Rakon reports record earnings performance, EBITDA up 132%

Results announcement



Results for announcement to the market
Name of issuer Rakon Limited
Reporting Period 12 months to 31 March 2022
Previous Reporting Period 12 months to 31 March 2021
Currency New Zealand Dollar

Amount (000s) Percentage change
Revenue from continuing
operations
$171,967 34%
Total Revenue $171,967 34%
Net profit/(loss) from
continuing operations
$33,111 244%
Total net profit/(loss) $33,111 244%
Interim/Final Dividend
Amount per Quoted Equity
Security
No dividends are proposed to be paid.
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.56 $0.42
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the Commentary and the audited financial
statements released in conjunction with this announcement.
Authority for this announcement
Name of person

authorised
to make this announcement
Maureen Shaddick
Contact person for this
announcement
Anand Rambhai
Contact phone number +64 (0) 9 571 9225
Contact email address anand.rambhai@rakon.com
Date of release through MAP

26/05/2022

Audited financial statements accompany this announcement.

---

26 May 2022

AUDITED RESULTS FOR THE FULL YEAR TO 31 MARCH 2022

Rakon reports record earnings performance, EBITDA up 132%
Highlights:
 Revenue $172.0m (FY21
1
: $128.3m)
 Underlying EBITDA
2
more than doubles to $54.4m (FY21: $23.5m)
 Net profit after tax $33.1m (FY21: $9.6m)
 Sustained core market growth, particularly 5G and industrial positioning
 Significant new opportunities captured from worldwide chip shortage
 Record delivery despite global supply chain disruptions and materials shortages
 New dividend policy announced
All amounts are in New Zealand Dollars

Rakon (NZX.RAK) today announced record earnings for the 12 months to 31 March 2022, on the back of
continued strong growth in global demand for its industry-leading frequency control and timing solutions.
Total revenue for the financial year rose 34% to $172.0 million (FY21: $128.3m). Gross margin improvements,
combined with largely unchanged overheads, drove a 132% increase in Underlying EBITDA to $54.4m (FY21:
$23.5m), which is slightly above the latest guidance of $49-$53m. Net profit after tax increased by 244% to
$33.1m (FY21: $9.6m).
Rakon Chair Lorraine Witten said: “This performance is the outcome of many years of hard work to
strengthen our foundations and position the company for future growth. The challenges of Covid-19 have
accelerated technological transformation, and these in turn have highlighted the advantages of Rakon’s 50-
year pedigree in technology innovation, our operating agility and our strong customer relationships.”
Chief Executive Officer Sinan Altug acknowledged the efforts of Rakon’s global team in delivering the
company’s best-ever earnings performance.
“This has been a year of tremendous progress for Rakon. We have scaled up significantly to meet strong
core market growth as well as new opportunities stemming from worldwide chip shortages. Thanks to the
efforts of our highly dedicated team, we have continued to deliver to our customers around the world
through the significant challenges of Delta and Omicron, raw material shortages and global supply chain
disruptions.”
Financial and market performance
Rakon’s revenue uplift was driven primarily by continued demand growth in 5G telecommunications
networks and industrial and precision positioning applications, in addition to the opportunities created by
worldwide chip shortages. The telecommunications segment generated revenue of $86.2m, 12% higher
than last year, and comprising 50% of the company’s total revenue. The company was able to convert the
additional chip shortage opportunities into $30.8m of revenue.
Gross profit rose 53% to $90.1m (FY21: $58.9m). A shift in the product mix towards new higher margin

1
All comparisons are against the prior corresponding period (FY21) unless otherwise stated
2
Refer to Note 5 of the FY2022 audited consolidated financial statements for an explanation of how ‘Non-GAAP Financial Information’ is used, including a definition of
‘Underlying EBITDA’ and reconciliation to net profit after tax

Page 2 of 3 www. r a k o n. co m


products increased the average gross margin percentage to 52% against last year’s 46%. Our response to
the chip shortages added $18.4m of gross margin.
Operating expenses remained stable at $49.3m, with increases in labour costs and other overheads offset
by factors such as reduced travel. Operating cash flow for the period was strong at $30.2m, 51% ahead of
last year.
Rakon’s balance sheet has continued to strengthen, with total assets increasing by 29% to $199.9m, and
the lift in earnings contributing to a 30% increase in equity since March 2021. The company had $23.2m in
net cash at balance date, against last year’s $5.0m.
Operations and Covid-19
Mr Altug said the increased demand for Rakon’s products was largely fulfilled by increased capacity in the
New Zealand manufacturing operation, which lifted its average monthly throughput by 60%. “This is a
fantastic achievement, given the Covid-19 and supply chain headwinds faced by our New Zealand team
through the year. Likewise, we saw exceptional resilience and adaptibilty from our Indian and French
operations despite a number of Covid-19 outbreaks and similar supply chain issues.”
He said raw material supply has remained tight, resulting in extended lead times and price increases.
“Capacity constraints, allocations and rising prices from suppliers unfortunately remain the norm, and we
continue to work hard to mitigate risks around procurement of materials and actively manage higher levels
of inventory.”
Rakon’s global manufacturing operations were largely able to continue throughout the year despite Covid-
19 outbreaks, restrictions and remote working requirements.
“The commitment of our teams has been exceptional,” said Mr Altug. “While our 1000 employees worldwide
had freedom of choice around vaccinations, 99.5% were fully vaccinated, vastly reducing transmission risk
on our sites. With strict protocols and a strong health and safety culture, we successfully avoided workplace
outbreaks and at no time during the year was more than 10% of our manufacturing workforce absent.”
Innovation
Rakon invested $13.1m in research and development, focused primarily on the development of new ASIC
3

semiconductor chips and their associated products, the new XMEMS® nanotechnology, and a new suite of
NewSpace products for Low Earth Orbit (LEO) satellites. Mr Altug said solid progress had been made in
each of these areas.
“Each new family of products pushes the boundaries of performance in respect of speed, precision, stability
and resilience. We are particularly excited about the results we are achieving from products using our new
XMEMS® nanotechnology. These products are delivering next-generation performance, and we are looking
forward to the release of multiple XMEMS® based product families this year.”
Dividend
Rakon today also announced a new dividend policy
4
. Ms Witten said the policy articulates Rakon’s
aspirations as a growth company and confirms its intentions to maintain a strong balance sheet to ensure
opportunities can be captured while risks are managed.
Under the policy, Directors will determine at least annually whether to declare a dividend, having regard
to all relevant information including Rakon’s current and expected operating results, its near and medium-
term operational cash requirements, its plans for organic and strategic investment in growth and

3
ASIC stands for Application Specific Integrated Circuit, referring to a customised semiconductor chip
4
Rakon’s new dividend policy can a be found on the Rakon website

Page 3 of 3 www. r a k o n. co m


expansion, current and foreseeable debt levels, interest rates, market and economic conditions and any
applicable funding or banking requirements.
After reviewing Rakon’s capital requirements in light of the three-year strategic plan and rapid growth
environment, Directors have determined that the FY22 cash surplus should be fully allocated to support
planned growth and capital expenditure requirements, and therefore no dividend will be paid for the 2022
financial year.
Ms Witten said: “We are pleased to provide clarity about how the company will apply future cash surpluses.
Specifically, the company intends to prioritise the use of cash surpluses towards capital investment, acquiring
skills and R&D projects that deliver our strategic growth objectives.”
Outlook
Looking ahead, Mr Altug said Rakon’s strong forward order book continues to be driven by growth in our
core markets.
“We are excited to see significant market opportunities for Rakon in future years and want to accelerate
product development. We are increasing our capacity in New Zealand and India to support this growth and
look forward to the completion of Rakon India’s new Bengaluru facility towards the end of FY23. While we
expect the impacts of Covid-19, supply chain disruptions, materials shortages and cost inflation to be
ongoing, these risks will continue to be closely and proactively managed.”
“We will continue with deliberate investments in R&D for XMEMS® nanotechnology, ASIC semiconductor
chips and NewSpace. The global roll-out of 5G is expected to continue for a good part of this decade,
expanding as 5G millimetre wave networks pave the way for more data-heavy applications and as datacentres
further enter the ecosystem. Demand for industrial and precise positioning applications is continuing to rise.
The exciting NewSpace market continues to gain momentum, along with the whole ecosystem surrounding
it. “
“These opportunities, together with a strong development pipeline, new proprietary chips in the works and
new XMEMS® nanotechnology provide a very positive outlook for Rakon.”
-Ends-
Contact:
Investors Media
Sinan Altug Sharon Williamson
Chief Executive Officer The Project
+64 21 371 567 +64 21 850 515

Anand Rambhai
Chief Financial Officer
+64 21 542 287
www.rakon.com

About Rakon
Rakon is a global high technology company and a world leader in its field. The company designs and manufactures
advanced frequency control and timing solutions. Its three core markets are Telecommunications, Positioning and Space
and Defence. Rakon’s products are found at the forefront of communications where speed and reliability are paramount.
Its products create extremely accurate electric signals which are used to generate radio waves and synchronise time in
the most demanding communication applications.
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.

---

Annual Report 2022
Enabling the connected future
RAKON Annual Report |

FY22

Leading the way
We are a world leader in precision timing
and frequency control solutions for the
most challenging specifications and
environments.
Rakon has three products in the Copernicus Low Earth Orbit (LEO) satellite
Sentinel-6 Michael Freilich (‘Sentinel-6’) which undertakes the ongoing
measurement of sea-surface height from space. Our world-leading USO
1
is part of
an instrument which gives extremely precise orbit determination to the satellite.
Image courtesy of the European Space Agency (ESA).
1
Product acronyms and definitions are explained in the Glossary on page 47.
2
RAKON Annual Report |

FY22

By working closely with our customers
and industry partners, we solve difficult
problems and enable next generation
technology to become a reality.
Solving difficult
problems
Rakon New Zealand team members
in a product strategy meeting
3
RAKON Annual Report |

FY22

We enable communications infrastructure
and applications to perform at ever-greater
levels of speed, reliability and capacity,
making things that were only ever dreamed
of possible.
An example of how Virtual Reality (VR) and metaverse applications may
enable remote medical diagnostics and surgery. 5G is enabling these
applications to become a reality and Rakon is providing the precise timing
that enables 5G to operate.
Continuing to
raise the bar
4
RAKON Annual Report |

FY22

About this report
Contents
6
Performance snapshot
7–9
Chair & CEO report
10
Changing of the guard
Welcome to our 2022 Annual Report.
This document reports on operational and
financial performance for the year to 31
March 2022 (FY22). 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 markets, customer
partnerships and flexible, scalable operations
to enable the connected future.
We know that our investors prefer to view
this report online. Our company review and
financial documents are included in this
report, in an easy-to-read format.
Taking Environmental, Social and Governance
(ESG) action is important to us. While we have
been doing so for many years, this year we
began the process of reporting against an
audited ESG framework. Pages 31 to 46 show
our current journey.
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 49–90
have been prepared in accordance with
appropriate accounting standards and
have been independently audited by
PricewaterhouseCoopers.
We welcome your feedback on this report,
including how we can improve. If you
would like to let us know any comments or
suggestions please email us at:
investors@rakon.com
Rakon people imagery
15–23
Delivering against
our strategy
24–27
Our people
28–30
Board and management
31–46
Environment,
social and governance
47
Glossary
49–90
Financial statements
and auditor’s report
96 –101
Remuneration and
shareholder information
Please note: All amounts in this document are in NZ$ unless otherwise specified. Product acronyms and definitions are explained in the Glossary on page 47.
11–14
About Rakon
5
RAKON Annual Report |

FY22

6
RAKON Annual Report |

FY22

Performance snapshot
Revenue
$172.0m
▲

$43.7m +34%
Operating cash flow
$30.2m
▲ 10.2m+51%
Underlying EBITDA
2
$54.4m
▲ $30.9m+132%
12 months ended 31 March 2022
Net cash (including borrowings)
$23.2m
▲ $18.2m+361%
Net Profit After Tax (NPAT)
$33.1m
▲ $23.5m+244%
Highlights
+10%
Core revenue growth
(non chip-shortage related revenue)
driven by 5G networks and industrial and
precision positioning.
XMEMS
®
3
nanotechnology-based products
disruptive new technology delivering
industry-leading performance.
>90% at work
across our global manufacturing
operations through Covid-19 peaks.
$13.1m
investment in R&D
developing proprietary new
technologies and products.
+60%
output increase
by value in our NZ manufacturing
operation.
2
Refer to the footnote on page 47 for the definition of Underlying EBITDA as a non-GAAP financial measure, referred to in this document.
3
XMEMS
®
– Crystal Micro-Electro-Mechanical System. Refer to the definition on page 47.
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 2021) unless otherwise stated.

7
RAKON Annual Report |

FY22

Chair & CEO report
We are pleased to report a record performance for Rakon in a year of tremendous challenges and opportunities.
The 12-month period to 31 March 2022 (FY22), has been Rakon’s best year ever. The company’s growth momentum
has continued to build, driven by strong underlying demand in our core markets and supported by new
opportunities stemming from worldwide TCXO chip shortages. Importantly, this growth was delivered through the
challenges of Delta and Omicron, materials shortages and global supply chain disruptions.
During the year, we have adapted and scaled
up our operations to capture the additional
chip shortage demand, worked closely with
our partners to develop new technologies and
carefully managed our supply and delivery risks.
This performance is a credit to our thousand-
strong worldwide Rakon team, in particular their
determination and commitment to meet our
delivery goals, and in operating safely through
Covid-19.
Financial overview
Total revenue for the financial year rose 34% to
$172.0 million compared with $128.3 million for
the year to 31 March 2021 (FY21). Gross margin
improvements, combined with largely unchanged
overheads, resulted in underlying EBITDA
4
of
$54.4 million, 132% ahead of last year’s $23.5
million. Net Profit After Tax (NPAT) increased by
244% to $33.1 million from $9.6 million for the
same period last year.
Revenue growth was driven by strong demand
in 5G telecommunications networks, and
industrial and precision positioning applications,
in addition to the new business opportunities
created by worldwide chip shortages. Rakon’s
core (i.e. non chip-shortage related) revenue grew
10%, contributing 82% of the total revenue. By
market this was: Telecommunications $86 million
(up 12%); Space & Defence $26 million (down
13%); Positioning $27 million (up 94%) and IoT,
emerging and other $32 million (up 363%). Further
market revenue information is provided on
pages 16–19.
Gross profit was $90.1 million, 53% higher than
last year’s $58.9 million. Gross margin percentage
improved to 52.4% against last year’s 45.9%,
reflecting a shift in the product mix towards
higher margin products over the year.
Operating expenses for the year remained stable
at $49.3 million. While we have had increases in
labour costs and some other operating expenses,
the overall costs were offset by factors such as
reduced travel.
Operating cash flow for the period was $30.2
million, 51% ahead of last year. Cash was
invested in growth-related capital projects,
increased research and development (R&D)
expenditure to support new technology
development, and manufacturing equipment
to capture growth. We have also deliberately
increased our inventory levels to help mitigate
against ongoing supply chain risks.
Rakon’s balance sheet continues to strengthen,
with total assets increasing by 29% to $200
million, and equity lifting by 30% since March
2021. The company remained net cash-positive,
with $23.2 million in net cash at balance date,
against last year’s $5.0 million.
We will continue to maintain a conservative
balance sheet as we prepare to invest in growth
opportunities that are critical to Rakon’s future,
while remaining cognisant of ongoing risk around
global supply chain, inflation, geopolitical risks,
and Covid-19.

Lorraine Witten Chair / Sinan Altug CEO
‘
While FY22 delivered a stellar
performance, this was the outcome of
many years hard work to lay strong
foundations and to position the
company for future growth.
’
4
Refer to the footnote on page 47 for the definition of Underlying EBITDA as a non-GAAP financial measure, referred to in this document.
Lorraine Witten (Chair), Sinan Altug (CEO)

Chair & CEO report
Progress against our strategy
Rakon’s strategy is to drive the advancement of
precision timing and frequency control solutions
in our core markets and to ensure long product
lifecycles through operational and manufacturing
excellence, and enduring customer relationships.
During FY22 we sought to better articulate this
through reframing our value creation model,
which is shown on page 14. This model identifies
the key priority areas (or strategic pillars) critical
to the creation of long-term value for Rakon, and
progress against each of these pillars is reported
on pages 16-22 of this report.
During the year we refreshed our three year
strategy, detailing our plan to increase our market
share in telecommunications infrastructure,
space & defence in particular the emerging Low
Earth Orbit satellite (LEO) market and precision
positioning including autonomous vehicles.
Equally important to our markets are the
strong foundations required for our business
– our values-driven & innovative culture; solid
financial management; sound disciplines in
managing risk and capturing new opportunities;
and an enduring commitment to looking after
each other, the planet and future generations.
Progress against each of these areas is provided
respectively in the people, financial and
Environment, Social and Governance (ESG)
sections of this report.


Dividend
Recognising that Rakon’s previous dividend
policy (in place since 2006) was no longer fit for
purpose, the Board introduced a new policy in
May 2022.
The policy articulates Rakon’s aspirations as
a growth company, and our intentions to
maintain a conservative balance sheet to ensure
opportunities can be captured while risks are
managed. Specifically, the company intends to
prioritise the use of cash surpluses towards capital
investment, acquiring skills and R&D projects that
deliver our strategic growth objectives.
At the 2021 Annual Shareholders’ Meeting
(ASM), shareholders were advised they may
expect a dividend if the forecast results for FY22
are achieved and there is no significant capital
requirement on the horizon. Whilst the guidance
of that time was well exceeded, the board has
reviewed Rakon’s capital requirements in light
of the new three year strategic plan and rapid
growth environment, and concluded that the
cash surplus should be fully invested to support
the company’s growth and capital expenditure
requirements. This includes the purchase of land
and construction of Rakon India’s new 9,755m
2
facility, continued investment in XMEMS
®
,
NewSpace
5
and the design of next generation
proprietary chips.
Covid-19 management
Rakon’s global operations continued with limited
disruptions throughout FY22, despite being
subject to country outbreaks, lockdowns and
remote working requirements brought about
by the pandemic. Stringent health and safety
measures were maintained at all locations and
whilst our employees were not always able to
escape community infection, we were largely able
to avoid workplace outbreaks. Employee feedback
shows that our team members have felt
well-supported through the year.
Governance
There were changes around the Board table as
succession planning was implemented during
the year. Steve Tucker and Sinead Horgan were
welcomed as new directors, bringing a range of
industry, technical and commercial expertise to
the Board. Both are standing for election at our
ASM in August.
Upon the completion of the Board succession,
Bruce Irvine retired April 2022, after 16 years as
a director, including the past three and a half
years as Chair. Bruce’s experience and leadership
in steering the company through significant
challenges and onto its more recent growth path
cannot be underestimated. We thank Bruce for his
guidance and wise counsel and wish him well for
the future.
We also extend a very special thanks to Brent
Robinson who stepped down on 31 March 2022
from his Managing Director role after 36 years.
Brent has been the driving force behind Rakon’s
technology innovation and, in recent years, led
the company through its strategic repositioning
Revenue $m
Underlying EBITDA $m
NPAT $m
Operating cash flow $m
FY18 FY19 FY20 FY21 FY22
$12.1m
FY18 FY19 FY20 FY21 FY22
FY18 FY19 FY20 FY21 FY22
FY18 FY19 FY20 FY21 FY22
$11.3m
$14.8m
$23.5m
$54.4m
$10.0m
$3.4m
$4.0m
$9.6m
$33.1m
$7. 9 m
($1.8m)
$9.4m
$20.1m
$30.2m
$101m
$114m
$119m
$128m
$172m

5
NewSpace refers to a globally emerging private / commercial spaceflight industry. This includes aerospace companies and ventures
working to develop faster, better and cheaper access to space and space technologies. It includes Low Earth Orbit satellites.
8
RAKON Annual Report |

FY22

9
RAKON Annual Report |

FY22

and into the strong growth position it now enjoys.
We are delighted that the company has retained
Brent’s expertise, both as Chief Technology Officer
and as an executive director.
Careful transition planning over a long period
has ensured a seamless handover to our new
Chair and Chief Executive Officer, and we were
well prepared to hit the ground running in our
new roles from 1 April 2022. We acknowledge the
support of the wider Board and Executive teams
through this period and look forward to working
together to lead Rakon in coming years.
During the year the Board has continued to
monitor and reassess the risks and opportunities
facing the business as we navigated the
challenges of rapid growth, supply chain
disruption and Covid-19. We remain confident
that Rakon is well placed to capture its core
market growth opportunities and believe that the
successful management of these various risks over
the past year reflects positively on our operational
agility and robustness.
Beyond our core business, we will continue
to scan and assess potential value-accretive
opportunities on the horizon which are aligned
with our strategy and will either enhance, or be
supported by, our competitive advantage and
capability.

Summary and outlook
We acknowledge and thank Rakon’s global
team for its tremendous efforts throughout the
year. The company’s outstanding performance
demonstrates the agility, capability and resilience
of our people, and their commitment to our
company.
While FY22 delivered a stellar performance, this
was the outcome of many years hard work to lay
strong foundations and strategically position the
company for future growth opportunities. We
have now completed our strategic pivot away
from consumer high volume/low value markets.
The challenges of Covid-19 have accelerated
technological change, and these have in turn,
highlighted the competitive advantages of our
operating agility, technology innovation and
strong customer relationships.
Forward orders are strong for FY23
6
, driven
primarily by continued core market growth.
The ongoing impacts of Covid-19, supply chain
disruptions and materials shortages will continue
to be managed closely.
In FY23 we are making thoughtful and deliberate
investments in people, products and capability
where we see future growth opportunities. This
investment aligns to our three year plan.
We will continue to build delivery capacity in New
Zealand and India, and we look forward to the
completion of Rakon India’s new Bengaluru facility
in late FY23. The new operation will provide
significantly enhanced manufacturing capability
as well as increased capacity, allowing products to
be transferred from other plants to be produced
at lower unit costs and extending their lifecycles
as they mature. This will become another vital
competitive advantage for Rakon.
We are excited about the opportunities beyond
FY23 and we are building the foundations to
capture these markets. The roll-out of 5G is
expected to continue for a number of years and
will evolve as datacentres enter the ecosystem.
The demand for industrial and automotive
positioning applications is continuing to rise,
whilst the aeronautical sector is expected to
return to growth. The exciting NewSpace market
continues to develop with increasing entrants into
Low Earth Orbit (LEO) satellites, along with the
whole ecosystem surrounding it.
These opportunities, together with a strong
development pipeline, multiple new proprietary
chips in the works and new XMEMS
®

nanotechnology manufacturing provide a very
positive outlook for Rakon.
Lorraine Witten ChairSinan Altug CEO
‘The company’s outstanding
performance demonstrates the
capability and resilience of our
people, and their commitment
to our company.
’
Chair & CEO report
6
FY23 refers to the year to 31 March 2023.

Multi-chamber temperature test
ovens designed in-house at Rakon NZ
Multi-chamber temperature test
ovens designed in-house at Rakon NZ

10
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FY22

Sinan Altug CEO / Brent Robinson CTO
Changing of the guard
This is an interesting leadership transition –
tell us how it came about.
Brent: We’ve been working on a succession
plan for a number of years, and during that
time it became apparent that Sinan, with his
leadership attributes, global industry expertise and
connections was the natural person to lead Rakon
through the next stage of its evolution.
We have repositioned the business in the past few
years, and with it now on a firm growth track, we
decided it was the right time to pass the mantle. As
Chief Operating Officer, Sinan was already leading
the execution of the company’s growth strategy
and expansion programme globally, so it was a
natural next step for him.
Sinan: It’s the best of both worlds really. While it
was time for Brent to take a step back from running
the whole company, he still has an unmatched
passion and energy to spearhead Rakon’s
technological direction. Brent’s ability to envision,
develop and commercialise new technologies has
been at the heart of Rakon’s success in recent years
and I’m delighted that he will continue to steer this
area for us.
It is a rare, yet privileged circumstance to have a
very smooth transition in leadership such as this
one. Brent, Darren and I have had the fortuitous
opportunity to work cohesively together across
the business over my 20 years at Rakon.
Does a change in leadership mean a new
direction for Rakon?
Sinan: No. Our current strategy is bold and
transformational; it has been developed over a
number of years and we all own it together. We
will, of course, continue to review and refresh it
dynamically. As the CEO, my focus is on allocating
our capital and resources to ensure we’re in the
best possible position to achieve our goals, capture
our opportunities and manage our risks.
Having Brent focus his energy on technology will
catalyse the execution of our strategy by increasing
our speed in getting leading-edge technology
into products and the hands of our customers as
quickly as possible.
Brent: As our direction of travel under our strategy
is very positive – core markets with significant
growth opportunities – we’ll stay focused on
maintaining product leadership and delivering
consistently good solutions. We don’t see this
fundamentally changing.
What is the key to Rakon’s future success?
Brent: I believe our vast industry knowledge has
always been a great strength and will remain so.
We started by producing channel crystals for radio
telephones for boats and commercial vehicles, and
have developed our expertise as communications
have become more complex and sophisticated.
We are now a recognised industry leader in
high-performance frequency control and timing
solutions in our core markets.
Working closely with our customers is key. As the
demand grows for connectivity at ever-greater
levels of speed and reliability, our goal is to
continue to be the ‘go-to’ partner in developing
solutions for our customers. We’re currently
working with customers on next-generation
technologies that most people won’t get to use for
many years. Our industry has long horizons.
Sinan: At Rakon I have always been proud of the
ingenuity and passion of our people and their
‘can-do’ attitude. This has allowed us to create
many industry-first products and has been key in
maintaining our leadership in the market segments
we choose to play in.
In recent years we’ve made great strides in our
global manufacturing and delivery capability –
both in-house and through partnerships, giving us
flexibility to scale up for the growth opportunities.
With technological advances in areas like cloud
computing, the metaverse, 6G and the NewSpace
sector exponentially increasing the demand for
connectivity, the future looks very exciting for us.
Brent Robinson (CTO), Sinan Altug (CEO)
In April, Dr Sinan Altug became Rakon’s Chief Executive Officer, in a long-planned
transition from Brent Robinson, who has led the family-founded company for more
than 35 years. Brent will continue leading Rakon’s technology arm in the capacity of
Chief Technology Officer, overseeing the development of cutting-edge solutions.
Sinan and Brent share their thoughts on the changing of the guard and what the
future holds . . .

Connectivity is like the nervous system of
technology – without it you can’t do much.
Our products are critical to enabling connectivity
between people, networks and machines and
are at the heart of hundreds of applications
around the world.
As technology gets smarter it needs to be
supported by connectivity that is faster, more
precise and more stable. That’s where Rakon
comes in. Our products are relied on to provide
the accurate, stable frequency and timing
reference to deliver this.
About Rakon
For more information on Rakon’s products and solutions, please visit: www.rakon.com
Product definitions and acronyms are explained on page 47.
We help make the world tick
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Pioneering innovation for 50+ years
HC-48 crystalUM-1 crystal
TXO4080
VTXO500 / USO
CDXO / RXT / ASICTCXO / OCXO
Space equipment
XMEMS
®
nanotechnology
SSB radioPagersCellular phones
GPS navigation
Precision satellite

positioning
Internet boom
Smartphones
3G | 4G | 5G networks
Internet of Things
6G
Cloud computing

infrastructure
NewSpace
1960s
1970s1980s1990s2000s2010s2020s
Our culture of innovation underpins Rakon’s proud record of continuous improvement and history
of industry ‘firsts’. Rakon has continually developed product solutions that help enable the next
wave of technology.
For more information on Rakon’s products and solutions please visit: www.rakon.com

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FY22

Manufacturing sites
R&D centres
Customer support

locations
Quality assurance
Key manufacturing

partners
EUROPE
ASIA
OCEANIA
NORTH AMERICA
70
countries with
Rakon customers
6
company and partner
manufacturing sites
6
R&D centres of
excellence
15
customer support
locations
~1000
full-time equivalent
employees worldwide
40+
nationalities in the
Rakon family
Our global footprint

14
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How we create value
We drive the advancement of precision timing and frequency control solutions in our core markets, and ensure
long product lifecycles through operational excellence and enduring customer relationships.
Our value creation model
underpins everything we do
at Rakon.
Our priority areas (or strategic
pillars) are critical to the creation
of long-term value for the
business.
As you continue reading, you
will see that our performance
reporting correlates to this model,
showing how we are progressing
against our strategic priorities.
SOLID FOUNDATIONS
A values-driven culture
Focuses on how we capture opportunities, manage risk and look after each other, our planet and future generations.
Enabling efficient
delivery and supporting
long product lifecycles
Creating first-mover

advantage and
next-generation solutions
Enduring relationships
and development of
market opportunities
Building leadership in
high-growth, high tech
markets
Intellectual capital
and trusted brand
Global manufacturing
platform
Talented and skilled
workforce
Financial resources
and capability
Partnerships and
relationships
Life-changing

applications
Advancement of
technology
Growth of our

people
Increased

shareholder value
Improved

delivery
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Getting around
our Annual Report

Delivering against our strategy
Our four strategic pillars – technology innovation, core markets, customer partnerships
and flexible, scalable operations – drive what we do at Rakon.
They 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.
Meeting of the Rakon Board and Executive Team
15
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Revenue $86m ▲12%
50% of total Rakon revenue
Telecommunications
Revenue growth was driven by the continued rollout
of 5G networks, increased demand in 4G network
components and an uplift in market share with
key Tier 1
7
customers. The average gross margin
percentage grew to 44% from last year’s 40%, due to
a higher specification product mix.
While growth momentum remained strong, delivery
was constrained by component shortages and
capacity limitations, particularly in India. This has
resulted in a strong order book for FY23, with further
measures under way to improve the manufacturing
capacity and pace of delivery in both New Zealand
and India.
Rakon’s telecommunications product leadership is
demonstrated by a high rate of inclusion in network
equipment reference designs. Being ‘designed-in’ to
major reference designs means there will be a stable
demand for product, over the life of the design
being used.
We experienced a substantial uptake of new
products over the year, particularly OCXO, TCXO
and VCXO products that are used in semiconductor
reference designs for 5G radio heads and small cells.
The coming year will see the release of new next
generation Application Specific Integrated

Circuit (ASIC) based oscillators for 5G mmWave
products, designed to enable even greater levels of
speed, reliability, stability and resilience.
We were also pleased to enter three new strategic
partnerships with important players in 5G and
O-RAN
8
networks. We are continuing to work
globally with key datacentre customers as the
evolution of new 5G open network ecosystems
continues.
Revenue
Gross margin
Our telecommunications products enable data to be transmitted across networks at ever-increasing levels of speed
and reliability, with market growth being led by the unrelenting advancement of telecommunications and cloud
computing equipment and infrastructure. 5G adoption is now well underway and has many more years to run.
$40m
$54m
$65m
$77m
$86m
Core markets
FY18 FY19 FY20 FY21 FY22
$14m
$20m
$26m
$31m
$38m
FY18 FY19 FY20 FY21 FY22
34%
38%
40%40%
44%
Rakon products:
OCXOs, TCXOs, VCXOs, XOs and Crystals
7
Refers to recognised key players within their respective industries and which make up a significant market share.
8
O-RAN – mobile networks that are more intelligent, open, virtualised and fully interoperable.
16
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17
After a steady first half, second half revenue
was impacted by reduced US government
investment in the country’s defence programme
and a subsequent decrease in product demand.
Defence represents around 60% of this
segment, and 9% of Rakon’s total revenue. The
gross margin percentage remained relatively
consistent.
With a strong level of space product orders,
our focus remains on delivery, building and
strengthening relationships in the NewSpace
ecosystem and participating in new mega
Low Earth Orbit (LEO) satellite constellation
contract bids. Good progress is being made
in NewSpace, where Rakon is working with
a number of partners including the Centre
national d’etudes spatiales (CNES), to develop
subsystems and modules for LEO satellites. We
announced a new suite of LEO satellite products
in the second half of the year, and now offer
the broadest range of frequency generation,
communication and positioning products in the
sector. Initial market interest has been pleasing.

We will continue to closely monitor defence
sector developments with our US and European
partners, working within Rakon’s Trade
Compliance Policy and all export controls.
Revenue $26m ▼13%
15% of total Rakon revenue
Our space and defence products enable connectivity in the most extreme environments and to the most demanding
performance specifications for applications such as satellites, ground stations, radar, aviation, communications and
positioning systems. We work with government agencies and commercial programmes in key markets to develop next
generation solutions.
Space & defence
Revenue
Gross margin
$28m
$32m
$28m
$30m
$26m
FY18 FY19 FY20 FY21 FY22
$19m
$22m
$19m
$20m
$18m
FY18 FY19 FY20 FY21 FY22
68%
69%
69%
68%
69%
Rakon products:
System Solutions, OCSOs, USOs, VCSOs, VCOs, OCXOs,
TCXOs, VCXOs, XOs, Crystal Filters and Crystals

Rakon’s very strong FY22 revenue performance
was driven by a combination of market growth in
our target segments, and the successful capture
of opportunities stemming from global TCXO
chip shortages. A significantly improved mix of
higher margin products resulted in the average
gross margin increasing from 48% to 56%.
We are seeing demonstrable benefits from
our strategic pivot to industrial and precision
applications such as autonomous agricultural,
mining and industrial machinery. Revenue for
this core segment showed a significant uplift,
both due to strong market growth and increased
share of customer spend. The emergency
locator beacon segment experienced growth as
recreational activities resumed after Covid-19
lockdowns.
The TCXO shortage opportunities have enabled
Rakon to build new customer relationships and
develop some longer-term business. Orders
stemming from this shortage will continue to be
fulfilled through FY23.
We will remain focused on building and
strengthening customer relationships and
capturing opportunities as the industrial,
emergency locator beacons, agricultural and
mining segments continue to grow. Forward
orders are strong. In the automotive segment,
electric and autonomous vehicle growth is
expected to continue putting pressure on
component supply, and the need for higher
performance and higher reliability frequency
control products is expected to grow as
autonomous vehicle industry standards evolve.
Revenue $27m ▲94%
11% of total Rakon revenue
Our positioning products enable the highest levels of precision and accuracy in applications such as
aircraft and marine navigation; automotive positioning; autonomous agriculture and mining;
and emergency locator beacons.
Positioning
Revenue
Gross margin
$26m
$20m
$19m
$14m
$27m
FY18 FY19 FY20 FY21 FY22
$11m
$8m
$7m$7m
$15m
FY18 FY19 FY20 FY21 FY22
42%
40%
36%
48%
56%
Rakon products:
OCXOs, TCXOs, VCXOs, XOs and Crystals
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19
IoT, emerging and other
Extraordinary revenue growth was achieved
during the year, arising from orders secured due
to the global TCXO chip shortages for consumer
IoT devices. This opportunity was captured
due to Rakon’s ability to design a solution
and quickly scale up for production, with
manufacturing commencing three months after
securing the order.
Eighty percent of the TCXO order was delivered
by the end of FY22, with the remaining 20% to
be delivered in the first half of FY23.
Revenue $32m ▲363%
19% of total Rakon revenue
With a more than 50-year track record in innovation, we continue to work with partners in delivering solutions for
cutting edge applications such as wireless control, test and measurement, the Internet of Things (IoT), Machine-to-
Machine (M2M), smart grids and metering, as well as other emerging markets.
Revenue
Gross margin
$7m
$8m
$7m
$7m
$32m
FY18 FY19 FY20 FY21 FY22
$1m
$1m
$18m
FY18 FY19 FY20 FY21 FY22
-6%
16%
-5%
15%
58%
Rakon products:
OCXOs, TCXOs, VCXOs, XOs and Crystals

Technology innovation
For more than 50 years, our culture of innovation has underpinned Rakon’s proud record of continuous
improvement and history of industry ‘firsts’. Our portfolio of patented products and technologies provides a
competitive moat against commoditisation as well as delivering long product lifecycles and revenue streams.
We work in multi-year timeframes to develop the next generation of technologies.
Rakon invested $13.1 million in research
and development during the year, focused
primarily on three key areas: development of
new ASIC-based products; the new XMEMS
®

core nanotechnology; and a new suite of
NewSpace products.
Several milestones were achieved in FY22. A first
half highlight was the development and delivery
of new TCXO products as described on page 19.
We were also pleased to achieve the successful
design-in and adoption of new OCXO, TCXO and
VCXO products in 5G millimetre wave radio heads
and small cells (see page 16); and a new
miniature Mercury OCXO, which has been
adopted by two Tier 1 customers.
The recently-announced new suite of LEO satellite
products allows Rakon to offer the largest
product range in its category in the evolving
NewSpace ecosystem. Development and testing
of these products, in partnership with the Centre
national d’etudes spatiales (CNES) and key
research organisations, will continue over FY23
with the first subsystem module scheduled to go
into space during the first half.
Rakon’s new semiconductor chips, which will
underpin the next generation of products, went
into market testing during the year, and are
receiving strong market interest.
Pleasing progress was made in the development
of Rakon’s XMEMS
®
nanotechnology which will
provide a technology core for future products.
Samples have delivered very encouraging testing
results and the company remains on track to
launch multiple XMEMS
®
-based product families
in the coming year.
R&D investment
(including capital expenditure)
$10.1m
$11.8m
$13.3m
$13.3m
$13.1m
FY18 FY19 FY20 FY21 FY22
R&D engineers at Rakon UK’s ASIC design facility
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Customer partnerships
As an approved supplier to the majority of Tier 1 companies in our core markets, Rakon has developed long
and enduring relationships with major customers, international agencies and industry standards organisations.
These partnerships are critical to our continued advancement of industry-leading technologies.
Over the past year, we have worked closely with
a number of partners on product development
opportunities. In the second half, an ultra-low
noise VCXO developed in partnership with a
major customer, was designed-into a major
chipset in the reference design for 5G mmWave
radio units. In NewSpace, we are working with
a North American partner to adapt our master
reference oscillator for LEO satellites.
As the new 5G open network (O-RAN and
C-R AN
9
) ecosystem evolves with the increasing
role of datacentres, we are continuing to
strengthen relationships and build new
partnerships with major players in this sector.
Our long-term customer partnerships assisted us
in navigating through a challenging supply chain
environment through the year. Through our
multi-sourcing strategy and strong relationships,
we have been able to work successfully with
suppliers and customers to ensure delivery.


In the coming year, work with customers will
continue in the development of next-generation
technologies, including semiconductor chipset
reference designs; next level OCXO technologies
for 5G; and further NewSpace opportunities.
We have developed enduring relationships with
major customers, international agencies and
industry standards organisations

9
C-RAN – a cellular network architecture that utilises cloud computing capabilities to provide a more disaggregated network;
i.e. a network where the processing of the data may be broken up into smaller units.

Our global manufacturing strategy focuses on building scale and flexibility at our three sites, lengthening
product lifecycles through lean manufacturing options, mitigating supply chain risk through multiple sourcing
and further developing our partnerships with original equipment manufacturers.
Flexible, scalable operations
Rakon’s continued improvement in operating
capability and resilience has underpinned our strong
FY22 performance. The proactive management
and mitigation of worldwide supply chain and
Covid-19 issues has enabled a strong manufacturing
performance.
During the year, our New Zealand operation
successfully achieved a major capacity expansion
to enable the fulfilment of new orders. Average
monthly revenue over the year was 60% higher than
FY21, delivering record gross margins.
Rakon India’s output was consistent with last year,
with the business demonstrating exceptional
resilience through the impacts of Delta, Omicron
and significant materials shortages. During FY22,
Rakon India has been developing the capability
to undertake part of the production process for
Mercury+ OCXO products. This top-selling product,
is currently only manufactured in New Zealand.
Production in India is expected to commence in
FY23. This important achievement marks a major
milestone in Rakon’s dual-sourcing strategy.
Rakon France likewise matched its previous year’s
manufacturing performance despite the challenges
of Delta, Omicron, materials shortages and remote
working.
Materials supply has remained extremely tight
across the globe, with extended lead times,
price increases and market consolidation.
We are continuing to work hard to overcome
uncertainties around manufacturing capacity
and the procurement of materials and parts.
Like others in our industry, we are also
experiencing increasing pressure from skills
shortages and cost inflation.

Projects to increase delivery capacity are under
way in both New Zealand and India, with planned
investment in building, plant and equipment. The
New Zealand operation will continue to expand
its XMEMS
®
nanotechnology capacity over the
coming year. In India, construction has commenced
on Rakon India’s new manufacturing facility in
Bengaluru (see page 23). The new operation will,
when complete, significantly enhance Rakon’s
manufacturing capability.
This facility will enable us to significantly increase
our OCXO production capacity and will be one
of the world’s largest and most sophisticated
manufacturing sites for frequency control products.
Rakon process engineers at one of our cleanroom facilities
22
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Future-proofing Rakon India
In its new location in the prime aerospace park,
Rakon India will be amongst the world’s leading
aerospace companies. The new operation will
cover 9,755m2 (105,000 square feet), not only
making it 150% larger than the existing sites but
also providing further potential to scale up as we
grow. The integrated nature of the facility will
enable lean manufacturing efficiencies, including
time and cost reduction, reduced material
movement between sites, lower inventories and
an integrated utility plan.
The new R&D and manufacturing centre of
excellence will enhance Rakon’s design and
manufacturing capability, enabling new product
lines to be manufactured. This will accommodate
future growth in Rakon’s core markets.
Importantly, it will also grow Rakon’s presence
within India’s aerospace sector through the
‘Make in India’ programme.
The high quality, economical operating
platform (including a technologically advanced
cleanroom) will allow significantly greater
volumes of products to be produced and
product lifecycles to be extended as they mature.
For example, part of the production of Mercury+
OCXO product range is planned to commence
in FY23, reducing product costs and ensuring
greater longevity. This approach both supports
Rakon’s multiple source manufacturing strategy
and lowers supply risk.
The new facility is planned for completion in
2023, with a comprehensive plan already in place
to enable continuity of supply to customers
through the transition. The facility will enable us
to significantly increase our OCXO production
capacity and is expected to be one of the world’s
largest and most sophisticated manufacturing
sites for frequency control products.
Construction is well underway for Rakon India’s new, world-class manufacturing facility in the aerospace technology hub in
Bengaluru, Karnataka. The new facility will be an integrated centre of manufacturing excellence, future-proofing our Indian
operations and replacing two existing leased Bengaluru sites which the business has outgrown.
23
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Architectural concept of
completed facility

RAKON Annual Report |

FY 2022

24
Our people
Rakon’s people are our key strength. We value the choice they have made to work with us. We attract high-
calibre talent, invest in their development and create a safe and inclusive environment, focussed on empowering
our people to do their best work while looking after their well-being.
Culture & values
At Rakon, our aim is to provide an environment
where our people are encouraged to be their
authentic self and are able to contribute
meaningfully to Rakon’s goals.
Our culture is built on family values. Our
employees are committed to, and share our
passion around the advancements in the
frequency control environment. At their core our
people share Rakon’s adventurous spirit and our
strong drive to deliver our customers the next
innovative solution. We work hard to ensure our
people are aligned to our purpose and vision,
and that their behaviours are guided in line with
our values of passion, respect, courage,
perseverance and integrity.
The strong engagement of Rakon’s team
members is reflected in our internal surveys
where employees name product, quality,
technology, culture and employee welfare as the
key things they rate most highly about Rakon.
Our values
Passion
Respect
Courage
Perserverance
Integrity
We’re driven by our energy and
excitement to create solutions and new
possibilities.
We’re honest, transparent and strive to
do the right thing by each other and the
planet.
We treat others as we expect to be treated;
we listen, value diverse perspectives and
take nothing for granted.
We’re proactive and challenge the status
quo with a ‘can do’ approach.
We’ve the determination to have another
go and achieve the best outcome as a
team.
Rakon India team

25
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FY22

Our people
~100032
%
68
%
5
%
153
799.5%
total global
workforce
female

employees
male

employees
voluntary turnover of
our salaried staff
people have worked

for us for 20+ years
lost time injuries
of our worldwide
workforce are double
vaccinated against
Covid-19
Diversity & inclusion
A true multinational organisation, Rakon’s
workforce is spread across 10 countries and
represent 43 different nationalities. We inherently
recognise the importance of diversity and
inclusion in achieving our business objectives,
fulfilling the needs of our customers and creating
a high-performing, values-driven culture.
Our diversity policy outlines our commitment
to a diverse and inclusive working environment
globally. We ensure that the unique strengths and
characteristics of our employees are recognised,
and strive to provide an atmosphere where
all employees feel free to bring their whole
selves to work. Our global talent acquisition
and management programmes, along with our
succession management processes ensure our
ability to attract, develop and retain high calibre
candidates and employees who are aligned to our
culture and values.
Our global team has a varied range of skills,
values, backgrounds, ethnicities and experiences.
This ensures that our workforce reflects the
diverse range of customers we have and the
communities in which we operate.
Learning & development
As a technology pioneer for more than 50 years,
Rakon has always strived to develop and promote
from within and provide meaningful career
opportunities for its employees. This is particularly
important in the current highly competitive skills
environment.
Developing leadership is a continuous focus for
Rakon across all levels of people leadership. We
ensure that our people leaders are developed
through a number of different programmes,
including in-house leadership programmes
delivered around the globe. During the pandemic
we have continued these programmes to ensure
51 people leaders globally had the ability to
continue on their leadership journey.
Every year our global business actively recruits
graduates, with engineering graduates often

starting with us via an internship. This allows
new graduates to sample different parts of the
business, eventually working in an area most
suited to their capabilities. In India, we partner
with technical institutes across the different
states to ensure we have a varied range of skills,
backgrounds and experiences joining our team.
We offer professional development across our
business and continue to expand in this area.
Through our graduate programme, we support
our people where appropriate to continue their
educational qualifications, from bachelors’
degrees through to PhDs and other qualifications.
So far, 26 current employees have achieved
qualifications through this programme, whether
it be an apprenticeship, diploma, bachelors’
degrees, masters or PhD qualification.

Our people
Health, safety and well-being
Rakon is committed to health, safety and
wellness. Established practices promote a safe
and healthy working environment globally to
ensure all our employees keep safe each day.
While each location is compliant with local
health and safety legislation, our areas of focus
remain Covid-19, education & training and safety
improvement opportunities.
Over the year, seven Lost Time Incidents (LTIs)
were recorded (compared to five in FY21)
and 47 incidents were recorded (compared
to 35 in FY21). These higher numbers can be
attributed to a higher number of hours worked
over the year and greater education around
reporting. Critical risk improvement reviews were
conducted, with improvement initiatives being
implemented.
Employee well-being
The well-being and mental health of our
employees has always been a focus for Rakon.
We continue to review and implement new
initiatives designed to promote and improve
employee well-being where appropriate, so that
our people can perform at their best within our
business, their families and community.
These 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
• Access to online seminars on well-being,
stress management, boosting mental health
and personal wellness
• Additional special leave to accommodate
effects of Covid-19 on employees and
families
• Regular check-ins from managers to their
team members, and where appropriate,
employee surveys focused on how our
people are doing.
Rakon supply chain employee at work in our
Inward Goods and Dispatch area
26
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27
Our people
C ov i d-19
Rakon’s global operations experienced minimal
personnel disruption driven by Covid-19
throughout FY22 despite being subject to
country outbreaks and lockdowns brought about
by the pandemic.
The ability of our people to remain agile and
pivot when necessary to new ways of working
to accommodate the pandemic meant our
manufacturing plants were able to continue with
limited disruptions.
Stringent health and safety measures were
maintained at all locations and hybrid or remote
working was implemented where appropriate.
Whilst our employees had freedom of choice
around vaccinations (provided by Rakon where
applicable), we were pleased to achieve high
double vaccination rates around the world,
including 100% uptake in India and 99% in New
Zealand and elsewhere.
As a manufacturer of essential products, it was
critical to maintain manufacturing operations
wherever possible. A range of measures were
introduced to minimise the risk of site outbreaks,
including reconfiguring shifts to longer hours
per day, but less days per week. Employees
continued to be educated and resourced to
implement strict hygiene standards and were
monitored daily for wellness.
Unfortunately, our employees were not always
able to escape community infection, however,
our flexible shift management and flexible
working arrangements, combined with stringent
health & safety measures, including daily rapid
antigen testing where appropriate, ensured we
were largely able to avoid workplace outbreaks.
It is to the credit of our employees that our
operational output across our manufacturing
sites either met or exceeded their manufacturing
targets, and that at the peak of Covid-19
outbreaks we had less than 10% of employees
off isolating.
In our employee surveys, feedback shows that
our team members have felt well-supported
through the year, with employee welfare being
named in the top three things Rakon does well.
Rakon production team leader Rakon production team leader
at our cleanroom facilitiesat our cleanroom facilities

Our board
Board of Directors with a strong mix of global experience and technology expertise
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 Wellington Drive
Technologies and vWork.
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 the
New Zealand Institute of
Economic Research (NZIER)
and a director of Acumen
Trust, Acumen Republic,
Counties Power, ECL Group
and Complete 3D.
He is a Chartered Member
of the Institute of Directors
in New Zealand.
Yin Tang (Tony) Tseng
Non-independent Director
Hon Master NTUST
Appointed 2017
Tony is the current
Chair of Siward Crystal
Technology Co. Limited,
a substantial shareholder
(12.3%) in Rakon.
He has more than 30
years of experience in the
frequency control product
industry, having founded
Siward in 1988 and grown
the company to become
one of the industry’s
global leaders.
Tony is a director of
Securitag Assembly Group
Limited.
Steve Tucker
Independent Director
BMS; FCA; CMInstD
Appointed October 2021
Steve is a professional
director with extensive
governance and
leadership experience in
the technology sector,
including Deputy Chief
Executive of
Gallagher Group.
He is currently Chair of
Gallagher Holdings and
Goodnature, and a director
of HJ Asmuss and Co, Taska
Prosthetics, 5th Element
and Purpose Capital Impact
Fund. He is also Chair of
Caprine Innovations NZ.
Steve is a Chartered
Member of the Institute
of Directors in New
Zealand and a Fellow of
the Institute of Chartered
Accountants.
Sinead Horgan
Independent Director
BComm; MAcc; CMInstD; FCA
Appointed January 2022
Sinead is a business consultant
and professional director
with significant experience
in financial analysis,
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), Bank of China (NZ)
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.
Lorraine Witten
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 Chair of Move
Logistics and a director of
Pushpay Holdings, Horizon
Energy Group and vWork.
She is a Chartered Fellow of
the New Zealand Institute
of Directors and a fellow
of Chartered Accountants
Australia and New Zealand
(CAANZ).

Brent Robinson
Executive Director
Hon FIPENZ
Appointed 1991
Brent’s 42 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.
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29
Our executive team
Dr Sinan Altug
Chief Executive Officer
PhD (EE); MBA; MSc (EE); BSc(EE)
Sinan joined Rakon in 2002 and
become CEO in April 2022. Prior
to this, he was COO where he led
the company’s global operations
to sustainably and profitably
meet increasing customer
demand, delivery and quality
requirements.
Sinan has previously been
Managing Director of Rakon’s
European businesses based in
France, and Global Business
Development Director based in
the US. Prior to joining Rakon
Sinan held various management
positions in the frequency control
product industry, including
Director of European Operations
for Champion Technologies.
An experienced team with deep industry and functional experience
Anand Rambhai
Chief Financial Officer
CA, BCom
Anand joined Rakon in January
2012 and was appointed CFO in
November 2018. He brings strong
leadership, commercial skills and
in-depth business knowledge
to the company. As CFO he is
responsible for Rakon’s finance,
information systems and investor
relations functions.
Anand’s previous experience
includes financial and
management roles with
organisations including Sony,
British Telecom and Deloitte.
Anand is a member of Chartered
Accountants Australia and New
Zealand (CAANZ).
Brent Robinson
Chief Technology Officer
Hon FIPENZ
Brent has been with Rakon since
1979. As Chief Technology Officer,
Brent oversees Rakon’s technology
development and innovation.
He has 42 years’ experience in
the design and manufacture of
crystals and oscillators, and has
included leading the development
of Rakon’s leading products and
technologies.
Brent was Managing Director
and Chief Executive Officer for
almost 36 years, until April 2022.
Under Brent’s leadership, Rakon
has grown into a global company
and recognised leader in the
frequency control product industry.
Darren Robinson
Chief Marketing Officer
Dip Export Marketing
Darren has led Rakon’s sales and
marketing function since 1990
and has been instrumental in the
company’s expansion into new
markets, its commercialisation
of new applications and its
development of business
relationships with many Fortune
500 companies.
Through his in-depth
understanding of Rakon’s
markets, Darren also plays an
integral role in steering the
company’s R&D efforts, guiding
product development teams
to develop solutions and meet
new requirements in emerging
applications and solving
customer problems.
Margo Thomas
General Manager
Global People and Capability
BA, PGDip, DipTchg, PGCertC
Margo joined Rakon in January
2016 and is responsible for
Rakon’s Human Resources (HR)
strategy, policies and processes,
including organisational
alignment, talent acquisition,
leadership development, change
management, employment relations
and health and safety.
Prior to this, Margo was
General Manager of People and
Capability New Zealand. She has
more than 20 years’ experience
working in HR including senior HR
positions in a range of industries
with Crowe Horwath, Spark,
Westpac and New Zealand Post.
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Our executive team
Scott Stemper
Global Quality Manager
BSc (EE)
Scott joined Rakon in January 2015.
He leads the development and
improvement of quality processes and
systems to enhance Rakon’s drive to
be the leading provider of world-class
frequency control products.
Scott’s background includes ten
years as Global Quality Manager with
Raltron Electronics Corporation and
20 years with CTS Frequency Controls
in oscillator product engineering and
quality management roles.
He has also held senior quality
management positions with L3
Technologies and D&S Consultants
Incorporated.
Scott is a member of the of the
American Society for Quality (ASQ).

Borja Thomas Schuhmacher
Head of Global Product Management
BEng (Elec), BEng (Telecom)
Thomas joined Rakon in April 2015 and is
currently responsible for overseeing the
profitable and sustainable management
of the company’s product offerings.
He has more than ten years’ experience
in the electronics sector, and former
Rakon positions include Head of Product
Management New Zealand and Senior
Product Line Manager.
Prior to joining Rakon, Thomas was
a Product Line Manager for Nexans
(formerly Alcatel) in France, leading the
launch of two new product lines for the
smart grid and electric vehicle markets.
Thomas has also held product
consultancy roles in France and began his
career as an R&D Engineer in the UK.
Dr Roy Cann
Head of Global Engineering
PhD (EE), BSc (Eng Science) 1st class Honours,
C.Eng (UK), MIET, DIC
Roy joined Rakon in May 2018 and is
responsible for driving new product
developments and leveraging the benefits
of a collaborative global R&D team.
Prior to joining Rakon, Roy was Electronic
Controls Design Manager at Fisher and
Paykel Technologies, where he was
responsible for the design and supply
chain management of high volume
microprocessor-based motor controllers
across New Zealand and China.
Previous roles include Engineering
Director at Trimble, plus other senior roles
with multi-site responsibilities, including
positions with Avery Weightronix (UK),
Rolls-Royce Aerospace (UK), Meissner
Power Systems (South Africa), and
Connetics (NZ).
Roy is a member of the Institution of
Engineering and Technology (MIET).
Maureen Shaddick
Company Secretary
LLB, BA
Maureen joined Rakon in
November 2018 and provides legal,
company secretarial and regulatory
advice and support. She has more
than 25 years’ experience as a
commercial lawyer and governance
adviser in private practice,
corporates and not-for-profit
organisations in New Zealand,
London and Dubai.
Maureen was the General Counsel
and Company Secretary of Genesis
Energy from 2003 to 2016. She
is the Chair of Cancer Research
Trust New Zealand and has been
a Trustee since 2003. She has also
held a number of other not-for-
profit governance roles.
Arun Parasnis
Managing Director, Rakon India
BEng (Elects & Comm); CPIM (APICS)
PGDip IB; PGDip Strategy
Arun joined Rakon in October 2018 and
is responsible for overseeing all business
functions at Rakon India.
He has more than 30 years experience
in the electronics industry, overseeing
a range of functions including
engineering, operations, business
development and profit and loss
management. His electronics experience
includes electronic components,
consumer electronics and Electronics
Manufacturing Services (EMS).
Prior to joining Rakon, Arun was the Vice
President of Cyient. He has also held
senior positions at Radiall India, Jabil
Circuit India and Vishay Components
India (formerly the Philips Electronics
Passive Components division).
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Environment, social and governance
Last year we began our journey to adopt a formal framework for Environmental, Social and Governance (ESG) reporting.
Our first step has been to identify our most material ESG topics, and from this we will create a sustainability strategy and reporting roadmap.
Materiality assessment
Our materiality assessment sought to identify
the most important sustainability aspects for
Rakon to measure, manage and report on.
This assessment entailed a desktop review of
internal and external input information, including
current trends, peer analysis, media reports
and reporting frameworks along with internal
policy, procedure and reporting documentation.
The assessment also involved stakeholder
engagement, including representatives of
institutional and other investors, potential
investors, senior management and other staff to
determine our material ESG topics.
The outputs of this work are illustrated here. The
materiality matrix graph summarises the relative
importance ratings of each ESG related topic to
our external and internal stakeholders and the
table of key material issues that follows on page
32 describes the most important ESG topics to
Rakon.
ESG framework
Results of materiality assessment
Most material topics

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Our key material issues
The table on this page summarises and
defines the most material ESG-related topics
for Rakon which have been distilled from the
initial long list identified during the review and
engagement process.
ESG framework
These findings were not a surprise to us and
are aligned with where we have been focusing
our efforts to improve our sustainability and
manage our risks. The following pages 33–35
provide examples of the past year’s initiatives to
improve our sustainability.
TopicSub-topicsDefinition
Environment
Sustainable products• Sustainable materials and product design
• Waste and circularity
• Decarbonisation (scope 3)
Minimising the negative impact of our products and embracing innovation to
positively impact the environment.
Sustainable operations• Waste and hazardous material management
• Water management
• Decarbonisation (scope 1 and 2)
• Climate adaptation and resiliency
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.
Social
Ethical supply chain• Responsible sourcing of materials
• Modern slavery
• Responsible selling of products
Ethical sourcing of raw materials, especially in relation to conflict minerals,
and labour, particularly in partner manufacturing plants outside New Zealand
where labour laws are less stringent. Ensuring sales of products that may have
a military end use comply with international humanitarian law and trade laws.
An engaged, healthy, diverse
and capable workforce
• Employee health, safety and well-being
• Employee engagement and growth
• Diversity and inclusion
Cultivating a strong, healthy workplace culture that attracts, engages and
develops high performing teams that embrace diversity of thought.
Governance
Risk management• Risk management
• Disclosure
• Compliance to legal and regulatory
requirements
Maintaining robust risk management processes.

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Our sustainability strategy will detail:
• Rakon’s vision for sustainability and how it
connects to our broader business strategy
• Rakon’s material sustainability topics, as well
as descriptions of how they affect, and are
affected by, our operations
• Rakon’s sustainability goals, objectives and
commitments.
Our sustainability strategy will include the
following key areas where Rakon has existing
initiatives in place:
• Reducing waste to landfill and committing to
a waste reduction target
• Reducing greenhouse gas (GHG) emissions
and committing to a GHG intensity reduction
target
• Improved visibility and management both up
and down the supply chain and commitments
relating to these
• Maintaining low rates of workplace injury and
committing to a target
• Maintaining high levels of employee
engagement and committing to a targeted
response rate to the employee engagement
survey.
Our reporting roadmap will outline key steps
towards mature sustainability reporting. Tasks
related to filling any climate change (TCFD)
disclosure gaps will be prioritised in preparation
for mandatory reporting from FY23.
Taskforce on Climate-related Financial
Disclosures (TCFD) disclosures
Rakon recognises that by improving transparency
and revealing climate-related information within
financial markets, our financial decision-making
will become more resilient, and climate change
risks and other financial risks better managed.
As a first step, we have undertaken a TCFD gap
analysis to determine Rakon’s current readiness
to be able to make disclosures in accordance with
the TCFD recommendations by FY23.


Next year’s annual report will include our
approach to climate-related risks and
opportunities: how they affect Rakon, and how
Rakon’s operations affect climate change. We will
also have benchmarked and tracked meaningful
metrics against our most material impacts.
Supply chain visibility
Rakon recognises that visibility of labour
practices, sources of materials and end use of
products are important issues for many of our
stakeholders including suppliers, customers,
investors, employees and regulators. In addition
to addressing these matters in our supplier and
broader Business Code of Conduct, Rakon’s Trade
Compliance Policy requires compliance with trade
laws, which typically regulate imports, exports,
trade sanctions and boycotts.
Rakon’s products are used in a wide range of
applications in many different industries and
market sectors. With customers in the defence
industry, we are particularly focused on ensuring
we comply with rules designed to control the
export of goods that may have a military end use
(including in weapons) in all the countries where
we do business.
Rakon’s Trade Compliance Policy requires
compliance with export controls and
restrictions in each of the countries it designs
and manufactures products within; including
application for export permits or licences. Our
Trade Compliance Policy states that we will not
sell products which could be used in weapons
of mass destruction (or their means of delivery);
or in cluster munitions or for terrorist activity.
Further, Rakon must undertake customer due
diligence when it is aware products may be
purchased for a military end use.
Rakon has a comprehensive compliance
framework in place including: staff training,
business management system protocols and
senior management oversight and escalations.
Compliance assurance reporting is required by
the Board bi-annually.
In accordance with our ongoing commitment to sustainability, we will build on these material topics to develop a sustainability
strategy and reporting roadmap over the next few months.
ESG framework

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Our EMS strives to deliver continuous
environmental improvement and maintain
business excellence. Across our facilities we seek
to:
• minimise waste, as well as treat it to
prevent pollution
• be efficient in the use of energy and
natural resources
• create environmentally friendly
products and technologies.
We have been reporting to CDP (formerly known
as the Carbon Disclosure Project) since 2010. The
information we measure and provide across our
global operations includes refrigerant use and
the consumption of carbon dioxide, electricity,
fuel and natural gas.
In New Zealand, our EMS is reviewed on an
ongoing basis following the Plan-Do-Check-
Act methodology. This includes establishing
objectives, implementing processes, monitoring
and measuring against environmental policy,
targets and legal requirements and then
reporting results. Actions are taken to improve
the performance of the EMS in a continuous
improvement approach, and our staff are invited
to provide input into the review process. Our
EMS targets are based on the last 2 years
of data.
Our New Zealand focus continues to be on
reducing waste and pollution, reducing water,
electricity and CO2 emissions, and reducing
hazardous materials on site. For example an
initiative to replace lights with LED panels and
sensor lighting is now 90% complete and energy
consumption has reduced by 6% over the last 2
years. Water consumption has reduced by 20%
based on litre per part produced since 2020.
At Rakon India we obtained our ISO14001
recertification during the year with zero non-
compliances. Improvements included reducing
consumption of the compounds Acetone and
Stycast in production, as well as eliminating the
use of the chemical Galden through installing a
new machine which is operated by electricity to
perform leak testing.
A new initiative is also planned for FY23 in India
to put a new solvent recycling machine into
production. The recycling process separates the
original solvent from waste materials picked up
during its use, then recondenses it for reuse.
Trials of the new machine are in progress and
we have seen 90% of the used solvent being
recovered.
In France, through the tremendous efforts of
the engineering team, we have been reducing
products classed as ‘REACH’ (Registration,
Evaluation, Authorisation and Restriction
of Chemical Substance) throughout our
manufacturing processes. We have also almost
completed the replacement of lights at our sites
with LED lighting where possible.
Rakon is ISO14001 certified at our manufacturing facilities in New Zealand and India. This standard sets out the requirements
for our Environmental Management System (EMS).
Improving our environmental footprint

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In India, our Rakon team has donated to Swami
Vivekananda Youth Movement (SVYM) and
provided palliative care services for 148 patients
living with or dying from advanced progressive
illness such as cancer, paralysis, kidney failure,
cerebral palsy and severe neurological disorders.
We also helped fund an athletics day at a local
polytechnic college for electrical engineering
students in the Bengaluru area, as well as
providing career opportunities for graduates.
In France, we participate in a government
initiative to support engineering students
by offering intern programmes and financial
assistance with their studies. This creates
a win-win by creating opportunities for
financially disadvantaged students to pursue an
engineering career as well as broadening the
pool of talent available for high tech companies
such as Rakon.
Our Research and Development centre in the
United Kingdom, has for the past five years,
assisted a charity radio station at the nearby
Princess Alexandra hospital through advertising
support.
In New Zealand, we support young people
studying engineering by providing two
scholarships annually to Auckland University’s
Engineering school.
We have also built connections with a range of
New Zealand charities that improve well-being
and quality of life with a focus on our tamariki
(next generation). Over the past year, we have
donated to Radio Lollipop, Koru Care, Special
Children’s Christmas Party, Kidney Kids NZ, the
New Zealand Down Syndrome Association, the
Rotary Club of Newmarket, Burn Support Group
Charitable Trust, Remuera Lions Club Charitable
Trust and the Auckland Rescue Helicopter Trust.
As a global employer, Rakon aims to actively and positively contribute to the communities where it operates.
Over the past year we have supported a range of initiatives that improve well-being or assist with education and career prospects.
Making positive social contributions
Rakon India is a supporter of SVYM
(here and above)

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Corporate governance
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.
Code of ethical behaviour

We are committed to ensuring the
highest standards of honesty and
integrity are maintained by our
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 well-being, 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.
The Board confirms that in the year to 31 March
2022, the company’s corporate governance
practices complied with the recommendations
in the NZX Corporate Governance Code, 10
December 2020 (NZX Code).
The governance information in this Annual
Report is current as at May 2022 and has been
approved by the Board.
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).
Rakon’s Business Code of Conduct sets out
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 regularly reviewed
and updated and is available on the in-house
portal, along with all human resources and
governance policies and procedures. Training
sessions with managers and team leaders
ensure they are well equipped to guide and
support their teams. Rakon continues to work
on improving its processes for promoting
awareness and for receiving assurance of
understanding and compliance.
The Business Code of Conduct requires
Directors and employees to promptly report
material breaches of the Code. Rakon’s
Protected
Disclosure (whistleblowing) Policy
supports
the expectation that 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 and employees. Additional
trading restrictions apply to Restricted Persons
as defined in the policy, including Directors and
certain employees.
Details of Directors’ shareholdings as at 31
March 2022 are set out in the Shareholder
Information section on page 98. 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.
The key corporate governance
documents, charters and policies
referred to in this report are available
on Rakon’s website at:
www.rakon/investors/corporate-governance

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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 senior
management team under the leadership of the
Combined board experience
Enterprise leadership
Industry technology
Listed corporate
governance
Finance audit & risk
MarketingManufacturing
M&AInternational
Corporate governance
Chief Executive Officer. This delegation and
further sub-delegation is subject to financial
controls and limitations advised from time to
time as set out in detailed Delegated Authorities
Schedules.
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 collectively held by the current Directors
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.
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.
The key corporate governance
documents, charters and policies
referred to in this report are available
on Rakon’s website at:
www.rakon/investors/corporate-governance

Information about each of Rakon’s Directors is
available on the Rakon website and on page 28.
The company maintains an interests’ register and
particulars of the entries made in the interests’
register during the year ended 31 March 2022 in
relation to Directors’ interests are disclosed in
the Shareholder Information section on Pages
99–101.
Board Audit & Risk
Committee
People
Committee
Total number of meetings held1155
Bruce Irvine1155
Keith Oliver11–5
Brent Robinson1055
Lorraine Witten1155
Roger Yao: Observer for Yin Tang Tseng
1
11––
Keith Watson115–
Steve Tucker
2
52
Sinead Horgan
3
21
1
Roger Yao is an observer for Director Yin Tang (Tony) Tseng, with the consent of the Board, in June 2017. Tony is the current
Chair of Siward Crystal Technology Co. Limited, a substantial shareholder (12.3%) in Rakon and is actively involved in the
governance of Rakon.
2
Steve Tucker was appointed to the Board with effect from 1 October 2021
3
Sinead Horgan was appointed to the Board with effect from 25 January 2022
Corporate governance
Image for here?
Board meetings and attendance
The Board meets as often as it deems
neccessary, including sessions to review the
company’s performance against agreed plans,
and to consider the Rakon’s strategic direction
and forward-looking business plans. Video and/
or phone conferences are used as required
including to accommodate the restrictions on
face-to-face meetings due to Covid-19.
The table below sets out Directors’ attendances
at the Board, Audit and Risk Committee and the
People Committee meetings during the year
ended 31 March 2022. In total, there were 11
Board meetings, five Audit and Risk Committee
meetings and five People Committee meetings.
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The key corporate governance
documents, charters and policies
referred to in this report are available
on Rakon’s website at:
www.rakon/investors/corporate-governance

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Diversity
At Rakon we recognise the value of diversity
of thinking and skills in our recruitment,
management and governance practices, and
we seek to create inclusive work environments
where all our people are valued and respected.
We recognise diversity means one or more of a
number of different characteristics and factors,
including but not limited to: gender, ethnic
background, religion, age, marital status, culture,
disability, economic background, education,
language, physical appearance and sexual
orientation. In building our teams we consider
the different backgrounds, communication
styles, life-skills and interpersonal skills of
Directors and employees to be valuable in
creating successful teams.
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.
The Board has set two key diversity and inclusion
objectives which were continued through
FY22, aimed at reflecting the undertakings and
intentions of the Diversity and Inclusion Policy in
Rakon’s planning, recruitment and remuneration
practices:
• Ensure succession plans for critical business
roles are aligned to Rakon’s Diversity and
Inclusion Policy and represent the diversity in
the Rakon business; and
• Collect and analyse data based on gender
with a view to designing and implementing a
three-to-five-year plan to achieve gender pay
equality.
In setting these objectives, we have recognised
that alignment with our Diversity and Inclusion
Policy needs to be addressed in the ongoing
development of succession plans for critical
business roles, and that gender pay equality
is a key indicator of a diverse and inclusive
organisation. Rakon gender data across all of
its global operations is recorded in the People
section on page 25.
As at 31 March 2022, women represented 25%
(FY21: 16.7%) of Rakon’s Directors and 22%
(FY21: 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 2022 and as at 31 March
2021 is set out in the table on this page.

In the table the Chief Technology Officer, who
was the Managing Director and Chief Executive
Officer, is included as a Director. Officers are the
other direct reports of the Chief Executive Officer
having key functional responsibilities.
With effect from 1 April 2022 and the resignation
of Director and Chair Bruce Irvine, the total number
of Directors reduced to seven and accordingly the
percentage of Directors who are women is ~29%.
Also, with effect from 1 April 2022, the Managing
Director position held by Brent Robinson, ceased and
he became Chief Technology Officer while remaining
an Executive Director and accordingly, will continue
to be counted as a Director for the purposes of the
diversity statistics.
Date of
determination
31 March
2022
31 March
2021
Directors
Females225%116.7%
Males6 75%583.3%
Officers
Females222%222%
Males7 78%7 78%
Corporate governance
The key corporate governance
documents, charters and policies
referred to in this report are available
on Rakon’s website at:
www.rakon/investors/corporate-governance

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 industry experts and key
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.
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. In FY22 the
Board’s key focus was succession planning,
which took into account previous Director
and Board performance evaluation exercises
Corporate governance
undertaken by the Board as a group, and on a
one-on-one basis. The Board engaged to discuss
the attributes, skills and experience required
from Directors for the good governance of the
company and its strategic direction.
The charters of the Board’s Committees also
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.
Independence
The Board currently comprises seven Directors:
six non-executive Directors, and one executive
Director. The executive Director was the
Managing Director and Chief Executive Officer
until 31 March 2022 and now 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 2022, a majority (five)
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. It accordingly
confirms: Lorraine Witten (Chair), Keith Oliver,
Keith Watson, Steve Tucker and Sinead Horgan
are independent; and Brent Robinson and Tony
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 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 the
Managing Director or Chief Executive Officer
shall not be the same person.
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RAKON Annual Report |

FY22

The key corporate governance
documents, charters and policies
referred to in this report are available
on Rakon’s website at:
www.rakon/investors/corporate-governance

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RAKON Annual Report |

FY22

Committees
Audit and Risk CommitteePeople Committee
Membership
From 1 April 2022:
• Sinead Horgan (Chair)
• Lorraine Witten
• Steve Tucker
From 1 April 2022:
• Keith Oliver (Chair)
• Lorraine Witten
• Keith Watson
To 31 March 2022: Lorraine Witten (Chair), Bruce Irvine, Keith Watson,
Steve Tucker, Sinead Horgan
To 31 March 2022: Keith Oliver (Chair), Bruce Irvine, Lorraine Witten
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. 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 and their appointment and
removal if required
• Oversight of the adequacy and effectiveness of internal controls
• Review of internal control procedures, risk management framework and
operational risk management, including insurance
• Regularly meet external auditor without management present.
Assist the Board in establishing coherent human resources, remuneration
and Director nomination policies and practices, to support the successful
management of Rakon. Duties and responsibilities include:
• Review of human resources strategy, organisational structure and
management succession planning
• Review of employee incentive schemes, remuneration for the Chief
Executive, senior management and Directors
• Oversight of compliance with human resources and health and safety
legislation
• Oversight of Director succession planning, selection, appointment and
evaluation
• Review of induction and training programmes for new and existing
Directors.
Corporate governance
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.
The Committees review and analyse policies
and strategies, 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 action 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 Committee meeting and all Directors
are entitled to attend any Committee meeting.
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 key corporate governance
documents, charters and policies
referred to in this report are available
on Rakon’s website at:
www.rakon/investors/corporate-governance

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Corporate governance
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 all three of the current members
are independent Directors and have accounting
and financial backgrounds.
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
through 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.
Management may attend Committee meetings
at the invitation of the Committee Chairs.
Other committees
The Board Charter specifically requires the Board
to assess regularly whether there is a need for
any further standing committees and the Board
acknowledges 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.
Takeover response guidance
Rakon has not developed a specific policy
governing the Board’s response to a takeover
situation. Current legal advice on process that
should be followed in the event of a takeover
offer is readily accessible by Directors in their
online Resource Centre. In the case of a takeover
offer, Rakon will form an Independent Takeover
Committee to oversee disclosure and response,
and engage expert legal and financial advisers to
provide advice on procedure.
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. Continuous disclosure is a standing
agenda item for each Board meeting for formal
consideration as to whether there is any relevant
material information that should be disclosed to
the market. In addition to all information required
by law, Rakon also seeks to provide
sufficient meaningful information, including
financial and non-financial information, to ensure
stakeholders and investors are well-informed of
all material information.
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 2022.
For the financial year ended 31 March 2022, 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 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 seven years are
available on our website.
The key corporate governance
documents, charters and policies
referred to in this report are available
on Rakon’s website at:
www.rakon/investors/corporate-governance

Non-financial information
This year for the first time, we combined non-
financial reporting into the Annual Report,
recognising the interdependence of financial
and non-financial matters to the long-term
sustainability of the business. During FY22
Rakon initiated a formal process to understand
Environmental, Social and Governance (ESG)
priorities including input from stakeholders
as we build our formal framework for mature
sustainability reporting. For further information
see pages 31–33.
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 the
Remuneration section at page 96.
Corporate governance
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 has overall responsibility 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 in regard
to risk assurance. The Committee’s work plan
and meeting schedule provide dedicated time
for review of the company’s risk management
framework, financial risks, operational risk
registers and review of the company’s risk
appetite. The Committee is required to report its
findings to the full Board.
The Board maintains a strategic risk register
which is required to be reviewed and updated
as required at each meeting. The Board and
management are focused on the continuous
improvement and effectiveness of Rakon’s risk
management framework.
Managers are required to regularly review the
key risks in their areas of responsibility and to
assess, rate, control, mitigate or monitor such
risks. Key operational, quality management
system, environmental management system,
business continuity, project and strategic
risks are required to be reviewed by the
senior management team to assess whether
appropriate risk management actions are being
taken, and the key risks are reported to the
Audit and Risk Committee and Board for further
oversight.
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The key corporate governance
documents, charters and policies
referred to in this report are available
on Rakon’s website at:
www.rakon/investors/corporate-governance

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FY22

IssueRisk Description Controls and Mitigation
Health, Safety and Well-beingEmployee workplace accidents and illness Rakon maintains a global focus on health, safety and well-being
through policy, practices and management. Information on the
management of health, safety and well-being across Rakon’s global
operations is provided regularly to the Board including incident
reporting and critical risks.
Product QualityDefects in product causing losses or damage to custom-
ers or public
Rakon maintains global quality management system (ISO certified)
at manufacturing sites in New Zealand, France and India, and strong
cultural focus on quality.
Intellectual Property and Technology Disruption Third party assertion of intellectual property rights and
competing technology
Rakon maintains a significant investment in R&D and a strong
cultural focus on technology leadership in the frequency control
product industry and management of its patent portfolio.
Business ContinuityCatastrophic events and supply chain disruptionRakon maintains business continuity protocols and manages and
maintains its focus on dual sourcing and inventory management,
dual manufacturing capability and Plan B business management
system arrangements.
Access to MarketsGeo-political issues affecting suppliers of parts and salesRakon maintains diversification of global suppliers, product lines,
customers and operating locations.
Cyber SecurityCyber-attack or data breachRakon maintains a continuous improvement process including
policies, practices and control mechanisms to protect personal and
customer and business information and address risk of cyber attacks
and data breaches.
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 for the operation of a
successful business, and to prevent harm and
promote well-being for employees, contractors
and customers.
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 continues to review its health and safety
policy and practices to achieve consistency of
behaviour, processes and expectations across its
global businesses.
Corporate governance
Key risks
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,
ensuring management review and Board level
oversight to ensure the impact of climate change
risks and opportunities form part of Rakon’s
strategy and financial planning. Based on advice
from management to the Board, Directors are
satisfied Rakon does not currently have any
significant climate-related risks.
Management of waste and hazardous material
management, water and carbon emissions
and climate adaptation and resiliency
were recognised as important topics by
stakeholders during Rakon’s recent assessment
of its Environmental, Social and Governance
materiality issues as more particularly discussed
on pages 31–33.
The key corporate governance
documents, charters and policies
referred to in this report are available
on Rakon’s website at:
www.rakon/investors/corporate-governance

Corporate governance
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 2022,
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, audit partner rotation (at
least every five years) and audit fee, and to
review and provide feedback in respect of the
annual audit plan. A comprehensive review
and formal assessment of the independence
and effectiveness of the external auditor
is undertaken periodically. The Committee
routinely allows time to meet with the external
auditor without management present.
The Audit and Risk Committee assesses the
auditor’s independence on an annual basis.
All audit work at Rakon is fully separated from
non-audit services, to ensure that appropriate
independence is maintained. Other services
provided by PwC in FY22 were non-audit related.
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
in note 7 to the Financial Statements in this 2022
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 has provided the Audit and Risk Committee
with written confirmation that, in their view, they
were able to operate independently during FY22.
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 2021
Annual Shareholders’ Meeting and is expected
to be in attendance at the 2022 Annual
Shareholders’ Meeting.
Internal audit
Rakon has a number of internal controls
overseen by the Audit and Risk Committee
and 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, insurance, health and safety,
conflicts of interest, prevention and identification
of fraud and legislative compliance.
The company does not have a permanent
internal audit function. From time to time and
as required external audit services are engaged
to review its systems and internal controls. To
maintain its ISO accreditation for a number of
its management systems including the Quality
Management System and the Environmental
Management System Rakon is subject to
rigorous, regular independent audits.
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The key corporate governance
documents, charters and policies
referred to in this report are available
on Rakon’s website at:
www.rakon/investors/corporate-governance

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FY22

Shareholder rights and relations
Corporate governance
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.
In FY22 Rakon undertook an Investor Perception
Study and also engaged with investors, potential
investors and investor representatives to inform
its assessment of its material Environmental,
Social and Governance issues.
Rakon maintains a website: www.rakon.com
where shareholders and other stakeholders may
obtain up-to-date financial and operational
information and key governance information
along with other information about the company
and its products.
The annual review of Rakon’s compliance with
the NZX Corporate Governance Code (NZX
Code) is available on Rakon’s website in the
relevant annual report.
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 Day
• Ad hoc investor presentations to institutional
investors and retail brokers
• Easy access to information through the Rakon
website: www.rakon.com
• Access to management and the Board via a
dedicated email address:
investors@rakon.com
• Option to sign-up via website to receive
email notification 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
The key corporate governance
documents, charters and policies
referred to in this report are available
on Rakon’s website at:
www.rakon/investors/corporate-governance
discussion at these events. While to date, Rakon
has held in-person meetings only, allowing
shareholders who are unable to attend to receive
audio and more recently video transmission of
the meeting, it is now Rakon’s intention to move
to a hybrid meeting allowing those not present
to actively participate in the meeting. Rakon
believes this change will better recognise the
wide geographic dispersion of shareholders in
New Zealand and overseas as well as addressing
concerns regarding Covid-19.
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
notification of investor news.
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
and regulators, as well as Rakon employees,
customers and suppliers.
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 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 its
governance practices against the NZX Code.

Glossary
Find out more
Visit our Investor Centre:
www.rakon.com/investors
At our Investor Centre you can sign up for our
email alerts and receive investor news updates

straight to your inbox.
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.
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.
System Solutions
Refers to Rakon’s solutions that include
high performance products, equipment and
consulting services for Space & Defence.
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.
Definition of Underlying EBITDA
Rakon has used ‘Underlying EBITDA’ as a non-gap financial measure in this 2022 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 5 of the Financial statements section of this document for additional information including a
reconciliation to Net Profit After Tax (NPAT).
Surface Mount Technology (SMT) Pick & Place machine
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Financial statements
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FY22

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Table of contents
Directors’ Statement .......................................................................................................................................50
Statement of Comprehensive Income .......................................................................................................51
Statement of Changes in Equity ..................................................................................................................52
Balance Sheet ....................................................................................................................................................53
Statement of Cash Flows ...............................................................................................................................54–55
Notes to the Financial Statements ..............................................................................................................56–90
Independent Auditor’s Report .....................................................................................................................91–95
Shareholder Information ...............................................................................................................................96 –101
Directory .............................................................................................................................................................102

Directors’ statement
The Directors are responsible for ensuring
that the financial statements fairly present the
financial position of the Group as at 31 March
2022 (FY2022) and the financial performance and
cash flows for the year ended on that date.
The Directors consider that the 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 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 financial statements,
set out in pages 49 – 90, of Rakon Limited and
subsidiaries for the year ended 31 March 2022.
The Board of Directors of Rakon Limited
authorised these financial statements for issue on
25 May 2022.
On behalf of the Directors
L. Witten S. Horgan
Chair Chair of the Audit and Risk Committee

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FY 2022

Statement of Comprehensive Income
For the year ended 31 March 2022
Note
2022
$000s
2021
$000s
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Decrease in fair value cash flow hedges (697)9,906
Cost of hedging (725)(105)
Income tax relating to components of other comprehensive
income
398(2,745)
Exchange differences on translation of foreign operations (517)(4,826)
Long term incentive plan 108–
Items that will not be reclassified subsequently to profit or loss
Changes in fair value of equity investments – Thinxtra (440)203
Other comprehensive income for the year, net of tax (1,873)2,433
Total comprehensive income for the year attributable to
equity holders of the Company
31,23812,071

Earnings per share attributable to the equity holders
of the Company
CentsCents
Basic earnings per share2414.6 4.2
Diluted earnings per share24 14.5 4.2
The accompanying notes form an integral part of these financial statements.
For the year ended 31 March 2022
Note
2022
$000s
2021
$000s
Continuing operations
Revenue6171,967128,260
Cost of sales (81,907)(69,344)
Gross profit 90,06058,916
Other operating income81,6342,604
Operating expenses
Selling and marketing (9,424)(9,441)
Research and development7(11,726)(12,944)
General and administration (28,193)(26,636)
Total operating expenses (49,343)(49,021)
Other (losses)/gains – net9(937)(1,181)
Operating profit 41,41411,318
Finance income103929
Finance costs10(1,945)(1,628)
Share of net profits of associates172,3821,446
Profit before income tax 41,89011,165
Income tax expense22(8,779)(1,527)
Net profit after tax for the year attributable to equity holders
of the Company
33,1119,638

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RAKON Annual Report |

FY 2022

Statement of Changes in Equity
The accompanying notes form an integral part of these financial statements.
For the year ended 31 March 2022


Note
Share
capital
$000s
Retained
earnings
$000s
Other
reserves
$000s
Total
equity
$000s
Balance at 31 March 2020 181,024 (65,875)(23,293) 91,856
Net profit after tax for the year – 9,638 – 9,638
Currency translation differences25 – – (4,826) (4,826)
Cash flow hedges, net of tax25 – – 7,056 7,056
Changes in fair value of equity investments at fair
value through other comprehensive income –
Thinxtra
25 – – 203 203
Total comprehensive income for the year – 9,638 2,433 12,071
Balance at 31 March 2021 181,024(56,237)(20,860)103,927
Net profit after tax for the year –33,111–33,111
Currency translation differences25––(517)(517)
Cash flow hedges, net of tax25–– (1,024)(1,024)
Changes in fair value of equity investments at fair
value through other comprehensive income –
Thinxtra
25––(440)(440)
Total comprehensive income for the year –33,111(1,981)31,130
Contribution of equity net of transaction costs
Employee share schemes
Value of employee services30––108108
Balance at 31 March 2022 181,024(23,126)(22,733)135,165

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RAKON Annual Report |

FY 2022

Balance Sheet
As at 31 March 2022
Note
2022
$000s
2021
$000s
Assets
Current assets
Cash and cash equivalents1139,22915,073
Trade and other receivables1244,52238,906
Inventories1357,32137,699
Derivative financial instruments 261,3452,521
Financial asset at fair value through profit or loss26201333
Current income tax asset 213478
Total current assets 142,83195,010
Non-current assets
Property, plant and equipment1421,38818,296
Intangible assets157,1647,584
Right-of-use assets164,7927,195
Interest in associates1716,17212,333
Trade and other receivables121,9413,843
Financial asset at fair value through other comprehensive
income – Thinxtra
182,6803,120
Derivative financial instruments261,095587
Deferred tax asset221,8066,398
Total non-current assets 57,03859,356
Total assets 199,869154,366
As at 31 March 2022
Note
2022
$000s
2021
$000s
Liabilities
Current liabilities
Bank overdraft19–3,599
Borrowings191,2976,433
Trade and other payables2036,00826,026
Current income tax liabilities 2,457–
Lease liabilities162,0762,272
Deferred income12–2,806
Provisions21631330
Derivative financial instruments2685429
Total current liabilities 43,32341,495
Non-current liabilities
Borrowings1914,684–
Provisions212,8173,134
Lease liabilities163,4045,418
Derivative financial instruments 26385260
Deferred tax liabilities2291132
Total non-current liabilities 21,3818,944
Total liabilities 64,70450,439
Net assets 135,165103,927
Equity
Share capital23181,024181,024
Other reserves25(22,733)(20,860)
Accumulated losses (23,126)(56,237)
Total equity 135,165103,927
The accompanying notes form an integral part of these financial statements.

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RAKON Annual Report |

FY 2022

Statement of Cash Flows
For the year ended 31 March 2022
2022
$000s
2021
$000s
Operating activities
Cash provided from
Receipts from customers168,226123,876
Advance from customers–2,806
R&D grants received2,1921,812
Covid-19 government assistance632,517
Other income received9823
170,579131,034
Cash was applied to
Payment to suppliers and others(84,108)(59,087)
Payment to employees(53,947)(50,060)
Interest paid(1,811)(534)
Income tax paid(475)(1,294)
(140,341)(110,975)
Net cash inflow from operating activities30,23820,059
Investing activities
Cash was applied to
Purchase of property, plant and equipment(8,461)(4,194)
Purchase of intangibles(1,708)(882)
(10,169)(5,076)
Net cash outflow from investing activities(10,169)(5,076)
For the year ended 31 March 2022
2022
$000s
2021
$000s
Financing activities
Cash was provided from
Proceeds from borrowings10,0006,450
10,0006,450
Cash was applied to
Lease liabilities payments(2,625)(2,962)
Cash was applied to financing activities(2,625)(2,962)
Net cash inflow from financing activities7,3753,488
Net increase in cash and cash equivalents27,44418,471
Effects of exchange rate changes on cash and cash equivalents311765
Cash and cash equivalents at the beginning of the year11,474(7,762)
Cash and cash equivalents at the end of the period39,22911,474
Refer to note 11 for the breakdown of cash and cash equivalents.
The accompanying notes form an integral part of these financial statements.

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FY 2022

Statement of Cash Flows (continued)
For the year ended 31 March 2022
2022
$000s
2021
$000s
Reconciliation of net profit to net cash flows from operating activities
Reported net profit after tax33,1119,638
Adjustments for
Depreciation and amortisation expense8,9388,692
Net increase in allowance for expected credit loss29173
Interest expenses–17
Gain on dilution of investment in Timemaker(634)–
Provisions provided551(338)
Movement in foreign exchange rates(851)(961)
Share of net profits of associate(2,382)(1,446)
Deferred tax movement5,041(67)
Employee share based expense108–
11,0625,970
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables(3,714)1,498
Increase in inventories(21,559)(1,870)
Decrease in provisions(17)(168)
Increase in trade and other payables10,3574,528
Decrease in tax provisions and deferred tax998463
Total impact of changes in working capital items(13,935)4,451
Net cash flow from operating activities30,23820,059
The accompanying notes form an integral part of these financial statements.

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FY 2022

Notes to the financial statements
1. General information ......................................................................................................................57
2. Impact of Covid-19 ........................................................................................................................57
3. Going concern ................................................................................................................................57
4. Statement of significant accounting policies .........................................................................57
5. Segment information ...................................................................................................................58
6. Revenue ............................................................................................................................................60
7. Expenditure included in net profit ............................................................................................62
8. Other operating income ..............................................................................................................63
9. Other (losses)/gains – net ............................................................................................................63
10. Net finance (costs)/income .........................................................................................................64
11. Cash and cash equivalents ..........................................................................................................64
12. Trade and other receivables ........................................................................................................64
13. Inventories .......................................................................................................................................66
14. Property, plant and equipment .................................................................................................66
15. Intangible assets ............................................................................................................................68
16. Leases ................................................................................................................................................71
17. Interest in associates .....................................................................................................................72
18. Financial asset at fair value through other comprehensive income – Thinxtra ...........74
19. Borrowings .......................................................................................................................................75
20. Trade and other payables ............................................................................................................77
21. Provisions .........................................................................................................................................77
22. Taxation ............................................................................................................................................78
23. Share capital ....................................................................................................................................80
24. Earnings per share .........................................................................................................................80
25. Other reserves.................................................................................................................................81
26. Financial risk and capital management ...................................................................................81
27. Commitments .................................................................................................................................86
28. Principal subsidiaries ....................................................................................................................86
29. Related party transactions ..........................................................................................................87
30. Share based payments .................................................................................................................88
31. Contingencies .................................................................................................................................90
32. Subsequent events ........................................................................................................................90

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FY 2022

Notes to the financial statements (continued)
1. General information
Rakon Limited (‘the 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 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 financial statements of the Group have been presented in New Zealand dollars and have been rounded
to the nearest thousand unless otherwise indicated.
2. Impact of Covid-19
There remains a heightened level of uncertainty given the continued presence of Covid-19. The risks and
uncertainties faced by the Group relate to (and are not limited to):
• The impact of wider global economic pressures and shift in market dynamics
• A potential outbreak at one of the Group’s production facilities, significantly affecting site access,
production and sales
• Supply chain disruptions
However, management continuously monitors these risks and plans accordingly to reduce the impact of
these on the Group.
3. Going concern
These 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, and the potential future impact of Covid-19.
4. Statement of significant 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 Standards (IFRS). The Group is a Tier 1 for-profit entity.
The 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 financial statements from the date
on which control commences until the date on which control ceases refer to note 28 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 17.
c. Significant accounting estimates and judgements
The preparation of the 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 significant to the financial statements are listed below and disclosed within
the specified notes:
• Identification of reportable segment (note 5)
• Calculation of inventory obsolescence (note 13)
• Valuation and estimated useful lives of product development assets (note 15)
• Valuation of the Group’s investment in Thinxtra (note 18)

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FY 2022

Notes to the financial statements (continued)
d. Significant accounting policies and new accounting standards
The significant accounting policies adopted in the preparation of these consolidated financial statements
are disclosed within each of the applicable notes to the financial statements. The accounting policies have
been consistently applied to all years presented with the exception of the treatment of certain ’Software-
as-a-Service’ arrangements. The Group has reconsidered its accounting treatment of certain ’Software-as-
a-Service’ arrangements based on the publication of the IFRS Interpretations Committee (IFRIC) agenda
decision on Configuration or Customisation Costs in a Cloud Computing Arrangement in March 2021 and
ratified by the International Accounting Standards Board (IASB) in April 2021 and changed its accounting
policy for software intangible assets. The impact of the change did not have material effect on the Group’s
financial statements, refer to note 15.
Prior period information has been re-presented to ensure consistency with current year disclosures and to
provide more meaningful comparison. In note 7, $700,000 research and development tax credit has been
reclassified from general and administration expense to research and development expense.
e. New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and interpretations have been
published that are not mandatory for 31 March 2022 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.
f. Consideration of climate change
The Group has considered the impact of climate change, particularly in the context of the disclosures
included in the Annual Report this year. The assessment and risk identification is ongoing. There have been
no material impact on the financial reporting judgements and estimates arising from these considerations.
g. 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
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 25.
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.
5. Segment information
The chief operating decision maker (CODM), is responsible for allocating resources and assessing
performance of the operating segments. During the year an internal restructure and realignment of
operating segments caused a change in the responsibilities of the previous CODM positions (the Chief
Marketing Officer, Chief Technology Officer and Chief Financial Officer) and as such the CODM has been
redefined to be the Chief Executive Officer.
The operating segments are presented in a manner consistent with the internal reporting provided to the
CODM. Significant 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.
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