AFT Pharmaceuticals Limited (AFT) Earnings Call Transcript & Summary

[Foreign Language] And good morning, everyone, and welcome to AFT Pharmaceutical Limited's Annual Meeting. I'm David Flacks, Chair of AFT. I hope you're all well, COVID-free and flu-free. So first of all, I'd like to draw your attention to this important notice on the presentation, which, along with my prepared remarks and the slide presentation has today been released to both the NZX and ASX. So on behalf of the Board, thank you very much for attending the 2022 Annual Meeting. This year, we have enabled the option to join the meeting by audio, and we extend our thanks to those of you who have joined by this means. We will be presenting with the slides and as well as being released to NZX and ASX, these are now also available on AFT's investor website. So for those of you who have joined by audio, you'll be able to see these and follow along. So before we start with the formal business of the meeting, a couple of housekeeping points. First of all, I'd be very grateful if you can make sure that your phone is switched to silent. And in the event of an emergency, please make your way through the door, which you came through and follow the instructions of the staff. So let me begin, please, by introducing those of you -- those on stage to you. First of all, Hartley Atkinson, who will be presenting to you shortly; Marree Atkinson; and Anita Baldauf; and Ted Witek. So Ted has travel to us from Canada. He's visited New Zealand a number of times in the past, but this is the first time that he's been able or allowed to visit us at AFT, so it's been great to have him here for the last few days. Now Doug Wilson, who's retiring today, is unfortunately not well, so he's not able to be with us. And Jon Lamb also is not well today, so could not make it here, but he's listening in to the meeting. Our auditors, Deloitte, are here and available to respond to questions later in the meeting. Actually, I would just like to acknowledge Jason Stacherski, who has completed his 5 years as our audit partner. We've appreciated his wise counsel and look forward to working with Bryce Henderson, who's here as well. And our lawyers, Harmos Horton Lusk, are also present. So I'd like to introduce you to some of our management team, our senior management team who are here today as well, and perhaps as I call your name, you could stand up, please. So Malcolm Tubby, CFO and Company Secretary; Ioana Stanescu, Director of Research and Development; Vladimir Ilievski, Regulatory Affairs Manager; Louise Clayton, Director of International Business; and Murray Keith, our Group Marketing Manager. Thanks, guys. And you can find details of all our directors and senior management team in the annual report and also on our website. So in terms of today's agenda, the company's constitution prescribes a quorum requirement of 5 shareholders. As you can see, this requirement has been met accordingly. I declare the meeting formally open. The items of business for this meeting and the resolutions to be considered by shareholders are contained in the notice of meeting, which was sent to shareholders on 5th of July. And in terms of the order of meeting, start with, I'm going to say a few words, following which Hartley is going to give a presentation, and then we'll then consider the formal business of the meeting and resolutions. In relation to the resolutions, there will be opportunities for shareholders to ask specific questions as we address each resolution in the formal part of the meeting, but there will also be an opportunity to ask general questions after Hartley has given his presentation. At the close of the meeting, we hope that you will join us for refreshments. It's a pleasure again to report to shareholders on another record year for AFT. Given our consistent record, it's tempting to look back on the year and see AFT's continued growth as a foregone conclusion. While the Board and management have always been confident in our strategy and ability to execute, the uncertainty of the past few years have required resilience and resolve. There's also attempting to gloss over the ongoing impacts of COVID-19 as we all seek to move on from the pandemic. While I certainly don't wish to dwell on it, I do wish to acknowledge the many unexpected challenges we have all experienced, not least of which our team here at AFT. The last financial year has not been easy. But if there is one message that I'd like you to take from AFT's performance during the 2022 financial year, it is our resilience and ability to continue to grow in the face of adversity. At the heart of our continued strong performance is our growing and highly defensible Australasian business, which is founded on a broad portfolio of more than 130 clinically proven products for a diverse spectrum of therapeutic applications. As you know, the success has not occurred overnight. This expanding portfolio is a result of more than 2 decades of careful and deliberate analysis and then the identification of medicines that will improve patient health outcomes. Maxigesic is a standout success, but we have a broad portfolio of products. For you, our shareholders, our consistent record of success in both in-licensing and the development and commercialization of our own intellectual property has continued to offer investors a rare proposition in New Zealand capital markets, highly defensible revenue streams with strong growth prospects. This has enabled directors to announce a dividend policy and indicate that we expect to declare a maiden dividend to shareholders for the 2023 financial year. This is a strong statement of confidence in AFT's future. I'll speak specifically about this further in a few moments. But first, I want to turn to the highlights of the 2022 financial year. Despite significant headwinds in all markets due to the pandemic, all regions posted strong revenue growth, and we announced results in line with our earlier forecast. Annual operating revenue grew by 15.2% to $130.3 million from $113.1 million in the previous year, and net profit after tax rose 153.8% from $7.8 million to $19.8 million. We remain well funded. The company has met its targeted net debt of $25 million to $30 million, and we've also continued to retain higher-than-normal inventory levels as a buffer against the ongoing disruption in the global supply chain. This approach, despite the additional holding costs has provided considerable support to the company over the last year, largely ensuring continuity of supply across our distribution networks and ongoing sales. We believe this has been a good decision, and we will continue to monitor supply chains as they start to improve globally. Our long-term success is thanks to our people. Fundamentally, AFT is a lean asset-light company that succeeds on the strength of its intellectual property and the relationships our people have with a broad range of organizations around the world, from licensees and distributors through to manufacturers, regulators, and research and development collaboration. We're proud to have a workforce consisting of many individuals with diverse skills, values, backgrounds, ethnicities and experience. We employ nearly 100 people around the world, with just over half in New Zealand, about 40 in Australia, and the remainder in Asia and Europe. They come from 30 different cultural backgrounds with a gender split of 61% women and 39% men. They're a talented team that punches above their weight, particularly in relation to medicine development, engagement with global regulators and product commercialization. Your Board has always been impressed by what they've achieved, but more so over the last 2 years of the pandemic. In the face of COVID restrictions, they've adapted and developed new ways of working and ensure that AFT as a global pharmaceutical company has not been disadvantaged by the location of its operations. They've made a tremendous effort, and we thank them. Today also represents a landmark change in the governance of AFT. So a fortnight ago, we announced that Independent Director, Dr. Doug Wilson, was retiring from the Board today. Doug came to AFT in 2012 after our diverse and distinguished career. His first job in medicine was as a nurse at Auckland Hospital during a student vacation. Upon graduating from a Otago University Medical School, he undertook postgraduate training in medicine, blood and kidney diseases and research. And after moving to the U.K., he gained a PhD in hematology and immunology. He returned to New Zealand and was appointed Associate Professor at Auckland Medical School, and this was followed by other academic roles. At the age of 50, he opted for a new career in business, joining the German pharmaceutical company, Boehringer Ingelheim. First, as its New Zealand Medical Director and ending his tenure as the company's worldwide Head of Medical Research and Regulatory Affairs. I list these achievements only to demonstrate the depth and breadth of expertise and capability that Doug brought to the AFT Board table when he joined the company. Since then, he has played a pivotal role in AFT's development and success. His pharmaceutical research development and commercialization expertise has been of enormous value to Hartley and the Board, and he's also brought to the Board table a worldview and a genuine and abiding care for people. He's a prolific author writing on subjects ranging from the management of stent and allergic diseases through to children's books and how to age. He's also a frequent and respected commentator in New Zealand's national media, especially Kim Hill. Doug has brought real insights and commitment to AFT, and it's been a real pleasure to work with them. Each year, as detailed in the Board's governance statement, which is published in the -- to the NZX, ASX and our website, we undertake a rigorous process of self-review. This includes the development of a comprehensive skills matrix to inform Board succession planning. It considers each director's experience against identified specific skills as set out in this slide. and also broader governance-related skills. And this process has informed the succession planning of the last few years, including the appointment of Anita and Ted, who bring to the Board the international health care regulatory and sales and marketing perspectives that have complemented the skills, which Doug has brought to the table. Ted actually worked with Doug at Boehringer, and we're very fortunate that he has a broad range of those relevant skills. We also continue to review potential director appointees, particularly those with complementary skills such as regulatory expertise and medical efficacy. Another key development in AFT's governance has been the ongoing evolution of our governance framework to acknowledge and report on the environmental, social and governance factors that are material to our performance. This year, we undertook a detailed analysis of the ESG matters that are relevant to our business. And we've established a framework that will drive our efforts to manage the risks to our business and ensure that we're meeting their expectations of our stakeholders. There are opportunities for us to continue to make progress, but undertaking this review has demonstrated to the Board that we are effectively managing our ESG risks. Key achievements in the past year relate to governance and supply chain. Specifically, we introduced and implemented a modern slavery policy and an antibribery and anticorruption policy as a supplement to our code of culture and ethics. These changes do not reflect any concern across the supply chain or in our business rather it is an acknowledgment that codifying and embedding such practices are fundamental to providing assurance to our customers, our people and our shareholders, that ethical responsible behavior is in our corporate DNA. As an example, and as set out in our modern slavery statement, which is set out on our website, we've been in contact with all our suppliers and partners globally for confirmation of compliance with our modern slavery policy, and we've embedded these principles in our supply and other contracts with third parties. We also monitor existing and new suppliers and partners on an ongoing basis. I would also like to call out our ongoing focus on improving the health of our customers and our continual search for new products and medicines. We spent over $10 million on further research and development last financial year. And we continue to work with educational and research institutions, including contributing $100,000 to the University of Auckland Medical Health Sciences Foundation for anesthesiology research. A key focus in the current year is preparation to report our carbon footprint under the new financial sector climate-related disclosures and other matters at that will be in the 2024 financial year. Again, I encourage shareholders to review our annual report, which sets out our priorities and the important work that we are doing to ensure that AFT is contributing to ESG issues. As announced in our annual results, AFT's strong defensible and growing care and growing international business built on our unique intellectual property has allowed the Board to announce the introduction of a dividend policy. The directors expect to declare a maiden dividend to shareholders for the 2023 financial year. This is a strong statement of confidence in our future. The Board believes this policy allows the company's sufficient headroom to fund ongoing significant growth opportunities that we continue to see. It's also a strong signal to you as shareholders and to future investors of our expectations of the returns that they can expect from their investment in the company. Turning to the outlook for the year ahead. We continue to see considerable opportunities to accelerate growth and we have significantly increased both our in-licensing and product R&D pipeline activities. We also believe the gradual move worldwide to living with COVID and our ability to now travel across borders to meet with both existing and new customers will allow a gradual return to a more normal trading environment. There is no doubt that there will be ongoing challenges particularly around the timing of regulatory approvals and clinical trials, which Hartley will talk more about. But at this stage, we continue to expect an operating profit for the year to 31 March 2023 to range between $27 million and $32 million. On behalf of shareholders, I want to thank the AFT team for all they do and what they've delivered. Thank you to my colleagues on the Board, including Hartley, for their efforts and commitment to the company's success. On behalf of the Board and the company, I'd also like to thank you, our shareholders, for your continued support. I will now invite Hartley to address the meeting.

Thank you, David. Thanks, everyone, for coming. As certainly, pleasingly surprised to talk to a gentleman from Nelson. So it's really good that people have come from not just local as well. So look, just to kind of try and give you an overview and not just looking at repeating a prior end of financial year kind of results, I'd like to sort of just also add a few details as well. So look, this one, we have put that number for. It's looking at our growth. And what was pleasing was despite challenges, we did have growth across all of our territories being Asia, International, Australia and New Zealand. It was a challenge with COVID and the shutdowns across our local markets but also internationally as well, and things like launching products in new markets like in Europe when hospitals were all closed down, was actually very difficult looking back. But a lot of that, obviously, is clearing away now, and we're certainly noticing that, which is important. What we've seen in terms of the revenue by region at this stage is starting to slowly expand on that ex ANZ part of it, and we expect over time that will actually pick up. It's not to say that we don't see further growth opportunities in Australia and in the New Zealand market. And then in terms of profit, as David's touched on, you could see that we sort of had ongoing progress. I mean, clearly, we do have some licensing income that can be a little bit lumpy. We're getting growing gross profit from our trading operations, which are growing quite strongly over a period of time, and that's a more even income, but we do also have license income as well, which is a relatively lumpy influence. And what's been important was really having the strong diverse Australasian portfolio of products. And this particular slide, during the pandemic, we've made pretty good progress with our a lot of sale in vitamin products. There's [ Otezla ]. I was at a Chemist Warehouse promotion where people by one of our products. They can go and the draw to win themselves at [ Otezla ], which a lot of people I talked to us certainly very interested that. But I mean it really brought it home though that it's very hard to predict going into the pandemic, which products would go really well and which ones wouldn't. Some of our very stable products like Crystaderm that sell well all the time and pretty good volume. Sales actually halved because what happened is people didn't want to go to the doctor. The Crystaderm, it's not a life-saving medicine, but it treats wounds and infections and things like that. But really, a lot of people made the decision that their child had a bit of a scrap. It was too bad. They weren't going to the doctor to sit in the waiting room where they all might catch COVID. So actually, the sales halved, while other products or sales actually improved, like the Liposomal vitamins. So what I really stresses it was important to have a range of products rather than just relying on kind of one particular product. And even things, for example, our eye care products grew really strongly in Australia and also here. And probably what happened, I think, is people spend a lot of screen time sitting at home on the aged, they got dry eye, and there is more eyedrops. So it's kind of -- I mean if people have asked me and said, what exactly do you think based on your knowledge will happen, to be honest, we didn't really know. But regardless, having that broad portfolio really helped to give us protection going forward. And that's important, has been very important. So 1 of our main markets at the moment is the Australian market, and we still see a lot of potential for growth. What happened during lockdown actually, interestingly enough was we couldn't travel, as you all know. And we actually did a lot of in-licensing work. So we got on Zoom, we chased people, they chase us actually as well. We did some out-licensing agreements as well, the other way with people that we've never met in France, which I had the pleasure of meeting in the middle of February, which is really nice to meet people you've done a deal with but actually never met them. And importantly, though, we did a lot of in-licensing. We've got 78 new products and licensed the [indiscernible] over the next kind of 3 to 4 years and even this financial year, but going from July to the end of March in the Australian market, we've got 24 new products. So that's a big focus of ours because that's not just something you can kind of click your fingers and say we're going to bring 24 new products. But yes, we have done things, like we've hired an NPD, a new product development manager, and he's now mainly our launch manager. So he's working on that. We've hired another person to do deals for us. He's got a legal background. He's a lawyer. So we've made a lot of steps like that, and we see going forward, there is potential to keep on with this and licensing work on top of our own R&D. We obviously have a lot of R&D ourselves, and we are accelerating that. But basically, if you really want to go for it, you've got to in-license products then you can't develop enough products, you can really go for it within our local markets, especially Australia and New Zealand. So that's really what we've been doing. And all said, in the Australian market, we've increased our resources. We do have a lot of resources there. We have 25 pharmacy reps, those are at pharmacies. We have 6 merchandisers. We increased our number of hospital reps to 6. We originally had about 2. So we've increased in to 6. We've hired another team as well who at the moment, our contract teams so they don't appear on their books. We've got another 12 salespeople that visit doctors in the Australian market, and we see that as very important as well. And we also have 2 key account managers that deal with the big clients, so like Chemist Warehouse or Terry White, those sort of people. We're increasing that now to 3. So we have done a lot of investment within that Australian market to build up a strong team because that really will be 1 of our growth engines going forward. Then in terms not to forget New Zealand, where we all live. New Zealand, it is a smaller market. So we're never going to make or break it based on just the New Zealand market. We have done and we always do long-term plans. We started this years ago. It was summing Jon Lamb impressed upon us when he kind of started to work with us. But also I was always knew you had to do it when I was at Roche and worked there was something they always did well. So we've seen a few years ago, we actually thought New Zealand growth might have leveled out a bit actually, and we thought, well, maybe we could sell about $40 million or something like that. But actually, we've realized just recently, actually, that was wrong. There is quite a lot more growth potential. We were pleased to see New Zealand despite the lockdown, grew from $30 million to $35 million, and we still see there's a lot of growth potential we're launching 12 new products in New Zealand from July to the end of the financial year. They're not quite as many as Australia. But those products will follow, and we will get further launches in the New Zealand market. So we're really pleased with the progress that we're making here as well. And certainly, it's made a big difference now, the lockdowns have kind of come off because what happened is a lot of the pharmacies closed their doors, they only let people in one by one. They roped off all the OTC aisles, you he couldn't get near them. And then not surprisingly, OTC sales slowed down. But despite that, we were still able to grow from $30 million to $35 million, which is really got effort by our sales team and everyone that was involved in that side of the business. Asia has -- we -- this is probably the one area where we still are getting impacted with lockdowns like we have got a regional office in Hong Kong, which is one of the decisions that we made open that up. Hong Kong is still unfortunately quite restricted like if you want to go there, you have to go into quarantine. And actually, there's a proper quarantine when they close the hotel door and they don't let you out at all for a period of time. So essentially pretty tough. So we -- our person in Hong Kong really has been quite restricted, and we're doing the best we can. And we are getting growth out of Asia this year, but I think once things ease up, we will get a lot more growth out of Asia. But this is a kind of long-term plan, but we are getting growth. We've got price last year, and we are getting growth this year. But I think this one will be the lag 1 and will pick up more kind of the year after. We've made a few decisions like we're pushing the OTC side in Singapore. We've hired a very well-known and very good sales broker called McPherson's, and they're helping us really push our OTC products. And we've seen our OTC sales growth pick up quite a lot in that market. We've had good sales in Malaysia as well, just even a couple of days ago, we got a $0.25 million order for Maxigesic for our distributor there. So certainly, things are going okay, but we do see that it will pick up more. What you can see in Asia, if you're looking at the pie graphs on the right, is you see at the moment, quite a lot of the business is hospital. Generally, that's sort of what we do. The hospital business normally can make quicker money, so we start off with that. The OTC is kind of a slower burn, but very sticky business once the brand gets established, the triggers that it costs money to get there. If you do a hospital in OTC, it's kind of a really nice mix where you fund the OTC from the hospital and then the OTC grows over time. So we see in Asia, when we look at our longer-term plans, we see the OTC business growing quite a lot. But at this stage, you'll notice, obviously, on the pie graph that it's mainly the hospital. What we've also done is we've started up our Tmall site, so very few companies actually have this. We got a range of about 15 of our OTC medicines approved for official cross-border sale into China to say someone like Kim's Warehouse they might sell vitamins and skin moisturizers, but they can't actually sell the medicines. So we actually are allowed to sell the medicines into China. China is one of the world's largest OTC markets, probably the second -- well, not probably, it is the second half to the U.S.A. They buy about 28% of their medicines are bought online because, to be frank, they along COVID, they had SARS, so they've actually been more used to this sort of thing where they have to buy stuff online. So they are a more advanced online economy than we are in terms of the e-commerce part. So we do see a good potential. It's sort of a slow build as well. We've introduced 2 or 3 products about 9 months ago, and we've been selling those, measuring what sort of things work, what sort of things done. We're launching another group of products about now, and then we're launching some further products in another few months. But we do see good potential. Quite difficult to give someone an exact figure and say we're going to sell exactly this much because with China, it tends to be often you get a few hero products, and it is actually very challenging to predict exactly what those hero products will be because it could be something you're really not expecting, to be honest. So there, we build it slowly because they really like something, they clean you out of stock because obviously, it's such a big country, Australia, New Zealand collectively are actually very small in comparison with China. So that's that one. Then in terms of international, we're continuing to grow our revenue. A chunk of this was actually licensing income as well. So there is an element of lumpiness at the moment in the international until it grows bigger, which we do believe it will grow a lot bigger. But basically, it was a tough year with international because especially in things like Europe, we did a few Maxigesic IV launches, for example, into Germany and Austria. But really, most of the hospitals in Germany and Austria were pretty much closed down last year because they were busy with COVID and people being sick, obviously, and things like that. So really, it's not a good time to launch a new hospital product to doctors and territories like that. What we've seen, obviously, is that has come back this year as everything is opened up. I mean I certainly personally noticed that, I spent 5 weeks in Europe in February and March and visited a lot of our main customers and manufacturers, et cetera, and things were really moving on fast. So we are seeing a big difference now that, that is sort of passing. But I think almost sitting here wasn't as obvious that things really were kind of quite stymied in Europe last year. So you can see the number of countries where Maxigesic is sold and ordered. Last year was actually relatively flat to be frank. And this year, we're looking to accelerate and certainly we see that's what's happening. We are rolling out additional Maxigesic line extensions like the hot drink sachet. In fact, in this case, the first country was Australia, and that's gone really well, actually. We did a lot of work on forecasting and actually embarrassing enough, it sold out in about 5 seconds flat, literally despite what we believe was a pretty reasonable forecast, and we've urgently been having to get more stock in kind of airfreighted then. So something, it was really nice for us to see that, that line extension kind of worked really well. And obviously, with the moment the cold and flu season actually been pretty good, that's obviously contributed to that where during the lockdown periods, cold and flu seasons were actually pretty muted really, but in fact, they come back with a vengeance, which isn't good for any of us, but as a drug company, it's not all bad, I have to say. But -- so that's certainly what we've seen. We've had our Maxigesic IV launches. We've had some additional tablet launches, and it's really just getting those better and the new ones happening and that's what we're working on presently. But what the teams really said to me is, gosh, actually been able to get there, get out and meet people again, it makes a huge difference. It kind of sounds silly, but you kind of really notice that I think our head of R&D, she spent a couple of weeks in the U.S. and the comment Ioana made when she came back because it's just so much easier when you're meeting people face-to-face and at the factory that's making our product to discuss the details whether Ioana say, it really has sort of made a difference. Then in terms of, look, this is the map we show where -- how we're progressing. We are getting more yellow over time. We yellower Maxigesic has launched. Blue is where it's licensed. So we've got to see a few things in progress. Presently, we're clearly, you will look at the map and sort of say, oh, there's still a couple of white that's what are you doing? So we are working on Brazil. We recently had a big American licensing meeting in San Diego called BIO, and we met with a number of parties from the sales. So we're working on that at the moment. In China, we also are working on that, and we've got various term sheet agreements, and we're meeting with the regulators over there as kind of the first step and a similar sort of process in Japan as well. So those are really the main sort of areas we're looking to pick up where we're not presently then obviously, it's rolling out across the other areas. I mean, I guess the obvious area of that at the moment is a little bit parked is Russia. Probably stay that way for a wee while. And then look, just in terms of the new dose forms. We've got a number of them. They also, we've got some new patent positions as well for the line extensions, which is useful. So the Maxigesic tablets, the IV, oral liquid, so we had our first European approvals, and we're getting a whole lot more European approvals at the moment and also finishing up locally in Australia and so the NZ where the oral liquid is a product, a lot of customers ask us about and sitting out, I think I mentioned to our staff have a day, I know what strike me as one of our children had their tonsils out, and man, they were in pain and actually cried for 3 days. So this is a sort of product that could really help young patients with a better form of pain relief. So we still see it as something really, really useful. Medicines are had a very challenging from a regulatory perspective. So often the regulators complain that drug companies don't provide enough products for children, but they actually also make it very challenging regulatory development point of view and pathway to get the products approved. So it isn't a simple walk in the park kind of exercise. So we are making good progress, and we have at least achieved our first European registrations, and we will get more. As I mentioned, the hot drink Sachet, we've got a rapid formulation, which is a nanotechnology formulation we licensed for a company in the United States as fast as dissolving as how it works. Generally, paracetamol actually dissolves pretty quickly. Ibuprofen does dissolve slower, and one way to get around that is to have a ground down into nanoparticles formulation, and that's why Maxigesic rapid dose when we've got cold and flu. [indiscernible] which we recently got approved in Australia, and we're just preparing around that and had additional patent granted out till 2042, which was nice. And we're also completing a dry stick sachet as well, which is quite popular in parts of Europe like France, North Africa, places like that. They're very keen on these dry spec kind of formulations. That one did definitely get slowed down, unfortunately, by COVID, slowed a few things down, but we're still on track to file that next year. So that's kind of the last one. Just in terms then to talk a little bit about kind of new product development, international markets, sort of what's happening to drive growth. As I mentioned before, this NPD, new product development, side has been pretty significant. And when we do sort of look at our plans, we do see -- we do get existing product growth, obviously, where products are growing and will carry on growing. But then we do see quite a lot of growth being driven by new launches as well. And when we do work it out potentially at least 50% or more is driven by NPD. So that that's been pretty significant. And as I mentioned before, we literally have 78 new products coming over the next 3 to 4 years into our Australasian market. Some of those products will then go into Asia as well. And with our own R&D, we then use that for the global market as well outside Australia, New Zealand and Asia. So that's really what we see is growing there. You can see we just provide you with a bit of a graph. The pie on the left, we do -- we're not random the way we do things like we are working on certain targeted therapeutic categories. We have about different areas that we're plugging products into Australia and New Zealand, sort of big chunk like eye care, pain, cold and flu. And then also dermatology is pretty big. And the rest of it, we do have other things like gastrointestinal medicated vitamins and allergy. So like certainly, in different markets like New Zealand, we're really strong in the allergy category. Australia, we're really strong in the eye care category, where we have the largest selling eye drop, lubricating eye drop in the whole of the Australian market, and we're #2 eye care company. Even though we're not really a specialist eye care company. We still actually beat in Allergan, which is a very well-known and established eye care company and we're busy trying to catch up Alcon, which is kind of the global giant. We've certainly done very well in that area. And that's one of the things that's important that we're focusing on the drug development side and in licensing, but we also have to focus and be good at sales and marketing. So we're not just sort of looking at 1 bit or the other, we have to focus on trying to be as good as we can across the whole range. You can see on the geography side, we are predominantly at this point in time on that top line, you can see 62% an Australian business. And I mean in many ways, I do say to people, and it's not really tongue-in-cheek, I mean we are really an Australian company that happens to sit here and take a phone in the North Shore because we like living here, but we are predominantly and think very much as an Australian company. When we license products in, this thing we look at as, could they sell in Australia? We don't, and if it sells in New Zealand as well, that's nice to have, but #1 is can it sell in Australia. So we do totally look at things where the Australian blinkers on, and that's pretty important, actually. Over time, though, we see Australia shrinking a bit. That's not because the sales go down in our opinion. And we see that we have got relatively greater growth potential in international and Asia, which split out to be bigger parts of the pie. So look, hopefully, that's just giving you some idea I appreciate that some people may get their calculators out and try and work out with the exact numbers, et cetera. So we're trying to -- I guess, I would like to give you our exact forecast. We do work on these longer-term plans. But look, I think I'm just trying to give you bit of an idea without necessarily voting the exact number around because these things are never cast in stone, but we definitely do work to these long-term plans their literal product by product, market by market, and we build them up and we keep coming back to them saying, how are we going? What are we doing? If something's not working as well, we are trying to address it then. So we do have quite a rigorous kind of process that we do where we do follow. Then in terms of investing in R&D, this is pretty important. What we've seen is we were able to finish quite a lot of our Maxigesic R&D, but we don't want to stop there. So we have actually been adding out our R&D portfolio with new projects. We have got actually quite a list of quite low-risk projects, which are the ones we put down here. And we are now in licensing maybe some slightly more early phase projects that arguably some might say because the early phase could be a bit risky, but we're trying to balance things out where we have some big shots, which may be a bit riskier. Also, we got some things that are relatively low risk and relatively simple. There are some quite good things at the moment with the way the climate is that, for example, when we went to the U.S., we met with quite a few people there and people like the venture capital people and the licensing people said, "Look, there's loads of companies in the United States that normally just keep raising money because they're loss-making." The problem is now they can't raise any money. The market is really tight. So for us, that's actually a positive thing because we can get much better deals than we ever used to be able to do this, and now is the time to get out to shopping bag and go shopping, and we are shopping. So just to give you one example, I think we've got a project down there. Look, we have kind of coded them because there are some commercial sensitivities. But there's one, say, if you look at that one in the middle on the bottom called BT, that was a nice example. I mean that was a product that we acquired the rights for globally. It's about a $200 million market. There are very few competitors to it, very few. So really, we're not competing against halls of other products. But literally, we picked up those rights, including all the development work for about $75 million, it's very cheap. That was one of the advantages at the moment where the guys we talk to needed the money for various reasons, and we were able to come along and do a deal on very favorable terms. So that's really sort of approach where it's nice being profitable, it's nice being cash flow positive. All those sort of things actually give you a lot more opportunities, and we're really trying hard to take advantage of that. And going forward, we typically said -- we say we'll probably spend about $12 million on R&D. We're not really saying -- some of the big pharma someone take a percentage and say we're going to send 15% of our turnover on R&D every year, whether we sell $10 billion or $50 billion, we'll spend that much. We're not really doing that. We're just sort of doing a bottom-up approach, so we see about 12% at the moment. But in the future, we do have to increase that to 15% or something like that. I think we certainly were as long as that turnover has gone up and profitability is looking all right. That's the R&D side. Yes. Look, just recently to talk a little bit about this, too. I don't know if you saw it or not, but Pascomer is an orphan drug for treatment of facial angiofibromas. We did finish at this clinical study. There was a few things in it that there was actually a very tough FDA mandated endpoint that we basically didn't statistically meet, but all the other data was actually very, very strong. What we are pleased to see was on all the other the ones are about one, which was related to the primary end point basically, we were highly statistically significant improvements. And just look, to give you a feel about what does that really mean. If they have sort of rating scale. So in this disease, you can see in this lady they get like gross on their face. It kind of looks like really bad acne and actually it's a lot worse than that and can block up in nostrils, and all sorts of things. You can see this is what was a 1-point improvement on most of the rating scales. There's a couple of rating scales, one is called IGA, which is an FDA one; another is called FASI, which is one they use in Europe, was invented in Europe, and they like to use that one. But this was using the IGA scale. This lady was a pretty typical example. She had 26 weeks of treatment with Pascomer cream, and she literally went from the one on the left to the one on the right, that is a 1 point improvement. And typically what that means, and I mean, personally, I don't know what you think, but from my point of view and from physicians we've talked to, people say that was your daughter or that was you, you would think that, that's kind of a clinically useful difference after 26 weeks. So we're actually pleased with that, even though we didn't meet the FDA endpoint. We're discussing filing it in Europe with the European regulator, and we can -- we believe we can use the data and other regulatory jurisdictions. With orphan drugs, they do have a rule that if you are the first one approved, you do get exclusivity for 7 years, and that applies in Europe and it applies in the U.S. We have not got exclusivity in the U.S. So we always had have a problem in the U.S., but that doesn't stop us filing another jurisdiction. So really, that's really what we're carrying on. As a result of the U.S. situation, with [ Timber ] who is our licensee that North America did actually terminate their development and licensing agreement. That might on one hand, sound bad. The positives is they actually paid for most -- for all of the study, which is about USD 4 million. So we got a free ride, and that's now our data. And we did have an agreement with [ Timber ] that outside the rest of the world, they did have a share of some of the sales and some of the royalties, but now because they've terminated, it becomes 100% AFT. Does not, in our opinion, it's not really a bad thing. Actually, the Timber has decided they don't want to carry on because they were very 100% focused on the U.S. and kind of nowhere else. So for us, we're obviously still looking at Europe, Australia and New Zealand. Now look, just quickly in terms of some numbers. Normally, my CFO does this, so I don't really gave in great detail. But obviously, it's something that we pay a lot of attention to. The positive thing was the profit after tax, it certainly went up 2.5x, which was nice on the back of 15% revenue growth. We did have some improvement in margin. Look, that's not from hiking prices and ripping people off or anything like that. There's very much a product mix thing. As we're selling more OTC products, generally, they do have superior margins. So we did improve a little bit at the margin side due to product mix. We have had a few price rises, nothing too major. But I mean, we -- one of the advantages of the OTC market is you can put your price up where government contracts, obviously, and things like that, you are more constrained. So that's one of the reasons we do like to have a proportion of our business in OTC because it tends to be very sticky business, and you do have some flexibility as well. So that was useful. We were, we did have to use up the last apply some of our tax losses as well which is kind of interesting because in the past, a few years ago when we were making losses, we could never do anything like that because there was always questions about going concern. And now they kind of turn around the other way to us and say, "Well, things are going okay, you actually got to use them." So anyway, it's sort of a nice thing. Cash is obviously really important. Like everything runs on cash. We're very used to that. We spent quite a lot of money last year like we spent $2.9 million U.S. filing Maxigesic IV in the United States. So despite some quite big spends, we were really pleased the cash balances actually grew. So basically, as you can see, they grew from about $3.2 million to sort of $7.9 million. So that was positive. So we are in a positive cash environment where cash is building. And obviously, the old saying cash is Ken certainly true. I mean the one thing I do want to say is that at the moment, you've obviously seen internationally, the government in the United States is having a debate about whether it's a recession or not because they're trying to redefine the fact that 2 negative quarters despite the last 10 recessions over the last so many years were defined as a recession. They're trying to say, no, that's not. And yes, we see lots of negative news. The thing that we've always found that's really important as pharmaceutical still sell. It's like food, and like boots really that people still have to have their health care even if times are good or bad. Obviously, if you're selling Ferraris, it's a bit of a different scenario. But health care is a really good area to be in if the economy tightens up, which I think most people would kind of see there is a bit of tightening. We've seen it in the U.S., and I guess it's arguably probably happening here a little bit as well. So for us, though, we're kind of quite relaxed about that. And in fact, when we go to the U.S., we see that as a positive. It presents more opportunities to do R&D partnerships than there would have been -- everything has been booming. Then in terms of balance sheet, the equity has grown, the net debt came back, which was good, especially in setting we were spending core a lot of money on things like the U.S. filing. And also, we were and still are holding about 6 months buffer on our stock. The reason why, I think, as David alluded to and probably most of you read about, there still are challenges with logistics in the past, it was very simple sometimes to get a container or whatever. It is more challenging now. But our team has done a really good job with that. And there are some quite crazy things, actually, as I was missing to 1 of the people before the other day, we actually ship something from New Zealand to Australia, it was cheaper, came by air freight than what it was to send them on a boat. I mean, absolutely ridiculous, but it is what it is, and we do the research and we do things in the most cost-effective manner. So that was just an example. But I mean, overall, we believe the balance sheet is looking in good condition. The operating -- that net debt rather has come down. And despite additional stock holdings and background of that, we still had an improvement. Last slide, really, just the outlook and talk about pipeline and kind of opportunities and the like. As I mentioned, what's been important for us is having this broad portfolio because it's tricky things happen like a pandemic that gives you more buffer and make things safer because some things maybe that don't sell that well, other things sell better, et cetera. So it is good to have a broad portfolio, and that's something we've always tried to do. And we're trying to do that going forward and checking that we still have a good balance of OTC, et cetera. We look at that to make sure nothing's happened to the business and our projections that aren't within what we think is a good idea. The Maxigesic line extensions, it's really getting those out and registered in additional markets, both locally and internationally is really important and also expanded R&D pipeline and getting that into the market. We have also learned a lot. We've got a good now international network of good companies that we work with. And in fact, we -- I noticed that when we went to visit them, one of the things they say is a kind of eyeball you and say, "Okay, we're happy with Maxigesic, but what else have you got?" So do not have something else, I think we'll be missing a big opportunity. There's no way we're putting our feet up and saying, oh, we've done a Maxigesic studies, this game has done, et cetera, et cetera. I think really, we're just at the start of really being able to roll things out and make some big kind of opportunities. So we do see that opportunity to grow things, and we are aggressively pursuing that. That's why we've increased our e-commerce platforms. I've talked a little bit about the Tmall side. It's not just that though. We've got other things that we want to talk to you about during the year. So just keep an eye on the news flow. We've got other things that we're working on in that area. And it's really important thing too, with our R&D, like I said time and time again, we want to leverage the fact that we're not a loss-making R&D company with profitable cash flow positive. So we can pick up other opportunities and take advantage of them because we are very efficient in doing R&D. A lot of companies go straight to a CRO, and they pay them a whole lot of money and don't have a lot to do with it. We have our own R&D department and we effectively run all the studies ourselves. Our Pascomer study was a 16-site global study run during COVID, and we managed to complete it, took a little bit longer because of COVID. But a good example how a little company like ours can actually do a big study, multiple jurisdictions from Europe to the U.S. to Taiwan Australia, New Zealand, and that's one of our strengths. So we do have this background and this capability, and it's something that we don't want to leave. We want to really leverage it because this is our opportunity. So look, I've probably talked enough, and I will hand back to David. So thank you very much for your attention.

Thanks, Hartley. Okay. Before I open up the floor for questions, I just want to introduce to you again to Ted Witek, who has traveled here from Canada. And he just wanted to say it was the first trip here for AFT that he just wanted to talk a few words. So over to you, Ted. Do you want to...

I'm happy to [indiscernible].

Are you wider?

No, no, it should be 2 minutes. I think I'll project it well. And over the last year, [indiscernible] and I were the board members and you have to see a video about us and that's [indiscernible]. I just wanted to make a few comments about the retirement of Doug Wilson. David mentioned, I did down here a few times. And although I didn't know AFT during my first year or minutes, there was a very interesting connection, and it was Doug Wilson. Doug invited me down here to meet our prominence as an allergy doctor several times into lecture in the country and also to help with some of the barrier issues that we have here. And one very interesting visit is that Doug invited my entire family to spend the weekends between business New Year's here back in 2003 and despite having both [ canals ] and beaches and beautiful servers on the beaches, my 3 daughters only talk about their evening discussions with Doug till today. [indiscernible] a special person. He then -- is it a gem of your country, but he is also a gem of the global pharmaceutical industry. Standing here, there was no other person in my professional life that was more important to me the Doug, I mean took me to be gone scientist, he challenged me with amazing projects. Gave me guardrails in about a little bit over time, I remember, he called me into his office to squeeze me back in. Because I spoke to Doug yesterday, we had some great discussions about those times. And I know Doug well enough to say I'd be foolish to say I can fill your shoes on this Board because I don't think anyone can. But I am very pleased and I am very proud to take the baton from him and to let you know that it does have such influence in the way, I think, scientifically, and behave in this industry that I couldn't be more pleased to be sitting in his chair on the Board of AFT. So thank you for allowing me to share those personal discussions about that being one of the most important individuals in my life. Thank you.

Thank you, Ted. Okay. So at this point, we are going to open up the floor for questions. So on the financial results and the business update and the other things that Hartley was talking about. And directors and senior management team will also be happy to answer questions while refreshments are being served. Could I ask any person wanted to speak if they could raise their hand and if you could wait for the microphone, please, because otherwise, those on attending by audio won't be able to hear the question. And if you could also state your name before asking your question, that would be great. Okay. Thank you very much.

Yes. David. My name is [indiscernible] Chen, and I've been AFT shareholder for several years. I could see that the revenue rise and rise every year. And I'm thinking of you can rise further, such as the vitamin C Lipo-Sachets, and now Ukraine war is there. I wish the children suffering so much, they have something sweet to drink or vitamin C. Because I came from pharmaceutical company, my parents were, what shall I say, pharmaceutical company when they were in their 20s, but that were destroyed by the companies that I don't want to spend time here that makes me sad. And I guess with the children can have those trains to lighten that up and I wish that [ Jacinda ] government can give the money to AFT. Yes, because she is a children commission that, and she always said, look after the children, yes. So I wish that it can be another way to raise revenue, and then another point is because I'm a vivid traveler. I have been to more than 50 countries, but as COVID lockdown, I haven't traveled for several years. And I notice like Sao Paulo, we have 12 million people in the city and 30% of them are Japanese and adding to the pharmacy there. I always like to visit things that I'm familiar with for my parents, yes. And then I think at that time, that is the year of 2008, at that time, the Brazilian money, I think, is higher than now, and there are similar products Western more there selling day and very busy. Yes. And that is a good point to expand in that market. Oh by the way, for the Ukrainian vitamin C, because Ukrainian they are not good at English, then how are they going to, what shall I say, have that progressed properly? Is there any English -- is there any Ukrainian version when -- if you can send them with the government grant, is there any?

Yes. Well, look, thank you. Look, thank you very much for your questions and comments. I'll take a couple. So firstly, with Brazil, we're not selling product into Brazil at the moment. But as I think Hartley mentioned, we are looking to try and develop a relationship with a Brazilian company who would be able to distribute our products. The Ukraine is a difficult 1 because, again, it's not easy right now to get product into the Ukraine. On the children side, again, as Hartley said, it is difficult to -- sometimes to develop children's products through the regulator.

[indiscernible] Vitamin C Lipo-Sachets.

Yes. Well -- again, that is available. I'm not sure whether we can get it into the Ukraine at the moment. Maybe, Hartley, you can comment on a couple of those.

I mean just to touch on a couple of things. I mean, certainly, in terms of Ukraine, we actually are obviously supportive, and we are working actually with a couple of companies in Ukraine because we see one of the best ways is to at least support and work with some training companies. We actually have got a product from the Ukraine approved. So we think as well once things settle down, obviously, the best way in many ways to help us to work with them as well. We do certainly offer support, and we are working with our partners in Europe, where they are shipping some stuff into the Ukraine, so that's one of the other things. And I think you touched on children. I mean, look, clearly, as well in terms of children's health. I mean, clearly, that is an area that we feel quite strongly about. So we are going the extra 9 yards with the Maxigesic. But actually, I mean, we are working, say, and we are looking in the future, we're having to make an announcement around an actual children's medicine because we do see -- and all our products, we actually look at them and say, are they things that are worthwhile and will they help people? Things we don't believe, we won't sell, like we don't opioids, we don't sell codeine, we don't sell pseudoephedrine because it can be tend to methamphetamine and those sort of things. And we do have a specific big R&D thing we're working on at the moment that we would hope we can actually -- there's a major children's problem, we would like to work on that. So you know that kids health is incredibly important, and we totally agree with that. Thank you.

So can I continue because I have many other suggestions...

Well, there may be other shareholders who would like to ask questions. So let's see how we go and then -- thank you.

Lindley [indiscernible]. Just wanted a comment or wondered if Hartley or David might like to comment on what they might see could be possible opportunities or road blocks coming from our own government over the next year or so.

Okay. Well, Hartley, over to you.

Yes. That's a bit of a hospital past question. Now look, I think one of the important things is the thing we always work in our business really is to put our own pathway out that we can follow, where we're not really reliant on the government or something like that. So really, the pathway we've got, we are trying to be very much an outward-looking company where the vast majority of our business comes actually from outside New Zealand. I mean don't get me wrong. We love living here, et cetera. But on a business point of view, we see the world is a big place and really is a population of 5 million was going to be limited. So I guess, government decisions can always have an impact, especially very much locally focused company, maybe that makes [indiscernible] or something like that or a supermarket. But I mean that's why we've really focused outside to lessen that sort of risk. We spread our products because as we've seen in Ukraine, for example, we actually were supposed to be registered there and we're supposed to be selling product there, however we are not for obvious reasons, but -- and obviously, there's much more serious and things like that. But I mean that's just our approach really is actually to minimize government risk, I suppose, by spreading our portfolio, our geographies, and that's our approach really. Yes. Thank you.

[indiscernible] Association. I was pleased, David, that you raised the matter of Board succession and Board planning. And also, first of all, like to say that it will be a great loss, of course, to lose out from the Board. He's done sterling work, and we know that. I'm sure that you'll be thinking about where you go to from here and hiring or looking to avoid a new director. But can I just also say that maybe you give some thought to the future and think about the IoD's future director program, which the shareholders association were involved in putting together 10 years ago or even taking on the merging director. I mean our thoughts are that certainly, we put pressure on the top 50 NZX companies as part of their corporate social responsibility because unfortunately, NZX directors are not getting any younger. The average age is 58, and the IoD details is it's increasing. Now maybe as a thought you could think as well as an appointment of a director, looking at somebody like a young scientist who was looking to further their career and going into the area of governance. We've found talking to the companies who have taken on young directors, and we're talking here by young, we're not talking that young, we're talking people in there 30, mid-30s to mid-40s, but they've actually gained a lot from having the perspective of a younger person who is looking to further their career, as I say, particularly in the governance area. So if I can just make that point to you that you do think about the [indiscernible].

Thank you, Grant. And look, thank you. We have talked about the IoD young direct program or emerging direct program from time to time. It's never quite failed to be the right time to do that, but we will -- we continually look at director succession. We do talk about this, and we will definitely take that on Board. So thank you for raising that.

Just a quick thought about the -- just one to other pharmaceutical companies listed in New Zealand, which are fairly specific in what they do. I just wondered if you ever think about the possibility of making a bigger New Zealand Australasian hub by acquisition.

Thank you. I'll pass that on to Hartley, but I will just say, look, we do obviously keep an eye on what other companies are doing. I mean we are that everyone is a little bit different, and we've got our own focus, which is slightly different from some of the focus from some of the other companies, but we always do keep an eye on things.

Yes. No, look, thank you, David. I mean, we do and have discussed the kind of lens possibilities around acquisitions and things like that. Certainly, we do get quite a few things presented to us. I mean our general view, though, as we think we can gain more by acquiring specifically R&D, those the sort of projects really that we're looking at is doing a partnership agreement with the company. I mean, we would hope sometime this year, we have been talking to local universities, and we certainly found 1 university that seems to have some very good IP and we would like to work with them. So that's kind of probably more that type of approach looking to local universities because I've always noticed in the United States, universities are a lot more engaged with industry than they are in New Zealand. It's really noticeable. And I mean, places like some of these universities like Stanford and stuff, I mean, they might license out of patent, and they get 2.5% or something might not sound a lot out of sales royalties that time a pharmaceutical company sells a few billion. It's amazing the royalty stream that accrues the university. And so our side are probably more looking at university kind of institutions for R&D because we personally believe there's more value. I mean we personally believe that we'd rather have something that strings out the cash flow. I mean -- Yes, because if we did buy something to, we'd have to raise capital. I mean, we personally don't feel our share price is overvalued at all. So we really don't see the point in going to the market and raising capital at effectively a low price and we see we gain more by hooking into some good R&D and really leveraging that. So that's sort of been our strategy rightly or wrongly. Thank you.

Yes, have a go. Oh, this gentleman over here. Oh, a couple of other gentlemen. Yes. There's a microphone over there.

Hello. Can you hear me?

Yes.

I'm Tim Familton, a shareholder. Just a quick question about research and development. Where about is your laboratory? Is it somewhere in the North Shore? And how many people...

Takapuna.

What?

Takapuna.

All right. How many people have you got working there? And are you getting good people? You've got a good number of scientists and good people who want to come and work your company.

Yes, good questions. We -- a lot of our work is still not necessarily a scientific laboratory around peers and microscope. So we have a few things. We have a device division, and they're probably the most scientific looking and offered like, they have a big special fume cover, and we're an owner of a particle size measurement device where apparently there's only 2 of them in the Southern Hemisphere. So we did a little bit of laboratory work. And in fact, Blade's wife is an engineer, and she works in the device division as well. So we do at that site. And then on more of the drug development side, most of that is conducted in clinics really literally around the world, and that's actually quite important. So if people come, I suppose, and they expect to see lots of people in white coats spending over microscopes, I hate to say it's going to be a bit disappointing because you won't see that. But really, as people who run clinical studies work closely with doctors. And as I was saying in that orphan drug study, we had 5 or 6 sites in the United States. We had another about 5 sites in Europe. And there's people we work very closely in Europe. There's a great lady dermatologist who work with in Barcelona, Marta, and she is like really up in her area and have amazing hospitals there actually -- they really are incredible. So we do mainly work actually offsite is how our R&D works really. And in terms of getting people, we find that we are able to find quite a lot of people say with pharmacy backgrounds and stuff that are maybe not that keen on working in the traditional pharmacy area and they want to come and work and the pharmaceutical industry. So it does require quite a lot of work and training, and Ioana sitting here is a very patient lady who trains up a lot of young staff, and we have got and are really proud of the fact we're able to take these young people. We just recently employed a PhD pharmacy lady, and we're -- [indiscernible] we're training here. So it is good to be able to take these people kind of build them up. So we are able to find them, but it takes a lot of leg work, a lot of companies complain that you can't get staff we need to do this and we need to do that. I suppose we do a lot of work. And it is a lot of work training up new people. So really, that's the approach that we've taken, yes.

[indiscernible]

Touch word, no. But there's obviously a challenge and it always continues to be. Yes. But no, we are able to get people were generally a pretty low staff turnover. But obviously, we have some a lot of stuff being with us for good chunky periods. You had 10 years sort of plus thing and stuff. So yes.

[indiscernible]

On-site, really. So we do a lot of kind of hands-on training, don't we. And really, the thing I think we will say to people in guarantee staff at AFT is you won't get forward. lots of start happening. So we really prefer all that kind of hands-on training. We're doing this project, okay, you don't know about it, but this is what you need to know, and we kind of train them up on it is Ioana. And then they'll come like Lilly is one of our young ones, too, and she sort of traveled around America with you and you talked all about inspecting factories, so and how to work out of its rubbish or not rubbish sort of things, doesn't it. Yes.

[indiscernible] younger generation. I could say [indiscernible] but we also [indiscernible] have that we have worked in a different program from the existing program like we have a very good relationship with different clinicians. But then also, we encourage their students or PhD students to work on certain programs and then some of them might end up being recruited by us. And I think gorgeous because in a way, it keeps us all very young and enthusiastic as such. So -- yes.

Well, [indiscernible] it was sort of kind of in the day, where our kids primary school reunion. I was talking to all the young guys there. And 1 of them was an engineer, and I said, what's the age range like in your company, [indiscernible] would have been 23 or something, 24 probably. He said the next youngest person was 40. You see, we don't have that. We have a really good range of kind of young people right the way through to experienced people than I, older, but it is actually good, and we do gain a lot out of are in these young people, isn't it? And it's fun, yes, we like it.

[indiscernible]

Yes. Yes. Very good.

[indiscernible] of the company's products are produced in New Zealand? And what percentage is produced overseas and what countries overseas, are they produced in?

Good question. We do make some products here, like our [ Crystamed 16 ] and [ Hem ] products manufactured in New Zealand. The vast majority, though, actually not made in New Zealand. I mean, also 2 of our markets generally being further away, it does unfortunately make logistical sense until we made elsewhere. So we have a range of countries. So we get quite a lot of product made in Europe actually, like Italy, Germany, Spain, Ireland, [indiscernible] products made there. We get some products made in Malaysia, and we do get some made and there in China as well, where we work with very carefully better and actually very good manufacturing plants or the high standard. They work to U.S. FDA standards, et cetera. So it is actually quite a broad geographical spread. And generally as well, though it was something to say like Maxigesic, for example, we are trying to spread to get a number of factories. So we're not just working in 1 region because we did find this problem in the pandemic, where 1 country made a particular crazy role and that did restrict manufacture. So we actually were fortunate that we also manufacture in another couple of countries. And some people don't like -- there are some elements to where some jurisdictions prefer European-made product, actually, including European over New Zealand made product. They prefer it. But generally, New Zealand, made, though is pretty positive. So we do try and make as much here. But it is difficult. There's limited laboratory testing and things. So there isn't a lot of infrastructure that will probably slowly change over time. But if you wanted to do a huge chunk of it here, yes, you wouldn't be able to.

Adam, would you. Yes, go ahead.

I'm [ Juddy Henner ]. I must say that I was a pharmacist once. My question is you're talking about, you had a policy about modern slavery. Do you have a policy on pay equity?

Look, we don't have a policy as such on pay equity, but what we do have is a very broad range of employees, men and women across ethnicities, and we make sure that each employee is paid according to how good they are. And frankly, whether they're male, female or wherever they come from, is completely irrelevant. So where a majority of women within our workforce. We also have, as you can see, women in our senior executive roles as well. And we ensure that they're paid for the work that they do rather than from who they are.

[indiscernible] we would spend across similar roles, so we look at everybody's pay scales and ensure that the same people at the same skill level are earning the same money. And it's quite a process, but we undertake that every year.

[indiscernible] rightfully strongly about it and you monitor it on a close...

It does fall under our ASX policy in a way and we balance by the Board to check on equity every year.

[indiscernible] had pay equality [indiscernible] the fact that people are still struggling with the after all these, Gosh, it's 60 years and more since I started.

Yes. Well, we agree with that.

Yes.

Now would you like to ask one more question?

It's not asking question. It's just now Dr. Atkinson mentioned about affiliation with Aukland University, above reset, et cetera. And because I'm a shareholder of Aroa Biosurgery Limited, which is in Aukland University academic company. And -- but it was focused in Australia, but have not focused here. And then Australia, there are 1,300 companies there. And this company actually did those, what shall I say, [indiscernible] and then make it into a stapling and then for a surgery purpose and then match into the scheme much quicker, and they are doing very well in America. And the revenue is now starting picking up double digits, and they are building another factory in [indiscernible] Airport. And next week, Wednesday, 1 o'clock, there will be an annual shareholder meeting there. But because I live in Takapuna, won't be able to go travel so far. I don't drive at all. And I don't know whether your company business development officer will be interested to go there, so they have a chance of getting more business across the hospitals in various countries. Yes. And then finally, I'm mentioning about the Asian countries, and I have been to Malaysia only to Penang, not yet to Kuala Lumpur. Penang is similar population as Auckland. And then because Malaysia is a Muslim country, when then they have several hours that don't do business because they have to -- the Muslim have to go to pray. So nothing to do during those pray hours. And then I went into the pharmacy, I don't like because my parents and 3 generation are doctors, surgeons, I'm really interested in this sort of thing. And then there is a company called Mannings. It also very famous in Hong Kong where I came from. And even though it's just 1.2 million people, business is very good, and I got things there as well. And they are comparable price to Hong Kong. But sometimes when you have nothing to do the [indiscernible], yes. So I think Malaysia can be another market to explore, to earn more revenue and do good for the society as well. And maybe Singapore as we report, they are open now.

We are, we are. Yes. Thank you very much. Hartley did say; of course, we have a strong Asian presence, and we certainly are looking towards...

No, we are selling in Malaysia, actually. So thank you for that. But no, we are. And actually, Marree and myself did a launch to Maxigesic in Malaysia where we spoke and help them in literally Penang, Ipoh and Kuala Lumpur. Nice thing actually about New Zealand is that we were able to conduct our launch at the ambassadors house. I think if you, in the United States, you probably have to be Microsoft to do it. But in New Zealand, that's actually really great with NZT. They're very supportive and we're able to hold our launch meeting at the ambassadors' house, which a lot of the doctors thought was pretty good because they might have been to the lesser tails and town, but no one had been to the ambassadors' house. So Yes, there's things like that were really nice. But anyway, thank you. I'm certainly -- and in terms of a roaster, I actually had done it with Brian Wood, the other day. So yes, yes, we are well aware of them. Thank you.

Any other questions or comments on the presentation. Okay. Well, thank you.

As there are no further questions, I'm now going to come to the formal matters requiring resolution, which are outlined in the notice of meeting. And there'll be an opportunity to ask questions on each of those resolutions that are being put to shareholders. So as is now required by the end of the existing rules, a poll will be conducted for each of these resolutions, and they'll be conducted altogether at the end of the formal business. So your Board supports each of the resolutions being put to the meeting. And as stated in the Notice of Meeting, each director intends to vote all their shares and their undirected proxies in favor of the resolutions. Proxies have been appointed for the purposes of this meeting in respect of approximately 84 million shares, representing about 80% of the total number of shares on issue. We'll share the proxies cast for each resolution before we vote. So Resolution 1 relates to the remuneration of AFT's auditors. The proposed resolution is to authorize the directors to fix the auditor's remuneration for the current year. And in accordance with the Companies Act, Deloitte has been automatically reappointed as the company's auditor. Details of the statutory audit fees paid to Deloitte for the financial year ended 31 March 2022 are set out in the annual report. 2022 audit fees are expected to be comparable with last year's with provision for an increase as the audit scope broadens with the company's expansion. I now propose as an ordinary resolution the directors are authorized to fix the fees and expenses of Deloitte as auditor for the 2023 financial year. Are there any questions concerning the motion? Thank you. The poll on this resolution will be conducted at the end of the formal business. We'll now move to the next resolution, which is that Dr. Hartley Atkinson be reelected as a Director of AFT Pharmaceuticals. Hartley is retiring by rotation in accordance with the listing rules and offers himself for reelection. I'm pleased about that. The Board recommends Hartley as a director and unanimously supports his reelection. His bio is set out in the Notice of Meeting. I will now invite Hartley to briefly address the meeting on his proposed reelection.

I've probably spill as I've said much too much today. But no, look, it's very much deftly very keen to stay on because I still feel very much it's a job. I don't even want to say half done. I recon there's a heck of a lot of opportunity, things to do. We don't want to sit around and be passive and sort of be content with what we've got in terms of business. I think there's very much potential and read, I think it's really important that I can sit on the Board and just make sure that we keep pushing that sort of whole vision of where we can really end up, and that's what I really want to do. Thank you.

Thanks, Hartley. So I now propose that Hartley Atkinson be reelected as a director of AFT. Are there any matters for discussion or questions concerning the motion? The poll on the reelection of Hartley will be conducted at the end of the formal business. We will now move to the next resolution. That Jon Lamb be reelected as a director. Jon is retiring by rotation in accordance with the listing rules and offers himself for reelection. As I mentioned at the beginning of the meeting, Jon has been unwell and -- but he is making good progress, and both he and the Board are confident that Jon will continue to be a strong contributor to AFT. Now Jon has prepared a statement, which I will read out for him, and his bio as set out in the notice of meeting. The Board recommends John as a director and unanimously supports his reelection. This is Jon's statement. "I apologize for not being able to join you at today's annual meeting, but look forward to seeing you all again soon. Although I've been unwell, I'm pleased to report that I'm making good progress, and I look forward to continuing to work with you and add value to Hartley, the Board and the AFT team. My background is in multinational pharmaceutical and FMCG businesses developing and marketing products. I've worked in several countries around the world. In 2004, I was asked to review AFT by a government agency because AFT had applied for a grant to help clinical trials on the product that was to become Maxigesic. Having done an assessment of the company, I recommended that the grant be awarded. AFT is 1 of the few New Zealand companies that has achieved double-digit growth year-on-year across the past decade. It now has a robust business in Australasia and is building in Asia and the rest of the world. There's considerable growth so in Australia. My aspirations for AFT going forward is to take its patented products to global markets. and build the first New Zealand-based homegrown multinational pharmaceutical company. This journey has commenced. Maxigesic is now licensed in more than 100 countries. The Maxigesic range extensions are underway. The Crystaderm range is underway. We've launched the NasoSURF product. This is considered by many analysts as a substantial business, and we are building on the company's allergy and eye care business. I'm a member of the Institute of Directors of New Zealand and have undertaken various courses, including governance and financial essentials, leading in the digital area, audit and risk and the 5-day Company Director's course. I'm also a member of the Australian Institute of Company Directors and have completed its 5-day course to upskill on the governments and regulatory issues in Australia. I look forward to continuing to represent you, the shareholders on the Board of AFT and request your vote on my reelection. Thank you." So I now propose that Jon Lamb be reelected as a director of AFT. Are there any matters for discussion or questions concerning the motion relating to Jon? Thank you. So you will now see on the screen the proxies that have been cast for each resolution. And now ladies and gentlemen, we'll conduct the polls on the matters described in the notice of meeting. Please use the voting card that you received when you registered on arrival. Please complete your voting paper by ticking for or against or abstain in the appropriate place on the form for each resolution. If you have any difficulty, please raise your hand and someone will assist you. Please remain seated until your voting card has been collected. As you can see, our share registrar Computershare will come around with ballot boxes and collect the voting cards. [Voting]

Are there any items of general business to be discussed? On behalf of the Board, I thank you all for your attendance at AFT's 2022 Annual Meeting. We will be announcing the results of the polls to the stock exchanges this afternoon. I now invite you to meet directors and senior management and the auditors and have some refreshments. So if you could stay seated until your voting papers have been collected, that would be great. And I now declare the meeting closed. Thank you very much, everyone.