KTM Power Sports AG - Investments

KTM Power Sports AG is a stock corporation according to Austrian law located in Mattighofen, Austria, at the following business address: Stallhofnerstr. 3, 5230 Mattighofen. The company's ID in the commercial register of the provincial court Ried im Innkreis is FN 107673v. The shares of KTM Power Sports AG (ISIN: AT0000645403) are listed in the Mid Market segment/regulated OTC Trading of the Vienna Stock Exchange under the symbol “KTM”.

Information about KTM Power Sports AG is available on the company's website www.ktm.com.

In April 2010 the equity capital of KTM Power Sports AG was increased from EUR 7,580,000 to EUR 10,109,000 in the course of a capital increase against contribution in kind and contribution in cash. Through the capital increase against contribution in cash, the share capital was increased by EUR 1,750,000 through the issue of 1,750,000 bearer shares with a par value of EUR 1.00 each. The capital increase against contribution in cash amounts to EUR 29,750,000. At the time the capital increase against contribution in cash took place, a capital increase against contribution in kind was carried out, increasing the share capital by EUR 779,000 through the issue of 779,000 bearer shares with a par value of EUR 1.00 each.

After the capital increase the distribution of ownership is structured as follows:

*49.59 % of the capital stock; 50.77 % of the voting rights

KTM Power Sports AG, is the holding company of the KTM group, which bundles 100 %-subsidiaries, such as KTM-Sportmotorcycle AG, KTM-Sportcar Produktions GmbH, holdings in KTM Technologies GmbH and in KTM Financial Services GmbH as well as 20 distribution subsidiaries and 4 joint ventures. KTM Power Sports AG is one of the leading manufacturers of motor sports vehicles world wide. The operative core company, KTM-Sportmotorcycle AG, develops and manufactures off-road and street motorcycles suitable for racing. KTM-Sportcar Produktions GmbH is responsible for the production of the light-weight sports car “X-Bow”, representing KTM’s first step into the automotive market.

The operative KTM-Sportmotorcycle AG has been fully consolidated as of December 2004.

Following our corporate philosophy motto “Ready-to-Race”, the KTM group offers experienced motorcyclists high quality sport motorcycles, which are ready for racing without further modifications and perfect for adventurous leisure time activities. Off-road and street motorcycles of the brands “KTM” and “Husaberg” are produced by KTM in Mattighofen. In addition to the motorcycles, the KTM group also manufactures and promotes brand accessories (spare parts, technical accessories as well as biker- and leisure apparel).

In the business year 2008/09, the KTM group achieved revenues of EUR 454.6 million as well as an EBITDA of EUR 6.5 million (restructuring costs excluded) with about 1,857 employees.

Becoming both the most profitable motorcycle manufacturer and the leading power sports brand in Europe are KTM´s long term goals. Therefore, KTM focuses on further expanding its market position in the core segment as well as on the access to new markets. The long term growth strategy of KTM includes the expansion of the product portfolio and the access of new niche markets. Thus the strategic focus lies on areas such as research and development, further development of the distribution network and an efficient supplier structure.

Due to the economic crisis, the original business model of serial production of the lightweight sports car, KTM X-Bow, had to be reorganized into make-to-order production. With 293 vehicles sold in 2008/09, KTM established itself in the super sport segment.

The cooperation with Bajaj Auto Ltd., India, regarding the joint development of engine and vehicle platforms for new 125cc and 250cc street motorcycles will be further promoted in the business year 2009/10. Bajaj Auto Ltd. has increased its share in KTM Power Sports AG in several steps until April 2010 to over 35 %. Bajaj Auto Ltd.´s interest in KTM Power Sports AG will form a firm foundation for further cooperation and sustainably strengthen the partnership between the two companies.