Half Yearly Report

VMOTO ACHIEVES ANOTHER RECORD RESULT WITH

PROFITABLE GROWTH CONTINUING

announcement 1 SEPTEMBER 2015

Vmoto Limited (ASX: VMT) is pleased to announce its results for the six months ended 30 June 2015 (1H15) that saw the Company deliver another record performance and generating strong growth across all key metrics.

Commenting on the 1H15 result, Managing Director Charles Chen said: "Vmoto has delivered on its clearly defined strategy of targeting high margin international unit sales, while also continuing to develop the brand's presence in the domestic Chinese market.

"The Company's strategy to pursue high margin international sales has enjoyed early success, with a 68% increase in international unit sales underpinning the growth in profits.

"With sales volume over the past six months in line with management expectations, Vmoto is well positioned to achieve its stated NPAT guidance for 2015 of between $5 million and $7 million. We have also received significant interest for potential collaborations with international groups that will complement and enhance our existing customer base, and we look forward to reporting on these in the coming months," said Mr Chen.

Key financial highlights

· Revenue up 57% to $24.9 million (1H14: $15.9 million)

· EBITDA up 264% to $2.1 million (1H14: $574k)

· Statutory NPAT up 379% to $1.0 million (1H14: $211k)

· Underlying NPAT (after removing non-cash expenses) up 122% to $1.6 million1 (1H14: $705k2)

· Strong balance sheet, with gross cash of $11.1 million (31 December 2014: $3.8 million)

Key operational highlights

· Total units sold up 13% to 41,503 units (1H14: 36,705)

· Units sold to international customers up 68% to 7,211 (1H14: 4,284)

· Expanded retail sales network in China with over 43 outlets comprising company owned retail stores and third party distributor/dealer relationships

· Continued growth in new international markets, including Denmark, Malaysia and Vietnam

· Appointed a distributor for the UK and Irish markets

· Progressed with the establishment of internet based retail sales platform

· Progressed discussions with PowerEagle to extend production agreement post 2015

· Successfully raised $8.9 million through an oversubscribed placement to existing and new institutional and sophisticated investors in Australia and the UK to fund growth initiatives.

Commenting on Vmoto's 1H15 performance, Mr Chen said he was pleased with how the Company was tracking in terms of revenue and profit, and he expects to see unit sales continue to grow in the second half as the online sales platform becomes operational and new international distributors receive their first shipments.

"Vmoto has developed a reputation as a prestigious, high quality brand, both in China and internationally. Making our products more accessible through our soon to be launched online sales platform will drive increased sales volumes of the Vmoto brand.

"Vmoto has progressed a number of international opportunities over the first half of 2015, commencing discussions with a significant European supermarket group and a high-tech North American company developing shared transportation and communication systems for electric vehicles.

"Vmoto also appointed a new distributor for the UK and Ireland, with delivery of that distributor's first order scheduled for this quarter. This exclusive distribution agreement for the UK and Ireland is an exciting step for Vmoto and will strengthen the visibility and accessibility of Vmoto's brand and products in international markets, which is in line with our strategy to target higher margin international sales.

"Following our successful, oversubscribed $8.9 million raising, Vmoto has further strengthened its balance sheet, putting the Company in a strong position to pursue several strategic initiatives that will underpin future growth," added Mr Chen.

Outlook

Vmoto will continue to execute its strategy of targeting high margin international sales and growth markets. The first half of this year has seen the Company progress significant new market entry and distribution opportunities, including North America, Italy, Switzerland, the UK, Ireland and New Zealand. These and further new markets will be developed over the second half of this year as the Company looks to deliver the growth that will drive achievement of its earnings forecast.

The three-wheel and four-wheel electric vehicle company, in which Vmoto holds a 20% equity interest, re-located its operations to Vmoto's Nanjing manufacturing facility, after initially producing units externally. This company focuses on three-wheel and four-wheel electric vehicles that have applications across a number of industries, including freight and goods delivery, leisure and sightseeing and transportation for the aged and disabled population. Any revenue generated will initially be re-invested back into the company as it scales up.

With plenty of capacity remaining in Vmoto's production facility, the Company is well positioned to continue ramping up its volume to meet growing global demand for its electric vehicles and benefit from further economies of scale.

The second half of the year is historically stronger than the first. With more domestic and international distributors and customers due to visit the factory to discuss and finalise orders, production and sales are expected to increase over the coming months in line with expectations previously provided to the market.

For further enquiries, please contact:

Vmoto

Investors and Media

About Vmoto

Vmoto Limited (ASX: VMT) is a global scooter manufacturing and distribution group. The Company specialises in high quality "green" electric powered scooters and manufactures a range of electric scooters, based on western technology and design, from its low cost manufacturing facilities in Nanjing, China. Vmoto combines low cost Chinese manufacturing capabilities with European design. The group operates through two primary brands: Vmoto (aimed at the value market in Asia) and E-Max (targeting Western markets with a premium end product). As well as operating under its own brands, the Company also sells to a number of customers on an original equipment manufacturer ("OEM") basis.

Note 1: The following table provides a reconciliation between the statutory NPAT and underlying NPAT figures for 1H15:

Note 2: The following table provides a reconciliation between the statutory NPAT and underlying NPAT figures for 1H14:

Directors believe this information is useful to provide investors with transparency on the underlying performance of the Company.

directors' report

The Directors present their report together with the financial report of Vmoto Limited ("Vmoto" or "the Company") and its controlled entities (the "Consolidated Entity") for the six months period ended 30 June 2015 and the auditor's review conclusion thereon:

1. Directors

The Directors of the Company at any time during or since the end of the half year are:

2. Results

The net profit for the Consolidated Entity for the six month period ended 30 June 2015 was $1,010,532 (six month period ended 30 June 2014: $210,760) after income tax of $440,233 (six month period ended 30 June 2014: nil). This represents an overall improvement of 379% compared to the net profit after tax of $210,760 recorded for the six month period ended 30 June 2014.

The Company notes that this net profit figure includes non-cash expenses of A$113,316 as a result of the issue of shares to consultants and tax expenses of $440,233, which was offset against carry forward tax losses previously recognised as deferred tax assets. The underlying net profit for the six month period ended 30 June 2015 adding back these non-cash expenses was $1,564,081.

The following table provides a reconciliation between the statutory NPAT and underlying NPAT figures for 1H15:

Directors believe this information is useful to provide investors with transparency on the underlying performance of the Company.

3. Review of Activities

The consolidated revenue for the six month period ended 30 June 2015 was up 57% to $24,891,217 (six month period ended 30 June 2014: $15,862,018).

During the six month period ended 30 June 2015, the Company increased its distribution footprint in China, which as at 30 June 2015 comprised a total of 43 outlets through a combination of its own retail outlets and third party distributors across China. During the period, the Company distributed a total of 41,503 units (six month period ended 30 June 2014: 36,705 units) as it continued ramping up its production across its domestic and international sales channel. Of these sales 23,253 units were sold to PowerEagle in addition to 11,039 of Vmoto's own units sold through Vmoto's comprehensive distribution network and retail stores, and 7,211 own units sold to other international distributors and customers.

The Consolidated Entity achieved a gross profit margin of 16.2% for the six month period ended 30 June 2015 (six month period ended 30 June 2014: 15.5%). The improved margin reflected the benefits of economies of scale as the Company continues to ramp up its production of electric two-wheel vehicle products, especially those to international customers. The Company is confident that the gross profit margin will continue to increase with further economies of scale generated as production of units at Vmoto's manufacturing facilities in Nanjing, China (the "Nanjing Facility") increases in anticipation of higher sales in the coming financial years.

The Company's increasing revenues and profits are a clear demonstration of the growing traction Vmoto brands are achieving in both the Chinese and international markets. International sales are continuing to increase as the Company is now recognised for its premium electric scooters and is delivering on its strategy off the back of this reputation.

Over the six month period ended 30 June 2015, the Consolidated Entity's net assets have increased by 43.1% to $35.5 million.

Vmoto has continued with its strategy of design, manufacture and distribution of high quality "green" electric powered two wheel vehicles and a range of western designed electric two wheel vehicles from its wholly owned Nanjing Facility.

The Company's international market continued to increase during the six month period with existing and new customers seeking to place new orders or agreements with the Company. During the six month period numerous international customers visited the Nanjing Facility including distributors from North America, Ecuador, Sri Lanka, Turkey, Switzerland and New Zealand. The Company also signed a distribution agreement with a United Kingdom company to distribute, stock and market the Company's Vmoto and E-max range of electric scooters for the United Kingdom and Irish markets.

The Chinese market remained strong during the six month period, with a sales network of 43 outlets, including third party distributors and company owned retail stores. China continues to be the Company's largest market.

The Company commenced discussions with PowerEagle with a view to entering a new OEM agreement at the end of 2015. A new agreement is anticipated to be entered into in the coming months.

The Company is in the process of establishing an online based retail sales platform that will open up a new sales stream for its products. This is progressing well and is expected to be operational and generating online sales by the end of 2015.

During the six month period ended 30 June 2015, the Company completed a 1 for 10 share consolidation and successfully raised A$8.9 million through an oversubscribed placement to existing and new institutional and sophisticated investors in Australia and the United Kingdom. The Company also received $117,000 from the exercise of ESOP options.

As at 30 June 2015, the total operating facility drawn down was RMB25 million (approximately A$5.2 million) and the total undrawn operating facility was RMB9 million (approximately A$1.9 million). 

As at 30 June 2015, the Company had cash of A$11.1 million.

COLLABORATIONS, TENDERS AND JOINT VENTURE OPPORTUNITIES

Vmoto continues to receive significant interest for potential collaborations from new international customers. Among these are discussions with a significant European supermarket group that has over 300 stores and a high-tech North American company developing shared transport and communication systems for electric vehicles and a New Zealand company to OEM manufacture electric two-wheel vehicle products wholly designed by its customers.

Discussions with these and other parties for potential orders or collaboration are ongoing and further developments will be announced as and when they occur.

CORPORATE

During the half year, the Company issued a total of 6,725,669 shares pre the share consolidation, comprising 1,175,669 shares to consultants of the Company in consideration for services provided, 2,000,000 shares to Directors following the vesting of performance rights and 3,550,000 shares to employees on the exercise of ESOP options exercisable at $0.03 each on or before 23 November 2015.

Post the share consolidation, which was completed on 4 June 2015, the Company issued a further 19,780,000 Shares at $0.45 per Share to raise $8.9 million (before costs), 35,000 Shares following the exercise of ESOP options (exercisable at $0.30 each on or before 23 November 2015), 266,668 shares to two Directors following the vesting of performance rights and 38,095 shares to a Director in lieu of Director fees, as approved at the Company Annual General Meeting held on 21 May 2015.

OUTLOOK

The six month period ended 30 June 2015 was another productive period for Vmoto as sales increased across the domestic and international sales channels.

The Company expects to see further growth for the second half of the year as it is historically stronger compared to the first half. Vmoto continues to grow in line with management expectations as more orders are received and new domestic and international distributors and customers continue to visit the factory to discuss and finalise orders and agreements.

4. Auditor's Independence Declaration under Section 307C of the Corporations Act 2001

The Auditor's Declaration is set out on page 17 and forms part of the Directors' Report for the half year ended 30 June 2015.

Dated at Perth, Western Australia, this 31st day of August 2015

Signed in accordance with a resolution of the Directors:

Charles Chen

Managing Director

consolidated STATEMENT OF FINANCIAL POSITION

as at 30 JUNE 2015

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

conSOLIDATED STATEMENT OF profit or loss

and other COMPREHENSIVE INCOME

for the half-year ended 30 JUNE 2015

The statement of profit or loss and other comprehensive income

should be read in conjunction with the accompanying notes.

CONSOLIDATED statement of cash flows

for the half-year ended 30 JUNE 2015

The statement of cash flows is to be read in conjunction with the accompanying notes.

conSOLIDATED statement of changes in equity

for the half-year ended 30 JUNE 2015

The statement of changes in equity is to be read in conjunction with the accompanying notes.

notes to the conSOLIDATED financial statements

1. SIGNIFICANT ACCOUNTING POLICIES

The half year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

The half year financial report should be read in conjunction with the Annual Financial Report of Vmoto Limited for the year ended 31 December 2014.

It is also recommended that the half year financial report be considered together with any public announcements made by Vmoto Limited and its controlled entities during the half year ended 30 June 2015 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.

(a) Basis of Preparation

The half year financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134 "Interim Financial Reporting".

The Directors have prepared the financial statements on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The Directors believe this to be appropriate for the following reasons:

· the Consolidated Entity has a significant working capital surplus;

· the Consolidated Entity has long term supply agreements and demand for its electric powered scooter products is increasing. As the units increase, this will further reduce the cost of goods manufactured due to achieving higher levels of economies of scale, which will further improve the gross profit margins;

· the Consolidated Entity achieved a profit during the period;

· the Consolidated Entity's Stage 1 and 2 of the Nanjing Facility have been completed and have been used as security for its existing operating facility. As at the date of this report, RMB9 million (approximately AUD1.9 million) of the operating facility is still available for draw down if required;

· the Consolidated has successfully raised $8.9 million of capital to fund growth;

· the Directors have prepared cash flow forecasts that indicate the Consolidated Entity will be cash flow positive for the year ending 31 December 2015 and will enable the Consolidated Entity to pay its debts as and when they fall due.

At the date of this report and having considered the above factors, the Directors are confident that the Consolidated Entity and the Company will be able to continue operations into the foreseeable future. The financial report does not include adjustments relating to the recoverability and classification of the recorded assets and liabilities amounts that might be necessary should the Consolidated Entity and the Company not continue as going concerns.

(b) Significant changes in accounting policies

The half year consolidated financial statements have been prepared using the same accounting policies as used in the annual financial statements for the year ended 31 December 2014.

The Group has adopted all the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to their operations and effective for the current half year.

The adoption of these amendments and interpretations does not have any material impact on this half year financial report.

(c) Principles of Consolidation

The parent entity and its subsidiaries are collectively referred to as the "Group". The parent of this Group is Vmoto Limited. Entities over which the parent (or the Group) directly or indirectly exercises control are called "subsidiaries". The consolidated financial statements incorporate the assets, liabilities and results of all subsidiaries. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The assets, liabilities and results of subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between group companies are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group.

2. profit for the period

Profit before income tax expense includes the following revenues and expenses whose disclosure is relevant in explaining the performance of the entity:

At the shareholders' meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

Options

The following options to subscribe for ordinary fully paid shares are outstanding at balance date:

- 350,000 options exercisable at 30 cents each on or before 23 November 2015.

- 500,000 options exercisable at 40 cents each on or before 23 May 2018.

- 500,000 options exercisable at 80 cents each on or before 23 May 2018.

- 100,000 options exercisable at 50 cents each on or before 21 May 2019.

- 100,000 options exercisable at 75 cents each on or before 21 May 2019.

- 200,000 options exercisable at $1.00 each on or before 21 May 2019.

These options do not entitle the holder to participate in any share issue of the Company or any other body corporate.

During the half year period, no options were issued.

Performance Rights

All performance rights convert to fully paid ordinary shares for nil cash consideration, subject to performance based vesting conditions.

The movements of performance rights over unissued ordinary shares of the Company for the half-year ended 30 June 2015 were:

These performance rights do not entitle the holder to participate in any share issue of the Company or any other body corporate.

4. SEGMENT REPORTING

The continuing operations of the Consolidated Entity are predominantly in the electric two-wheel vehicle manufacture and distribution industry. Reported segments were based on the geographical segments of the Consolidated Entity, being Australia and China. The management accounts and forecasts submitted to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance are split into these components.

The electric two-wheel vehicles segment is managed on a worldwide basis, but operates in two principal geographical areas: Australia and China. In China, manufacturing facilities are operated in Nanjing. The following table presents revenue and profit or loss in relation to geographical segments for the six month periods ended 30 June 2015 and 30 June 2014:

Half year ended 30 June 2015

Half year ended 30 June 2014

The total assets of the Consolidated Entity have increased $11.9 million and total liabilities of the Consolidated Entity have increased $1.2 million as compared to that in the last annual financial report for the year ended 31 December 2014.

5. INTANGIBLES

6. OTHER FINANCIAL ASSETS

(i) During the half year period ended 30 June 2015, the Consolidated Entity provided loans of RMB5 million ($1,049,076) to Jiangsu Kaiyang New Energy Vehicle Co, Ltd ("Kaiyang"). The loans to Kaiyang are interest free and repayable in two year. Kaiyang is a company which the Consolidated Entity acquired a 20% equity interest and focuses on designing, manufacturing and distributing electric three-wheel and four-wheel vehicles.

7. LOANS AND BORROWINGS

The following loans and borrowings (current) were issued and repaid during the half year ended 30 June 2015:

8. SUBSEQUENT EVENTS

Shares Issue

On 10 July 2015, the Company issued 42,633 shares to its UK broker as part consideration for broker services to be provided to the Company as announced on 26 February 2015.

Apart from the above, there were no other significant events subsequent to half-year ended 30 June 2015 and prior to the date of this report that have not been dealt with elsewhere in this report.

9. FAIR VALUE MEASUREMENT

In accordance with AASB13, Fair Value Measurement, the group is required to disclose for each class of assets and liabilities measured at fair value, the level of the fair value hierarchy within which the fair value method is categorized. The group view that no assets or liabilities are measured at fair value other than cash, trade and other receivables, trade and other payables and borrowings with carrying amounts assumed to approximate their fair value.

directors' declaration

The Directors declare that:

(a) in the Directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and

(b) in the Directors' opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with Accounting Standard AASB 134: Interim Financial Reporting and giving a true and fair view of the financial position as at 30 June 2015 and of its performance for the half year ended on that date.

Signed in accordance with a resolution of the Directors made pursuant to s303(5) of the Corporations Act 2001.

Dated at Perth, Western Australia, this 31st day of August 2015

On behalf of the Directors

Charles Chen

Appendix 4D

Half Year Report

to the Australian Stock Exchange

Part 1

Part 2 - Results for Announcement to the Market

Part 3 - Contents of ASX Appendix 4D

Part 4 - Commentary on Results

Part 5 - Details Relating to Dividends

Part 6 - Net Tangible Assets per Security

Part 7 - Details of Entities Over Which Control has been Gained or Lost

 Part 8 - Details of Associates and Joint Venture Entities

Part 9 - Audit/Review Status

Attachments Forming Part of Appendix 4D