Final Results

Draganfly Investments Limited ("Draganfly" or the "Company")

Directors' report and financial statements

for the year ended 30 April 2011

Chairman's Statement

Year Ending 30 April 2011

During the 12 months under review net assets have risen from 0.80 pence per share to 1.03 pence per share, an increase of 28.8%.

This increase mirrors the 25% rise in the wider AIM market during the period under review, and also reflects a more positive stock market backdrop with rising risk appetite and values in global equity markets generally. The rally was particularly sharp during the latter quarter of 2010, and spilled over into the early stages of 2011.

Consequently, portfolio liquidity improved markedly with strong gains from our shareholdings in Sirius Minerals and Sino Gas and Energy. In both cases we took the opportunity to reduce holdings into rising markets, achieving sale prices well in excess of current market valuations for each share. Moreover, the overall performance of the quoted portfolio is masked by a net reduction in holding values from our private holdings. Taking these into account, the underlying quoted portfolio grew by approximately 55% during the review period. The portfolio has been further boosted by the recent flotation in April 2011, of Microsaic Systems, which initially traded well above the 30p placing price. We took the opportunity to sell part of our position at prices ranging between 40p and 42p per share, but retain a shareholding in the Company.

Turning to the private holdings, your Board has decided to reduce the holding value for Continental Petroleum, reflecting the difficulty the Company has experienced in renewing its exploration and production licences in Siberia. Little progress has been made in this regard and the Company has not been forthcoming with a cogent plan for the resurrection of these licences during the past year. It is therefore prudent to revise the valuation to zero, resulting in a net reduction in holding value of £258,900. Thankfully, this has been offset by good progress from Atlantic Healthcare, where the Company recently confirmed it has successfully raised in excess of £1.7m for the commercialisation of its core gastro-intestinal product, alicaforsen. We are very excited by the strong progress made by Atlantic, and look forward to keeping shareholders up to date with developments as the Company progresses through its commercialisation phase. This event increases the holding value by £134,375, and Atlantic remains the only unquoted portfolio investment where we ascribe a positive valuation. The net effect of amendments within the unquoted holdings is a reduction of £124,525.

The commencement of the Company's new financial year has coincided with turbulent times in global markets which, at 30 June 2011, had reduced the net asset value to 0.88 pence per share. Nevertheless, we look forward to the future with renewed confidence and look forward to updating shareholders on our growth plans in due course. May I take this opportunity to thank shareholders for their continued support.

Mark Horrocks

Chairman

For further information please contact:

Roy Pitcher +44 (0) 1534 787889

Dennis Edmonds +44 (0) 7796 338 372

Clive Carver/Rose Herbert

FinnCap (Nominated Adviser) +44 (0)20 7600 1658

Profit and loss account

for the year ended 30 April 2011

Notes to the financial statements

for the year ended 30 April 2011

1.2. Going concern basis of accounting

The company's business activities, together with the factors likely to affect its future development and financial position are set out in the Chairman's statement, the review of the business on page 4 and in the risk management disclosures on pages 4 to 5 and in note 10.

The company's investments in quoted securities, which are readily realisable, enable the company to maintain its liquidity and it is therefore well placed to manage its financial risks and in ensuring it can meet its obligations as they fall due.

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for a minimum period of at least 12 months from the date of approval of the financial statements. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3. Foreign currencies

The company's accounts are presented in sterling which is its functional currency. Transactions in foreign currencies are initially recorded at the rate of exchange prevailing at the date of the transaction. Assets and liabilities denominated in foreign currencies are retranslated at the balance sheet date with any exchange differences charged or credited to the profit and loss account.

1.4. Taxation

The Company is eligible to pay Jersey tax at the standard rate of 0% and consequently, no provision for taxation, either current or deferred, has been made in these financial statements.

1.5. Financial instruments

Financial assets and liabilities are recognised in the balance sheet when the company has become party to the contractual provisions of the instrument.

Investments

The company manages its investments with a view to profiting from the receipt of dividends and changes in fair value of investments. Therefore all quoted investments and unquoted equity investments are designated as at fair value through the profit or loss and carried in the balance sheet at fair value. All investments are initially recognised at the fair value of the consideration given plus acquisition costs associated with the investment and held at this value until it is appropriate to measure fair value on a different basis.

Investments are fair valued using quoted market prices, independent appraisals, discounted cash flow analysis or other appropriate valuation models at the balance sheet date.

Quoted investments are stated at bid 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' in accordance with the International Private Equity and Venture Capital Valuation Guidelines, published in September 2009.

(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.

(iii) 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.

Cash and cash equivalents

Cash and cash equivalents are included in the balance sheet at cost. Cash and cash equivalents comprise cash at

bank and in hand and short term deposits with an original maturity of three months or less.

Interest-bearing loans and borrowings

All loans and borrowings are recognised initially at cost, which is the fair value of the consideration received.

Short term debtors and creditors

Short term debtors are comprised wholly of prepayments and as such do not satisfy the definition of a

 financial asset as a prepayment does not give the company right to receive cash in the future.

Short term creditors are comprised of accrued costs at the year end, which do satisfy the definition of a financial liability as they create an obligation for the company to pay cash in the future.

1.6. Income

Interest income is recognised on a time apportionment basis. Dividend income from investments is recognised when the shareholders' right to receive payment has been established.

The basic earnings/(loss) per ordinary share is calculated by dividing the profit/(loss) for the year by the weighted average number of equity shares outstanding during the year.

The diluted earnings/(loss) per ordinary share is calculated by dividing the profit/(loss) for the year by the weighted average number of equity shares outstanding during the year (after adjusting both figures for the effect of dilutive potential ordinary shares).

The calculation of the basic earnings/(loss) per ordinary share is based upon the following data:

There have been no transactions involving ordinary shares or potential ordinary shares since the reporting date and before the approval of these financial statements.

 3. Fixed asset investments

None of the investments were 20% or more of the nominal value of any class of shares held, except for Millpath Limited.

4. Annual Report and Accounts

 Copies of the annual report and accounts for the year ended 30 April 2011 will shortly be sent to shareholders and will be available to view and download from the Company's website www:draganflyinvestments.com