Operational Update

VMOTO LIMITED

("Vmoto" or "The Company")

OPERATIONAL REVIEW

ANNOUNCEMENT 30 January 2013

Vmoto Limited (ASX:VMT, AIM:VMT), the global scooter manufacturing and distribution group specialising in "green" electric powered scooters, provides the following statement for the quarter ended 31 December 2012.

HIGHLIGHTS

·; Successful dual listing on the UK's AIM market in conjunction with a share placement to UK institutions and sophisticated investors, raising £1.6 million.

·; Manufacturing and Supply Agreement signed with E-Tropolis GmbH, a prestigious electric scooter company in Germany worth potentially $24m in sales over 3 years.

·; Delivery of approximately 6,300 units to Shanghai PowerEagle International Co Ltd ("PowerEagle") under the Strategic Cooperation Agreement. The Company remains on track to fulfil the PowerEagle's forecast production of 42,000 units by December 2013.

·; Compliance testing is underway in Australia for Vmoto's new E-Milan, an electric version of its popular petrol Milan scooter.

·; Continued expansion for significant customers including Correios Brazil.

·; Participation in international motorcycle and scooter exhibitions, INTERMOT and EICMA.  

·; Post quarter appointment of Directors - Simon Farrell as Non-Executive

Chairman and Ivan Teo as Finance Director.

·; $1.8m cash and $1.1 undrawn bank operating facility as at 31 December 2012.

CASH FLOW

Vmoto Limited's ("Vmoto" or "the Company") receipts from customers during the December quarter increased by 31% in comparison to the previous quarter mainly due to receipts from PowerEagle for scooters produced and delivered. Operating cash flow for the quarter saw continued investment in working capital, predominantly due to the continuing build up of stocks required to fulfil the orders from PowerEagle. However, such investment was still at a lower level than incured in the prior three month period.

As at 31 December 2012, the total operating facility drawn down was RMB26.9 million (approximately AUD4.2million) and the total undrawn operating facility was RMB7.1million (approximately AUD1.1million).

In January 2013, the Company repaid RMB13million (approximately AUD2million) and drew down RMB13million (approximately AUD2million) from its operating facility.

Payments for staff during the quarter increased compared with the previous quarter. The increase in payments for staff included a one off payment to senior management staff who retired during the quarter.

Payments in respect of advertising and marketing decreased slightly during the quarter compared to the previous quarter. During the period, Vmoto participated in Intermot, an international motorcycle and scooter fair, in Cologne, Germany from 3-7 October 2012 and the EICMA show in Milan from 15-18 November 2012.

Payments in respect of other working capital (including inventories) for the December 2012 quarter increased mainly due to payments to suppliers to continue building up stocks to fulfil PowerEagle's sales orders for the coming quarters.

Vmoto successfully dual listed on the UK's AIM market in conjunction with a share placement to UK institutions and sophisticated investors, raising £1.6 million (approximately AUD2.4million). During the quarter, the Company paid a number of one off costs to its advisors with regard to professional services provided to Vmoto to dual list on the UK's AIM market.

EXISTING CUSTOMERS

PowerEagle: As announced on 27 January 2013, the Company produced approximately 7,000 units of PowerEagle electric scooters in 2012 and, as at 31 December 2012, had delivered approximately 6,300 units of PowerEagle electric scooters to the customer.  Production for Power Eagle continues to ramp up with the recent finalisation of Stage 2 where all Power Eagle production lines are now resident and management are putting on double shifts of staff to ensure production keeps up with demand. Now that PowerEagle production is working efficiently the Company is confident about improving production rates as the year goes on.

E-Tropolis: Manufacture of the E-Tropolis electric scooters remains on course and delivery is expected to commence in February 2013. E-Tropolis senior management have recently been at the factory overseeing the first production lines.

Vietnam: The Company has discontinued the supply of petrol scooters to its Vietnamese customer as the Company understands that the Vietnamese customer has ceased its scooter division. The Company will continue selling its existing petrol scooter stocks to other customers and has received an order for 200 units from its Korean customer.

USA: The Company was pleased to take its first container order from our new USA distributor, Tharo EV, part of Tharo Systems, which is a hi-tech company founded in 1982 with a very strong service ethic and a network across USA. The distributor exhibited Vmoto scooters at CES, the largest technology show in the world, in Las Vegas in January 2013.

South Africa: The Company, on the back of the very positive start made by our South African distributor, has taken orders for several fleet customers with 120LD and 120LD+ models.

Sweden: EON Sweden agreed to market our range of electric scooters to 150,000 of its private customers and over 14,000 of its business customers with a special offer for the 2013 season. We are simultaneously finalising a financing offer from EON for all of these targeted customers.

The Company has continued to supply to our network of distributors across the world, albeit in smaller numbers due to it being the low season for our main markets. The preparations for larger orders both to end customer and major fleets which have had successful trials have been made ahead of the 2013 season.

NEW AND POTENTIAL SIGNIFICANT CUSTOMERS

Brazil: The trials with Correios Brazil have continued and the initial phase was completed in December 2012 with positive feedback from riders and technicians in the five cities where the trials took place.

Netherlands: As announced on 21 January 2013, the Company has secured B.V> Nimag as its new exclusive distributor in the Netherlands. Vmoto's products are to be marketed as Nimoto Pro range. Nimag is a well established electric scooter distributor in Netherlands and has the number one selling scooter there already. It is also the importer for Suzuki cars and motorcycles. Nimag is part of the Louwmann Group, a multi-billion Euro turnover giant in the automotive sector.

Luxembourg: The distributor in Luxembourg is Electric Vehicle Luxembourg, a leader in the market and part of Group Louisiana which, is the importer for such brands as Phillips and Samsung.

Norway: REEL AS is a leading distributor of two wheel electric scooters and is already a supplier to fleets such as Posten Norge (Norway Post). REEL signed up as a Vmoto distributor in the quarter under review.

Slovakia: Elektromobility SK is a new company for distribution of electric vehicles and part of a large automotive supplier group with existing sales through more than 50 dealer locations. Elektromobility signed up as a Vmoto distributor in the quarter under review.

Vmoto expects to complete the negotiations and new agreements for distributors in additional territories in Q1 2013.

NEW MODELS/VERSIONS

The Company has completed the development of newer versions of its electric scooters including new versions of 80L, 80S, 120S and 120L, which have more advanced and sophisticated settings, and new lithium batteries packs that are inter-changeable with the silicone batteries pack. The Company will continue working on research and development to improve the technology of its electric scooters.

Compliance testing is underway in Australia for Vmoto's new E-Milan, an electric version of its popular petrol Milan scooter and is expected to launch in Australia in Q2 2013 subject to compliance approval in Australia.

EXHIBITIONS

The Company showcased its products at two important exhibitions during the period.

Vmoto was a leading exhibitor with 100sqm in the "e-motion" hall of the Intermot show held in Cologne, Germany 3-7 October 2012, the largest motorcycle and scooter show in the world in 2012 with over 200,000 visitors. Vmoto held a distributor meeting with over 18 countries represented. The Company also met potential new distributors, several of which were appointed as above.

Vmoto also shared a 90sqm booth with our partner, E-Tropolis, for the EICMA show in Milan 15-18th November 2012 which is similar in size and attendance to Intermot. Our booth was situated in the Green Planet Zone and a full 3 days of meetings with potential customers were held.

CORPORATE

As announced on 13 August 2012, last year the Company changed its financial year end to 31 December from 30 June. Accordingly, this quarterly update relates to the second reported quarter in an 18 month cycle to 31 December 2013.

On 9 November 2012, the Company successfully listed on the UK's AIM market. The purpose of the dual listing is to give access to broader equity capital markets and in recognition of the Company's current and globally expanding customer base.

In conjunction with the AIM listing, the Company completed a placement of 121,075,002 ordinary shares to UK institutions and sophisticated investors at an issue price of 1.3 pence (2 cents) per share, raising approximately £1.6 million. The placement was approved by Vmoto shareholders on 23 October 2012. The net proceeds of the placement were and will be applied to meet the Company's current order book (including the significant PowerEagle Strategic Cooperation agreement), expand its product range, expand its distribution base across Europe and the rest of the world, increase its workforce, extend its programme to continuously improve quality control, improve after sales service and complete the fit out of the Stage 2 manufacturing facility in Nanjing, China.

On 12 October 2012, the Company also announced that following the successful capital raising completed on 27 September 2012, Mr Blair Sergeant resigned as a non-executive director.

On 29 January 2013 the Company announced the appointment of Mr Simon Farrell and Ivan Teo as Non-Executive Chairman and Finance Director respectively.

2013 OUTLOOK

2013 will be another extremely busy year for Vmoto as it looks to continue and improve on the significant operational and corporate events of 2012. With PowerEagle production now ramping up the Company's focus is to ensure those orders are met and, where possible, beaten.

Maintaining good relationships with existing customers will be important as will the work behind the scenes to win new customers in China and around the world.

The continuous interest in Vmoto's manufacuring capacity and electric scooters by customers has demonstrated their confidence in Vmoto's infrastructure, capabilities and products. This progression bodes well for the Company and its position within the global electric scooter market.

AUTHORISED BY:

Charles Chen

Managing Director

For further information, please contact:

About Vmoto

Vmoto is a global scooter manufacturing and distribution group and is listed on the Australian Stock Exchange (ASX) and on the AIM market of the London Stock Exchange. The Company specialises in high quality "green" electric powered scooters and manufactures a range of western designed electric (and some petrol) scooters from its low cost manufacturing facilities in Nanjing, China, marketed in Europe through its operation in Barcelona, Spain and marketed outside Europe through its operations in Australia. 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 the 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.

Picture: Vmoto's electric scooter products in trials with Correios Brazil

Picture: Vmoto e-motion hall at Intermot exhibition in October 2012

Picture: Vmoto showcased its products with E-Tropolis at EICMA exhibition in November 2012