Ann: Quarterly Activities/Appendix 4C Cash Flow Report, page-9

I've been holding DRO for about 12 months now, and while the defence sector has potential, it's often a mixed bag. One of the biggest challenges is the heavy investment required in R&D to stay competitive, which can take years to pay off. The need for constant innovation is critical, particularly in cutting-edge fields like drones, where technology is evolving rapidly. On top of that, building a skilled workforce and growing the business takes significant time and resources, meaning profitability can be delayed for a long period.

While DRO is in the right industry, I can't fully comment on whether their current product lineup is the most cost-effective or competitive. The drone industry itself is full of uncertainties, as we've seen from its role in the Russia-Ukraine war. Drones are being deployed in new ways, but it's hard to predict how the technology will evolve and which companies will emerge as leaders.Another major issue is that the defence industry is highly relationship-driven, often more about who you know than what you produce. Contracts are frequently secured through long-standing relationships and behind-the-scenes dealings, making it difficult for new players to break in. There's also a lot of murky "brown envelope" business dealings, with contracts sometimes awarded not purely based on product merit but rather on undisclosed factors. Additionally, government regulations and geopolitical tensions can shift priorities rapidly, adding to the unpredictability of the sector. All these factors make defence a tough industry to navigate, despite its enormous potential.