digital protection
rotecting 
privacy 
    security in  
an online world
Annual Report 2015
Defenx PLC With more malicious 
computer software  
being created daily,  
Defenx provides  
trusted protection,  
aimed at keeping the 
world safe while online.
Overview
Highlights 1
At a glance 2
Strategic Report
Chairman’s statement 4
Our markets 6
Our technology 8
Our strategy 10
Strategy in action 14
Chief Executive Officer’s review 16
Financial review 18
Principal risks and uncertainties 21
Corporate Governance Report
Board of Directors 22
Chairman’s statement on governance 24
The Board 24
Audit committee report 26
Remuneration report 28
Directors’ report 31
Statement of Directors’ responsibilities 32
Financial Statements
Independent Auditor’s Report to  
the members of Defenx PLC 33
Consolidated statement of 
comprehensive income 34
Consolidated statement of 
financial position 35
Consolidated statement of 
changes in equity 35
Consolidated cash flow statement 36
Company statement of financial position 37
Company statement of changes in equity 37
Company cash flow statement 38
Notes to the consolidated 
financial statements 39
Other information
Notice of AGM 58
Company information 61
Track record 62 Defenx PLC
Financial Statements
Annual Report 2015 1
Strategic Report Governance
• Over 3.1 million licences sold to date with 937 ,000 
active licensed users of Defenx software at the 
year end
• 70% of revenues from software for mobile devices
• 88% year-on-year revenue growth to €4.5 million
• Fourth consecutive year of profitable growth – 
operating profit before exceptional AIM admission 
costs of €979,000 (2014: €805,000)
• Successful admission to AIM raising €3.0 million 
(£2.1 million) in gross proceeds to fund software 
development and sales growth
Financial
“ 2015 has been a year of good progress  
for Defenx. We have continued to grow  
the business financially and are delighted 
to report that we finished the year  
slightly ahead of market expectations.  
We successfully completed our IPO  
on AIM in December where  
we raised £2.1 million  
to invest in our business.”
  —  Anthony Reeves
      Chairman
• Launched Defenx Mobile Security Suite for iOS  
and Enterprise NAS antivirus software (under  
the Seagate Security brand)
• Key customer 3Italia (Italy’s Three network) 
launched Defenx-branded security software, which 
is available online and in their ‘3Stores’ across Italy
• Won two major channel partners, one of whom 
bundles Defenx Security Suite with its mobile 
device insurance and generated over €1.4 million  
in sales in the first year
• Windows 10 launch – Defenx Mobile Security Suite 
now addresses the top three smartphone operating 
systems and over 90% of the market worldwide
• Established management, reporting and systems 
suitable for AIM and to support future growth; 
appointed two Non-executive Directors, including 
our Chairman, significantly strengthening the Board 
of Directors
Operational
Financial
operational highlights
€4.5 million
revenue
88%
year-on-year revenue growth
3.1 million
licences sold to date Chairman’s Statement page 4 Defenx PLC Annual Report 2015 2 Defenx PLC Annual Report 2015 2
Founded in 2009, Defenx is a fast-growing and 
profitable security software company that offers a 
range of products for the mobile, PC and network 
security markets. Defenx security software is  
priced competitively, fully featured and efficient 
(reduced use of memory, processing capacity and 
therefore power).
A flexible marketing strategy, focused on white label and profit-share 
arrangements with distributors, telecoms companies and hardware 
manufacturers, enables Defenx to compete with established industry 
incumbents. Since inception, Defenx has sold over 3.1 million security 
software licences, primarily in Europe, the Middle East and Africa.
Defenx’s global distribution partners currently include 3Italia, the fourth 
largest Italian mobile network operator, and Seagate Technology, a world 
leader in disk drive manufacturing, amongst others including telecoms 
operators, systems integrators and original equipment manufacturers. 
Defenx was admitted to trading on AIM on 3 December 2015, raising  
€3.0 million to accelerate its growth through new channel partners  
and product development.
Who we are 
what we do
€1.35 million
invested in our products in 2015
€3.0 million
raised to accelerate growth
Our products
Total Security
Our complete solution to protect all  
your devices combining Defenx Mobile 
Security Suite for Android, iOS or 
Windows and Defenx Security Suite  
for PC.
Cloud Backup 
Defenx Cloud Backup provides backup, 
synchronisation and sharing of your 
most important ﬁles, such as 
documents, music, video and pictures of 
your family. If your computer or mobile 
device breaks, is stolen or if the ﬁle is 
corrupted or removed by mistake, there 
will always be a copy available in the 
Defenx Cloud.
Multi-device
At a glance Defenx PLC
Strategic Report Governance Financial Statements
Annual Report 2015 3 Defenx PLC
Strategic Report 
Annual Report 2015 3
What is malware?
Malware, which is short for malicious software, 
is a general term used to refer to a variety of 
forms of hostile or intrusive software. It is 
software used to disrupt computer operation, 
gather and distribute sensitive information,  
or gain access to private computer systems. 
Malware can also cause direct financial loss by 
sending premium SMS messages, consuming 
your data allowance, and abusing personal 
banking and credit card information obtained  
on your device.
Malware includes computer viruses, 
ransomware, worms, trojan horses, rootkits,  
key loggers, diallers, spyware, adware, malicious 
browser-helper objects, rogue security software 
and ‘govware’ and other malicious programs.
Malware can also take the form of code,  
scripts, active content and other software  
that exploits weaknesses in commonly used 
software. The most common end-point exploits 
in 2015 used well known software including 
Internet Explorer, Adobe Flash, Adobe Reader, 
Microsoft Silverlight and Java. 
End-points, such as PC and mobile devices, are 
targeted because they contain specific user 
information that is used for gaining access to 
privileged or protected networks. 
How do you protect yourself?
There are some simple yet effective measures 
anyone can take. Keeping your device up-to-
date significantly cuts the chances that exploits 
work because vendors work hard to patch 
vulnerabilities.
For the security conscious, using browser 
add-ons that check web addresses against 
known lists of malicious sites, block Adobe Flash 
and disable scripts is also an effective way of 
thwarting malicious redirections although it  
can affect the browsing experience.
The effective solution is to adopt a layered 
approach: maintain a fully patched device  
with the latest OS update together with  
anti-malware protection.
The problem
Security Suite
Defenx Security Suite offers 360° 
protection with mail and website 
ﬁltering, antivirus and a ﬁrewall 
ensuring the safety of your data and 
preventing hacker exploitation. We 
keep your PC protected and let you 
use it with full peace of mind.
Mobile Security Suite
Security and privacy
Information on the device,  
apps behaviour and potentially 
malicious activity is monitored  
by Defenx to thwart data theft 
and keep your device safe.
Theft protection
Defenx theft protection 
features give you the tools  
you need to ﬁnd a lost device 
and to help you get a stolen 
device back.
Utility
The Defenx dashboard 
provides you with a quick  
view of your device to manage 
applications, scanning 
schedules and activity. 
Antivirus
Defenx Antivirus protects you from 
malware keeping your PC safe. 
Whether a security novice  
or expert, you can conﬁgure Defenx 
Antivirus to suit your needs.
Desktop Mobile devices
Our technology page 8 Defenx PLC Annual Report 2015 4
Hard work
progress
Dear shareholder
I was delighted to be asked to join the Board of Defenx in 
October 2015 prior to its successful AIM IPO in December 
2015. Although we have only been a listed company for a short 
time, I believe that we have made much progress across the 
business and confidence is high. It is thanks to the hard work 
put in by our talented management team, as well as those 
working across and with the business, that we have been able 
to make this progress and give us the foundation from which to 
grow our operation.
Highlights
I am pleased that in our maiden results as a listed company, 
Defenx has reported an 88% increase in revenue to €4.5 million 
and an operating profit before exceptional AIM admission costs 
of €979,000, making this our fourth consecutive year of 
profitable growth. At the turn of the year, over 900,000 
Defenx users around the globe were protected by our software 
and security updates.
The IPO in December together with the funds raised 
strengthens our balance sheet and gives us the flexibility to 
invest in sales and technology, and consider acquisitions where 
they complement our strategy for growth.
“We have had a strong start to 2016, launching 
Windows Phone 10 and Defenx Cloud Backup 
products. I would like to take this opportunity to 
thank our staff and shareholders whose hard 
work and support have facilitated the growth 
seen in 2015, which we hope to continue.”
Chairman’s statement Defenx PLC
Strategic Report Governance Financial Statements
Annual Report 2015 5
As a company we have worked hard in 2015 to bring together 
a team that has the right combination of sector knowledge 
and corporate experience to enable us to deliver on our vision 
and strategy. We have also taken the opportunity to structure 
the business for growth with new employment terms, 
systems and procedures.
Board and management
Along with my arrival on the Board, Defenx also secured the 
services of Leonard Seelig as Non-executive Director. Leonard 
chairs the Audit Committee and sits on the Remuneration 
Committee, which I chair. Philipp Prince joined Defenx as our 
CFO in July 2015 and has many years’ experience in corporate 
finance at BDO where he was a partner. Philipp comes to us 
from Enecsys, a Silicon Valley-based business.
The senior management team is led by our founder,  
Andrea Stecconi, CEO and includes Guido Branca, COO, highly 
experienced in IT and telecoms systems implementation, 
Mauro Celentano, Technical Director and Angelo Motti, 
Commercial Director.
Outlook
So far in 2016, we have launched Defenx Mobile Security 
Suite for Windows 10 along with updates for Android and iOS. 
Our strategic partnership with Memopal saw the launch of 
Defenx Cloud Backup, which has already generated significant 
interest from our channel partners. Meanwhile development 
continues on products aimed at families and SMEs, which are 
discussed in more detail in the CEO’s review.
This is an exciting time to be part of Defenx as we seek to 
build on the momentum from 2015. As a profitable and 
fast-growing mobile security solutions company, I am 
confident Defenx will have an exciting 2016. The whole 
Board looks forward to meeting shareholders at the AGM on 
Wednesday 22 June 2016.
Anthony Reeves
Chairman
18 April 2016
Key milestones
2009
• Defenx SA launched in Switzerland
• Defenx Security Suite launched for PC
2010
•  Defenx Security Suite for  
Windows networks launched
2012
•  Defenx Mobile Security Suite launched  
for Android
• Generated ﬁrst proﬁt on sales of €1.1 million
2013
•  Mobile Security Suite for Android IP bought  
out from developer
2014
• Defenx PLC incorporated
•  Private placing raising €1.3 milion  
after expenses
• NAS Antivirus launched for Seagate NAS drives
2015
•  Defenx Mobile Security Suite launched for iOS
• AIM IPO raising €2.1 million after expenses
2016
•  Defenx Mobile Security Suite launched for 
Windows 10 Phone
• Defenx Cloud Backup launched Defenx PLC Annual Report 2015 6
The market
opportunity
The mobile security market is growing 
rapidly, there are now more mobile devices 
than people on the planet
1
.
Smartphone usage is increasingly ubiquitous: at the end of 
2014, there were 3.6 billion mobile subscribers worldwide, 
equivalent to over 50% of the world’s population. A further 
billion unique subscribers are predicted to join the market by 
2020 of which 65% will be smartphone users. Over half of the 
world’s population will soon have access to a smartphone.
We now use our smartphones far more than a PC, but 
smartphones are more than a mobile computer. They are 
virtually always on and connected to the Internet, sending and 
receiving data, much of it personal, some of it private and 
sensitive, including: 
• banking and finance;
• health and well-being;
• political views and affiliations; and
• sexual preferences and orientation.
Aside from the right to keep one’s data private, key aspects  
of society rely on data privacy. This includes attorney-client 
privilege and the protection of journalistic sources. In parts of 
the world, data privacy can be the difference between freedom 
and imprisonment, and even life and death.
With the increasing acceptance in the business world of bring 
your own device (BYOD), corporate data is also accessed  
and stored on mobile devices not directly managed by the 
employer. The loss and theft of commercially sensitive and 
confidential data is now a major boardroom challenge.
Then there is data we are not necessarily aware is captured by 
our devices. For example, call and messaging history, detailed 
browsing and location history.
In the wrong hands, all this data can and is being used by 
criminals. In 2015, there were 431 million new malware 
variants created, an increase of 36% from the previous year
2
.
Market share
Mobile devices
¢ Android 81% 
¢ Other 19%
1 Mobile Economy Report 2015, GSMA.
2 Internet Threat Security Report April 2016, Symantec.
3 Mobile Security Market Global Forecast to 2019, Markets and Markets.
Our markets
3.6 billion
Mobile subscribers
1.8 billion
PCs
$5. 7 5 billion
Mobile security market in 2019 Defenx PLC
Strategic Report Governance Financial Statements
Annual Report 2015 7
43 1 million
New pieces of malicious  
software created in 2015
Desktop
¢ Windows 88%
¢ Other 12%
36%
An increase of
Mobile security threats
Social engineering – the art of manipulating people so 
they give up confidential information – is increasingly 
common. 
Phishing attacks – messages purporting to  
be from reputable companies to induce individuals to 
reveal personal information, such as passwords and 
credit card numbers – originally sent as emails are 
common now across messaging platforms (SMS, 
FaceTime, WhatsApp, Snapchat and Facebook 
Messenger).
Mobile devices are vulnerable as they switch across 
different networks, particularly unsecured WiFi 
hotspots. Cybercriminals can easily gain access to 
devices, steal data and install software without the 
user ever knowing what is happening.
Thanks to the growing interconnectedness 
of devices and increased awareness of the 
potential damage caused by computer 
infections, the mobile security market is 
estimated to grow from $1.5 billion in 2014 
to $5.75 billion by 2019
3
.
We all protect our PCs, but until now it seems few have 
considered mobile security to be necessary or important. We 
believe that 2015 may well be looked back on as ‘Year Zero’ for 
awareness of the threat.
Now is the right time to be targeting this market. Defenx PLC Annual Report 2015 8
Mobile security
technology
Defenx is a mobile security solutions 
technology business with a strategy to: 
• Own and develop security solutions to protect against  
data loss and theft.
• Market these security solutions to individuals, families  
and SMEs.
• Partner with providers of complementary security solutions 
to broaden our product range.
Defenx is focused first on mobile devices. However, we realise 
that the market is constantly evolving and converging. For 
example, tablets like the iPad sit between the smartphone  
and PC, but all are now connected to the Internet. Users 
increasingly want a solution protecting all of their connected 
devices since any one device can become the weak link. Our 
solutions are therefore designed for mobile devices, PCs and 
other network connected devices such as Network Attached 
Storage (NAS) devices and, during 2016, smart TVs and set-top 
boxes. We see bundled products protecting multiple devices 
becoming more popular with customers.
Our product range currently comprises: 
• Defenx Mobile Security Suite – protection from data loss, 
viruses and other malware intrusion*, phishing and other 
attack for Google’s Android, Apple’s iOS and, since April 
2016, Microsoft’s Windows 10 operating system.
• Defenx Security Suite and Defenx Antivirus – full 360º  
PC protection from data loss and hacker exploits for 
Windows XP, Vista, Windows 7, 8 and 10.
• NAS Antivirus currently sold as Seagate Antivirus with  
their 2, 4, 6 and 8-bay NAS and NAS pro drives providing 
antivirus protection with daily updates, email updates and 
event driven notification.
• Since March 2016, Defenx Cloud Backup provides backup, 
synchronisation and sharing of data on Windows, Apple and 
Linux PCs as well as Android, iOS and Windows 10 devices.
In 2015, we invested €1.35 million (2014: €1.21 million) in our 
products. Our design ethos is to create easy to use, effective 
and lightweight software that protects users with minimal 
impact on processor, memory and battery resources. We want 
users to enjoy using their devices in the knowledge they are 
protected but undisturbed by Defenx software.
We focus first on Android not only because it is the 
worldwide market leading mobile platform, but also because 
as an open system it has been the most attacked platform. 
However, our channel partners satisfy the needs of Apple 
and Microsoft users too. So we seek to provide solutions for 
the full range of devices and operating systems.
So far in 2016, we have launched Defenx Mobile Security 
Suite for Windows 10 and Defenx Cloud Backup. Defenx 
Privacy Advisor and Mobile Device Management for families 
and SMEs will also launch soon as we continue to broaden 
the Defenx product offering.
Our technology
*  Android only since Apple iOS and Windows 10 currently provide their own malware protection. Defenx PLC
Strategic Report Governance Financial Statements
Annual Report 2015 9
Virus scanner
Defenx guards your device 
against millions of viruses, 
spyware, adware and harmful 
applications. Information will 
be gathered and sent to our 
server for assessment.
Locate
Is your device missing? 
Stolen? Use our web 
portal to locate your 
device, there you will  
be shown on Google  
Maps the exact location 
with a pin.
SMS/MMS ﬁltering
Defenx offers complete 
control of SMS and MMS 
messages. The easy-to-use 
module will help you minimise 
SPAM by identifying them as 
either welcome (whitelist) or 
unwelcome (blacklist).
Anti-phishing
Defenx protects your 
personal data when browsing 
through websites which are 
considered unsafe, blocking 
access to the website and 
taking you back to a safe 
landing page.
Lock & wipe
Log in to mdm.defenx.com 
from any browser to  
quickly lock your device  
or delete your personal  
data if it is missing or stolen.
App manager
Get a view of all your installed 
and running applications,  
drill down to see speciﬁc 
information associated  
with each application.
App locking
Defenx can add an extra 
layer of security by locking 
personal applications like 
Amazon, Facebook, or 
WhatsApp.
SIM protection
In the event of a SIM change, 
notiﬁcation will be sent via 
email and SMS, allowing you 
to respond quickly in the 
event of theft.
Scanner scheduler 
To ensure your device is 
always malware free, with 
Defenx Scheduler you can 
plan weekly scans. Simply 
choose your favourite days 
and set the time; Defenx  
will do the rest.
Safe browsing
This Defenx module  
allows the user control of  
the browser so that entire 
categories of websites  
can be blocked.
Activity log
With the activity log, you can 
have a quick summary of 
what events the Defenx 
application has performed 
and when.
Security & privacy Theft protection Utilities
Defenx Mobile Security Suite for Android 
Our Android solution keeps your data protected, prevents 
malware intrusions, provides anti-theft features and filters  
your messages with the following features: Defenx PLC Annual Report 2015 10 Defenx PLC Annual Report 2015 10
Our strategy
Delivery 
growth
Route to market
Defenx sells to businesses who already 
have customer relationships with potential 
end-users for our products and solutions.
This strategy is not just about cost-effective distribution.  
We seek also to improve our channel partners’ revenues  
and margins by providing a value-adding proposition for  
their customers.
We do this by:
• Sharing revenue with channel partners not only on  
the initial sale, but also on subsequent renewals –  
we do not disintermediate our channel partners.
• White labelling to allow our channel partners to build  
their brands.
• Integrating with our channel partners’ sales and marketing, 
billing and other IT systems.
In essence, we help our channel partners discuss security 
issues with their customers, generating more trusting 
relationships, incremental sales and brand loyalty. In turn, 
we gain valuable insight into what our end-users want in 
their security solutions.
We call this our business-to-business-to-consumer (B2B2C) 
strategy. It is not common in the industry and, we believe, 
provides Defenx with competitive advantages in speed to 
market, customer acquisition cost and retention.
Channel partners provide marketing support through sales 
force training, point-of-sale support, marketing activities, 
and display and advertising materials in order to protect 
and project the Defenx brand.
Defenx products End-users
Mobile
Individuals
Te lc oms
Distributors
Resellers
OEMs 
Device manufacturers
System integrators
Content aggregators
Families
SMEs
Desktop  
Cloud
Network security
Channel partners Defenx PLC
Strategic Report Governance Financial Statements
Annual Report 2015 11 Defenx PLC
Strategic Report Governance Financial Statements
Annual Report 2015 11
Strategy in action page 14
Our channel partners include:
• Telecoms operators – mobile security is becoming a must-have that 
operators can promote as a value added service to increase revenues  
and margins.
• Distributors and resellers – many end-users buy mobile devices and PCs 
in-store where the addition, for example as part of a bundle, of a security 
solution can increase retailers’ sales and margins.
• Device manufacturers – hardware is often commoditised with  
bundled software the key way to differentiate products in the  
eyes of the consumer.
• System integrators – security is now a critical component of most  
IT systems.
• Other vendors – many other businesses ﬁnd a security solution helps to 
drive sales and margins.
Addressable market
3.6bn
Mobile subscribers
1.8bn
PCs
‘Billions’
Network devices Defenx PLC Annual Report 2015 12
Our strategy continued
Geographical focus
Our focus is Europe – our home and likely to  
become the region with the strongest privacy 
regulations – Asia, the Middle East and Africa (MEA) 
and Latin America. We do not directly market into 
North America, Russia or China since these markets 
are well served domestically and, more importantly, 
appear to be diverging from Europe in their approach 
to privacy .
The smartphone market in emerging markets is growing rapidly 
due, in part, to sales of low and mid-price smartphones. Africa 
is a particularly interesting market for Defenx. In 2012, there 
were 79 million smartphone connections in Africa; by 2018, 
this figure is expected to rise to 412 million
1
. Africa is already  
a world leader in mobile money, with the adoption of mobile 
banking growing exponentially and a proliferation of digital 
ventures and services. We expect this growth to translate into 
multiple opportunities to sign-up new channel partners.
Strategic partnerships
As a result of the growing number of channel partners, Defenx 
provides an ideal sales platform for technology businesses 
without their own marketing capacity and expertise. While 
Defenx’s strategy is focused on identifying market needs, 
developing and owning its own software, we can sometimes 
move faster by partnering with other technology owners.
In January 2016, we announced a strategic partnership  
with Memopal Srl (see box). Memopal has developed its own 
multi-language Cloud backup, synchronisation and file sharing 
software solution for PCs and mobile devices. 
We see a perfect fit between Defenx’s security solutions 
(making devices safe) and Cloud backup (making data secure)  
to provide more effective device protection. Security+Backup= 
Protection. For example, rolling back to an earlier copy of data 
from an uninfected backup is currently the best way to deal 
with ransomware; now a rapidly growing problem.
Since March 2016, our product range has included a Defenx-
branded Cloud backup and sync solution sold on a revenue 
sharing basis with Memopal.
Your Board will continue to seek out similar technologies to 
broaden Defenx’s product offering. We will carefully consider 
the acquisition strategy – M&A, licensing or strategic 
partnership – subject to the availability of funding and the 
interests of Defenx and shareholders.
¢ Trading: 
Republic of the Congo, Ireland,  
Italy, Malta, Switzerland, UAE
¢ New wins: 
Brazil, Netherlands, Iran,  
Italy, UK, Ukraine
¢ Selected prospects: 
Egypt, Germany, India, Japan,  
Mexico, Nigeria, South Korea,  
Spain, Turkey Defenx PLC
Strategic Report Governance Financial Statements
Annual Report 2015 13
Channel and geographic targeting 
The Board segments the market by channel and geography. The cost, timeframe and risk profile of investment varies 
significantly by market. The Board seeks to balance these attributes in growing sustainable sales and building long-term 
shareholder value.
Defenx currently classifies and targets channel partners as follows: 
Channel Selected partners
2
• Telecoms operators – mobile security is becoming a must-have that operators  
can promote as a value added service to increase revenues and margins
3Italia (Italy), Du and Etilsat (UAE),  
MCI (Iran)
• Distributors and resellers – many end-users buy mobile devices and PCs in shops 
where the addition, for example as part of a bundle, of a security solution can 
increase retailers’ sales and margins
Brigantia (UK), Media Web (Italy),  
Total Import Solutions (Ireland) 
• Device manufacturers – hardware is often commoditised with bundled software 
being the key way to differentiate products in the eyes of the consumer
Seagate (France and US)
• System integrators and other vendors – security is now a critical component of 
most systems and solutions necessary to drive sales and margins
Aggregando (Brazil), Metrological 
(Netherlands), Memopal (Italy),  
Safe Active (Italy)
1 Africa Telecoms Outlook 2014, Informa Telecoms & Media.
2 Channel partners and other direct customers of the Group and their customers. Defenx PLC Annual Report 2015 14
Strategy in action
Seagate T echnology
Seagate, a leader in hard disk technology, sought  
an antvirus solution for factory installation on 
consumer and small enterprise Network Attached 
Storage (NAS) drives. Defenx was one of only a  
few to respond to their tender for a multi-OS  
aware solution.
Following 12 months’ development, the consumer solution was 
launched in 2014 followed by the enterprise solution in 2015.
Solving challenges
getting results
3Italia
During 2015 we became 3Italia’s anti-malware 
provider. Providing Defenx Mobile Security to 
their mobile customers will increase their ARPU. 
Since we share revenue with them month-in, 
month-out they also benefit from increased 
margins in an increasingly competitive market.
We have integrated with their systems allowing their 
customers to be billed monthly; something other providers 
are often reluctant to do. 3Italia sends text messages and 
emails promoting Defenx Mobile Security, which is sold 
online and in their 3Store retail outlets.
Memopal strategic partnership
In January 2016, we announced the strategic 
partnership with Memopal Srl. The partnership 
demonstrates our ability, through our channel 
partners, to distribute complementary security 
solutions to end-users.
Memopal, based on the Pi Campus in Rome (www.picampus.it), 
developed its own software for Cloud storage and sync. 
Memopal provides users with backup, file synchronisation and 
sharing for an annual fee as well as licensing its technology to 
corporate users and channel partners who operate their own 
Cloud storage facilities.
Since March 2016, our product range has included a Defenx-
branded Cloud backup solution sold on a revenue sharing basis 
with Memopal. Defenx PLC
Strategic Report Governance Financial Statements
Annual Report 2015 15
Sales Resource Management (SRM) system 
We launched the SRM system, a proprietary Cloud-based 
licence sales and tracking tool for distributors and their 
resellers, in late 2014. It offers significant benefits to both 
Defenx and its distributors:
• Distributors have an easy to use inventory management 
platform to purchase licences, monitor their sales and  
track end-user licence activation on a 24/7 basis. Licence 
activation data allows distributors to anticipate licence 
expiry, make contact with customers and generate  
renewal revenue.
• Defenx can monitor distributor activity and licence sales  
in real-time on an individual, but also aggregated basis.  
As the use of the SRM system increases, this data will 
provide valuable insight in customer demand, licence usage 
and renewal activity by product, channel and geography.
As at the end of 2015, the SRM system was used by 
four distributors who, in turn, manage 120 resellers. 
Distributor feedback has been extremely positive and 
we expect the SRM system to help attract and retain 
distribution channel partners. Defenx’s additional sales 
and marketing overhead for a new distributor using the 
SRM system is far lower than managing the customer 
relationship by phone and email.
Mobile device insurer
Our largest customer in 2015, an insurer of mobile 
devices, bundles Defenx Security Suite with its 
mobile device insurance.
In response to an increasingly commoditised insurance market 
they sought means to generate sales and improve margins. 
Bundling physical and digital security was the solution. In the 
first year, our share of revenue was over €1 million. Defenx PLC Annual Report 2015 16
Chief Executive Officer’s review
Tran sform ation
development
Dear shareholder
A year of transformation 
2015 was a transformative year in the development of Defenx.
We successfully joined AIM, the junior market of the London 
Stock Exchange, on 3 December after a year of hard work.  
I am pleased that the shareholders who invested in our 
private placing during 2014 have seen this next stage of 
development and an uplift in the value of their investment.  
I hope they and our IPO investors will continue to support us 
on our journey.
The IPO is also important for the Group as not only does it 
give us access to equity capital markets as we seek to grow 
the business, but it has also resulted in enhanced governance 
and improved disciplines which we implemented in 
preparation for our IPO. 
You have already heard from our Chairman on the 
appointments to the Board. We have also improved our 
infrastructure across the organisation by formalising 
employment contracts, introducing new remuneration 
structures aligned with our strategy and implementing 
cloud-based systems that facilitate the production of, and 
access, to sales and financial information and reports.
Delivering the strategy
Defenx’s strategy can be framed simply as technology 
marketing: we know how to develop security software  
and market solutions to meet the needs of end-users.
During the year we successfully launched Defenx Mobile Security 
Suite for iOS, the Enterprise NAS software for our storage partner, 
Seagate, and completed the systems integration with 3Italia 
enabling them to bill customers on a monthly basis from their 
webstore and over 3,000 outlets across Italy.
At the start of 2015, two new channel partners joined us.  
I am pleased to report that they both exceeded the annual 
sales targets set at the outset. We also implemented new 
agreements with channel partners under which Defenx 
provides a contribution towards their marketing activities, 
payable in arrears, but only if they achieve the pre-agreed  
sales targets. We expect this to increase the effectiveness  
of marketing activities undertaken by our channel partners  
and to improve our working capital position.
By 31 December 2015, agreements have been signed with 
seven major distributors who, in turn, have access to hundreds 
of resellers across Europe, the Middle East and Africa. In 2016, 
we intend to further Defenx’s marketing efforts across Africa, 
Asia and Latin America. Defenx PLC
Strategic Report Governance Financial Statements
Annual Report 2015 17
Our in-house Sales Resource Management (SRM) system allows 
our partners to save time and costs, so they can easily manage 
licence inventory and reordering. The SRM control panel allows 
resellers to see when their customers are ready for renewal and 
plan marketing campaigns to renew or up-sell. The SRM can be 
accessed online 24 hours a day, seven days a week, 365 days  
a year. 
Product development
Using the proceeds of the private placing from 2014, we were 
able to continue the development of our software. Immediately 
following the IPO, our software developers started work on a range 
of upgrades and new products at an expected cost of around  
€2 million. In April 2016, we announced the launch of Defenx 
Mobile Security Suite for Windows 10 and Defenx Cloud Backup.
Defenx Mobile Security Suite for Windows 10 Phone was the 
first major product release since the IPO and delivers on the 
commitment made at the time to complete the development of 
full Windows 10 and PC compatibility. Defenx Mobile Security 
Suite, already available for Android and iOS, now runs on over 
90% of smartphone platforms.
Defenx Cloud Backup significantly expands our product 
portfolio. It offers online backup, synchronisation and sharing 
of files across multiple mobile and desktop devices. The suite 
of features, such as online-only access to free up memory/disk 
space, unlimited version history and selective backup, is 
commonly not available with other products. Defenx Cloud 
Backup is available in 16 different languages.
New feature and upgrade work continues for Android and iOS 
along with the development of Defenx Privacy Advisor and 
mobile device management solutions for families and SMEs to 
broaden the Defenx product offering further.
Financial
I am pleased that despite the pressures of the IPO, we were  
able to grow revenue during 2015 to €4.5 million, an 88% 
year-on-year increase on 2014. We also maintained our record of 
profitable growth since 2012. We report in detail on the financial 
performance of Defenx during 2015 on pages 18 to 20.
We continue to operate a lean team, believing that a broader 
range of expertise can be mobilised more rapidly and cost 
effectively on an outsourced basis. In addition to the three 
Executive Directors, there have been on average three senior 
staff working from our Swiss office. Other sales, marketing, 
development and finance resources have been engaged as 
needed on an outsourced basis.
Corporate and social responsibility
Our software is optimised for mobile devices running on 
battery power. We seek to maximise its efficiency by reducing 
the impact on processing capacity and memory. Our products 
therefore have lower power consumption reducing the 
frequency of battery recharging: a small, but scalable 
contribution to the environment.
In common with many businesses, our greatest impact on the 
environment comes from travel, notably air travel. We seek to 
use modern communications to limit air travel as far as possible. 
Current trading and outlook
Trading in the first quarter is in line with expectations. Our 
focus continues to be delivery of new and updated products to 
drive sales growth through existing and new channel partners.
In light of the modest funds raised at IPO, senior management 
including the Executive Directors, agreed to a one third 
reduction of their contractual salary entitlements for 2016,  
a saving of around €200,000.
Since the beginning of the year, we have engaged additional 
sales resources based in the UK, agreed revised terms with  
our development partner in Romania and signed sales and 
distribution contracts with Brigantia (UK), Metrological 
(Netherlands) and Memopal (Italy).
We actively continue to seek new channel partners across 
Europe, the Middle East and Africa. A number of negotiations 
are at an advanced stage and I hope to be able to announce 
further progress soon. Longer term, we continue to engage 
with potential partners in Asia and Latin America and hope to 
broaden our geographic footprint during 2016.
I continue to believe that with our B2B2C strategy described 
above, increasingly coming into shape, Defenx is well-
positioned to deliver value to shareholders in the year ahead.
The Strategic Report, which includes the Chief Executive 
Officer’s Review, was approved by the Board of Directors  
and signed on its behalf.
Andrea Stecconi
Chief Executive Officer
18 April 2016 Defenx PLC Annual Report 2015 18
Highlights
• Group revenues grew 88% to €4.49 million  
(2014: €2.38 million) with mobile revenues accounting 
for around 70% of our business
• Gross profit margins increased to 88.6% (2014: 85.4%)
• Operating profit before exceptional costs rose 22% to 
€979,000 (2014: €805,000)
• Defenx closed the year with a significantly stronger 
balance sheet – total equity increased to €5.81 million 
(2014: €2.05 million) representing a net asset value 
per share of €1.28 (2014: €0.64)
• Year end cash balances stood at €1.33 million  
(2014: €206,000)
• Earnings per share (EPS) for the year was 4.2¢  
(2014: 16.7¢) undiluted and 3.9¢ (2014: 15.9¢) diluted
Revenues
Group revenues grew 88% to €4.49 million (2014: €2.38 million) 
driven primarily by new channel partner wins at the start of 
2015. Mobile revenues continued to account for around 70% 
of our business with the balance from PC and Server segments. 
Although we see the focus on mobile device protection 
continuing, we are beginning to see the sale of software 
bundles – providing protection for Mobile, PC and, in due course, 
Server segments – increasing in popularity.
Margins
Gross profit margins increased to 88.6% (2014: 85.4%) due 
to sales growth exceeding the rise in amortisation charges to 
€477,000 (2014: €160,000) following the launch of Defenx 
Mobile Security Suite for iOS and a full year’s amortisation 
of our NAS software. Cost of sales also includes sales 
commissions expensed customer integration and software 
maintenance costs.
Financial Review
Growth
opportunity Defenx PLC
Strategic Report Governance Financial Statements
Annual Report 2015 19
With the introduction of Defenx Cloud Backup in March 2016, 
for which there are additional storage, connectivity and labour 
costs of sales, we anticipate gross margins will fall modestly 
during 2016 dependent on the mix of security software licence 
and Cloud backup service sales.
The operating profit margin (before exceptional costs) of 
21.8% (2014: 33.8%) reflects the step change in the Group’s 
cost base this year creating the platform for growth we 
now have. Being largely fixed costs, we anticipate operating 
margins improving during 2016.
Expenses
Marketing contributions and staff costs account for  
the majority of the Group’s ongoing operating expenses.
Marketing contributions towards developing the Defenx  
brand, which are typically paid to channel partners only upon 
the achievement of pre-agreed sales targets, increased to  
€1.45 million (2014: €0.74 million) a modest rise to 32.3% 
(2014: 31.2%) as a proportion of sales.
Staff costs increased to €691,000 (2014: €114,000) with the 
three additions to the Board and alignment of remuneration 
to market rates. We continue to engage most sales and 
development resources as contractors at an additional cost 
during the year of €114,000 (2014: €130,000) excluding 
software development costs that have been capitalised.
The Group aims to incentivise and retain key staff through the 
use of share options and implemented share option schemes 
during the year. The Group incurred a share-based payment 
charge of €60,343 (2014: €nil) in respect of the 465,625 share 
options granted to Directors and staff and 60,989 warrants 
granted at IPO.
Other administrative expenses increased to €692,000  
(2014: €327,000).
Key Performance Indicators
The Group reports the following key performance 
indicators as part of its monthly Board reporting:
Active users
Revenue  € millions
2013 295,906
500,082
936,913
2014
2015
2013 €2.08
€2.38
€4.49
2014
2015 +88.5%
+14.7%
 +133%
This is what the Board has always focused on. It represents the 
number of licences that are active at a point in time, being the 
number of end-users protected by Defenx software.
Non-financial
Financial
Revenue and revenue growth provides the evidence that our 
software is purchased and used.
Gross profit margin
2013 75.0%
85.4%
88.6%
2014
2015
Gross profit reflects revenues less direct costs of sales and the 
amortisation of capitalised software costs. The Board believes 
the gross margins trends indicate the Group’s ability to grow 
revenues to match the full cost of developing and maintaining 
its software portfolio. 
Operating profit margin
2013 19.8%
33.8%
21.8%
2014
2015
The Board targets growth in operating margins to ensure sales,  
marketing and administrative costs are controlled and to drive  
efficiency in the Group’s operations. Defenx PLC Annual Report 2015 20
Financial review continued
Net current assets increased to €3.21 million (2014: €326,000) 
including year end trade receivables of €2.83 million 
(2014: €1.02 million) and cash balances of €1.33 million 
(2014: €206,000). Credit risk is managed by regular review 
of outstanding and overdue balances and dialogue with 
customers. Collections since the year end so far exceed the 
amounts agreed with customers and represent a reduction in 
receivables as a proportion of sales. The provision for bad debts 
fell to €270,000 (2014: €417,000). 
Cash deposits are held in Euro, Sterling, Swiss Francs and US 
Dollars and placed on deposit in the UK and Switzerland. Cash 
forecasts are updated monthly to ensure that sufficient cash is 
available for foreseeable requirements. The Group had no debt 
at 31 December 2015.
The deferred revenue provision increased to €315,000 
(2014: €145,000) representing the proportion of 2015 sales 
attributable to the provision of virus definition updates and 
support over the licence period outstanding at the year end.
Defenx closed the year with a significantly stronger balance 
sheet. Total equity attributable to equity holders increased to 
€5.81 million (2014: €2.05 million) representing a net asset 
value per share of €1.28 (2014: €0.64).
EPS and dividends
The earnings per share (EPS) for the year was 4.2¢  
(2014: 16.7¢) undiluted and 3.9¢ (2014: 15.9¢) diluted. 
At this stage in the Group’s development, we intend to  
reinvest profits in future growth. The Board will review the 
dividend policy in light of the Group’s funding requirements 
each year. The medium-term intention is to become a dividend 
paying business.
The Group is in a strong financial position to continue to grow 
and exploit many exciting opportunities ahead.
Philipp Prince
Chief Financial Officer
18 April 2016
Profitability
Operating profit before exceptional costs rose 22% to 
€979,000 (2014: €805,000). Exceptional IPO costs of 
€614,000 and net interest expenses resulted in profit  
before tax of €362,000 (2014: €761,000).
With the transition to the Euro as the Group’s functional 
currency on 1 January 2015, reflecting the currency in which 
the majority of the Group’s business is transacted, there are  
no longer any exchange differences on consolidation.
Taxation
The Group’s effective tax rate for the year was 64.6%  
(2014: 26.9%) reflecting the loss incurred by Defenx PLC itself. 
Although we expect to be able to utilise the carried forward UK 
tax losses, there is insufficient certainty to justify recording a 
deferred tax asset on the balance sheet. We keep the Group’s 
operations under review to ensure taxes are paid that fairly 
reflect activities in the UK and Switzerland.
Cash flow 
The net cash outflow from operating activities was  
€1.92 million (2014: €534,000) reflecting an increase in net 
trade receivables to €2.17 million (2014: €561,000) and the 
one-off payment of IPO related fees in December. We continue 
to work with our channel partners to accelerate the receipt of 
debtors, although extended terms are common in Southern 
Europe, the Middle East and Africa.
The cash outflow from investing activities reflects continued 
investment in our software assets. During the year,  
capitalised software development costs were €1.35 million 
(2014: €1.21 million).
The net cash inflow from financing activities reflects the  
€2.78 million net proceeds of the IPO received in December 
2015 and the final closings from the 2014 private placing  
of €735,000.
Balance sheet
The net book value of capitalised development costs increased 
to €2.61 million (2014: €1.72 million) reflecting the completion 
of work on Defenx Mobile Security of iOS, our Enterprise NAS 
product and the integration work with a number of channel 
partners’ systems. Having assessed the sales prospects for our 
software products, the Board is satisfied that carrying value of 
these intangible assets is appropriate. Defenx PLC
Strategic Report Governance Financial Statements
Annual Report 2015 21
The Board is responsible for developing a comprehensive risk framework and a system of internal controls. The principal risks and 
uncertainties presented below are those considered by the Board to have a potentially material impact on the Group’s ability to 
achieve its key objectives. They do not include all the risks associated with the Group’s activities. 
Risk description Mitigation
Technology
The industry in which Defenx operates is in the process of  
continual change reflecting technical developments as industry  
and government standards and practices change and emerge.
Developing new technologies entails technical and business risks 
and may require substantial continuing investment. Ineffective 
development or procurement or significant delays may place the 
Group at a competitive disadvantage and adversely affect the 
Group’s prospects.
New products and features are carefully assessed against their 
target markets and in response to channel partner feedback prior 
to development.
Defenx works with expert development partners who have a track 
record of producing high quality software quickly and at highly 
competitive costs.
Competition
The markets in which Defenx operates are competitive and  
rapidly evolving. The Group’s existing products may become  
less competitive or even obsolete as competitors introduce  
new products and customer behaviour changes.
Certain of the Group’s competitors have greater scale with 
significant financial, technical, sales and marketing resource  
and may therefore be better able to generate sales.
Defenx’s products have been optimised for mobile devices,  
the fastest growing product category, which the Board believes 
reduces the likelihood of obsolescence.
The Board further believes that our B2B2C strategy is more efficient 
with lower customer acquisition costs and higher average revenues 
per user (ARPU). This efficiency, which is expected to increase with 
scale, will become a competitive advantage for Defenx.
Retention of channel partners
Our B2B2C strategy relies on the attraction and retention  
of channel partners. These relationships are fundamental  
to achievement of our business objectives. If we do not  
retain channel partners whether by reason of competition, 
mismanagement or other cause, the Group’s financial  
performance could be significantly adversely impacted.
Defenx seeks to attract and retain high quality channel partners by:
• offering a growing range of security products and solutions 
that meet the needs of end-users
• providing tools to help partners manage renewals and generate 
recurring revenues rather than disintermediating them by 
selling direct to end-users
• pricing our products competitively and sharing revenues to give 
partners fair margins
Recruitment and retention of staff
The success of Defenx depends upon high quality staff with the 
relevant expertise and experience to broaden and sell the Group’s 
products and solutions. Failure to retain these staff and attract  
and retain other high calibre individuals may adversely affect the 
Group’s performance and profitability.
The Board believes that the Group’s focus on the fast growing 
mobile security market, its recent IPO and strong leadership offers 
a compelling and refreshing employment proposition.
Operations overseas
A rising proportion of Defenx’s revenues are generated outside the 
European Union. The Group may be adversely affected by changes  
in local and regional economic, political and social conditions  
such as changes in law and regulation, taxation and currency 
restrictions. In addition, fluctuating exchange rates and the costs 
of conversion and exchange controls may have an unfavourable 
impact on profitability, particularly when reported in Sterling.
By working with channel partners, Defenx leverages their 
expertise of overseas markets to trade more effectively than by 
operating directly in such markets.
The Group incurs the majority of its costs and generates most of 
its revenues in Euros. This natural hedging reduces the impact of 
fluctuations in foreign currencies.
Working capital and funding
The Group has many investment choices in its fast growing 
markets. Growing sales, particularly in new and emerging markets, 
and new product development requires time and working capital. 
Poor investment choices may result in weaker or no sales growth, 
products with limited market potential and limited funding 
constraining our ability to grow.
The Group is profitable and invests its positive operating cash 
flows in sales, marketing and software development. It does not 
need to fund trading losses.
All software development and material sales generation activity, 
for example into new territories, are assessed and prioritised by 
market potential and risk.
Principal risks and uncertainties Defenx PLC
Anthony Reeves
Chairman 
Anthony is an experienced public 
company chairman and director, having 
until recently been chairman of Kellan 
Group plc, the AIM listed recruitment 
business. He remains chairman of 
CloudTag Inc, an AIM listed company 
which develops wearable devices for 
sports and personal monitoring. Anthony 
spent some 45 years in the recruitment 
sector; in addition to his time at Kellan, 
he was also chair and CEO at both 
hotgroup plc and at Delphi Group (before 
it was acquired by Adecco) and Lifetime 
Corporation, then a public company listed 
on the New York Stock Exchange. With 
his many years of board experience, 
Anthony ensures that appropriate issues 
are discussed and debated objectively, 
whilst providing a constructive challenge 
to the executive team.
Andrea Stecconi
Chief Executive Officer 
Andrea founded Defenx in 2009, 
following over 20 years in retail and 
software distribution. This included 10 
years as chief executive at Exa Media 
spa, a media software developer based 
in Italy where he successfully developed 
the distribution network including the 
introduction of Kaspersky PC security 
software. Previously he had been chief 
executive of Best Computer srl, an 
Italian-based PC and electronics chain, 
where he was responsible for market 
facing and operational aspects of the 
company. Andrea brings extensive 
marketing and channel development 
skills to the Group’s operations and 
provides strategic direction with a 
particular focus on lead generation and 
customer engagement.
Guido Branca
Chief Operating Officer  
Guido is a technology manager with over 
25 years’ experience in IT and systems 
implementation working with many IT, 
telecom and software companies. He 
has worked with technology start-ups in 
the USA, India, Russia, Western Europe, 
the Nordics and Israel. Prior to joining 
the Company, he was managing director 
at Charles Street Securities Europe LLP 
where he supervised portfolio 
investment and originated technology 
transactions. Guido leads on UK and 
Western European sales and the related 
operations to ensure profitable delivery 
of our solutions.
Board of
Directors
Annual Report 2015 22 Defenx PLC
Strategic Report Governance Financial Statements
Philipp Prince
Chief Financial Officer 
Philipp has over 20 years’ experience as  
a chartered accountant, having qualified 
with Stoy Hayward (now BDO LLP) in 
1995. He spent 16 years in corporate 
finance, becoming a partner in 2002, 
during which time he led over 50 capital 
market transactions, which raised  
in aggregate approximately £4 billion.  
Prior to joining the Company Philipp  
was CFO at Enecsys, a Silicon Valley  
based business. As CFO, Philipp brings  
a wealth of experience in financial 
management, reporting, governance  
and investor perspectives.
Leonard Seelig
Non-executive Director  
Leonard is an experienced company 
director. After a successful career in 
finance over 25 years which included 
senior roles in the US and Europe with 
American banks, he is now involved  
both at an operating and board level  
in a number of companies including  
an anaerobic digestion operating and 
development company, a European 
on-shore wind developer and a solar 
energy development finance company 
active in Europe, North America and 
emerging markets. He is currently non-
executive chair of an AIM listed technology 
company. Leonard provides a commercial 
and financial perspective to the decisions 
facing the Board.
Annual Report 2015 23 Defenx PLC
Dear shareholder
In this short period since Defenx joined AIM, our focus as a Board 
has been to establish the framework of governance. As an AIM 
company we are not required to comply with the UK Governance 
code (UK Code). We are, however, committed to following the 
principles set out in the Quoted Companies Alliance Corporate 
Governance Code (QCA Code), widely accepted as being the 
industry standard for growing companies to which the UK Code 
does not apply, together with the provisions of the Corporate 
Governance Code, to the extent we consider them appropriate 
having regard to the current size and stage of development of  
the Company.
The IPO was the catalyst for Defenx to establish good 
governance arrangements which will form the foundation for 
the future. Having joined the Board in preparation for IPO, the 
Non-executive Directors, being Leonard Seelig and myself, 
established two committees, namely Audit and Remuneration, 
with clearly defined responsibilities in their terms of reference. 
Summaries are available on the Company’s website at 
www.defenx.com/company/investors.
We believe we have established a Board with a range of 
backgrounds that provide the right mix of sector specific and 
corporate knowledge and experience.
The reports from the Committee chairmen are set out on pages 
26 to 30 and you will hear from them how Defenx is developing 
its governance framework. We see the evolution of good 
governance going hand in hand with the evolution of the 
Group. We believe that high standards of governance will make 
an important contribution to shareholder value in the future.
Future plans
We do not currently anticipate any succession issues  
but recognise that it may be necessary to recruit either 
replacement or additional Directors and senior management. 
We will therefore consider the need to create a Nominations 
Committee to consider the suitability of any proposed Directors 
and make recommendations to the Board.
Anthony Reeves
Chairman 
18 April 2016
The Board comprises a balanced mix of executives and 
non-executives with a combination of relevant skills and 
experience, designed to ensure there is effective leadership of 
the Group. Directors’ biographies appear on page 22 and 23.
Both Non-executive Directors are considered by the Board to 
be independent, Anthony Reeves having fulfilled the test of 
independence on his appointment. In determining that the two 
non-executives are independent the Board considered the 
individual’s interests in the Company’s shares and the share 
options granted to them. The Board determined that these 
interests aligned the Directors’ interests with those of the 
Group and bearing in mind the small percentages held, that the 
non-executives remained independent. 
Between IPO and the financial year end there was one Board 
meeting. Since the year-end and prior to the approval of the 
Annual Report, four regular Board meetings have been held 
which were attended by all the Directors.
The Board is responsible for setting strategy, performance and for 
the stewardship of the Group, within the framework of effective 
controls which enable risk to be assessed and managed. 
Importance is placed on maintaining a robust control environment.
Anthony Reeves is responsible for the leadership of the Board, 
ensuring its effective operation and setting the agenda. 
Andrea Stecconi as Chief Executive Officer is responsible for 
day-to-day operations. The Directors have access to the 
services of a Company Secretary through Equiniti David Venus 
Limited who provides advice on company legal and corporate 
governance matters. In addition, the Directors are able to take 
independent legal advice at the Company’s cost if so required.
Board performance evaluation
The Board is committed to undertaking reviews of Board and 
committee performance and of individual Board members every 
year and the first review, which will include the identification 
of any training needs for the Board, will be conducted within 
12 months of the IPO.
Chairman’s statement on governance The Board
Annual Report 2015 24 Defenx PLC
Strategic Report Governance Financial Statements
Risk management and internal control
The Board is responsible for determining the nature and extent 
of major risks which face the Group and for establishing and 
maintaining a risk management framework and system of 
internal financial controls. A summary of the principal risks 
identified by the Group and how these are mitigated is set out 
on pages page 21. The key elements of the Group’s risk 
framework and internal control systems are:
• A schedule of matters reserved for decision by the Board
• Defined responsibilities and authority limits
• Close involvement of the Executive Directors and other 
members of senior management in day-to-day operations
• Monthly management reporting
• Comprehensive annual budgeting process and monitoring of 
performance against budget
The Board discusses all business matters having regard to the 
risk for the Group and to the extent that risks inherent in a 
particular activity are considered significant, appropriate action 
is taken and steps taken to mitigate the issue.
Going concern
The Directors are satisfied that the Group has adequate 
resources to continue in operational existence for the 
foreseeable future and, accordingly, continue to adopt the 
going concern basis in preparing the Group and Company 
financial statements.
Relations with shareholders
The Directors are committed to regular engagement with 
existing shareholders and prospective investors and will make 
themselves available to meet existing and potential investors 
in London during the weeks in which Board meetings are held. 
In accordance with good governance, the Company has entered 
into a relationship agreement with its major shareholder, who  
is also our Chief Executive Officer, designed to ensure the 
independent operation of the Group without undue influence, 
requiring that all transactions between Andrea Stecconi and his 
associates to be conducted at arm’s length and on normal 
commercial terms. He may also not vote on transactions 
involving himself and his associates. Andrea Stecconi has 
undertaken to the Company and to Strand Hanson, the 
Company’s Nominated Adviser, to procure that there will be at 
least two independent Directors on the Board and the Board 
committees will comprise a majority of independent Directors. 
The agreement requires amongst other things that the 
approval of Strand Hanson is required before additional 
Directors are appointed.
The Directors, Angelo Motti, Mauro Celentano and Marco 
Moschetta, who in aggregate hold 2,344,054 (38.4% of the) 
Ordinary Shares, agreed not sell or otherwise dispose of any of 
their shares, subject to certain limited exceptions, during the 
12 months to 2 December 2016. Normal orderly market 
provisions apply for a further 12 months. 
In addition, Charles Street Securities Europe LLP, CSS Capital 
Managers LLP and certain principals, related or associated 
entities, who in aggregate hold 225,022 (3.7%) Ordinary 
Shares, agreed not sell or otherwise dispose of any of their 
shares, subject to certain limited exceptions, during the 
six months to 2 May 2016. Normal orderly market provisions 
apply for a further six months. CSS Alpha Fund Limited agreed 
to normal orderly market provisions until 2 May 2016 in respect 
of its holding of 89,532 (1.5%) Ordinary Share.
Website
Our corporate website at www.defenx.com/company/investors 
and relevant social media platforms provide access to Company 
information, public announcements, published financial reports 
and contact details.
AGM
The forthcoming AGM will be the first opportunity to meet with 
the shareholder body as a group and the Chairman and other 
Directors will be available to meet shareholders and to answer 
any questions. 
Annual Report 2015 25 Defenx PLC
Dear shareholder
This is the first report of the Audit Committee following 
admission to AIM.
The Committee is responsible for reviewing and reporting to the 
Board on financial reporting, internal control and risk management, 
and for reviewing the performance, independence and 
effectiveness of the external auditors in carrying out the 
statutory audit. The Committee advises the Board on the 
statement by the Directors that the Annual Report, when read as 
a whole is fair, balanced and understandable and provides the 
information necessary for shareholders to assess the Group’s 
performance, business model and strategy.
In the short period since IPO, our primary focus as a Committee 
has been to plan for and monitor the integrity of the annual 
financial statements and the audit thereof.
In the coming year, in addition to our ongoing duties we will be:
• Undertaking a comprehensive review of ongoing audit and 
tax services.
• Considering the impact on the Group of the introduction of 
International Financial Reporting Standard (IFRS) 15 
‘Revenue from Contracts with Customers’.
• Keeping the need for an internal audit function under review, 
having regard to the Company’s strategy and resources.
Leonard Seelig
Chairman of the Audit Committee
8 April 2016
Audit committee report
Committee members and attendance
The Audit Committee comprises Anthony Reeves and Leonard 
Seelig who chairs the Committee. In the period since IPO the 
Committee has met twice and both members of the Committee 
attended on each occasion. In addition Philipp Prince, the 
Finance Director, attended by invitation as did representatives 
of haysmacintyre, the Company and Group’s auditors.
The Board considers that Leonard Seelig has sufficient relevant 
financial experience to chair the Audit Committee given his 
25-year career in banking and finance.
Key activities from IPO to the issue of the Annual Report
• Planned for the financial year-end and reviewed the audit plan
• Assessed the key risks which have a material impact on the 
financial statements.
• Considered the independence and objectivity of the 
auditors.
• Reviewed significant issues and areas of judgement with the 
potential to have a material impact on the financial statements, 
making specific recommendations to the Board thereon.
• Reviewed and monitored the integrity of the published 
financial information including the preliminary 
announcement and the Annual Report.
Financial reporting and signiﬁcant ﬁnancial judgements
At the first meeting with haysmacintyre the Committee 
discussed the nature and scope of the audit; the audit approach; 
the major risks likely to be encountered; the audit evidence that 
would be available in relation to key risks and the key accounting 
policies to ensure that these remained appropriate.
At its second meeting, the Committee discussed how the risk 
areas previously identified had been dealt with and how 
judgements or uncertainties underlying the financial 
statements had been resolved.
Revenue recognition
The Committee discussed business developments in the sector, 
in particular the increasing frequency with which the Group’s 
channel partners adopt a ‘bundling’ strategy for selling 
software which gives rise to licences sold by Defenx not 
necessarily being activated. The Committee was satisfied that 
the consequential judgement taken on licences sold and not 
activated and therefore the timing of release of deferred 
revenue in the accounts was appropriate. The Committee also 
took into account an initial appraisal that the impact of 
adopting IFRS 15 in subsequent years would not make a 
material change to the Group’s revenue recognition policy.
Annual Report 2015 26 Defenx PLC
Strategic Report Governance Financial Statements
Recoverability of debtors
The Committee reviewed the track record of payments and 
after-date recoveries from slow-paying debtors. In the light of 
this evidence and having regard to the payment profile being 
considered typical for the sector and the relevant geographical 
regions, the Committee was satisfied that trade receivables 
were fairly stated.
Share-based payments
The Committee discussed the assumptions which should be 
adopted in accounting for share-based payments and recognising 
that these involve a certain amount of judgement complexity, 
concluded that in the absence of a track record of exercising 
options, the assumption that an effective life-span of five years, 
compared with an option period of up to 10 years, was not an 
unreasonable assumption. Further details of the assumptions 
made are contained in note 18 to the financial statements.
Going concern 
The Committee reviewed the cash flow forecasts for the Group 
and discussed the key assumptions and risks relevant to their 
achievement. The Committee was satisfied that the basis for 
adopting the going concern basis in preparing the Group and 
Company financial statements, set out in note 1 on page 39, 
was reasonable.
Valuation of intangible assets
The Board considered the intangible value attributed to the 
mobile segment and was satisfied that the anticipated level of 
future revenues is sufficient to support the carrying value. The 
Committee reviewed the carrying value of the Network Attached 
Storage (NAS) product in conjunction with recent customer 
interest and pipeline activity and concluded that the carrying 
value of the asset was supported by potential future cash flows. 
The auditors concurred with the Committee’s conclusions.
Risk review process
The Audit Committee is responsible for reviewing the financial 
risks and the internal controls relating thereto but the Board as 
a whole has responsibility for reviewing the overall business 
risks and risk management framework. The Group’s principal 
risks and uncertainties are set out in the Strategic Report 
together with mitigating actions and the internal controls and 
risk management procedures are summarised in the Corporate 
Governance Report.
External auditor
The Committee reviewed the effectiveness of the audit carried 
out at the time of the AIM IPO and has undertaken a further 
such review immediately prior to publishing this report. In doing 
so, members of the Committee spoke to the Chief Financial 
Officer, Chief Executive Officer and members of senior 
management. The Committee continues to be satisfied that 
the auditors are delivering the necessary scrupulousness and 
robust challenge in their work. In keeping with good 
governance, the Committee will be undertaking a 
comprehensive review of ongoing audit services before the end 
of the calendar year which will include both technical aspects 
and delivery of service.
External audit and non-audit services
haysmacintyre acted as reporting accountant on the Company’s 
IPO and has also provided tax advisory services. An analysis of 
the audit and non-audit fees is provided in note 6 to the 
financial statements. The Audit Committee considered the 
independence and objectivity of haysmacintyre in carrying out 
both tax and audit services together with the reporting 
accountant work on the IPO. The Committee was satisfied with 
the written assurances received that the work undertaken 
haysmacintyre did not pose a threat to their objectivity 
and independence.
Annual Report 2015 27 Defenx PLC
Remuneration report
Dear shareholder
Following the Company’s admission to AIM on 3 December 2015, the Remuneration Committee assumed responsibility for 
determining the remuneration policy for the Executive Directors and other members of senior management and for overseeing  
the Company’s share plans. The Board as a whole are responsible for determining Non-executive Directors’ remuneration.
As an AIM company, we are not required to publish a Remuneration Report and so the report that follows is disclosed voluntarily 
and has not been subject to audit.
In the short period since admission, the Committee has had one meeting and so the primary purpose of this report is to  
provide you with further information on the role of the Committee going forward and to disclose the current remuneration  
of the Directors.
During the current financial year, we have reviewed the bonus arrangements payable to our Executive Directors on admission to 
AIM and the Board acted on our recommendations. Since the year end we have also reviewed Executive Directors’ salaries and 
increased the performance-related bonus component without altering the overall maximum total package.
In the coming months, we will be undertaking a review of future remuneration policy, including the potential introduction of a 
Long Term Incentive Plan and a comprehensive benefits package designed to facilitate retention and recruitment of high calibre 
members of staff.
Anthony Reeves 
Chairman of the Remuneration Committee
18 April 2016
Remuneration Committee and attendance at meetings
The members of the Committee are Anthony Reeves (Chairman) and Leonard Seelig. One meeting has been held since admission 
to AIM and both the members of the Committee attended that meeting. Andrea Stecconi was in attendance for the relevant part 
of the meeting but this did not include that part of the meeting where his own remuneration was discussed.
Remuneration policy for Executive Directors
The aim of the remuneration policy is to attract, retain and motivate high calibre senior executives.
The Executive Directors’ salaries were reviewed following admission to AIM. In setting salaries, the Committee takes into account 
individual performance and experience and the relative performance of the Company.
The Committee accepted the Chief Executive Officer’s proposal to vary the service agreements such that one third of the 
Executive Directors’ salaries, £120,000 in aggregate, is payable as a bonus. The bonus starts to become payable when profit 
before tax exceeds 90% of the 2016 budget with the full bonus entitlement being payable if profit before tax exceeds budget by 
approximately €250,000.
The Executive Directors’ service agreements are as follows:
With Defenx PLC With Defenx SA Group total
Date of service 
agreement Current salary
1
Date of contract Current salary
1
 
Andrea Stecconi 21 July 2015 £10,000 1 July 2015 £80,000 £90,000
Guido Branca 21 July 2015 £70,000 - - £70,000
Philipp Prince 21 July 2015 £80,000 - - £80,000
1 Amount denominated in Sterling or Swiss Francs; the amount included in the financial statements will be subject to currency fluctuation. 
Annual Report 2015 28 Defenx PLC
Strategic Report Governance Financial Statements
Andrea Stecconi’s service agreement is subject to termination by either party on six months’ notice while the agreements for 
Guido Branca and Philipp Prince specify three months by either party.
Prior to admission to AIM annual salaries were £20,000 from the Company plus CHF 60,000 from the Subsidiary for Andrea 
Stecconi and £60,000 from the Company for each of Guido Branca and Philipp Prince.
Bonus for the year ended 31 December 2015
Andrea Stecconi and Guido Branca were paid bonuses of €57,077 (£41,250) and €38,748 (£27,500), being 75% and 50% of the 
respective entitlements specified in their service agreements following admission to AIM. This variation was approved by the 
Board having regard to the funds raised from the placing and subscription of the Company’s shares upon admission. Philipp Prince 
received a bonus of €35,225 (£25,000), of which €31,280 (£22,200) was re-invested in shares at the time of admission. 
Beneﬁts and allowances
Both Guido Branca and Philipp Prince are entitled to an office allowance of £4,500 per annum in the period prior to the Company 
opening a London-based head office in May 2016.
Remuneration policy for Non-executive Directors
The Chairman and Non-executive Director provide their services under letters of appointment. The appointments are terminable 
on three months’ notice by either party.
The current annual fees together with the dates of the letters of appointment are:
Date of letter Current fee
Anthony Reeves 7 October 2015 £24,000
Leonard Seelig 7 October 2015 £24,000
On admission to AIM, Anthony Reeves and Leonard Seelig received additional fees in connection with the IPO of £19,500 and 
£16,000 respectively.
Terms of office for Executive and Non-executive Directors
In accordance with the Articles of Association, a third of the Directors must retire from office, by rotation, at the AGM and may be 
reappointed. Accordingly Messrs Reeves, Prince and Seelig will retire at the AGM and offer themselves for reappointment.
Long term incentives for Executive and Non-executive Directors
EMI Option Scheme
The Company established an EMI Option Scheme to provide incentives to employees, including Directors, to achieve the longer-term 
objectives of the Group, to give suitable recognition to the ability and industry of the individuals concerned and to attract and retain 
suitably experienced and able people, by providing them with the opportunity to acquire ownership interests in the Company.
The vesting of the existing options is not conditional on performance conditions; the only vesting condition being that the 
individual remains an employee of the Group.
The following share option awards were granted to Executive Directors under the EMI Option Scheme:
Date of grant
Number of 
shares Exercise price Vesting period Expiry date
Guido Branca 22 July 2015 83,000 £0.80 37,000 on grant;  
balance over following 20 months from grant
22 July 2025
Guido Branca 3 December 2015 125,000 £1.48 One third on ﬁrst anniversary;  
balance over following 24 months from grant
2 December 2025
Philipp Prince 22 July 2015 42,000 £0.80 Over 36 months 22 July 2025
Philipp Prince 3 December 2015 125,000 £1.48 One third on ﬁrst anniversary;  
balance over following 24 months from grant
2 December 2025
Annual Report 2015 29 Defenx PLC
Remuneration report continued
Unapproved Share Option Scheme
The Company established an Unapproved Share Option Scheme and the following options were granted under this scheme:
Date of grant
Number of 
shares Exercise price Vesting period Expiry date
Anthony Reeves 3 December 2015 15,625 £1.48 One third on ﬁrst anniversary; 
balance over following 24 months from grant
2 December 2025
Leonard Seelig 3 December 2015 12,500 £1.48 One third on ﬁrst anniversary; 
balance over following 24 months from grant
2 December 2025
Disclosure of Directors’ remuneration for the year
The remuneration of the Directors who served during the year ended 31 December 2015 is set out below:
Fees and salaries
€
Beneﬁts
€
Annual bonus
€
Pension
€
Total
€
Executive
Andrea Stecconi 81,875 – 57,077 – 138,952
Guido Branca 87,049 3,136 38,748 – 128,933
Philipp Prince 49,255 3,136 35,225 – 87,616
Marco Moschetta 36,078 – – – 36,078
Joyce Bigio 14,090 – – – 14,090
Non-executive
Anthony Reeves 8,454 – 27,476 – 35,930
Leonard Seelig 8,454 – 22,544 30,998
The remuneration of the Directors who served during the year ended 31 December 2014 is set out below:
Fees and salaries
€
Beneﬁts
€
Annual  
bonus
€
Pension
€
Total
€
Executive
Andrea Stecconi 28,683 – – – 28,683
Guido Branca 33,188 – – – 33,188
Marco Moschetta 10,838 – – – 10,838
Directors’ interest in shares and share scheme interests
The Directors’ beneficial interests in shares, together with their respective families, immediately following admission to AIM and 
as at 31 December 2015 are shown below together with their interests in share schemes. 
Director
Scheme interests 
in shares – share 
options without 
performance 
conditions
Vested but 
unexercised 
options
Shares  
beneﬁcially
owned
1
Total interest  
in shares
Andrea Stecconi – – 1,608,086 1,608,086
Guido Branca 208,000 27,667 25,002 233,002
Philipp Prince 167,000 5,833 40,005 207,005
Anthony Reeves 15,625 – 31,250 46,875
Leonard Seelig 12,500 – 25,000 37,500
1 Includes those held by connected persons.
Annual Report 2015 30 Defenx PLC
Strategic Report Governance Financial Statements
Directors’ report
The Directors present their report together with the audited 
financial statements for the year ended 31 December 2015.
Principal activity
Defenx PLC is a public limited company incorporated in England 
and Wales, registered number 08993398, which is listed  
on the Alternative Investment Market (AIM) of the London  
Stock Exchange. Its principal activity is to provide security 
solutions with a range of products for mobile devices and PCs, 
protecting them against hackers and data loss. Management  
and control is exercised from the UK and its main country of 
operation is Switzerland.
Review of business
The Strategic Report on pages 4 to 21 provides a review of the 
business, the Group’s trading for the year ended 31 December 
2015, key performance indicators and an indication of research 
and future developments as well as the principal risks and 
uncertainties facing the business.
Results and dividend
The results for the year ended 31 December 2015 are set out 
in the consolidated statement of comprehensive income on 
page 34. The Directors do not recommend the payment of a 
dividend, because the Board believes it is in the Company’s 
interests to retain earnings to fund working capital needs and 
achieve capital growth.
Directors 
The Directors who served during the year ended 31 December 
2015 and up to the date of signing the financial statements 
were as follows:
A Stecconi
G Branca
J Bigio (appointed 18 February 2015, resigned 28 May 2015)
M Moschetta (resigned 19 February 2015)
P Prince (appointed 21 July 2015)
A Reeves (appointed 7 October 2015)
L Seelig (appointed 7 October 2015)
Directors’ interests 
Details of the Directors’ interests in the shares of the Company 
and details of options granted under the Group’s share scheme 
are set out in the Remuneration Report on pages 28 to 30.  
No Director has any beneficial interest in the share capital of 
the subsidiary undertaking. In accordance with the Articles of 
Association, Anthony Reeves, Philipp Prince and Leonard Seelig 
will retire by rotation at the 2016 AGM, being held on 22 June 
2016 and, being eligible, will offer themselves for re-election.
Qualifying indemnity provision
The officers of the Company are indemnified in respect of 
proceedings which might be brought by a third party. No cover 
is provided in respect of fraudulent or dishonest transactions.
Financial risk management policies and objectives
A summary of the Group’s key operating risks is set out on 
page 21. The Group’s risk management policies and objectives 
including exposure to price risk, credit risk, liquidity and cash 
flow risk are contained in note 16 to the financial statements.
Share capital 
On 3 December 2015, the Company’s shares were admitted to 
trading on AIM. On admission, the Company raised £2.1 million 
before expenses by way of a placing of 448,276 Ordinary 
shares of £0.018 each and a subscription of 977,378 Ordinary 
Shares. Details of the movements in the Company’s ordinary 
share capital and deferred share capital are contained in 
note 17 to the financial statements.
Substantial shareholdings 
At 31 March 2015, the Company’s significant shareholders were:
Number of shares Holding
Andrea Stecconi 1,608,086 26.4%
Defenx Nominees Limited 757,228 12.4%
Angelo Motti 426,890 7.0%
Safe Active srl 337,500 5.5%
Translated srl 331,910 5.4%
Chris Luty 285,000 4.7%
Shareholder agreement 
As described above, on 3 December 2015 the Company entered 
into a relationship agreement with its major shareholder and 
Chief Executive Officer, Andrea Stecconi that is designed to 
ensure that while he and his associates have an interest in 20% 
or more of the voting rights of the issued share capital, any 
transactions and relationships with Andrea Stecconi and his 
associates are conducted at arm’s length and on normal 
commercial terms.
Share option schemes
Details of share options issued during the year are contained in 
note 18 to the financial statements.
Political donations 
During the year ended 31 December 2015 the Group made no 
political donations.
Events after the reporting date
Details of significant events since the balance sheet date are 
contained in note 22 to the financial statements.
Annual Report 2015 31 Defenx PLC
Provision of information to the auditors
Each of the Directors who held office at the date of approval of 
this Directors’ Report confirms that:
• so far as he is aware, there is no relevant audit information 
of which the Company’s and Group’s auditor is unaware; and
• he has taken all the steps he ought to have taken as a 
Director in order to make himself aware of any information 
needed by the Company and the Group’s auditors in 
connection with their report and to establish that the 
auditors are aware of that information.
Auditor
haysmacintyre has expressed its willingness to continue in 
office as Auditor to the Company. A resolution to reappoint 
haysmacintyre will be proposed at the forthcoming AGM.
AGM
The AGM will be held on 22 June 2016. The notice of AGM and 
the ordinary and special resolutions to be put to the meeting 
are included on pages 58 to 60.
Approval
The Directors’ report was approved on behalf of the Board on 
18 April 2016.
Anthony Reeves
Chairman
18 April 2016
Directors’ report continued Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report  
and the Group and Company financial statements in accordance 
with applicable UK law and those IFRSs as adopted by the 
European Union.
Under Company law the Directors must not approve the Group and 
Company financial statements unless they are satisfied that they 
present fairly the financial position, financial performance, and 
cash flows of the Group and Company for that period. In preparing 
those financial statements, the directors are required to:
• select suitable accounting policies
• present information, including accounting policies, in a manner 
that provides relevant, reliable, comparable and understandable 
information
• provide additional disclosures when compliance with the 
specific requirements in IRFSs is insufficient to enable users to 
understand the impact of particular transactions, other events 
and conditions on the Group’s financial position and financial 
performance
• state that the Group and the Company have complied with 
IFRSs subject to any material departures disclosed and 
explained in the financial statements
• make judgements and estimates that are reasonable 
and prudent.
The Directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the Company’s 
transactions and disclose with reasonable accuracy at any time 
the financial position of the Company and the Group and enable 
them to ensure that the financial statements comply with the 
Companies Act 2006 and Article 4 of the IAS regulation. They are 
also responsible for safeguarding the assets of the Company and 
the Group and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of 
the Company’s website. Legislation in the UK may differ from 
legislation in other jurisdictions.
Each of the Directors, whose names are listed in the Strategic 
Report above, confirms that, to the best of his knowledge:
• The Group financial statements which have been prepared in 
accordance with IFRSs as adopted by the EU, give a true and 
fair view of the assets, liabilities, financial position and profit of 
the Group
• The Strategic Report includes a fair review of the development 
and performance of the business and the position of the Group 
and the Company, together with a description of the principal 
risks and uncertainties that it faces.
• The Directors consider that the Annual Report and Accounts, 
taken as a whole is fair, balanced and understandable.
This responsibility statement was approved by the Board on  
18 April 2016.
Andrea Stecconi  Philipp Prince
Chief Executive Officer Chief Financial Officer
Annual Report 2015 32 Defenx PLC
Strategic Report Financial Statements
Independent Auditors’ Report to the members of Defenx PLC
We have audited the financial statements of Defenx PLC for  
the period ended 31 December 2015 which comprise the 
consolidated statement of comprehensive income, the Group 
and parent company statements of financial position, the 
Group and parent company statements of changes in equity, 
the Group and parent company cash flow statements and the 
related notes. The financial reporting framework that has been 
applied in their preparation is applicable law and International 
Financial Reporting Standards (IFRSs) as adopted by the 
European Union.
This report is made solely to the Company’s members, as a 
body, in accordance with Chapter 3 of Part 16 of the Companies 
Act 2006. Our audit work has been undertaken so that we 
might state to the Company’s members those matters we are 
required to state to them in an auditors’ report and for no other 
purpose. To the fullest extent permitted by law, we do not 
accept or assume responsibility to anyone other than the 
Company and the Company’s members as a body, for our audit 
work, for this report, or for the opinions we have formed. 
Respective responsibilities of Directors and auditors 
As explained more fully in the statement of Directors’ 
responsibilities, the Directors are responsible for the 
preparation of the financial statements and for being satisfied 
that they give a true and fair view. Our responsibility is to audit 
and express an opinion on the financial statements in 
accordance with applicable law and International Standards on 
Auditing (UK and Ireland). Those standards require us to comply 
with the Auditing Practices Board’s (APB’s) Ethical Standards 
for Auditors. 
Scope of the audit of the ﬁnancial statements 
A description of the scope of an audit of financial  
statements is provided on the APB’s website at 
www.frc.org.uk/apb/scope/private.cfm. 
Opinion on ﬁnancial statements 
In our opinion: 
• the financial statements give a true and fair view of the 
state of the Group’s and the parent company’s affairs as at 
31 December 2015 and of the Group’s profit for the period 
then ended; 
• the financial statements have been properly prepared in 
accordance with IFRSs as adopted by the European Union; and 
• the financial statements have been prepared in accordance 
with the requirements of the Companies Act 2006. 
Opinion on other matters prescribed by the  
Companies Act 2006 
In our opinion the information given in the Strategic Report 
and Directors’ Report for the financial year for which the 
financial statements are prepared is consistent with the 
financial statements.
Matters on which we are required to report by exception 
We have nothing to report in respect of the following matters 
where the Companies Act 2006 requires us to report to you if, 
in our opinion: 
• adequate accounting records have not been kept by the 
parent company, or returns adequate for our audit have not 
been received from branches not visited by us; or 
• the parent company financial statements are not in 
agreement with the accounting records and returns; or 
• certain disclosures of Directors’ remuneration specified by 
law are not made; or 
• we have not received all the information and explanations 
we require for our audit. 
Ian Cliffe (senior statutory auditor) 
For and on behalf of haysmacintyre 
26 Red Lion Square 
London 
WC1R 4AG
18 April 2016
Annual Report 2015 33
Governance Defenx PLC
Note
Year ended
31 December 
2015
€
Year ended 
31 December 
2014
(restated)
€
Revenue 2, 5 4,489,557 2,381,568
Cost of sales 6 (512,168) (347,958)
Gross proﬁt 3,977,389 2,033,610
Sales, marketing and administrative expenses 6 (2,998,190) (1,229,093)
Operating proﬁt before exceptional expenses 979,199 804,517
Exceptional expenses (614,192) –
Proﬁt from operations 365,007 804,517
Finance income 8 37 74
Finance expense 8 (2,787) (43,600)
Proﬁt before tax 362,257 760,991
Tax expense 9 (170,339) (225,196)
Proﬁt for the year 191,918 535,795
Exchange gains arising on the translation of foreign subsidiaries – 28,929
Total comprehensive proﬁt for the year 191,918 564,724
Earnings per share
Basic 10 €0.042 €0.167
Diluted 10 €0.039 €0.159
The profit for the year arises from the Group’s continuing operations and is attributable to equity holders of the parent company, 
Defenx PLC.
The notes on pages 39 to 57 form part of these financial statements.
Consolidated statement of comprehensive income
Annual Report 2015 34 Defenx PLC
Strategic Report Financial Statements
Consolidated statement of financial position
Company registration number: 08993398
Note
31 December 
2015
€
31 December 
2014
(restated)
€
Non-current assets
Intangible assets 11 2,607,400 1,721,404
Current assets
Trade and other receivables 13 3,305,604 1,039,538
Cash and cash equivalents 14 1,333,869 205,995
4,639,473 1,245,533
Total assets 7,246,873 2,966,937
Current liabilities
Trade and other payables 15 (1,434,431) (918,728)
Total liabilities (1,434,431) (918,728)
Net assets 5,812,442 2,048,209
Capital and reserves
Called up share capital 17 145,004 90,903
Share premium 17 4,051,322 580,374
Merger reserve 695,212 678,610
Share-based payment reserve 18 60,343 –
Retained earnings 860,561 660,144
Foreign exchange reserve – 38,179
Total equity attributable to equity holders of the parent company 5,812,442 2,048,209
The notes on pages 39 to 57 form part of these financial statements.
The financial statements were approved by the Board and authorised for issue on 18 April 2016 and signed on its behalf by:
Andrea Stecconi
Chief Executive Officer
Consolidated statement of changes in equity
Share
capital
€
Share
premium
account
€
Merger
reserve
€
Share-based
payment
reserve
€
Retained
earnings
€
Foreign
exchange
reserve
€
Total
€
As at 1 January 2014 63,148 – 260,537 – 124,349 9,250 457,284
Proﬁt for the year (restated) – – – – 535,795 – 535,795
Foreign exchange translation – – – – – 28,929 28,929
Total comprehensive proﬁt for the year 
(restated) – – – 535,795 28,929 564,724
Defenx SA share capital issue – – 418,073 – – – 418,073
Shares issued 27,755 580,373 – – – – 608,128
As at 31 December 2014 (restated) 90,903 580,373 678,610 – 660,144 38,179 2,048,209
Change in functional currency 1,465 11,613 16,602 – 8,499 (38,179) –
Proﬁt for the year – – – – 191,918 – 191,918
Shares issued 52,636 3,459,336 – – – – 3,511,972
Share-based payments – – – 60,343 – – 60,343
As at 31 December 2015 145,004 4,051,322 695,212 60,343 860,561 – 5,812,442
The movement on the merger reserve during the year ended 31 December 2014 resulted from the issue of share capital by 
Defenx SA prior to the share for share exchange taking place with Defenx PLC.
Annual Report 2015 35
Governance Defenx PLC
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Cash ﬂows from operating activities
Proﬁt for the year after taxation 191,918 535,795
Adjustments for:
Income tax 170,339 225,196
Net interest expense 2,750 43,526
Amortisation of intangible assets 476,623 160,307
Share-based payments expense 60,343 –
Operating cash ﬂows before movements in working capital 901,973 964,824
Increase in trade receivables (1,809,552) (263,658)
(Increase)/decrease in other receivables (456,513) 450,465
Increase/(decrease) in trade and other payables 177,521 (719,833)
Increase/(decrease) in deferred revenue
169,138 (533)
(1,919,406) (533,559)
Interest paid (2,787) (43,526)
Tax paid (1,295) –
Net cash ﬂow from operating activities (1,021,515) 387,739
Investing activities
Investment in intangible assets (1,351,000) (1,210,693)
Interest received 37 –
Net cash used in investing activities (1,350,963) (1,210,693)
Financing activities
Net proceeds from issue of share capital 3,511,972 1,026,201
Net cash from ﬁnancing activities 3,511,972 1,026,201
Net increase in cash and cash equivalents 1,139,494 203,247
Cash and cash equivalents at beginning of year 205,995 2,460
Effect of foreign exchange translation on cash and cash equivalents (11,620) 288
Cash and net cash equivalents at end of year 1,333,869 205,995
Consolidated cash flow statement
Annual Report 2015 36 Defenx PLC
Strategic Report Governance Financial Statements
Note
31 December 
2015
€
31 December 
2014
(restated)
€
Non-current assets
Investments in subsidiary company 12 65,603 63,148
Current assets
Trade and other receivables 13 167,376 946
Loans to subsidiary company 12 2,130,013 594,381
Cash and cash equivalents 14 1,218,464 18,599
3,515,853 613,926
Total assets 3,581,456 677,074
Current liabilities
Trade and other payables 15 (470,558) (103,446)
Total liabilities (470,558) (103,446)
Net assets 3,110,898 573,628
Capital and reserves
Called up share capital 17 145,004 90,903
Share premium 17 4,051,322 580,373
Share-based payment reserve 18 60,343 –
Retained earnings (1,145,771) (108,227)
Foreign exchange reserve – 10,579
Total equity attributable to equity holders 3,110,898 573,628
The notes on pages 39 to 57 form part of these financial statements.
The financial statements were approved by the Board and authorised for issue on 18 April 2016 and signed on its behalf by:
Andrea Stecconi
Chief Executive Officer
Company statement of changes in equity
Share
capital
€
Share
premium
account
€
Merger
reserve
€
Share-based
payment
reserve
€
Retained
earnings
€
Foreign
exchange
reserve
€
Total
€
On incorporation – – – – – – –
Loss for the year – – – – (108,227) – (108,227)
Foreign exchange translation – – – – – 10,579 10,579
Total comprehensive loss for the year – – – – (108,227) 10,579 (97,648)
Shares issued 90,903 580,373 – – – – 671,276
As at 31 December 2014 90,903 580,373 – – (108,227) 10,579 573,628
Change in functional currency 1,465 11,613 – – (2,499) (10,579) –
Total comprehensive loss for the year – – – – (1,035,045) – (1,035,045)
Shares issued 52,636 3,459,336 – – – – 3,511,972
Share-based payments – – – 60,343 – – 60,343
As at 31 December 2015 145,004 4,051,322 – 60,343 (1,145,771) – 3,110,898
Company statement of financial position
Company registration number: 08993398
Annual Report 2015 37 Defenx PLC
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Cash ﬂows from operating activities
Loss for the year after taxation (1,035,045) (108,227)
Adjustments for:
Net interest income (25,809) (3,883)
Share-based payments expense 60,343 –
Operating cash ﬂows before movements in working capital (1,000,511) (112,110)
(Increase) in trade receivables (9,503) –
(Increase) in other receivables (156,927) (946)
Increase in trade and other payables 365,505 114,024
Increase in deferred revenue 1,605 –
200,680 113,078
Net cash ﬂow from operating activities (799,831) 968
Investing activities
Investment in subsidiary – (63,148)
Loans to subsidiary (1,509,823) (590,498)
Net cash used in investing activities (1,509,823) (653,646)
Financing activities
Net proceeds from issue of share capital 3,511,972 671,277
Net cash from ﬁnancing activities 3,511,972 671,277
Net increase in cash and cash equivalents 1,202,318 18,599
Cash and cash equivalents at beginning of year 18,599 –
Effect of foreign exchange translation on cash and cash equivalents (2,453) –
Cash and net cash equivalents at end of year 1,218,464 18,599
Annual Report 2015 38
Company cash flow statement Defenx PLC
Strategic Report Governance Financial Statements
Notes to the consolidated financial statements
Defenx PLC is a public limited company incorporated in the UK on 11 April 2014. The Company’s Ordinary Shares are traded on 
AIM. The consolidated financial statements comprise Defenx PLC and its subsidiary, Defenx SA, a company incorporated in 
Switzerland (together referred to as the ‘Group’), for the year ended 31 December 2015.
The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and has not 
presented the parent company’s own income statement. The parent company’s loss for the period ended 31 December 2015 
amounted to €1,035,047 (2014: €108,227).
1. Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards and 
Interpretations (collectively IFRSs) issued by the International Accounting Standards Board (IASB) as adopted by the European 
Union (adopted IFRSs).
The preparation of the financial statements in compliance with adopted IFRSs requires the use of certain critical accounting 
estimates. It also requires management to exercise judgement in applying the accounting policies. The areas where significant 
judgements and estimates have been made in preparing the financial statements and their effect are disclosed in this note.
Basis of consolidation: merger accounting
The financial statements have been prepared on a consolidated basis in line with the principles laid out in IFRS 3: Business 
Combinations. The standard states that in instances where group reconstructions have taken place, such as in the case of a share 
for share exchange, guidance should be taken from the appropriate national GAAP in preparing the financial statements. The 
Directors have therefore considered the implications of FRS 6: Acquisitions and Mergers and consider it appropriate to adopt 
merger accounting. As a result, comparative information for the Group is presented using the previous results of Defenx SA as if 
the existing group structure had always been in place. The current and comparative capital structure of the Group disclosed is 
that of Defenx PLC.
Going concern
The Chief Executive Officer’s Review on pages 16 and 17 outlines the activities of the Group along with factors which may affect 
its future development and performance. The Group’s financial position is discussed in the Financial Review on pages 18 to 20 
along with details of its cash flow and liquidity. Note 16 sets out the Group’s financial risks and the management of those risks.
As at 31 December 2015, the Group had net assets of €5,812,442 (31 December 2014: €2,048,209) as set out in the 
consolidated statement of financial position on page 35. The Directors have prepared detailed forecasts of the Group’s 
performance for the next two years. The forecasts contain certain assumptions about the level of future sales, margins and the 
level of cash recovery from trading.
After considering the forecasts and the risks, the Directors are satisfied that the Group has adequate resources to continue in 
operational existence for the foreseeable future and, accordingly, continue to adopt the going concern basis in preparing the 
Group and Company financial statements.
2. Principal accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies  
are consistent with those applied in the prior financial year and are applied by both Group entities unless otherwise stated.
Revenue recognition
Revenue is recognised to the extent that it is probable that economic benefits will flow to the Group and the revenue can be 
reliably measured. Revenue is measured at the fair value of the consideration received or receivable for the sale of goods or 
services provided in the normal course of business, net of all related discounts and sales taxes. 
The Group’s revenues to date comprise sales of software licences, the majority of which are for 12 months with a limited number 
for two, three and five years. These term-based agreements include free upgrades and enhancements on a when-and-if-available 
basis. The Group recognises the software licence portion of revenue at the time of delivery while the portion attributable to 
upgrades and enhancements is deferred and recognised on a straight-line basis over the period of the relevant agreement. 
Customers have no right of return; once sold, licences are neither refundable nor returnable.
Annual Report 2015 39 Defenx PLC
2. Principal accounting policies continued
Foreign currency
The Directors reviewed the functional currency applied by the Group and determined that, with effect from 1 January 2015,  
the functional currency should be the Euro. This change has arisen due to the increasing proportion of the Group’s operational 
activities denominated in Euro such that a Sterling functional currency is no longer considered appropriate by the Directors. 
Transactions in foreign currencies are initially recorded at the respective functional currency rates ruling when the transactions 
occurred. Foreign currency monetary assets and liabilities are translated at the rates ruling on the reporting date. Differences 
arising on settlement or translation are recognised in profit or loss. Non-monetary items that are measured in terms of historical 
cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. 
The Group’s presentation currency remains the Euro. As this now matches the functional currency applied by both Defenx PLC  
and Defenx SA, there are no longer any currency translations on consolidation.
Trade and other receivables
Trade receivables are stated at fair value being the lower of their original invoiced value and recoverable amount. A provision for 
impairment is made where there is objective evidence that the Group will not be able to recover balances in full. Indications of 
impairment include customers in financial difficulty or seriously in default against agreed payment terms. There is no material 
variance between carrying and fair values.
Property, plant and equipment
Property, plant and equipment are recognised initially at cost. After initial recognition, these assets are carried at cost less any 
accumulated depreciation and impairment losses. Cost comprises the aggregate amount paid and the fair value of any other 
consideration given to acquire the asset. Depreciation is computed by allocating the depreciable amount of an asset on a 
systematic basis over its useful life and is applied separately to each identifiable component.
The Group’s property, plant and equipment assets are represented by fully depreciated IT equipment, office furniture and fixtures. 
The Company has no property, plant and equipment assets.
Intangible assets
Identifiable intangible assets are recognised when the Group controls the asset, it is probable that future economic benefits 
attributable to the asset will flow to the Group and the cost of the asset can be reliably measured. The Group’s intangible assets 
represent investments in development costs of software. All intangible assets are amortised over their useful economic life, from 
the date of purchase or development on a straight-line basis.
During the year, the Directors have reviewed the estimated useful lives of intangible assets and concluded that an increase  
from three to four years better reflected the lifetime of mobile device software assets. The estimated useful lives of intangible 
assets are now: 
Development costs for software
Related to anti-malware for mobile devices 4 years
For anti-malware for NAS devices 5 years
Related to integration with customer systems 3 years
Impairment of assets
At each balance sheet date, the Directors review the carrying amounts of property, plant, equipment and intangible assets to 
determine whether there is any indication that those assets have suffered an impairment. If any such indication exists, the 
recoverable amount of the asset, which is the higher of its fair value less costs to sell and its value in use, is estimated in order  
to determine the extent of the impairment loss. Where the asset does not generate cash flows that are independent from other 
assets, the Directors estimate the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amounts are based on a calculation of expected future cash flows discounted to their present value using pre-tax 
discount rates that reflect market assessments of the time value of money and risks specific to the asset for which the expected 
future cash flows have not been adjusted.
Any impairment charge is recognised in the income statement in the period in which it occurs for assets carried at cost if the 
recoverable amount is less than the carrying value. Where an impairment loss subsequently reverses due to a change in the 
original estimate, the carrying amount of the asset is increased to the revised estimate of its recoverable amount.
Notes to the consolidated financial statements continued
Annual Report 2015 40 Defenx PLC
Strategic Report Governance Financial Statements
Pension costs
The Group makes defined contributions to its employees’ pension plans according to the laws of the country of employment.  
The pension costs charged in the financial statements represents the contributions payable by the Group and Company during  
the year.
Share-based payments
In accordance with IFRS 2 Share-based payments reflects the economic cost of awarding shares and share options to employees 
and Directors by recording an expense in the statement of comprehensive income equal to the fair value of the benefit awarded. 
The expense is recognised in the statement of comprehensive income over the vesting period of the award.
Fair value is measured by the use of a Black-Scholes model, which takes into account conditions attached to the vesting and 
exercise of the options. The expected life used in the model is adjusted, based on management’s best estimate, for the effects  
of non-transferability, exercise restrictions and behavioural considerations.
Where awards are granted to employees of the subsidiary, the fair value of the award at grant is recorded in the parent company’s 
financial statements as an increase in the value of the investment with a corresponding increase in equity via the share-based 
payment reserve.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings  
per share.
Leased assets and obligations
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards of ownership 
to the Group. All other leases are classified as operating leases.
Operating leases
Assets leased under operating leases are not recorded on the statement of financial position. Rental payments are charged 
directly to the income statement on a straight-line basis over the lease term.
Current and deferred taxation
Current tax is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at  
the balance sheet date, and any adjustments to tax payable in respect of previous years.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and 
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits (‘temporary 
differences’) and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised to the extent that it is probable that taxable profits will be available against which 
deductible temporary differences can be utilised. Where there are deductible temporary differences arising in subsidiaries, 
deferred tax assets are recognised only where it is probable that they will reverse in the foreseeable future and taxable profits 
will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer 
probable that sufficient tax profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is 
realised. Deferred tax is charged or credited to the income statement.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held with banks, other short-term highly liquid investments with 
original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities 
in the statement of financial position.
Annual Report 2015 41 Defenx PLC
2. Principal accounting policies continued
Trade and other payables
Trade payables are recognised at fair value. There is no material variance between book and fair values.
Borrowings
Bank loans and overdrafts are recorded initially at their fair value, net of direct transaction costs and finance charges and are 
recognised in the income statement over the term of the instrument. There is no material variance between book and fair values.
3. Judgements and estimates
The Board makes judgements and assumptions concerning the future that affect the application of accounting policies and  
the reported amounts of assets, liabilities, income and expenses. The resulting accounting estimates calculated using these 
judgements and assumptions will, by definition, seldom equal the related actual results but are based on historical experience  
and expectations of future events. Actual results may differ from these estimates.
The judgements and key sources of estimation uncertainty that may have a significant effect on the amounts recognised in the 
financial statements are discussed below:
Revenue recognition
Judgement is required in the assessment of licence activation; which can be immediately upon sale, sometime after sale or not  
at all where our licences are sold as a bundle by channel partners. However, the revenue portion attributable to upgrades and 
enhancements that is deferred represents a small proportion of the total revenue from licence sales.
Impairment of assets
Judgement is required in the impairment assessment of assets, notably intangible software development costs. Recoverable 
amounts are based on a calculation of expected future cash flows, which require assumptions and estimates of future 
performance to be made. Cash flows are discounted to their present value using pre-tax discount rates based on the Directors 
market assessment of risks specific to the asset.
4. Changes in accounting policies and disclosures
New standards adopted during the year
The following new standards and amendments became effective as of 1 January 2015: 
• Amendments to IAS 19 Defined Benefit Plans: Employee Contributions 
• Amendment to IAS 32 Financial Instruments: Presentation (effective date year beginning 1 January 2015)
• Amendment to IAS 36 Impairment of Assets (effective date year beginning 1 January 2015)
• IFRIC 21 Levies (effective date year beginning 1 January 2015)
• Annual Improvements Cycle – 2010–2012  
• Annual Improvements Cycle – 2011–2013  
In the current period, the Group and Company have adopted all of the new and revised standards and interpretations issued by  
the International Accountancy Standards Board (IASB) and the International Financial Reporting Interpretations Committee (the 
IFRIC) of the IASB that are relevant to its operations and effective for reporting dates beginning on 1 January 2014.
New standards adopted early
At the date of the authorisation of the financial statements, no standards and interpretations, that are issued but not yet 
effective, have been adopted early.
Notes to the consolidated financial statements continued
Annual Report 2015 42 Defenx PLC
Strategic Report Governance Financial Statements
New standards and interpretations not yet adopted
Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for the 
Group’s accounting periods beginning on or after 1 January 2016 or later periods and which the Group has decided not to adopt 
early are:
• Amendments to IFRS 7 Financial Instruments Disclosures (effective for accounting periods beginning on or after 1 January 2016)
• IFRS 9 Financial Instruments (effective for accounting periods beginning or after 1 January 2018).
• Amendments to IFRS 10 Consolidated Financial Statements (effective for accounting periods beginning on or after 1 January 2016)
• IFRS 15 Revenue from Contracts with Customers (effective for accounting periods beginning on or after 1 January 2017)
• IFRS 16 Leases (effective for accounting periods beginning on or after 1 January 2019)
• Amendments to IAS 7 Statement of cash flow (effective for accounting periods beginning on or after 1 January 2017)
• Amendments to IAS 16 Property, Plant and Equipment (effective for accounting periods beginning on or after 1 January 2016)
• Amendments to IAS 34 Interim Financial Reporting (effective for accounting periods beginning on or after 1 January 2016)
• Amendments to IAS 38 Intangible Assets (effective for accounting periods beginning on or after 1 January 2016)
The Directors have considered the above new standards, interpretations and amendments to published standards that are  
not yet effective and concluded that, except for the amendments to IAS 1 Presentation of Financial Statements and IFRS 10 
Consolidated Financial Statements, they are either not relevant or that they would not have a significant impact on the Group’s 
and Company’s financial statements.
Correction of prior period errors 
In January 2014, Defenx SA entered into a loan facility that was repaid by Defenx PLC from the proceeds of the private placing 
later in the year. The fees and interest on this loan were not charged to profit and loss. As a consequence, interest expense 
was understated. 
In November 2014, Defenx SA invoiced a new customer for software licences. The Group’s policy is to agree to make contributions 
to customers’ marketing efforts contingent on agreed sales targets. However, Defenx SA did not accrue for the marketing 
contribution in its 2014 accounts. As a consequence, expenses were understated. 
These errors have been corrected by restating each of the affected financial statement items for the period as follows: 
Year ended
31 December 
2014
(restated)
€
Increase/(decrease) on equity
Other payables (196,584)
Taxation 31,230
Net impact on equity (165,354)
Increase/(decrease) in proﬁt
Administrative expenses (156,150)
Finance expense (40,434)
Tax expense 31,230
Net impact on proﬁt for the period (165,354)
Annual Report 2015 43 Defenx PLC
5. Segmental analysis
The Group currently has three reportable product segments: Mobile, PC and NAS, which reflect the three separate product 
categories for which software is developed and sold. The Group does not analyse costs or assets other than intangible assets by 
segment. The Group does not analyse costs or assets by geographical region.
Revenue by product segment and geographic market (based on customer location) for the Group is as follows:
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Revenue by product category
Mobile 3,197,934 1,637,105
PC 1,252,544 721,557
NAS 25,145 6,533
Other 13,934 16,373
4,489,557 2,381,568
Revenue by geographic market (customer location)
Europe (EU including the UK) 3,725,222 1,245,834
Europe (Non-EU) 739,190 1,108,966
Other 25,145 26,768
4,381,209 2,381,568
Non-current assets (capitalised development costs) by product segment for the Group are as follows: 
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Non-current assets
Mobile 394,307 199,002
PC – –
NAS 1,747,258 1,522,402
Other 465,835 –
Total 2,607,400 1,721,404
Notes to the consolidated financial statements continued
Annual Report 2015 44 Defenx PLC
Strategic Report Governance Financial Statements
6. Proﬁt from operations 
The operating profit is stated after charging:
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Cost of sales
Amortisation of intangible assets 476,623 160,307
Sales, marketing and administrative expenses 
Marketing contributions 1,451,965 743,166
Staff costs 691,358 114,319
Share-based payment expense 60,343 –
Bad debt expense 69,485 33,176
Lease payments – land and buildings 29,588 19,753
Net foreign exchange (gains)/losses 34,443 (8,677)
Auditors’ remuneration (included within administrative expenses)
Audit services
Parent company and Group audit 17,965 8,500
Audit of the parent company’s subsidiary 11,272 6,239
Non-audit services
Reporting accountant for the AIM admission 113,706 –
Tax compliance and other fees 32,003 –
Total auditors’ remuneration 174,946 14,739
Exceptional expenses
Costs in respect of the AIM admission 614,192 –
AIM admission costs of €366,817, including auditors’ remuneration of €26,579, were charged to the share premium account.
7. Staff costs
Staff costs (including Directors’ emoluments) incurred in the year were as follows:
 
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Wages and salaries 616,727 104,840
Social security costs 46,424 4,343
Pension costs 9,126 5,136
Share-based payments expense 19,081 –
Net staff costs 691,358 114,319
Annual Report 2015 45 Defenx PLC
7. Staff costs continued
The average monthly number of permanent employees during the period was as follows:
Year ended
31 December 
2015
Number
Year ended
31 December 
2014
Number
Directors’ 3 3
Administration, sales and support 3 1
6 4
  € €
Directors emoluments 
Emoluments 472,597 72,709
  € €
Highest paid Director
Emoluments 138,952 33,188
8. Finance income and expenses
 
Year ended
31 December 
2015
£
Year ended
31 December 
2014
(restated)
£
Finance income
Interest income 37 74
Finance expense
Interest expense 2,787 43,600
9. Income tax
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2015. The tax charge for both 2015 
and 2014 arose in respect of operations in Switzerland as follows:
 
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Current tax
Current income tax on proﬁts for the year 233,905 204,580
Deferred tax
Relating to origination and reversal of temporary differences (63,566) 20,616
Total income tax expense 170,339 225,196
Notes to the consolidated financial statements continued
Annual Report 2015 46 Defenx PLC
Strategic Report Governance Financial Statements
The reasons for the difference between the actual income tax charge for the year and the standard rate of corporation tax in the 
UK applied to the profit for the year are as follows:
 
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Proﬁt for the year 191,918 535,795
Tax expense 170,339 225,196
Proﬁt before tax 362,257 760,991
Tax charge using Defenx PLC’s domestic rate of 20.25% (2014: 21.5%) 73,357 163,613
Effect of higher income tax rate in Switzerland 4,049 (8,344)
Defenx PLC loss carried forward for future offset 85,021 21,645
Expenses not deductible for tax purposes 121,041 –
Temporary timing differences (50,859) –
Overseas taxation 1,296 –
Timing difference arising on standards conversions – 29,934
Utilisation of previously unrecognised tax losses – (2,268)
At the effective income tax rate 233,905 204,580
The aggregate tax rate in Switzerland was 20.4% during the year (2014: 20.4%). The corporation tax rate in the UK was reduced 
from 21% to 20% effective 1 April 2015.
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 20.4% (2014: 20.4%) 
being the effective rate of tax applicable in Switzerland where the deferred tax arises.
Consolidated statement of 
 ﬁnancial position
Consolidated statement of 
 proﬁt or loss
Year ended
31 December
2015
€
Year ended
31 December
2014
(restated)
€
Year ended
31 December
2015
€
Year ended
31 December
2014
(restated)
€
Timing difference arising on standards conversion – (146,452) 146,452 12,133
Accelerated depreciation for accounts purposes (85,270) (12,147) (73,123) 12,147
Deferred revenue 64,620 29,681 34,614 108
Disallowed bad debt provision – 44,377 (44,377) (3,772)
Deferred tax expense/(income) – – (63,566) 20,616
Net deferred tax asset/(liability) (20,650) (84,541) – –
The accumulated tax losses available to the Group at 31 December 2015 were €553,284 (2014: €106,620). These losses all 
relate to activities, and are available indefinitely for offsetting against future taxable profits, of Defenx PLC in the UK. No 
deferred tax asset is recognised in respect of these losses as it is not sufficiently certain that the Company will be able to utilise 
them in the near future. If the Group were able to recognise all unrecognised deferred tax assets, the retained profit would 
increase by €110,657 (2014: €21,324).
Annual Report 2015 47 Defenx PLC
10. Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to ordinary equity holders of the Company by the 
weighted average number of Ordinary Shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted 
average number of Ordinary Shares outstanding during the year plus the weighted average number of Ordinary Shares that would 
be issued on conversion of all the dilutive deferred shares into Ordinary Shares. 
The following reflects the income and share data used in the basic and diluted EPS computations: 
 
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Proﬁt attributable to ordinary equity holders of the Defenx PLC for basic earnings and adjusted for the  
effects of dilution 191,918 535,795
Weighted average number of Ordinary Shares for basic earnings per share 4,549,653 3,208,561
Effect of dilution from deferred shares 300,000 171,663
Effect of dilution from share options 86,571 –
Weighted average number of Ordinary Shares for basic earnings per share adjusted for the effect of 
dilution 4,936,224 3,380,224
The weighted average numbers of shares above reflect the eight for one Ordinary Share consolidation implemented on 16 
November 2015 as further disclosed in note 17. There have been no other relevant transactions involving Ordinary Shares or 
potential Ordinary Shares since 31 December 2014.
11. Intangible assets
The Group’s intangible assets all relate to capitalised software development costs. There were no intangible assets in the 
statement of financial position of the Company.
Group 
Mobile
€
NAS
€
Other
€
Total
€
Cost
At 1 January 2014 22,109 636,319 – 658,428
Additions 275,741 934,952 – 1,210,693
Foreign exchange adjustment 651 11,939 – 12,590
At 31 December 2015 298,501 1,583,210 – 1,881,711
Change in functional currency 10,978 641 – 11,619
Additions 339,500 511,500 500,000 1,351,000
At 31 December 2015 648,979 2,095,351 500,000 3,244,330
Accumulated depreciation
At 1 January 2014 – – – –
Charge for the year 99,500 60,807 – 160,307
At 1 January 2015 99,500 60,807 – 160,307
Charge for the year 155,172 287,286 34,165 476,623
At 31 December 2015 254,672 348,093 34,165 636,930
Net book value
At 31 December 2014 199,001 1,522,403 – 1,721,404
At 31 December 2015 394,307 1,747,258 465,835 2,607,400
The intangible assets booked represent qualifying expenditure on the development of software products for resale less 
accumulated amortisation and impairment costs. The carrying value of these intangible assets is tested for impairment on a half 
yearly basis, or when there are indications that the value of the assets might be impaired.
Annual Report 2015 48
Notes to the consolidated financial statements continued Defenx PLC
Strategic Report Governance Financial Statements
The Directors have assessed development projects’ individual net present value against forecasts of future sales of the related 
products, unit sales prices and costs over a five-year period. No sales beyond five years have been included in the calculations. 
The impairment tests are sensitive to changes in these forecasts and changes could result in impairment; however, the varying 
bases indicate a net present value in excess of the carrying value of the intangible assets at the balance sheet date.
The key assumptions in the value in use calculations are:
Year ended
31 December 
2015
31 December 
2014
(restated)
Gross margin 80–95% 85%
Marketing contributions 0–35% 35%
Discount rate 20% 20%
Future events may cause these assumptions to change, which could have an adverse effect on the future results of the Group. 
The discount rate would need to increase to around 60% or the gross margin and marketing contribution assumptions would 
need to change by over 50% before affecting the carrying value of intangible assets. As a result no sensitivity analysis has 
been disclosed.
12. Investments in subsidiary
The Company owns 100% of the issued share capital of the following subsidiary undertakings, which have been included in the 
consolidated financial statements:
Subsidiary undertaking Country of registration Principal activity
Defenx SA Switzerland Development and licensing of software
The movement in investments in the parent company’s statement of financial position is:
Company
 
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Opening balance 1 January 63,148 –
Change in functional currency 2,455 –
Additions – 63,148
Closing balance at 31 December 65,603 63,148
Annual Report 2015 49 Defenx PLC
13. Trade and other receivables
Group Company
Year ended
31 December
2015
€
Year ended
31 December
2014
(restated)
€
Year ended
31 December
2015
€
Year ended
31 December
2014
(restated)
€
Gross trade receivables 3,099,697 1,437,138 9,503 –
Provision for impairment (270,360) (417,354) – –
Net trade receivables 2,829,337 1,019,784 9,503 –
Prepayments and accrued income 162,191 19,754 157,873 946
Payments on account 314,076 – – –
Total receivables 3,305,604 1,039,538 167,376 946
Provisions for impairment
Opening balance at 1 January (417,354) (481,319) – –
Utilised during the year 200,193 129,504 – –
Net increase during the year (53,199) (65,539) – –
Closing balance at 31 December (270,360) (417,354) – –
All amounts shown under receivables are due within one year. The payments on account represent advances to an established 
software developer with whom the Group had agreed detailed specifications for work that had been started, but not invoiced 
prior the year end.
14. Cash and cash equivalents
Cash and cash equivalents comprise balances on bank accounts, cash in transit and cash floats held in the business. Finance 
charges are accounted for on an accruals basis and charged to the statement of comprehensive income when payable. 
Cash and cash equivalents are held in Euro, Sterling, Swiss Francs and US Dollars and placed on deposit in the UK and Switzerland.
15. Trade and other payables
Group Company
Year ended
31 December
2015
€
Year ended
31 December
2014
(restated)
€
Year ended
31 December
2015
€
Year ended
31 December
2014
(restated)
€
Current
Trade payables 440,241 88,454 419,111 9,508
Other payables and accruals 215,893 389,833 49,840 93,938
Current taxation 442,690 210,406 – –
Total payables 1,098,824 688,693 468,951 103,446
Deferred taxation 20,975 84,541 – –
Deferred revenue 314,632 145,494 1,605 –
Total current liabilities 1,434,431 918,728 470,556 103,446
All amounts shown above are payable within one year.
Annual Report 2015 50
Notes to the consolidated financial statements continued Defenx PLC
Strategic Report Governance Financial Statements
16. Financial instruments and risk management 
General objectives, policies and processes 
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s 
competitiveness and flexibility. Further details regarding these policies are set out below. 
The Board receives monthly reports from the Chief Financial Officer through which it reviews the effectiveness of the processes 
put in place and the appropriateness of the objectives and policies it sets. 
The Group does not use derivative financial instruments such as forward currency contracts, interest rate swaps or similar 
instruments. The Group does not issue or use financial instruments of a speculative nature. 
Principal ﬁnancial instruments 
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows: 
• trade receivables;
• cash and cash equivalents; and
• trade and other payables.
Trade and other receivables are initially measured at face value. Book values and expected cash flows are reviewed by the Board 
and any impairment charged to the consolidated statement of comprehensive income in the relevant period. 
Trade and other payables are measured at book value. The book value of financial assets and liabilities equates to their fair value. 
A summary of the financial instruments held by category is provided below:
Group Company
Financial assets
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Trade receivables – due at reporting date 1,215,070 564,922 – –
Trade receivables – not due at reporting date 1,884,627 872,216 9,503 –
Gross trade receivables 3,099,697 1,437,138 9,503 –
Less: provision for impairment (270,360) (417,354) – –
Net trade receivables 2,829,337 1,019,784 9,503 –
Other receivables 476,267 19,754 157,873 946
Net receivables 3,305,604 1,039,538 167,376 946
Cash and cash equivalents 1,333,869 205,995 1,218,464 18,599
Trade receivables principally comprise amounts outstanding for sales to customers and are typically payable between 90 and 120 
days. The average age of debtors was 91 days (2014: 85 days). An impairment review of outstanding trade receivables is carried 
out at each period end and a specific amount provided for. A general provision is maintained reflecting the fact that some 
customers are small and do not have strong credit histories.
Group Company
Financial liabilities
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Trade payables 440,241 88,454 419,111 9,508
Other payables and accruals 215,893 389,833 49,840 93,938
Current taxation 442,690 210,406 – –
Total payables 1,098,824 688,693 468,951 103,446
Annual Report 2015 51 Defenx PLC
16. Financial instruments and risk management continued
Trade and other payables and accruals comprise amounts outstanding for trade purchases and ongoing costs and are typically 
payable within 90 days. The average age of trade credits was 28 days (2014: 45 days). Where there is a contractual right of 
set-off with a customer that is also a supplier, notably in relation to marketing contributions payable to customers, relevant 
receivable and payable balances are set against one another.
Cash and cash equivalents 
Cash and cash equivalents comprise balances on bank accounts, cash in transit and cash floats held in the business. Finance 
charges are accounted for on an accruals basis and charged to the statement of comprehensive income when payable. Cash  
and cash equivalents are held in Euro, Swiss Francs, Sterling and US Dollars and placed on deposit in UK and Swiss banks.
The Group is exposed to the following financial risks: 
• credit risk; 
• foreign exchange risk; 
• other market price risk; and 
• liquidity risk. 
Credit risk 
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its 
contractual obligations. The Group is mainly exposed to credit risk from credit sales. At 31 December 2015, the Group has net 
trade receivables of €2,829,337 (2014: €1,019,784).
The Group is exposed to credit risk in respect of these balances such that, if one or more customers encounter financial 
difficulties, this could materially and adversely affect the Group’s financial results. The Group attempts to mitigate credit risk  
by assessing the credit rating of new customers prior to entering into contracts and by entering contracts with customers with 
agreed credit terms. The analysis below shows the ageing of trade and other receivables and the movement in bad debt provision 
in the year:
Group Company
Ageing of trade and other receivables
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Up to three months 1,675,202 564,922 9,503 –
Three to six months 943,742 179,285 – –
Above six months 480,753 692,931 – –
Gross receivables 3,099,697 1,437,138 9,503 –
Less: allowance for receivables (270,360) (417,354) – –
Net receivables 2,829,337 1,019,784 9,503 –
Sales to three customers based in Italy amounted to approximately 65% (2014: 15%) of Group revenue. Sales to one customer 
based in Switzerland amounted to 16% (2014: 22%) and one customer based in Malta amounted to 14% (2014: 24%) of Group 
revenue. No other individual customer accounted for more than 5% of Group revenue.
Customer credit risk is managed in accordance with the Group’s established policy and procedures. Customer credit quality is 
assessed and periodically reviewed based on available information and individual credit limits defined based on this assessment. 
Outstanding customer receivables are actively monitored and reviewed at least quarterly. At 31 December 2015, the Group had 
four customers (2014: one) that owed more than €500,000, accounting for 92% (2014: 42%) of trade receivables outstanding.
As at 31 December 2015, trade receivables of €923,853 (2014: €1,362,739) were past due but not impaired.
Annual Report 2015 52
Notes to the consolidated financial statements continued Defenx PLC
Strategic Report Governance Financial Statements
Liquidity risk 
Liquidity risk arises from the Group’s management of working capital. The risk is that the Group will encounter difficulty in 
meeting its financial obligations as they fall due. The Group’s policy is to ensure that it will always have sufficient cash to allow  
it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain cash balances to meet expected 
requirements for a period of at least 90 days. The table below analyses the Group’s financial liabilities by contractual maturities. 
All amounts disclosed in the table are the contractual undiscounted cash flows.
Group Company
Ageing of trade and other payables
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Up to three months 1,098,824 688,693 468,951 103,446
Three to six months – – – –
Above six months – – – –
1,098,824 688,693 468,951 103,446
Capital management 
The Group’s capital is made up of share capital, share premium, merger reserve, foreign currency reserve and retained profits 
totalling €5,812,442 at 31 December 2015 (2014: €2,048,209).
The Group’s objectives when maintaining capital are: 
• to safeguard the ability to continue as a going concern, so that the Group can continue to provide returns for shareholders  
and benefits for other stakeholders; and 
• to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk. 
The capital structure of the Company consists of shareholders’ equity as set out in the consolidated statement of changes in 
equity on page 35. All working capital requirements are financed from existing cash resources. 
Foreign exchange risk 
Foreign exchange risk arises when Group entities enter into transactions denominated in a currency other than their functional 
currency. The Group’s policy is, where possible, to allow customers to settle liabilities denominated in the customer’s functional 
currency, being primarily Euro and Swiss Franc. 
The Group is predominantly exposed to currency risk on sales and purchases made from customers and suppliers based in the 
Eurozone. Sales and purchases from customers and suppliers are made on a central basis and the risk is monitored centrally, but 
not hedged utilising any forward exchange contracts. Apart from these particular cash flows the Group aims to fund expenses  
in the respective currency and to manage foreign exchange risk at a local level by matching the currency in which revenue is 
generated and expenses are incurred. As at 31 December 2015, the Group’s net exposure to foreign exchange risk was as follows 
for those entities with Euro representational currencies.
 
Euro
€
Sterling
€
Swiss Franc
€
US Dollar
€
Total
€
As at 31 December 2015
Trade and other receivables 3,153,671 148,773 2,957 203 3,305,604
Cash and cash equivalents 588,808 736,378 8,657 26 1,333,869
Trade and other payables (127,545) (379,984) (587,994) (3,301) (1,098,824)
Net current assets 3,614,934 505,167 (576,380) (3,072) 3,540,649
As at 31 December 2014
Trade and other receivables 933,038 – 25,607 80,893 1,039,538
Cash and cash equivalents 139,115 45,117 14,138 7,625 205,995
Trade and other payables (23,493) – (665,200) – (688,693)
Net current assets 1,048,660 45,117 (625,455) 88,518 556,840
Annual Report 2015 53 Defenx PLC
16. Financial instruments and risk management continued
The impact of a reasonably possible strengthening by 10% of Euro exchange rates, with all other variables held constant, on the 
Group’s profit before tax due to changes in the fair value of monetary assets and liabilities is shown below:
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Sterling (50,517) 4,512
Swiss Franc 57,638 (62,546)
US Dollar 307 (8,852)
17. Share capital 
Ordinary Share capital
The Ordinary Shares of £0.018 carry the right to one vote per share at general meetings of the Company and the rights to share  
in any distribution of profits or returns of capital and to share in any residual assets available for distribution in the event of a 
winding up. The shares are denominated in Pounds Sterling.
Defenx SA successfully implemented a share for share exchange whereby Defenx PLC became the holding Company of the Group. 
Under the scheme of arrangement, Defenx SA’s shares in issue on 3 June 2015 were exchanged on a one for one basis for Defenx 
PLC shares. 22,816,716 newly issued Ordinary Shares were credited as fully paid. However, in accordance with the adoption of 
merger accounting as the basis of consolidation, the share exchange is assumed to have taken place at the beginning of the 
relevant period. All disclosures of shares in these financial statements reflect this change as though the exchange had always 
been in place.
On 12 October 2015, shareholders approved the consolidation of the Ordinary Share capital of Defenx PLC on an eight for one 
basis. This took effect on 16 November 2015 following which there were 4,673,258 Ordinary Shares in issue each with a  
nominal value of £0.018.
On 3 December 2015, a total of 1,425,654 Ordinary Shares of Defenx PLC were issued upon the admission to AIM at a price of 
£1.48 per share.
 
Number of 
shares
Share capital
€
Share premium
€
As at 1 January 2014 22,817,160 63,148 –
Issue of new Ordinary Shares – private placing 9,204,000 27,460 580,373
As at 31 December 2014 32,021,160 90,608 580,373
Change in functional currency – 1,453 11,613
Issue of new Ordinary Shares – private placing 5,364,904 16,068 762,325
Equity issue costs – – (43,490)
37,386,064
Eight for one consolidation 4,673,258 –
Issue of new Ordinary Shares – AIM placing and subscription 1,425,654 36,568 2,970,136
Equity issue costs – – (229,635)
As at 31 December 2015 6,098,912 144,697 4,051,322
Share issue costs of €823,493 (2014: €463,952) have been charged against the share premium account.
Notes to the consolidated financial statements continued
Annual Report 2015 54 Defenx PLC
Strategic Report Governance Financial Statements
Deferred Share capital
The Deferred Shares of £0.0001 carry no right to vote, no right to share in any distribution of profits or returns of capital and to 
share in any residual assets available for distribution in the event of a winding up. The shares are denominated in Pounds Sterling. 
Deferred shareholders have the right for five years from issue to convert their shares into Ordinary Shares for a consideration of 
£0.10 per share less the amount paid for each Deferred Share on a one for one basis. The Company must give prior notice to 
deferred shareholders in the event of a sale. 
 
Number of 
shares
Share capital
€
Share premium
€
As at 1 January 2014 – – –
Issue of new Deferred Shares – private placing 2,400,000 295 –
As at 31 December 2014 2,400,000 295 –
Change in functional currency – 12 –
As at 31 December 2015 2,400,000 307 –
The Company has not issued any partly paid shares nor any convertible securities, exchangeable securities or securities with 
warrants. The Company does not hold any Treasury Shares.
18. Share-based payments
Defenx has established EMI and Unapproved Option Schemes as part of the Group’s incentive and retention strategy.
Under the option schemes, the Group, at its discretion, may grant share options over the Ordinary Shares of Defenx PLC to 
employees and Directors. The share options generally vest over 36 months, either from inception or from the first anniversary of 
grant, provided the holder remains in employment. There are no performance conditions. The exercise price of the share options is 
equal to the market price of the underlying shares on the date of grant. The contractual term of the share options is 10 years and 
there are no cash settlement alternatives. 
The Company also issued 60,989 warrants to advisers as part of its admission to AIM.
The fair value of the options granted is estimated at the grant date using a Black-Scholes pricing model, taking into account the 
terms and conditions upon which the options were granted, and the estimated share price volatility of the Company relative to 
that of its competitors. 
The fair value of options granted was estimated on the date of grant using the following assumptions: 
Year ended
31 December 
2015
Year ended
31 December 
2014
(restated)
Weighted average share price £1.319 –
Weighted average exercise price £1.319 –
Expected volatility 34% –
Risk free rate of return 1.76% –
Expected life (years) 5 –
Expected dividend yield 0% –
The expected life of the share options is based on current expectations and is not necessarily indicative of exercise patterns that 
may occur. The full contractual life of options is 10 years. The expected volatility reflects the assumption that the historical 
volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual 
outcome. Expected volatility was determined by referring to the share prices of a selection of comparable AIM listed companies.
Annual Report 2015 55 Defenx PLC
18. Share-based payments continued
Year ended 31 December 2015 Year ended 31 December 2014
Number WAEP
1
Number WAEP
1
Outstanding at 1 January – – – –
Granted during the year 526,614 £1.319 – –
Forfeited during the year – – – –
Exercised during the year – – – –
Expired during the year – – – –
Outstanding at 31 December 526,614 £1.319 – –
Exercisable at 31 December 94,489 £1.023 – –
Vested at 31 December 94,489 £1.023 – –
1
  Weighted average exercise price.
The weighted average remaining contractual life for the share options outstanding as at 31 December 2015 was 9.3 years 
(2014: nil). 
The range of exercise prices for options outstanding at the end of the year was £0.80 to £1.48 (2014: £nil). In the year ended 
31 December 2015, options were granted on 22 July at £0.80 each and 3 December 2015 at £1.48 each (including the warrants). 
The aggregate of the estimated fair values of the options granted on those dates is €316,756 (£225,293). The total share-based 
payment expense recognised was €60,343 (£42,827) related to equity-settled share-based payment transactions in 2013. 
No options were granted during the year ended 31 December 2014. 
19. Reserves
The following describes the nature and purpose of each reserve within equity: 
Share premium The amount of capital contributed in excess of the nominal value of each Ordinary £0.018 (2014: £0.00225) 
Share.
Merger reserve The amount arising from the use of merger accounting (as outlined in note 22) being the difference between 
the Company’s cost of investment in Defenx SA and the issued share capital of Defenx SA.
Foreign exchange reserve Foreign exchange translation reserve resulting in the translation of the ﬁnancial information from the 
functional to the presentation currency. Upon the adoption of the Euro as the Group’s functional currency,  
the balance on the foreign exchange reserve was eliminated. 
Retained earnings All other net gains and losses and transactions with owners (eg dividends) not recognised elsewhere.
20. Commitments and contingencies
Operating lease commitments – Group as lessee
The Group has operating leases on office premises in Warwick, UK, and Balerna, Switzerland on one and six months’ notice 
respectively. Future minimum rentals receivable under non-cancellable operating leases as at 31 December are €13,453 
(2014: €12,232) within one year.
Finance lease and hire purchase commitments 
The Group has no finance lease or hire purchase commitments.
Commitments
At 31 December 2015, the Group had commitments of €1,300,000 (2014: €nil) relating to software development.
Notes to the consolidated financial statements continued
Annual Report 2015 56 Defenx PLC
Strategic Report Governance Financial Statements
21. Related party transactions
Key management personnel – Group
In the opinion of the Board, only the Executive Directors of the Company are regarded as key management personnel. The 
Executive Directors have service agreements that require three months’ notice of termination from either party, except Andrea 
Stecconi for whom the notice period is six months. Key management personnel compensation, including social security, comprised 
the following: 
 
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Wages and salaries 349,229 72,709
Beneﬁts 6,272 –
Share-based payments expense 17,376 –
372,877 72,709
Other related party transactions – Group
Defenx SA entered into a rental agreement with Mr Stecconi in respect of its offices in Switzerland. Defenx SA paid Mr Stecconi 
€22,003 (2014: €19,753). There was no balance outstanding at the year end (2014: €nil).
Defenx SA sold antivirus licences to Staff Srl, a company in which Mr Stecconi is a shareholder and director, for a consideration of 
€nil (2014: €23,870) while Staff Srl issued invoices to Defenx SA for a total amount of €nil (2014: €7,704) for the reimbursement 
of marketing services. The year end net balance outstanding from Staff Srl to Defenx SA was €nil (2014: €5,600).
All transactions were on arm’s length terms.
Other related party transactions – Company
 
Year ended
31 December 
2015
€
Year ended
31 December 
2014
(restated)
€
Transactions between Defenx PLC and Defenx SA
Income 356,487 –
Expenses (24,374) –
Interest receivable 25,809 3,883
Long term loans from Defenx PLC to Defenx SA 2,130,013 594,381
22. Events after the reporting date
On 22 January 2016, Defenx SA entered into a CHF 100,000 overdraft and revolver facility with its principal bankers, Credit 
Suisse, in Switzerland.
Annual Report 2015 57 Defenx PLC
Notice of AGM
Defenx PLC
(the Company)
(Company number 8993398)
Notice is given that the AGM of the members of the Company will be held at the offices of Fladgate LLP, 16 Great Queen Street, 
London WC2B 5DG on Wednesday 22nd June 2016 at 12.00pm, to consider and, if thought fit, pass the following resolutions,  
of which resolutions 1 to 8 (inclusive) will be proposed as ordinary resolutions and resolutions 9, 10 and 11 will be proposed as 
special resolutions.
Ordinary resolutions
Report and Accounts
1. To receive the Audited Accounts and Reports of the Directors and auditors for the year ended 31 December 2105.
Remuneration Report
2. To approve the Remuneration Report for the year ended 31 December 2015.
Re-election of Directors
3. To re-elect Philipp Prince as a Director who is retiring in accordance with Article 25.8 of the Articles and being eligible, offers 
himself for re-election.
4. To re-elect Anthony Reeves as a Director who is retiring in accordance with Article 25.8 of the Articles and being eligible, offers 
himself for re-election.
5. To re-elect Leonard Seelig as a Director who is retiring in accordance with Article 25.8 of the Articles and being eligible, offers 
himself for re-election.
Reappointment of auditors
6. To reappoint haysmacintyre as auditors until the conclusion of the next AGM of the Company at which accounts are laid.
Auditors’ remuneration
7. To authorise the Directors to determine the remuneration of the auditor.
Directors’ authority to allot shares
8. That in substitution for all existing authorities, the Directors be generally and unconditionally authorised in accordance with 
section 551 of the Companies Act 2006 (the Act) to exercise all the powers of the Company to allot shares in the Company  
or to grant rights to subscribe for or convert any security into shares in the Company up to an aggregate nominal amount of 
£36,593.46 during the period from the date of the passing of this resolution and expiring on the date of the next AGM or on  
30 June 2017, whichever is earlier, but so that this authority shall allow the Company to make offers or agreements before the 
expiry of this authority which would, or might, require shares to be allotted or rights to subscribe for or convert security into 
shares to be granted after such expiry.
Annual Report 2015 58 Defenx PLC
Strategic Report Governance Financial Statements
Special resolutions
Authority to disapply pre-emption rights
9. That, subject to resolution 8 above being passed and section 551 of the Act, the Directors be empowered, pursuant to section 
570 of the Act, to allot equity securities (as defined in section 560 of the Act) as if section 561(1) of the Act did not apply to 
any such allotment, provided that this power shall be limited to the allotment of equity securities:
(a) during the period expiring on the date of the next AGM of the Company or, if earlier, on 30 June 2017 but so that this power 
shall enable the Company to make offers or agreements which would or might require equity securities to be allotted after 
the expiry of this power;
(b) up to an aggregate nominal amount of £10,978.04 representing the nominal value of 10% of the Company’s issued share 
capital at the date of this Notice; and
(c) shall include the power to sell treasury shares under section 727 of the Act.
Purchase of own shares
10.   That the Company be generally and unconditionally authorised to make one or more market purchases, within the meaning of 
Section 693(2) of the Act, of Ordinary Shares of 1p each in the Company (Shares) and to hold such Shares as Treasury Shares, 
provided that:
 (a)  the maximum number of Shares to be repurchased shall be 304,945 Shares representing the nominal value of 5% of the 
Company’s issued share capital at the date of this Notice;
 (b)  the minimum price (exclusive of expenses) which may be paid for a Share shall be 1p per share;
 (c)   the maximum price (exclusive of expenses) which may be paid for a Share shall be an amount equal to 105% of the average 
market value of the Shares (as derived from the mid-market price) for the five business days immediately preceding the 
date on which the Share is purchased;
 (d)  any purchase of Shares will be made in the market for cash at prices below the prevailing net asset value per share as 
determined by the Directors;
 (e)  the authority hereby conferred shall expire at the conclusion of the next AGM of the Company or, if earlier, on 30 June 2017; 
and
 (f)   the Company may make a contract to purchase Shares under the authority hereby conferred prior to the expiry of such 
authority and may make a purchase of Shares pursuant to any such contract notwithstanding such expiry.
Registered office: By order of the Board
Ashley Park House Tim Hughes
42–50 Hersham Road A duly authorised signatory of
Walton-on-Thames David Venus & Company LLP
Surrey KT12 1RZ   Company Secretary
12 May 2016.
Annual Report 2015 59 Defenx PLC
Notes:
1. A member entitled to attend and vote at the above meeting has the right to appoint a proxy or proxies to attend and vote in  
his place. A proxy need not be a member of the Company.
2. The form of proxy and the power of attorney or other authority, if any, under which it is signed, or a copy of such power or 
authority certified by a notary, must be completed and returned to the offices of the Company’s registrars, SLC Registrars, 
Ashley Park House, 42–50 Hersham Road, Walton-on-Thames, Surrey KT12 1RZ, to arrive no fewer than 48 hours before the 
date set for the meeting or adjourned meeting.
3. In accordance with regulation 41 of the Uncertificated Securities Regulations 2001, (as amended) only those persons entered 
in the register of members of the Company as the holders of Ordinary Shares at 6.00pm on the pre-penultimate day of the 
AGM, are entitled to attend and vote at the meeting in respect of the shares held by them at the relevant time. Any changes 
made to the register of members of the Company after that time will be disregarded in determining the right of any person to 
attend or vote at the meeting.
4. Resolutions 3, 4 and 5 – Article 25.8 of the Company’s Articles of Association requires that any person who has been 
appointed as a Director since the last AGM, must retire at the next AGM following such appointment and if they are eligible, 
may offer themselves for re-election. Persons retiring under the provisions of Article 25.8 are not counted in calculating the 
number of Directors who are required to retire by rotation.
5. Resolutions 6 and 7 – The auditors are required to be reappointed at each AGM at which accounts are presented. The Board 
on the recommendation of the Audit Committee, which has evaluated the effectiveness and independence of the external 
auditors, is proposing the reappointment of haysmacintyre. Resolution 7 is proposed to authorise the Board to fix the 
remuneration of the auditors.
6. Resolution 9 – This resolution is to renew the authority given to the Directors to allot shares or rights to subscribe for or 
convert security into shares in the capital of the Company subject to the conditions of the Act. The authority to be given by 
this resolution is limited to the allotment of 2,032,970 Ordinary Shares representing one third of the issued share capital at  
the date of this Notice and shall be in substitution for all existing authorities but shall be without prejudice to any allotment of 
shares or grant of rights to subscribe for or convert security into shares already made or offered or agreed to be made pursuant 
to such authorities. The authority shall expire at the next AGM or on 30 June 2017 , whichever is earlier.
7. Resolution 9 – When shares are to be allotted for cash, section 561(1) of the Companies Act 2006 provides that existing 
shareholders have pre-emption rights and that any new shares are offered first to such shareholders in proportion to their 
existing shareholdings. This resolution is seeking to authorise the Directors to allot Shares of up to an aggregate nominal 
amount of £10,978.04 otherwise than on a pro rata basis. This represents 10% of the Company’s issued share capital on the 
date of this document. This authority shall expire at the next AGM or on 30 June 2017 , whichever is earlier.
 Whilst the Directors have no intention at the present time of issuing relevant securities, other than pursuant to existing rights 
under employee share schemes, they are seeking annual renewal of this authority in accordance with best practice and to 
ensure the Company has maximum flexibility in managing capital resources.
8. Resolution 10 – This resolution is to authorise the Company to make market purchases of up to 5% of its own shares in  
issue as set out in the resolution. The authority shall expire at the next AGM or on 30 June 2017 , whichever is earlier.
 The Directors consider that in certain circumstances it may be advantageous for the Company to purchase its own shares at  
a discount to net asset value. Purchases will only be made on the London Stock Exchange within guidelines established from 
time to time by the Board.
 The Directors would only consider exercising this authority if it is considered that such purchases would be to the advantage  
of the Company and its shareholders as a whole. The principal aim of this share buyback facility is to enhance shareholder value 
by acquiring shares at a discount to net asset value, as and when the Directors consider this to be appropriate. The purchase  
of shares when they are trading at a discount to net asset value per share, and their cancellation, should result in an increase  
in the resulting net asset value per share for the remaining Ordinary Shares. The Company will also be in a better position to 
address any imbalance between supply and demand for the shares that may be reflected in the discount to net asset value at 
which the Company’s shares trade on the London Stock Exchange.
 The Directors intend that any shares purchased under this authority will be held by the Company as Treasury Shares, within  
the limits allowed by the law, unless the Directors consider that purchasing the shares and cancelling them would be to the 
advantage of the Company and its shareholders. The Directors may dispose of Treasury Shares in accordance with relevant 
legislation and the authority relating to rights of pre-emption granted by shareholders in general meeting (see resolution 9  
and the note thereto).
9. The following documents, which are available for inspection during normal business hours at the registered office of the 
Company on any business day, will also be available for inspection on the day of the meeting until the Company’s normal close 
of business:
(a) copies of Executive Directors’ service contracts with the Company;
(b) copies of Non-executive Directors’ letters of appointment; and
(c)  a copy of the Company’s current Articles of Association and the proposed new Articles of Association. 
Notice of AGM continued
Annual Report 2015 60 Defenx PLC
Strategic Report Governance Financial Statements
Directors
Anthony Reeves
Andrea Stecconi
Guido Branca
Philipp Prince
Leonard Seelig
Secretary
Equiniti David Venus Limited
42–50 Hersham Road 
Walton-on-Thames 
Surrey KT12 1RZ
Registrars
SLC Registrars
42–50 Hersham Road 
Walton-on-Thames 
Surrey KT12 1RZ 
Registered office
42–50 Hersham Road 
Walton-on-Thames 
Surrey KT12 1RZ 
Registered number
08993398
Share capital
The ordinary share capital of Defenx PLC is  
listed on AIM, a market operated by London  
Stock Exchange Group plc. The shares are  
listed under the trading ticker DFX.  
The ISIN number is GB00BYNF4J61  
and SEDOL number is BYNF4J6.
Auditors
haysmacintyre
6 Red Lion Square 
London WC1R 4AG
Nominated adviser
Strand Hanson Limited
26 Mount Row 
London W1K 3SQ 
Nominated broker
WH Ireland Limited
11 St James’s Square 
Manchester M2 6WH 
Solicitors
Fladgate LLP
16 Great Queen Street 
London WC2B 5DG 
Bankers
National Westminster Bank
135 Bishopsgate
London EC2M 3UR
Credit Suisse AG
SGCT 1
Viale Stazione 19
6501 Bellinzona
Switzerland
Website
www.defenx.com
Company information
Annual Report 2015 61 Defenx PLC
Track record
  2015 2014 2013 2012
As at 31 December
Revenue unit €000s 4,490 2,382 2,077 891
Revenue growth +88% +15% +33% –
Gross profit €000s 3,977 2,034 1,557 439
Gross margin % 88.6% 85.4% 75.0% 49.3%
Operating proﬁt before exceptional expenses €000s 979 805 410 114
Operating proﬁt margin % 21.8% 33.8% 19.7% 12.8%
Proﬁt before tax €000s 362 761 409 113
Earnings per share
Basic €0.042 €0.167 €0.115 €0.045
Diluted €0.039 €0.159 €0.115 €0.045
Net cash ﬂow from operating activities €000s (1,022) 388 661 (149)
Net cash used in investing activities €000s (1,351) (1,211) (658) 69
Net cash from ﬁnancing activities €000s 3,512 1,026 – 75
Net increase in cash and cash equivalents €000s 1,139 203 3 (5)
Cash and cash equivalents at year end €000s 1,334 206 2 1
Net assets €000s 5,812 2,048 457 129
Net assets per share €1.277 €0.638 €0.160 €0.045
Annual Report 2015 62 Defenx PLC
Strategic Report Governance Financial Statements
Notes
Annual Report 2015 63 Defenx PLC
Notes
Annual Report 2015 64 FSC LOGO TO 
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Defenx PLC Annual Report 2015
Defenx PLC
42-50 Hersham Road
Walton-on-Thames
Surrey KT12 1RZ
www.defenx.com