DRAGANFLY INVESTMENTS LIMITED 
By
During tbe period under review net assets bave fallen from 0.67 pence per sbare to 0.50 pence per sbare. Tbis dec!ine primarily reflects tbe continued decline in tbe sbare prices of URU Metals Limited, Motive Television PLC, and Royal Resources Limited (ASX). Portfolio liquidity bas reduced as a result but remains healtby. Trading activity bas been very ligbt but was cbaracterised by tbe sale of sbares in Sirius Minerals PLC, two way trade in URU, and tbe purcbase of sbares in Strategie Minerals PLC. Tbe core quoted portfolio during tbe period under review consisted of Immedia Group PLC, URU Metals Limited, Motive Television PLC, Royal Resources Limited (ASX), and Strategie Minerals PLC.
We bave previously alluded to our enthusiasm regarding our sbarebolding in Royal Resources. During tbe course of2012 Royal Resources announced a sequence ofupgrades to its magnetite resource base, confirming tbe potential previously bigbligbted by that company's management and exceeding our own expectations. In addition tbe resources company progressed towards finalisation of its pre-feasibility report fora 10 million tonne per annum concentrate operation. Despite these extremely positive developments tbe sbare price declined markedly during tbe period under review, and bas continued to slide since tbe period end. We can onìy surmise tbat tbe delays to tbe pre-feasibility work frustrated the predominantly domestic retail sbarebolder base oftbe company, resulting in selling activity. Equally, tbe dramatic fall in iron ore prices had a significant impact on sentiment towards sucb projects, particularly in tbe Australian market piace, and we note that since tbe period end, tbe sbare price bas not recovered to reflect stronger iron ore prices. Meanwbile, we remain of tbe view tbat the resources company's market capitalisation is consistent witb assets a fraction of its size, and look forward to concrete news on project funding in due course.
Strategie Minerals PLC bas also been buffeted by iron ore price volatility but we believe it has tbe potential to generate bealthy casb flows in tbe current market environment, and tbat 2013 will be a positive year for tbe company. We would refer investors to tbe Strategie Minerals website for further information. Elsewbere among tbe quoted sbareboldings, we are disappointed by MTV's sbare price performance and bope tbe company can unlock its various commerciai opportunities in 2013. We also note that URU's South African nickel project is in deadlock and bope tbat matters can be progressed during tbis year, to allow the exploitation oftbe project's undoubted potential. Meanwbile, URU maintains a bealtby balance sheet.
Our core un:quoted sbarebolding, Atlantic Healthcare, is making good progress on a number of fronts, including patient treatment across Europe via the company's Named Patient Sales (NPS) programme, and continues to work towards the establishment of out-licensing agreements for the USA. We hope to be able to update shareholders on progress in due course.
May I take the opportunity to thank our shareholders for their continued support. Mark Horrocks
Chairman
For further information please contact:
T Edward G Bayman
Dennis Edmonds
+44 (O) 1534 787898
+44 (O) 7796 338 372
Ed Frisby!Rose Herbert
Fim1Cap (Nominated Adviser) +44 (0)20 7220 0500
Draganfly Investments Limited
Unaudited Profit and loss account
for the 6 month period ended 31 October 2012
Note
Continuing Operations
6 months to 6 months to
31110/12 31110/11
! !
Turnover
Administrative expenses
2 (173,044)
(40,463)
(323,669)
(44,180)
Operating (loss)
(213,507) (367,849)
Other interest receivable and similar
income 5 10
lnterest payable and similar charges
(Loss) on ordinary activities (213,502) (367,839)
There are no recognised gains or losses other than those included in the profit and loss account.
(Loss) per share - basic
Basic (in pence) (0.17)p (0.32)p
Draganfly Investments Limited
Unaudited Balance sheet as at 31 October 2012
31110/12 31110/11
Notes f f f f
Current assets
Debtors 2,942 2,537
lnvestments 3 633,685 801,110
Cash accounts 6,771 15,845
643,398 819,492
Creditors: amounts falling due within one year
Creditors 4 (17,347) (13,687)
Net assets 626,051 805,805
Capitai and reserves | |||
Called up share capitai | 1,256,270 | 1,142,270 | |
Share premium account | 1,980,303 | 1,980,303 | |
Protit and loss account | (2,610,522) | {2,316,7682 |
Equity shareholders' 5 626,051 805,805 funds
Draganfly Investments Limited
Unaudited Cash flow statement
for the 6 month period ended 31 October 2012
Reconciliation of operating loss to net cash outflow from operating activities Operating (loss)
Realised loss/(gain) on sale of investments Unrealised loss on revaluation of investments Decrease in debtors
(Decrease) in generai creditors
6 months to
31110/12
f,
(213,502)
56,531
334,850
2,208 (11,271)
6 months to
31110/11
f,
(367,839) (40,292)
363,961
3,467 (590)
Net cash outflow from operating activities
Cash flow statement
Net cash outflow from operating activities Capitai expenditure and financial investment Increase/(decrease) in cash in the period
Increase /(decrease) in cash in the period
Opening cash balance
Closing cash balance
168,816 (41,293)
168,816 (41,293) (165,166) (58,9772
3,650 (100,270)
3,650 (100,270)
3,121 116,115
6,771 15,845
Draganfly Investments Limited
Notes to the interim statements
for the 6 month period ended 31 October 2012
l Accounting policies
Basis of preparation
The financial statements are prepared in accordance with applicable UK accounting standards.
Going concern basis of accounting
The company's investrnents in quoted securities, which are readily realisable, enable the cornpany to
rnaintain its liquidity and it is therefore well placed to rnanage its financial risks and in ensuring it can
rneet its obligations as they fall due.
The directors bave a reasonable expectation that the cornpany has adequate resources to continue in operational existence for a rninirnurn period of at Jeast 12 months frorn the date of approvai of the financial statements. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.
Investments
In accordance with FRS 26, investrnents are designated as at fair value through profit or loss.
Quoted investrnents are stated at mid-market prices at the balance sheet date.
Unlisted investrnents are stated at 'price of recent investment', reflecting the early stage nature of the investment. The following considerations are used when calculating the 'price of recent investment'
(i) Where the investment being valued was itself made recently, its cost will generally provide a good indication of fair value.
(ii) Where there has been a recent investment by third parties, the price of that investrnent will provide a basis ofthe valuation.
Where a fair value cannot be estirnated reliably, the investrnent is reported at cost or the carrying value at the previous reporting date, unless there is evidence that the investment has since been impaired.
Taxation
The company has been granted exempt company status within the meaning of Artide 123A of the
Incarne Tax (Jersey) Law 1961 (as amended). The effect of such special status is that the cornpany is
treated as a non-resident cornpany for the purposes of Jersey tax laws and is therefore exernpt from Jersey incarne tax on its profits arising outside Jersey and, by concession, on bank deposit interest arising in Jersey (and frorn any obligation to withhold Jersey incarne tax frorn any interest or dividend payments rnade by it). This status is renewable on an annual basis upon payment of a fee to the Cornptroller oflncome Tax in Jersey, and it is the company's intention to maintain this status.
Consequently, no provision for taxation, either current or deferred has been rnade in these financial statements.
2 Turnover
Turnover is derived frorn its principal activity and includes dividends received from investrnents. It
also includes realised and unrealised profits and losses on investrnents.
Draganfly Investments Limited
Notes to the interim statements
for the 6 month period ended 31 October 2012
3 Investments
The carrying value of investments is stated as follows:
Fair value of investments at l May 2012
Costs of investment purchases in the period
Sale proceeds of investments sold in the period
Realised gains on sale of investments included in the profit and loss account
Unrealised change in fair value of investments held at
31 October 2012 included in the profit and loss account
Fair nlue of portfolio of investments at 31 October
2012
Millpath Limited
Fair value of total investments at 31 October 2012
4 Creditors: amounts falling due within one year
Other creditors
Quoted
;E
475,505
55,997
109,169
640,671
(56,531) (334,850)
(391,381)
249,290
249,290
Unquoted
;E
384,375
384,375
384,375
20
384,395
31/10/2012
:E
17,347
17,347
Total
:E
859,880
55,997
109,169
1,025,046
(56,531) (334,850)
(391,381)
633,665
20
633,685
31/10/2011
:E
13,687
13,687
Draganfly Investments Limited
Notes to the interim statements
for the period ended 31 October 2012
5 Reconciliation of Shareholders' funds
As at 1st May 2012 (Loss) for the period
Profitand Loss Account f
(2,397,020)
(213,502)
Called up Share
Capitai
f
1,256,270
Share Premium
Account
f
1,980,303
Total
f
839,553 (213,502)
As at 31st October
2012 (2,610,522) 1,256,270 1,980,303 626,051
6 Earnings per share
Basic earnings per share is calculated on the basis of the (loss) for the period of f:213,502 and
125,627,000 shares (114,227,000 shares - 31 October 2011) being the weighted average number of shares in issue during the trading period and is stated in pence.
7 Dividends
No dividends have been paid or proposed.
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