Civitanavi S p A : 2021 Annual Financial Report (including Opinion of Board of Statutory Auditors and Opinion of Independent Auditors – PDF

Civitanavi Systems S.p.A.

Annual Financial Report

31 December 2021

TABLE OF CONTENTS

• 1. Company Data and Governance

• 2. Letter to Shareholders

• 3. Directors' Report on Operations

• 4. Financial Statements

• 5. Attestation of Manager in charge of Financial Reporting

• 6. Opinion of the Board of Statutory Auditors

• 7. Opinion of Independent Auditors

Company Data and Governance

Registered office of the Company

Civitanavi Systems S.p.A.

Via del Progresso 5, 63827 Pedaso (FM) - Italy

VAT no. IT01795210432

Corporate websitehttps://www.civitanavi.com

Board of Directors

Andrea Pizzarulli	Chairman of the Board of Directors and CEO
Michael Perlmutter	Non-executive director
Thomas Jung	Non-executive director
Mario Damiani*	Non-executive director
Laura Guazzoni*	Independent director**
Maria Serena Chiucchi*	Independent director**
Tullio Rozzi*	Independent director**

Lead Independent Director: Laura Guazzoni*

Remuneration and Appointments Committee

Laura Guazzoni*	Chairwoman
Maria Serena Chiucchi*	Member
Tullio Rozzi*	Member
Control and Risk Committee
Laura Guazzoni*	Chairwoman
Maria Serena Chiucchi*	Member
Tullio Rozzi*	Member
Board of Statutory Auditors

Marco Donadio Chairman of the Board of Statutory Auditors Cesare Tomassetti Standing Statutory Auditor

Eleonora Mori Standing Statutory Auditor Giuseppe Mogliani Alternate Statutory Auditor Daniela Angeloni Alternate Statutory Auditor

Auditing Firm BDO Italia S.p.A.

Executive Competent for drafting the company's accounting documents Letizia Galletti*

*In office from the Start Date of Trading in the Euronext Milan of the Italian Stock Exchange, on 17 February 2022 **Independent director pursuant to art. 148, paragraph 3 of the TUF [Consolidated Law on Finance], as cited in art. 147-ter, paragraph 4 of the TUF and pursuant to the Corporate Governance Code.

Methodological note

Values are reported in thousand euro and/or to euro punctual within the Directors' Report on Operations and Finanacial Statements documents, accompanied by the related Notes.

Percentage ratios, margins and variations, have been calculated referring to punctual euro values.

Letter to Shareholders

To the Shareholders,

This Annual Financial Report for the year that ended on 31 December 2021, of the company Civitanavi Systems S.p.A. (hereinafter also referred to as the "Company") consists of the statement of financial position, the income statement, the net equity, and the cash flow statement, as well as the notes, together with the Directors' Report on Operations for the year ended 31 December 2021.

With effectiveness from 12 October 2021, the company transformed into a Public Limited Company by virtue of a notarial deed dated 7 October 2021, taking steps to appoint the Board of Statutory Auditors.

On 13 October, the ordinary meeting of the shareholders accepted the resignation of the sole administrator and appointed a new managing body composed of three members, envisaging the appointment of two additional independent directors, subjecting the appointment to the condition precedent that the ordinary shares of the Company would start trading in the Euronext Milan of the Italian Stock Exchange. On 21 December 2021, the meeting also appointed two additional directors, of whom one is independent, with a similar condition precedent.

On 17 February 2022, the company started trading at the Italian Stock Exchange in the Euronext Milan main market with the code ISIN IT0005466153. The Company and the parent company Civitanavi Systems Ltd opted to include in such Offer a total number of 7,760,000 Shares, of which 5,760,000 Shares originating from a capital increase decided by the Company on 13 January 2022, and 2,000,000 Shares put up for sale by the parent company. Moreover, the Greenshoe Option - elarged to the Selling Shareholder Civitanavi Systems Ltd - has been partially asserted for an amount of 674,500 Shares out of a maximum amount of 776,000 Company Shares. The offer price was set at EUR 4.00 per Share.

A total of 8,434,500 Shares were allocated at the Offer Price, of which:

- 5,760,000 ordinary Shares newly issued by the Company, originating from the Capital Increase; - 2,000,000 Shares put up for sale by the Selling Shareholder;

-

674,500 Shares of the Over-allotment Option granted by Civitanavi Ltd.

Based on the Offer Price, the Institutional Placement amounts to approximately EUR 33.7 million The stock is equal to 27.4% of the share capital of Civitanavi and the Company's capitalisation, calculated on the Offer Price, on the trading start date amounts to approximately EUR 123 million.

Based on the Offer Price, the net proceeds due to the Company in relation to the Capital Increase, net of maximum commissions (including any discretional components) to be paid to the Joint Global Coordinators and to the Sponsor amount to EUR 21.8 million.

At the document date share capital, entirely registered and paid up, amounts to EUR 4,244,000 divided into nr. 30,760,000 ordinary shares, without indications about the nominal value and dematerialised. Any ordinary share grant the right of vote in ordinary and extraordinary assemblies, as well as the other administrative rights provided for by the applicable legal dispositions and the Statutory. The Company has not in place any purchasing program of own shares and the Company is not currently holding any own share.

It has not been issued any category of shares granting right of vote or any nature of right different than ordinary shares. Also, it has not been issued any financial instruments that grant the right to subscribe new issued shares.

The Financial Statements on 31 December 2021 were drafted in compliance with the EU-IFRS. The financial statements that we submit for your approval close with a total profit of EUR 4.8 million, following the accounting of accrued taxes for EUR 1.7 million, and amortisation/depreciation and write-downs for a total of EUR 1 million.

The 2021 results confirm the expectations in terms of total revenues of 25.1 million Euro (+31%) and EBITDA of 7.8 million

Euro (+55%), with a double-digit growth in the main financial indicators. Booking reaches a record value of EUR 29.8 million.

The results achieved confirm a solid and stable growth, strengthening our position in the field of inertial stabilization and navigation systems globally. The expectations in terms of increase in total revenues and EBITDA compared to the same period of 2020, allow us to confirm what was indicated to the market during the IPO process. The positive trend is supported by the investments we are performing to expand the production capacity, with the aim to consolidate our relationships withinternational players of very high strategic importance. All this strengthens our confidence for 2022, despite the current situation of general uncertainty, thanks also to the solidity of our supply chain and the wide geographic diversification of our customer portfolio. We continue to work at a fast pace to drive growth with a view to creating value for our customers and shareholders, through continuous innovation and the entrepreneurial spirit that has always characterized us.

Signed by

Andrea Pizzarulli

Chairman of the Board of Directors and CEO