Interim Management Statement

17 February 2012

("Torotrak" or the "Company")

Interim Management Statement

Torotrak (LSE: TRK) today announces its Interim Management Statement relating to the period from 1 October 2011 to 16 February 2012.

The Company has made good progress towards its key objectives, which we last reported on at the time of the half year results to 30 September 2011, announced on 22 November 2011. Our financial performance in the second half of the year is in line with our expectations with higher levels of licensing income being experienced.

Fuel economy testing in relation to commercial vehicle main drive transmissions is validating previous modelling. This confirms the strong fuel economy benefits in the target sectors of buses and trucks with high urban or stop/start cycles, which represent the largest share of the commercial vehicles market. We are continuing to provide engineering support to our lead industrialisation partner, Allison Transmission Inc., which is progressing towards representative hardware. The programme with our European truck and bus customer is focusing mainly on fuel economy testing across a range of vehicle types.

In our programme to develop a cost effective variable supercharger, Torotrak's demonstration vehicle, and that of our Tier 1 partner, has now progressed to road testing. Results are positive and are confirming our expectations, with the full test results to be released according to our engagement programmes with manufacturers. The Company's work with variable superchargers continues to indicate considerable opportunity.

Progress on mechanical KERS (kinetic energy recovery systems) is very encouraging. The financial proposition compared with an electrical hybrid is strong, with typical pay back periods on the cost of investment from fuel saved in commercial vehicles more than halved. There are a number of opportunities to progress this technology towards commercialisation in both passenger cars and commercial vehicles. Test results relating to the Flybus consortium project will now be released following our financial year end on 31 March 2012 and as agreed with the consortium's partners.

We are engaged in a number of programmes with key international component and fluid companies in order to identify quality validated and cost effective supply routes for our licensees. This is important in terms of assisting our licensees with resilient planning towards production.

We are experiencing a particularly busy period of discussions with potential business partners across the target areas highlighted above. We hope to be in a position to report on some of those more fully in May when announcing our final results for the year to 31 March 2012.

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