported risks and adverse
events are incorporated in the product package insert, in accordance
with licensors’ advice, and local regulatory accepted rules and labels.
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58 | WORKING TO IMPROVE YOUR HEALTH
RiskAFT mitigates this risk by:
Growth Strategy
Failure to execute
growth strategy.
–adopting expansion strategies that are scalable and are not
capital intensive, for example using out-licensing and distributor
arrangements outside of Australia and New Zealand; and
–closely monitoring our personnel, internal company structures and
systems to ensure they remain appropriate to support our growth
plans; and
–regular review and close monitoring of progress of growth strategies
against business plans and targets.
Capital
Management
–closely monitoring forecasts, cash flows and our financial covenants
to ensure they are not breached;
–actively monitoring key revenue growth plans;
–managing the mix of equity capital and borrowings; and
–maintaining an active investor relations program should a further
equity raise be considered.
Key
Personnel
Loss
–succession planning and promoting a culture of diversity and inclusion;
–adopting a competitive remuneration policy designed to assist us in
retaining key personnel; and
–carefully selecting our personnel to try to ensure that they fit with our
culture and growth plans.
Health
and Safety
Risks
–adopting a Health and Safety Policy and monitoring performance
against it. The Board and management are committed to promoting
a safe and healthy working environment for everyone working in/or
interacting with AFT’s business. The Health and Safety Policy requires
AFT people to endeavour to take all practicable steps to provide
a working environment that promotes health and wellbeing, while
minimising the potential for risk, personal injury, ill health, or damage;
–agreeing a detailed (Board-approved) programme of work, which
aims to ensure AFT remains compliant with its health and safety
obligations. The Board is updated on health and safety (including
wellness) matters and metrics at each Board meeting and there is a
detailed review on health and safety risks each quarter; and
–operating an employee-led Health and Safety Committee. The
committee meets regularly to monitor and manage health and
safety risks, including hazards, within the business, and inform Board
reporting. Further detail on the Company’s management of health
and safety risks is covered on page 34 of this report.
Cyber Risk
–maintaining robust systems and processes to support our information
and communication technology (ICT) system security;
–commissioning regular independent reviews of our ICT systems;
–maintaining and regularly reviewing business continuity and disaster
recovery plans and systems; and
–promoting a culture of cybersecurity in the organisation through
regular training; and communication.
Climate
Change
Risk
–embedding oversight and management of climate related risks within
the Board Charter and the incorporation programmes to manage
these risks into The Company’s strategy. This has seen the formation of
a standing management-led working group, the Climate Governance
Working Group, which is charged with assessing and manages the
company’s climate related risks and opportunities and updating the
Board quarterly on its activities.
–transparently reporting for the first time its approach and strategies
to identify monitor and managing climate related risks and
opportunities within its supply chain alongside metrics and targets
to measure and manage these matters.
–further detail is covered in the Climate Related Disclosures
in Appendix 1 on pages 108 to 120 of this report.
GOVERNANCE
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 59
PRINCIPLE 7:
Auditors
“The Board should ensure the quality and independence of the external
audit process.”
External Auditor Independence
(Recommendation 7.1)
AFT has adopted an Audit Independence Policy
that requires, and sets out the criteria for, the
external auditors to be independent. The Policy
recognises the importance of facilitating frank
dialogue between the Audit and Risk Committee,
the auditor and management.
The Policy prescribes the services that can and
cannot be undertaken by the external auditors,
which are designed to ensure that services
provided by AFT’s external auditors do not conflict,
and are not perceived as conflicting, with their
independent role.
The Policy also requires that the key audit partner
be changed at least every five years so that no
person shall be engaged in an audit of AFT for
more than five consecutive years. AFT engaged a
new audit firm in February 2018 and in accordance
with this Policy and in accordance with NZX Listing
Rule 2.13.3 rotated to a new audit partner for the
year to 31 March 2023.
The Audit and Risk Committee Charter requires
the Committee to facilitate the continuing
independence of the external auditor by assessing
the external auditor’s independence and
qualifications and overseeing and monitoring its
performance.
This involves monitoring all aspects of the external
audit, including the appointment of the auditor, the
nature and scope of its audit, and reviewing the
auditor’s service delivery plan.
In carrying out these responsibilities the
Audit and Risk Committee meets regularly
with the auditor without Executive Directors
or management present.
The auditor is restricted in the non-audit work
it may perform, as detailed in the Auditor
Independence Policy. In the last financial year, the
audit firm has undertaken specific non-audit work.
Details of this work are covered on page 86
of this report.
None of that non-audit work is considered to have
compromised (or been seen to have compromised)
the independence of the auditor. For further details
on the audit and non-audit fees paid and work
undertaken during the period, refer to page 86
in the Financial Statements of this report.
The Audit and Risk Committee regularly monitors
the ratio of fees for audit to non-audit work.
Internal Audit Function
(Recommendation 7.3)
AFT does not have a dedicated internal auditor.
Instead, internal controls are managed on a day-
to-day basis by the finance team. Compliance with
internal controls is reviewed annually by AFT’s
auditors who provide feedback on AFT’s control
environment, which is reviewed by the finance
team and Board.
The Board and finance team regularly consider
how AFT can improve its internal audit and risk
management practices during AFT’s annual
governance review, bi-annual risk reviews,
preparation of interim and full-year financial
statements and following AFT’s annual audit.
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60 | WORKING TO IMPROVE YOUR HEALTH
PRINCIPLE 8:
Shareholder Rights and Relations
“The Board should respect the rights of shareholders and foster
constructive relationships with shareholders that encourage them
to engage with the issuer.”
Information for Shareholders
(Recommendation 8.1, 8.2)
AFT is committed to maintaining a full and open
dialogue with its shareholders (and other interested
stakeholders). The Company has in place an
investor relations programme to facilitate effective
two-way communication with shareholders.
The aim of the Company’s communication
programme is to ensure fair recognition of the
value the company creates, provide stakeholders
with information to help them accurately assess
the company’s performance and prospects. It also
seeks to enable shareholders to active engage
with the Company and exercise their rights in an
informed manner.
The Company facilitates communication with
shareholders through written and electronic
communication, and by facilitating shareholder
access to Directors, Management, and the
Company’s auditors.
The Company provides shareholders with
communication through the following channels:
• the Investor Centre on the Company’s website;
• full-year and half-year results and/or reports;
• the Annual Shareholders Meeting;
• regular disclosures on Company performance
and news via the NZX and ASX online disclosure
platforms; and
• disclosure of presentations provided to analysts,
investors, and the media during regular briefings.
The Company’s website is an important part
of the Company’s communication programme.
Included on the website is a range of information
relevant to shareholders and others concerning
the financial position, operation, and governance
of the Company, including information about
the Company and its history, biographies of the
Company’s Directors and senior management, the
Company’s Constitution, Board Charter (and the
charters of the various committees) and other
corporate governance policies of the Company.
Shareholders may, at any time, direct questions,
or requests for information to Directors or
management through the Company’s website
or by sending an email to:
investor.relations@aftpharm.com
The Company provides shareholders with the
option to receive communications from, and
send communications to, the Company and its
share registrar electronically. A majority of AFT’s
shareholders have elected to receive electronic
communications.
Shareholder Voting Rights
(Recommendation 8.3)
In accordance with the Companies Act 1993, AFT’s
Constitution and the NZX Listing Rules, AFT refers
major decisions which may change the nature of
AFT to shareholders for approval.
In the financial year ended 31 March 2024, there
were no such transactions requiring shareholders’
approval under the Companies Act 1993, AFT’s
Constitution and/or the NZX Listing Rules.
As required by the NZX Listing Rules, AFT
conducts voting at its shareholder meetings by way
of polls, reflecting the principle of one share, one
vote. Further information on shareholder voting
rights is set out in AFT’s Constitution.
Annual Shareholders Meeting
(Recommendation 7.2, 8.2, 8.5)
AFT’s 2024 Annual Shareholders Meeting is
currently intended to be held in early August
2024. Shareholders will be given an opportunity to
participate, vote and ask questions and comment.
In addition, the Company’s auditors, Deloitte
Limited, will be available to answer any questions
about their audit report. A Notice of Meeting will
be posted on AFT’s website as soon as possible
and will be posted at least 20 working days prior
to the meeting.
GOVERNANCE
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 61
REMUNERATION
REMUNERATION
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 63
Remuneration
AFT Pharmaceuticals remuneration policies are
targeted at supporting the company to attract,
retain and motivate high calibre people to achieve
AFT Pharmaceuticals’ business objectives and
create shareholder value. They are guided by the
principles that remuneration practice should:
• be clearly aligned with AFT Pharmaceuticals’
values, culture, risk appetite and corporate
strategy;
• support the attraction, retention, and
engagement of employees;
• be understood by employees;
• be equitable and flexible;
• appropriately reflect market conditions and
organisational context;
• recognise individual performance and
competency, rewarding individuals for achieving
high performance; and
• recognise team and company performance and
the creation of shareholder value.
In 2024, in line with the NZX’s new guidance on
remuneration disclosure, we have updated how
we report remuneration and consolidated it in this
standalone section of this Annual Report.
We believe this new approach of reporting on our
remuneration and outcomes, alongside disclosure
of the remuneration of Directors during the 2024
financial year is aligned with our commitments to
transparency. We also believe it fosters greater
understanding among our investors and other
stakeholders on our approach to remuneration.
Remuneration Governance
AFT’s policies regarding the remuneration
of Directors and its people are set out in the
Board Charter and the company’s Remuneration
Policy, both of which is available on the Investor
Centre on the company’s website. There have
been no changes to the Company’s approach
to remuneration during the period.
As detailed in the Board Committee Section
(pages 53 to 54 of this report), the governance
arrangements relating to remuneration are
overseen by the Board’s Remuneration and
Nominations Committee.
Director Remuneration
Non-Executive Director Remuneration
The current maximum total monetary sum
permitted to be paid by the Company by way
of Non-Executive Directors’ fees is $575,000
per annum. This sum has not been increased
since it was approved by shareholders in 2015.
Non-Executive Directors’ fees were last reviewed
in May 2023 and are detailed in the table below.
Committee fees are payable to Non-Executive
Directors, as detailed in the table below.
Non-Executive Directors’ fees are still within
the $575,000 per annum limit noted above.
Directors may hold shares in the Company, the
details of which are set out in the statutory
information section on page 105 of this report.
It is the Company’s policy to encourage Directors
to hold shares in the Company.
The Non-Executive Directors are entitled
to be reimbursed for all reasonable travel,
accommodation and other expenses incurred by
them in connection with their attendance at Board
or shareholder meetings or otherwise in connection
with AFT’s business. No retirement allowances will
be paid to the Non-Executive Directors on their
retirement.
The current approved fixed annual fees payable to
Non-Executive Directors are detailed in the table
on page 64.
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64 | WORKING TO IMPROVE YOUR HEALTH
Governance bodyPositionFees per annum
Period to the March 2024
1,2.
2023
Board of Directors Chair
Director
$142,000
$77,000³
$127,500
$70,000
Audit and Risk Committee Committee Chair
Committee Member
$20.000
$6,000
$20,000
$5,000
Remuneration and Nominations Committee Committee Chair
Committee Member
$7,500
$6,000⁴
$7,500
$5000
Regulatory and Product Development
Oversight Committee
Committee Chair
Committee Member
$15,000⁵
$6,000
$15,000
$5000
1 Effective April 2023
2 All fees are paid in NZD unless stated.
3 Fee payable to non-United States (US) based Directors. US-based Directors receive USD$77,000.
4 Fee payable to non-US based Directors. US based Directors receive USD$6,000.
5 Fee payable to non-US based Directors. US based Directors receive USD$15,000.
Non-Executive Directors received the following Directors’ fees, remuneration and other benefits from the
Company in the financial year ended 31 March 2024:
Non-Executive Director
Anita
Baldauf
David
Flacks
Dr Ted
Witek²
Andrew
Lane³
Jon
Lamb³
Non-Executive Director Board fees $77,000$142,000$126,530$38,50038,500
Audit and Risk Committee fees$6,000$6,000-$10,000$10,000
Remuneration and Nomination
Committee fees-$6,000$9,859$1,875$3,750
Regulatory and Product Development
Oversight Committee fees --$24,649--
Shares and other payments or benefits-----
Total remuneration¹ $83,000$154,000$161,038$50,375$52,250
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. Dr Ted Witek received fees paid in USD. These fees have been converted into NZD in the above table, calculated at
an exchange rate of 1:0.6086
3 Jon Lamb retired from the Board on 28 September 2023 and was replaced on the same day by Andrew Lane
REMUNERATION
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 65
Executive Director remuneration
The remuneration of the Executive Directors –
Managing Director and Chief Executive Officer
Hartley Atkinson and Executive Director and Chief
of Staff Marree Atkinson is covered in the ‘Senior
Executive Remuneration’ section on page 66.
Senior Executive Remuneration
Remuneration Policy
AFT has a formal Remuneration Policy, the
purpose of which is to outline the remuneration
principles that apply to all employees to ensure
that remuneration practices within AFT are fair and
appropriate for the organisation and its Directors
and employees.
AFT’s Remuneration Policy supports the Company
to attract, retain and motivate high-calibre people
to achieve the Company’s business objectives and
create shareholder value. The Remuneration Policy
is available in the Investor Centre on the Company’s
website.
Under AFT’s remuneration framework,
remuneration paid to the Chief Executive Officer
and Senior Officers includes a mix of the following
fixed and variable components:
• Fixed remuneration, which includes base salary
and employer KiwiSaver (or overseas equivalent)
contributions (where relevant) and relates to the
base requirements of the role.
• A discretionary Short-Term Incentive (STI) may
be offered to some employees, at the discretion
of the CEO (or be offered to the CEO and/or
Chief of Staff, at the discretion of the Board).
AFT’s short-term incentive is performance
based, with any short-term incentive plan
payment being conditional on satisfaction
of pre-determined Company and individual
performance objectives.
• Potential short-term incentive payments are
generally between 10% to 30% of base salary,
depending on seniority and role, and this
increases to 75% for the Chief Executive Officer.
• A Long-Term Incentive (LTI) Plan may be
offered, generally only to permanent senior
management, as approved by the Board. AFT
currently operates an option scheme. This is
designed to attract and retain senior managers
within the business and to align the interests of
management with shareholders’ interests.
• Under the LTI Plan, participants are granted
options to acquire ordinary shares in AFT. One
option will give the participant the right to
subscribe for (or otherwise purchase) one
ordinary share, subject to meeting any vesting
conditions set by the Board and payment of
the exercise price. The Board has an absolute
discretion to invite employees to participate in
the LTI Plan and to set the terms and conditions
of options at the time they are granted.
The maximum aggregate number of options that
may be granted under the LTI Plan is 5% of the
total number of ordinary AFT shares on issue
immediately after the issue of options, unless
shareholder approval is obtained. With respect
to AFT’s LTI Plan, no Director or employee is
permitted to enter into financial products or
arrangements that operate to limit the economic
risk of their vested or unvested entitlements.
In addition, AFT may offer provisions that have
a monetary benefit to employees but are not
considered part of remuneration.
Each year an internal review against our public
company peers is carried out to benchmark salaries
with market increases and adjustments are made
accordingly.
The Remuneration and Nominations Committee is
responsible for reviewing the remuneration of the
Company’s senior executives in consultation with
the CEO. The Company’s senior executives are
subject to regular performance reviews.
The performance of senior executives is reviewed
by the CEO who meets with each senior executive
to discuss their performance, as measured against
key performance targets (both financial and
non-financial) previously established and agreed
with that executive.
During the financial year ended 31 March 2024,
performance reviews took place in accordance
with this process.
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66 | WORKING TO IMPROVE YOUR HEALTH
Chief Executive and
Chief of Staff Remuneration
The Executive Directors, Hartley Atkinson and
Marree Atkinson, receive remuneration and other
benefits in their respective executive roles as CEO
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. The
executive Directors’ performance is reviewed by
the Board annually. During the financial year ended
31 March 2024, performance reviews took place
in accordance with that process. No termination
payments are payable to the executive Directors
in the event of serious misconduct.
During the financial year ended 31 March 2024,
Hartley Atkinson, and Marree Atkinson’s
remuneration both comprised a fixed cash
component and an at-risk short-term incentive.
The breakdown of the short-term incentive and
the performance hurdles required to achieve them
are set out 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 years ended 31 March:
Base salaryTaxable benefits
Short-term
incentive¹
Long-term
incentive²Total remuneration
FY2024FY2023FY2024FY2023FY2024FY2023FY2024FY2023FY2024FY2023
Dr Hartley Atkinson
$670,000$606,375--$304,785$324,844--$974,785$931,219
Maree Atkinson
$161,250$150,000--$14,188$10,920--$175,438$160,920
1 The short-term incentives (STI) paid in each year was earned in the prior year and paid in the year stated.
The short-term incentive for the FY2024 year has not been finalised.
2 Neither Executive Director was issued any form of long-term incentive during the financial period.
Executive Director remuneration, including short-term performance incentives, is set with reference
to the company’s strategic objectives and the factors material to delivering on those objectives
For Hartley Atkinson these objectives include:
• company revenue and profit targets;
• key innovative product development; and
• key product registration and licensing.
For Maree Atkinson these objectives include:
• company revenue and profit targets;
• human resources objectives; and
• overhead cost savings.
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AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 67
Employee Long-Term Incentive Scheme
At 30 April 2024 AFT had issued 510,000 options
with an exercise price of $3.46 as part of the
company’s Long-Term Incentive scheme (LTI).
Certain of the Options vest (and therefore become
available for exercise) over one or more minimum
vesting periods, the details of which are particular
to each Option holder (during which time the
Option holder must remain employed by the
Company).
Vesting of some of the Options is also conditional
on one or more performance hurdles, specific to the
Option holder (such as the Option holder meeting
their budget for a particular year), being met.
However key objectives include:
• Meeting their budget for the financial year
and being employed by the company.
• The CEO’s assessment of a person’s overall
individual performance.
The Options have a final exercise date of the date
four years and two months from the Grant Date
of the Options.
Employee Remuneration
The table below sets out the number of employees
or former employees of AFT and its subsidiaries,
not being Directors of AFT, who, in their capacity as
employees received remuneration and other benefits
during the financial year ended 31 March 2024 totalling
at least $100,000 per annum. The remuneration of
those employees paid outside of New Zealand has
been converted into New Zealand dollars.
The table includes base salaries and short-term
incentives paid during the financial year ended
31 March 2024 and long-term incentives vested
or exercised during the financial year ended 31
March 2024. The table does not include long-term
incentives that have been granted, but which have
not yet been vested.
Where the individual is a KiwiSaver member,
contributions of 3% of gross earnings towards
that individual’s KiwiSaver scheme are included in
the table. Where the individual works in Australia,
contributions of 9.5% of gross earnings towards
Australian Superannuation are included in the table.
Remuneration range (NZD)
Total number
of employees
100000 - 11000023
110001 - 1200008
120001 - 1300006
130001 - 1400004
140001 - 1500001
150001 - 1600002
170001 - 1800001
180001 - 1900001
190001 - 2000004
200001 - 2100002
210001 - 2200001
270001 - 2800001
310001 - 3200001
340001 - 3500001
470001 - 4800001
Total employees and former
employees earning more
than $100k57
AFT Pharmaceuticals Limited
CONSOLIDATED
FINANCIAL
STATEMENTS
For The Year Ended 31 March 2024
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
2024, and the consolidated income statement, consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash
flows for the year then ended, and notes to the consolidated financial statements, including
material accounting policy information.
In our opinion, the accompanying consolidated financial statements, on pages 73 to 103,
present fairly, in all material respects, the consolidated financial position of the Group as at
31 March 2024, and its consolidated financial performance and cash flows for the year then
ended in accordance with New Zealand Equivalents to IFRS Accounting Standards (‘NZ
IFRS’) as issued by the External Reporting Board and IFRS Accounting Standards (‘IFRS’)
as issued by the International Accounting Standards Board.
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, we have no relationship with or interests
in the Company or any of its subsidiaries.
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 $1.6 million.
INDEPENDENT AUDITOR’S REPORT
70 | WORKING TO IMPROVE YOUR HEALTH
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.
Key audit matterHow our audit addressed the key audit matter
Recoverability of Pascomer Intellectual
Property
As disclosed in Note 12, the Group has
intellectual property with a carrying
value of $12.5m as well as capitalised
development costs of $2.8m in relation
to the Pascomer product at 31 March
2024.
The recoverability of the intellectual
property associated with the Pascomer
product depends upon successful
clinical trials and registration. The
recoverable amount is determined
based on a fair value less costs of
disposal methodology, using a risk
adjusted net present value model
(the ‘valuation’). The model reflects key
assumptions regarding the development
and marketing of the product. The
valuation methodology uses significant
inputs which are not based on
observable market data.
Fair value less costs of disposal was
determined by an independent valuer.
We identified this as a key audit matter
because of the significance of the
intellectual property to the Group’s
consolidated financial statements, the
judgement involved in determining the
recoverable amount of the intellectual
property, and the consideration arising
from the High Court judgement as well
the subsequent appeal thereon
as disclosed in Note 3.
We evaluated the Group’s recoverable amount
assessment for the Pascomer intellectual
property. In performing our procedures, we:
• Obtained an understanding of the relevant
controls over the valuation process including
controls around the methodology adopted,
the data used and the setting of key
assumptions.
• Assessed the independence, objectivity
and competence of the valuer engaged
by the Group.
• Challenged the key assumptions in the
valuation by:
– Considering the timing of when successful
clinical trials may be completed and the
product registered by understanding
the milestones achieved to date and the
Group’s progress against plans.
– Challenging the addressable market
assumptions.
– Evaluating and challenging the Group’s
assessment of changes in key assumptions
in the period since the last independent
valuation.
– Working with our internal valuation
specialist to assess whether the valuation
method and discount rate assumptions
applied were appropriate.
• Assessed the sensitivity of the valuation
to changes in key assumptions.
• Inquired with and inspected correspondence
from the Group’s external legal counsel
to understand the status of the legal claim
disclosed in Note 3, and its potential impact
on the recoverable amount of the Intellectual
property.
INDEPENDENT AUDITOR’S REPORT
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 71
Other information
The directors are responsible on behalf of the Group for the other information.
The other information comprises the information in the Annual Report that accompanies
the consolidated financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially
inconsistent with the consolidated financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated. If so, we are required
to report that fact. We have nothing to report in this regard.
Directors’ responsibilities for the consolidated financial statements
The directors are responsible on behalf of the Group for the preparation and fair
presentation of the consolidated financial statements in accordance with NZ IFRS
and IFRS, and for such internal control as the directors determine is necessary to enable
the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf
of the Group for assessing the Group’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
and ISAs (NZ) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken
on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial
statements is located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/
audit-report-1
This description forms part of our auditor’s report.
Restriction on use
This report is made solely to the Company’s shareholders, as a body. Our audit has been
undertaken so that we might state to the Company’s shareholders those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other
than the Company’s shareholders as a body, for our audit work, for this report,
or for the opinions we have formed.
Bryce Henderson, Partner
for Deloitte Limited
Auckland, New Zealand
23 May 2024
INDEPENDENT AUDITOR’S REPORT
72 | WORKING TO IMPROVE YOUR HEALTH
Consolidated Income Statement
For the Year Ended 31 March 2024
Note
2024
$’000
2023
$’000
Revenue 4195,411156,641
Cost of sales(107,139)(83,658)
Gross profit 88,27272,983
Other Income528 -
Selling and distribution expenses(45,256)(36,543)
General and administrative expenses(11,215)(11,123)
Research and development expenses(8,094)(5,648)
Operating profit 24,23519,669
Finance income6613
Interest costs7(3,686)(2,873)
Other finance gain / (loss)71,404(1,010)
Profit before tax 22,01915,799
Income tax expense13(6,410)(5,145)
Net Income 15,60910,654
Profit after tax attributable to owners of the parent 15,60910,654
Earnings per share
Basic and diluted earnings per share ($) 18$0.15$0.10
The accompanying Notes form an integral part of the consolidated Financial Statements.
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 73
Consolidated Statement of Comprehensive Income
For the Year Ended 31 March 2024
Note2024
$’000
2023
$’000
Profit after tax 15,60910,654
Other comprehensive income
Items that may be reclassified subsequently to profit and loss
Foreign exchange difference on translation of foreign operations(67)(168)
Other comprehensive loss for the year, net of tax (67)(168)
Total comprehensive income 15,54210,486
The accompanying Notes form an integral part of the consolidated Financial Statements.
FINANCIAL STATEMENTS 2023-2024
74 | WORKING TO IMPROVE YOUR HEALTH
Consolidated Statement of Changes in Equity
For the Year Ended 31 March 2024
Note
Share
capital
$’000
Share
options
reserve
$’000
Foreign
currency
translation
reserve
$’000
Retained
earnings
$’000
Total
$’000
Balance 31 March 2022 77,606160394(15,852)62,308
31 March 2023
Profit after tax - - -10,65410,654
Other comprehensive income - -(168) -(168)
Total comprehensive income - -(168)10,65410,486
Issue of share capital17,20634(161) - -473
Movement in share options reserve -1 - -1
Balance 31 March 2023 78,240 -226(5,198)73,268
31 March 2024
Profit after tax - - -15,60915,609
Other comprehensive income - -(67) -(67)
Total comprehensive income - -(67)15,60915,542
Movement in share options reserve -139 - -139
Dividends paid - - -(1,154)(1,154)
Balance 31 March 2024 78,2401391599,2578 7,79 5
The accompanying Notes form an integral part of the consolidated Financial Statements.
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 75
Consolidated Balance Sheet
As at 31 March 2024
Note
2024
$'000
2023
$'000
ASSETS
Current assets
Inventories1049,05742,397
Trade and other receivables944,22246,718
Cash and cash equivalents12,0404,749
Derivative assets23408736
Total current assets105,72794,600
Non-current assets
Property, plant and equipment11363450
Intangible assets1253,45945,627
Right of use assets113,4582,915
Deferred tax132,2504,471
Total non-current assets59,53053,463
Total assets 165,257148,063
LIABILITIES
Current liabilities
Trade and other payables1534,14031,658
Provisions167,3314,147
Lease liabilities14796571
Current income tax liability3,801834
Derivative liabilities23 -107
Interest bearing liabilities14 -2,458
Total current liabilities46,06839,775
Non-current liabilities
Lease liabilities143,1942,820
Interest bearing liabilities1428,20032,200
Total non-current liabilities31,39435,020
Total liabilities 77,46274,795
EQUITY
Share capital1778,24078,240
Retained earnings/(losses)9,257(5,198)
Share options reserve20139 -
Foreign currency translation reserve159226
Total equity 8 7,79 573,268
Total liabilities and equity 165,257148,063
The accompanying Notes form an integral part of the consolidated Financial Statements.
On behalf of the Board on 23 May 2024
David Flacks Dr Hartley Atkinson
Chair Founder and Chief Executive Officer
FINANCIAL STATEMENTS 2023-2024
76 | WORKING TO IMPROVE YOUR HEALTH
Consolidated Statement of Cash Flows
For the Year Ended 31 March 2024
2024
$’000
2023
$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers194,552146,801
Payments to suppliers and employees(164,469)(133,836)
Tax paid(1,222)(1,336)
Net cash generated from operating activities28,86111,629
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment(116)(197)
Purchase of intangible assets(9,411)(8,980)
Net cash used in investing activities(9,527)(9,177)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital -475
Dividends paid(1,154) -
Payment for lease liabilities(859)(593)
Borrowings repaid(5,000)(4,000)
Interest received6613
Interest paid on lease liabilities(307)(235)
Interest costs paid on borrowings(3,379)(2,638)
Net cash used in financing activities(10,633)(6,978)
Net increase/(decrease) in cash8,701(4,526)
Impact of foreign exchange on cash and cash equivalents48(123)
Opening cash and cash equivalents3,2917,940
Closing cash and cash equivalents 12,0403,291
Made up of:
Cash and cash equivalents 12,0404,749
BNZ overdraft -(1,458)
12,0403,291
The accompanying Notes form an integral part of the consolidated Financial Statements.
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 77
Reconciliation of Profit After Tax with Net Cash Flow From Operating Activities
2024
$’000
2023
$’000
Profit after tax15,60910,654
Non-cash items and items classified as financing activities
Depreciation201170
Depreciation ROU assets802638
Amortisation1,010916
Intangible disposals569530
Share options expense139 -
Interest on lease liabilities307235
Interest and finance expense3,3802,638
Unrealised (gain)/loss on foreign currency movements220(934)
Provision for tax expense5,1883,742
Interest received(66)(13)
Movement in working capital
(Increase)/decrease in inventories(6,660)(8,897)
(Increase)/decrease in trade and other receivables2,496(10,716)
Increase/(decrease) in trade and other payables, provisions5,66612,666
Net cash generated from operating activities28,86111,629
The accompanying Notes form an integral part of the consolidated Financial Statements.
FINANCIAL STATEMENTS 2023-2024
78 | WORKING TO IMPROVE YOUR HEALTH
Notes to the Financial Statements
For The Year Ended 31 March 2024
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 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 23 May 2024.
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 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 IFRS Accounting
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
IFRS Accounting Standards (‘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:
• Monetary 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, and
• Exchange differences arising are recognised in
other comprehensive income and accumulated
in equity.
• Non-monetary items carried at fair value that are
denominated in foreign currencies are translated
at the rates prevailing at the date when the fair
value was determined. Non-monetary items
that are measured in terms of historical cost in a
foreign currency are not retranslated
For the purpose of presenting consolidated financial
statements, the assets and liabilities of the Group’s
foreign operations are translated at exchange rates
prevailing on the reporting date. Income and expense
items are translated at the average exchange rates
for the period, unless exchange rates fluctuate
significantly during that period, in which case the
exchange rates at the date of transactions are used.
Exchange differences arising, if any, are recognised in
other comprehensive income and accumulated in a
foreign exchange translation reserve.
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.
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 79
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.
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.
Material accounting policy information
Material 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.
Standards and interpretations in issue
not yet effective
At the date of authorisation of these financial
statements, the Group has not applied new and
revised NZ IFRS standards and amendments that
have been issued but are not yet effective. It is not
expected that the adoption of these standards and
amendments will have a material impact on the
financial statements of the Group.
In April 2024, the International Accounting
Standards Board introduced IFRS 18 Presentation
and Disclosure in Financial Statements (effective
for reporting periods beginning on or after 1
January 2027). This standard replaces IAS 1
Presentation of Financial Statements. An equivalent
NZ IFRS has not yet been issued. Management are
still assessing the impact and note this may change
the presentation of primary 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 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
The High Court of Auckland made judgement in
late August 2023 in the case brought against the
company by a former contractor to the Company,
PBL Solutions Limited (PBL), in Southeast Asia.
The substance of the claim was that AFT Orphan
Pharmaceuticals Limited (“AFTO” of which PBL
is a 35% shareholder) rather than the Company
(which owns the remaining 65%), should have
had the opportunity to pursue the Pascomer
drug development opportunity. The High Court
dismissed PBL’s claim for a lump sum payment for
an assessed present value of PBL’s claimed 35%
proportionate share of future profits attributable
to the Pascomer opportunity. The Court found that
AFT owed PBL a fiduciary duty in the context of
evaluating the Pascomer opportunity and that AFT
breached that duty but had not acted dishonestly.
The Court has held that PBL is entitled to an
account of a 35% share of the profits which are in
future made by AFT from Pascomer for orphan or
orphan-like opportunities only. Any profit is to be
assessed after making allowance for AFT’s costs
and expenses and direct labour costs in relation to
development of the Pascomer opportunity and for
use of AFT’s proprietary Crystaderm® technology
in Pascomer. AFT is not required to account to
PBL for any profit which AFT may earn from the
application of Pascomer for treatment of non-
orphan conditions such as Port Wine Stain (PWS).
PBL has appealed this aspect of the judgement.
This has been set down to be heard in February
2025. The group has reviewed the possible impact
on the carrying value of the Pascomer IP as
detailed in the Intangible Assets note 12.
There were no other significant transactions
and events during the current year.
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
80 | WORKING TO IMPROVE YOUR HEALTH
4. Revenue from Operations
2024
$’000
2023
$’000
Sale of goods185,495154,947
Royalty income1,377821
Licensing Income8,539873
Total revenue from operations195,411156,641
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract
with a customer and excludes amounts collected on behalf of third parties:
• The sale of goods, excluding GST and discounts are recognised when control of the product is
transferred to the customer at a point in time. For discounts not invoiced at reporting date, these are
estimated based on agreements with customer and estimated depletions during the period.
• Licensing income, the Group has entered into a number of out-licencing contracts whereby the
Group’s obligations are the provision of territorial rights to the company’s intellectual property and
the provision and support of the documentation required to enable registration of the product in the
territory. The Group typically receives an upfront fee, milestone payments for specific registration and/or
development-based outcomes, and sales-based milestones or royalties as consideration for the license.
Licenses coupled with other services, must be assessed to determine if the license is distinct (that is, the
customer must be able to benefit from the IP on its own or together with other resources that are readily
available to the customer, and the Group’s promise to transfer the IP must be separately identifiable
from other promises in the contract). If the license is not distinct, then the license is combined with other
goods or services into a single performance obligation. Revenue is then recognised as the Group satisfies
the combined performance obligation.
A license will either provide:
• A right to access the entity’s intellectual property throughout the license period, which results
in revenue that is recognised over time;
or
• A right to use the entity’s intellectual property as it exists at the point in time in which the license
is granted, which results in revenue that is recognised at a point in time. For sales- or usage-based
royalties that are attributable to a license of IP, the amount is recognized at the later of:
– when the subsequent sale or usage occurs; and
– the satisfaction or partial satisfaction of the performance obligation to which some or all of the sales-
or usage-based royalty has been allocated.
• Royalties Royalty revenue is recognised on an actual and accrual basis in accordance with the substance
of the relevant agreement provided that it is probable that economic benefits will flow to the Company
and the amount of revenue can be measured reliably.
E
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
AP
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 81
5. Joint Operations
Hyloris Pharmaceuticals SA and AFT have been collaborating in the development of the
Maxigesic IV product. AFT has now licensed the product to a number of partners covering
multiple countries. Maxigesic IV is protected by several granted and pending patent
applications. Under the terms of the development collaboration agreement between
Hyloris and AFT, Hyloris is eligible to receive a share on any product related revenues,
such as license fees, royalties, milestone payments, received by AFT. The arrangement
constitutes a joint operation whereby the Group recognises, in relation to its interest in the
joint operation, its share of assets and liabilities in the consolidated statement of financial
position and share of revenue earned and expenses incurred in the consolidated income
statement. The Group accounts for the assets, liabilities, revenues and expenses relating
to its interest in the joint operation in accordance with the NZ IFRS standards applicable
to the particular assets, liabilities, revenues and expenses.
Interests in joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the assets and obligations for the liabilities relating to the arrangement. Joint control
is the contractually agreed sharing of control of an arrangement, which exists only when decisions
about the relevant activities require unanimous consent of the parties sharing control.
6. Segment Reporting
Operating Segments
Australia
$’000
New
Zealand
$’000
Asia
$’000
Rest of
World
$’000
Head
Office
$’000
Total
$’000
31 March 2024
Revenue - Sale of goods108,20948,71910,02318,544 -185,495
Revenue - Royalties - -671706 -1,377
Revenue - Licensing - - -8,539 -8,539
Total revenue108,20948,71910,69427,789 -195,411
Other income - - -528 -528
Depreciation - ROU assets48357 - -262802
Depreciation - Other15 - - -186201
Amortisation - - -1,010 -1,010
Operating profit / (loss)15,5107,2772,5048,555(9,611)24,235
Finance income1 - - -6566
Interest expense - Loans - - - -(3,379)(3,379)
Interest expense - Lease
liabilities
(112)(9) - -(186)(307)
Other finance gains/(losses) - - - -1,4041,404
Profit / (loss) before tax15,3997,2682,5048,555(11,707)22,019
Total assets53,58751,099355,9054,663165,257
ROU assets1,29288 - -2,0783,458
Property plant
and equipment
25 - -3335363
Pascomer IP - - -12,500 -12,500
Other intangible assets - - -40,959 -40,959
Total liabilities12,55929,510282034,57177,462
Capital expenditure *1 -29,4141118,528
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
AP
FINANCIAL STATEMENTS 2023-2024
82 | WORKING TO IMPROVE YOUR HEALTH
Operating Segments
*Australia
$’000
*New
Zealand
$’000
*Asia
$’000
*Rest of
World
$’000
*Head
Office
$’000
Total
$’000
31 March 2023
Revenue - Sale of goods94,11744,0276,8149,989 -154,947
Revenue - Royalties - - -821 -821
Revenue - Licensing - - -873 -873
Total revenue94,11744,0276,81411,683 -156,641
Other income - - - - -
Depreciation - ROU assets37051 - -217638
Depreciation - Other24 - - -146170
Amortisation - - -916 -916
Operating profit / (loss)19,2918,319773445(9,159)19,669
Finance income - - - -1313
Interest expense - Loans(56) -(87) -(2,495)(2,638)
Interest expense - Lease
liabilities
(55)(9) - -(171)(235)
Other finance gains/(losses)17 - - -(1,027)(1,010)
Profit/(loss) before tax19,1978.310686445(12,839)15,799
Total assets53,87841,500345,6277,055148,063
ROU assets865108 - -1,9422,915
Property plant
and equipment
38 - - -412450
Pascomer IP - - -12,500 -12,500
Other intangible assets - - -33,127 -33,127
Total liabilities8,67927,0565 -39,05574,795
Capital expenditure11 - -8,9801869,177
Capital expenditure includes both intangible and tangible asset additions.
* Restatement of segment note
The structure of the segment note has been updated to reflect enhanced internal business
reporting and the comparative segment notes have been restated to reflect this change.
Head office costs that were previously reported within the NZ operating segment are now
separately disclosed under the Head Office column as these costs support all operating
segments. Head office functions include maintaining all supplier relationships, procurement
of inventory, regulatory activity, governance marketing activity and finance activity.
No other segments have been changed. Total assets and Capital expenditure for Rest of
World have been restated to reflect the fact that this segment manages intangible assets
and incurred capital expenditure.
The below items were previously reported under the New Zealand Segment, the table
below shows the restatement into the new operating segment.
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 83
Australia *as previously reported$’000New Zealand *as previously reported$’000Asia *as previously reported$’000Rest of World *as previously reported$’000Australia *restated$’000New Zealand *restated$’000Asia *restated$’000Rest of World *restated$’000Head Office$’000
Depreciation -
ROU assets370268 - -37051 - -217
Depreciation - other24146 - -24 - - -146
Operating profit19,291(840)77344519,2918,319773445(9,159)
Finance income -13 - - - - -13
Interest expense -
loans(56)(2,495)(87) -(56) -(87) -(2,495)
Interest expense -
lease liabilities(55)(180) -(55)(9) - -(171)
Other finance
gains / (losses)17(1,027) -17 - - -(1,027)
Profit/(loss)
before tax19,197(4,529)68644519,1978,310686445(12,839)
Total assets51,42383,635313,00253,87841,500345,6277,055
ROU assets8652,050 - -865108 - -1,942
Property plant
and equipment38412 - -38 - - -412
Total liabilities60,20911,3762,5306808,67927,0565 -39,055
Capital expenditure119,166 - -11 - -8,980186
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. Management report on operating segments net of intersegment
revenue so that the revenue amount reflects the end customer’s reportable geography.
Inter-segment transactions are eliminated for Management reporting. 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:
• New Zealand – Includes the sales and distribution activity relating 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 Asian market.
• 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$45.9m (2023 NZ$44.5m) and from
one customer of the New Zealand segment (also being a licensed wholesaler) represents
approximately NZ$24.5m (2023: NZ$21.1m) of the Group’s revenues.
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
84 | WORKING TO IMPROVE YOUR HEALTH
7. Operating Profit
Note
2024
$’000
2023
$’000
Profit before tax22,01915,799
After charging the following specific expenses
Finished goods materials included in cost of sales105,21782,811
Inventory write off included in cost of sales1,922847
Fees paid to auditors8278275
Short term rental expenses - premises154127
Share options expense 139 -
Short term employee emoluments (*)
Selling and distribution expenses10,1028,200
General and administration expenses3,1972,919
Research and development expenses3,1872,651
16,48613,770
Research and development expenses
Business development3,2861,260
New market development1,6201,736
4,9062,996
Depreciation
Plant and machinery14295
Furniture and fittings2423
Vehicles3552
ROU equipment1216
ROU vehicles412285
ROU buildings378337
1,003808
Amortisation
Patents19640
Software24
Development costs739799
Registration costs7373
1,010916
Finance costs
Interest on borrowings3,3792,638
Interest on ROU liabilities307235
Foreign exchange (gains)/losses(1,106)3,143
Derivative (gains)/losses(287)(2,131)
Other financing costs/(gains)(11)(2)
2,2823,883
* This includes contributions recognised as an expense
for defined contributions 883607
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 85
8. Fees Paid to Auditors
2024
$’000
2023
$’000
Audit of financial statements
Audit of annual financial statements235220
Review of interim financial statements4349
Total fees for audit and review services278269
Other services
Tax R&D services - Deloitte -6
Total fees paid to Deloitte278275
9. Trade and Other Receivables
2024
$’000
2023
$’000
Trade receivables52,26359,682
Less provision for customer rebates(11,258)(20,064)
41,00539,618
Expected credit loss - -
Prepayments & sundry debtors3,2177,100
Total trade and other receivables44,22246,718
Ageing of overdue trade debtors
1-30 Days
$’000
31-60 Days
$’000
61-90 Days
$’000
90+ Days
$’000
Total
$’000
31 March 20242,259460902813,090
31 March 20231,0883254111,0402,864
All balances are expected to be settled within the next 12 months.
The expected credit loss (ECL) allowance provision has been determined as follows:
As at 31 March 2024
Current
$’000
Current to
1 month
$’000
Greater
than 1
month
$’000
Total
$’000
Expected loss rate**0.03%
Gross carrying amount49,1732,25983152,263
Expected credit loss allowance provision -
Short term loss allowance provision -
Long term loss allowance provision -
As at 31 March 2023
Current
$’000
+1 Month
$’000
>1 Month
$’000
Total
$’000
Expected loss rate**0.03%
Gross carrying amount56,8181,0881,77659,682
Expected credit loss allowance provision -
Short term loss allowance provision -
Long term loss allowance provision -
*Expected credit losses are negligible.
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
86 | WORKING TO IMPROVE YOUR HEALTH
The average credit period on sale of goods is 52 days (2023: 44 days). No interest
is charged on outstanding trade receivables.
The Group always measures the loss allowance for trade receivables at an amount equal
to lifetime ECL.
The 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.
Bad debt expense for the current year was nil (2023: nil).
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.
10. Inventories
2024
$'000
2023
$'000
Inventory on hand50,04643,210
Provision for obsolescence(989)(813)
Total inventories49,05742,397
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
AP
AP
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 87
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 fixtures 9% to 60%
Vehicles 26% to 36%
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposal are determined by comparing proceeds to carrying amounts and are included
in the consolidated income statement.
11. Property, Plant and Equipment
Plant and
machinery
$’000
Furniture
and
fixtures
$’000
Vehicles
$’000
ROU
Buildings
$’000
ROU
Vehicles
$’000
ROU
Equipment
$’000
Total
$’000
Cost
Balance at 30 March 20221,1624614293,5111,0471876,797
Additions15938 - -677 -874
Disposals(6) -(228) -(445)(143)(822)
Balance at 30 March 20231,3154992013,5111,279446,849
Net foreign currency
exchange differences
16211018 -47
Additions10412 -397937141,464
Disposals(3) - - -(359) -(362)
Balance at 31 March 20241,4325132023,9181,875587,998
Accumulated depreciation
Balance at 30 March 2022(1,037)(333)(198)(978)(729)(162)(3,437)
Depreciation(95)(23)(52)(337)(285)(16)(808)
Disposals5 -168 -445143761
Balance at 30 March 2023(1,127)(356)(82)(1,315)(569)(35)(3,484)
Net foreign currency
exchange differences
(13)2(9)(17) -(1)(38)
Depreciation(142)(24)(35)(378)(412)(12)(1,003)
Disposals2 - - -347 -349
Balance at 31 March 2024(1,280)(378)(126)(1,710)(634)(48)(4,177)
Carrying amounts
Balance at 30 March 20231881431192,19671093,365
Balance at 31 March 2024152135762,2071,241103,821
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
AP
FINANCIAL STATEMENTS 2023-2024
88 | WORKING TO IMPROVE YOUR HEALTH
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.
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
If or when 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)
If or when a lease contract is modified and the lease modification is not accounted for as a separate lease,
in which case the lease liability is re-measured by discounting the revised lease payments using a revised
discount rate.
The Group did not make any such adjustments during the periods presented.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease
payments made at or before the commencement day and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site
on which it is located or restore the underlying asset to the condition required by the terms and conditions
of the lease, a provision is recognised and measured under NZ IAS 37. The costs are included in the related
right-of-use asset.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying
asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects
that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the
useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the balance sheet.
The Group applies NZ IAS 36 to determine whether a right-of-use asset is impaired and accounts for any
identified impairment losses.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease
liability and the right-of-use asset. The related payments are recognised as an expense in the period in
which the event or condition that triggers those payments occurs and are included in the line “general
and administrative expenses” in the income statement.
See note 14 for interest bearing liability analysis and note 23 for lease maturity analysis.
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
AP
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 89
12. Intangible Assets
Pascomer
IP
$’000
Trademarks
$’000
Capitalised
registration
$’000
Capitalised
development
$’000
Patents
$’000
Software
$’000
Total
$’000
Cost
Balance at 30 March 202212,5009605,56416,9073,62753340,091
Additions -2232,0236,347387 -8,980
Disposals -(81)(24)(120)(442) -(667)
Balance at 30 March 202312,5001,1027,56323,1343,57253348,404
Additions -1781,3287,500405 -9,411
Disposals -(46)(319)(199)(5) -(569)
Balance at 31 March 202412,5001,2348,57230,4353,97253357,246
Accumulated amortisation
Balance at 30 March 2022 - -(215)(151)(1,107)(525)(1,998)
Amortisation - -(73)(799)(40)(4)(916)
Disposals - - - -137 -137
Balance at 30 March 2023 - -(288)(950)(1,010)(529)(2,777)
Amortisation - -(73)(739)(196)(2)(1,010)
Disposals - - - - - - -
Balance at 31 March 2024 - -(361)(1,689)(1,206)(531)(3,787)
-
Carrying amounts -
Balance at 30 March 202312,5001,1027, 2 7522,1842,562445,627
Balance at 31 March 202412,5001,2348,21028,7472,766253,459
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
90 | WORKING TO IMPROVE YOUR HEALTH
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 Pharmaceuticals LLC, 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.
Considering 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 at the time of the FY2019 business combination. It is being assessed for impairment on an
annual basis.
Since initial acquisition, the group continually assesses the progress of Pascomer. In April 2022 the US
Food and Drug Administration (FDA) approved a topical treatment indicated for facial angiofibroma (FA)
associated with Tuberous Sclerosis Complex (TSC) developed by Japan’s Nobelpharma. This means that
Nobelpharma has gained exclusivity for a period of seven years in USA which will prevent AFT achieving
approval of its Pascomer for this orphan indication with the FDA during this period. Nobelpharma also
gained approval in the EU in May 2023 and exclusivity for a period of ten years. The update on the High
Court judgement involving Pascomer can be found in Note 3. Significant Transactions and Events in the
Financial Year.
The clinical trial study was issued in July 2022 and showed Pascomer delivered statistically significant
[p<0.05] benefits against the clinically relevant investigator Global Assessment (IGA), FASI and patient-
physician improvement scales. However, the medicine did not reach the threshold on the IGA scale that the
US Food and Drug Administration (FDA) considered necessary for its registration in the United States (US)
as a treatment for FA. At around the same time Timber Pharmaceuticals LLC terminated its agreements
with AFT.
The clinical trial program for non-orphan drug Pascomer indications, including Port Wine Stain (PWS) will
continue and the significant formulation patent for Pascomer has been granted in Australia until November
2040 which will form the basis of further patent filings around the world.
The Group has assessed the recoverability of the Pascomer IP carrying value of $12.5m plus Pascomer
capitalised development costs of $2.8m by reviewing the key assumptions made by independent registered
valuer, Edison Investment Research Limited in February 2024, which had been commissioned by the board.
The material assumptions made in this review are:
a) the successful clinical trials and timing of registration in the US, Europe and Australasia
b) The period used for the discounted cash flow is out to 2043 (2023: 2040)
c) The discount rate used 12.5% (2023: 12.5%)
d) For PWS the addressable market has been taken as 0.7 million patients in the USA, 1.95 million
in Europe and 0.1 million in Australasia (2023: 1.0 million patients in the USA, 3.15 million in Europe
and 0.1 million in Australasia). It is assumed there is no growth in the patient base and a peak
penetration of 2.5% (2023: 2.5%) in all markets with a probability of success is 30% (2023: 40%).
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.
The group has also considered the possible impact, if any, arising from the appeal made against the high
court judgement detailed on note 3. Significant Transactions and Events in the Financial Year.
The groups valuation indicates sufficient headroom such that a reasonably possible change to the key
assumptions and the sensitivity above is unlikely to result in an impairment of the Pascomer assets.
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
E
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 91
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, GM Development and Financial Controller. The status of each project is measured
against the requirements of NZ IAS 38 and the relevant costs incurred during the financial year are
capitalised where projects meet those criteria. The criteria considered in this assessment are:
a) the technical feasibility of completing the intangible asset so that it will be available for use or sale.
b) the Group’s intention to complete the intangible asset and use or sell it.
c) the Group’s ability to use or sell the intangible asset.
d) how the intangible asset will generate probable future economic benefits. Among other things,
e) the Group can demonstrate the existence of a market for the output of the intangible asset or the
intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.
f) the availability of adequate technical, financial and other resources to complete the development
and to use or sell the intangible asset.
g) 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 are considered to have indefinite useful lives. 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 inflows (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 the Financial Statements (Continued) For The Year Ended 31 March 2024
AP
FINANCIAL STATEMENTS 2023-2024
92 | WORKING TO IMPROVE YOUR HEALTH
13. Income Tax
2024
$’000
2023
$’000
Tax expense
Profit before tax22,01915,799
Tax calculated at domestic tax rates applicable6,1664,424
Adjustment due to different tax rates of subsidiaries
operating in different jurisdictions
313166
Tax on expenses not deductible7916
Prior year tax adjustment(148)185
Non-resident withholding tax -354
Tax expense6,4105,145
Comprising
Current tax:
Current tax on profits for the year4,2061,287
Adjustment for current tax of prior year(17) -
Deferred tax2,2213,858
6,4105,145
Deferred tax balance
Deferred tax asset2,2504,471
Deferred tax asset2,2504,471
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 2024, the Group recognised deferred tax assets on
temporary differences totalling $2,250k (2023 $4,471k) 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
$'000
Recognised
Total
Tax losses
$'000
Intangible
Assets
$'000
Stock Profit
Elimination
$'000
Total
$'000
31-Mar-22 (Restated)7242,041 -5,5648,329
Movements(119) - -(1,698)(1,817)
Recognition of losses -(2,041) - -(2,041)
31-Mar-23605 - -3,8664,471
Movements196 -(2,167)1,344(627)
Recognition of losses - - - - -
Prior period adjustments - -(1,594) -(1,594)
31-Mar-24801 -(3,761)5,2102,250
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 93
Current and deferred income tax
The income tax expense or benefit for the year is the tax payable on the current period’s taxable income
(based on the national income tax rate for each jurisdiction) adjusted by changes in deferred tax assets
and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their
carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to
apply when the assets are recovered, or liabilities are settled, based on those tax rates which are enacted
or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts
of deductible and taxable temporary differences to measure the deferred tax asset or liability. Such assets
and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in
a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit
nor the accounting profit and does not give rise to equal taxable and deductible temporary differences.
In addition, a deferred tax liability is not recognised if the temporary difference arises from the initial
recognition of goodwill.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying
amount and tax bases of investments in controlled entities where the parent entity is able to control the
timing of the reversal of the temporary differences and it is probable that the differences will not reverse
in the foreseeable future.
Based on independent tax advice received during the year, the Group has calculated the current tax and
deferred tax expense on the basis that a tax deduction will be available for capitalised product registration
fees and development expenditure for 2023 and 2024 income tax years. If the Inland Revenue were to
successfully challenge the position taken by the Group, that would increase the current tax payable and
current tax expense by $3,786k; and decrease the deferred tax liability and deferred tax expense by $3,761k.
The Group has applied for amending each of the 2018 to 2022 income tax returns for capitalised product
registration fees and development expenditure to be treated as deductible. However, the current tax
expense has not been revised on that basis as the requested amendments are subject
to the Commissioner’s discretion.
As at the date these financial statements were authorised for issue, the Group are yet to receive a response
from the Inland Revenue, and therefore there is uncertainty about the tax position.
14. Interest Bearing Liabilities
2024
$’000
2023
$’000
Current lease liabilities796571
Non-current lease liabilities3,1942,820
BNZ overdraft -1,458
BNZ Term loans current portion -1,000
BNZ Term loans non-current portion28,20032,200
Total32,19038,049
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
AP
FINANCIAL STATEMENTS 2023-2024
94 | WORKING TO IMPROVE YOUR HEALTH
Opening balance of BNZ loan33,20037,200
BNZ loans drawn down - -
Repayment of principal(5,000)(4,000)
Closing balance28,20033,200
The BNZ loans have a general security over the assets of the Group together with a Group
guarantee.
On 30 September 2022 the BNZ facility was renewed for a further three-year term through
to April 2026. The facility retains a) the $18.2 million term loan, b) the $10.0 million working
capital facility, c) the $3.0 million overdraft and d) the $5.0 million Business Finance
Scheme Loan (BFS). The maturity date for the BFS is May 2026.
Interest on the term loan and working capital facility is the BNZ CCAF or CARL plus a margin
of 1.45%. Interest on the overdraft is the BNZ market connect base rate plus a margin of 1.00%.
Interest on the BFS is fixed at 2.30%. The non fixed interest rates are reset on a quarterly basis.
As at year end the Group overdraft facility was nil (2023: drawn down by $1,458k)
All covenants relating to the BNZ facility have been complied with during the year.
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and other
short-term investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.
Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
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.
15. Trade and Other Payables
2024
$’000
2023
$’000
Trade payables25,32822,185
GST payable2,4763,483
Employee entitlements2,0431,939
Other payables and accruals4,2934,051
Total34,14031,658
16. Provisions
2024
$’000
2023
$’000
Opening balance of supplier rebates at 1 April4,1474,143
Prior period provision utilised(2,035)(3,440)
Provision utilised(4,436)(1,600)
Additional provisions required9,6555,044
Closing balance of supplier rebates at 31 March7,3314,147
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
AP
AP
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 95
17. Share Capital
Ordinary shares are classified as equity.
2024
Shares
2023
Shares
2024
$'000
2023
$'000
Ordinary share capital104,866,260
104,866,26081,40681,406
Less capital raising costs - -(3,166)(3,166)
Total104,866,260104,866,26078,24078,240
2024
Shares
2023
Shares
2024
$'000
2023
$'000
Share capital at beginning of the year104,866,260104,697,26078,24077,606
Issue of ordinary shares for exercised
share options
-169,000 -634
Total104,866,260104,866,26078,24078,240
Ordinary shares
No shares were issued during the period (2023: 169,000 shares were issued as a result of
staff share options being exercised as detailed below).
Staff share options
During the period no staff share options were exercised (2023: 169,000 staff share options
were exercised, raising $475k).
18. Earnings Per Share
2024
$'000
2023
$'000
Earnings used in the calculation of basic and diluted earnings per share
Profit after tax15,60910,654
Less Redeemable Preference shares dividend - -
Net Profit after tax attributable to Ordinary shareholders15,60910,654
Weighted average number of ordinary shares for the
purposes of basic and diluted earnings per share104,866,260104,848,510
Basic and diluted profit per share ($)$0.15$0.10
Basic earnings per share is computed by dividing net earnings by the weighted average number
of ordinary shares outstanding during each period.
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
AP
FINANCIAL STATEMENTS 2023-2024
96 | WORKING TO IMPROVE YOUR HEALTH
19. Dividends per Share
On 3 July 2023 payment of a maiden dividend of 1.1 cent per share of approximately
$1.2 million was paid, this was not imputed. No dividends were declared to the ordinary
shareholders during the prior year.
20. Staff Share Options
20242023
Average
exercise price
$ per shareOptions
Average
exercise price
$ per shareOptions
Balance at beginning of year-- 2.80330,000
Issued3.46510,000 2.80 -
Forfeited3.46- 2.80 -
Exercised *3.46- 2.80(169,000)
Lapsed **3.46- 2.80(161,000)
Balance at end of year3.46510,000 2.80 -
* Weighted average share price for options exercised during the period $nil (2023: $3.77)
** Of the 510,000 outstanding options, none are currently exercisable (2023: nil)
Share options outstanding at the end of the year have the following
expiry dates, exercise dates and exercise prices:
20242023
Expiry month
Exercisable
month
Exercise
price
May 2026May 20243.46 168,600 -
May 2027May 20253.46 168,600 -
May 2028May 20263.46 172,800 -
Total share options outstanding 510,000 -
The weighted average remaining contractual life of options outstanding
at the end of the period was 3.2 years (2023 none)
Share options reserve
2024
$’000
2023
$’000
Balance at beginning of year -(160)
Current year amortisation139(1)
Transferred to ordinary share capital -161
Options lapsed transferred to retained earnings -14
Balance at end of year 139 -
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 97
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, certain employees on 5 May 2023 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; and
• 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.
21. Contingent Assets and 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.
22. Capital Commitments
The Group has no capital commitments at 31 March 2024 (31 March 2023: nil).
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
AP
FINANCIAL STATEMENTS 2023-2024
98 | WORKING TO IMPROVE YOUR HEALTH
23. Financial Risk Management
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 descriptionDescriptionSensitivity
Currency riskExposure to changes in foreign exchange rates on assets,
liabilities, revenue and expenses
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 sells and purchases goods and services to and from overseas customers and
suppliers in several 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, which allow for up to 50% forward
cover out for twelve months. Future revenues from markets outside Australasia will be
denominated primarily in USD and EUR which will provide an increasing natural hedge
against costs.
In the current year net foreign exchange gains totalled $1,404k (2023: loss $1,010k). The balance
of gains/losses are derived from the restatement of monetary balances at the spot rate on the
period-end balance date of 31 March 2024 and settlement of transactions during the period.
In total, the Group had financial assets and liabilities denominated in the following currencies:
Currency
20242023
Assets
NZD$’000
Liabilities
NZD$’000
Assets
NZD$’000
Liabilities
NZD$’000
AUD41,7985,83429,5128,732
USD3,7777,3378,1016,643
MYR51414356
GBP494315153-
EUR2,9085,5261,1167,990
SGD558994710
CNY198810-
BND80--
HKD24-1
YEN---2
CHF8-4-
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 99
The following forward foreign exchange contracts were held at 31 March 2024:
Forward Foreign Exchange Contracts
Buy currency
Buy currency
amount ‘000
Sell amount
NZD$’000
Buy amount
NZD$’000
Fair value
NZD$’000
EUR4,8708,6448,838194
USD3,6505,9136,084171
Sell currency
Sell currency
amount $’000
Buy amount
NZD$’000
Sell amount
NZD$’000
Fair value
NZD$’000
AUD10,54011,56411,52143
Total asset as at 31 March 2024408
Total liability as at 31 March 2024 -
The following forward foreign exchange contracts were held at 31 March 2023:
Forward Foreign Exchange Contracts
Buy currency
Buy currency
amount ‘000
Sell amount
NZD$’000
Buy amount
NZD$’000
Fair value
NZD$’000
EUR2,0953,4973,648151
GBP50597499925
USD3,2805,3305,223(107)
Sell currency
Sell currency
amount $’000
Buy amount
NZD$’000
Sell amount
NZD$’000
Fair value
NZD$’000
AUD17,39019,24818,688560
Total asset as at 31 March 2023736
Total liability as at 31 March 2023 (107)
• 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 cash flow
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 and cash and cash equivalents. 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 2024, with the largest
debtor being AU$15.93m (31 March 2023: AU$27.27m). The value is stated net of expected
rebates. 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 deposit. At balance date, bank deposits at each financial institution as a percentage of
total assets were; an overdraft position with Bank of New Zealand at 31 March 2024 (2023
overdraft position), and 3.8% at NAB Bank (2023: 2.8%). The carrying value of financial
assets represents the maximum exposure to credit risk.
• Liquidity risk
Liquidity risk is the risk that the Group may encounter difficulty in raising funds at short
notice to meet its commitments and arises from the need to borrow funds for working
capital. The directors monitor the risk on a regular basis and actively manage the cash
available to ensure the net exposure to liquidity risk is minimised.
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
100 | WORKING TO IMPROVE YOUR HEALTH
The liquidity/maturity profile of the liabilities (inclusive of derivative assets and liabilities) is as follows:
31 March 2024
< 1 year
$’000
1-2 years
$’000
2-5 years
$’000
> 5 years
$’000
TOTAL
$’000
Trade and other payables(34,609) - - -(34,609)
Borrowings(2,542)(2,542)(33,500) -(38,584)
Lease liabilities(1,010)(852)(1,539)(1,098)(4,499)
Derivative instruments (outbound)(26,078) - - -(26,078)
Derivative instruments (inbound)26,486 - - -26,486
Total(37,753)(3,394)(35,039)(1,098)(77,284)
31 March 2023$’000$’000$’000$’000$’000
Trade and other payables(31,658) - - -(31,658)
Borrowings(5,279)(2,788)(35,454) -(43,521)
Lease liabilities(799)(722)(1,394)(1,446)(4,361)
Derivative instruments (outbound)(29,049) - - -(29,049)
Derivative instruments (inbound)29,678 - - -29,678
Total(37,107)(3,510)(36,848)(1,446)(78,911)
Fair Values
The carrying values of trade receivables, trade payables and borrowings approximate their fair
values because of their short terms to maturity or interest reset dates. Trade receivables are
valued net of provision and trade payables are valued at their original amounts by contract.
24. 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 are 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 principal and
interest cover ratio, a minimum net leverage ratio and a maximum capital expenditure (capex)
and research and development (R&D) ratio. Covenant reporting is required on a quarterly basis.
The Group was compliant with all BNZ covenants during the period.
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 101
25. Investment in Subsidiaries
Interest held
2024
%
2023
%
Country of
incorporationPrincipal activities
AFT Pharmaceuticals (AU) Pty Ltd100%100%Australia
Distribution of pharmaceuticals
in Australia
AFT Pharmaceuticals (S.E. Asia) Sdn Bhd100%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 Partnership100%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%100%Ireland
Distribution of pharmaceuticals
in Europe
Kiwi Health Pty Ltd100%100%Australia
Distribution of pharmaceuticals
in Asia
AFT Pharma UK Limited70%70%
United
Kingdom
Distribution of pharmaceuticals
in the UK
AFT Pharmaceuticals (HK) Limited100%-Hong KongNo activity
AFT Pharmaceuticals (CAN) Limited70%-CanadaNo activity
AFT Pharmaceuticals US Inc100%-USANo activity
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 the Financial Statements (Continued) For The Year Ended 31 March 2024
AP
FINANCIAL STATEMENTS 2023-2024
102 | WORKING TO IMPROVE YOUR HEALTH
26. Significant Events After Balance Sheet Date
On May 23 2024 the board approved the payment of a dividend of 1.6 cent per share
of approximately $1.7 million. This will not be imputed.
There were no other significant events after balance sheet date.
27. Related Parties
The Group had related party relationships with the following entities:
Related partyNature of relationship
Atkinson Family TrustThe Trust is a substantial product holder of ordinary shares
in the Company
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
Key management compensation
2024
$’000
2023
$’000
Director fees 501472
Executive salaries1,5581,416
Short term benefits416443
Options expense -32
Key management compensation2,4752,363
Key management includes external directors, the Managing Director, the Chief of Staff, the
Chief Financial Officer and the Director of International Business Development.
These positions are mainly responsible for planning, controlling and directing the activities
of the business.
Notes to the Financial Statements (Continued) For The Year Ended 31 March 2024
FINANCIAL STATEMENTS 2023-2024
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 103
STATUTORY DISCLOSURES
104 | WORKING TO IMPROVE YOUR HEALTH
Statutory Disclosures
DIRECTOR INTEREST DISCLOSURES
Shareholder Director Officer or Trustee
Directors have given general notices disclosing interests pursuant to section 140(2) of the Companies Act
1993. All of those interests (and any changes to interests) notified and recorded in the Interests Register
during the financial year ended 31 March 2023 (and subsequently) are set out below:
Director EntityRelationship
Hartley Atkinson AFT Orphan Pharmaceuticals LimitedDirector
AFT Pharmaceuticals (AU) Pty LimitedDirector
AFT Pharmaceuticals (SE Asia) SDN BHDDirector
Atkinson Family TrustTrustee/Discretionary Beneficiary
(Holds shares in AFT)
AFT Limited Partner LimitedDirector
DSGP LimitedDirector
Dermatology Specialties, L.P.Director of AFT Limited
Partner Limited
AFT Dermatology LimitedDirector
AFT Pharmaceuticals (EUR) LimitedDirector
AFT Pharma UK LimitedDirector
Kiwi Health Pty LimitedDirector
AFT Pharmaceuticals (HK) LimitedDirector
AFT Pharmaceuticals (CAN) LimitedDirector
AFT Pharmaceuticals US, IncDirector
Hama Holdings LimitedDirector
Marree Atkinson Atkinson Family TrustTrustee/Discretionary Beneficiary
(Holds shares in AFT)
Hama Holdings LimitedDirector
Anita BaldaufSmart Design LimitedDirector (company contracted with
AFT for services)
Future Ready NZ LimitedDirector
David FlacksVero Liability Insurance New Zealand LimitedChairman
Flacks & Wong LimitedDirector
Asteron Life LimitedChairman
Vero Insurance New Zealand LimitedChairman
Todd Corporation LimitedDirector
Angel Association of New ZealandChairman
Andrew Lane Abbott Laboratories Shareholder
Ted WitekTrudell Medical InternationalDirector
Lumira VenturesSpecial advisor
Kuano LimitedDirector
Jon Lamb retired from the Board on 28 September 2023. As at the date of his retirement his interests disclosed to AFT included: Rivers One
Limited Trustee of Shareholder (with beneficial interest in AFT shares held by Rivers One; Redvers Limited, Director, a company that also
contracted with AFT for services; Project X Trustee Limited, Director; Coronation Equities Limited Director; Three dots Limited (formerly
Nightingale Telemed Limited), Director; Zero Waste Seas Limited (formerly Culture Check Limited), Director; Medreleaf NZ Limited, Director
& Shareholder; Indica Industries NZ Limited, Director & Shareholder; BV&RR Trustees Limited, Director; Rodney Road Limited, Director; and
Aurora Cannabis Limited Director; Aurora Medicinal Cannabis Limited, Director.
No directors have disclosed interests for the purposes of section 140 (1) of the companies Act 1993 during
the financial year ending 31 March 2024.
STATUTORY DISCLOSURES
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 105
Acquisitions or Disposals of Shares in AFT
Jon Lamb, who retired from the Board on 28 September 2023 disclosed on 14 September 2023 that Rivers
One Limited, over which he – as a trustee of Rivers One Trust - had the power to control the exercise of
the right to vote, sold 32,450 shares on market, leaving Rivers One with holding of 271,314 shares in the
company. No other Directors disclosed acquisitions or disposals of relevant interests in AFT ordinary shares
during the financial year ended 31 March 2024.
Relevant Interests in AFT’s Shares
In accordance with the NZX Listing Rule 3.7.1 (d), at 31 March 2024, directors had a relevant interest in AFT
ordinary shares as follows:
Director¹NumberShare of issued capital
Hartley Atkinson72,899,435²69.517%
David Flacks178,7640.170%
1 Jon Lamb, who retired from the Board on 28 September 2023 disclosed on 14 September 2023 that he had relevant interest of 271,314
shares in the company.
2 Includes the holdings of the Atkinson Family Trust and Hama Holdings.
Remuneration and Other Benefits
For the purposes of section 161 of the Companies Act 1993, the following entries were made in the Interests
Register in relation to the payment of remuneration and other benefits to Directors during the financial year
ended 31 March 2024:
Director Remuneration and other benefits
Anita Baldauf, David Flacks,
Jon Lamb, Ted Witek
The increase in Directors fees to take effect on 1 April 2023 on the
terms set out in the 18 May 2023 Board paper.
Hartley Atkinson
Marree Atkinson
The payment of remuneration and the provision of other benefits by
the Company to each of Hartley Atkinson and Marree Atkinson on the
terms set out in a letter of amendment to the relevant employment
agreement and the 18 May 2023 Board paper.
Hartley Atkinson
Marree Atkinson
The payment of STI remuneration by the Company to each of Hartley
Atkinson and Marree Atkinson on the terms set out in a letter of Short-
Term Incentive notification.
Indemnity and Insurance
For the purposes of section 162 of the Companies Act 1993, an entry was made in the Interests Register
in relation to insurance effected for Directors of AFT, in relation to any act or omission in their capacity
as Directors on 31 October 2022.
STATUTORY DISCLOSURES
106 | WORKING TO IMPROVE YOUR HEALTH
Shareholdings
As at 30 April 2024 there were 104,866,260 ordinary shares on issue, each conferring on
the registered holder the right to vote on any resolution at a meeting of shareholders, held
as follows:
Size of
shareholding Holders
Proportion of
total holders Shares
Share of
issued capital
1 - 1,000 932 43.69% 400,956 0.38%
1,001 - 5,000 742 34.79% 1,902,326 1.81%
5,001 - 10,000 236 11.06% 1,745,982 1.66%
10,001 - 50,000 172 8.06% 3,463,544 3.30%
50,001 - 100,000 16 0.75% 1,150,846 1.10%
100,001 - and over 35 1.64% 96,202,606 91.74%
TOTAL 2,133 100.00% 104,866,260 100.00%
As at 30 April 2024 there were 14 individuals holding a total of 510,00 options to acquire
shares issued by AFT under its employee long-term incentive scheme. The options are
unlisted and carry no voting rights.
Top 20 Shareholders
The top twenty holders of AFT’s ordinary shares as at 30 April 2024 are as follows:
NameShares
Share of
issued capital
Hartley Atkinson & Colin McKay72,031,609 68.69%
Accident Compensation Corporation - NZCSD 4,889,379 4.66%
Forsyth Barr Custodians Limited 4,093,476 3.90%
Bnp Paribas Nominees (NZ) Limited - NZCSD 2,560,365 2.44%
Mmc Limited - NZCSD 1,986,638 1.89%
Hsbc Nominees A/C NZ Superannuation Fund
Nominees Limited - NZCSD 1,699,112 1.62%
Fnz Custodians Limited 1,576,594 1.50%
Bnp Paribas Nominees (NZ) Limited - NZCSD 1,094,053 1.04%
Hama Holdings Limited 867,826 0.83%
New Zealand Depository Nominee Limited 655,467 0.63%
Custodial Services Limited 385,806 0.37%
Forsyth Barr Custodians Limited 367,364 0.35%
MMC - Queen Street Nominees Limited ACF Salt Long
Short Fund - NZCSD 319,834 0.30%
JP Morgan Nominees Australia Limited 300,000 0.29%
Jpmorgan Chase Bank NA Nz Branch-Segregated
Clients Acct - NZCSD 296,651 0.28%
Joeri Yvonne Jozef Sels 286,325 0.27%
Fnz Custodians Limited 284,805 0.27%
Jbwere (Nz) Nominees Limited 258,000 0.25%
Rivers One Limited 221,305 0.21%
JB Were (Nz) Nominees Limited 193,340 0.18%
1 Hama Holdings is an entity linked to the Atkinson Family Trust.
STATUTORY DISCLOSURES
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 107
Substantial Product Holders
According to notices given to AFT under the Financial Markets Conduct Act 2013, the following persons
were substantial product holders in AFT at 31 March 2024 in respect of the number of quoted voting
products noted below. As at the balance date 31 March 2024 there were 104,866,260 ordinary
shares on issue:
Substantial Product Holder
Number of ordinary shares in
which the relevant interest is held
Share of class held as
at the date of last notice
Hartley Campbell Atkinson
and Colin McKay as Trustees
of the Atkinson Family Trust72,899,435¹69.51%
1 Includes the holdings of the Atkinson Family Trust and Hama Holdings
Subsidiary Company Directors
The following people held office as Directors of subsidiary companies as at 31 March 2024:
• Donald MacKenzie received A$50,000 in his capacity as a Director
of AFT Pharmaceuticals (AU) Pty Limited.
• Raymond McGregor received A$12,000 in his capacity as a director
of AFT Pharmaceuticals (AU) Pty Limited.
• Eddie Townsley received €12,000 in his capacity as a Director
of AFT Pharmaceuticals (EUR) Limited (Ireland)
The following people held office as directors of subsidiary companies at 31 March 2024
Subsidiary Directors
AFT Pharmaceuticals (AU) Pty LimitedHartley Atkinson, Raymond MacGregor,
Donald Mackenzie.
AFT Pharmaceuticals (EUR) LimitedHartley Atkinson, Eddie Townsley
AFT Pharma UK LimitedHartley Atkinson, Vivian Hansen, Samer Taslaq.
AFT Pharmaceuticals (SE Asia) SDN BHDHartley Atkinson, Dion Seng Peng
AFT Limited Partner LimitedHartley Atkinson
DSGP LimitedHartley Atkinson
Dermatology Specialties, L.P.DSGP
AFT Dermatology LimitedHartley Atkinson
Kiwi Health Pty LimitedHartley Atkinson, Raymond MacGregor.
AFT Pharmaceuticals (HK) LimitedHartley Atkinson
AFT Pharmaceuticals (CAN) LimitedHartley Atkinson
AFT Pharmaceuticals US, IncHartley Atkinson
AFT Orphan Pharmaceuticals LimitedHartley Atkinson, Andrew Moore, Giles Moss,
Malcolm Tubby.
NZX Waivers and Exercise of Powers
AFT was not granted any NZX Waivers during the financial year ending 31 March 2024, nor did it rely on waivers
granted in any prior period. Similarly, NZX did not exercise any of its powers under NZX Listing Rule 9.9.3
Donations
During the financial reporting period AFT contributed $5,000 to its local North Shore MP Simon Watts.
Credit Rating
AFT does not currently have an external credit rating status.
108 | WORKING TO IMPROVE YOUR HEALTH
Appendix 1
CLIMATE RESILIENCE
AFT Pharmaceuticals FY23 Aotearoa New Zealand Climate Standard Disclosure
Important information
AFT Pharmaceuticals (AFT) is a climate-reporting
entity under the Financial Markets Conduct Act
2013. Our inaugural climate related disclosures
on pages 108 to 120 cover our progress between
1 April 2023 and 31 March 2024 and comply with
the Aotearoa New Zealand Climate Standards
issued by the External Reporting Board. All figures
and commentary relate to the full year ended
31 March 2024, unless otherwise indicated.
In preparing our climate-related disclosure, AFT has
elected to use the following adoption provisions:
• Adoption provisions 1 and 2: Current and
anticipated financial impacts.
• Adoption provision 3: Transition planning – a
description of our progress towards developing
our transition plan can be found on page 116.
• Adoption provision 4: Scope 3 GHG emissions
– our scope 3 emissions will be reported in our
second climate disclosure next year.
• Adoption provisions 5 and 6: Comparatives
for Scope 3 GHG emissions and metrics
• Adoption provision 7: Analysis of trends
This disclosure contains climate-related and other
forward-looking statements and metrics, which
are not and should not be considered guarantees,
predictions or forecasts of the future-related
outcomes or financial performance. These
statements are subject to known and unknown
risks, uncertainties, and other factors, many of
which are beyond AFT’s control. Readers are
cautioned not to place undue reliance on such
statements considering the significant uncertainty
in climate metrics and modelling that limit the
extent to which they are useful for decision-making,
and the many underlying risks and assumptions
may cause actual outcomes to differ materially.
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AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 109
Governance
AFT’s climate governance structure is shown in Figure 2 below.
Board of Directors
AFT's Board is responsible for overseeing climate-related risks and opportunities.
The material climate related risks and opportunities identified by the business are
presented quarterly to the AFT Board, following a quarterly review of risks and
opportunities against current trends and scenarios. Climate change and sustainability are
standing agenda items on the Board’s meetings, and interim progress on management
action in these areas is monitored and discussed during these meetings.
Climate Risk
Working Group
The Climate Governance Working Group is responsible for assessing and managing
climate-related risks and opportunities. This group consists of key Management positions
and is responsible for assessing and reviewing climate risks/opportunities, monitoring
progress and engaging with the Board about climate related risks and opportunities.
AFT Pharmaceuticals
Personnel
AFT’s personnel will have specific knowledge not necessarily held by members of
the Climate Governance Working Group. The Climate Governance Working Group
will engage other AFT employees in this process when required. AFT personnel will
implement operational changes to the strategy determined by the Board and Climate
Risk Working Group.
Figure 2: Governance structure for managing climate-related impacts.
Figure 3: Governance roles for managing climate-related impacts.
BOARD
CLIMATE GOVERNANCE WORKING GROUP
AFT PHARMACEUTICALS PERSONNEL
Oversight of climate-related risks and opportunities
Assess and manage climate-related risks and opportunities
Support and operationalise activities to address climate-related risks and opportunities
Board oversight
AFT’s Board is responsible for overseeing
climate-related risks and opportunities.
During 2023, The AFT management team engaged
in a range of training and education to ensure it has
the appropriate skills and competencies available
to provide oversight of climate-related risks and
opportunities. This included engaging external
experts to provide climate knowledge-building
across the whole Board. Board climate capability
is also established through experience on Boards
of other climate reporting entities, including AFT’s
Chair David Flacks, through his director roles at the
Suncorp group of companies, the Todd Corporation
and Zero invasive predators. Anita Baldauf through
the Nestle Group, Laboratoires Inneov, Edmond
Hilary Fellowship and Future Ready Platform.
Andrew Lane through Abbott Laboratories where
he was on the Global ESG subcommittee. Ted Witek
through Trudell Medical International, Lumira
Ventures, Kuana and the University of Toronto where
he also curates lectures on environmental health and
climate change. The Board has integrated climate
change into its skills matrix and recruitment process.
The skills matrix is reviewed twice yearly, most
recently in October 2023.
The material climate related risks and opportunities
identified by the business are presented quarterly
to the AFT Board, following a quarterly review of
risks and opportunities against current trends and
scenarios. Climate change and sustainability are
standing agenda items at the Board’s meetings,
and interim progress on management action in
these areas is monitored and discussed.
When developing AFT’s strategy, the Board and
Executive management team attend an annual
two-day session immediately prior to the Annual
General Meeting (AGM). This strategic planning,
110 | WORKING TO IMPROVE YOUR HEALTH
includes considering any climate-related risks and
opportunities. It also includes a session focused
on reviewing and the subsequent amending, if
required of the AFT risk matrix. The AFT risk
register is reviewed by the board bi-annually.
AFT’s climate metrics and targets include its Scope 1
and 2 emissions and associated targets. These have
been reviewed and signed off by the AFT Board and
emissions progress will be monitored (monthly, with
quarterly reporting to Leadership team).
Management’s role
The Climate Governance Working Group was
established to assess and manage climate-related
risks and opportunities. This group consists of the
key Management including: the Chief Executive
Officer, Chief Financial Officer, Manager Financial
Planning and Analysis, Head of Global Logistics
and Inventory, and the Supply Manager. Other key
Management attend meetings and assist the group
as required. This Climate Governance Working
Group is responsible for:
• Assigning climate-related responsibilities to
management-level positions;
• Integrating, reviewing and updating climate-
related risks and opportunities within AFT
Pharmaceuticals’ risk management framework
and strategy resilience;
• Working with AFT’s personnel and external
stakeholders to operationalise its activities to
address climate-related risks and opportunities;
• Monitoring AFT’s progress on its climate-related
risks and opportunities;
• Meeting quarterly to ensure the effective
progress of AFT’s climate-related activities;
• Engaging with the Board quarterly on AFT’s
progress against its climate-related activities.
Strategy
Our business model and value chain
AFT is a growing multinational pharmaceutical
company that develops, markets and distributes a
broad portfolio of pharmaceutical products across
a wide range of therapeutic categories which
are distributed across all major pharmaceutical
distribution channels: over-the-counter (OTC),
prescription and hospital. Our product portfolio
comprises both proprietary and in-licensed
products, and includes patented, branded,
and generic drugs.
AFT’s business model is to develop and in-license
products for sale by dedicated sales teams
in markets of Australia, New Zealand, United
Kingdom, Canada and the USA, for some products.
For selected EU nations, Singapore and Hong Kong
we engage contract sales. Elsewhere, we license
products to local enterprises and distributors.
Consistent with pharmaceutical industry practice,
we generate revenue primarily through the sale of
products and through royalties received from our
out-licensing and distribution arrangements.
We use third-party manufacturers to manufacture
all our products. Where practicable, we engage
multiple manufacturers for any one product to
mitigate any potential interruption to the supply
chain. We monitor product quality is monitored
through an internal risk-based quality assurance
programme to augment the rigorous industry and
regulatory (Good Manufacturing Practice (GMP)
certification systems.
PHARMACEUTICAL
MANUFACTURERS
AFTDISTRIBUTIONCUSTOMERS
Figure 4: AFT’s value chain
• Contract Manufacturers
(CMOs)
- Australia
- China
- Europe
- India
- North America
• Research & Development
• Regulatory Compliance
• Quality Assurance
• Sales & Marketing
• Third-Party Logistics
• Warehousing
• Wholesalers NZ & AUS
• Licensees
• Pharmaceutical Companies
• International Distributors
• Hospital
• Pharmacy
• Retail
• Ecommerce
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AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 111
Current physical and transitional impacts
AFT tracks interruptions to its supply chain
through an event reporting log. The Climate Risk
Working Group reviewed the log and identified one
physical impact that occurred during the reporting
period. This impact was caused by flooding, which
interrupted the rail network, causing delays to
distribution and increased costs from the need
to arrange storage and alternative road transport.
In addition, two transitional impacts have been
experienced. These were:
• Increased climate reporting requirements –
Inaugural NZ Climate Standard disclosure which
caused increased costs, time, and capability
to meet the reporting obligations. This was
managed through the appointment of external
consultants to ensure compliance against the
standard was achieved. These costs have been
expensed as they have been incurred.
• Changing supplier contracts/tender
requirements to include sustainability. This risk
was experienced when applying for some new
tenders that had sustainability as part of the
selection criteria. This was managed through
the presentation of AFT’s ESG framework.
Scenario analysis
In August 2023, our Climate Risk Working Group
engaged external consultants to support our scenario
analysis. In collaboration with Tonkin & Taylor,
AFT contributed to the Technical Working Group
supporting the development of the healthcare
sector-level climate scenarios. The approach to
developing the scenarios was based on guidance
from the Taskforce for Climate Related Financial
Disclosures (TCFD) and the New Zealand External
Reporting Board (XRB). Six steps were undertaken,
as shown in Figure 5, with a series of workshops
being held with the TWG as the project progressed.
Figure 5: Key steps in scenario development
AFT used the three scenarios developed at the
sector level for its entity-level scenario assessment,
focusing on both the global and New Zealand-
specific parameters in line with the scope of its
operations, manufacturing, distribution networks
and end users. No part of AFT’s value chain was
excluded from the scenario assessment process,
the scope of which is described in Figure 4.
We analysed three different scenarios: ‘ambitious
and orderly’, which assumed the conditions under
SSP1-1.9 (average warming of 1.4 degrees C by
2100); ‘delayed and disorderly’, which assumed
the conditions under SSP2-4.5 (average warming
of 2.7 degrees C by 2100); and ‘hothouse world’,
which assumed the conditions under SSP3-7.0
(average warming of 3.6 degrees by 2100).
The three scenarios and key drivers for AFT
are found in Table 15.
We undertook climate training followed by three
scenario assessment workshops, focused on
identifying the material risks and opportunities under
these three scenarios, testing the resilience of our
strategy and discussing the management response
required to address risks or harness opportunities.
We are now conducting transition planning that will
leverage the learnings from the scenario analysis
process and this includes developing our emissions
reduction plan, quantifying the financial impacts
and the longer-term implication to our core business
model and strategy.
AFT identified the climate change physical
and transitional issues arising under these
three warming scenarios, the associated risks
and opportunities and their priority based on
consequence and likelihood (over the short,
medium, and long term) (Tables 4 and 5).
4.
Map
drivers to
archetypes
1.
Agree focal
question &
“scope”
2.
Agree
scenario
archetypes
3.
Identify &
rank driving
forces
5.
Draft
narratives
6.
Quality
check
& review
112 | WORKING TO IMPROVE YOUR HEALTH
Table 1: Climate Change Scenarios used in AFT’s Scenario Analysis
Category
Ambitious and orderly -
Net Zero 2050
Delayed / Disorderly
transitionHothouse world
SummaryThe world shifts towards
a more sustainable
and socially inclusive
path, which respects
environmental boundaries
and emphasises human
health and wellbeing. With
growing recognition that
climate change is causing
a global health emergency,
emissions decline globally
from 2025-2050 through
the implementation of
ambitious and coordinated
climate action across
countries.
The world follows a path in
which social, economic, and
technological trends do not
shift markedly from current
patterns. While global
ambition and rhetoric is
high, the implementation
of climate action is variable
across countries.
With resurgent nationalism
around the world, policies
shift over time to become
increasingly oriented
towards domestic and
regional priorities. There is
declining public investment
in health and education,
with countries focusing on
achieving their own energy,
water and food security at
the expense of international
cooperation.
Severity of
physical
climate
impacts
Lowest (but not none)Moderate to highHighest
Severity of
transition-
related impacts
Moderate
(greatest in short-term)
Low initially, then very highLowest (steadily increasing,
but also giving businesses
more time to adapt)
Consumer
sentiment
Rapid re-orientation
towards sustainable
lifestyles, as characterised
by a focus on wellbeing
and conscious consumption
including low carbon and
local production.
High levels of rhetoric
but limited changes to
consumption patterns
initially. As wealth
disparity increases, high
wealth individuals able to
access and afford highly
specialised products. Low
income individuals forced to
prioritise basic needs.
Highly material, but high
inequality means limited
purchasing power for many.
Direct impacts
from climate
hazards
Extreme weather events,
felt most by rural areas
including water borne
disease. Increased fire risk
leading to lower air quality
temporarily.
Minor increase in
distribution and ecology of
infectious diseases, water-
borne and vector-borne
diseases, insects and pests.
The severity, frequency and
duration of fire weather
increases with drought
conditions and increased
afforestation. Regular
fires lead to declining
air quality, particularly in
rural communities, which
increases the incidence of
respiratory disease between
2050-2100.
Frequent wildfires impact
air and water quality causes
an increased number of
hospitalisations due to
asthma and respiratory
diseases.
Rise in extreme heat events
throughout the century.
Vector borne diseases also
affected – new species
establish in NZ and cause
outbreaks.
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Category
Ambitious and orderly -
Net Zero 2050
Delayed / Disorderly
transitionHothouse world
Financial
impact of
supply chain
disruptions
LowestHigh – fuel price shocks
and impacts from extreme
weather events.
Frequent extreme events,
regular shortages.
Drives move towards
Australasian production in
pharmaceuticals.
Policy reaction
to climate
change
Immediate and smooth
(well signalled)
Delayed, abrupt and
onerous.
Uncoordinated and reactive,
focused on adaptation
rather than mitigation.
Regional policy
variation
LowHigh, gap between
developed and developing
countries
on action.
High, focused on domestic
priorities and regional
rivalry.
Socioeconomic
context
Income inequalities
reduced, both in NZ and
between countries.
Erosion of public services,
increase in poverty, increase
in traditional healing
practices due to this.
High levels of inequality,
breakdown in social
cohesion.
Global
warming
2040-2060: 1.6°C,
2081-2100: 1.4°C
2040-2060: 2.0°C,
2081-2100: 2.7°C
2040-2060: 2.1°C,
2081-2100: 3.6°C
Carbon price1.3°C2025: $tbc, 2050:
$250tCO2e
3.0°C
Global GDP
per capita by
2050
2025: $81tCO2e,
2050: $250tCO2e
Highest
(equal to Net Zero 2050)
2025 & 2050: no change
NZ GDP impactModerate GDP impactsModerate/high GDP
impacts
High GDP impacts
NZ population2025: 5.22m, 2050: 6.13m2025: 5.22m, 2050: 6.13m2025: 5.25m, 2050: 6.93m
Percentage
NZ >65
2025: 20%, 2050 23.3%2025: 17.5%, 2050 23.3%2025: 17.6%, 2050 21.4%
114 | WORKING TO IMPROVE YOUR HEALTH
Timeframes
The Healthcare sector-level scenarios’ short, medium and long term time horizons spanned to 2100,
to align with projected climate physical impacts over this period. Our entity level time horizons align
with our strategic planning horizons and financial decision-making, as defined in Table 2.
Table 2: Time horizons
Short-termLess than 1 year (aligned with stock
planning and budget cycles)
Managing any physical disruption from extreme
weather events. Putting in place climate change
plan to manage emissions and physical and
transition risks.
Medium-termNext 1- 3 years (aligned with
supplier and manufacturing
management)
Monitor possible transitional risks. Monitor and
mitigate any climate-related risks relating to
manufacturing and distribution, through strategy,
risk management process and contingency
planning.
Long-termNext 3 – 10 years (aligned with AFT
strategy and product development
cycles).
Monitor and manage any transitional risks
(which may accelerate depending on context).
AFT continues to mitigate the impacts of
potential physical risk (which may become more
pronounced) and may need to evolve in response.
Very Long-
term
Next 11 – 75 years (aligned with
scenario timeframes)
Focus on the continued mitigation of physical
risks resulting from climate change, such as sea
level rise, frequent extreme weather events, and
permanent changes in temperature patterns.
To prioritise the severity of the risks and opportunities present under a particular scenario, we evaluated
their likelihood and consequence, where ‘likelihood’ assessed the speed of onset, or the time the risk or
opportunity was expected to be first experienced (in the short, medium, long term, or very long term – Table
2) and ‘consequence’ related to the potential financial, regulatory, operational, staffing and/or customer
impacts on AFT. This consequence scale is the same as AFT’s current consequence scale used to evaluate
the impact of all other risk types. Opportunities were analysed using the same method under each scenario,
where the consequence on the business was positive.
Table 3: AFT’s risk assessment matrix
Key
Severe/catastrophicVery highHighMediumLow
MajorHighHighMediumLow
ModerateMediumMediumLowLow
MinorLowLowLowVery low
InsignificantVery lowVery lowVery lowVery low
Short term
(<1)
Medium term
(1-3 years)
Long term
(3-10 years)
Very long term
(11-75 years)
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Anticipated climate-related risks and opportunities
The anticipated climate-related risks and opportunities identified under each scenario are summarised
in Tables 4 and 5. The results of the assessment indicate that climate change presents a relatively low-risk
profile for AFT. The most material rating was medium for the following risks:
• Physical risk: In a hothouse scenario, increased severity of extreme weather resulting in interruption
to manufacturing/increased interruptions /outages to freighting and damage to/loss of sites.
• Transition risk: In a hothouse scenario, transition to lower emissions /more efficient technology, impacting
the speed of supply of low carbon technology, as well as the potential for misalignment of medical
regulation and climate regulation requirements.
Table 4: Anticipated climate - related risks
TypeIssueRisk
Ambitious
& orderly
Delayed &
disorderly
Hothouse
world
Short term Medium termLong
term
Very long termShort term Medium termLong
term
Very long termShort term Medium termLong
term
Very long term
Physical
Increased
severity
of extreme
weather
Interruption to manufacturing
Loss of products
Staff unable to get to work/travel (inc reps)
Increased interruptions/outages to freighting
Interruption to supply of raw materials
Damage to/loss of sites
Changes to
mean temp,
weather
patterns
Stability of products at different environmental
conditions, availability of ingredients
Higher HVAC requirements
Ability to achieve GMP
(good manufacturing practice)
Access to water for production
Risk of ICH guidelines changing to higher
temp testing
Transitional
Increased
climate
reporting
requirements
Not meeting increased obligations
(including legislated) for reporting
Requirement to reduce emissions and cost
of doing so
Risk of not achieving targets, carbon
pricing and tariffs
Changing
regulatory
and drug
buyer
requirements
Changes to regulator (FDA/Medsafe/TGA)
requirements.
Changing supplier contracts/tender
requirements to include sustainability
Changing needs of healthcare systems
Reputational
risk and
changing
consumer
expectations
Consumers favouring organisations with
strong ESG/social license to operate
Expectations to provide appropriate
health solutions
Talent attraction and retention
Transition
to lower
emission/
more
efficient
tech
Speed of supply of lower carbon technology
Costs to transition
Misalignment of medical regulation
and climate regulation/requirements
Changes in operating parameters - eg slower
shipping, sales routes with electric chargers
Changing
finance and
investor
requirements
Less access to capital/higher cost of finance
if not taking enough climate action
Investors demanding ESG performance
Costs of insurance/ability to access insurance
116 | WORKING TO IMPROVE YOUR HEALTH
Table 5: –Anticipated climate-related opportunities
Climate related risks and opportunities and
capital planning
AFT’s primary focus during capital deployment
is research and development (R&D) phases for
products. As such, climate-related risks and
opportunities are not currently being used as
inputs for AFT’s capital deployment and funding
decision-making processes.
AFT completed a base-year GHG emissions
measurement in FY24 and further work in FY25
will investigate the financial impact of its material
climate-related risks and opportunities. Once these
impacts have been quantified, climate-related risks
and opportunities will be further considered.
Portfolios, geographies, sector or asset-specific
exposure
AFT operates across multiple geographies and
legal jurisdiction. While all geographies were
thought to be exposed to both physical and
TypeIssueRisk
Ambitious
& orderly
Delayed &
disorderly
Hothouse
world
Short term Medium termLong
term
Very long termShort term Medium termLong
term
Very long termShort term Medium termLong
term
Very long term
Physical
Increased
severity
of extreme
weather
Acute increased demand due to weather events
Changes to
mean temp,
weather
patterns
New opportunities due to increased pollution
and vector borne diseases
Transitional
Increased
climate
reporting
requirements
Ability to operate in environments with fewer
competitors
Access to supportive policy incentives
Changing
regulatory
and drug
buyer
requirements
First mover advantage
New emerging markets
Reputational
risk and
changing
consumer
expectations
Employee retention
Meet/exceed consumer expectations
Transition
to lower
emission/
more
efficient
tech
Ability to meet carbon targets
Reduction in operational expenditure
More efficient manufacturing and distribution
Changing
finance and
investor
requirements
Ability to access new finance streams including
sustainability linked loans, low emissions capital
funds
transitional risks, the exact nature and extent of
the impact will vary across different geographies.
The scenario assessment undertaken for this FY24
disclosure did not investigate risk at a geography
specific level. Our FY25 assessment will consider
this further using a fit-for-purpose approach.
Transitioning to a climate resilient future
The first step in AFT's transition towards a low
carbon business model has been to establish a
baseline measure of our greenhouse gas emissions.
Our Scope 1 and 2 emissions have been disclosed
on page 117 and we are in the process of measuring
our Scope 3 emissions, which will be disclosed
in the FY25 disclosure.
We have established science-aligned targets
for our Scope 1 and 2 emissions, consistent with
limiting global warming to 1.5 degrees Celsius.
We are now developing our emissions reduction
plan, which will provide a roadmap to achieve
our emissions targets.
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Risk Management
AFT undertook scenario analysis to identify and assess the scope, size and impact of its climate-related
risks and opportunities. We identified the broadest range of potential climate risks and opportunities that
could plausibly impact our business under all scenarios. We then used the scenario-specific narratives
to explore the relevance of each risk or opportunity and whether it may worsen or improve under the
respective scenarios. No part of AFT’s value chain was excluded from its climate related assessment.
Process for prioritising climate-related risks relative to other types
In identifying its current and potential climate related risks, AFT recognised that many of the risks were
interconnected to existing risks being managed through its risk register. AFT has used the same thresholds
to assess its climate-related risks as its other risks, and so can directly measure and prioritise climate related
risks relative to its other risks.
As a result, risks that were identified as material (rated medium or higher) to AFT were incorporated into
its existing risk register, either separately or as input to existing risks on the register. The management
response to our material risks is described in Table 6.
AFT will repeat the scenario analysis exercise on an annual basis, regularly monitor key indicators/inputs
and update its risk management framework accordingly.
Table 6: Material risks and mitigation strategies
Risk
TypeIssueRiskManagement Actions
Physical
Increased
severity of
extreme
weather
Interruption to manufacturingManufacturing strategy, contingency
planning, risk management process
Increased interruptions/outages to
freighting
Supply chain strategy, contingency
planning, risk management process
Damage to/loss of sitesManufacturing strategy, contingency
planning, risk management process
Transitional
Transition to
lower emission/
more efficient
tech
Speed of supply of lower carbon
technology
GHG emissions management plan and
decarbonsation strategy.
Misalignment of medical
regulation and climate regulation/
requirements
Monitoring regulatory environment,
engaging regulators, R&D strategy.
Metrics and Targets
GHG emissions
In FY24, AFT reports on its Scope 1 and 2 emissions. AFT’s total Greenhouse Gas emissions Scope 1 and
2 emissions for the period ending March 31 2024 were approximately 350.33 tonnes of carbon dioxide
equivalent (tCO2e). AFT’s Scope 1 and 2 emissions intensity is 1.87 tCO2e per $Million Revenue.
Table 7: AFT’s GHG emissions
Category
(ISO 14064-1:2018)
Scopes
(ISO 14064-1:2006)
2024
Category 1: Direct emissions (tCO2e)Scope 1331.76
Category 2: Indirect emissions from imported energy
(location-based method*) (tCO2e)
Scope 218.57
Total direct emissions (tCO2e)331.76
Total indirect emissions* (tCO2e)18.57
Total gross emissions* (tCO2e)350.33
Category 1 direct removals (tCO2e)0.00
Purchased emission reductions (tCO2e)0.00
Total net emissions (tCO2e)350.33
*Emissions are reported using a location-based methodology.
118 | WORKING TO IMPROVE YOUR HEALTH
Table 9: AFT’s GHG reporting methodology
DetailApproach
Measurement period1st April 2023 to 31st March 2024 (FY 24)
Base period1st April 2023 to 31st March 2024 (FY 24)
AssuranceReasonable assurance issued by Toitū Envirocare
Preparation standardAFT's GHG emissions inventory has been prepared in accordance with ISO14064-1.
Consolidation
approach
AFT has taken an equity share consolidation approach in the preparation
of its GHG emissions inventory.
Organisation
boundaries
AFT has accounted for all parts of its business outlined in Figure 6.
This is aligned with AFT’s financial accounting boundaries.
Emissions
factors and Global
Warming Potential
(GWP)
All emissions were calculated using Toitū emanage with emissions factors and
Global Warming Potentials provided by the Programme. Global Warming Potentials
(GWP) from the IPCC fifth assessment report (AR5) are the preferred GWP
conversion.
Calculations and
uncertainties
A calculation methodology has been used for quantifying the emissions inventory
based on the following calculation approach, unless otherwise stated below:
Emissions = activity data x emissions factor
Where applicable, unit conversions applied when processing the activity data has
been disclosed.
There are systems and procedures in place that will ensure applied quantification
methodologies will continue in future GHG emissions inventories.
ExclusionsAFT has not excluded any emissions sources, facilities, operations or assets
from its Scope 1 and 2 emissions inventory.
Table 10: AFT’s emissions reduction targets
Target nameBaseline periodTarget dateType of target (intensity or absolute)Categories coveredTargetBase Year (tCO2e)KPIResponsibilityRationale
Scope
1 Short
Term
23-24
Period
2030AbsoluteScope 142% by
2030
332tco2eClimate
Working
Group
Inline with the
Science Base Targets
for our company
Scope
2 Short
Term
23-24
Period
2030AbsoluteScope 242% by
2030
19tco2eClimate
Working
Group
Inline with the
Science Base Targets
for our company
Scope
1 Long
Term
23-24
Period
2050AbsoluteScope 190% by
2050
332tco2eClimate
Working
Group
Inline with the
Science Base Targets
for our company
Scope
2 Long
Term
23-24
Period
2050AbsoluteScope 290% by
2050
19tco2eClimate
Working
Group
Inline with the
Science Base Targets
for our company
Industry-based metrics
Table 8: AFT’s Industry based metrics
CategoryScopeConsumption
Regular petrol (L)1125,648.71
Premium petrol (L)115,201.7
Diesel (L)11,115.99
HFC-134A refrigerant (kg)10.44
Electricity (kWh)2117,787
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Internal carbon price
AFT does not currently use an internal carbon
price. AFT will continue to develop its transition
plan in the next reporting year.
Remuneration linked to climate-related risks and
opportunities.
Management remuneration is not currently linked
to climate-related risk and opportunities nor
incorporated into remuneration policies. AFT
will consider this further in the future.
Assets or business activities vulnerable to physical
and transitional risks
AFT outsources the manufacture and distribution
of its products across multiple suppliers and
geographies. This diversification, along with
other risk management practices, limits climate-
related risks. The business activity is subject to
the most acute risk if severe weather interrupts
the manufacture or distribution of products. This
is managed through manufacturing strategy, risk
management process, and contingency planning.
Australia
Business
Unit
New Zealand
Business
Unit
Figure 6: AFT’s Organisational boundaries
100%100%
100%
100%
100%
100%100%65%100%70%100%
AFT PHARMACEUTICALS LIMITED
Company number: 873005
General Partner
DSGP Limited
Company
number:
5723219
Dermatology
Specialties,
L.P.
AFT
Pharmaceuticals
UK Limited
Company
number:
14521612
AFT
Pharmaceuticals
(HK) Limited
AFT
Pharmaceuticals
SE Asia)
SDN.BHD.
Company
number:
962386-U
AFT
Pharmaceuticals
(EUR) Limited
Company
number:
674118
AFT
Pharmaceuticals
Singapore PTE
Limited
Company
number:
201222337W
AFT
Pharmaceuticals
Limited
Partner Limited
Company
number:
5723310
AFT
Dermatology
Limited
Company
number:
5723327
AFT Orphan
Pharmaceuticals
Limited
Company
number:
3619331
AFT
Pharmaceuticals
(AU) Pty Limited
ACN: 105 636 413
120 | WORKING TO IMPROVE YOUR HEALTH
Table 11: AFT’s GHG uncertainties and assumptions
GHG emissions
category
GHG emissions
source or sink
subcategory
Overview of
activity data
and evidence
Explanation of uncertainties or
assumptions around your data
and evidence
Use of default
and average
emissions
factors
Category 1:
Direct emissions
and removals
Mobile
combustion
(incl. company
owned or
leased vehicles)
Car Average
(unknown fuel
type), Private
Car average
(fuel type
unknown),
Rental Car
average (fuel
type unknown),
Diesel, Petrol
premium, Petrol
regular
Assumed all supplier reports are
accurate and all additional fuel
spent has been captured within
our internal financial tracking
systems. There is a higher level of
uncertainty in regard to the spent
based data compared to the fuel
card report but it represents a
smaller proportion.
Fuel estimates from commuting
was based on staff commuting
survey and extrapolated for total
number of staff.
The internal
claim for fuel
process does
not yet allow
us to export
litres of fuel
used. Litres
are calculated
based on
Fleetcard
average price.
Leakage of
refrigerants
HFC-134aAssumed manufacture specified
refrigerants are accurate.
The most
accurate factor
options were
selected.
Overall
assessment
of uncertainty
for Category 1
emissions and
removals
9%Medium
Category 2:
Indirect
emissions
from imported
energy
Imported
electricity
ElectricityAssumed all supplier reports are
accurate and electricity usage
has been captured.
The most
accurate factor
options were
selected.
Overall
assessment
of uncertainty
for Category 2
emissions and
removals
5%Medium
APPENDIX 1: CLIMATE RESILIENCE
APPENDIX 2: MATERIAL SUSTAINABILITY MATTERS DEFINITIONS
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 121
Appendix 2
MATERIAL SUSTAINABILITY MATTERS DEFINITIONS:
AFT has built its Sustainability Framework and
ESG reporting programme on a robust process
of assessing what is material to the company. As
a publicly listed company, ‘material’ matters are
those that a reasonable person would consider
impacting the company’s valuation or the
sustainability of our operations.
In line with best practice ESG standards, we also
considered those topics that reflect AFT’s most
significant impacts on the economy, environment,
and people.
We have followed a robust process to identify
and manage the material sustainability matters.
Our definitions of them are set out below.
DefinitionDescription
Consumer/patient good health
Responsive to customer needs, health sector developments, and
tracking consumer trends and purchasing habits. Expanding the
range of products aimed at enhancing the health and well-being
of consumers. Enhancing the proper use of products by healthcare
professionals and patients. Creating business value and social
impact through the use of medicines. This topic includes AFT
providing products that can provide alternative pain relief
to opioids.
Product quality and safety of
medicines
Ensuring product safety and quality, including through design,
traceability of materials, manufacture, communications, and
reporting. Disclosure of safety information. Preventing the
distribution of counterfeit drugs. Mitigating the risk of a product
recall, liability issues, loss of reputation, and reduced revenue.
Relationships with regulators and regulatory compliance.
Product innovation / R&D
Creating innovative medicines and medical solutions in areas with
high unmet medical needs. Creating future value for the business.
Ensuring R&D and testing are done safely and in compliance with
all regulatory requirements. Ensuring the mental and physical health
of employees and clinical trial participants. Meeting all animal
welfare requirements.
Corporate governance,
compliance,
and transparency
A commitment to comply with all laws, including competition laws
and best practice governance and the recommended governance
codes and rules that apply in each region. Monitoring the supply
chain for the same. Compliance and transparency also refer to cyber
security and privacy. The independence and effectiveness of the
Board of Directors are regularly reviewed. Directors understand
and monitor ESG strategy, metrics, and performance, including
climate-related risks.
Ethical and sustainable supply
chains (including environmental
and labour standards)
Working with suppliers on sustainability performance and managing
risks for AFT’s brand and operations. This is across the areas of
ethics, labour, environment, health and safety, and management
systems. Specifically on labour, this includes compliance with AFT’s
Modern Slavery policy. On environment, this includes compliance
with our Supplier Code of Conduct, which includes water use.
122 | WORKING TO IMPROVE YOUR HEALTH
DefinitionDescription
Ethical business practices
(including
anti-bribery & corruption,
sales and marketing practices,
lobbying)
Policies and practices to prevent bribery, corruption, counterfeiting,
and conflicts of interest. A culture of openness and support with
raising concerns. Ethical marketing - codes of ethics and shareholder
transparency.
Employee health, safety, and
wellbeing
Ensuring compliance with local health and safety regulations.
Emergency and disaster preparedness, safe machinery, equipment
and facilities, staff training, biosafety, and protection from hazardous
substances and chemicals. Supportive return to work or post-
accident policies.
Requiring best practices in the supply chain through Supplier
Code of Conduct.
Workforce (Diversity and
Inclusion, Retaining and
Attraction)
Ensuring equal opportunity regardless of race, nationality, gender,
sexual orientation, age, religion, or disability, including into positions
within management, the Board of Directors. Pay parity assessments
are in place. Policies to prevent sexual harassment and workplace
bullying, a safe and supportive complaints process, code of conduct,
and flexible working. Whistleblowing policy. Policies in place to
attract and retain highly skilled employees.
Access to medicines
Ensuring a stable and resilient supply of products to patients.
Prioritising R&D in areas of specific need.
Climate change
Climate change mitigation (reducing emissions through the value
chain), climate change adaptation (assessing risks to the value
chain associated with a changing climate), reporting emissions and
climate-related risks, and compliance with regulatory requirements
(Financial Sector (Climate-related Disclosures and Other Matters)
Amendment Act).
Packaging (consumer and supply
chain)
Taking a life-cycle approach to packaging from manufacture
to disposal, particularly of supply-chain/distribution packaging,
consumer packaging, and hospital packaging.
APPENDIX 2: MATERIAL SUSTAINABILITY MATTERS DEFINITIONS
STATUTORY DISCLOSURES
AFT PHARMACEUTICALS ANNUAL REPORT 2024 | 123
Directory
AFT is a company incorporated with limited liability under the New Zealand Companies Act 1993
(Companies Office registration number 873005).
Registered Offices Level 1, 129 Hurstmere Road, Takapuna,
Auckland 0622, New Zealand.
+64 9 488 0232
www.aftpharm.com
113 Wicks Road, North Ryde NSW 2113, Australia.
+61 2 9420 0420
Principal Administration Offices New Zealand:
Level 1, 129 Hurstmere Road, Takapuna,
Auckland 0622, New Zealand.
+64 9 488 0232
Australia:
113 Wicks Road, North Ryde NSW 2113, Australia.
+61 2 9420 0420
United Kingdom:
133 Whitechapel High Street, London, UK
Directors
– at the date of this Annual Report
Dr Hartley Atkinson
Marree Atkinson
Anita Baldauf
David Flacks
Andrew Lane
Dr Ted Witek
Share Registrar:Computershare Investor Services Limited
Level 2, 159 Hurstmere Road, Takapuna,
Auckland 0622, New Zealand.
+64 9 488 8777
enquiry@computershare.co.nz
Computershare Investor Services Pty Limited, Yarra Falls,
452 Johnston Street, Abbotsford VIC 3001, Australia.
+61 3 9415 4083
enquiry@computershare.co.nz
Auditor Deloitte Limited,
Deloitte Centre, 1 Queen Street,
Auckland 1140, New Zealand.
+64 9 303 0700
Legal Counsel Harmos Horton Lusk
Level 33, Vero Centre,
48 Shortland Street, Auckland 1140, New Zealand.
+64 9 921 4300
Financial Calendar
Annual Meeting August 2024
Half-year end 30 September 2024
Half-year end results announcementNovember 2024
Financial year end 31 March 2025
REMUNERATION
Level 1, 129 Hurstmere Road
Takapuna
Auckland 0622
New Zealand
+64 9 488 0232
www.aftpharm.com
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.