Draganfly Investments Regulatory News (DRG)

31 Jan 2006 07:01

Draganfly Investments Ltd31 January 2006 Draganfly Investments Limited (the "Company") 31 January 2006 Interim results for the period from incorporation on 7 April 2005 to 31 October2005 Chairman's Statement I am pleased to report good progress during the first six months of the year. Net Assets have risen from £3,050,000 (2.67p per share) upon AIM admission on 29April 2005, to £3,534,421.42 (3.09p per share) on 31st October 2005. As at 31December 2005, the NAV stands at 2.84p per share. At the end of October, we held eight investments to reflect the size of the fundand the original investment brief, which is to run a small and focused portfolioof investments. Of these eight holdings, two were pre-IPO investments, namely ACTA SpA ("ACTA")and Continental Petroleum Limited ("Continental"). We have achieved an excellent strike rate with our pre-IPO investments and haverapidly overcome the early disappointment of the non-completion of Russia Coal'sproposed deal in Southern Russia. Most notably, in June, we participated in a pre-IPO funding round by ACTA, thedeveloper of platinum free catalysts for the fuel cell industry. ACTA sharessuccessfully admitted to trading on AIM on 4th October, yielding a 120 per cent.return on our investment. We have subsequently top-sliced the position in orderto reduce our original entry price but ACTA remains a holding with theportfolio. In August we completed our second pre-IPO investment, participating in a privateplacing by Continental. Continental recently announced their agreement to beacquired subject to satisfactory due diligence and shareholder approval, byCordillera Resources PLC. This deal potentially values Continental at £11.64 pershare, representing an uplift of £197,000 (94 per cent.) on our originalinvestment. This uplift will not be reflected in our NAV until the enlargedentity is re-admitted to AIM, most probably in early March 2006. Subsequent to 31st October 2005, we secured a £400,000 credit facility to allowus to deliver continued improved returns to our shareholders. Since the period end we have made one pre-IPO investment and participated in asecondary placing in AIM-listed Mercator Gold PLC, resulting in a total of tenholdings. We are always alert to fresh investment opportunities but do notanticipate materially increasing the number of holdings at this stage. Webelieve the current environment for small companies and pre-IPO investmentsremains very encouraging. The portfolio of stocks as at 31st October 2005 comprised: ACTA SpABDI Mining Corp.Braemore Resources PLCCambrian Mining PLCContinental Petroleum LtdGB Group PLCImmedia Broadcasting PLCUnited Clearing PLC Subsequently we have added Mercator Gold PLCS.H.I.P Mark HorrocksChairman 31 January 2006 Enquiries Dennis Edmonds 07796 338 372Peter HarrisDraganfly Investments Limited Draganfly Investments LimitedUNAUDITED PROFIT AND LOSS ACCOUNTfor the period from incorporation on 7 April 2005 to 31 October 2005 2005 Notes £ TURNOVER 584,225 Cost of sales - ________ GROSS PROFIT 584,225 Administrative expenses 190,800 ________ OPERATING PROFIT 393,425 Interest receivable and other income 18,423 ________ PROFIT ON ORDINARY ACTIVITIES 411,848 ________ Earnings per share - basic £0.0036 4 The operating profit for the period arises from the company's continuingoperations. There were no other gains or losses in the period other than those stated above. Draganfly Investments LimitedUNAUDITED BALANCE SHEET AT 31 OCTOBER 2005 2005 Notes £ £CURRENT ASSETSInvestments 2 3,208,003Cash at bank 326,418 _________ 3,534,421 _________ NET CURRENT ASSETS 3,534,421 _________NET ASSETS 3,534,421 _________ CAPITAL AND RESERVESCalled up share capital 3 1,142,270Share premium account 3 1,980,303Profit and loss account 3 411,848 _________ EQUITY SHAREHOLDERS' FUNDS 3,534,421 _________ Approved by the board on 27 January 2006 Draganfly Investments LimitedUNAUDITED CASH FLOW STATEMENTfor the period ended 31 October 2005 2005 £ NET CASH (OUTFLOW) FROM OPERATING ACTIVITIES (2,814,578) RETURNS ON INVESTMENTS AND SERVICING OF FINANCEInterest received 18,423 ___________ NET CASH (OUTFLOW) BEFORE FINANCING (2,796,155) FINANCING Net proceeds from the issue of ordinary share capital 3,122,572 ___________ INCREASE IN CASH IN THE PERIOD AND AT 31 OCTOBER 2005 326,417 ___________ RECONCILIATION OF OPERATING PROFIT TO NET CASH (OUTFLOWS) FROM OPERATINGACTIVITIES Operating profit 393,425(Increase) in investment value (584,225)Purchase of investments (2,623,778) ___________ (2,814,578) ___________ Draganfly Investments LimitedNOTES TO THE UNAUDITED ACCOUNTSfor the period ended 31 October 2005 1 Accounting policies a) Basis of preparation The financial statements are prepared in accordance with United Kingdom Accounting Standards. b) Investments In accordance with FRS 26, investments are designated as at fair value through profit or loss. Quoted investments are stated at mid-market prices at the balance sheet date. Unlisted investments 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 investment will provide a basis of the valuation. Where a fair value cannot be estimated reliably, the investment is reported at cost or the carrying value at the previous reporting date, unless there is evidence that the investment has since been impaired. c) Taxation The company has been granted exempt company status within the meaning of Article 123A of the Income Tax (Jersey) Law 1961 (as amended). The effect of such special status is that the company is treated as a non-resident company for the purposes of Jersey tax laws and is therefore exempt from Jersey income tax on its profits arising outside Jersey and, by concession, on bank deposit interest arising in Jersey (and from any obligation to withhold Jersey income tax from any interest or dividend payments made by it). This status is renewable on an annual basis upon payment of a fee to the Comptroller of Income 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 made in these financial statements. Draganfly Investments LimitedNOTES TO THE UNAUDITED ACCOUNTS (continued)for the period ended 31 October 2005 2 Investments The carrying value of investments is stated as follows: Quoted Unquoted Total £ £ £ Cost of investments 2,238,278 385,500 2,623,778Change in fair values 363,121 221,104 584,225 _________ _________ _________ As at 31 October 2005 2,601,399 606,604 3,208,003 _________ _________ _________ 3 Reconciliation of movement in shareholders' funds Profit and loss Called up Share premium Share-holders' Account Share capital account funds £ £ £ £ Openingshareholders' funds - - - -Profit for the 411,848 - - 411,848periodNew equity sharecapital subscribed - 1,142,270 1,980,303 3,122,573 _________ _________ _________ _________ As at 31 October 411,848 1,142,270 1,980,303 3,534,4212005 _________ _________ _________ _________ 4 Earnings per share Basic earnings per share is calculated on the basis of profit for the period of £411,848 and 114,227,000 shares being the weighted average number of shares in issue during the trading period. 5 Dividends No dividends have been paid or are proposed. 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