Ann: FLLYR: RAK: Rakon Limited 31 March 2012 FY R

  1. lightbulb Created with Sketch. 2
    • Release Date: 17/05/12 12:29
    • Summary: FLLYR: RAK: Rakon Limited 31 March 2012 FY Results
    • Price Sensitive: No
    • Download Document  66.5KB
    					
    
    RAK
    17/05/2012 10:29
    FLLYR
    
    REL: 1029 HRS Rakon Limited
    
    FLLYR: RAK: Rakon Limited 31 March 2012 FY Results
    
    Rakon Limited
    Results for announcement to the market
    Reporting period Year ended 31st March 2012
    Previous reporting period Year ended 31st March 2011
    
     Amount NZ$000 % Change
    Revenue from ordinary activities 178,254 -6%
    Earnings before interest, tax, depreciation, amortisation & share based
    payments  13,086 a -47%
    Earnings before interest & tax 480 b -96%
    Net (loss)/profit after tax (420) b -105%
    Note  a: includes share of EBITDA from associates and joint ventures of
    NZ$3,024,000 (2011: $5,810,000 ).
    b: includes equity accounted earnings of NZ$925,000 (2011: $2,911,000).
    
     Amount per security Imputed amount per security
    Interim / Final Dividend Nil Nil
    Record Date Not Applicable Not Applicable
    Dividend Payment Date Not Applicable Not Applicable
    
    Comments
    Rakon Limited (NZX: RAK) has reported a full year revenue of NZ$178m and a
    look through EBITDA (including associates) of NZ$13.1m.
    This compares with an EBITDA of $24.8m for the previous year, reflecting the
    impact of the continuing strength of the NZ$.  The company's underlying
    revenue is predominantly recorded in US$ and in US$ terms revenue increased
    by 4% on the previous year. Brent Robinson, Rakon Managing Director, said
    underlying product margins were generally improved on the prior year
    reflecting a strong continuing focus on cost reduction across the business.
    The company's operating cash flow of NZ$7.9 million reflected improvement in
    working capital in the second half of FY12 through reduced inventory levels
    and improved terms of trade, an area the company signalled would be monitored
    continually to improve efficiencies and costs.
    Commenting on the year under review Mr Robinson said this was a year of
    significant investment for Rakon, especially in China where Rakon's recently
    commissioned JV plant in Chengdu is meeting expectations for the fast growing
    Smart Wireless Device market.
    Mr Robinson said the company is now very well positioned to take advantage of
    this high-growth market, expanding and acquiring new business with the
    premier tier one and two manufacturers, particularly in China.
    He went on to say "we have never felt better about the business' overall
    position, the market opportunity and our customers."
    Rakon products are designed into all new technology for mobile data, a market
    experiencing explosive growth. He explained, "we are in the devices, and the
    connections from handset to network, satellite and undersea cables.  Network
    infrastructure growth is and will continue to be driven by smart devices."
    Revenues from the former Temex business (now Rakon France) are in line with
    expectations, with the French company highly regarded as the European leader
    for High Precision and High Reliability Frequency Solutions for Space and
    Defence Applications.
    This year, the telecommunications sector provided lower revenue than
    expected, due to continued deferred spending by telecommunications operators.
       However, Mr Robinson said Rakon was seeing recent improvement after a
    quiet period.  He expected this improvement to continue as telcos resumed
    investment in infrastructure needed to meet global growth in data traffic,
    especially that created by smart wireless devices
    Revenues for the past year were impacted by global financial instability
    particularly in Europe, along with some impact from the earthquake in Japan,
    which saw manufacturers quickly adopt a cautious approach initially, before
    relaxing and returning to a business as usual approach.
    "We have been accurate in our long term market predictions and have put a lot
    of emphasis and continuing R&D into those markets where we had foreseen good
    growth," he said.  "Early on we identified the underlying markets that we
    needed to be in and have worked consistently over the years to meet their
    needs and that has contributed to our feeling that Rakon is now 'in the right
    place at the right time'.
    "That strategy is proving to be a good formula for Rakon, as we see the
    results from our expansion into China, and the growth of Smart Wireless
    Devices, as well as massive increases in data traffic needs all contributing
    to Rakon's strong positions in those markets."
    Mr Robinson said that growth had been slower in arriving than first
    predicted, reflecting the volatility of new markets.  "But when you are
    involved in high growth markets, there is always going to be some variability
    but eventually they do come to fruition; GPS and the internet itself are good
    examples."
    "Rakon is well positioned for the expected growth surge in smart wireless
    devices and associated network infrastructure globally.  Our product range is
    world leading and targeted at the lucrative new generation products and
    networks.  This is backed by our investment in an extremely competitive
    manufacturing base which will enable Rakon to continue to capture increased
    market share."
    Mr. Robinson said Rakon's Chengdu JV had been consistently increasing
    production since its commissioning in December, and is now operating 24/7,
    with almost 200 employees.
    
    "As part of Rakon's strategic growth plan, the Chengdu plant provides
    significant additional capacity, at a lower cost base, for our high volume
    consumer products.  So now we are focusing on optimising the existing
    capacity and also have begun planning further capacity expansion.  We are
    also investing in expanding capacity and developing new technology in India,
    Europe and NZ to meet future demand in telecommunications."
    Operating costs were impacted by Rakon's Chinese joint venture in Chengdu and
    the full year impact of the former Temex business, but Rakon expects these
    two facilities to continue to provide outstanding long-term benefits to the
    company's growth strategy.
    Mr. Robinson confirmed the company's commitment to continuing innovation, as
    well as investment into a strong product range and manufacturing presence in
    two of the world's fastest-growing markets would continue to position Rakon
    as a global leader in frequency control systems.
    Directors Declaration (NZX Listing Rules Appendix 1, 3.1 & 3.2)
    The Directors declare that the selected consolidated financial information on
    pages 3 to 20 has been prepared in compliance with applicable Financial
    Reporting Standards and extracted from audited financial statements.  The
    auditors have issued an unqualified opinion on the financial statements.  The
    accounting policies the Directors consider critical to the portrayal of the
    company's financial condition and results which require judgements and
    estimates about matters which are inherently uncertain are disclosed in note
    2.17 of the financial statements that form part of this announcement.
    
    Statements of Comprehensive Income
    For the year ended 31 March 2012
      GROUP PARENT
      2012 2011 2012 2011
     Note ($000s) ($000s) ($000s) ($000s)
    Continuing operations
    Revenue 3 178,254 189,314 88,033 93,737
    Cost of sales  (126,224) (131,056) (74,479) (76,064)
    Gross Profit  52,030 58,258 13,554 17,673
    
    Other operating income 4 5,937 2,525 10,987 6,364
    Operating expenses 5 (59,005) (49,599) (27,656) (26,807)
    Other gains/(losses) - net 6 593 (1,905) (610) (715)
    Operating (loss)/profit  (445) 9,279 (3,725) (3,485)
    Finance income 222 616 61 422
    Finance costs  (1,767) (521) (1,692) (429)
    Share of profit of associates and joint venture  925 2,911 - -
    (Loss)/profit before income tax  (1,065) 12,285 (5,356) (3,492)
    Income tax (expense)/credit  645 (3,805) 2,827 1,581
    Net (loss)/profit after tax  (420) 8,480 (2,529) (1,911)
    
    Other comprehensive income:
    Cash flow hedges  (565) 631 (456) 226
    Net investment hedge  (651) 508 - -
    Currency translation differences  (9,514) (1,970) - -
    Income tax relating to components of other comprehensive income  353 (333)
    128 (68)
    Other comprehensive (losses)/income for the period, net of tax (10,377)
    (1,164) (328) 158
    Total comprehensive (losses)/income for the period  (10,797) 7,316 (2,857)
    (1,753)
    
    (Loss)/profit Attributable to:
    Equity holders of the company  (192) 8,826 (2,529) (1,911)
    Non-controlling interests  (228) (346) - -
      (420) 8,480 (2,529) (1,911)
    
    Total comprehensive (losses)/income
     attributable to:
    Equity holders of the company  (10,419) 7,687 (2,857) (1,753)
    Non- controlling interests  (378) (371) - -
      (10,797) 7,316 (2,857) (1,753)
    
    Earnings per share for (loss)/profit attributable to the equity holders of
    the Company:  Cents Cents
    Basic (losses)/earnings per share (from continuing operations) 12 (0.1) 4.7
    
    Diluted (losses)/earnings per share (from continuing operations) 12 (0.1) 4.6
    
     The accompanying notes form an integral part of these financial statements.
    
    Statements of Changes in Equity
    For the year ended 31 March 2012
      Attributable to owners of parent
      Share Capital Retained Earnings Other Equity Non-controlling Interests
    Total Equity
    GROUP  ($000s) ($000s) ($000s) ($000s) ($000s) ($000s)
    Balance at 31 March 2010  173,846 31,520 (14,058) 191,308 1,636 192,944
    Net profit after tax for the year ended 31 March 2011  - 8,826 - 8,826
    (346) 8,480
    Currency translation differences  - - (1,945) (1,945) (25) (1,970)
    Cash flow hedges, net of tax  - - 450 450 - 450
    Net investment hedge, net of tax  - - 356 356 - 356
    Total comprehensive income for the year  - 8,826 (1,139) 7,687 (371) 7,316
    Non-controlling interest on additional investment in subsidiary  - - - -
    4,082 4,082
    - value of employee services  - - 624 624 - 624
    Balance at 31 March 2011  173,846 40,346 (14,573) 199,619 5,347 204,966
    Net loss after tax for the year ended 31 March 2012  - (192) - (192) (228)
    (420)
    Currency translation differences  - - (9,365) (9,365) (150) (9,515)
    Cash flow hedges, net of tax  - - (394)  (394) - (394)
    Net investment hedge, net of tax  - - (468) (468) - (468)
    Total comprehensive loss for the year (192) (10,227) (10,419) (378)
    (10,797)
    - value of employee services  - - 83 83 - 83
    - Other  - - (20) (20) - (20)
    Issue of ordinary shares  35 - - 35 - 35
    Balance at 31 March 2012  173,881 40,154 (24,737) 189,298 4,969 194,267
    
    PARENT
    Balance at 31 March 2010  173,846 24,214 2,181 200,241 - 200,241
    Net loss after tax for the year ended 31 March 2011  - (1,911) - (1,911) -
    (1,911)
    Cash flow hedges, net of tax  - - 158 158 - 158
    Total comprehensive (losses) / income for the year  - (1,911) 158 (1,753) -
    (1,753)
    Employee share schemes
    - value of employee services  - - 624 624 - 624
    Issue of ordinary shares  1,350 - - 1,350 - 1,350
    Balance at 31 March 2011  175,196 22,303 2,963 200,462 - 200,462
    Net loss after tax for the year ended 31 March 2012  - (2,529) - (2,529) -
    (2,529)
    Cash flow hedges, net of tax  - - (328) (328) - (328)
    Total comprehensive (losses)/income for the year  - (2,529) (328) (2,857) -
    (2,857)
    Employee share schemes
    - value of employee services  - - 83 83 - 83
    Issue of ordinary shares  35 - - 35 - 35
    Balance at 31 March 2012  175,231 19,774 2,718 197,723 - 197,723
    
    The accompanying notes form an integral part of these financial statements.
    Balance Sheets
    As at 31 March 2012
      GROUP PARENT
      2012 2011 2012 2011
      ($000s) ($000s) ($000s) ($000s)
    Assets
    Current assets
    Cash and cash equivalents  15,879 22,775 5,225 1,697
    Trade and other receivables  42,467 45,875 23,569 24,618
    Derivatives - held for trading 275 199 170 91
    Derivatives - cash flow hedges 843 757 532 339
    Inventories  49,239 54,924 27,888 33,413
    Current income tax asset  6 128 - 128
    Total current assets  108,709 124,658 57,384 60,286
    Non-current assets
    Trade and other receivables  7,897 3,748 1,473 655
    Property, plant and equipment  90,411 79,035 32,397 36,469
    Intangible assets  31,480 35,955 1,879 4,298
    Investments in subsidiaries  - - 158,455 139,559
    Investment in associates  19,164 19,548 - -
    Interest in joint venture  3,744 4,475 - -
    Deferred tax assets  6,052 1,674 4,732 1,995
    Total non-current assets  158,748 144,435 198,936 182,976
    Total assets  267,457 269,093 256,320 243,262
    Liabilities
    Current liabilities
    Bank overdraft 3,445 784 3,445 784
    Trade and other payables  30,762 38,991 20,575 20,530
    Derivatives - held for trading - - - -
    Derivatives - cash flow hedges 682 24 682 24
    Current income tax liability  1,835 797 - -
    Provisions  281 281 - -
    Total current liabilities  37,005 40,877 24,702 21,338
    Non-current liabilities
    Bank borrowings  33,500 20,000 33,500 20,000
    Provisions  2,685 3,250 395 1,462
    Deferred tax liabilities  - - - -
    Total non-current liabilities  36,185 23,250 33,895 21,462
    Total liabilities  73,190 64,127 58,597 42,800
    Net assets  194,267 204,966 197,723 200,462
    Equity
    Share capital  173,881 173,846 175,231 175,196
    Reserves  (24,737) (14,573) 2,718 2,963
    Retained earnings  40,154 40,346 19,774 22,303
      189,298 199,619 197,723 200,462
    Non-controlling interests  4,969 5,347 - -
    Total equity  194,267 204,966 197,723 200,462
    
    The accompanying notes form an integral part of these financial statements.
    Statements of Cash Flows
    For the year ended 31 March 2012 GROUP PARENT
      2012 2011 2012 2011
      ($000s) ($000s) ($000s) ($000s)
    Operating activities
    Cash provided from
    Receipts from customers  178,670 172,215 91,606 85,971
    Interest received  287 578 8 529
    Dividends received from associate  335 - - -
    Dividend received from subsidiaries   - 3,476 1,660
    Other income received  2,027 1,685 1,995 938
    Income tax refund  581 1,534 - 1,534
      181,900 176,012 97,085 90,632
    Cash was applied to
    Payment to suppliers and others  (114,734) (130,362) (62,314) (71,619)
    Payment to employees  (52,864) (45,428) (24,838) (23,166)
    Interest paid  (1,773) (336) (1,692) (301)
    Income tax paid  (4,679) (3,967) - -
      (174,050) (180,093) (88,844) (95,086)
    Net cash flow from operating activities  7,850 (4,081) 8,241 (4,454)
    Investing activities
    Cash was provided from
    Sale of intangibles  1,627 - 1,627 -
    Sale of property, plant and equipment  52 237 113 462
      1,679 237 1,740 462
    Cash was applied to
    Purchase of property, plant and equipment  (26,240) (36,303) (3,098) (10,522)
    
    Refundable duties paid on plant & equipment  (3,942) - - -
    Purchase of intangibles  (1,490) (1,764) (844) (911)
    Additional investment in subsidiaries  - - (18,707) (43,169)
    Business acquisition  - (717) - -
    Issuance of loan to joint venture  - (210) - -
      (31,672) (38,994) (22,649) (54,602)
    Net cash flow from investing activities  (29,993) (38,757) (20,909) (54,140)
    Financing activities
    Cash was provided from
    Issue of ordinary shares  - - 35 1,350
    Proceeds from borrowings  13,500 20,309 13,500 20,000
    Intercompany loans  - - - 5,587
      13,500 20,309 13,535 26,937
    Cash was applied to
    Repayment of principals on borrowings  - (522) - -
      - (522) - -
    Net cash flow from financing activities  13,500 19,787 13,535 26,937
    Net increase/(decrease) in cash and cash equivalents  (8,643) (23,051) 867
    (31,657)
    Foreign currency translation adjustment  (914) (839) - (177)
    Cash and cash equivalents at the beginning of the period  21,991 45,881 913
    32,747
    Cash and cash equivalents at the end of the period  12,434 21,991 1,780 913
    Composition of cash and cash equivalents
    Cash and cash equivalents  15,879 22,775 5,225 1,697
    Bank overdraft (3,445) (784) (3,445) (784)
      12,434 21,991 1,780 913
    
    Statements of Cash Flows
    
    For the year ended 31 March 2012 GROUP PARENT
      2012 2011 2012 2011
     Note ($000s) ($000s) ($000s) ($000s)
    Reconciliation of net (loss)/profit to net cash flows from operating
    activities
    Reported net (loss)/profit after tax  (420) 8,480 (2,529) (1,911)
    
    Items not involving cash flow
    Depreciation expense 5 8,018 7,641 6,152 6,245
    Amortisation expense 5 2,033 1,486 1,364 990
    (Decrease)/increase in estimated doubtful debts  (64) 45 (24) -
    Employee share based payments  83 624 54 503
    Movement in foreign currency  (416) 283 (42) 179
    Share of profit from joint venture & associate (829) (2,911) - -
    Deferred tax  (4,362) 388 (2,737) 149
    (Gain)/loss on disposal of property, plant and equipment  (26) (291) (68) -
    (Gain)/loss on disposal of intangibles (988) - (988) -
      3,449 7,265 3,711 8,066
    Impact of changes in working capital items
    Trade and other receivables  3,265 (14,193) 976 (7,579)
    Inventories  3,829 (11,371) 5,519 (5,150)
    Trade and other payables  (3,225) 5,871 436 3,746
    Tax provisions 952 (134) 128 (1,626)
      4,821 (19,827) 7,059 (10,609)
    Net cash flow from operating activities  7,850 (4,081) 8,241 (4,454)
    
    The accompanying notes form an integral part of these financial statements.
    Notes to the Financial Statements
    1. General information
    Rakon Limited ("the Company") and its subsidiaries (together "the Group") is
    a world leader in the development of frequency control solutions for a wide
    range of applications. Rakon has leading market positions in the supply of
    crystal oscillators to the GPS, telecommunications network
    timing/synchronisation, and aerospace markets.
    The Company is a limited liability company incorporated and domiciled in New
    Zealand. It is registered under the Companies Act 1993 with its registered
    office at One Pacific Rise, Mt Wellington, Auckland.  The Company is an
    issuer in terms of the Securities Act 1978 and is listed on the New Zealand
    Stock Exchange.
    These financial statements have been approved for issue by the Board of
    Directors on 17 May 2012.
    2. Summary of significant accounting policies
    2.1. Basis of preparation
    These financial statements of the Group and Parent, profit oriented entities,
    are for the year ended 31 March 2012.  They have been prepared in accordance
    with the requirements of the Financial Reporting Act 1993, the Companies Act
    1993 and in accordance with New Zealand Equivalents to International
    Financial Reporting Standards ("NZ IFRS").
    The financial statements have been prepared in accordance with NZ GAAP.
    Accounting policies applied in these financial statements comply with NZ IFRS
    and New Zealand equivalents to International Financial Reporting
    Interpretations Committee ("NZ IFRIC") interpretations issued and effective
    or issued and early adopted as at the time of preparing these financial
    statements as applicable to Rakon Limited as a profit oriented entity. The
    financial statements of the Group and Parent are in compliance with
    International Financial Reporting Standards ("IFRS").
    The accounting principles recognised as appropriate for the measurement and
    reporting of profit and loss and financial position on an historical cost
    basis have been applied, except for derivative financial instruments and
    available for sale investments, which have been measured at fair value.
    The preparation of 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. Actual results may differ from these estimates, refer to
    note 2.17.
    The Group has adopted the following new and amended NZ IFRSs of relevance to
    the Group and Company as of 1 April 2011:
    NZ IFRIC 13 (revised): Customer Loyalty Programmes (effective for annual
    periods beginning on or after 1 January 2011)
    The amendments clarify that the fair value of award credits takes into
    account the amount of discounts or incentives that otherwise would be offered
    to customers that have not earned the award credits.
    NZ IFRIC 19: Extinguishing financial liabilities with equity instruments
    (effective for annual periods beginning on or after 1 July 2010)
    This interpretation addresses the accounting by an entity when the terms of a
    financial liability are renegotiated and result in the entity issuing equity
    instruments to a creditor of the entity to extinguish all or part of the
    financial liability.  It does not address the accounting by the creditor.
    NZ IAS 27 (amendment): Consolidated and separate financial statements
    (effective for annual periods beginning on or after 1 July 2010)
    The amendments clarify that the consequential amendments to NZ IAS 21 The
    effects of Changes in Foreign Exchange Rates, NZ IAS 28 and NZ IAS 31
    resulting from NZ IAS 27 (2008) should be prospectively applied, with the
    exception of amendments resulting from renumbering.
    NZ IFRS 7 (amendment): Financial Instruments disclosures (effective for
    annual periods beginning on or after 1 January 2011)
    The amendments add an explicit statement that qualitative disclosure should
    be made in the context of the quantitative disclosures to better enable users
    to evaluate an entity's exposure to risks arising from financial instruments.
     In addition, the IASB amended and removed existing disclosure requirements.
    
    NZ IAS 24 Related party disclosures (Revised 2009) (effective for annual
    periods beginning on or after 1 January 2011)
    The amendment simplifies the definition of a related party and provides a
    partial exemption from the disclosure requirements for government-related
    entities.
    The adoption of these amendments has not resulted in material accounting or
    disclosure changes for the Group or Company.
    
    2.2. Consolidation
    2.2.1. Subsidiaries
    Subsidiaries are entities that are controlled, either directly or indirectly,
    by the Group. Control exists when the Group has the power, directly or
    indirectly, to govern the financial and operating policies of an entity so as
    to obtain benefits from its activities. In assessing control, potential
    voting rights that presently are exercisable or convertible are taken into
    account. The financial statements of subsidiaries are included in the
    consolidated financial statements from the date that control commences until
    the date that control ceases.
    Business combinations are accounted for using the acquisition method.  The
    consideration transferred in a business combination shall be measured at fair
    value, which shall be calculated as the sum of the acquisition date fair
    values of the assets transferred by the Group, the liabilities incurred by
    the Group to former owners of the acquire and the equity issued by the Group,
    and the amount of any non-controlling interest in the acquire either at fair
    value or at the proportional share of the acquiree's identifiable net assets.
     Acquisition related costs are expenses as incurred, and included in other
    gains/(losses) - net.
    All material transactions between subsidiaries or between the Parent Company
    and subsidiaries are eliminated on consolidation.
    Accounting policies of subsidiaries have been changed where necessary to
    ensure consistency with the policies adopted by the group
    2.2.2. Associates
    Associates are entities over which the Group has significant influence but
    not control, generally accompanying a shareholding of between 20% and 50% of
    the voting rights.  Investments in associates are accounted for using the
    equity method of accounting and are initially recognised at cost.  The
    Group's investment in associates includes goodwill identified on acquisition,
    net of any accumulated impairment loss.
    The Group's share of its associates' post-acquisition profits or losses is
    recognised in the statement of comprehensive income, and its share of
    post-acquisition movements in reserves is recognised in reserves.  The
    cumulative post-acquisition movements are adjusted against the carrying
    amount of the investment.  When the Group's share of losses in an associate
    equals or exceed its interest in the associate, including any other unsecured
    receivables, the Group does not recognise further losses, unless it has
    incurred obligations or made payments on behalf of the associate.
    Unrealised gains on transactions between the Group and its associates are
    eliminated to the extent of the Group's interest in the associates.
    Unrealised losses are also eliminated unless the transaction provides
    evidence of impairment of the asset transferred.  Accounting policies of
    associates have been changed where necessary to ensure consistency with the
    policies adopted by the Group.
    2.2.3. Joint ventures
    The Group's interests in jointly controlled entities are accounted for using
    the equity method of accounting and are initially recognised at cost.  The
    Group's investment in jointly controlled entities includes goodwill
    identified on acquisition, net of any accumulated impairment loss.
    The Group's share of its joint ventures' post-acquisition profits or losses
    is recognised in the statement of comprehensive income, and its share of
    post-acquisition movements in reserves is recognised in reserves.  The
    cumulative post-acquisition movements are adjusted against the carrying
    amount of the investment.
    Unrealised gains on transactions between the Group and its joint ventures are
    eliminated to the extent of the Group's interest in the joint venture.
    Unrealised losses are also eliminated unless the transaction provides
    evidence of impairment of the asset transferred.  Accounting policies of
    joint ventures have been changed where necessary to ensure consistency with
    the policies adopted by the Group.
    
    2.3. Foreign currency translation
    2.3.1. Functional and presentation currency
    Items included in the financial statements of each entity in the Group are
    measured using the currency that best reflects the economic substance of the
    underlying events and circumstances relevant to that entity (the "functional
    currency"). The consolidated financial statements are presented in New
    Zealand dollars, (the "presentation currency"), which is the functional
    currency of the Parent.
    2.3.2. Transactions and balances
    Transactions in foreign currencies are translated at the foreign exchange
    rate ruling at the date of the transaction. Monetary assets and liabilities
    denominated in foreign currencies at the balance sheet date are translated to
    New Zealand dollars at the foreign exchange rate ruling at that date. Foreign
    exchange differences arising on translation are recognised in the statement
    of comprehensive income, within other gains/(losses) - net, except when
    deferred in other comprehensive income as qualifying cash flow hedges and
    qualifying net investment hedges. 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 to New Zealand dollars at foreign exchange rates ruling
    at the dates the fair value was determined.
    2.3.3. Group companies
    The assets and liabilities of all of the Group companies (none of which has a
    currency of a hyper-inflationary economy) that have a functional currency
    that differs from the presentation currency, including goodwill and fair
    value adjustments arising on consolidation, are translated to New Zealand
    dollars at foreign exchange rates ruling at the balance sheet date. The
    revenues and expenses of these foreign operations are translated to New
    Zealand dollars at rates approximating to the foreign exchange rates ruling
    at the dates of the transactions.
    Exchange differences arising from the translation of foreign operations are
    recognised in the foreign currency translation reserve and of borrowings and
    other currency instruments designated as hedges of such investments, are
    taken to shareholders' equity.
    Goodwill and fair value adjustments arising on the acquisition of a foreign
    entity are treated as assets and liabilities of the foreign entity and are
    translated at the foreign exchange rates ruling at the balance sheet date.
    2.4. Share capital
    Ordinary shares and redeemable ordinary shares are classified as equity.
    Partial payments received in respect of redeemable ordinary shares issued
    under the Rakon Share Growth Plan are classified as liabilities in the
    financial statements. When employees exercise their conditional rights to the
    redeemable ordinary shares, these shares convert to ordinary shares with the
    proceeds credited to equity.
    Incremental costs directly attributable to the issue of new shares or options
    are shown in equity as a deduction, net of tax, from the proceeds.
    Where any group company purchases the company's equity share capital (Rakon
    Restricted Share Plan), the consideration paid, including any directly
    attributable incremental costs (net of income taxes) is deducted from equity
    attributable to the company's equity holders until the shares are cancelled
    or reissued.  Where such ordinary shares are subsequently reissued, any
    consideration received, net of any directly attributable incremental
    transaction costs and the related income tax effects, and is included in
    equity attributable to the company's equity holders.
    
    2.5. Property, plant and equipment
    2.5.1. Initial recording
    Items of property, plant and equipment are stated at cost less accumulated
    depreciation and impairment losses.  The cost of purchased property, plant
    and equipment is the value of the consideration given to acquire the assets
    and the value of other directly attributable costs, which have been incurred
    in bringing the assets to the location and condition necessary for their
    intended service. Where parts of an item of property, plant and equipment
    have different useful lives, they are accounted for as separate items of
    property, plant or equipment.
    2.5.2. Subsequent costs
    The entity recognises in the carrying amount of an item of property, plant or
    equipment the cost of replacing part of such an item when that cost is
    incurred only when it is probable that the future economic benefits embodied
    with the item will flow to the entity and the cost of the item can be
    measured reliably. All other costs are recognised in the statement of
    comprehensive income as an expense as incurred.
    2.5.3. Depreciation
    Depreciation of property, plant and equipment, other than freehold land, is
    calculated on a straight line basis so as to expense the cost of the assets
    to their expected residual values over their useful lives as follows:
    
    Land Nil
    Buildings 5 - 10%
    Leasehold improvements 20 - 36%
    Computer hardware 36%
    Plant and equipment  5 - 10%
    Motor vehicles 20 - 25%
    Furniture and fittings 6 - 50%
    Assets under course of construction Nil
    
    The assets' residual values and useful lives are reviewed, and adjusted if
    appropriate, at each balance date.
    Gains and losses on disposals are determined by comparing the proceeds with
    the carrying amount and are recognised within "other gains/(losses) - net" in
    the statement of comprehensive income.
    
    2.6. Leases
    The entity is the lessee
    Leases where the lessor retains substantially all the risk and rewards of
    ownership are classified as operating leases.  Payments made under operating
    leases (net of any incentives received from the lessor) are charged to the
    statement of comprehensive income on a straight-line basis over the period of
    the lease.
    
    2.7. Intangible assets
    2.7.1. Goodwill
    Goodwill acquired in a business combination is initially measured at cost of
    the business combination being the excess of the consideration transferred
    over the fair value of the Group's net identifiable assets acquired and
    liabilities assumed.  If this consideration transferred is lower than the
    fair value of the net identifiable assets of the acquired subsidiary,
    associate or joint venture, the difference is recognised in profit or loss.
    Goodwill on acquisitions of subsidiaries is included in intangible assets.
    Goodwill on acquisition of associates and joint ventures is included in
    "investment in associates/interest in joint ventures" and is tested for
    impairment as part of the overall balance.
    Separately recognised goodwill is tested annually for impairment and carried
    at cost less accumulated impairment losses. Impairment losses on goodwill are
    not reversed. Gains and losses on the disposal of an entity include the
    carrying amount of goodwill relating to the entity sold.
    Goodwill is allocated to cash-generating units for the purpose of impairment
    testing. The allocation is made to those cash-generating units or groups of
    cash-generating units that are expected to benefit from the business
    combination in which the goodwill arose.
    2.7.2. Patents, trademarks,  licenses and software
    Identifiable intangible assets that are acquired by the Group are stated at
    cost less accumulated amortisation and impairment losses. Subsequent
    expenditure on intangible assets is capitalised only when it increases the
    future economic benefits embodied in the specific asset to which it relates.
    All other expenditure is expensed as incurred.
    Expenditure on internally generated goodwill and brands is recognised in the
    statement of comprehensive income as an expense as incurred.
    Amortisation is charged to the statement of comprehensive income on a
    straight-line basis over the estimated useful lives of intangible assets
    unless such lives are indefinite.  Acquired patents and licenses are
    amortised over their anticipated useful lives of 5-10 years.
    Software assets, licences and capitalised costs of developing systems are
    recorded as intangible assets and amortised over a period of 3-5 years unless
    they are directly related to a specific item of hardware and recorded as
    property, plant and equipment.
    2.7.3.        Research and development
    Expenditure on research activities, undertaken with the prospect of gaining
    new scientific or technical knowledge and understanding, is recognised in the
    statement of comprehensive income as an expense as incurred.  Any research
    and development taxation credits are recognised when eligibility criteria
    have been met and are treated as a reduction in expenses. Government grant
    funding for research and development is recognised when eligible criteria
    have been met and is recognised as other operating income.
    Expenditure on development activities, whereby research findings are applied
    to a plan or design for the production of new or substantially improved
    products and processes, is capitalised if the product or process is
    technically and commercially feasible and the entity has sufficient resources
    to complete development. Other development expenditure is recognised in the
    statement of comprehensive income as an expense as incurred.
    
    2.8. Inventories
    Inventories are stated at the lower of cost (weighted average cost) or net
    realisable value. Net realisable value is the estimated selling price in the
    ordinary course of business, less the estimated costs of completion and
    selling expenses.
    
    2.9. Impairment of non-financial assets
    The carrying amounts of the Group's non-financial assets are reviewed at each
    balance sheet date to determine whether there is any indication of
    impairment. If any such indication exists, the asset's recoverable amount is
    estimated being the higher of an asset's fair value less costs to sell and
    the asset's value in use.  An impairment loss is recognised whenever the
    carrying amount of an asset or its cash-generating unit exceeds its
    recoverable amount. Impairment losses are recognised in the statement of
    comprehensive income.
    For goodwill the recoverable amount is estimated at each balance sheet date.
    Impairment losses recognised in respect of cash-generating units are
    allocated first to reduce the carrying amount of any goodwill allocated to
    cash-generating units (group of units) and then, to reduce the carrying
    amount of the other assets in the unit (group of units) on a pro rata basis.
    An impairment loss is reversed only to the extent that the asset's carrying
    amount does not exceed the carrying amount that would have been determined,
    net of depreciation or amortisation, if no impairment loss had been
    recognised.
    
    2.10. Financial instruments
    Financial instruments comprise cash and cash equivalents, trade and other
    receivables, trade and other payables, borrowings and derivative financial
    instruments (forward foreign exchange contracts, forward foreign exchange
    options, zero cost collars).
    Financial assets and financial liabilities are recognised on the Group's
    balance sheet when the Group becomes a party to the contractual provisions of
    the instrument. Financial assets are derecognised when the rights to receive
    cash flows from the investments have expired or have been transferred and the
    group has transferred substantially all risks and rewards of ownership.
    2.10.1. Cash and cash equivalents
    Cash and cash equivalents comprise cash balances, call deposits, other short
    term, highly liquid investments with original maturities of three months or
    less that are readily convertible to known amounts of cash and which are
    subject to an insignificant risk of changes in value, and bank overdrafts.
    Bank overdrafts are shown within borrowings in current liabilities on the
    balance sheet.
    
    2.10.2. Trade and other receivables
    Trade and other receivables are recognised initially at fair value and
    subsequently measured at amortised cost using the effective interest method,
    less provision for impairment.
    Collectability of trade receivables is reviewed on an ongoing basis. Debts
    which are known to be uncollectable are written off. A provision for
    impairment of trade receivables is established when there is objective
    evidence that the Group will not be able to collect all amounts due according
    to the original terms of receivables.  The amount of the provision is the
    difference between the asset's carrying amount and the present value of
    estimated future cash flows, discounted at the effective interest rate.  The
    amount of the provision is recognised in the statement of comprehensive
    income.
    2.10.3. Classification of financial assets
    The Group classifies its financial assets in the following categories:
    financial assets at fair value through profit or loss, loans and receivables.
     The classification depends on the purpose for which the financial assets
    were acquired. Management determines the classification of its financial
    assets at initial recognition and re evaluates this designation at each
    reporting date.
    1. Financial assets at fair value through profit or loss
    This category has two sub categories: financial assets held for trading, and
    those designated at fair value through profit or loss on initial recognition.
     For accounting purposes, derivatives are categorised as held for trading
    unless they are designated as hedges.  Assets in this category are classified
    as current assets if they are either held for trading or are expected to be
    realised within 12 months of the balance sheet date.
    2. Loans and receivables
    Loans and receivables are non-derivative financial assets with fixed or
    determinable payments that are not quoted in an active market. They arise
    when the Group provides money, goods or services directly to a customer
    with no intention of selling the receivable.  They are included in current
    assets, except for those with maturities greater than 12 months after the
    balance sheet date which are classified as non-current assets. The Group's
    loans and receivables comprise 'trade and other receivables' and 'cash and
    cash equivalents' in the balance sheet.
    Purchases and sales of financial assets are recognised on trade-date - the
    date on which the Group commits to purchase or sell the asset. Financial
    assets at fair value through profit and loss are carried at fair value.
    Loans and receivables are carried at amortised cost using the effective
    interest method.  Realised and unrealised gains and losses arising from
    changes in the fair value of the 'financial assets at fair value through
    profit or loss' category are included in the statement of comprehensive
    income in the period in which they arise.
    The Group establishes fair value by using valuation techniques.  These
    include reference to the fair values of recent arm's length transactions,
    involving the same instruments or other instruments that are substantially
    the same, and discounted cash flow analysis.
    The Group assesses at each balance date whether there is objective evidence
    that a financial asset or group of financial assets is impaired.  Impairment
    testing of trade receivables is described above.
    2.10.4. Trade and other payables
    Trade and other payables are recognised initially at fair value and
    subsequently measured at amortised cost using the effective interest method.
    2.10.5. Interest bearing borrowings
    Interest bearing borrowings are recognised initially at fair value, net of
    transaction costs incurred.  Subsequent to initial recognition, interest
    bearing borrowings are measured at amortised cost with any difference between
    the proceeds (net of transaction costs) and the redemption amount recognised
    in the statement of comprehensive income over the period of the borrowings
    using the effective interest method.  Arrangement fees are amortised over the
    term of the loan facility.  General and specific borrowing costs directly
    attributable to the acquisition, construction or production of qualifying
    assets, which are assets that necessarily take a substantial period of time
    to get ready for their intended use, are added to the cost of those assets
    until such time as the assets are substantially ready for their intended use.
     Other borrowing costs are expensed when incurred.
    Borrowings are classified as current liabilities unless the Group has an
    unconditional right to defer settlement of the liability for at least 12
    months after the balance sheet date.
    2.10.6. Derivative financial instruments
    The Group uses derivative financial instruments to hedge its exposure to
    foreign exchange and interest rate risks. The Group does not hold or issue
    derivative financial instruments for trading purposes. However, derivatives
    that do not qualify for hedge accounting are accounted for as trading
    instruments.
    Derivative financial instruments are initially recognised at fair value on
    the date a derivative contract is entered into and are re-measured at their
    fair value at subsequent reporting dates. The method of recognising the
    resulting gain or loss depends on whether the derivative is designated as a
    hedging instrument and, if so, the nature of the item being hedged.  The
    Group designates certain derivatives as hedges of a particular risk
    associated with a recognised liability or a highly probable forecast
    transaction (cash flow hedge).
    The Group documents, at the inception of the transaction, the relationship
    between hedging instruments and hedged items, as well as its risk management
    objectives and strategy for undertaking various hedging transactions. The
    Group also documents its assessment, both at hedge inception and on an
    ongoing basis, of whether the derivatives that are used in hedging
    transactions are highly effective in offsetting changes in cash flows of
    hedged items.
    The full fair value of a hedging derivative is classified as a non-current
    asset or liability when the remaining maturity of the hedged item is more
    than 12 months; it is classified as a current asset or liability when the
    remaining maturity of the hedged item is less than 12 months. Trading
    derivatives are classified as a current asset or liability.
    The effective portion of changes in the fair value of derivatives that are
    designated and qualify as cash flow hedges is recognised in other
    comprehensive income. The gain or loss relating to the ineffective portion is
    recognised immediately in the statement of comprehensive income within other
    gains/(losses) - net.
    Amounts accumulated in equity are recycled in the statement of comprehensive
    income in the periods when the hedged item affects profit or loss (for
    example, when the forecast sale that is hedged takes place). The gain or loss
    relating to the effective portion of interest rate swaps hedging variable
    rate borrowings is recognised in the statement of comprehensive income within
    finance costs. The gain or loss relating to the effective portion of forward
    foreign exchange contracts hedging export sales is recognised in the
    statement of comprehensive income within sales.  The gain or loss relating to
    the effective portion of forward foreign exchange contracts hedging raw
    materials purchases is recognised in the statement of comprehensive income
    within cost of sales.
    When a hedging instrument expires or is sold, or when a hedge no longer meets
    the criteria for hedge accounting, any cumulative gain or loss existing in
    equity at that time remains in equity and is recognised when the forecast
    transaction is ultimately recognised in the statement of comprehensive
    income. When a forecast transaction is no longer expected to occur, the
    cumulative gain or loss that was reported in equity is immediately
    transferred to the statement of comprehensive income within other
    gains/(losses) - net.
    Certain derivative instruments do not qualify for hedge accounting.  Changes
    in the fair value of any derivative instrument that does not qualify for
    hedge accounting are recognised immediately in the statement of comprehensive
    income within other gains/(losses) - net.
    
    2.11. Fair value estimates
    The fair value of financial assets and financial liabilities must be
    estimated for recognition and measurement or for disclosure purposes.
    The fair value of financial instruments that are not traded in an active
    market is determined using valuation techniques.  The Group uses a variety of
    methods and makes assumptions that are based on market conditions existing at
    each balance date.  Techniques, such as estimated discounted cash flows, are
    used to determine fair value for financial instruments.  The fair value of
    forward exchange contracts is determined using forward exchange market rates
    at the balance sheet date.
    The nominal value less estimated credit adjustments of trade receivables and
    payables are assumed to approximate their fair values. The fair value of
    financial liabilities for disclosure purposes is estimated by discounting the
    future contractual cash flows at the current market interest rate that is
    available to the Group for similar financial instruments.
    
    2.12. Employee entitlements
    2.12.1. Long term employee benefits
    The Group's net obligation in respect of long service leave and the French
    retirement indemnity plan is the amount of future benefit that employees have
    earned in return for their service in the current and prior periods. The
    obligation is calculated using the projected unit credit method and is
    discounted to its present value and the fair value of any related assets is
    deducted.  The French retirement indemnity plan entitles permanent French
    employees to a lump sum on retirement. The payment is dependent on an
    employee's final salary and the number of years of service rendered.
    2.12.2. Short term employee benefits
    Employee entitlements to salaries and wages and annual leave, to be settled
    within 12 months of the reporting date represent present obligations
    resulting from employee's services provided up to the reporting date,
    calculated at undiscounted amounts based on remuneration rates that the
    entity expects to pay.
    2.12.3. Share based plans
    The Group's management awards qualifying employees bonuses in the form of
    share options and conditional rights to redeemable ordinary shares, from time
    to time, on a discretionary basis.  These are subject to vesting conditions
    and their fair value is recognised as an employee benefit expense with a
    corresponding increase in other reserve equity over the vesting period.  The
    fair value determined at grant date excludes the impact of any non-market
    vesting conditions, such as the requirement to remain in employment with the
    entity.  Non-market vesting conditions are included in the assumptions about
    the number of options that are expected to vest and the number of redeemable
    ordinary shares that are expected to transfer. At each balance sheet date
    the estimate of the number of options expected to vest and the number of
    redeemable ordinary shares expected to transfer is revised and the impact of
    any change in this estimate is recognised in the statement of comprehensive
    income with a corresponding entry to equity.  The proceeds received net of
    any directly attributable transaction costs are credited to share capital
    when the options are exercised or the conditional rights to redeemable
    ordinary shares are transferred.
    2.12.4. Superannuation schemes
    The Group's NZ and overseas operations participate in their respective
    government superannuation schemes whereby the Group is required to pay fixed
    contributions into a separate entity.  The Group has no legal or constructive
    obligations to pay further contributions if the fund does not have sufficient
    assets to pay all employees the benefits relating to the employee service in
    the current and prior periods. The Group has no further payment obligations
    once the contributions have been paid. The contributions are recognised as
    employee benefit expense when they are due.
    
    2.13. Provisions
    A provision is recognised in the balance sheet when the Group has a present
    legal or constructive obligation as a result of a past event, and it is
    probable that an outflow of economic benefits will be required to settle the
    obligation. If the effect is material, provisions are determined by
    discounting the expected future cash flows at a pre-tax rate that reflects
    current market assessments of the time value of money and, where appropriate,
    the risks specific to the liability.
    
    2.14. Revenue
    2.14.1. Goods sold and services rendered
    Revenue comprises the fair value of amounts received and receivable by the
    Group for goods and services supplied in the ordinary course of business.
    Revenue is stated net of Goods and Services Tax collected from customers.
    Revenue from the sale of goods is recognised in the statement of
    comprehensive income when the significant risks and rewards of ownership have
    been transferred to the buyer and the amount can be measured reliably.
    Revenue from services rendered is recognised in the statement of
    comprehensive income in proportion to the stage of completion of the
    transaction at the balance sheet date.
    2.14.2. Interest income
    Interest income is recognised in the statement of comprehensive income as it
    accrues, using the effective interest method.
    2.14.3. Dividend income
    Dividend income is recognised when the right to receive payment is
    established.
    2.14.4. Royalty income
    Royalty income is recognised on an accruals basis in accordance with the
    substance of the relevant agreements.
    2.14.5. Government grants
    Government grants related to an expense item are recognised as income when
    the right to receive payment has been met. The income is recognised within
    other operating income in the statement of comprehensive income.
    
    2.15. Income tax
    Income tax on the profit or loss for the periods presented comprises current
    and deferred tax. Income tax is recognised in the statement of comprehensive
    income except to the extent that it relates to items recognised directly in
    other comprehensive income, in which case it is recognised in other
    comprehensive income.
    Current tax is the expected tax payable on the taxable income for the period,
    using tax rates enacted or substantially enacted at the balance sheet date,
    and any adjustment to tax payable in respect of previous years.
    Deferred tax is provided using the balance sheet liability method, providing
    for temporary differences between the carrying amounts of assets and
    liabilities for financial reporting purposes and the amounts used for
    taxation purposes. The following temporary differences are not provided for:
    goodwill not deductible for tax purposes, the initial recognition of assets
    or liabilities that affect neither accounting nor taxable profit, and
    differences relating to investments in subsidiaries, associates and joint
    ventures to the extent that they will probably not reverse in the foreseeable
    future. The amount of deferred tax provided is based on the expected manner
    of realisation or settlement of the carrying amount of assets and
    liabilities, using tax rates enacted or substantively enacted at the balance
    sheet date.
    A deferred tax asset is recognised only to the extent that it is probable
    that future taxable profits will be available against which the asset can be
    utilised. Deferred tax assets are reduced to the extent that it is no longer
    probable that the related tax benefit will be realised.
    2.16. Segment reporting
    Operating segments are reported in a manner consistent with the internal
    reporting provided to the chief operating decision maker.  The chief
    operating decision maker, who is responsible for allocating resources and
    assessing performance of the operating segments, has been identified as the
    Managing Director, Marketing Director and the Chief Operating Officer.
    
    2.17. Critical accounting estimates and assumptions
    The Group makes estimates and assumptions concerning the future.  The
    resulting accounting estimates will, by definition, rarely equal the related
    actual results.  The estimates and assumptions that have a significant risk
    of causing a material adjustment to the carrying amounts of assets and
    liabilities within the next financial year are outlined below.
    2.17.1. Estimated impairment of goodwill
    The Group tests annually whether goodwill has suffered any impairment, in
    accordance with the accounting policy stated in note 2.9.  The recoverable
    amounts of cash-generating units have been determined based on value-in-use
    calculations.  These calculations require the use of estimates.  Refer note
    22.
    2.17.2. Income taxes
    The Group is subject to income taxes in numerous jurisdictions.  Significant
    judgement is required in determining the worldwide provision for income
    taxes. There are many transactions and calculations for which the ultimate
    tax determination is uncertain during the ordinary course of business. The
    Group recognises liabilities for anticipated tax audit issues based on
    estimates of whether additional taxes will be due.  Where the final tax
    outcome of these matters is different from the amounts that were initially
    recorded, such differences will impact the income tax and deferred tax
    provisions in the period in which such determination is made.
    2.17.3. Provisions for inventory obsolescence
    The Group makes estimates and assumptions regarding the value of inventory
    obsolescence, these are based on the existing available information.  Refer
    note 16.
    
    2.18. New accounting standards and IFRIC interpretations
    (a) Standard and Interpretations early adopted by the Group
    The Group and Company have not early adopted any new accounting standard and
    IFRIC interpretations in the current financial period.
    (b) Standards, amendments and interpretations to existing standards that are
    relevant to the Group, not yet effective and have not been early adopted by
    the Group
    At the date of authorisation of these financial statements, the following
    standards and interpretations were on issue but not yet effective but which
    the Group and Company have not early adopted:
    NZ IFRS 7 (amendment): Financial Instruments disclosures - Transfer of
    Financial Assets (effective for annual periods beginning on or after 1 July
    2011)
    The amendments require additional disclosures about transfer of financial
    assets to enable users of financial statements
    - to understand the relationship between transferred financial assets that
    are not derecognised in their entirety and the associated liabilities; and
    - to evaluate the nature of, and risks associated with, the entity's
    continuing involvement in derecognised financial assets.
    The amendment is not expected to have a material impact on the Group or
    Company's financial statements and will be adopted in the financial
    statements for the annual reporting period ending 31 March 2013.
    FRS 44 New Zealand Additional Disclosures and Harmonisation Amendments
    (effective for annual periods beginning on or after 1 July 2011)
    FRS 44 sets out New Zealand specific disclosures for entities that apply NZ
    IFRSs. These disclosures have been relocated from NZ IFRSs to clarify that
    these disclosures are additional to those required by IFRSs. The
    Harmonisation Amendments amends various NZ IFRSs for the purpose of
    harmonising with the source IFRSs and Australian Accounting Standards.
    The new standard and amendments are not expected to have a material impact on
    the Group or Company's financial statements and will be adopted in the
    financial statements for the annual reporting period ending 31 March 2013.
    NZ IFRS 10 Consolidated Financial Statements, NZ IFRS 11 Joint Arrangements,
    NZ IFRS 12 Disclosure of Interests in Other Entities, revised NZ IAS 27
    Separate Financial Statements and NZ IAS 28 Investments in Associates and
    Joint Ventures (effective for annual periods beginning on or after 1 January
    2013)
    NZ IFRS 10 replaces all of the guidance on control and consolidation in NZ
    IAS 27, and NZ IFRIC 12. The core principle that a consolidated entity
    presents a parent and its subsidiaries as if they are a single economic
    entity remains unchanged, as do the mechanics of consolidation. However, the
    standard introduces a single definition of control that applies to all
    entities. The Group does not expect the new standard to have a significant
    impact on its composition.
    NZ IFRS 11 introduces a principles based approach to accounting for joint
    arrangements, focusing on how rights and obligations are shared by the
    parties to the joint arrangement rather than on the legal structure. A joint
    arrangement will be classified as either a joint operation or joint venture.
    Joint ventures are accounted for using the equity method, and the choice to
    proportionately consolidate will no longer be permitted. Parties to a joint
    operation will account for their share of revenues, expenses, assets and
    liabilities in much the same way as under the previous standard. The Group
    does not expect this standard to alter the accounting for its existing joint
    venture.
    NZ IFRS 12 sets out the required disclosures for entities reporting under the
    two new standards, NZ IFRS 10 and NZ IFRS 11, and replaces the disclosure
    requirements currently found in NZ IAS 28. Application of this standard by
    the Group will not affect any of the amounts recognised in the financial
    statements, but will impact the type of information disclosed in relation to
    the Group's investments.
    NZ IAS 27 is renamed Separate Financial Statements and is now a standard
    dealing solely with separate financial statements. Application of this
    standard by the Group and Company will not affect any of the amounts
    recognised in the financial statements, but may impact the type of
    information disclosed in relation to the parent's investments in the separate
    parent entity financial statements.
    Amendments to NZ IAS 28 provide clarification that an entity continues to
    apply the equity method and does not re-measure its retained interest as part
    of ownership changes where a joint venture becomes an associate, and vice
    versa. The amendments also introduce a "partial disposal" concept. The Group
    is still assessing the impact of these amendments.
    The Group expects to adopt these new standards in the financial statements
    for the annual reporting period ending 31 March 2014.
    NZ IFRS 13 Fair Value Measurement  (effective for annual periods beginning on
    or after 1 January 2013)
    NZ IFRS 13 aims to improve consistency and reduce complexity by providing a
    precise definition of fair value and a single source of fair value
    measurement and disclosure requirements for use across IFRSs. The Group has
    yet to determine which, if any, of its current measurement techniques will
    have to change as a result of the new guidance. It is therefore not possible
    to state the impact, if any, of the new rules on any of the amounts
    recognised in the financial statements. However, application of the new
    standard will impact the type of information disclosed in the notes to the
    financial statements.  The Group and Company expect to adopt the new standard
    in the financial statements for the annual reporting period ending 31 March
    2014.
    NZ IAS 1 Amendments Presentation of Items of Other Comprehensive Income
    (effective for annual periods beginning on or after 1 July 2012)
    The amendment requires entities to separate items presented in other
    comprehensive income into two groups, based on whether they may be recycled
    to profit or loss in the future. This will not affect the measurement of any
    of the items recognised in the balance sheet or the profit or loss in the
    current period.  The Group and Company expect to adopt the amendment in the
    financial statements for the annual reporting period ending 31 March 2014.
    
    NZ IAS 12 Recovery of Underlying Assets (effective from 1 January 2012)
    The amendment requires the measurement of deferred tax assets or liabilities
    to reflect the tax consequences that would follow from the way management
    expects to recover or settle the carrying of the relevant assets or
    liabilities, that is through use or through sale and introduces a rebuttable
    presumption that investment property which is measured at fair value is
    recovered entirely by sale. The amendment is not expected to have a material
    impact on the Group or Company's financial statements. The Group and Company
    expect to adopt the amendment in the financial statements for the annual
    reporting period ending 31 March 2014.
    NZ IFRS 9: Financial instruments (effective for annual periods beginning on
    or after 1 January 2015)
    NZ IFRS 9 addresses the classification, measurement and recognition of
    financial assets and financial liabilities and replaces the parts of NZ IAS
    39 relating to classification and measurement of financial instruments. NZ
    IFRS 9 requires financial instruments to be classified into two measurement
    categories: amortised cost and fair value. The determination is made at
    initial recognition. All equity investments are measured at fair value. A
    debt instrument is measured at amortised cost only if the entity is holding
    it to collect contractual cash flows and the cash flows represent principal
    and interest. Otherwise it is measured at fair value through profit or loss.
    
    For financial liabilities the standard retains most of the NZ IAS 39
    requirements. The main change is that, in cases where the fair value option
    is taken for financial liabilities, the part of a fair value change due to an
    entity's own credit risk is recorded in other comprehensive income rather
    than the income statement, unless this creates an accounting mismatch.
    The new standard is not expected to have a material impact on the Group or
    Company's financial statements. The Group and Company have not yet decided
    when to adopt NZ IFRS 9.
    
    3. Segment information
    The chief operating decision maker assesses the performance of the operating
    segments based on a measure of adjusted earnings before interest, tax,
    depreciation and amortisation (EBITDA).  Interest income and expenditure are
    not included in the result for each operating segment that is reviewed by the
    chief operating decision maker.  Except as noted below, other information
    provided to the chief operating decision maker is measured in a manner
    consistent with that in the financial statements.
    During the current period EBITDA for reportable segments was expanded to
    separate Rakon's share of EBITDA from associates and joint venture.  The
    EBITDA for the year ended 31 March 2011 has been restated to align with this
    change.
    
    Breakdown of the revenue from all sources is as follows:
    
      2012
    ($000s) 2011
    ($000s)
    Sales of goods 176,693 187,691
    Revenue from services  1,561 1,623
      178,254 189,314
    The Group's trading revenue is derived in the following regions.
    Total Revenues by destination  2012
    ($000s) 2011
    ($000s)
    Region
    Asia  87,975 96,651
    North America  34,857 33,948
    Europe 51,812 53,709
    Others 3,610 5,006
      178,254 189,314
    Revenue is allocated above based on the country in which the customer is
    located.
    4. Other operating income
     GROUP PARENT
     2012 2011 2012 2011
     ($000s) ($000s) ($000s) ($000s)
    Dividend income 3 2 3,476 1,662
    Management fees/royalties received from subsidiaries - - 3,539 2,420
    Government grants - research and development 5,316 2,219 3,970 2,219
    Government grants - business support, China 592 - - -
    Other income 26 304 2 63
     5,937 2,525 10,987 6,364
    
    5. Operating expenses
     GROUP PARENT
     2012 2011 2012 2011
     ($000s) ($000s) ($000s) ($000s)
    Operating expense by function:
    Selling and marketing costs 15,459 15,260 7,739 9,033
    Research and development 14,738 13,177 6,730 6,328
    General and administration 28,808 21,164 13,187 11,446
     59,005 49,599 27,656 26,807
    
    Operating expenses include:
    Net loss/(gain) on sale of property, plant and equipment - 29 - (22)
    Depreciation - inclusive of depreciation included in cost of sales (note 18)
    8,018 7,641 6,152 6,245
    Amortisation (note 19) 2,033 1,486 1,364 990
    Research and development expense 15,696 14,482 6,730 6,328
    Research and development taxation credit (958) (1,305) - -
    Rental expense on operating leases 2,340 2,219 1,639 1,486
    
    Costs of offering credit
    Impairment write back on trade receivables (101) (26) (25) -
    Bad debt write-offs 20 71 1 12
    Governance expenses
    Directors' fees (note 35) 300 300 300 300
    
    Auditors' fees
    Audit services for current year - principal auditors 594 537 180 198
    Share registrar audit - principal auditors 3 3 3 3
    Audit services - other auditors 55 - - -
    Advisory services in relation to disposal of Proprietary software - principle
    auditors 105 - 105 -
    Sundry expenses
    Donations 7 62 3 52
    Prior year
    General and administration costs and cost of sales have been decreased and
    increased respectively by Group $4,511,000 and Parent $4,111,000 in order to
    more accurately reflect the classification of these cost in a manner
    consistent with the current year.
    6. Other gains/(losses) - net
     GROUP PARENT
     2012 2011 2012 2011
     ($000s) ($000s) ($000s) ($000s)
    Gain on disposal of property, plant, equipment and intangibles 1,014  1,057
    Costs attributable to investment in joint venture and sale of intangibles,
    plant and equipment - (129) - -
    Costs attributable to investments in associates and subsidiaries - (100) -
    (100)
    Bargain purchase gain on acquisition (note 33) - 1,226 - -
    Acquisition costs - (721) - -
     1,014 276 1,057 (100)
    Foreign exchange (losses)/gains - net
    Forward foreign exchange contracts
    - held for trading 205 70 90 80
    (Losses)/gains on revaluation of foreign denominated monetary assets and
    liabilities1  (626) (2,251) (1,757) (695)
     (420) (2,181) (1,666) (615)
     593 (1,905) (610) (715)
    
    1 Includes realised and unrealised gains/(losses) arising from accounts
    receivable and accounts payable.  Hedge accounting is sought on the initial
    sale of goods and purchase of inventory, subsequent movements are recognised
    in trading foreign exchange.
    
    Other Information
    A. Dividends (NZX Listing Rules Appendix 1: 2.3(d))
    Rakon Limited currently has adopted a policy that there will not be any
    dividend payments made for the foreseeable future and surplus funds will be
    used for immediate and future growth opportunities.
    B. Net Tangible Assets per Security (NZX Listing Rules Appendix 1: 2.3(f))
     31 March 2012 31 March 2011
    Net tangible assets $000 162,787 169,011
    Number of ordinary securities 000 191,039 191,039
    Net tangible asset backing per ordinary security $ 0.85 0.88
    C. Control gained and lost over Entities (NZX Listing Rules Appendix 1:
    2.3(g))
    Rakon Limited has acquired the following entities during the period:
    nil
    D. Associates & Joint Ventures (NZX Listing Rules Appendix 1: 2.3(h))
    Rakon Limited has the following associate entities and joint venture
    arrangements.
     Shareholding
    Centum Rakon India Private Limited 49%
    Shenzhen Timemaker Crystal Technology Co, Limited 40%
    Chengdu Timemaker Crystal Technology Co, Limited  40%
    Shenzhen Taixiang Wafer Co, Limited 40%
    The contribution of Centum Rakon to Rakon Limited's net results from ordinary
    activities is a net profit after tax of $386,000 (prior year $479,000).  The
    contribution of Shenzhen Timemaker, Chengdu Timemaker and Shenzhen Taixiang
    to Rakon Limited's net results from ordinary activities is a net profit after
    tax of $538,000 (prior year $2,432,000).
    E. Audit (NZX Listing Rules Appendix 1: 1.3(l))
    The financial statements have been audited and will not be subject to any
    qualification.
    F. Business Changes (NZX Listing Rules Appendix 1: 1.3(m))
    There have not been any major changes or trends in Rakon's business
    subsequent to year end.
    End CA:00222948 For:RAK    Type:FLLYR      Time:2012-05-17 10:29:40
    				
 
Add to My Watchlist
What is My Watchlist?
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.