Ann: Company Update , page-6

The key point from my perspective is the sales through "other Chinese Distributors".

This has from memory never been singled out before....in fact I don't really recall much commentary around that other than their being interest from other retailers in distributing Vmoto scooters. I never realised that it was actually happening.

So far for the YTD - 30% of China sales are actually coming from other China distributors.

Longer term I think that this is incredibly significant....as it reduces the dependency on the PowerEagle OEM which is such a high portion of overall sales.

Monthly profit is a little less than expected - but it is difficult to draw conclusions as the monthly numbers do tend to fluctuate a bit, probably depending on the level of corporate costs each month.

8 new stores in the last 6 mths would have added to the cost base and they did mention that it takes a while for the new stores to get their sales volumes up (especially considering it has been during the low season) - so I would be looking to see quite a sales pick up over the next few months from their own stores.

sents