Rakon 2024 Annual Report

Rakon Limited
T +64 9 573 5554
8 Sylvia Park Road, Mt Wellington, Auckland 1060, New Zealand
Private Bag 99943, Newmarket, Auckland 1149, New Zealand
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27 June 2024

Rakon 2024 Annual Report
Rakon has released its Annual Report for the twelve months ended 31 March 2024 (FY24). The report
is available to view or download on the Rakon website.
You can also view or download previous Annual Reports, Interim Reports and announcements on the
Rakon website.

ENDS

Investor and media relations
Nick Laurent
investors@rakon.com
+64 21 240 7541
www.rakon.com
About Rakon
Rakon is a world leader in advanced frequency control and timing solutions for communications
where speed and reliability are paramount. Our ground-breaking technology and products enable
customers across our core markets of Telecommunications, Positioning and Space and defence, and
emerging core market of AI computing hardware, to develop next generation applications for life-
changing technologies.
Rakon has three manufacturing plants, six research and development centres, and sixteen customer
support offices worldwide. Founded in Auckland in 1967, Rakon is proud of its New Zealand heritage.
It is a public company listed on the New Zealand stock exchange, NZX, ticker code RAK.

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RAKON / ANNUAL REPORT / 2024

Synchronising
the AI revolution.
Rakon’s Niku
™
TCXO platform.
Groundbreaking semiconductor
design combined with cutting-
edge XMEMS
®
oscillator
technology. Delivering the
precise timing and synchronisation
required for next-generation data
centres and AI Factories.
Niku
™
TCXO platform not shown to scale.
RAKON / ANNUAL REPORT / 2024

Precision is power.
Our products help people to connect, explore and innovate.
They are the ‘heartbeat’ for electronic systems, delivering fast,
precise and stable connectivity in everything from mobile
networks and autonomous vehicles to satellite constellations
and AI data centres.
Whether connecting to a 5G tower or to a rover exploring Mars,
our technology is relied on to deliver the highest performance in
even the most extreme conditions.
Thanks to our constant drive to innovate, we continue to
empower our customers to create the next-generation of
life-transforming technologies. On Earth, and beyond.
About Rakon
01
RAKON / ANNUAL REPORT / 2024

Supplying the global
space industry
For over 40 years Rakon has worked alongside leading
agencies including NASA, ESA and ISRO to develop
ground-breaking products for their space programmes.
We’ve now leveraged that experience and expertise to
capture growth opportunities within the fast-growing
commercial space industry, and are a top-3 supplier for
our subsystems products.
We’re seeing unprecedented demand for our expanding
product range and are proud to have been selected to
supply our subsystems for two new Low-Earth Orbit
satellite constellations (see page 28).
02
RAKON / ANNUAL REPORT / 2024

Emerging core market: AI
Rakon’s technology and products are ideally suited
for overcoming the synchronisation challenges
that data centres face with AI workloads.
Our solutions help to unlock the major
performance gains demanded by AI workloads,
and we are working with leading players in
AI hardware to enable next-generation
platforms and data centres (see page 26).
03
RAKON / ANNUAL REPORT / 2024

This document reports on Rakon’s
operational and financial performance for
the year to 31 March 2024 (FY24). We
have focused on what we believe matters
most to our stakeholders and business.
This report provides a clear look at our company and shows
how we are delivering against our strategic priorities of
technology innovation, core market growth, customer
partnerships, and flexible, scalable operations.
Our commitment to sustainability is demonstrated through
our Environmental, Social and Governance (ESG) actions
and this report includes an update on our progress across
a number of material ESG related topics. In a change from
last year’s report, we will deliver our climate reporting as
a standalone online document, to be published on or
before 31 July 2024, that will be available on our website:
rakon.com/investors/reports-presentations-events.
We have endeavoured to ensure all information is
accurate, including performing internal verification.
The information provided in this report has been
compiled in line with NZX Listing Rules and
recommendations for investor reporting.
The financial statements on pages 65-113 have been
prepared in accordance with appropriate accounting
standards and have been independently audited by
PricewaterhouseCoopers.
We know many investors prefer to view this report
online. Our company review and financial documents
are included in this report, in an easy-to-read format.
We welcome your feedback on this report, including
how we can improve. Please email your feedback to:
investors@rakon.com.
Welcome to our 2024 Annual Report
04
RAKON / ANNUAL REPORT / 2024

THE YEAR
IN CONTEXT
LONG-TERM
GROWTH PLAN
CORE MARKET
OVERVIEW
SUSTAINABILITY
AND ESG
AI, SPACE, AND INDIA
MANUFACTURING
FINANCIALS AND
OTHER DISCLOSURES
Contents
Our global operations 06
Performance snapshot 08
Highlights 08
Chair & CEO report 09
Four paths to growth 14
How we create
long-term value 15
3 year roadmap 16
Space and defence 20
Telecommunications 22
Positioning 24
Emerging core market: AI 26
Synchronising AI 27
Subsystem success in space 28
Four decades of
space exploration 29
Framework for efficiency
and innovation 30
Our People 32
Board and
Management profiles 35
Driving sustainability
through our business 40
Our ESG framework 42
Improving our
environmental impact 44
Our supply chain, people
and practices 49
Contributing in
our communities 50
Corporate Governance 51
Glossary 63
Consolidated
financial statements 66
Notes to the consolidated
financial statements 72
Independent
Auditor’s Report 110
Remuneration Report 114
Shareholder
Information 2024 119
Indexing 122
Directory 124
05
RAKON / ANNUAL REPORT / 2024

~
70
countries with
Rakon customers
7
company and partner
manufacturing sites
6
R&D centres
of excellence
16
customer support
locations
~
850
employees worldwide
45
nationalities in the
Rakon global team
KEY:
••
Manufacturing sites
••
R&D centres
••
Customer support locations
••
Quality assurance
••
Key manufacturing partners
Our global operations
06
RAKON / ANNUAL REPORT / 2024THE YEAR IN CONTEXT

THE YEAR
IN CONTEXT
07
RAKON / ANNUAL REPORT / 2024THE YEAR IN CONTEXT

REVENUE
$128.0m
▼ $52.3M OR 29%
Highest ever space
segment revenue
CYCLICAL SLOWDOWN IMPACTING
TELCO AND POSITIONING
Top 3 player in space
subsystems
NEW SATELLITE SPACE CONTRACTS POSITION
RAKON AS A TOP PLAYER IN SUBSYSTEMS
Consistent market
share gains
NEAR 100% DESIGN WIN RATE
ON TARGETED PROJECTS
Emerging core market:
AI computing hardware
EXPANDING PRODUCT RANGE FOR AI DATA CENTRES
Delivery of 3-year
growth plan
ALL FY24 MILESTONES ACHIEVED OR IN PROGRESS
NET PROFIT AFTER TAX (NPAT)
$4.5m
▼ $18.7MM OR 81%
OPERATING CASH FLOW
$ 1 7. 8m
▲ $6.7MM OR 60%
UNDERLYING EBITDA1
$13.5m
▼ $28.7M OR 68%
NET CASH
$ 1 7. 8m
▼ $3.9M OR 18%
Performance snapshotHighlights
All figures are presented in New Zealand dollars unless otherwise indicated.
All comparisons are to the prior corresponding period (i.e. 12 months to 31 March 2023) unless otherwise stated.
1 Refer to the footnote on page 63 for the definition of Underlying EBITDA as a non-GAAP financial measure, referred to in this document.
GROSS MARGIN
$ 5 7. 9m
▼ $30.9M OR 35%
08
RAKON / ANNUAL REPORT / 2024THE YEAR IN CONTEXT

Chair & CEO report
In challenging and evolving market
dynamics, we continue to drive more
efficiency through the business and
execute on our plan to protect the path
towards sustainable future growth.
The last 12 months have been the most challenging
in Rakon’s history from a demand standpoint, as we
experience a cyclical downturn in some of our core markets.
Our telecommunications and positioning customers continue
to work through their inventories, after stockpiling through the
global supply chain disruptions, and, in telecommunications,
mobile network operators continue to defer some planned 5G
capex. Alongside this the Board and Management team have
spent considerable time and resources working on the
acquisition proposal received in December last year.
Despite this, we’re proud to say that our team has
demonstrated remarkable adaptability and agility as we
continue to execute our strategic growth plan and optimise
our business to ensure we are set up for future success.
We have also continued to gain market share and secure
design wins at a consistently high rate, which positions us
well to capture a larger market share as conditions improve.
In May, we announced a
$17 million space contract
to supply our subsystems
for a new Low Earth Orbit
satellite constellation
We are delivering exceptional results in the space segment
and making strong headway with AI computing hardware
as an emerging core market. The investments we’re making
will keep this momentum going. In May, we announced a
$17 million space contract to supply our subsystems for a
new Low Earth Orbit (LEO) satellite constellation. This was
followed by a second subsystems contract win in June
to supply our products for another new LEO satellite
constellation. These wins have helped to establish Rakon
as a top global supplier for our space subsystems products –
further tangible proof that our strategic plan and investments
are delivering results.
We continue to have confidence in the fundamental growth
drivers across all our core and emerging core markets. Rakon
has a diversified and growing range of cutting-edge products,
industry-leading innovation and customer service, a clear plan
for growth and efficiency initiatives already in place to drive
future profitability improvements.
LORRAINE WITTEN / CHAIR
SINAN ALTUG / CEO
09
RAKON / ANNUAL REPORT / 2024THE YEAR IN CONTEXT

CHAIR & CEO REPORT / CONTINUED
FY24 FINANCIAL RESULT
Looking back at the 12 months ended 31 March 2024 (FY24),
revenue was $128.0 million, compared with $180.3 million
for the year ended 31 March 2023 (FY23). Excluding the
completion of one-off chip shortage contracts in the prior
year, revenue was down $36 million. While we continue
to gain market share we have seen orders received in both
our telecommunications and positioning segments fall as
customers take longer than anticipated to work through
their stockpiled inventory.
The space and defence segment, buoyed by recent space
contract wins, was a standout success with revenue
increasing by 27% to $36.8 million.
Gross profit was lower at $57.9 million and margin
percentage was 45% (FY23: 49%), impacted by one-off
redundancy and restructuring costs and manufacturing
inefficiencies that occur with lower volumes of production.
Total Operating Expenses were $59.5 million. Excluding
the costs related to the acquisition proposal and retention
incentives, of $2.2 million, operating expenses fell by
$1.5 million to $57.3 million. The success we are having
with our cost-cutting and efficiency initiatives have more
than offset inflationary pressures and the continued
investment in the growth strategy.
Underlying EBITDA was $13.5 million (FY23: $42.2 million)
and Net Profit after tax was $4.5 million (FY23: $23.2 million).
Capital expenditure of $17.0 million was spent on strategic
investments as Rakon continues to deliver on its growth plan.
Included in this was a key ongoing project to accelerate the
transfer of high-priority space and telco products from France
and New Zealand into the new Indian facility.
BALANCE SHEET AND DIVIDEND UPDATE
Rakon’s balance sheet remains robust, with net assets of
$159.3 million. The company had $17.8 million in net cash
at balance date, $3.9 million lower than a year ago reflecting
ongoing capital expenditures investments along with incurring
costs associated with the acquisition proposal. Operating
Cash Flow was a positive $16.8 million this year, up 51% over
last year driven by our focus on working capital management
including a $7.7 million reduction in total inventory balances.
In April 2024, Rakon entered into a 2-3 year debt facility with
global banking and financial services group, HSBC, replacing
a previous facility with an Australian bank at a similar cost
structure. With this, Rakon’s working capital facility has
increased to NZ$24 million, plus an additional US$14 million
facility for capital expenditure. The refinancing gives us
additional flexibility to support organic growth globally,
and future M&A activity, over the coming years.
Rakon continues to manage the balance sheet to support the
company’s long-term sustainability. Given the FY24 financial
performance and the unanticipated cost of the acquisition
proposal, the Board has not declared a dividend in relation
to FY24. While the Board continues to have confidence
in the company’s future, as outlined in its dividend policy,
it must also take into account the company’s operational
cash requirements, debt levels, interest rates, and market
conditions. This decision was not taken lightly and a return
to dividends will be considered at the next annual results.
SIGNIFICANT PROGRESS AGAINST OUR
GROWTH STRATEGY
The opportunities before Rakon remain real, growing and
significant. The 3-year strategic growth plan is essential to
ensure our market leadership position is retained and we are
positioned to capture these opportunities. The growth plan
was developed to deliver improved revenue and margins and,
importantly, diversify revenue to provide increased protection
through the cycles.
During the year we launched our next generation Niku™
semiconductor chip and MercuryX™ product range for AI
and cloud data centres. This growing AI computing hardware
product portfolio is already contributing to revenue and is
projected to provide additional design wins, collaborations,
10
RAKON / ANNUAL REPORT / 2024THE YEAR IN CONTEXT

CHAIR & CEO REPORT / CONTINUED
and revenue growth within the next 12 months. In May 2024,
we signed our largest space contract with a global leader in
communications satellites (see page 28). Rakon will supply
its Master Reference Oscillator subsystems for a new satellite
constellation, with deployment starting in FY26 and running
for an initial period of 3 years, with the potential for a
substantial extension thereafter. The contract will provide
over $3 million of revenue in FY25. We also secured another
subsystems contract win in June, to supply our products
for a second LEO satellite constellation. These wins are
a significant development for Rakon’s space business and
tangible confirmation that our strategy and investments
to become a key supplier in this rapidly growing ecosystem
are delivering results. We will continue to target strategic
high-level contracts in this sector and are confident that
our latest products and technology have put the company
in a strong position to deliver future wins.
We are progressing well with transferring select product
lines from France and New Zealand to the new Indian facility
and this is a key area of focus for the current financial year.
This will bring some margin improvement later in the current
financial year by increasing manufacturing cost efficiencies
and is expected to bring greater benefit as the transfer
program continues.
DRIVING EFFICIENCY ACROSS THE BUSINESS
As we navigate today’s market dynamics and high inflation
environment, your Board and Management have not shied
away from the hard decisions. We have adjusted operations
and reduced costs, while protecting our future path to growth
and ensuring we maintain market leadership. Actions taken
have included:
• the optimisation of manufacturing cost structures, including
an accelerated schedule for Indian facility production of
high-priority product lines from New Zealand and France;
• a continued focus on optimising inventory that led to
a $7.7 million overall decline year-on-year and will
continue to drive reductions;
• an ongoing process to streamline operations globally,
ensuring all key expenditures across the board contribute
to Rakon’s growth strategy; and
• a 13% reduction in our global workforce over the last year,
in line with current production levels.
We will continue to target
strategic high-level contracts
in [the space] sector and
are confident that our latest
products and technology
have put the company
in a strong position to
deliver future wins.
11
RAKON / ANNUAL REPORT / 2024THE YEAR IN CONTEXT

CHAIR & CEO REPORT / CONTINUED
NON-BINDING INDICATIVE OFFER
On 18 December 2023, Rakon announced it was undertaking
a process to consider an unsolicited, non-binding, indicative
proposal (the Proposal). Rakon advises that, following a period
of due diligence, the Proposal will not be progressed further
and the process is at an end. Rakon refers shareholders to its
market announcement dated 19 June 2024 on this matter.
OUTLOOK
As we head into the first half of FY25, there is no doubt it
will continue to be challenging in both the telecommunications
and positioning segments, with uncertainty as to when the
mobile operators will recommence deferred investment in
5G networks.
With a strong order book for FY25, the space and defence
segment is expected to continue along its current growth
trajectory. This includes the new contract signed in May
which will deliver a $3 million revenue benefit in the
current year. Rakon will continue to focus on efficiency
initiatives driving further cost savings and improving
future resilience and competitiveness.
Rakon continues to have confidence in the fundamental
growth drivers supporting its core markets, and our Tier 1
customers are currently anticipating better markets towards
the end of FY25. With an established and strong presence
in the space segment, the recent contract wins, and several
new product launches, the company is in a strong position
to secure further contract wins.
We have a solid foundation of products, innovation
and customer service, a clear plan to grow, and efficiency
initiatives underway to improve profitability. The
opportunities across the ongoing evolution of 5G, cloud
and edge computing, AI hardware, autonomous machines
and vehicles, and the entire space ecosystem remain
significant and growing.
Your Board and Management take our commitment to drive
long-term shareholder value very seriously. With confidence
in our future we will continue to optimise the business and
invest in our plan for future sustainable growth.
LORRAINE WITTEN / CHAIR
SINAN ALTUG / CEO
LEADERSHIP AND GOVERNANCE
We were delighted to welcome Drew Davies as our
Chief Financial Officer in October last year. Drew’s extensive
experience and proven track record aligned perfectly with
our strategic direction. His financial acumen and strategic
leadership have been and continue to be invaluable as we
drive forward our growth strategy.
In July last year, Yin Tang Tseng (Tony) retired from the
Board. The Board would like to take this opportunity to
thank Tony for his contribution since 2017 when Siward
became a substantial shareholder and entered into a
technology partnership with Rakon. As we farewelled Tony,
we welcomed Jung Meng Tseng (JM) to the Rakon Board.
As the President of Siward Crystal Technology Company,
JM brings extensive technical, industry and business
knowledge and experience to the Board. In March this
year, Steve Tucker also stepped down reflecting workload
commitments. We thank Steve for the valuable innovative
exporting knowledge and insights he has brought to the
company, which has been of benefit as we continued
to expand and grow our global markets. The Board
now comprises of six directors, four of whom are
independent directors.
12
RAKON / ANNUAL REPORT / 2024THE YEAR IN CONTEXT

LONG-TERM
GROWTH PLAN
13
RAKON / ANNUAL REPORT / 2024LONG-TERM GROWTH PLAN

A clear growth strategy to build long-term value
FOUR PATHS
TO GROWTH
Rakon’s growth strategy is
based around an evolving
set of objectives which
focus on: growing our core
business, maintaining our
product and technology
leadership, expanding into
new markets, and being a
world-class manufacturer.
Each path has key areas
where we are focusing
our efforts to drive growth.
This may be through
organic growth initiatives
or strategic acquisitions
which accelerate growth
through access to markets
or technologies. As we
invest in growth, our
investments will align
with these areas.
GROW
OUR CORE
BUSINESS
MAINTAIN PRODUCT
AND TECHNOLOGY
LEADERSHIP
EXPAND INTO
NEW MARKETS
DELIVER
WORLD CLASS
MANUFACTURING
STRATEGIC ACQUISITIONS SUPPORTING GROWTH STRATEGY
Telco market leadership
– products using
proprietary technologies
Space and defence –
market access in North
America
Precision industry
Positioning applications
New technology design-in
Rakon semiconductor
chips – accelerate
time-to-market
XMEMS
®
– deliver next
generation products and
performance
Space and defence – move
up value chain into
equipment and subsystems
NewSpace
Cloud computing
Autonomous vehicles
AI hardware
Targeting key customer
partnership in new markets
Global Manufacturing
Roadmap
Manufacturing capacity
and capability expansion
Advanced supply chain
management
XMEMS
®
nanotechnology
volume manufacturing
14
RAKON / ANNUAL REPORT / 2024LONG-TERM GROWTH PLAN

How we create long-term value
Growth of
our people
Advancement
of technology
Life-changing
applications and
scientific discovery
Increased
shareholder value
Improved
delivery
OUR OUTPUTS
Our 850+
global team
Global manufacturing
platform & supply
Intellectual capital,
R&D investment and
trusted brand
Financial resources
and capability
Partnerships and
relationships
OUR INPUTS
Our strategic pillars:
customer partnerships;
technology innovation;
core markets, and flexible,
scalable operations –
are our key drivers of
value and underpin
our planning, activities
and how we measure
performance. They are
critical to the creation
of long-term value, while
providing the flexibility
to explore emerging
opportunities and thrive.
A VALUES-DRIVEN CULTURE
Our values-driven, innovation-focused culture provides the foundation – shaping how we capture opportunities,
manage risk, look after each other, and deliver on our ESG objectives and sustainability goals.
Enduring
relationships
and
development
of market
opportunities
Creating
first-mover
advantage and
next-generation
solutions
Enabling
efficient
delivery and
supporting
long product
life cycles
Building
leadership in
high growth,
high tech
markets
C
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15
RAKON / ANNUAL REPORT / 2024LONG-TERM GROWTH PLAN

Growth strategy: 3 year roadmap
Investors will be familiar
with our growth roadmap
as we enter into year three.
Our strategy is focused
and resilient, designed to
build long-term value in
high-growth markets.
We aim to grow market
share, improve margins,
and diversify our revenue
base to reduce reliance
on the highly cyclical
telecommunications sector.
Despite market volatility,
our teams have delivered
on our roadmap. We have
met most of our targets for
FY24, and some initiatives
have been strategically
reprioritised and shifted
to FY25.
NEW
MANUFACTURING
FACILITY IN INDIA
Transfer of select
Space subsystems
Transfer of select
NZ products
Transfer of select
NewSpace products
Launch of enhanced MercuryX
™
Chip based product revenue
growing to over 60%
Volume production of XMEMS
®
XMEMS
®
products qualified into
key 5G platforms
Chip based product
revenue growing
Release of Vulcan
™

next generation chip
Leadership in
targeted market
segments
Expansion into
other product
categories
Become a top 3
player in
subsystems
Delivery of orders
Recognised player in the
NewSpace ecosystem
Significant orders secured
FY2025FY2024
RAKON DESIGNED
SEMICONDUCTOR
CHIPS
XMEMS
®

NANOTECHNOLOGY
MANUFACTURING
NEWSPACE
BUSINESS
Construction completed
Fitout / capacity expansion
Existing manufacturing
transfer
Substantial increase in R&D
and chip design capability
Release of Niku
™
next
generation chip
Continued investment in
XMEMS
®
capability
Release of initial XMEMS
®

based products
R&D and supply chain
investment
Strategic relationships
established
FY2023
16
RAKON / ANNUAL REPORT / 2024LONG-TERM GROWTH PLAN

CORE MARKET
OVERVIEW
17
RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

FY24 REVENUE
$37m
▲ UP 27%
GROSS MARGIN
65%
Space and defence
Core markets mixed;
strong progress in space
FY24 has been challenging from a demand standpoint in
some of our core markets. However, our space and defence
segment has continued to grow, reaching its highest-ever
revenue level, and is set to maintain this trajectory buoyed
by recent space contract wins. In our other core markets,
we have faced the same cyclical slowdown as our peers,
especially in telecommunications as mobile network
operators deferred planned 5G infrastructure capital
expenditures. Despite this, we’ve continued to gain market
share and maintained a high design win rate across all
markets. We believe this is a clear precursor that the
company is poised to capture a larger market share as
conditions improve.
18
RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

CORE MARKETS MIXED; STRONG PROGRESS IN SPACE / CONTINUED
FY24 REVENUE
$67m
▼ DOWN 34%
Telecommunications
FY24 REVENUE
$14m
▼ DOWN 59%
Positioning
GROSS MARGIN
34%
GROSS MARGIN
44%
19
RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

Space and defence
A strategic push to diversify our
products and move up the value
chain in the global space industry,
including the development of
groundbreaking subsystem
products, has opened up new
opportunities and led to recent
contract wins to supply our
products for Low Earth Orbit
satellite constellations.
20
RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

SPACE AND DEFENCE / CONTINUED
In FY24 our space and defence segment continued to grow,
reaching its highest-ever revenue level up 27% to $36.8m,
and is set to maintain this trajectory buoyed by recent
space contract wins. Gross margin grew by 22% to $24m –
a continued reflection of the bespoke, high value and
performance requirements for this market.
In May 2024, we announced Rakon’s largest space contract
win, to supply our groundbreaking subsystems for a new
Low Earth Orbit (LEO) satellite constellation (see page 28).
The contract is worth up to $17m over the next 3 years,
representing over $3m of revenue in FY25, with the
potential for a substantial extension thereafter.
As further validation of our growth strategy for the space
sector, we secured a second subsystems contract win in June
2023 to supply another new LEO satellite constellation. These
wins are a direct result of Rakon’s strategic push to expand
and diversify our product range, and move up the value chain,
in the fast growing LEO satellite constellation and commercial
space (NewSpace) market. It is further validation that Rakon’s
growth strategy for the rapidly expanding space ecosystem is
delivering results and that our confidence for securing future
high level contracts in this sector is well placed.
Rakon has a strong order book for FY25 and beyond,
reflecting robust demand for our space products, and
we expect continued growth as we focus on diversifying
our product offering and increasing market share. In the
defence market, we are seeing continued strong demand
in communication applications.
The recent space contract wins put Rakon ahead of schedule
in achieving our three-year growth strategy milestone of
becoming a top-3 supplier for our space subsystem products.
We are also on track to double our serviceable addressable
market for the global space industry, in the next 5 years,
largely driven by demand for our subsystem products.
We continue to grow our partnerships in the ‘traditional’
space segment as well, and were incredibly proud to have
several of our cutting-edge products onboard the Indian
Space Research Organisation’s (ISRO) Chandrayaan-3
spacecraft which completed the first successful landing
on the Moon’s South Pole in August 2023 (see page 29).
FY24FY23FY22FY21FY20
Gross MarginGross Margin %
$19m
69%69%
68%68%
65%
$20m
$17m
$20m
$24m
FY24FY23FY22FY21FY20
$28m
$30m
$24m
$37m
$29m
REVENUE
GROSS MARGIN
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RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

Telecommunications
We continue to deliver consistent
market share gains and a high
design win rate for this segment.
However, FY24 sales were down
due to stockpiled inventory with
our largest customers – as the
rate of 5G network upgrades
globally has fallen versus prior
periods. Included in this segment
is our AI computing hardware
product revenue, which we
believe will grow significantly
to become a standalone core
market.
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RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

TELECOMMUNICATIONS / CONTINUED
FY24FY23FY22FY21FY20
$65m
$77m
$86m
$67m
$101m
REVENUE
FY24FY23FY22FY21FY20
Gross MarginGross Margin %
$26m
40%
44%
40%
43%
34%
$31m
$38m
$43m
$23m
GROSS MARGIN
Telecommunications revenue declined 34% to $66.9m,
primarily due to delayed 5G infrastructure investments by
global mobile network operators. Gross margins fell from
42% to 34%, reflecting several factors, including restructuring
and redundancy charges incurred during the year, the
production ramp up costs at our new Indian facility during
2023, as well as the lower overall production volumes
globally leading to inefficiencies in cost allocation from
our manufacturing operations.
As discussed previously, we continue to gain market share
and our rate of design wins remains consistently high,
however, we have faced a cyclical slowdown as mobile
network operators deferred planned capital expenditures.
This has led to lower orders and longer inventory cycles
in this market segment.
Our product leadership ensures high rates of inclusion
in network equipment as well as third party reference
designs. We believe this is a clear precursor that Rakon
is poised to capture a larger market share as conditions
improve. We continue to experience key design wins with
our new XMEMS
®
manufactured products being qualified
into next generation 5G and 6G equipment, as well as strong
uptake for our latest next-generation product ranges – Niku
™

and MercuryX
™
.
Currently included in the telecommunications segment is an
emerging core market for Rakon: AI computing hardware.
Our technology and products are ideally suited for this
emerging market and are already generating revenue.
We are working with leading players in AI hardware to
enable the next-generation platforms for new ‘AI Factory’
data centres, and expect this business to grow significantly
over next 5 years to become a key core market for us
(see page 26).
Looking ahead, following to the outlook of our large
Tier 1 telecom infrastructure customers, we expect the
telecommunications market to remain somewhat muted
at least in the first half of FY25. However, we anticipate
potential stabilisation on a year-on-year basis during the
second half of the 2025 fiscal year.
We expect our gross margin levels to return back to their
normal levels as we regain operating leverage with increase
in demand, the start of volume production in India, and
additional efficiency initiatives.
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RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

Positioning
Our market share in positioning
remains steady, but the segment
continues to be affected by
customers’ stockpiled inventories,
resulting in lower sales. We are
securing a consistently high rate
of design wins, especially in the
precision positioning segment,
where we anticipate we will
capture a larger market share as 
conditions improve.
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RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

POSITIONING / CONTINUED
Positioning market revenue declined 59% to $13.9m in FY24.
Segment revenue is down $20m from the prior year, and is
primarily lower due to customers drawing down stockpiled
inventories, resulting in lower sales, with our market share
remaining steady. It should be noted that when the one-off
TCXO shortage revenues in FY23 are excluded, our
positioning segment revenues are down $10m or 41%
from the prior year.
Our gross margin in the positioning market of $6.2m is down
by $12m annually, but when the margins associated with
the TCXO shortage sales in the prior year are excluded, the
segment gross margin is down $7m annually. The gross
margin percentage of 44% is down annually, primarily
due to the lower order volumes and inefficiencies in cost
allocation from manufacturing operations.
Similar to the telecommunications segment, the positioning
sector is showing a temporary slowdown of orders as
customers continue to readjust inventory levels. We are
also facing increased competition and price erosion,
particularly in the consumer positioning segment,
but overall volumes have remained steady.
Our positioning products meet the most accurate positioning
requirements in key industries, such as aircraft and marine
navigation, automotive, autonomous agriculture and mining,
and we have maintained a strong position in the high-end
precise positioning segment. Looking ahead, this will continue
to be a key market for us with several new applications
enabled by increasingly precise positioning.
The short-term outlook in the positioning segment remains
suppressed but is expected to stabilise in the second half
of the fiscal year. Our latest suite of products has extended
our technological leadership for the positioning segment
and resulted in increased opportunities to develop and
capture additional market share as conditions improve.
FY24FY23FY22FY21FY20
Gross MarginGross Margin %
$7m
36%
58%
48%
53%
44%
$7m
$16m
$18m
$6m
FY24FY23FY22FY21FY20
$19m
$14m
$28m
$14m
$34m
REVENUE
GROSS MARGIN
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RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

Emerging core market: AI
Rakon is making significant strides
in the emerging core market of AI
computing hardware, a segment we
anticipate could potentially rival our
current telecommunications market
revenues over the next 5 years.
Our technology and products are uniquely positioned to
tackle the timing and synchronisation challenges that data
centres face with AI workloads (see next page for details).
Our innovative solutions enhance performance, data
integrity
1
 and security
2
. They also improve power
efficiency, addressing a major concern for data centres
and the leading AI players.
Over the past 12 months we have continued to work with
the leading players in the AI hardware ecosystem to enable
next-generation platforms and data centres, including AI
Factories. These collaborations are critical for ensuring our
solutions are integrated into cutting-edge AI infrastructure.
At the core of our AI computing hardware solutions are our
next-generation semiconductor chips, MercuryX
™
and Niku
™
,
which are the platforms for our new AI computing hardware
product lines.
The launch of these products has been met with high
customer demand and we are seeing substantially high
conversion rates on samples provided to world leading
AI infrastructure companies. These products are already
generating revenue, and we expect this to increase
significantly over the next five years.
1 Data Integrity: synchronisation across distributed systems allows
consistent timestamps to be maintained and ensures that events and
data updates occur in the correct temporal order, mitigating conflicts
and discrepancies.
2 Data security: accurate and reliable timekeeping helps manage cache
expiration and invalidation, prevents stale data from being served,
ensures that certificates (e.g. SSL/TLS) are valid during their intended
lifespan, and help to detect anomalies and security breaches by
correlating timestamped log entries.
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RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

Synchronising AI
Rakon’s technology and products
are ideally suited for overcoming the
synchronisation challenges that data
centres face with AI workloads. But
what does that actually mean?
At a basic level, it’s about data. Lots of data. Specifically the
massive workloads created by generative AI.
To handle these workloads, data centres need to operate
with greater speed and efficiency. One of the best ways to
achieve this is through parallel and distributed processing:
• ‘Parallel processing’ is like splitting up a complex task
into multiple parts that are worked on simultaneously
by different people (in AI workloads, replace “task” with
computations and “people” with processors like GPUs).
• ‘Distributed processing’ spreads the task (data and
computations) across multiple locations (servers).
Each server handles only part of the overall workload,
and communicates with servers working on the other
parts to complete the task collaboratively.
For AI workloads, parallel and distributed processing
speeds up tasks like training machine learning models,
and improves overall efficiency and scalability through
distributing data, training, and inference tasks across
different servers or clusters.
To have effective parallel and distributed processing
you need incredibly precise and reliable timing – placing
more stringent requirements on oscillator hardware
when compared to non-AI applications. Delivering on
these requirements is an area where Rakon’s industry-
leading technology and products excel.
Our AI computing hardware solutions help unlock the major
performance gains demanded by AI workloads, including
high bandwidth availability (allowing large data volumes)
and ultra-low latency (reducing response times down
to nanoseconds).
That’s why we’ve been selected to work with leading
players in the AI hardware ecosystem, collaborating on
the next-generation platforms and data centres for this
revolutionary technology.
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RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

Subsystem success in space
The latest contracts awarded to Rakon
to supply our groundbreaking Master
Reference Oscillators (MROs) for two
new Low Earth Orbit (LEO) satellite
constellations reinforce our position as
a top subsystem supplier in the global
space industry.
These contracts include Rakon’s largest space contract,
which was awarded by MDA Space, a leading player for
communications satellites, Earth and space observation,
and space exploration and infrastructure. We are pleased
to continue and deepen our long-standing partnership with
MDA Space, who are a well respected industry leader and
a trusted partner to the global space ecosystem. The LEO
satellite constellation to be supplied by this contract is Telesat
Lightspeed, an innovative new global network that will bring
enterprise-class connectivity to customers worldwide.
Following this contract win, Rakon picked up as second
subsystem contract in June 2024 to supply another new
LEO constellation. These wins are validation that Rakon’s
growth strategy for the rapidly expanding space ecosystem
is delivering results and that our confidence for securing
future high level contracts in this sector is well placed.
Rakon’s MRO subsystems provide highly accurate and
stable frequency references, and precision timing that
enable satellite communications and synchronisation.
Our ultra-stable oscillator technology also delivers
industry-leading reliability and timing holdover (ability
to maintain uninterrupted frequency stability and time,
during periods when a GPS signal may be unavailable).
Our growing range of products has increased Rakon’s
addressable market within the global space industry to
$250m, and we are now a top-3 global supplier for our
space subsystems. We are on track to double our share
of serviceable addressable market in the next 5 years,
largely driven by demand for subsystem products.
We also recently released several new products for
our space product range, including new GNSS (Global
Navigation Satellite System) receivers, MROs, and
ultra-stable oscillators.
Rakon is also preparing to launch a new range of
semiconductor chips for space oscillators. These chips
are the first of their kind in the space industry. More
information will be provided soon.
A rendering of a Telesat Lightspeed satellite based on MDA’s new
software-defined platform. Credit: Telesat
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RAKON / ANNUAL REPORT / 2024CORE MARKET OVERVIEW

For over 40 years Rakon has worked
alongside leading agencies, including
NASA, European Space Agency (ESA)
and Indian Space Research Organisation
(ISRO), to develop ground-breaking
products for over 50 space programmes,
including NASA’s Mars Perseverance rover.
Our products are currently onboard ESA’s Jupiter Icy
Moons Explorer mission (JUICE) which will make detailed
observations of Jupiter and three of its moons – looking for
signs of life.
In June 2023 we helped ISRO make history, with several
of our products onboard Chandrayaan-3’s lunar lander and
rover as part of the first successful landing on the Moon’s
South Pole – exploring an area thought to be rich with
water ice that could be an essential resource for future
moon missions.
And in September 2023 our products took off again with
ISRO, onboard the Aditya-L1 mission to study the Sun.
It’s a privilege to be part of these missions of uncharted
discovery and we are proud to continue our collaborations
with these leading agencies.
Four decades of space exploration
Chandrayaan-3 launch. Credit: ISRO
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Framework for efficiency and innovation
“ICC” – INNOVATE, CAPTURE, CAPITALISE
In FY24 we stepped up our ‘Innovate, Capture, Capitalise’
(ICC) initiative, refining a five-year plan that aims to deliver
on key goals to support Rakon’s growth strategy:
• Innovate; enabling new product and technology
development – including through flexible processes
and increased capacity availability
• Capture; delivering fast turnaround times on
customer samples, and small-scale production
capability to capture market share earlier
• Capitalise; using Rakon’s global manufacturing
capabilities to enable high-volume, low-cost
manufacturing where practical.
The five-year ICC plan is a strategic program of work
across our global operations, starting with an accelerated
plan for enabling capability and volume manufacturing of
key products, transferred from our New Zealand and
France locations, at our Indian facility.
STRATEGIC INVESTMENTS IN INDIA
Rakon’s world-class manufacturing facility in Bengaluru, India,
inaugurated in June 2023, is well on its way to delivering
on long-term competitive advantages and significant cost
reductions. The accelerated transfer of existing manufacturing
production lines for both our telecommunications and space
and defence market segments will result in improved gross
margins when the Indian facility production volume of these
transferred products ramps up in Q4 FY25.
Our manufacturing presence in India also continues to open
doors for Rakon, aligning with the Indian Government’s ‘Make
in India’ initiative. We are continuing to work with the Indian
Government on applications through various programmes
to access benefits, in the form of Government reimbursement
of a significant percentage of capex investment, for setting up
product lines in India.
As we carry-out these product transfers, and capture
additional value through our Indian operations, our UK,
New Zealand, and France business units will continue to
play a crucial role in innovation (R&D) and manufacturing.
Our new facility in Bengaluru, India, inaugurated June 2023
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SUSTAINABILITY
AND ESG
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CULTURE AND VALUES
Rakon’s culture of innovation not only drives our next
generation technology, it also connects our people to
the same mission, and to a work environment that
allows them to feel comfortable being themselves while
making meaningful contributions to our goals. We
attract high calibre talent, invest in their development
and create a safe and inclusive environment, focused
on empowering our people to do their best work while
supporting them to look after their well-being.
The collective passion among our team for contributing
towards next generation innovation and solutions leads
to collaboration, a commitment to customer and
continued team success. The strong engagement
of Rakon’s team members is reflected in our internal
surveys where employees name product, quality,
technology, and culture as the key things they rate
most highly about Rakon.
PASSION
We’re driven by our energy and
excitement to create solutions
and new possibilities.
RESPECT
We treat others as we expect
to be treated; we listen, value
diverse perspectives and take
nothing for granted.
COURAGE
We’re proactive
and challenge the status quo
with a ‘can do’ approach.
PERSEVERANCE
We’ve the determination to have
another go and achieve the best
outcome as a team.
INTEGRITY
We’re honest, transparent and
strive to do the right thing
by each other and the planet.
OUR VALUES
Our People
People are at the heart of
everything we do.
Whether it’s life-changing applications for our
products or maintaining close ties with customers
and a long-term approach to relationships within
our markets, Rakon’s culture is built around putting
people first, and central to that is our global team.
We attract high calibre talent, invest in their
development and create a safe and inclusive
environment, focused on empowering our people
to do their best work while supporting them to
look after their well-being.
74%
OF RAKON TEAM
MEMBERS ARE
“ENGAGED”
88%
FEEL THEY CAN BE
THEIR AUTHENTIC
SELF AT WORK
(based on results from Q4 2023 internal survey)
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OUR PEOPLE / CONTINUED
DIVERSITY & INCLUSION
Rakon is a global organisation, with a workforce
located across 10 countries and representing over
45 different nationalities.
We’re proud of the wide range of skills, backgrounds,
ethnicities and experiences in our global team. They reflect
the diversity of our customers and the communities in
which we operate.
We recognise the importance of diversity and inclusion
at the strategic and day-to-day levels in achieving our
business objectives, fulfilling customer needs, and creating
a high-performing, enjoyable and values-driven culture.
Our diversity policy outlines our commitment to a diverse and
inclusive working environment globally. The unique strengths
and characteristics of our team members are recognised, and
we strive to provide an environment across all of our sites,
where everyone can feel comfortable bringing their authentic
selves into the workplace.
Our global talent acquisition and management programmes,
along with our succession management processes, guide our
efforts to attract, develop and retain high calibre candidates
and employees who are aligned to our culture and values.
Diversity by gender
HEALTH, SAFETY AND WELL-BEING
Rakon is committed to the health, safety and wellness of
our team. Across our global locations we have established
practices to promote a safe and healthy working environment,
compliant with local health and safety legislation. We have
ongoing education and training, as well as the implementation
of initiatives for continuous improvement.
Over FY24, five Lost Time Incidents (LTIs) were recorded
(compared to two in FY23) and 32 incidents were recorded
(compared to 31 in FY23).
These numbers reflect the consistent positive impact of our
ongoing education and training efforts, including improved
reporting procedures for Rakon India and Rakon France, as
part of our initiatives for continuous improvement.
New Zealand
■ Female44%
■ Male56%
Global
■ Female29%
■ Male71%
2024 Rakon India annual sports day
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OUR PEOPLE / CONTINUED
EMPLOYEE WELL-BEING
Supporting and looking after the well-being and mental
health of our employees is at the core of Rakon’s culture.
We regularly review and implement new initiatives designed
to promote and improve workplace wellness, so that our
people can monitor and maintain personal well-being, and be
at their best within the workplace and in their personal lives.
These initiatives include:
• Flexible working, including a move globally to hybrid
working where employees can perform some of their roles
from home. At our manufacturing operations, employees
are able to request shift adjustments to accommodate
personal circumstances
• Access for employees to Rakon’s outsourced Employee
Assistance Programme (EAP) or similar counselling
services
• Mental Health ‘First Aid’ training for people leaders
• Online seminars on well-being, stress management,
boosting mental health and personal wellness available
for all employees
• Regular check-ins from managers to their team members
and anonymised employee surveys focused on feedback
around how they are and what else we could be doing
to better support our teams and people.
ATTRACTING AND RETAINING TALENT
A technology pioneer for more than 50 years, Rakon has
always recognised the importance of developing talent
and promoting from within. We strive to provide meaningful
career opportunities for our team members – across all levels
and areas of the business, and particularly in the highly
competitive skills environment.
Length of tenure – global
LEARNING & DEVELOPMENT
Raising up and developing leaders at all levels is a continuous
focus. We provide development opportunities for our people
leaders through a number of different programmes delivered
around the globe. We also offer professional development
across our business and continue to grow the opportunities
available. Through our graduate programme, we offer support
to team members where appropriate to continue their
educational qualifications.
Our yearly graduate programme is run globally and allows
our new graduates to sample different parts of the business,
eventually settling in an area most suited to their capabilities
and interests. Across the global business we partner with
multiple technical institutes to ensure we have a varied range
of skills, backgrounds and experiences joining our team.
235
HAVE BEEN PART OF OUR
GLOBAL TEAM FOR 10+ YEARS
Years at Rakon
■ 5 and under55%
■ 6-1016%
■ 11-2015%
■ 21-3011%
■ 31+3%
TEAM
MEMBERS
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Board and
Management
profiles
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Our Board
Lorraine Witten
CHAIR AND INDEPENDENT DIRECTOR
BMS (Hons); CFInstD; FCA
Appointed 2017
Lorraine is a professional director with extensive experience
in technology and Information Communications Technology
(ICT) sectors, as well as strategy and entrepreneurship.
She is a director of NZX & ASX listed Mercury and Move
Logistics, and New Zealand private company vWork.
She is a Chartered Fellow of the New Zealand Institute of
Directors and a Fellow of Chartered Accountants Australia
and New Zealand (CAANZ).
Keith Watson
INDEPENDENT DIRECTOR
NZCE (Telecom); CMI
Appointed 2018
Keith is a professional director with substantial governance
and leadership experience in technology and engineering
companies across Asia Pacific, the Americas, Central Europe,
UK, Australia and New Zealand.
He is currently Chair of Counties Energy, ECL Group and
the New Zealand Institute of Economic Research (NZIER)
and a director of Acumen and Wine Works.
He is a Chartered Member of the Institute of Directors
in New Zealand.
Sinead Horgan
INDEPENDENT DIRECTOR
BComm; MAcc; CMInstD; FCA
Appointed 2022
Sinead is a professional director with significant experience
in finance, strategy development, risk management and
M&A across Europe, the Americas, Asia, Australia, and
New Zealand.
She is a director and Chair of the Audit and Risk Committees
of FMG (Farmers Mutual Group) and EcoCentral. She is also
a director or trustee of a number of other private companies
and not-for-profit organisations.
She is a Chartered Member of the New Zealand Institute
of Directors and a Fellow of the Institute of Chartered
Accountants Ireland.
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OUR BOARD / CONTINUED
Brent Robinson
EXECUTIVE DIRECTOR
Hon FIPENZ
Appointed 1991
Brent’s 44 years at Rakon includes establishing global
operations and markets and almost 36 years as
Managing Director/CEO.
Brent is an Honorary Fellow of the Institute of Professional
Engineers New Zealand and was awarded the New Zealand
Hi-Tech Trust – Flying Kiwi Award in 2011.
Brent is also a director of Quantifi Photonics Limited.
Jung Meng (JM) Tseng
DIRECTOR
Appointed to the Board on 13 July 2023 and
elected at the 2023 annual meeting.
Jung Meng (JM) is the president of Siward Crystal Technology
Co. Limited (Siward), a substantial shareholder (12.19%) in
Rakon. An experienced business leader with over 45 years
in the frequency control product industry, JM has helped
grow Siward to become a global leader with revenue of
US$100+ million.
JM is a director of Securitag Assembly Group Limited,
Apex Optech Co., Limited and Siward subsidiaries.
He holds an EMBA from Feng Chia University in Taiwan.
Keith Oliver
INDEPENDENT DIRECTOR
BE (Hons)
Appointed 2017
Keith is a professional director and business advisor with
an extensive management, governance and investment
background in NZ technology companies operating in
international markets in Asia, Europe and the Americas.
He is currently the Executive Chair of Blackhawk Tracking
Systems, a director and business advisor with Alto Capital and
a director of AoFrio (formerly Wellington Drive Technologies)
and private company vWork.
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RAKON / ANNUAL REPORT / 2024SUSTAINABILITY AND ESG

Rakon management team
Dr Sinan Altug
CHIEF EXECUTIVE OFFICER
Drew Davies
CHIEF FINANCIAL OFFICER
Brent Robinson
CHIEF TECHNOLOGY OFFICER
Maureen Shaddick
GENERAL COUNSEL AND
COMPANY SECRETARY
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Our management team are core to
Rakon’s success and for leading our
people to capture opportunities and
navigate challenges. It is the vision,
insight and understanding of our
leadership, coupled with their strong
operational oversight, that ensures
continued delivery of our growth
strategy and long-term value creation
for shareholders.

RAKON MANAGEMENT TEAM / CONTINUED
Margo Thomas
GENERAL MANAGER
GLOBAL PEOPLE AND CAPABILITY
Michael McIlroy
ADVANCED TECHNOLOGY
MANAGER – GLOBAL ENGINEERING
Scott Stemper
GLOBAL QUALITY MANAGER
Cliff Hand
GENERAL MANAGER OPERATIONS
Arun Parasnis
MANAGING DIRECTOR, RAKON INDIA
Adam Robinson
GLOBAL SALES MANAGER
Darren Robinson
CHIEF MARKETING OFFICER
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Driving sustainability
through our business
Consistent with our belief that
connectivity can play a major role
in the future sustainability of our
planet, our vision for sustainability
is simple – to support people
and the planet through the
connected future. This focus is
increasingly embedded in our
decision-making and behaviour,
and is closely aligned with our
business strategy.

DRIVING SUSTAINABILITY THROUGH OUR BUSINESS / CONTINUED
ENVIRONMENT
• Implementing a sustainability management software
platform to facilitate the collection, calculation, analysis
and reporting of Scope 1, 2 and 3 greenhouse gas
emissions across Rakon’s global operations.
• Preparing our first mandatory climate-related disclosure
as a reporting entity under the External Reporting Board’s
(XRB) Aotearoa New Zealand Climate Standards (NZCS).
• Engaging with global teams to develop their understanding
of climate change and expectations from stakeholders
including regulators, customers and shareholders.
• Exploring vision and opportunities for execution of
sustainability in practice on a large scale at our new
Manufacturing Centre of Excellence in Bengaluru, India.
SOCIAL
• Fostering health and safety and well-being practices and
consistent reporting across global operations for healthy
workforce and safe workplaces.
• Regular employee engagement surveys across
global teams.
• Focus on Rakon’s Supplier Code of Conduct and
procurement terms and conditions to support an ethical
and sustainable supply chain including addressing quality,
environment, climate change, business practices, labour
practices, management systems and governance.
• Continued contribution to local communities through
staff-initiated activities that reflect staff interest
and values.
GOVERNANCE
• Regular engagement with the Board and
Committees reflecting their oversight
responsibilities and strategic focus on ESG
and climate-related matters.
• Recognition of the importance of understanding,
monitoring and addressing Rakon’s climate-
related risks and opportunities.
• Investment in software platform that enables
reliable and repeatable measurement of
emissions and other environmental data. Data
will inform initiatives and support reporting.
FY24 PROGRESS
Over the past year we have continued to work on our
sustainability journey, including developing our capability
for environmental, social and governance (ESG) reporting.
Here we highlight our main achievements for FY24,
with further details provided on pages 44-48 and
in our Climate Statement which will be available on
Rakon’s website on or before 31 July 2024:
rakon.com/investors/reports-presentations-events.
In FY25, we plan to build on our achievements to date and
to pursue further initiatives and activities that address our
material ESG topics related to our products, supply chain,
operations, people and governance. Enablers that are
important to our progress include training and development,
ongoing engagement with our people, assigning roles and
responsibilities across the organisation to support ESG and
climate change initiatives and activities and engagement
with our shareholders, customers and suppliers.
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Our ESG framework supports our sustainability goals. In this
section we share our material ESG issues, how they impact
our business and our priorities for improvement. We also
provide an update of our performance and progress over
FY24. This includes performance in the key environmental
areas of carbon, waste and water.
MATERIALITY ASSESSMENT – WHAT OUR
STAKEHOLDERS THINK
In FY22 we undertook an assessment to identify the most
important ESG aspects for Rakon. This assessment entailed:
• a desktop review of Rakon’s own information and
external information, including current trends, peer
analysis, media reports; and
• stakeholder engagement with institutional and
other investors, potential investors, senior
management and staff.
The output of this work continues to help us to determine
the environmental, social and governance topics we should
prioritise (as set out on the next page). However, we recognise
all ESG related topics are important to sustainability and
how we must govern and manage our global business
and operations.
Our ESG framework
42
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OUR ESG FRAMEWORK / CONTINUED
OUR PRIORITY AREAS
The table below summarises and defines the
environmental, social and governance topics that
Rakon and its stakeholders believe are most material
to the company. They are wide-reaching and impact
Sustainable products
Sustainable operations
Ethical supply chain
An engaged, healthy, diverse
and capable workforce
Risk management
TopicSub-topics
• Sustainable materials and product design
• Waste and circularity
• Decarbonisation (scope 3)
• Waste and hazardous material management
• Water management
• Decarbonisation (scope 1 and 2)
• Climate adaptation and resiliency
• Responsible sourcing of materials
• Modern slavery
• Responsible selling of products
• Bribery and corruption
• Employee health, safety and well-being
• Employee engagement and growth
• Diversity and inclusion
• Risk management
• Disclosure
• Compliance to legal and regulatory requirements
Definition
Minimising the negative impact of our products and
embracing innovation to positively impact the environment.
Sustainable and efficient use and protection of resources
in the operating processes, particularly manufacturing.
Adapting to the physical impacts of climate change to
maintain a resilient business model.
Ethical sourcing of raw materials, especially in relation
to conflict minerals and labour, particularly in partner
manufacturing plants outside New Zealand where labour
laws differ. Policy of compliance with international trade
laws and practice of due diligence about sales and exports of
products, who is buying and for what. No tolerance for bribes,
facilitation payments or kickbacks in any business activities
including in engagement with public officials.
Cultivating a strong, healthy workplace culture that attracts,
engages and develops high performing teams that embrace
diversity of thought.
Maintaining robust risk management processes supported by
internal controls and assurance.
ENVIRONMENT
SOCIAL
GOVERNANCE
most parts of our operations. From these topics, we identify
the areas where we should focus our efforts to improve
sustainability. As we implement improvement initiatives,
we are concurrently developing our framework to support
the measurement, reporting and assurance of our
performance across these areas.
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RAKON / ANNUAL REPORT / 2024SUSTAINABILITY AND ESG

We recognise the importance of
protecting the environment and our
Corporate Environmental Policy sets
out our commitment to achieving
environmental best practice.
We are highly conscious of the need to protect the world’s
environment and be efficient in the use of energy and
natural resources. We aim to develop environmentally
friendly products and technologies through our design
and development processes and endeavour to use
appropriate methods to dispose of and treat our wastes
to prevent pollution.
Our Environmental Management System (EMS) is central to
meeting our customers’ expectations, achieving continuous
environmental improvement and maintaining compliance
with applicable laws and regulations relating to the protection
of the environment and the welfare of our employees.
As part of this commitment. Rakon is certified to ISO14001
standard at its sites in Auckland, New Zealand and Bengaluru,
India. This standard sets out the requirements for our EMS.
We have been reporting to CDP (formerly known as the
Carbon Disclosure Project) since 2010. The information
we measure across our global operations includes refrigerant
use and the consumption of carbon dioxide, electricity, fuel
and natural gas. CDP, a global environmental disclosure
system, enables our customers to access information about
our environmental practices, management of risks and
opportunities and improvement initiatives and to support
their assessment of their own carbon footprint.
Over the past year we have made good progress on
improving our processes for measuring and reporting our
environmental performance. We have implemented an energy
efficiency and sustainability management software platform,
which enables input of data from global teams and access
to data and reports for local and corporate-wide business
requirements and initiatives. Our environmental metrics
include measurement of greenhouse gas (GHG) emissions,
electricity usage, waste to landfill and water consumption.
We had expected to set meaningful environmental targets
to support our environmental management goals in FY24,
however we expect to be better positioned in FY25 to
consider whether there are meaningful environmental
targets for some Rakon locations.
Improving our environmental impact
44
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IMPROVING OUR ENVIRONMENTAL IMPACT / CONTINUED
GREENHOUSE GAS (GHG) EMISSIONS
Rakon’s most relevant climate change metrics relate to
GHG emissions. We currently measure Rakon’s Scope 1
(Direct) and Scope 2 (Indirect Energy) GHG emissions
and are now commencing a project to collect, measure
and disclose Scope 3 (Other Indirect) GHG emissions
for FY25 and onwards.
Currently, Rakon’s principal sources of GHG emissions are
electricity usage to run offices, factories and manufacturing
equipment and processes and the use of carbon dioxide in
parts of our production process.
We have changed the basis of our GHG emissions
measurement from a calendar year basis to a financial
year basis to meet the requirements of the mandatory
climate-related disclosures regime.
Rakon’s Scope 1 (Direct) and Scope 2 (Indirect Energy)
GHG emissions, using the location-based method,¹
across our global operations are set out on the right.
Emissions by Country
The decrease in total Scope 1 & 2 GHG emissions between
calendar year 2022 and FY24 has been driven mainly by
reduced carbon dioxide use in production processes at Rakon
New Zealand, with some offset from increased carbon dioxide
use in production processes at Rakon India (Scope 1). Scope 2
emissions relating to electricity consumption have remained
similar in total between these two periods. There was lower
production output in New Zealand resulting in lower electricity
consumption, offset by higher electricity consumption in India
driven by its higher production output and due to more carbon
intensive electricity provided by the national grid in India than
by New Zealand’s national grid.
0
1,000
2,000
3,000
4,000
5,000
6,000
FY242022
Scope 2 emissions (tCO
2
e)
Scope 1 emissions (tCO
2
e)
Scope 1 & 2 emissions intensity (tCO
2
e per m units produced) 
Scope 1 & 2 emissions intensity (tCO2e per $m of revenue)
  
tCO
2
e
tCO
2
e per Sm / tCO
2
e per m unts
0
20
40
60
80
100
120
140
160
180
200
GHG EMISSIONS
SCOPE 1 & 2 GHG EMISSIONS (tCO
2
E) FY24
■ India85%
■ New Zealand9%
■ France5%
■ UK1%
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IMPROVING OUR ENVIRONMENTAL IMPACT / CONTINUED
The reduction in the use of CO
2
in New Zealand was primarily
achieved as a result of the continuation of a project to switch
from the use of CO
2
to N
2
in the temperature testing ovens
used in the manufacturing process. This project is
well-advanced. We are planning to trial a similar switch at
Rakon India early in FY25 for products that currently require
CO
2
for testing. We expect that the CO
2
to N
2
change process
for Rakon India will be a multi-year, phased approach driven
by customer requirements and the speed of product lifecycle
changes. Lifecycle changes for products which require CO
2

for testing may be impacted by timing of re-qualification
processes with relevant customers.
As the GHG emissions data demonstrates, Rakon’s greatest
source of emissions is at its Rakon India operations and
therefore Rakon India also presents the greatest challenge
and opportunity for emissions reduction.
Rakon India is currently assessing an opportunity to
purchase renewable electricity for at least some of its
electricity usage for FY25. If this initiative is viable and
verifiable, it would lead to a reduction in Scope 1 and 2
GHG emissions for Rakon India in FY25 and for Rakon
globally, using the market-based method.2
Targets
While we measure our GHG emissions and have commenced
initiatives focused on reducing our Scope 1 GHG emissions,
we have not yet set reduction targets. We had planned to set
reduction targets by the end of FY24 but that work has been
delayed due to the factors including:
• Reduced revenue in a tough macro-economic environment
put increased pressure on budgets and available
resources; and
• Difficulty in establishing a baseline operating position
for Rakon India’s new facility completed in mid-2023
(impacting our ability to establish Scope 1 and 2 GHG
emissions reduction targets).
Similarly, our previously signaled work towards becoming
a Toitū carbonreduce certified organisation in New Zealand
and related initiatives have also been delayed.
Rakon will continue to assess whether it can set meaningful
targets and appropriate timing for setting any such targets.
Carbon Intensity
Our total Scope 1 & 2 GHG emissions revenue related
intensity measure (tonnes of CO
2
e per $m of revenue)
has increased from calendar year 2022 due to lower sales
volumes in FY24, following the completion of the high volume
one-off chip shortage contracts early in calendar year 2023.
This is also shown in the more significant increase in the
production related intensity measure (tonnes of CO
2
e per
million units produced) where the need to run production
at high capacity during calendar year 2022 for the one-off
contracts contrasts with smaller production runs in FY24
at lower, less efficient volumes due to fixed costs being a
substantial proportion of the cost base. The reduction in
Rakon’s holding of finished goods stock over FY24 also
contributed to the increase in this production-related intensity
measure due to reduced production volumes. Given that
electricity consumption is relatively fixed for a given Rakon
facility regardless of the volume of production, we expect
significant on-going variability in these intensity measures
and consider the absolute GHG emissions measures
(tonnes of CO
2
e) to be of more relevance.
Scope 2 GHG emissions measurement approaches:
1 Location-based method – uses an emission factor calculated from all electricity delivered to the grid in a period; and
2 Market-based method – uses contractual instruments (e.g., renewable energy certificates) which reflect emissions from
renewable electricity generation that organisations have purposefully chosen.
Sourced from: www.toitu.co.nz
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IMPROVING OUR ENVIRONMENTAL IMPACT / CONTINUED
OUR MANUFACTURING OPERATIONS
New Zealand
Our New Zealand manufacturing operation retained its
ISO14001 (Environmental Management System Certification)
during the year with two minor non-compliances identified
which have now been addressed. New Zealand’s EMS is
regularly reviewed following the Plan-Do-Check-Act
methodology and a continuous improvement approach is
taken with EMS targets based on the last two years of data.
CO
₂
During the year, we continued our project to convert
temperature testing ovens (for oscillator production) from
using CO
2
to using N
2
. We have seen a significant reduction
in our CO
2
usage, which has contributed to ongoing CO
2

reduction efforts. The opportunities for further conversion
are limited for our New Zealand operation.
Electricity
Electricity consumption does not change significantly relative
to production volumes of products and is affected only to
some degree by some products requiring more electricity to
manufacture than others. Therefore, a substantial proportion
of such costs are incurred regardless of the volumes produced.
options in New Zealand being curtailed as a result of overseas
recycling agencies ceasing import of recycling from New
Zealand, and some of Rakon’s plastic waste (e.g. plastic reels)
having a fire retardant compound which is incompatible with
recycling. There are ongoing initiatives in place to recycle
e-waste, metal parts and other plastics. We were not able to
set a waste reduction target for the New Zealand operation in
FY24 for similar reasons to those that impacted our GHG
emissions target process. We maintain our intent to set a
target and plan to do so in FY25.
Measure
Calendar Years
Financial
Year
202020212022FY24
Waste to landfill
(tonnes)
17.725.5829.5122.62
Measure
Calendar Years
Financial
Year
202020212022FY24
Waste recycled
(tonnes)*
N/a21.4129.3518.74
Percentage of
waste recycled*
N/a45.6%49.9%45.3%
* N/a – not available that year
Measure
Calendar
Year
2022
Financial
Year
FY24
Electricity Consumption
(MWh/Year)
4,7854,249
Water
Total water consumption in New Zealand decreased by
0.8% against calendar year 2022. Our New Zealand
operation’s principal use of water is in the manufacturing
cleanrooms which operate at a similar level regardless of
changes in production volumes, as well as for general staff 
and cleaning requirements.
Measure
Calendar Years
Financial
Year
202020212022FY24
Water usage
(cubic metres)
10,98211,03311,12211,031
Waste
While the percentage of waste recycled has decreased
slightly from calendar year 2022, the tonnage of waste to
landfill has also decreased, influenced by lower production
volumes and associated waste. The previous increase in
waste to landfill up to 2022 was largely due to recycling
47
RAKON / ANNUAL REPORT / 2024SUSTAINABILITY AND ESG

IMPROVING OUR ENVIRONMENTAL IMPACT / CONTINUED
Rakon India
Rakon’s new manufacturing facility in Bengaluru, India is now
fully operational. The new facility is certified for ISO14001
(Environment management system) with validity through
to February 2025 and for ISO 45001 (Occupational health
and safety management system) with validity through to
December 2024 with zero non-compliances to date.
The new factory is a green building incorporating various
sustainable building practices and has applied for ‘LEED
Certification’ (Leadership in Energy and Environmental
Design). Rakon is expecting to achieve LEED Silver rating
certification by July 2024.
In the design and construction of the new manufacturing
facility, Rakon’s goal was to achieve zero water discharge
from the premises. During the financial year FY24, 1.3 million
litres of recycled water from the inhouse STP (Sewage
treatment plant) and ETP (Effluent treatment plant) were used
for toilet use and for gardening purposes. We also collected
0.42 million litres of water through rainwater storage tanks
which is used for gardening and cleaning purposes. Rainwater
is also collected through rainwater recharge pits to improve
the Groundwater table at the premises.
Energy efficiency is also a focus with various measures
including use of LED lights, motion sensors for lighting control,
energy efficient motors, variable frequency drives for HVAC
and AHU motors, and evaporator cooling systems being
implemented in the new facility. Double-glazed tinted glass
is used in office and other areas to reduce the temperature
inside thereby reducing the air conditioning load.
48
RAKON / ANNUAL REPORT / 2024SUSTAINABILITY AND ESG

Rakon recognises that visibility of
labour and business practices, sources
of materials and end use of products
are important issues for many of our
stakeholders including customers,
suppliers, investors, employees
and regulators.
In addition to addressing these matters in our Supplier Code
of Conduct and broader Business Code of Conduct, Rakon
has codes and policies which set out how we approach the
sourcing of materials, products and labour as well as who
we sell to.
Key codes and policies include our Supplier Code of Conduct,
Trade Compliance Policy, Conflict Minerals Statement, Slavery
and Human Trafficking Statement and Whistleblowing
(Protected Disclosure) Policy.
Rakon’s standard terms of procurement require our suppliers
to comply with our Supplier Code of Conduct and Conflict
Minerals Statement as updated from time to time. Our
Supplier Code of Conduct addresses our high expectations
regarding our suppliers’ responsibility for and attention
to business ethics, health and safety, environment and
sustainability, employees’ rights and management systems.
Rakon’s products are used in a wide range of applications
in many different industries and market sectors.
Our Trade Compliance Policy sets out principles and
processes that Rakon employees are required to follow
in relation to sales and exports of Rakon products and
imports of materials including due diligence processes.
With customers in the defence industry, it is important
to comply with rules designed to control sales and exports
of products that may have a military end use.
Staff training, business management system protocols
and senior management oversight and escalation processes
support compliance. Compliance assurance reporting is
required by the Board bi-annually.
Our supply chain, people
and practices
49
RAKON / ANNUAL REPORT / 2024SUSTAINABILITY AND ESG

India
Rakon India continues to forge strong community
partnerships and provides ongoing support for two
local charitable organisations to help fund the provision
of health-related services to the elderly and youths.
Those organisations are the Swami Vivekananda
Youth Movement (SVYM), which provides palliative
care services for patients living with or dying from
advanced progressive illness, and the Shri Sarva
Dharma Sharanalaya Trust, which provides assisted
living, medical support, and other special services for
senior citizens with chronic and progressive health
related requirements.
The Rakon India team is also working with the Indian
Forest Department on a key local reforestation project,
using indigenous plant biodiversity. In addition to a
financial contribution for the project, Rakon India team
members will be taking part in upcoming programmes
to assist with the tree planting.
France
In France, we participate in a government initiative to
offer intern programmes and financial assistance for
students, with a particular focus on those studying
engineering. The opportunities created through this
initiative assist financially disadvantaged students
in pursuing careers in engineering and technology.
The resulting broadening of the pool of talent available
for the local high tech ecosystem also benefits companies
like Rakon.
United Kingdom
Our Research and Development centre in the United Kingdom,
continues to support a charity radio station at the Princess
Alexandra Hospital, in Harlow, Essex. Established in 1970,
the station broadcasts exclusively to the patients and staff
of the hospital.
New Zealand
In New Zealand, we regularly provide study opportunities
to students, including work experience placements and
support for engineering students. These initiatives provide
a pathway to employment for some of the students and
aligns with our long history of fostering talent and strategic
focus on technology leadership. We also support a number
of New Zealand charities each year.
Over the past year, we have donated to NZ Downs Syndrome
Association, NZME Auckland Special Children’s Christmas
Party, Radio Lollipop Appeal, Kidney Kids, Koru Care, Kids Big
Day Out and Westpac Helicopter Trust. Our New Zealand
team also held a fundraising day for Gumboot Friday with
proceeds helping to provide youth counselling.
Contributing in
our communities
Rakon is committed to actively
and positively contributing to
the communities in each of the
countries and locations we operate
in. Over the past year we have
supported a range of initiatives
that improve well-being or
assist with education and
career prospects.
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The Board of Rakon Limited is committed
to conducting business in the right way
and maintaining the highest standards of
corporate behaviour and accountability.
The Board regularly reviews Rakon’s
corporate governance framework and
supports best practice reporting.
The Board confirms that in the year to 31 March 2024, the
company’s corporate governance practices complied with
the recommendations in the NZX Corporate Governance
Code (1 April 2023).
The information in this Annual Report is current as at
27 June 2024 and has been approved by the Board.
The key corporate governance documents referred
to in this report are available on Rakon’s website at:
www.rakon.com/investors/corporate-governance.
Rakon is listed on the NZX Main Board and is subject
to regulatory control and monitoring by both the NZX
and the Financial Markets Authority (FMA).
Corporate Governance
CODE OF ETHICAL BEHAVIOUR
We are committed to ensuring the highest standards
of honesty and integrity are maintained by our directors
(Directors), employees, suppliers, contractors and
consultants, in all activities conducted by, or in the
interests of, Rakon.
Corporate policies, guidelines, procedures and practices
address how we support our people, respect communities,
act in the interests of our investors, conduct our business and
protect the environment. This includes our requirements in
relation to health, safety and wellbeing, and ethical behaviour.
Ethical standards and guiding principles are set out in our
Business Code of Conduct. The high standards of honesty,
integrity and ethical conduct which Directors are required
to maintain, are also set out in the Board Charter which is
regularly reviewed by the Board.
Rakon’s Business Code of Conduct sets out our expectations
of ourselves and our suppliers of how we operate and do
business. It includes respect for, and compliance with, all laws
in the countries in which we operate and universally
recognised standards for the environment, human rights,
labour and ethics.
Rakon has processes in place to ensure all new and existing
employees have awareness and understanding of the
Business Code of Conduct and other company policies. These
include an Employee Handbook which is provided to all new
employees. The Handbook is regularly reviewed and updated
and is available on the in-house portal, along with all human
resources and corporate policies and procedures. Training
sessions with managers and team leaders aim to equip them
to guide and support their teams. Rakon recognises it is
necessary to use a range of methods and approaches over
time to promote awareness and obtain assurance of
understanding and compliance.
Directors and employees are expected to report material
breaches of the Business Code of Conduct. Rakon’s
Whistle Blowing (Protected Disclosure) Policy, supports
the expectation that directors and employees should report
breaches of the Business Code of Conduct and policies,
as well as other wrongdoing or suspected wrongdoing. The
policy provides a framework and process for safe reporting
and is accessible by all employees on the in-house portal.
Rakon’s Financial Product Trading Policy addresses the
risk of insider trading in Rakon securities by Directors,
employees and contractors. Additional trading restrictions
apply to Restricted Persons as defined in the policy, including
Directors, and certain employees. Regular reminders of the
purpose and meaning of this policy are provided to staff and
Directors including advice in relation to the commencement
and end of restricted trading periods. Details of Directors’
shareholdings as at 31 March 2024 are set out in the
Shareholder Information section on page 119. The policy
is also available on the in-house portal and notices about
restricted trading periods and reminders about the rules
regarding financial product trading and related policies
are provided to employees.  
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CORPORATE GOVERNANCE / CONTINUED
BOARD COMPOSITION AND PERFORMANCE
The Board is ultimately responsible for Rakon’s strategic
direction and oversight of Rakon’s management, with the
aim of increasing shareholder value and ensuring the
company’s obligations are met.
The Board operates under a written charter which sets out
the structure of the Board and the procedures for the
nomination, resignation and removal of Directors; and outlines
the respective responsibilities and roles of the Directors and
management. It also identifies procedures to ensure that the
Board meets regularly, conducts its meetings in an efficient
and effective manner and that Directors are fully empowered
to perform their duties and to fully participate in meetings of
the Board.
Rakon’s day-to-day management and operation is delegated
by the Board to the Chief Executive Officer. This delegation
and further sub-delegation to senior management and their
direct reports is subject to financial controls and limitations
advised from time to time as set out in Rakon’s Delegation
of Authority Policy.
In discharging their duties, Directors have direct access
to and may rely upon Rakon’s senior management and
external advisers.
Directors have the right, with the approval of the Chair or by
resolution of the Board, to seek independent legal or financial
advice at the company’s expense to assist them in the proper
performance of their duties.
While the appointment of new Directors is the responsibility
of the whole Board, the People Committee Charter outlines
the Committee’s particular duties and responsibilities in
relation to the selection and appointment of new Directors
and succession planning.
The People Committee is responsible for identifying
and recommending candidates for the role of Director,
taking into account such factors as it deems appropriate,
including tenure, capability, skill sets, experience, diversity,
qualifications, judgement and the ability to work with
other Directors.
The Board recognises a skills matrix can assist with identifying
and assessing existing Directors’ skills and competencies as
well as new skills and competencies which may be needed
to meet Rakon’s future governance requirements. The skills
and experience the Board has determined are important to
Rakon’s strategic direction and those held by the Directors
through FY24 are shown on this page. The number of elected
Directors and the procedure for their appointment, retirement
and re-election at annual meetings are set out in Rakon’s
Constitution and the NZX Listing Rules.
All Directors, including any executive Director, must retire
by rotation and if eligible, may stand for re-election at the
third annual meeting, or three years after their last election,
whichever is longer. Any Director appointed since the
previous annual meeting must also retire and is eligible
for election. To ensure a better cadence of director rotation
the director rotation schedule is adjusted from time to time
to provide for directors to retire and stand for re-election,
if eligible, earlier than the end of their three-year term since
their last election.
DIRECTORS’ SKILLS MATRIX
100%
75%
60%
75%
70%
70%
65%
ENTERPRISE LEADERSHIP
CORPORATE GOVERNANCE
FINANCE AUDIT & RISK
INDUSTRY TECHNOLOGY
STRATEGIC VALUE CREATION
M&A
INTERNATIONAL
MANUFACTURING
70%
52
RAKON / ANNUAL REPORT / 2024SUSTAINABILITY AND ESG

CORPORATE GOVERNANCE / CONTINUED
All new Directors enter into a written agreement with the
company in the form of a letter of appointment. The letter
sets out the key terms and conditions of their appointment.
The letter addresses tenure, duties and responsibilities and
requirements outlined in relevant legislation, the NZX Listing
Rules, Rakon’s Constitution and the Board Charter and is
supported by general rules and practice.
Information about each of Rakon’s Directors is available on the
Rakon website and on pages 36-37. The company maintains
an interests’ register and particulars of the entries made in
the interests register during the year ended 31 March 2024
in relation to Directors’ interests are disclosed in the
Shareholder Information section on pages 119-121.
Board meetings and attendance
The Board meets as often as it deems appropriate, including
sessions to review the company’s performance against
agreed plans, and to review Rakon’s strategic direction
and forward-looking business plans. Video and/or phone
conferences are used to accommodate and reduce director
travel requirements and to address inclement weather
restricting local travel and organisational convenience.
The table (right) sets out Directors’ attendances at the
Board, Audit and Risk Committee, People Committee and
Independent Committee meetings during the year ended
31 March 2024. In total, there were 12 Board meetings,
five Audit and Risk Committee meetings and three
People Committee meetings. Directors also attended
strategy and risk workshops and the 2023 Annual Meeting.
A record of attendances at committee of independent
Directors is also included in the table.
Board
Meetings
Audit & Risk
Committee
People
Committee
Strategy
& Risk
Workshops
& Annual
Meeting
Independent
Director
Committee
Total number of meetings held1253322
Lorraine Witten1253321
Sinead Horgan125–321
Keith Watson1213321
Steve Tucker
1
104–36
Keith Oliver 11–3318
Brent Robinson 11––3 –
Yin Tang Tseng
2
–
Jung Meng Tseng
3
1–
Roger Yao: Observer for Jung Meng Tseng
4
11––3–
1 Steve Tucker resigned with effect from 1 April 2024
2 Yin Tang Tseng resigned with effect from 13 July 2023
3 Jung Meng Tseng was appointed with effect from 13 July 2023
4 Roger Yao is an observer for Director Jung Meng (JM) Tseng, with the consent of the Board. JM is the President of Siward Crystal Technology Co. Limited
which is a substantial shareholder (12.19%) in Rakon and is actively involved in the governance of Rakon.
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CORPORATE GOVERNANCE / CONTINUED
Diversity
At Rakon, we are committed to a workforce reflecting the
diverse communities in which we operate and our customer
base, and to ensuring that our employees’ unique strengths
and characteristics are valued and celebrated.
We inherently recognise the importance of inclusion and
diversity in helping to deliver our business objectives, fulfil
the needs of our customers and create a high-performing,
values-driven culture. Committing to inclusion and diversity
means incorporating inclusion and diversity into our talent
acquisition, talent management and succession management
processes, and into our values and culture.
Rakon’s Diversity and Inclusion Policy requires Rakon to
set objectives for measuring and promoting diversity and
inclusion within the company. Progress on these objectives
is required to be monitored and assessed by the People
Committee and the Board at least annually.
In FY24 the key objective set under Rakon’s Diversity and
Inclusion Policy was consistent collation and recording of
human resources data including gender, ethnicity, tenure,
remuneration and benefits across its global operations. In
setting this objective, the Board recognised that to determine
whether Rakon’s global recruitment, succession, retention,
development and remuneration strategies were in alignment
with Rakon’s Diversity and Inclusion Policy required access to
comprehensive, reliable data on an iterative basis. The process
of collation and recording of human resources data across
Rakon’s global operations has significantly improved, enabling
enhanced reporting to the Board. As at 31 March 2024,
women represented 29% (FY23: 29%) of Rakon’s Directors
and 22% (FY23: 22%) of Rakon’s Officers (as defined in
NZX Listing Rule 3.8.1(c)). A quantitative breakdown of
the number of male and female Directors and the number
of male and female Officers as at 31 March 2024 and as at
31 March 2023 is set out in the table below. In that table the
Chief Technology Officer, who is an Executive Director, is
included as a Director, and Officers are the Chief Executive
and other direct reports of the Chief Executive Officer having
key functional responsibilities. Rakon gender data across
all its global teams can be found in the People section
pages 32-34.

Date of
determination31 March 202431 March 2023
Directors
Females229%229%
Males571%571%
Officers
Females222%222%
Males778%778%
Director Development
All Directors are encouraged to undertake appropriate training
and education to build on their governance and directorship
skills. Appropriate training and education includes: attending
presentations on changes in governance, legal and regulatory
frameworks; attending technical and professional development
courses; and attending presentations from subject matter
experts and Rakon advisers. Senior management provide
updates to the Board on relevant industry and company
issues. A number of Rakon’s Directors are chartered members
of the New Zealand Institute of Directors. During the year,
Rakon directors received further training information in
relation to climate change and reporting and initiated a
process to identify the training and development needs
of the Board as a whole and how they can best be
addressed in the Board’s annual work plan.
Board, Committee and Director Evaluation
The Board Charter requires the Board to regularly consider
individual and collective performance, together with the skill
sets, training and development and succession planning
required to govern the business. The Board initiated a Board
Evaluation process in 2023 using the Institute of Directors’
Kickstart Programme. Following receipt of the results of the
evaluation survey, the Directors met to discuss the survey
results and suggestions generated from the survey and to
consider and agree actions and initiatives for directors and
management that would support the ongoing improvement
of the Board’s administration, operation and stewardship.
The actions and initiatives have been captured in a document
to monitor progress.
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The charters of the Board’s Committees require the
Committees to undertake a self-review process, including
receiving feedback from the Board as a whole and reporting
to the Board on the outcome of the reviews. Review and
evaluation checklists are used by each Committee for the
review and evaluation exercise. Self-review of each
Committee was scheduled to be undertaken in FY24
being a year since the membership and the Chairs of the
Committees were changed and will be completed in FY25.
Independence
As of 1 April 2024, the Board comprises six Directors: five
non-executive Directors, and one executive Director. The
executive Director holds the position of Chief Technology
Officer. In order for a director to be independent, the Board
has determined, among other things, they must not be an
executive of Rakon and must have no disqualifying
relationships. The Board records guidance for determining
independence in its Charter and follows the guidelines in
the NZX Listing Rules.
By reference to this guidance, the Board considers that
as at 1 April 2024 a majority (four) of the Directors are
independent of the company and do not have any interests,
positions, associations or relationships which might interfere,
or might be seen to interfere, with their ability to bring
independent judgement to the issues before the Board.
None of the independent directors has been a director for
more than seven years, none has a significant shareholding
in Rakon and none has been an employee of the company,
the auditor or an adviser. The Board accordingly confirms:
Lorraine Witten (Chair), Keith Oliver, Keith Watson and Sinead
Horgan are independent; and Brent Robinson and Jung Meng
Tseng are not independent.
The Board recognises that from time to time it is appropriate
for the Board to confer without executive directors or other
senior management present, and for there to be separate
meetings of independent directors. The Board builds regular
sessions for independent Directors to meet into its annual
work plan.
The Chair of Rakon is an independent Director. While the
Board Charter does not require the Chair of the Board to
be an independent Director, if the Directors appoint a fellow
Director as Chair who is not independent, then they are
required to disclose this fact in the company’s annual report,
along with reasons justifying such a decision. The Rakon
Board Charter records the Board’s intention that the Chair
and Chief Executive Officer shall not be the same person.
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COMMITTEES
The Board has delegated certain activities
to committees to assist in the execution of its
responsibilities. The current committees of the
Board are the Audit and Risk Committee and
the People Committee (Committees).
The Committees meet as required and have terms
of reference (charters), which are approved and
regularly reviewed by the Board, and are available
on Rakon’s website.
Audit and Risk CommitteePeople Committee
Membership
• Sinead Horgan (Chair)
• Lorraine Witten
• Vacancy (following resignation of Steve Tucker
effective 31 March 2024)
• Keith Watson (Chair)
• Lorraine Witten
• Keith Oliver
Purpose
Ensure oversight of all matters related to Rakon’s financial
accounting and reporting, monitoring the processes
undertaken by external auditors and internal audit activity,
operational risk management and compliance with all
financial corporate governance requirements. Its duties
and responsibilities include:
• Review of consolidated financial statements.
• Oversight of compliance with financial reporting
rules and accounting policies.
• Review of performance of the external auditor, their
appointment and removal and their independence.
• Oversight of risk management framework, risk
policies, risk appetite and risk reviews including
climate-related risks.
• Review of the adequacy and effectiveness of
internal controls.
• Oversight of insurance programme and
treasury management.
Assist the Board in establishing coherent human resources,
remuneration and Director nomination policies and practices,
to support the successful management of Rakon. Its duties
and responsibilities include:
• Review of human resources strategy, organisational
structure and management succession planning,
• Review employee incentive schemes, remuneration for
the Chief Executive, senior management and Directors.
• Oversight of compliance with human resources and
health and safety legislation and policies.
• Oversight of Director succession planning, selection,
appointment and evaluation.
• Review induction and training programmes for new
and existing Directors.
• Review and monitor setting and implementation
of diversity and inclusion policy and objectives.
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The Committees review policies and monitor their
implementation, which are within their terms of reference.
They examine reports, information and proposals and,
where appropriate, make recommendations to the full Board.
Committees do not take, act or make decisions on behalf of
the Board unless specifically mandated by prior authorisation
from the Board to do so.
All members of the Board receive the minutes of each of the
Audit and Risk Committee and People Committee meetings
and all Directors are entitled to attend the Audit and Risk
Committee and People Committee meetings. In pursuing its
duties and responsibilities, each Committee is empowered
to seek any information it requires from employees and to
obtain independent legal or other professional advice. Each
Committee is required to report to the Board after each
meeting of the Committee.
The Audit and Risk Committee’s Charter provides that the
Committee must be comprised solely of Directors of Rakon,
have a minimum of three members, have a majority of
independent Directors and have at least one Director with an
accounting or financial background. The Chair of the Audit
and Risk Committee is not the Chair of the Board and the
current members are independent Directors and have
professional accounting qualifications and financial and
business experience. Following the resignation of one
member of the Committee on 31 March 2024 there is
currently a vacancy for a Committee member.
Management may attend Committee meetings at the
invitation of the Committee Chairs. Under the Whistleblowing
(Protected Disclosure) Policy, a person seeking to disclose a
wrongdoing or suspected wrongdoing may contact the
Committee in certain circumstances.
The People Committee’s work plan reflects duties and
responsibilities that would otherwise be covered by separate
remuneration and nomination committees. This approach is
sensible from an administrative and resourcing perspective
and facilitates regular oversight of both remuneration and
nomination matters during the year. Currently Rakon health
and safety matters are the responsibility of the full Board with
oversight of legislative compliance and policy by the People
Committee. All three of the People Committee members are
independent Directors.
Other Committees
The Board Charter specifically requires the Board to assess
regularly whether there is a need for any further standing
committees. The Board expects that any committee
established should operate under a written charter. From time
to time, special purpose committees may be formed to review
and monitor specific projects with senior management.
In December 2023, the Rakon Board approved a formal
committee of Independent Directors (Independent Committee)
and its terms of reference. The members of the Committee
are independent Directors Sinead Horgan (Chair of the
Committee), Lorraine Witten (Chair of the Board), Keith
Watson and Keith Oliver.
Takeover response guidance
Rakon does not have a specific Takeover Response Policy.
Rakon meets its takeover response preparedness through
training provided by external legal counsel and through
maintaining resources of up-to-date guidance in the
Directors’ Resource Centre. As was done in December 2023,
if a takeover situation arises, Rakon will convene a committee
of independent Directors to oversee disclosure, evaluation
and response and engage expert legal and financial advisers
to advise the committee. The terms of reference of the
Independent Committee formed in FY24 were approved
by the Board.
REPORTING AND DISCLOSURE
Rakon’s Directors are committed to keeping investors and
the market informed of all material information about the
company and its performance, in a timely manner.
Continuous Disclosure
Rakon has a Continuous Disclosure Policy to ensure that
material information is identified, reported, assessed and
disclosed promptly and without delay to the market. This
policy is regularly reviewed and circulated to Directors and
employees, along with further guidance on the application
of the policy and additional reminders about its purpose
and importance. Continuous disclosure is a standing agenda
item for each Board meeting. At each meeting the Board
considers whether there is any relevant material information
that should be disclosed to the market and minutes the
outcome of that consideration whether or not any disclosure
obligation is identified. In addition to all information required
by law, Rakon also seeks to disclose sufficient meaningful
information, including financial and non-financial information,
to ensure stakeholders and investors are kept well-informed
about the company.
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Financial information
Our business teams are responsible for implementing and
maintaining the appropriate accounting and financial reporting
principles, policies and internal controls designed to ensure
compliance with accounting standards and applicable laws
and regulations.
The Audit and Risk Committee oversees the quality and
integrity of external financial reporting, including the accuracy,
completeness, clarity, balance and timeliness of financial
statements. It reviews Rakon’s full and half-year financial
statements and makes recommendations to the Board
concerning accounting policies, areas of judgement,
compliance with accounting standards, stock exchange
and legal requirements, and the results of the external audit.
All matters required to be addressed, and for which the
Committee has responsibility, were addressed for the
reporting period ended 31 March 2024.
For the financial year ended 31 March 2024, the Directors
believe that proper accounting records have been kept
which enable, with reasonable accuracy, the determination
of the financial position of the company and facilitate the
compliance of the financial statements with the Financial
Markets Conduct Act 2013. The Chief Executive Officer
and Chief Financial Officer have confirmed in writing to the
Board that Rakon’s external financial reports present a true
and fair view of the company’s financial position in all
material aspects.
Rakon’s full and half-year financial statements for the current
year and the past eight years, are available on our website.
Non-financial information
Rakon combines its non-financial reporting into the Annual
Report, recognising the interdependence of financial and
non-financial matters to the long-term sustainability of the
business. In late FY22 Rakon carried out a formal process
to understand Environmental, Social and Governance (ESG)
priorities including engagement with stakeholders who helped
inform the focus of the development of our formal framework
for mature sustainability reporting. Through FY23 and FY24
Rakon has continued to be guided by the roadmap first
developed in 2022.
As signalled in Rakon’s FY23 annual report, the principal focus
for FY24 has been to ensure Rakon is prepared to make its
mandatory climate reporting in relation to FY24 under the
Climate-related Disclosures regime in New Zealand
established by the External Reporting Board (XRB). Rakon’s
climate-related disclosure report in relation to FY24 will be
available on Rakon’s website or before 31 July 2024:
rakon.com/investors/reports-presentations-events.
In addition, Rakon is continuing to develop its wider ESG
Framework and pursuing initiatives that address its material
ESG topics. For further information on our progress through
FY24 see the Sustainability and ESG section of this report.
REMUNERATION
Rakon applies a fair and equitable approach to remuneration
having regard to the financial position of the company and the
external environment.
For full information please refer to the Remuneration section
at page 114.
RISK MANAGEMENT
Rakon is committed to the identification, monitoring and
management of material financial and non-financial risks
associated with all its business activities in the interests
of all of its stakeholders.
The Board is responsible for Rakon’s system of risk
management and internal control and delegates day-to-
day management of risk to the Chief Executive Officer.
The Audit and Risk Committee provides additional and
more specialised oversight of the company’s risks to
support the Board’s oversight.
As recorded in the Audit and Risk Committee’s Charter,
the Board delegates specific responsibilities to the
Committee to ensure appropriate risk assurance processes
are implemented. The Committee’s work plan and meeting
schedule provide dedicated time for review of the company’s
risk management framework. The Committee is required to
report its findings to the full Board.
The Board and management are focused on the continuous
improvement and effectiveness of Rakon’s risk management
framework. The Board recognises that risk is anything
that could potentially impact on Rakon’s ability to achieve
its business goals and objectives and therefore risk
management is interconnected with the Company’s
strategy and business plan.
In FY23 and FY24 Rakon worked with external risk advisory
services to assist with a review of its risk management
framework including its risk policy, risk categories, risk
appetite, risk rating methodology, risk register, risk mitigation
plans and risk reporting. Workshops were held with senior
management and the Board.
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Rakon’s risk management framework is designed to facilitate
identification of strategic, operational and financial risks,
both existing and emerging, and that these are assessed
as regards likelihood of occurrence and impact; have risk
mitigation plans; have defined management accountability;
and are reviewed on an ongoing basis.
Key risks are those risks with material implications to Rakon.
Management is required to report key risks to the Audit and
Risk Committee and Board for further review and oversight
including reviewing them relative to the Board’s appetite
for risk and the effectiveness of the implementation and
maintenance of the risk management and internal
control systems.
A high-level overview of key risks for Rakon is set out in the
following table.
Rakon’s key risks include
IssueRisk Description Controls and Mitigations
Health, Safety and
Well-being
Employee workplace
accidents and illness
Rakon maintains a global focus on health, safety and well-being.
Information on the management of health, safety and well-being across
Rakon’s global operations is provided regularly to the Board, including
incident reporting, health and safety employee meetings, drills, audits,
training and critical risks.
Product QualityDefects in product causing
losses or damage to
customers or public
Rakon maintains global quality management systems (ISO certified at
main manufacturing sites in New Zealand and India) and strong cultural
focus on quality and regular comprehensive reporting to the Board.
Competition and
Technology Disruption
Competing technology
and technology disruption
and commoditisation
Rakon maintains significant investment in R&D and a strategic focus
on technology leadership in the frequency control product industry.
Business ContinuityCatastrophic events and
supply chain disruption
Rakon maintains business continuity protocols to support
business management systems and a focus on dual sourcing
and inventory management.
Access to MarketsGeo-political issues and
climate change affecting
suppliers of parts and
product sales
Rakon maintains a strategic diversification of global suppliers, product
lines, customers and operating locations.
Cyber Security Cyber-attack or data breachRakon maintains a continuous improvement process including policies,
practices and control mechanisms to protect personal, customer business
information and to address risk of cyber attacks and data breaches.
Compliance Regulatory and contractual
compliance across
global operations
Rakon maintains compliance training, monitoring and assurance
processes and is focused on continuous improvement.
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In conjunction with Rakon’s risk management framework
Rakon reviews its insurance programme annually to ensure
it maintains an appropriate level of insurance cover for its
insurable risks. Annual insurance planning forms a key part
of the annual workplan of the Audit and Risk Committee.
Details of Rakon’s financial risk management are available
in section 25 of the Notes to the Financial Statements
on page 100.
Health, Safety and Well-being
Health, safety and well-being matters are the responsibility
of the full Board, with oversight of policy and legislative
compliance by the People Committee. The Board recognises
that effective management of employee health, safety
and well-being is essential to prevent harm and promote
well-being for employees, contractors and customers and
for the operation of a successful business.
The Board is responsible for governance and oversight of
Rakon’s health and safety framework. This includes ensuring
that the systems used to identify and manage health and
safety risks foster an effective health and safety culture,
set clear expectations, are fit for purpose, and are effectively
implemented, properly resourced, regularly reviewed and
continuously improved.
Rakon works with its global teams and regularly reviews
its health and safety policy and practices to achieve
consistency of behaviour, processes and expectations
across its global businesses.
Climate-related risks
Rakon documents, scores and manages operational
climate-related risks through its ISO14001 Environmental
Management System processes.
Rakon recognises the importance of fully integrating its
climate-related risk assessment processes into its risk
management framework and ensuring management
review and Board-level oversight. The Board requires
that the impact of climate change risks and opportunities
form part of Rakon’s strategic and financial planning.
In FY24 Rakon has undertaken a review of its climate-
related risks and opportunities for the purpose of its
mandatory climate related disclosures which will be
available on Rakon’s website on or before 31 July 2024:
rakon.com/investors/reports-presentations-events.
Management of waste and hazardous materials, water
and carbon emissions and climate adaptation and resiliency
were recognised as important topics by stakeholders
during the assessment of Rakon’s Environmental, Social
and Governance materiality issues undertaken in FY22.
The examination of climate-related risks has formed part of
the work contributing to Rakon’s Climate Statement which will
be available on Rakon’s website on or before 31 July 2024:
rakon.com/investors/reports-presentations-events.
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AUDITORS
External Audit
The Board is committed to ensuring audit independence,
both in fact and appearance, in order that Rakon’s
external financial reporting is viewed as being highly
objective and without bias.
The Audit and Risk Committee reviews the quality and cost
of the audit undertaken by the company’s external auditor
and provides a formal channel of communication between
the Board, senior management and external auditor. For the
financial year ended 31 March 2024,
PricewaterhouseCoopers (PwC) was Rakon’s external auditor,
a position it has held since 2006.
As outlined in the Audit and Risk Committee Charter, the
Committee regularly meets with the external auditor to
approve the terms of engagement and audit fee, and to
review and provide feedback in respect of the annual audit
plan. The Charter also provides for the Committee to ensure
the audit partner from the external audit firm is changed
every five years. A comprehensive review and formal
assessment of the independence and effectiveness of the
external auditor is undertaken periodically. The current audit
partner has been involved as Rakon’s audit partner for four
years. The Audit and Risk Committee also assesses the
auditor’s independence on an annual basis. The Committee
routinely allows time to meet with the external audit partner
without management present.
All audit work at Rakon is fully separated from non-audit
services, to ensure that appropriate independence is
maintained. PwC provided other services in FY24 in the
areas of providing certification of expenditure for the
purposes of the Production Linked Incentive Scheme in India,
agreed-upon procedures in relation to India’s Scheme for
Promotion of Manufacturing of Electronical Components
and Semiconductors and provides access to training material
through an on-line platform. These services were deemed
to have no effect on the independence or objectivity of the
auditor in relation to audit work. The fees paid to PwC for
audit and non-audit work are identified at section 6 in
the Notes to the Financial Statements in this 2024
Annual Report.
Rakon’s External Auditor Independence Policy provides
comprehensive and current guidance to Directors and
management to assist them in determining the services
that may or may not be performed by the external auditor.
PwC is asked to provide the Audit and Risk Committee with
written confirmation that, in their view, they were able to
operate independently during the FY24 audit.
The audit partner of the company’s external auditor, PwC,
is asked to attend the company’s annual meetings, and to
be available to answer questions from shareholders at those
meetings. The PwC audit partner attended Rakon’s 2023
Annual Shareholders’ Meeting and is expected to be in
attendance at the 2024 Annual Shareholders’ Meeting.
Internal Audit
Rakon has a number of internal controls overseen by the Audit
and Risk Committee and/or the Board, which are supported
by policy, processes and procedures and regular reporting.
These include controls for computerised information and
management systems, cyber risk and information security,
business continuity management plans, insurance, health
and safety procedures, conflicts of interest registers,
processes for prevention and identification of fraud and
legislative compliance review processes.
The company does not have a permanent in-house or
externally resourced internal audit function. From time
to time, and as required, external providers are engaged
to review its systems and internal controls. To maintain its
ISO (International Standard Organisation) accreditation
for a number of its management systems, including
its Quality Management System and Environmental
Management System, Rakon is subject to rigorous,
regular independent audits.
The Board considers an assurance programme
providing for regular review of key processes and
controls supporting critical business operations, strategic
objectives and risk management is an important arm of
its governance framework and is building this into its
risk management framework.
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SHAREHOLDER RIGHTS AND RELATIONS
We are committed to open and regular dialogue and
engagement with shareholders.
Rakon seeks to ensure that investors understand its activities
by communicating effectively with them and giving them
access to clear and balanced information. The Board regularly
reviews its shareholder communications strategy and Rakon
has a dedicated Investor Relations and Corporate
Communications Manager.
Rakon maintains a website: www.rakon.com where
shareholders and other stakeholders may obtain information
about the company, financial and other information released
to the market, up-to-date product information and key
governance information, including its Business Code of
Conduct, Board and committee charters and other policies.
The annual Corporate Governance Report is available
on Rakon’s website in the relevant annual report.
Effective from 31 July 2024, Rakon’s annual Climate
Statement is available on the Rakon website.
Rakon has a calendar of communications and events
for shareholders, including but not limited to:
• Annual Report and half-year shareholder
communications
• Annual and half-year results announcements
• Annual and interim business update and
results presentations
• Annual meetings
• Investor events
• Ad hoc investor presentations to institutional
investors and retail brokers
Rakon maintains:
• Easy access to information through the Rakon website:
www.rakon.com
• Access to a dedicated investor relations email address:
investors@rakon.com
• Option to sign-up via website to receive email
notifications of investor news
• Option to sign-up via website to receive product updates
Shareholders are actively encouraged to attend the company’s
annual meetings and vote on major decisions, which affect
Rakon. Voting is by poll, upholding the ‘one share, one vote’
philosophy. Shareholders may raise matters for discussion at
these events. In 2023, Rakon’s annual meeting was a hybrid
meeting allowing those not present at the meeting venue in
Auckland, New Zealand to actively participate in the meeting.
Shareholders and their proxies were able to vote and ask
questions and to view the live presentations whether they
attended the meeting in person or online. Rakon believes this
change better recognises the wide geographic dispersion of
shareholders in New Zealand and overseas as well as offering
greater choice to shareholders and other stakeholders.
All shareholders have the option to elect to receive electronic
communications from the company through the company’s
share registrar (Computershare) and by electing to receive
email notifications of investor news from the company.
In addition to shareholders, Rakon has a wide range of
stakeholders and maintains open channels of communication
for all audiences, including brokers, the investing community
and the New Zealand Shareholders’ Association (NZSA),
and regulators, as well as Rakon employees, customers and
suppliers. In September 2023, Rakon hosted members of
the NZSA at its premises in Auckland where they received
a presentation from management and a tour of Rakon’s
Auckland factory. In accordance with the Companies Act
1993, Rakon’s Constitution and the NZX Listing Rules,
Rakon will refer major decisions which may change the
nature of Rakon to shareholders for approval.
The Board notes the NZX Corporate Governance Code
recommendation in relation to considering the interests
of all existing financial product holders. The Board will take
account of the recommendation in the event of a capital raise,
as well as the expectation that it should explain why any
capital raising method other than pro-rata was preferred
when reporting against the NZX Code.
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Crystal Filter
A filter that allows only the desired frequency to pass through
to the output.
Crystal Micro-Electro-Mechanical System (XMEMS
®
)
Rakon’s advanced quartz-based resonator technology. It is
made using Rakon’s NanoQuartz™ microfabrication process,
delivering unprecedented resonator and oscillator performance.
Crystal Oscillator (XO)
A crystal resonator combined with appropriate circuitry to
generate a variety of repeating electrical signal waveforms
(e.g. CMOS /square wave).
Crystal (Xtal) Resonator
At the heart of XOs, VCXOs, TCXOs and OCXOs are quartz
crystal resonators, which naturally oscillate at a certain
frequency with electrical stimulation. This frequency is
based off their width and the piezoelectric effect.
Master Reference Oscillator (MRO)
Used as the main source of frequency generation for satellite
payloads, Rakon’s MRO subsystems provide highly accurate
and stable frequency references, and precision timing that
enable satellite communications and synchronisation.
Glossary
Oscillator
A circuit or device that generates a fixed frequency signal
and consists of a resonator and electronic components.
Oven Controlled Crystal Oscillator (OCXO)
A crystal oscillator that uses a miniaturised oven to keep
its internal temperature constant.
Oven Controlled SAW Oscillator (OCSO)
An oven controlled oscillator using Surface Acoustic Wave
(SAW) technology.
Surface Acoustic Wave (SAW) Resonator
At the heart of SAW oscillators are SAW resonators. This is
a special type of crystal resonator that has the piezoelectric
effect occurring on the resonator’s surface, compared to
traditional resonators which are through the bulk of the
crystal resonator.
Temperature Compensated Crystal Oscillator (TCXO)
A crystal oscillator with additional circuitry to remove
frequency variations due to temperature change.
Ultra Stable Oscillator (USO)
An extremely stable oscillator used in high-end space and
instrumentation applications.
Ultra Stable TCXO
Using unique technology these TCXOs can achieve stabilities
of 50 parts per billion (ppb) over temperature.
Voltage Controlled Crystal Oscillator (VCXO)
A VCXO is an XO that allows the user to manually adjust
a control voltage; it helps to compensate for instabilities in the
output frequency. It is mainly used to bring the oscillator back
to frequency after being impacted by instabilities (e.g. long
term stability).
Voltage Controlled Oscillator (VCO)
A purely electronic oscillator circuit with an adjustable output
frequency, without the use of a crystal or SAW resonator.
Voltage Controlled SAW Oscillator (VCSO)
Similar to the VCXO, but uses a SAW resonator instead
of a traditional crystal resonator.
FIND OUT MORE
Visit our Investor Centre: www.rakon.com/investors
Definition of Underlying EBITDA
Rakon has used ‘Underlying EBITDA’ as a non-gap financial measure in this 2024 Annual Report document. Underlying EBITDA
is defined as ‘Earnings before interest, tax, depreciation, amortisation, impairment, employee share schemes, non-controlling
interests, adjustments for associate’s share of interest, tax and depreciation, loss on disposal of assets and other cash and
non-cash items’. Refer to note 4 of the Financial statements section of this document for additional information including a
reconciliation to Net Profit After Tax (NPAT).
63
RAKON / ANNUAL REPORT / 2024SUSTAINABILITY AND ESG

64
RAKON / ANNUAL REPORT / 2024

FINANCIAL
STATEMENTS AND
OTHER DISCLOSURES
65
RAKON / ANNUAL REPORT / 2024

The Directors are responsible for ensuring that the consolidated financial statements fairly present
the financial position of the Group as at 31 March 2024 (FY2024) and the financial performance
and cash flows for the year ended on that date.
The Directors consider that the consolidated financial statements of the Group have been
prepared using appropriate accounting policies, consistently applied and supported by reasonable
judgements and estimates, and that all relevant financial reporting and accounting standards have
been followed.
The Directors believe that proper accounting records have been kept, which enable, with reasonable
accuracy, the determination of the financial position of the Company and the Group and facilitate
compliance of the consolidated financial statements with the Financial Markets Conduct Act 2013.
The Directors consider they have taken adequate steps to safeguard the assets of the Company
and the Group and to prevent and detect fraud and other irregularities.
The Directors present the consolidated financial statements, set out in pages 67 – 109, of Rakon
Limited and its subsidiaries for the year ended 31 March 2024.
The Board of Directors of Rakon Limited authorised these consolidated financial statements for
issue on 28 May 2024.
On behalf of the Directors
Directors’ StatementTable of Contents
LORRAINE WITTEN
CHAIR
S HORGAN
CHAIR OF THE AUDIT AND RISK COMMITTEE
Directors’ Statement 66
Consolidated Statement of Comprehensive Income 67
Consolidated Statement of Changes in Equity 68
Consolidated Balance Sheet 69
Consolidated Statement of Cash Flows 70
Notes to the consolidated financial statements 72
Independent Auditor’s Report 110
66
RAKON / ANNUAL REPORT / 2024
FINANCIAL STATEMENTS

Note
2024
$000s
2023
$000s
Continuing operations
Revenue5128,010180,334
Cost of sales(70,151)(91,542)
Gross profit57,85988,792
Other operating income7350401
Operating expenses
Selling and marketing(11,139)(10,626)
Research and development6(17,684)(16,979)
General and administration(30,666)(31,214)
Total operating expenses(59,489)(58,819)
Other gains/(losses) – net84,0922,969
Operating profit2,81233,343
Finance income9529371
Finance costs9(662)(891)
Share of net losses of associates16(2,332)(1,460)
Profit before income tax34731,363
Income tax expense214,168(8,144)
Net profit after tax for the year attributable to equity holders
of the Company4,51523,219
Note
2024
$000s
2023
$000s
Other comprehensive income/(losses)
Items that may be reclassified subsequently to profit or loss
Increase/(decrease) in fair value cash flow hedges1,256(2,517)
Cost of hedging (190)(1,494)
Income tax relating to components of other
comprehensive income(298)1,123
Exchange differences on translation of foreign operations1,1841,774
Items that will not be reclassified subsequently to profit or loss
Decrease in fair value of equity investments – Thinxtra17(1,529)(753)
Other comprehensive income/(losses) for the year, net of tax 423(1,867)
Total comprehensive income for the year attributable to
equity holders of the Company4,93821,352
Earnings per share attributable to the equity holders of the CompanyCentsCents
Basic earnings per share23 2.0 10.2
Diluted earnings per share23 2.0 10.2
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2024
The accompanying notes form an integral part of these consolidated financial statements.
67
RAKON / ANNUAL REPORT / 2024
FINANCIAL STATEMENTS

Consolidated Statement of Changes in Equity
For the year ended 31 March 2024
The accompanying notes form an integral part of these consolidated financial statements.
Note
Share capital
$000s
Retained
earnings
$000s
Other
reserves
$000s
Total equity
$000s
Balance at 1 April 2022181,024(23,126)(22,733)135,165
Net profit after tax for the year – 23,219–23,219
Currency translation differences24 – –1,7741,774
Cash flow hedges, net of tax24 – –(2,888)(2,888)
Changes in fair value of equity investments at fair value through other comprehensive income – Thinxtra 24 – –(753)(753)
Total comprehensive income for the year–23,219(1,867)21,352
Contribution of equity net of transaction costs
Employee share schemes
Value of employee services29––347347
Balance at 1 April 2023181,02493(24,253)156,864
Net profit after tax for the year –4,515–4,515
Currency translation differences24––1,1841,184
Cash flow hedges, net of tax24––768768
Changes in fair value of equity investments at fair value through other comprehensive income – Thinxtra 24––(1,529)(1,529)
Total comprehensive income for the year–4,5154234,938
Contribution of equity net of transaction costs
Dividend paid22 – (3,482) – (3,482)
Dividend reinvestment plan issues22568– – 568
Employee share schemes
Value of employee services29––398398
Balance at 31 March 2024181,5921,126(23,432)159,286
68
RAKON / ANNUAL REPORT / 2024
FINANCIAL STATEMENTS

Consolidated Balance Sheet
As at 31 March 2024
The accompanying notes form an integral part of these consolidated financial statements.
Note
2024
$000s
2023
$000s
Assets
Current assets
Cash and cash equivalents1017,83121,717
Trade and other receivables1151,93651,421
Inventories1254,90662,614
Derivative financial instruments 25921,100
Financial asset at fair value through profit or loss25796
Current income tax asset1,001362
Total current assets125,773137,310
Non-current assets
Property, plant and equipment1340,14334,387
Intangible assets1410,8247,671
Right-of-use assets156,1663,435
Interest in associates1611,95314,154
Trade and other receivables112,7193,615
Financial asset at fair value through other comprehensive
income – Thinxtra173991,927
Derivative financial instruments25341,228
Deferred tax asset219,0853,543
Total non-current assets81,32369,960
Total assets207,096207,270
Note
2024
$000s
2023
$000s
Liabilities
Current liabilities
Borrowings181,4391,635
Trade and other payables1925,56529,978
Current income tax liabilities8521,688
Lease liabilities151,8171,562
Provisions201,0301,176
Derivative financial instruments253,0034,107
Total current liabilities33,70640,146
Non-current liabilities
Borrowings185,1583,600
Trade and other payables19–92
Provisions203,7813,057
Lease liabilities154,9562,507
Derivative financial instruments 25138940
Deferred tax liabilities217164
Total non-current liabilities14,10410,260
Total liabilities47,81050,406
Net assets159,286156,864
Equity
Share capital22181,592181,024
Other reserves24(23,432)(24,253)
Retained earnings1,12693
Total equity159,286156,864
69
RAKON / ANNUAL REPORT / 2024
FINANCIAL STATEMENTS

Consolidated Statement of Cash Flows
For the year ended 31 March 2024
The accompanying notes form an integral part of these consolidated financial statements. Refer to note 10 for the breakdown of cash and cash equivalents.
2024
$000s
2023
$000s
Operating activities
Cash provided from
Receipts from customers136,611173,137
R&D grants received2,1382,092
Other income received594506
139,343175,735
Cash was applied to
Payment to suppliers and others(57,846)(95,749)
Payment to employees(59,770)(58,375)
Interest paid(662)(1,004)
Income tax paid(3,234)(9,495)
(121,512)(164,623)
Net cash inflow from operating activities17,83111,112
Investing activities
Cash was applied to
Purchase of property, plant and equipment(12,715)(17,342)
Purchase of intangibles(4,314)(1,356)
Net cash outflow from investing activities(17,029)(18,698)
2024
$000s
2023
$000s
Financing activities
Cash was provided from
Proceeds from borrowings875–
875–
Cash was applied to
Repayment of borrowings(1,317)(10,746)
Lease liabilities payments(1,739)(2,472)
Dividends paid(2,914)–
(5,970)(13,218)
Net cash outflow from financing activities(5,095)(13,218)
Net decrease in cash and cash equivalents (4,293)(20,804)
Effects of exchange rate changes on cash and cash equivalents4073,292
Cash and cash equivalents at the beginning of the year21,71739,229
Cash and cash equivalents at the end of the period17,83121,717
Composition of cash and cash equivalents
Cash and cash equivalents17,83121,717
Total cash and cash equivalents 17,83121,717
70
RAKON / ANNUAL REPORT / 2024
FINANCIAL STATEMENTS

Consolidated Statement of Cash Flows (continued)
For the year ended 31 March 2024
The accompanying notes form an integral part of these consolidated financial statements.
2024
$000s
2023
$000s
Reconciliation of net profit to net cash flows from
operating activities
Reported net profit after tax4,51523,219
Adjustments for
Depreciation and amortisation expense8,1327,777
Net (decrease)/increase in allowance for expected credit loss(497)222
Provisions provided5851,103
Movement in foreign exchange rates3,834(1,333)
Share of net loss of associate2,3321,460
Deferred tax movement(5,785)(644)
Employee share based expense446347
Gain from termination of lease(126)–
8,9218,932
Change in operating assets and liabilities
Decrease/(Increase) in trade and other receivables2,816(8,794)
Decrease/(Increase) in inventories7,708(5,293)
Increase in provisions(7)785
Decrease in trade and other payables(4,505)(7,125)
Increase in tax provisions and deferred tax(1,617)(612)
Total impact of changes in working capital items4,395(21,039)
Net cash flow from operating activities17,83111,112
71
RAKON / ANNUAL REPORT / 2024
FINANCIAL STATEMENTS

Notes to the consolidated financial statements
1. General information 73
2. Going concern 73
3. Statement of material accounting policies 73
4. Segment information 74
5. Revenue 77
6. Expenditure included in net profit 78
7. Other operating income 80
8. Other gains/(losses) – net 80
9. Net finance (costs)/income 80
10. Cash and cash equivalents 81
11. Trade and other receivables 81
12. Inventories 82
13. Property, plant and equipment 83
14. Intangible assets 85
15. Leases 88
16. Interest in associates 89
17. Financial asset at fair value through other comprehensive income – Thinxtra 91
18. Borrowings 92
19. Trade and other payables 94
20. Provisions 94
21. Taxation 95
22. Share capital 97
23. Earnings per share 98
24. Other reserves 99
25. Financial risk and capital management 100
26. Capital Commitments 106
27. Principal subsidiaries 106
28. Related party transactions 107
29. Share based payments 107
30. Contingencies 109
31. Subsequent events 109
72
RAKON / ANNUAL REPORT / 2024
FINANCIAL STATEMENTS

1. GENERAL INFORMATION
Rakon Limited (‘the Company’ and parent company) and its subsidiaries (‘the Group’) are a global
technology company that design and manufacture advanced frequency control and timing solutions
for a wide range of applications. Rakon’s core markets are Telecommunications, Space & Defence,
and Global Positioning. The Company is a limited liability company, incorporated and domiciled in
New Zealand, and listed on the New Zealand Stock Exchange (NZX code: RAK). The address of the
registered office is 8 Sylvia Park Road, Mt Wellington, Auckland.
The Company is registered under the Companies Act 1993 and is a FMC reporting entity under
Part 7 of the Financial Markets Conduct Act 2013. The consolidated financial statements of the
Group have been prepared in accordance with the requirements of Part 7 of the Financial Markets
Conduct Act 2013 and the NZX (Main Board) Listing Rules.
The consolidated financial statements of the Group have been presented in New Zealand dollars
and have been rounded to the nearest thousand unless otherwise indicated.
2. GOING CONCERN
These consolidated financial statements have been prepared on a going concern basis. The Directors
are not aware of material uncertainties related to events or conditions that may cast significant doubt
upon the entity’s ability to continue as a going concern. In making this assessment management
and the Directors considered factors including the current profitability of the Group, current market
conditions, Group liquidity and forecast.
3. STATEMENT OF MATERIAL ACCOUNTING POLICIES
a. Basis of preparation and measurement base
The consolidated financial statements of the Group have been prepared in accordance
with New Zealand Generally Accepted Accounting Practice (NZ GAAP). They comply with
New Zealand equivalents to International Financial Reporting Standards (NZ IFRS), other
New Zealand accounting standards and authoritative notices that are applicable to entities
that apply NZ IFRS. The consolidated financial statements also comply with International
Financial Reporting Accounting Standards (IFRS Accounting Standards). The Group is a
Tier 1 for-profit entity.
The consolidated financial statements have been prepared on a historical cost basis, with the
exception of certain financial assets and liabilities, and equity instruments, which are measured
at fair value.
b. Basis of consolidation and equity accounting
The financial statements of the subsidiaries are included in the Group’s consolidated financial
statements from the date on which control commences until the date on which control ceases,
refer to note 27 for information on subsidiaries. All material intercompany transactions, balances
and unrealised gains on transactions between the subsidiaries are eliminated on consolidation.
Interest in associates are accounted for by using the equity method, refer to note 16.
c. Material accounting estimates and judgements
The preparation of the consolidated financial statements in accordance with NZ IFRS requires
management to make judgements, estimates and assumptions that affect the application of
policies and reported amounts of assets and liabilities, income and expenses. The estimates and
assumptions that involved a higher degree of judgement or complexity, or are material to the
consolidated financial statements are listed below and disclosed within the specified notes:
• Calculation of inventory provision (note 12)
• Valuation of the Group’s investment in Thinxtra (note 17)
• Recognition of deferred tax assets from carry forward losses (Rakon France) (note 21)
d. Material accounting policy information and new accounting standards
Material accounting policy information adopted in the preparation of these consolidated financial
statements are disclosed within each of the applicable notes to the consolidated financial
statements. The accounting policies have been consistently applied to all years presented with
the exception of the following standards and amendments that the Group is applying for the
first time for its annual reporting period commencing 1 April 2023:
Disclosure of Accounting Policies – Amendments to NZ IAS 1 and IFRS Practice Statement 2.
The consolidated financial statements have been updated to reflect changes to the disclosure of
accounting policies. Previously, “significant” accounting policies were disclosed. The amendments
require disclosing material accounting policies instead. This change did not have material impact on
Group’s reporting.
73
RAKON / ANNUAL REPORT / 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS / CONTINUED
FINANCIAL STATEMENTS

Definition of Accounting Estimates – Amendments to NZ IAS 8. This change did not have a material
impact on the Group’s reporting.
NZ IFRS 17 Insurance Contracts became effective for annual periods commencing on or after
1 January 2023. The adoption of NZ IFRS 17 did not have a material impact to the Group’s reporting.
Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to
NZ IAS 12. This amendment did not have a material impact on the Group’s reporting.
e. New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and interpretations listed
below have been published that are not mandatory for 31 March 2024 reporting periods and have
not been early adopted by the Group. These standards, amendments or interpretations are not
expected to have a material impact on the entity in the current or future reporting periods and on
foreseeable future transactions.
• Amendments to FRS 44
• Classification of Liabilities as Current or Non-current – Amendments to NZ IAS 1 and
Non-current Liabilities with Covenants – Amendments to NZ IAS 1
IFRS 18 Presentation and Disclosure in Financial Statements, as a replacement for IAS 1. Most
of the presentation and disclosure requirements would largely remain unchanged together with
other disclosures carried forward from IAS 1. The Group is currently assessing the impact and will
disclose more detailed assessments in the future.
f. Foreign currency translation
Functional and presentation currency
The financial statements of each of the Group’s overseas operations are measured using the
currency of the primary economic environment in which the overseas entity operates (the functional
currency). The consolidated financial statements are presented in New Zealand dollars, (the
presentation currency), which is also the functional currency of the Company.
Transactions and balances
Foreign currency transactions are translated into the relevant functional currency of the Group’s
overseas operations at the exchange rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at balance date are translated to the functional currency
at the foreign exchange rate at that date. Foreign exchange differences arising from translation are
recognised in the Consolidated Statement of Comprehensive Income, except for qualifying cash
flow hedges which are recognised in other comprehensive income (OCI). Non-monetary assets and
liabilities that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in
foreign currencies that are stated at fair value are translated at foreign exchange rates at the dates
the fair value was determined.
The assets and liabilities of all Group companies that have a functional currency that differs
from the Group’s presentation currency, including goodwill and fair value adjustments arising on
consolidation, are translated to New Zealand dollars at foreign exchange rates at balance date. The
revenues and expenses of these foreign operations are translated to New Zealand dollars at rates
approximating to the foreign exchange rates at the dates of the transactions. Exchange differences
arising from the translation of foreign operations are recognised in the foreign currency translation
reserve, refer to note 24.
Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as
assets and liabilities of the foreign entity and are translated at the foreign exchange rates at the
balance date.
4. SEGMENT INFORMATION
The chief operating decision maker (CODM) is responsible for allocating resources and assessing
performance of the operating segments. CODM for the Group is the Chief Executive Officer.
The operating segments are presented in a manner consistent with the internal reporting provided
to the CODM. Material judgement has been applied in the determination of reportable operating
segments. Ownership of products’ intellectual property have been used as the key factor to identify
reportable operating segment and aggregation criteria, based on synergies between the businesses
not limited by geography.
The CODM assess the performance of the operating segments based on ‘Underlying EBITDA’,
a non-GAAP measure, defined as: ‘Earnings before interest, tax, depreciation, amortisation,
impairment, employee share schemes, non-controlling interests, adjustments for associate’s share
of interest, tax & depreciation, loss on disposal of assets and other cash and non-cash items. The
CODM also receives information about the segments’ revenue on monthly basis.
74
RAKON / ANNUAL REPORT / 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS / CONTINUED
FINANCIAL STATEMENTS

a. Segment results
Information relating to each reportable segment is set out below:
31 March 2024
NZ
$000s
France/
India
$000s
France
HiRel
$000s
T’maker
$000s
Other
1
$000s
Total
$000s
Segment revenue by market
Telecommunications38,81032,296256– (4,505)66,857
Global Positioning14,089426360– (1,016)13,859
Space and Defence15,7362,55119,779– (1,257)36,809
Other4,3281406,516–(499)10,485
Total segment revenue
by market72,96335,41326,911–(7,277)128,010
Underlying EBITDA9,3161,7184,501(697)(1,382)13,456
Total assets
2
101,96955,47235,79111,9531,911207,096
Additions of property, plant and
equipment, and intangibles6,9305,4844,615––17,029
Total liabilities
3
23,43613,7669,531–1,07747,810
31 March 2023
NZ
$000s
France/
India
$000s
France
HiRel
$000s
T’maker
$000s
Other
1
$000s
Total
$000s
Segment revenue by market
Telecommunications65,87439,215453– (4,961)100,581
Global Positioning35,287112233– (1,790)33,842
Space and Defence10,4482,84616,248–(640)28,902
Other12,2232345,390–(838)17,009
Total segment revenue by
market123,83242,40722,324–(8,229)180,334
Underlying EBITDA39,1177,5801,642622(6,779)42,182
Total assets
2
111,43552,03228,12614,1541,523207,270
Additions of property, plant and
equipment, and intangibles5,93510,9051,858––18,698
Total liabilities
3
26,86914,0557,930–1,55250,406
1
Revenue is losses on cash flow hedges apportioned to each market based on hedged currency. The Group’s
treasury function is carried out centrally at head office in New Zealand, refer note 25.
2
Segment assets are measured in the same way as in the consolidated financial statements. These assets are
presented as it is regularly provided to the chief operating decision maker.
3
Segment liabilities are measured in the same way as in the consolidated financial statements. These liabilities are
presented as it is regularly provided to the chief operating decision maker.
75
RAKON / ANNUAL REPORT / 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS / CONTINUED
FINANCIAL STATEMENTS

b. Segment description and principal activities
The New Zealand (NZ) operating segment designs and manufactures products for Telecommunications,
Global Positioning and Defence markets. The segment includes research and development (R&D)
engineering teams located in NZ and UK that develop new products and process innovations.
The France/India operating segment designs and manufactures products for the Telecommunication
market. Design and support services are in France and NZ, with manufacturing in India.
Rakon’s India facility in Bengaluru contract manufacture products exclusively for the Group. They
also design and manufacture products for the local Indian defence, aeronautics and space markets.
Though there is potential for future growth in the domestic market, this business currently is not
large enough for the CODM to view separately, therefore is aggregated with France Telecom.
The France HiRel operating segment designs and manufactures products for the Space & Defence
markets. Design, support services and manufacturing are predominantly carried out in France.
The Timemaker Group (T’maker) produces crystal blanks and represents the Group’s 37.07%
(2023: 37.07%) ownership interest, refer to note 16.
All other segments (Other) includes Rakon Financial Services Limited, Rakon UK Holdings Limited,
and Rakon Investment HK Limited. These are not operating segments and are not separately
included in reports provided to the CODM. Also included are the head office, and group sales
and marketing services segments. These are reported separately to the CODM.
c. Reconciliation of Underlying EBITDA to net profit after tax for the year
Underlying EBITDA is a non-GAAP measure that has not been presented in accordance with GAAP.
The Directors present Underlying EBITDA as a useful non-GAAP measure to investors, in order
to understand the underlying operating performance of the Group and each operating segment,
before the adjustment of specific cash and non-cash items and before cash impacts relating to
the capital structure and tax position. Underlying EBITDA is considered by the Directors to be the
closest measure of how each operating segment within the Group is performing. Management
uses the non-GAAP measure of Underlying EBITDA internally to assess the underlying operating
performance of the Group and each operating segment.
Continuing operationsNote
2024
$000s
2023
$000s
Underlying EBITDA13,45642,182
Depreciation and amortisation6(8,132)(7,777)
Adjustment for associate share of interest, tax and
depreciation(1,642)(2,100)
Finance costs – net9(133)(520)
Long term incentive scheme29(643)(376)
One-off costs relating to acquisition proposal6(2,206)–
Other non-cash items(353)(46)
Profit before income tax34731,363
Income tax benefit/(expense)214,168(8,144)
Net profit after tax for the year4,51523,219
76
RAKON / ANNUAL REPORT / 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS / CONTINUED
FINANCIAL STATEMENTS

5. REVENUE
The Group designs, manufactures and sells frequency control solutions for a wide range of
applications. Revenue is derived from the transfer of goods over time and also at a point in time
at an amount that reflects the consideration the Group expects to be entitled to in exchange
for products and services excluding any applicable taxes. Arrangements are agreed with the
customers, set out in the terms and conditions which cover the pricing, settlement of liabilities,
return policies and any other negotiated performance obligations.
Typically, control transfers to the customer at the same time as the legal title of the product
is passed to the customer. This is usually on terms of delivery of the product. The transaction
price includes all amounts that the Group expects to be entitled to, net of any sales taxes.
A receivable is recognised based on the delivery terms of the products as this is the point in time
when the consideration is unconditional.
Sale of products – at a point in time
The Group recognises revenue when the performance obligations are satisfied by transferring
control of products to the customer based on the specified contract price.
Products and services transferred over time – France HiRel segment
For certain contracts in the France HiRel segment, the revenue is recognised over time as the
Group’s performance creates an asset, which does not have an alternative use to the Group, and the
Group has an enforceable right to be paid for work completed to date. The Group applies judgement
by using the percentage-of-completion method to determine the appropriate amount to recognise
in a given period. The stage of completion is measured by reference to the contract costs incurred
up to the end of the reporting period as a percentage of total estimated costs for each contract.
In case of fixed price contracts, payments are received from the customer based on an agreed
payment schedule. A contract liability is recognised when the payments exceed estimated work
completed, and contract asset when estimated work completed exceeds payments.
a. Reportable segment revenue from contracts with customers
31 March 2024
NZ
$000s
France/
India
$000s
France
HiRel
$000s
Other
1
$000s
Total
$000s
Products transferred at a point in time72,96335,41322,010(7,277)123,109
Products and services transferred
over time––4,901–4,901
Sales to external customers72,96335,41326,911(7,277)128,010
31 March 2023
NZ
$000s
France/
India
$000s
France
HiRel
$000s
Other
1
$000s
Total
$000s
Products transferred at a point in time123,83242,40719,437(8,229)177,447
Products and services transferred
over time––2,887–2,887
Sales to external customers123,83242,40722,324(8,229)180,334
1
Revenue is losses on cash flow currency hedges. The Group’s treasury function is carried out centrally at head
office in New Zealand, refer note 25.
77
RAKON / ANNUAL REPORT / 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS / CONTINUED
FINANCIAL STATEMENTS

b. Revenue by geography
The Group’s trading revenue is derived in the following regions. Revenue is allocated based on the
country in which the customer is located.
2024
$000s
2023
$000s
Asia52,70782,516
North America47,77361,892
Europe25,51630,750
Others2,0145,176
Total segment revenue by geography128,010180,334
c. Assets and liabilities related to contracts with customers
The Group has recognised the following assets and liabilities related to contracts with customers in
France HiRel segment.
2024
$000s
2023
$000s
Total current contract assets4,029952
Total current contract liabilities(360)(872)
3,66980
The contract assets have increased as the Group has provided services ahead of the agreed payment
schedules. Customer contracts liabilities are payments received in advance for subsequent delivery
of services and goods to the customers. In prior year $872,000 was recognised as customer contract
liabilities, and is recognised as revenue in the year ended 31 March 2024. The remaining
performance obligations at 31 March 2024 have an expected duration of less than a year.
The performance obligation of the products and services transferred over time that were in progress
at 31 March 2023 were mainly completed during the year, with the exception of $87,000 relating
to one project. This is expected to be finalised in 2025. The remaining performance obligations at
31 March 2024 have an expected duration of less than a year. As a consequence, the Group does
not adjust any of the transaction prices for the time value of money.
6. EXPENDITURE INCLUDED IN NET PROFIT
Additional information in respect of expenses included in the Consolidated Statement of
Comprehensive Income is as follows:
a. Breakdown of expenses by nature
Employee benefit expenses
2024
$000s
2023
$000s
Wages and salaries54,24056,073
Redundancy costs305489
Contributions to defined plans907814
Increase in liability for retirement plan (note 20)310169
Increase in liability for long service leave (note 20)232114
Long term incentive plan (note 29)643376
Total employee benefit expenses56,63758,035
Depreciation and amortisation
2024
$000s
2023
$000s
Depreciation on property, plant and equipment (note 13)5,3064,336
Amortisation on intangible assets (note 14)9521,235
Depreciation on right-of-use assets (note 15)1,8742,206
Total depreciation and amortisation8,1327,777
Research and development
2024
$000s
2023
$000s
Research and development expenses20,65419,522
Research and development government grant(1,868)(1,309)
Research and development tax credit(1,102)(1,234)
Net research and development expense17,68416,979
78
RAKON / ANNUAL REPORT / 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS / CONTINUED
FINANCIAL STATEMENTS

Fees to the auditors
2024
$000s
2023
$000s
Audit and review of financial statements
PwC New Zealand 566 478
PwC France 134 115
PwC India 44 42
PwC 744 635
BDO Limited (Hong Kong)
1
32 14
T S Tay Public Accounting Corporation (Singapore)
1
1011
MHA MacIntyre Hudson (UK)
1
4438
Total audit and review fees 830 698
Assurance and audit related services
2024
$000s
2023
$000s
Performed by PwC India
Certification of expenditure for the purposes of the Production
Linked Incentive Scheme 16 –
Total assurance and audit related services 16 –
Other services
Performed by PwC New Zealand
Access to training material through an on-line platform 1 –
Agreed-upon procedures in relation to India’s Scheme for
Promotion of Manufacturing of Electronical Components
and Semiconductors (SPECS) 7–
Total other services fees8 –
Total fees paid to auditors 854 698
1
The fee relates to the annual audit of the local territory financial statements.
Employee benefits expenses
Employee entitlements to salaries, wages and annual leave to be settled within 12 months of
balance date represent present obligations resulting from employees’ services provided up to the
balance date. These are calculated at undiscounted amounts based on remuneration rates that the
Group expects to pay.
Superannuation schemes
The Group’s New Zealand and overseas operations participate in their respective government
superannuation schemes. Where the Group is required to pay fixed contributions into a separate
entity, the Group has no legal or constructive obligations to pay further contributions if the fund
does not have sufficient assets to pay all employees the benefits relating to the employee service
in the current and prior periods. The contributions are recognised as an employee benefit expense
when they are due.
Acquisition proposal - costs related to indictive offer
The Group has incurred $2,206,000 in legal, consulting, additional directors’ fee and employee
retention costs. These are recorded in general administration cost under operating expenses.
Research and development
Expenditure on research activities has been undertaken with the prospect of gaining new scientific
or technical knowledge and understanding. Any research and development taxation credits and
government grant funding for research and development are recognised when eligibility criteria
have been met and there is a reasonable assurance that tax credits and the grants will be received.
Grants and tax credits from governments are recognised at their fair value. The research and
development grants and tax credits are recognised in trade and other receivables (note 11), and
in the Consolidated Statement of Comprehensive Income. Government grants are offset against
the related expenses over the periods in which those costs are recognised.
79
RAKON / ANNUAL REPORT / 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS / CONTINUED
FINANCIAL STATEMENTS

7. OTHER OPERATING INCOME
Revenue from activities which are not related to principal activities of the Group:
2024
$000s
2023
$000s
Other income341281
Sale of raw materials944
Covid-19 government assistance
1
–76
Total other operating income350401
1
Eligible New Zealand Covid leave support subsidy
8. OTHER GAINS/(LOSSES) – NET
2024
$000s
2023
$000s
Gain/(loss) on disposal of property, plant and equipment,
and intangible assets8(33)
Foreign exchange gains/(losses) – net
Forward foreign exchange contracts
Financial asset at fair value through profit or loss(1,345)(880)
Revaluation of foreign denominated monetary assets and liabilities
1
5,4293,882
Total foreign exchange gains/(losses) – net4,0843,002
Total other gains/(losses) – net4,0922,969
1
Includes realised and unrealised gains/(losses) arising from accounts receivable and accounts payable.
9. NET FINANCE (COSTS)/INCOME
Interest income and costs are recognised in the Consolidated Statement of Comprehensive Income
as it accrues, using the effective interest rate applicable.
2024
$000s
2023
$000s
Finance income
Interest income529371
Finance costs
Interest expense on borrowings(309)(596)
Unwinding of lease make good provision(19)(17)
Interest on lease liabilities (note 15) (334)(278)
Total finance costs(662)(891)
Net finance costs(133)(520)
Interest expense rate
The average interest rate was as follows. Additional information on borrowings is presented in
note 18.
• ASB facility in New Zealand 8.57% – (2023: 7.23%)
• HDFC Bank in India 9.15% (2023: 8.75%)
• Crédit Agricole Provence Côte D’Azur facility in France 0.55% (2023: 0.55%)
• BPI France 7.2%
80
RAKON / ANNUAL REPORT / 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS / CONTINUED
FINANCIAL STATEMENTS