MIRA INFORM REPORT

Report Date :

15.12.2014

IDENTIFICATION DETAILS

Name :	RAKON LIMITED
Registered Office :	8 Sylvia Park Road Mt Wellington Auckland 1060
Country :	New Zealand
Financials (as on) :	31.03.2014 (Consolidated)
Year of Establishment:	1967
Com. Reg. No.:	480247
Legal Form :	Public Limited Company
Line of Business :	Designs, Develops and Manufactures of Frequency Control Solutions For Various Applications.
No of Employees :	800

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	No complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2014

Country Name	Previous Rating (30.06.2014)	Current Rating (30.09.2014)
New Zealand	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

NEW ZEALAND - ECONOMIC OVERVIEW

Over the past 20 years the government has transformed New Zealand from an agrarian economy dependent on concessionary British market access to a more industrialized, free market economy that can compete globally. This dynamic growth has boosted real incomes - but left behind some at the bottom of the ladder - and broadened and deepened the technological capabilities of the industrial sector. Per capita income rose for ten consecutive years until 2007 in purchasing power parity terms, but fell in 2008-09. Debt-driven consumer spending drove robust growth in the first half of the decade, helping fuel a large balance of payments deficit that posed a challenge for economic managers. Inflationary pressures caused the central bank to raise its key rate steadily from January 2004 until it was among the highest in the OECD in 2007-08; international capital inflows attracted to the high rates further strengthened the currency and housing market, however, aggravating the current account deficit. The economy fell into recession before the start of the global financial crisis and contracted for five consecutive quarters in 2008-09. In line with global peers, the central bank cut interest rates aggressively and the government developed fiscal stimulus measures. The economy pulled out of recession late in 2009, and achieved 2-3% per year growth in 2010-13. Nevertheless, key trade sectors remain vulnerable to weak external demand. The government plans to raise productivity growth and develop infrastructure, while reining in government spending.

Source : CIA

Company name & address

Verified
Subject name:	RAKON LIMITED
Address:	8 Sylvia Park Road
Town:	Mt Wellington
State/province:	Auckland
Zip/postal code:	1060
Country:	New Zealand
Telephone:	+64 (9) 5735554
Fax:	+64 (9) 5735559
Email:	sales@rakon.com
Website:	www.rakon.com

EXECUTIVE SUMMARY

Date established:	1967
Legal form:	Public Limited Company
Authorised capital:	NZD 173,881,000
Sales turnover:	NZD 149,951,000 (Consolidated 12 months, 31-03-2014)
Main activities:	Designs, develops, and manufactures frequency control solutions for various applications.
Employees:	800

REGISTRY DATA

Key Facts
Date established:	1967
Date registered:	09-08-1990
Legal form:	Public Limited Company
Registration no:	480247
Registry auth.	Registrar of Companies
Other reg.:	NZBN 9429039193186
Registry status:	Live/Active

LEGAL FILINGS

Bankruptcy filings:	None
Court judgements:	None
Tax liens:	None
Other:	None

MANAGEMENT & STAFF

Key Managers
Name:	Brent John Robinson
Job title:	Managing Director
Name:	Simon Bosley
Job title:	Chief Financial Officer
Name:	Darren Paul Robinson
Job title:	Sales Director
Name:	Nick Maire
Job title:	General Manager
Name:	Andrew McCraith
Job title:	Global Director – Strategic Marketing & Business Development
Name:	Malcolm Leuchars
Job title:	Human Resources Manager
Name:	Sinan Altug
Job title:	Managing Director, Europe
Staff
No of employees	800

BOARD OF DIRECTORS / OTHER APPOINTMENTS

Appointments
Name:	Bryan William Mogridge
Board function:	Chairman
Address:	326 Seaview Road Waiheke Island Auckland, 1081 New Zealand
Biography:	Bryan Mogridge was appointed Chairman in November 2005. Bryan has been a public company Director since 1984. Formerly CEO of Corporate Investments and Montana Wines. He has chaired BUPA Care Services NZ Limited, Yealands Wine Group Limited, Momentum Energy PTY Limited, Waitakere City Holdings Limited, Enterprise Waitakere, The New Zealand Food and Beverage Exporters Council, The New Zealand Wine Institute and The New Zealand Tourism Board, among many other companies. Bryan was also Vice Chairman of UBS New Zealand and a former Director of Heartland Building Society Limited.
Name:	Brent John Robinson
Board function:	Managing Director
Address:	48 Shortland Street Auckland, 1010 New Zealand
Biography:	Brent Robinson was first appointed to the Board in 2005. He has spent 35 years at Rakon which has included establishing a global business. Brent became Managing Director and Chief Executive Officer (CEO) at Rakon in 1986 and continues in that role at Rakon today. He also leads the technical engineering team acting as Chief Technology Officer (CTO), remaining involved in leading the design of new products and processes. Under Brent’s leadership Rakon has grown and diversified from a New Zealand company with revenue of NZ$1 million to a global company with revenue of NZ$150 million in 2014 and a full portfolio of frequency control products. Brent has over 25 years experience in the design and manufacture of crystals and oscillators and as Rakon’s Chief Technology Officer has been instrumental in Rakon establishing its position as a technology industry leader. Brent is an Honorary Fellow of the Institution of Professional Engineers New Zealand. He was awarded the New Zealand Hi-Tech Trust Flying Kiwi Award in 2011.
Name:	Bruce Robertson Irvine
Board function:	Director
Address:	167 Heaton Street Christchurch, 8052 New Zealand
Biography:	Bruce Irvine was appointed as a Director of Rakon in November 2005. He was Managing Partner of Deloitte Christchurch from 1995 to 2007. Bruce has chaired Canterbury Business Recovery Group Limited, House of Travel Limited and Pyne Gould Corporation Limited among many other companies. He was formerly involved in a voluntary capacity as a trustee of Canterbury Business Recovery Trust.
Name:	Charles Peter Maire
Board function:	Director
Address:	17 Brett Avenue Takapuna Auckland, 0622 New Zealand
Biography:	Sir Peter Maire was appointed to the Board in 2005. Peter is the Co-Founder and former President of Navman NZ Limited. He is an Honorary Fellow of the Institution of Professional Engineers New Zealand. Peter was made a Knight Companion of the New Zealand Order of Merit (KNZM) in 2008. He is formerly a Director of Orion Health Limited and a board member of New Zealand Trade and Enterprise.
Name:	Darren Paul Robinson
Board function:	Director
Address:	48 Shortland Street Auckland, 1010 New Zealand
Biography:	Darren Robinson was appointed to the Board in 2005. Darren has spent 24 years at Rakon as Sales and Marketing Director. Darren has driven sales for Rakon through exploring new markets, applications and establishing business with many Fortune 500 companies. Under Darren's sales and marketing leadership, Rakon now has sales revenue of NZ$150 million and a full portfolio of frequency control solutions.
Name:	Herbert Dennis Hunt
Board function:	Director
Address:	523 E Putnam Unit A Cos Cob, CT 06870 USA
Biography:	Herb Hunt was appointed to the Board in November 2012. He has over 40 years experience in senior global operational and strategic roles in the technology industry with leading companies including IBM, Siebel Systems and Symphony Group. Herb had a 32 year career with IBM including 12 years at IBM NZ culminating as Chairman and CEO before rising to more senior roles in Australia, Asia, Europe and the USA. Currently Herb heads his own company, Transformation Services, in the US which focuses on improving performance in sales, services and product development for international technology companies.
Name:	Warren John Robinson
Board function:	Director
Address:	Apt 801, 10 Middleton Road Remuera Auckland, 1050 New Zealand
Biography:	Warren Robinson founded the Rakon business in the basement of his Howick home in 1967. He successfully grew and operated the business until 1986 when Brent Robinson became the Managing Director. In subsequent years, Warren has continued to maintain an active role within Rakon and was Chairman until November 2005. Warren is a member of the Institute of Electrical and Electronics Engineers, a senior member of the New Zealand Electronics Institute and is a member of The Royal Society of New Zealand. He has a First Class Certificate in Radio Technology.

SHARE CAPITAL

Composition
Authorised:	NZD 173,881,000
Number/type:	191,038,591 ordinary shares
Issued:	191,038,591 ordinary shares
Paid-up:	NZD 173,881,000

Shareholders/Owners

How Listed	Major Shareholders only (all having more than 5%)
Composition
Name:	Warren John Robinson
% of shares:	13.1%
Address:	Apt 801, 10 Middleton Road Remuera Auckland, 1050 New Zealand
Name:	Charles Peter Maire
% of shares:	5.61%
Address:	17 Brett Avenue Takapuna Auckland, 0622 New Zealand
Name:	Darren Paul Robinson
% of shares:	5.46%
Address:	48 Shortland Street Auckland, 1010 New Zealand
Name:	Brent John Robinson
% of shares:	5.19%
Address:	48 Shortland Street Auckland, 1010 New Zealand
Comments	The Subject is listed on the New Zealand Stock Exchange.

CORPORATE AFFILIATIONS

Comments

The full list of subsidiaries is attached to this report.

BANKING & FINANCING

Charges & Mortgages

A detailed list of charges is attached to this report.

FINANCIAL ACCOUNTS

Description
Required to file:	Yes
Source:	External Sources
Presentation:	Attached to this report / Summarised below
Date of accounts:	31-03-2014
Type of accounts:	Full audited (6 months-unaudited)
Currency:	New Zealand Dollar (NZD)
Exchange rate:	USD 1 = NZD 1.31 as of 08-12-2014

Summarised
	30-09-2014	31-03-2014	31-03-2013
Consolidation:	Consolidated	Consolidated	Consolidated
Period:	6 months	12 months	12 months
Sales turnover:	61,371,000	149,951,000	176,259,000
Gross profit:	16,969,000	28,720,000	42,513,000
Operating profit:	-4,335,000	-49,409,000	-23,068,000
Profit before tax:	-3,089,000	-49,426,000	-22,759,000
Profit after tax:	-3,368,000	-83,799,000	-32,821,000
Non-current assets:	57,317,000	55,418,000	138,215,000
Current assets:	69,512,000	72,967,000	105,212,000
Inventories:	27,431,000	28,443,000	45,786,000
Total assets:	126,829,000	128,385,000	243,427,000
Current liabilities:	45,240,000	34,298,000	67,696,000
Non-cur. liabilities:	4,354,000	15,120,000	19,045,000
Total liabilities:	49,594,000	49,418,000	86,741,000
Shareholders' equity:	77,235,000	78,967,000	156,686,000

OPERATIONS & HISTORY

Activities

Full description:

The Subject is engaged in develops, and manufactures frequency control solutions for various applications in Asia, Europe, North America, and internationally. It offers crystal resonators, crystal oscillators and clock oscillators, voltage control crystal oscillators and voltage control clock oscillators, temperature compensated crystal oscillators, oven controlled crystal oscillators, and oven controlled surface acoustic wave (SAW) oscillators for smart wireless devices, positioning/GNSS, defense, space, telecommunications, and other market applications. The company also provides digital pulse compression sub-systems for SAW-based radars; and a range of crystal filters, including band pass filters, notch/stop band filters, linear phase or constant group delay filters, phase and/or amplitude matching filters, and monolithic filters for various space and military applications, as well as offers specialized products.

PROPERTY & ASSETS

Premises

The Subject's head office is located at the heading address.

PAYMENTS

Purchase Terms
Local:	Cash Credits 14-30 days
Imports:	L/Cs Credits 30 days net
Sales Terms
Local:	Cash Credits 14-30 days
Exports:	L/Cs Credits 30 days net
Debt Collections / Judgements	No negative information was found.
Payment Experience
Payment behaviour:	As trade references were not supplied, the Subject's payment track record history CANNOT BE ACCURATELY DETERMINED, but payments are believed to be PROMPT.

INVESTIGATIVE NOTES

Sources:

Interviews and material provided by the Subject Other official and local business sources

ATTACHMENTS

Attachments:

Financial statements Financial ratios List of subsidiaries List of charges

Financial Statements (NZD'000)

Financial Ratios
	31-03-2014	31-03-2013	Trend
PROFITABILITY [%]
Gross Margin	19.15%	24.12%	-20.61%
Gross Profit / Sales Turnover * 100
Operating Margin	-32.95%	-13.09%	-151.72%
Operating Profit / Sales Turnover * 100
Net Profit Margin	-55.88%	-18.62%	-200.11%
Profit After Tax / Sales Turnover * 100
Return On Equity (ROE)	-106.12%	-20.95%	-406.54%
Profit After Tax / Equity * 100
Return On Assets (ROA)	-65.27%	-13.48%	-384.2%
Profit After Tax / Total Assets * 100
Return On Investment (ROI)	-62.59%	-14.53%	-330.76%
Profit Before Tax / Equity * 100
EFFICIENCY [%]
Asset Turnover	116.8%	72.41%	61.3%
Sales Turnover / Total Assets * 100
Inventory Turnover	527.2%	384.96%	36.95%
Sales Turnover / Inventory * 100
LIQUIDITY [%]
Current Ratio (CR)	212.74%	155.42%	36.88%
Current Assets / Current Liabilities * 100
Quick Ratio (QR)	129.82%	87.78%	47.89%
(Current Assets – Inventory) / Current Liabilities * 100
DEBT [%]
Debt Ratio	38.49%	35.63%	8.03%
Total Liabilities / Total Assets * 100
Long-Term Debt Ratio	19.15%	12.15%	57.61%
Long-Term Liabilities / Equity * 100

Interim financials

List of subsidiaries

List of charges

Time of Registration/
PPSR Registration Date

Debtor Name

Financing Statement
Registration No.

Debtor
Reference

28-Oct-2002 18:48

RAKON LIMITED

FJ4HP90523P3F661/C0004

1010658

Date of Prior Registration/Creation:	07-Nov-1997

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

Goods - Other

16-Nov-2002 07:14

RAKON LIMITED

F27MG08U696J6155/C0005

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

Goods - Other

11-Sep-2003 23:10

RAKON LIMITED

F30W9M466240AJ29/C0004

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

All present And After Acquired Personal Property Except...

23-Jun-2005 13:50

RAKON LIMITED

FM1PH62498291B3D/C0001

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

All Present And After Acquired Personal Property

21-Nov-2006 09:09

RAKON LIMITED

F61R9D561R8Z5302/C0003

3M_102536

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

Goods - Other

13-Sep-2008 01:40

RAKON LIMITED

FP1UD51M23746X23/C0003

101510

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

All Present And After Acquired Personal Property; Goods - Other

22-Mar-2010 15:14

RAKON LIMITED

FU3382M97D05KB41

Brent Robinson

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

Goods - Other

21-Jun-2010 12:43

RAKON LTD

F50MX02D8F0P2952

CRAKMTW

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

Goods - Other

01-Sep-2010 16:39

RAKON LTD

FV3832RX1HP63840/C0001

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

Goods - Other

01-Dec-2010 09:43

RAKON LIMITED

FA5KS20C22E78173/C0001

480247

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

Goods - Other

27-Apr-2011 14:03

RAKON LIMITED

FE55V5G0563WU215

9302

Org Type:

Company

Incorporation No:

480247

City/Town:

NEWMARKET

Collateral Type:

All Present And After Acquired Personal Property; Goods - Other

25-Jul-2011 15:25

RAKON LIMITED

FM777847AT20EK81

132798

Org Type:

Company

Incorporation No:

480247

City/Town:

MT WELLINGTON

Collateral Type:

All Present And After Acquired Personal Property; Goods - Other

04-Jul-2012 17:30

RAKON LIMITED

FP7U27G1258US661

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

Goods - Other

29-Apr-2013 09:10

RAKON LIMITED

FB72T7J09X4M9194

HPFS

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

All Present And After Acquired Personal Property; Goods - Other

07-Nov-2013 12:06

RAKON LIMITED

F28F45R567460JR2

129958

Org Type:

Company

Incorporation No:

480247

City/Town:

AUCKLAND

Collateral Type:

All Present And After Acquired Personal Property; Goods - Other

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.62.44
UK Pound	1	Rs.98.15
Euro	1	Rs.77.44

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	ANK

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.