Defence Tech S p A : Consolidated Financial Statements 2021

Defence Tech Holding S.p.A.

Consolidated financial statements

as at 31 December 2021

Defence Tech Holding S.p.A.

Registered office in Rome, Via Giacomo Peroni 452 Fully paid-up share capital Euro 2,554,286

Rome Economic and Administrative Register No. 1276114 Tax ID and Rome Business Register No. 11065701002

CONTENTS

∙	REPORT ON OPERATIONS............................................................................	3
∙ CONSOLIDATED FINANCIAL STATEMENTS AS AT 31.12.2021.....................................	17
∙ CONSOLIDATED STATEMENT OF FINANCIAL POSITION.............................................	17
∙	CONSOLIDATED INCOME STATEMENT............................................................................	19
∙ CONSOLIDATED STATEMENT OF CASH FLOWS, INDIRECT METHOD......................	21
∙ NOTES TO THE FINANCIAL STATEMENTS.......................................................................	23

Defence Tech Holding S.p.A.
Financial statements as at 31 December 2021	2

REPORT ON OPERATIONS

Dear Shareholders,

as the requirements under Italian Leg. Decree 127 of 1991 are met, your company has prepared the consolidated financial statements for the year 2021, showing a profit of Euro 3,741,096.

The notes to the consolidated financial statements set out the relevant basis of preparation as well as all information required to describe the line items from the statement of financial position and the income statement that comprise it.

Financial Position and Performance of the Group

As for the financial position and performance of the group, see the information reported in the consolidated financial statements and the relevant notes as well as the separate financial statements of the entities included in the scope of consolidation.

Group Structure

The following entities are included in the scope of consolidation:

DEFENCE TECH

HOLDING SPA

DONEXIT SRL

FO.RA.MIL. SRL

NEXT SPA

DEFENCE TECH HOLDING S.P.A.

Registered office in Rome, Via Giacomo Peroni 452

Fully paid-up Share Capital Euro 2,554,286

Equity Euro 26,744,560

(Parent)

Defence Tech Holding S.p.A.
Financial statements as at 31 December 2021	3

DONEXIT S.r.l. unipersonale (single-member company)

Registered office in Rome, Via Giacomo Peroni 452

Fully paid-up Share Capital Euro 598,000

Equity Euro 3,564,022

Direct ownership interest Euro 598,000, equal to 100.00%

FO.RA.MIL. S.r.l. unipersonale (single-member company)

Registered office in Rome, Via Giacomo Peroni 452

Fully paid-up Share Capital Euro 86,700

Equity Euro 2,429,196

Direct ownership interest Euro 86,700, equal to 100.00%

NEXT S.p.A.

Registered office in Rome, Via Giacomo Peroni 452

Fully paid-up Share Capital Euro 4,450,000

Equity Euro 10,220,039

Indirect ownership interest Euro 4,450,000, equal to 100.00%

The above entities are included in the scope of consolidation and were consolidated on a line-by-line basis.

Reference market

The Defence Tech group operates in three main business areas:

• Cyber Security & Technology Data intelligence

Proprietary solutions for secure communications, detection of critical infrastructure vulnerabilities, and big data & analytics solutions for intelligence operations.

• Communication & Control System

Complex application solutions for the following industries: defence (CMS, Radar, SAR), space (Satellite Navigation and Earth Observation), and avionics (Air Traffic Control).

• Microelectronics

Production of highly complex single-board computers with a focus on the shipbuilding industry.

Defence Tech Holding S.p.A.
Financial statements as at 31 December 2021	4

Therefore, the reference markets are Cyber Security, for both government and corporate entities, as well as Defence and Space, and the Group operates mostly in Italy-also because of the status of group strategic to national security conferred by Italy's Presidency of the Council of Ministers under the Decree of the President of the Council of Ministers (DPCM) dated 7 June 2018.

Our services are rendered through the Group's three operating entities, with competence centres dedicated to the different lines of business and reference markets.

Cyber Security

In 2021, Italy's Cyber Security market grew by 13% over 2020 to Euro 1.55 billion-a record pace, with 60% of large organisations anticipating an increase in their cyber security budget.

These findings come from a survey by the Cybersecurity & Data Protection Observatory of Politecnico di Milano's School of Management, according to which, faced with constantly growing threats (1,053 serious incidents in the first half of 2021, +15% compared to the first half of 2020, according to Clusit data), as many as 31% of large Italian businesses reported yet another increase in cyber attacks over the last year, after the surge registered in the first few months of the health emergency triggered by the COVID-19pandemic.

There is growing attention paid to cyber security also at the international level, as shown by the Global Cyber Security Outlook 2022, published by the World Economic Forum: key indicators gleaned from specific surveys among 120 global cyber leaders from 20 countries offer a picture of how organisations are dealing with the shift from a cyber-defensive to a cyber-resilient approach capable of anticipating, identifying and swiftly resolving a cyber attack.

The accelerated shift to remote work during the COVID-19 pandemic coupled with increasingly frequent cyber attacks against public and private organisations have resulted in key decision-makers being more aware of the need to prioritise cyber risks and integrate them into business strategy. Key indicators include:

• 82% of leaders believe that the digital transformation is the main driver of the shift to cyber- resilience;
• 92% of leaders agree that cyber-resilience must be integrated into enterprise risk management strategies;
• 84% of leaders consider cyber-resilience a business priority;

Defence Tech Holding S.p.A.
Financial statements as at 31 December 2021	5