Interim report · centrotherm photovoltaics AG Zwischenbericht zum 30

centrotherm photovoltaics AG Zwischenbericht zum 30. Juni 2008

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Interim report

as of June 30, 2008


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Highlights of Q2 2008

Order backlog of TEUR 978,339

� Continued strong inflow of new orders with a volume of TEUR 373,403 in Q2 2008

� Major orders won from well-known companies

� TEUR 435,048 order volume from the silicon business

Continued strong growth in sales and earnings

� Sales of TEUR 72,461 (previous year: TEUR 45,542)

� EBIT rises to TEUR 9,857 (previous year: TEUR 9,010)

� Significant rise in EBT to TEUR 11,660 (previous year: TEUR 8,990), which contains positive

earnings contribution of TEUR 1,769 from the silicon business of SolMic GmbH

Expansion of technological expertise

� Complete acquisition of GP Solar

� Range of services extended in the quality control area

Consolidated figures

Key Figures01.01.-

30.06.2008

01.01.-

30.06.2007

01.04.-

30.06.2008

01.04.-

30.06.2007

Revenue in TEUR 140,138 61,088 72,461 45,542

Total operating performance in TEUR 146,130 65,061 78,145 48,232

EBITDA in TEUR 18,780 9,135 10,103 9,099

EBITDA margin in %* 12.9% 14.0% 12.9% 18.9%

EBIT in TEUR** 18,356 8,972 9,857 9,010

EBIT margin in %* 12.6% 13.8% 12.6% 18.7%

adjusted EBIT in TEUR*** 20,877 - 12,264 -

adjusted EBIT margin in %* 13.8% - 15.0% -

EBT in TEUR 20,499 8,900 11,660 8,990

EBT margin in %* 14.0% 13.7% 14.9% 18.6%

Consolidated net income in TEUR 14,540 5,442 8,380 5,577

Earnings per share in EUR 0.91 0.87 0.52 0.89

Weighted average number of shares in T 16,000 6,275 16,000 6,27501.01.-

30.06.2008

01.01.-

30.06.2007

01.04.-

30.06.2008

01.04.-

30.06.2007

Total expenses R&D in TEUR 7,540 1,694 5,774 1,581

Capex in TEUR 34,604 452 11,816 0

Operating cash flow in TEUR 75,753 10,242 16,407 6,897

Average number of employees 328 106 356 117

Number of employees as of the reporting date 377 125 377 125

30.06.2008 31.12.2007

Total assets in TEUR 375,110 274,243 - -

Equity in TEUR 159,076 162,117 - -

Equity ratio in % 42.4% 59.1% - -

Order book in TEUR 978,339 462,686 - -* Margin referring to total output

** Period 01.01.-30.06.2008 without positive EBIT-contribution of SolMic GmbH due to at-equity consolidation (see EBT)

*** adjusted EBIT: Presentation as if proportionate consolidation of SolMic GmbH had continued


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Contents

centrotherm photovoltaics expands: creation of thin-film production capacities

Interim management report for the centrotherm photovoltaics Group

Important events during the reporting period p. 4

Analysis of financial position p. 7

The share p. 10

Employees p. 11

Research and development p. 12

Report on opportunities and risks p. 13

Related parties report p. 13

Forecast report p. 13

Report on events subsequent to the reporting date p. 13

Consolidated interim financial statements

Consolidated balance sheet p. 14

Consolidated income statement p. 16

Consolidated cash flow statement p. 17

Consolidated statement of changes in equity p. 18

Notes to the consolidated financial statements p. 20

Certification following auditor's review p. 31

Further information

Financial calendar U2

Editorial details U2

Contact U2


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Interim management report for the centrotherm photovoltaics Group

Research and development: our research specialists are developing the next generation of crystalline solar cells in Constance.

Important events during the reporting period

� Solar cell: major orders won from well-known companies

o Hyundai Heavy Industries enters mass production with centrotherm

o Itarion, a joint-venture between Qimonda and CENTROSOLAR, relies on exper-

tise from Blaubeuren for new production location in Portugal

We booked a further business success in the promising Korean market in June 2008: Hyundai Heavy

Industries Co., Ltd., the world's largest shipbuilder, has ordered five 50 MW production lines to pro-

duce crystalline solar cells. The intention is that the turnkey lines will be shipped in 2009. This order

represents an industrial entry into a new market for the shipbuilder. The size of the plant means Hyun-

dai Heavy Industries is following an observable trend whereby new entrants are not exclusively start-

ing with small lines, but are making market entries with large turnkey plants. The Koreans' decision

shows how established groups that are new to the solar sector are becoming increasingly interested in

investing in the sector. centrotherm photovoltaics has already positioned itself as a technology partner

in this respect.

South Korea is one of the largest photovoltaics growth markets. The country's government has de-

cided to press ahead with the expansion of photovoltaics as one of the most important renewable en-

ergy sources. Research and development has been supported since 2004. An installed cell capacity of

500 MW is anticipated by the end of 2009.

On June 30, 2008, we reported the signing of an agreement with Itarion Solar Lda, a joint-venture

between Qimonda, one of the world's leading suppliers of storage products, and the CENTROSOLAR

Group. The plan is to create a production facility for solar cells based on silicon at the Portuguese

location of Vila do Conde. In doing so, Itarion is relying on expertise from Blaubeuren: the master

agreement with centrotherm photovoltaics AG, as the leading supplier of technology and services for

the manufacturing of solar cells and solar silicon, envisages the delivery of turnkey production lines.

This major order includes several turnkey lines with a project planning period of two years, and guar-

anteed levels of cell efficiency and production capacity. Delivery of the first line will prospectively occur

in early 2009.


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Solar silicon in focus at the first capital market day: investors and analysts were particularly interested in reactors and convert-

ers. These are available for testing and demonstration purposes at the technical center in Blaubeuren.

� Continued high growth in the silicon business

Following the start of operation of our technical center at the Blaubeuren location at the start of the

year, we have successfully performed various applications with our pilot reactors to produce polysili-

con. We achieved a further milestone in the expansion of our silicon business in June with the delivery

of our first reactors and converters to Asia, which have been developed and built to specifications in-

house. Our service staff members are currently assembling and putting these plants into operation on

a local basis to prepare the next important milestone: "first silicon out" for our customers.

The solar silicon area overall reported the strongest growth momentum in the first half of the year with

a current order backlog of TEUR 435,048 (December 31, 2007: TEUR 107,698). Two major orders

from the Ukraine and China made a particular contribution to this figure. For the Ukrainian customer

centrotherm photovoltaics delivers a large number of reactors and converters for the production of

around 2,500 tons of polysilicon as well as engineering services to create the silicon factory. And, for the first time, the company is offering the new vent gas recovery system. Vent gas recovery is a

chemical process where the gas mixture arising from silicon production is separated into its individual

components before being reintroduced into the production process. This gas recovery allows a signifi-

cant reduction in energy costs, and simultaneously makes an important contribution to environmental

protection.

The order from China relates to a major strategic order that comprises significant steps of the value-

creation chain. Besides two 30 MW turnkey production lines to produce solar cells, centrotherm

photovoltaics is supplying a large number of reactors and converters, and is offering engineering ser-

vices for polysilicon production.

Good growth in the silicon business confirms our business model and strategy to further establish

ourselves along the value-creation chain, all the way through to offering complete silicon factories. We

are relying on the technological expertise of our associated company SolMic GmbH for the develop-

ment of our business. SolMic GmbH is a leading silicon technology company that has specialized in

engineering services surrounding the design and process optimization of silicon factories for photovol-

taics and microelectronics.


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� Expansion of technological expertise

o Complete acquisition of GP Solar

o Range of services extended in the quality control area

We further expanded our range of services in the quality control area during the reporting period: on April 29, 2008, we signed an agreement to make a full acquisition of GP Solar GmbH. The company,

which is based in Constance, provides products, consultancy services, and technology for photovol-

taics with a focus on quality control and process technology for the manufacturing of solar cells and

solar modules. GP Solar currently employs a workforce of over 70 staff members. The company also

holds a 76% stake in GP Inspect GmbH. The management of GP Inspect holds the remaining 24% of

the shares. The company, which has its headquarters at Martinsried near Munich, was founded in

April 2008, and concentrates on the quality controlling of wafers and solar cells in the production proc-

ess. This allows wafer quality to be identified at an early juncture, and breakage rates to be reduced.

This once again underscores our objective of enabling our customers to optimize costs.

The complete integration of GP Solar has allowed us to make an important strategic step in the ex-

pansion of our solar silicon business. As GP Solar holds a 50 % stake in SolMic GmbH, we could also

more closely integrated SolMic GmbH into our company.

� Expansion of the Management Board team

GP Solar founder and managing director Dr. Peter Fath has strengthened the Management Board

team of centrotherm photovoltaics AG since May in his role as Chief Technology Officer (CTO). The

Management Board has to date consisted of three members. Dr. Fath, who holds a doctorate in phys-

ics, is responsible for the Management Board area of Overall Technology, Research & Development,

and Group Marketing. Above and beyond this, Dr. Fath was also appointed managing director of cen-

trotherm Photovoltaics Technology GmbH.

Dr. Fath can look back on a 17-year career in photovoltaics in the areas of research and development,

engineering, technology transfer, and consulting, accompanied by over 170 publications and numer-

ous patents. He has been awarded several national and international prizes. Dr. Fath was responsible

for research and development at Sunways AG before founding GP Solar in 1999.

� Creation of production capacities for thin film

We started to build up production capacities in Blaubeuren in May 2008. Capacities for the simultane-

ous production of up to five thin-film production lines are being created on around 15,000 square me-

ters. The aim is that, in particular, series products will be produced at this location in the future. Our

subsidiary FHR Anlagenbau has also set up a production workshop for further capacity expansion.

We are in permanent contact with our suppliers, so that they expand their capacities in line with our

growth plans. Our currently largest supplier of single equipment, centrotherm thermal solutions, has

developed a three-step plan to successively expand its capacities, and support our rapid growth. A

supplier development team has been in existence since 2007, which works together closely with our

suppliers, and ensures the smooth coordination of our supplier relationships.


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Ordinary Shareholders' General Meeting: around 300 shareholders and guests gathered at the Donauhalle in the Ulm Trade

Fair Centre on June 11.

� First Shareholders' General Meeting following the IPO

The first ordinary Shareholders' General Meeting following the flotation of centrotherm photovoltaics

AG was held on June 11, 2008 in Ulm. The Shareholders' General Meeting granted its approval to all

of the resolutions submitted to it with a large majority.

Analysis of financial position

Important notes and preliminary remarks

These consolidated financial statements have been prepared according to International Financial Re-

porting Standards (IFRS). When "centrotherm photovoltaics" is referred to below, the information re-

lates to the centrotherm photovoltaics Group with its subsidiaries and associated companies. The

following changes have occurred to the scope of consolidation compared with December 31, 2007:

FHR Anlagenbau GmbH was consolidated for the first time as of January 1, 2008, applying the pur-

chase method. Besides the fully consolidated subsidiaries, SolMic GmbH, Burghausen, as a joint-

venture, was consolidated using the at-equity method from the 2008 financial year.

Earnings

� Revenue and total output

The rapid rate of sales growth registered since the start of the year has continued. Sales rose to

TEUR 72,461 the second quarter of 2008 compared with TEUR 45,542 in the second quarter of 2007.

Total first-half sales in 2008 increased to TEUR 140,138, considerably above the previous year's level

(TEUR 61,088). We generated sales of TEUR 63,179 with our international customers during the

quarter, and TEUR 126,595 in the first half of the year. This corresponds to a further rise in the export

ratio to 87.2% (previous year: 69.5%) in the quarter, and 90.3% (previous year: 77.0%) in the half

year. The most important markets for our plant and turnkey production lines continue to include the

Asian region, particularly Taiwan, China, India, and Korea. Our turnkey business, in particular, regis-

tered strong growth:


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Revenue by regions in TEUR 01.01.-

30.06.2008

01.01.-

30.06.2007

01.04.-

30.06.2008

01.04.-

30.06.2007

Asia 95,038 44,098 50,047 30,210Germany 13,543 14,070 9,282 13,895Other Europe 22,489 1,511 5,935 204Other 9,068 1,409 7,197 1,233

Total 140,138 61,088 72,461 45,542

Revenue by product in TEUR 01.01.-

30.06.2008

01.01.-

30.06.2007

01.04.-

30.06.2008

01.04.-

30.06.2007

Revenue from construction contracts Turnkey production lines 60,695 13,232 33,066 12,749 Individual items of equipment 67,575 41,618 33,855 28,761Service and replacement parts 3,125 3,157 1,530 2,012Other revenues 8,743 3,081 4,010 2,020

Total 140,138 61,088 72,461 45,542

� Trend in new orders

We once again recorded a record order backlog of TEUR 978,339 as of the end of the first half of

2008. 51.0% of the order book related to the crystalline solar cell area, 4.5% to the thin film area, and

44.5% of the orders came from the solar silicon area. In the solar cell area, we won major and well-

known industrial companies as partners: Hyundai Heavy Industries and Itarion. The solar silicon area

is also reporting particularly strong growth. Whereas silicon order volumes amounted to just TEUR

107,698 as of December 31, 2007, they had risen to TEUR 435,048 as of June 30, 2008. Strong

growth in our order book provides a good indicator for our sales growth over the next two years.

Order book in TEUR

30.06.2008 31.12.2007

Cells 499,291 310,988Thin film 44,000 44,000Solar silicon 435,048 107,698

Total 978,339 462,686

� Costs

Within the expense items, materials expense recorded the strongest rise, due to the continued

strength of growth in our business. It rose from TEUR 44,683 to TEUR 109,252 in the first half of

2008. The materials expense ratio increased to 74.8% (previous year: 68.7%). The increase results

from a higher number of turnkey production lines which have not been shipped out. Due to the fact,

that material costs have to be realized before other project related costs, material expenses ratio is

temporarily higher until full invoicing of the production line. A second effect lies within adjustments of SolMic at equity consolidation. Personnel expense rose to TEUR 9,032 in the first half of 2008, re-

flecting high growth, and the related expansion of the personnel base (previous year: TEUR 3,291).

The rise in the personnel expense ratio to 6.2% (previous year: 5.1%) mainly results from the fact that

centrotherm photovoltaics recruited some highly qualified staff members, including physicists and en-

gineers with many years of experience. Other operating expenses rose to TEUR 13,681 (previous

year: TEUR 8,841), and mainly contain expenses for travel expenses, transportation costs, other ser-

vices, and sales commissions. Despite higher sales and order backlog as of the end of the first half of

2008, sales commissions were reduced further to TEUR 1,314 (previous year: TEUR 3,703).


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� Earnings growth

The trend in earnings was in line with our budget in the first half of 2008. Operating earnings (EBIT)

more than doubled from TEUR 8,972 in the previous year to TEUR 18,356. The EBIT margin - EBIT

expressed as a percentage of total output - of 12.6% in the first half of 2008 was below the previous

year's level of 13.8%. Earnings from SolMic were included on a proportionate basis in the previous

year. If proportionate consolidation had continued, the earnings contribution from SolMic would have

had a positive impact of TEUR 2,521 at the EBIT margin level in the first half of 2008. In overall terms,

the EBIT of 12.6% margin was despite the non-recognition slightly above the level for the whole of

2007 (12.5%).

Adjusted EBIT was 20,877 TEUR in the first half-year 2008, adjusted EBIT-margin 13.8 %. This cal-

culation shows the earnings development as if SolMic’s proportional consolidation was continued in

the first half-year 2008.

Earnings before tax (EBT) rose significantly from TEUR 8,900 in the previous year to TEUR 20,499

at the end of the first half of 2008 due to the positive earnings contribution from SolMic GmbH.

The net financial result amounted to TEUR 312 in the first half of 2008, compared with TEUR -72 in

the previous year. Financial expenses of TEUR 304 (previous year: TEUR 169) mainly contain com-

missions relating to guarantee bonds. Financial income totaled TEUR 616 in the first half of the year

(previous year: TEUR 97).

This resulted in a significant rise in consolidated earnings as of the end of the first half of 2008 of

TEUR 14,540 (previous year: TEUR 5,442). After taking into account the impact of the capital increase arising from the IPO, earnings per share rose to €0.91 (previous year: €0.87).

Financing position and net assets

Total assets rose to TEUR 375,110 as of June 30, 2008 (December 31, 2007: TEUR 274,243). Non-

current assets increased to TEUR 51,368 (December 31, 2007: TEUR 10,848). This mainly reflects

the rise in goodwill resulting from the acquisition of FHR Anlagenbau GmbH, as well as the increase in

property, plant, and equipment relating to plant under construction.

Current assets grew to TEUR 323,742 (December 31, 2007: TEUR 263,395). Inventories and pre-

payments rendered rose in line with the order book. Trade receivables reported a fall that was related

to the reporting cut-off date. The short-term securities item increased in the first half of the year to

TEUR 161,901 due to the rise in prepayments rendered, reflecting the significant growth of the order

backlog (December 31, 2007: TEUR 132,910). Other assets grew from TEUR 10,452 to TEUR 15,610

due to an increase in VAT receivables.

The complete acquisition of the remaining shares in GP Solar reduced equity to TEUR 159,076 (previ-

ous year: TEUR 162,117). The capital reserves were reduced to reflect the balance between the pur-

chase price and the equity capital of the minority shareholders in GP Solar GmbH (TEUR 19,674),

compared with December 31, 2007, and increased to reflect the obligation arising from the stock option

program (TEUR 118). This is equivalent to an equity ratio of 42.4% (December 31, 2007: 59.1%).


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The rise in non-current liabilities results entirely from higher deferred tax of TEUR 4,981 (TEUR

3,412). Deferred tax assets were formed particularly with respect to the earnings contributions calcu-

lated using the percentage of completion method (POC).

Current liabilities were at TEUR 211,053 (December 31, 2007: TEUR 108,714). Liabilities arising

from production orders, liabilities to related companies, and other current liabilities rose in parallel with

the continuous rise in order volumes, and the degree of completion of the relevant projects. Prepay-

ments received from customers production orders still in processing increased simultaneously to

TEUR 129,696 (December 31, 2007: TEUR 67,047).

Cash flow from operating activities rose to TEUR 75,753 (previous year: TEUR 10,242). This re-

sults of the significant growth in earnings and increased prepayments due to the strong growth in busi-

ness volume.

Cash flow from investment activities of TEUR -77,959 (previous year: TEUR -1,555) mainly con-

tains the purchase price payment for the acquisition of FHR, outgoing part of cash payments for the

complete acquisition of GP Solar, and payments for plant under construction, including the technical

center in Blaubeuren, which was completed in the first half of 2008.

centrotherm photovoltaics finances itself almost exclusively with its own funds. Cash flow from

financing activities consequently amounted to TEUR 0 in the first quarter of 2008 (previous year:

TEUR 4,810).

Financial resources rose to TEUR 28,745 (TEUR 20,986).

The share

Stockmarkets in Europe, Asia, and the US were characterized by the international financial markets

crisis in the first half of 2008. After the DAX traded at the start of the year at levels of over 8000 points,

it suffered major price losses during the course of January, and collapsed to 6440 points. Continued

concerns about the threat of economic slowdown in the USA, and further burdens resulting from the

US subprime crisis, were the reasons for the marked weakness. Following the sharp price falls in the

first quarter, major European equity indices recovered significantly from mid-March, before registering

sharp falls again until the end of June.

The performance of the TecDax was somewhat weaker than that of the DAX, since it was particularly

affected by the performance of solar stocks.


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Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08

CT PV DAX TecDAX GEX Prime IG Renewable Energy

Our share followed the general market trend with a significant price correction at the start of the year.

However, it recovered, and reported its high of the first half of 2008 at €68.24 on May 23, 2008. The

centrotherm photovoltaics share performed particularly well compared with its peer group. The share

closed at €58.75 on June 30, 2008 (Xetra).

First capital market day encounters great interest

As part of its first capital market day, centrotherm photovoltaics AG welcomed over 40 institutional

investors and analysts to the company's site at Blaubeuren on 8 May 2008. The day focused entirely

on current market and technology trends, which the Management Board and senior management pre-

sented to the public. Besides a visit to the technical center and production facilities, the management

provided an insight into the manufacturing of production lines and equipment to produce solar cells,

polysilicon, and thin-film modules in various presentations and rounds of talks. Focal topics covered

included a presentation of strategy and a market analysis, a presentation of technology roadmap, and

an insight into future capacities and resources.

Employees

Qualified and motivated employees are key to the success of centrotherm photovoltaics. This is why

we once again made major investments in building up our personnel base in the first half of 2008. The

number of employees in the Group rose compared with the previous year to 377 (previous year: 125

employees).

Number of Employees 30.06.2008 30.06.2007

Reporting date Reporting date

Management Board 4 3Administration 67 17Sales 14 9Technology and research 292 96Total 377 125


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Research and development

Our research and development project for multi- and mono-crystalline silicon solar cells formed the

focus of our activities in the first half of 2008. Our aim is to integrate the new processes in the next

generation of turnkey factories, thereby enabling our customers to achieve lower production costs

when measured in terms of euros per watt peak. Search and development expense totaled

TEUR 7,540 in the first half of 2008 (previous year: TEUR 1,694).

Two topics provided the focus in the solar cell area. Firstly, we made further progress with the devel-

opment of a new generation of solar cells, and the related production process to achieve significant

increases in degrees of efficiency. centrotherm photovoltaics AG is bundling the know-how of over 25

experts from all areas of solar cell production in a cross-Group development project. The project, in

which the company is intending to invest a total of around €10 million over a period of two years, aims

to develop a new generation of solar cells, and the related production process, accompanied by sig-

nificant enhancements in efficiency. This will benefit centrotherm photovoltaics insofar as significant

parts of the value-creation chain to manufacture solar cells and solar silicon will be established within

the Group. For example, the Group enjoys in-house access to experts from the areas of total process

development, metallization, wet chemistry, and production line layouts. The International Solar Energy

Research Centre in Constance provides additional research support. A new, improved design is being

developed for the front and rear sides of conventional solar cells as part of the project. centrotherm

photovoltaics has already intensively researched the requisite alternative process routes and their cost

structures in an initial phase of the project, and has significantly improved them in the laboratory. Im-

proved process sequences for multi- and mono-crystalline solar silicon for mass production will now

be prepared over the coming months. The project aims to realize degrees of efficacy of at least 16.5%

for multi-crystalline, and of at least 18% for mono-crystalline, solar silicon production.

Independently from the development of the next generation of solar cells, we have also registered successes in optimizing processes for conventional solar cells. Further improvements have been

achieved with the diffusion process to manufacture cell diode structure. This particularly allowed sig-

nificant improvements in the degree of efficacy to be achieved for multi-crystalline silicon with low out-

put quality.

In the solar silicon area, our associate company SolMic GmbH in cooperation with centrotherm SiQ

GmbH achieved important technical performance improvements, which allow our customers to realize

significant potentials to reduce their production costs. Among other things, this includes efficiency-

enhancement for so-called STC-TCS conversion. The converter converts silicon tetrachloride (STC)

into trichlorosilane (TCS) in a chemical reaction, which is then reintroduced into the process. Besides

this, increases in production volume in initial test runs, and successful further reductions in energy

consumption per kilogram of polysilicon volume, can be achieved.

In the thin-film area, the team was strengthened to over 25 staff members. In doing so, we were able

to recruit further experts with many years of CIGS experience. The focus in the first half of the year

was on the creation of the thin-film analytical laboratory, and of our CIGS reference line in Blaubeuren.

Various tests relating to continuous improvement and degrees of efficiency were performed success-

fully using analysis equipment especially appropriate for CIGS technology, the so-called thin-film x-ray

diffractometer. CIGS is currently the thin-film technology with the highest degree of efficacy. This is

currently around 19.9 % in research.


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Report on opportunities and risks

There were no significant changes in the first half of 2008 compared with the opportunities and risks

described in detail in the 2007 annual report under "Report on opportunities and risks".

Related parties transactions

Key transactions occurred between centrotherm photovoltaics AG and related companies during the

reporting period. A list can be found in the notes to the consolidated interim financial statements.

Forecast report

Given the continued strong growth of our business, the Management Board is retaining the forecast

made at the start of the 2008 financial year of sales between €330 million and €350 million, and EBIT-

margin of at least 12.5 %. The current order backlog of TEUR 978.339 underpins this estimate.

Report on events subsequent to the reporting date

� Current share repurchase program concluded

On July 3, 2008, the Management Board resolved to perform a share repurchase of up to 156,000

shares on the basis of the authorization of the Shareholders' General Meeting of June 11, 2008. The

repurchase was conducted for the purpose of using the shares as payment for the acquisition of the

minority stake in GP Solar GmbH, which occurred in April 2008. A total of 156,000 shares had been

repurchased at an average price of €50.86 per share by July 3. This is equivalent to almost 1% of the

share capital. The shares were transferred to Dr. Peter Fath, Managing Director of GP Solar and

Management Board member responsible for technology at centrotherm photovoltaics AG, on July 25,

2008.

Blaubeuren, August 2008

centrotherm photovoltaics AG

The Management Board

Robert M. Hartung Hans Autenrieth Oliver Albrecht Dr. Peter Fath


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Consolidated financial statements (IFRS)

Consolidated balance sheet

IFRS Consolidated Balance Sheet as of June 30, 2008

ASSETS

in TEUR Note 30.06.2008 31.12.2007

Non-current assets

Intangible assets 16.

Goodwill 21,787 3,852

Internally generated intangible assets 5,218 2,404

Other intangible assets 215 170

Property, plant and equipment 17. 20,694 4,309

at-equity investments 18. 3,133 0

Other receivables and assets 321 113

Total 51,368 10,848

Current assets

Inventories 19. 5,829 1,058

Receivables relating to production orders 20. 26,012 28,013

Trade receivables 21. 19,237 28,445

Other receivables

Receivables due from equity interests 22. 503 0

Receivables due from related companies 23. 340 144

Advance payments made 24. 65,565 32,072

Other assets 25. 15,610 10,452

Securities 26. 161,901 132,910

Cash and cash equivalents 27. 28,745 30,301

Total 323,742 263,395

Total assets 375,110 274,243


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EQUITY AND LIABILITIES

in TEUR Note 30.06.2008 31.12.2007

Equity 28.

Equity attributable to parent company shareholders

Subscribed capital 16,000 16,000

Capital reserves 110,928 130,484

Revaluation reserve 3,362 732

Retained earnings 14,249 628

Consolidated net income 14,540 13,611

Minority interests -3 662

Total 159,076 162,117

Non-current liabilities

Deferred tax 4,981 3,412

Total 4,981 3,412

Current liabilities

Provisions for taxes 29. 3,123 1,624

Other current provisions 30. 1,768 1,752

Liabilities arising from construction contracts 31. 23,256 1,884

Trade payables 32. 33,595 25,845

Advance payments received 33. 129,696 67,047

Liabilities due to equity interests 34. 279 0

Liabilities towards related companies 35. 3,789 1,940

Other current liabilities 36. 15,547 8,622

Total 211,053 108,714

Total equity and liabilities 375,110 274,243


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Consolidated income statement

Consolidated Income Statement

in TEUR Note

01.01.-

30.06.2008

01.01.-

30.06.2007

01.04.-

30.06.2008

01.04.-

30.06.2007

Sales Revenue 5. 140,138 61,088 72,461 45,542

Change in inventory of finished goodsand work-in-progress 1,156 3,859 1,787 2,576

Capitalized services rendered to own account 6. 4,446 0 3,232 0

Change in liabilities for services yet to be performed 390 114 665 114

Total operating performance 146,130 65,061 78,145 48,232

Other operating income 7. 4,616 888 4,148 334

Cost of materials 8. -109,252 -44,683 -59,632 -31,518

Personnel expenses 9. -9,032 -3,291 -5,096 -1,984

Amortisation and depreciation -425 -162 -247 -88

Other operating expenses 10. -13,681 -8,841 -7,461 -5,966

Earning before interest an taxes (EBIT) 18,356 8,972 9,857 9,010

At-equity earnings 11. 1,831 0 1,769 0

Financial result 12. 312 -72 34 -20

Earnings before taxes (EBT) 20,499 8,900 11,660 8,990

Taxes on income 13. -5,969 -3,282 -3,210 -3,274

Net income (EAT) 14,530 5,618 8,450 5,716

Minority interests 14. 10 -176 -70 -139

Consolidated net income 14,540 5,442 8,380 5,577

Weighted average number of shares in '000 16,000 6,275 16,000 6,275

Earnings per share as of the reporting date in EUR 15. 0.91 0.87 0.52 0.89


17

Consolidated cash flow statement

in TEUR

01.01.-

30.06.2008

01.01.-

30.06.2007

Earnings before income tax and minority interests 20,499 8,900

+ Amortisation / depreciation of non-current assets 426 162

-/+ Change of provisions -133 -90

-Increase in inventories, future receivables from production orders, and prepayments rendered

-29,515 -6,320

+/- Increase/ decrease in trade receivables 10,775 -3,555

- Increase in other assets not allocated to investment or financing activities -4,725 -3,412

+/- Increase/ decrease in trade payables 7,981 -3,615

+Increase in prepayments received and liabilities relating to construction contracts

74,442 15,717

+/-Increase/ decrease in other liabilities not allocated to investment or financing activities

-302 2,882

- Income tax payments -3,462 -424

+/- Other non-cash expenses and income -233 -3

= Cash flow from operating activities 75,753 10,242

- Outgoing payments for investments in intangible assets -2,902 -1,555

- Outgoing payments for consolidated companies -34,271 0

- Payments received from fixed asset disposals -14,532 0

-Outgoing/ incoming payments for investments in short-term securities and financial assets

-26,254 0

= Cash flow from investment activities -77,959 -1,555

+ Incoming payments from shareholders 0 5,800

- Outgoing payments to sharesholders of CTPVS KG 0 -990

= Cash flow from financing activities 0 4,810

= Earnings-effective change in cash and cash equivalents -2,206 13,497

+Change in liquid funds resulting from changes in the scope of consolidation

650 282

+ Cash and cash equivalents at the start of the period 30,301 7,207

= Cash and cash equivalents at the end of the period 28,745 20,986

Consolidated Cash Flow Statement


18

Consolidated statement of changes in equity

Statement of Changes in Consolidated Equity from January 1, 2008 to June 30, 2008

in TEUR Subscribed capital Capital reserves

Revaluation

reserve

As of January 1, 2008 16,000 130,484 732

Transfer to parent company revenue reserves 0 0 0

Revaluation of securities 0 0 2,630

Stock Appreciation Rights Program (SARP) 0 118 0

Changes in the scope of consolidation 0 0 0

Increase of majority shareholding 0 -19,674 0

Consolidated net income January 1 - June 30, 2008 0 0 0

As of June 30, 2008 16,000 110,928 3,362

Statement of Changes in Consolidated Equity from January 1, 2007 to June 30, 2007

in TEUR Subscribed capital Capital reserves

Revaluation

reserve

As of January 1, 2007 1,000 0 5

Transfer to parent company revenue reserves 0 0 0

Capital increased from corporate funds, deposits and merger 10 0 0

Revaluation of securities 0 0 49

Consolidated net income January 1 - June 30, 2007 0 0 0

As of June 30, 2007 1,010 0 54


19

Other retained

earnings

Consolidated

balance sheet

profit Total Minority interests

Consolidated

equity

628 13,611 161,455 662 162,117

13,611 -13,611 0 0 0

0 0 2,630 0 2,630

0 0 118 0 118

10 0 10 0 10

0 0 -19,674 -655 -20,329

0 14,540 14,540 -10 14,530

14,249 14,540 159,079 -3 159,076

Other retained

earnings

Consolidated

balance sheet

profit Total Minority interests

Consolidated

equity

93 5,811 6,909 77 6,986

5,275 -5,275 0 0 0

0 0 10 0 10

0 0 49 0 49

0 5,442 5,442 175 5,617

5,368 5,978 12,410 252 12,662

Exposure of captured expenses and revenues

in TEUR 06 2008 06 2007

Profit out of revaluation of securities 2,912 78

Deferred taxes -282 -29

Difference from currency conversion 0 0

Earnings recognized as direct to equity 2,630 49

Earnings after Tax 14,530 5,617

Total earnings 17,160 5,666

thereof attributed to minority interests -10 175

thereof entiteled to shareholders of the group 17,170 5,491


20

Notes to the consolidated financial statements

1. General information

centrotherm photovoltaics AG (hereinafter referred to in brief as "CTPV AG"), a joint stock corporation

according to German law, was founded on December 28, 2005 by notary Dr. Ulrich Kromer,

Ulm/Danube.

CTPV AG has its headquarters in Blaubeuren, Germany, and is entered in the commercial register of

Ulm/Danube under HR B 720013.

The majority shareholder and parent company in the sense of IAS 27 is Hartung Beteiligungs GmbH,

which is based at Blaubeuren, Germany.

centrotherm photovoltaics AG is an internationally leading provider of technology and services for the

production of solar cells and solar silicon. The broad product spectrum comprises key equipment and

turnkey production lines for crystalline and thin-film solar cells. The product range is supplemented by

reactors, converters, and waste gas purification plants for the manufacturing of solar silicon. Business

operations currently focus on the growth market of Asia. The international customer base includes

well-known companies from the solar sector.

2. Scope of consolidation

Besides CTPV AG, all companies are included in the consolidated financial statements where CTPV

AG enjoys the direct or indirect ability to determine their financial and business policies. Inclusion oc-

curs at the time when control becomes possible; it ends when control is no longer possible.

The following changes have occurred to the scope of consolidation compared with December 31,

2007:

FHR Anlagenbau GmbH, which has its headquarters at Dresden/Ottendorf-Okrilla, was included in the

consolidated financial statements after the purchase of 100% of the shares with effect as of January 1,

2008 (please refer to the quarterly report as of March 31, 2008). The expert reports required for the

final purchase price allocation are currently being prepared. It is consequently currently impossible to

adjust the provisional purchase price allocation performed in the first quarter.

The following subsidiaries were founded in the first quarter:

- Taiwan branch office of centrotherm photovoltaics Asia Pte. Ltd, Singapore, founded on January 2,

2008.

- centrotherm photovoltaics USA, Inc., USA, founded on January 11, 2008

- centrotherm photovoltaics ITALIA S.R.L, Italy, founded on February 4, 2008

These subsidiaries will strengthen sales and service activities in the relevant regions. We decided not

to include the newly founded companies in the USA and Italy due to the insignificance of their impact

on the company's assets, liabilities, and earnings positions, both individually and taken together.


21

GP Inspect GmbH based in Martinsried near Munich was founded on April 24, 2008. The purpose of

the company is to develop, produce, and sell equipment to inspect and measure series products in the

photovoltaics industry. GP Solar holds a 76% stake in this newly founded company. The management

holds 24% of the shares.

With a notary agreement of April 29, 2008, CTPV AG acquired the remaining 25.2% of the shares of

GP Solar GmbH, Constance, with effect as of May 1, 2008. CTPV AG consequently holds 100% of the

shares of this company from May 1, 2008. The takeover also allows CTPV AG to raise its indirect

shares in SOLMIC GmbH, Burghausen and centrotherm SiQ GmbH, Blaubeuren. The purchase price

for the shares amounted to TEUR 20,329 (of which costs connected with the purchase: TEUR 17).

The purchase price was paid partly in cash and partly in shares of CTPV AG (156,000 shares). The

part of the purchase price paid in cash entailed TEUR 12,200, and the part paid in shares TEUR 8,112

(156,000 shares valued at a price of €52.00 on April 29, 2008). The repurchase of own shares re-

quired for this purpose was started on July 4, 2008. The share repurchase was concluded on July 23,

2008. The repurchase cost amounted to TEUR 7,969. The difference between the actual purchase

price for the own shares and the amount entered in the balance sheet of TEUR 143 will be booked

through the income statement in the third quarter. The purchase price for the remaining shares in GP

Solar GmbH was booked against equity since it relates to the acquisition of minority interests, and this

accounting treatment is pursuant to IAS 27 and IFRS 3.

This means that, besides CTPV AG, five domestic subsidiaries and one foreign subsidiary where

CTPV AG directly or indirectly holds the majority of the voting rights are included in the interim con-

solidated financial statements as of June 30, 2007.

Besides the fully consolidated subsidiaries, SOLMIC GmbH, Burghausen, as a joint-venture, is con-

solidated using the equity method as of June 30, 2008. The company was consolidated on a propor-

tionate basis in the consolidated financial statements as of December 31, 2007.

The following is a list of CTPV AG's consolidated shareholdings as of June 30, 2007: Share property centrotherm photovoltaics AG as

of June 30, 2008 Direct share

Indirect

share Combined share

centrotherm Photovoltaics Technology GmbH, Blaubeuren 100.00% 0.00% 100.00%FHR Anlagenbau GmbH Dresden/Ottendorf-Okrilla 100.00% 0.00% 100.00%GP Solar GmbH, Konstanz 100.00% 0.00% 100.00%GP Inspect GmbH, Martinsried 0.00% 76.00% 76.00%centrotherm SiQ GmbH, Blaubeuren 61.00% 19.50% 80.50%SOLMIC GmbH, Burghausen 0.00% 50.00% 50.00%centrotherm photovoltaics Asia Pte. Ltd., Singapur 100.00% 0.00% 100.00%

GP Solar GmbH, which has its headquarters in Konstanz and is hereinafter referred to in brief as "GP

Solar" holds a 50% share in SOLMIC GmbH, Burghausen, hereinafter referred to in brief as

"SOLMIC".

SOLMIC, in turn, holds a 39% stake in centrotherm SiQ GmbH, hereinafter referred to in brief as "ct

SiQ".


22

3. Basis of preparation of the interim consolidated financial statements

These interim consolidated financial statements have been prepared using IFRS applicable on the

June 30, 2008 reporting cut-off date. There are no significant changes in accounting principles com-

pared with December 31, 2007. The only remaining company still consolidated using the equity

method is SOLMIC GmbH, Burghausen, which was included on a proportionate basis in the annual

consolidated financial statements as of December 31, 2007. The previous year's figures for the "at-

equity result" and "at-equity shareholdings" items in the notes of the consolidated financial statements

were adjusted for purposes of comparison.

The notes to the financial statements contain the requisite minimum disclosures according to IAS 34

(Interim Financial Reporting).

These interim consolidated financial statements have been prepared in euros. All amounts are pre-

sented in thousands of euros (TEUR) unless otherwise stated.

These consolidated interim financial statement as of June 30, 2008 have been voluntarily submitted

for an auditor's review pursuant to § 37w Paragraph 5 of the German Securities Trading Act (WpHG).

The exchange rates of currencies important to the centrotherm photovoltaics Group changed as fol-

lows:

Exchange rates to the euro

Reporting date rate Average rate

30.06.2008 30.06.2007 30.06.2008 30.06.2007

US dollar (USD) 0.63 0.74 0.65 0.75Singapore dollar (SGD) 0.46 0.48 0.47 0.49

4. Segmental reporting

The Group's activities during the reporting period continued to be concentrated on one primary busi-

ness segment: The planning, design, distribution, and creation of customized and turnkey production

lines and individual items of equipment to manufacture mono-crystalline and multi-crystalline solar

cells. Sales from the silicon business segment were of subordinate importance during the reporting

period. This was the reason for the decision not to perform segmental reporting according to primary

segmentation.

Notes to the income statement

Expenses are presented according to the cost of sales method in the consolidated income statement.

5. Revenue

Revenue amounted to TEUR 140,138 in the first six months of 2008 (previous year: TEUR 61,088),

TEUR 352 of which was attributable to related companies (previous year: TEUR 12).

6. Capitalized services rendered to own account

Own work capitalized of TEUR 4,446 (previous year: 0) mainly relates to own work capitalized in con-

nection with development projects.


23

7. Other operating income

Other operating income of TEUR 4,616 as of June 30, 2008 (previous year: TEUR 888) mainly relates

to the release of provisions and obligations of TEUR 3,995.

8. Materials expense

The materials expense for the period January 1 to June 30, 2008 of TEUR 109,252 (previous year:

TEUR 44,683) is composed as follows: Cost of materials in TEUR

Expenses for raw materials and supplies, and for procured goods 107,032 43,654 57,979 30,765Expenses for procured services 2,220 1,029 1,653 753Total 109,252 44,683 59,632 31,518

01.04.-

30.06.2008

01.04.-

30.06.2007

01.01.-

30.06.2008

01.01.-

30.06.2007

Of the expenses for raw materials and supplies, procured goods, and services procured, TEUR

58,991 (previous year: TEUR 34,401) was attributable to related companies.

9. Personnel expense

Personnel expense amounted to TEUR 9,032 in the first half of 2008 (previous year: TEUR 3,291).

This amount includes TEUR 1,111 of expenses for social contributions (previous year: TEUR 307), of

which TEUR 81 comprised pension expenses (previous year: TEUR 6).

A total of 377 members of staff were employed in the Group as of the reporting date (previous year:

125 members of staff). The average number of employees was 328 in the first half of 2008 (previous

year: 106).

10. Other operating expenses

Other operating expenses of TEUR 13,681 (previous year: TEUR 8,841) are composed as follows: Other operating expenses in TEUR

Travel expenses 1,801 1,118 1,022 642Freight & packaging 1,626 628 979 322Other services 1,567 549 1,127 258Sales commissions 1,314 3,703 360 2,806Research and development 1,108 63 515 -38Management Services 1,007 642 548 451Legal and general consultancy 845 782 326 607Insurance and contributions 824 439 383 363Advertising costs 471 158 308 96Premises expenses 439 122 182 63Other 2,679 637 1,711 396Total 13,681 8,841 7,461 5,966

01.04.-

30.06.2007

01.04.-

30.06.2008

01.01.-

30.06.2008

01.01.-

30.06.2007

Other operating expenses include services with a value of TEUR 1,100 as of June 30, 2008 (previous

year: TEUR 933) sourced from related companies. Of this amount, TEUR 1,011 was attributable to

performance-related allocation of services (previous year: TEUR 666), and TEUR 55 to rent (previous

year: TEUR 56).


24

11. At-equity earnings

At-equity earnings amounted to TEUR 1,831 for the first half of 2008 (previous year: TEUR 0, ad-

justed: TEUR 550). These earnings result exclusively from the at-equity consolidation of SOLMIC

GmbH, Burghausen.

12. Net financial result

The net financial result is composed as follows:

Net financial result in TEUR

Financial income 616 97 167 83Financial expenses -304 -169 -133 -103Net financial result 312 -72 34 -20

01.01.-

30.06.2008

01.01.-

30.06.2007

01.04.-

30.06.2008

01.04.-

30.06.2007

13. Income tax

The corporation tax rate from the 2008 financial year was lowered from 25% to 15% (in each case

plus the Solidarity Surcharge equivalent to 5.5% of the corporation tax charge) due to the 2008 reform

of German corporate taxation. Trade tax amounts to approximately 11.9%, which results in a total tax

rate in Germany of around 27.7%. A future estimated tax rate of 30.0% was used for the deferral of tax

in the interim consolidated financial statements.

The tax expense is as follows: Taxes expense in TEUR

Deferred tax 1,290 693 913 815Actual income tax 4,679 2,589 2,297 2,459Total 5,969 3,282 3,210 3,274

01.01.-

30.06.2008

01.01.-

30.06.2007

01.04.-

30.06.2008

01.04.-

30.06.2007

14. Minority interests' share of earnings

Minority interests' share of earnings amounted to TEUR 10 (previous year: TEUR -176).

15. Earnings per share

In accordance with IAS 33 (Earnings per Share), earnings per share are calculated by dividing con-

solidated net earnings by the weighted average number of shares. As per IAS 33, the previous year's

calculation of earnings per share was modified due to the capital increase performed in 2007 resulting

from the conversion of revenue reserves amounting to TEUR 5,275.

Earnings per share are calculated as follows for the reporting period in the previous year:

Earnings per share in EUR

Consolidated earnings 14,539,850 5,442,474 8,380,066 5,576,995Weighted average number of shares 16,000,000 6,275,000 16,000,000 6,275,000Undiluted/diluted earnings per share 0.91 0.87 0.52 0.89

01.01.-

30.06.2008

01.01.-

30.06.2007

01.04.-

30.06.2008

01.04.-

30.06.2007


25

Notes to the balance sheet

16. Intangible assets

Intangible assets reflect mainly goodwill relating to the companies GP Solar (TEUR 3,853), and FHR

(TEUR 17,934), and capitalized development costs (TEUR 5,218).

17. Property, plant, and equipment

Property, plant and equipment of TEUR 20,694 (December 31, 2007: TEUR 4,309) relates primarily to

plant under construction (TEUR 11,909), among other things for testing and development plant (TEUR

4,567) and buildings (TEUR 7,342).

A general contractor agreement relating to TEUR 14,200 was signed in the first half of 2008 in con-

nection with the expansion of production areas. Of this amount, TEUR 1,420 has already been in-

voiced. The residual obligation arising from this agreement consequently amounts to TEUR 12,780 as

of June 30, 2008.

No extraordinary write-downs were performed during the reporting period.

18. At-equity investments

This relates solely to the equity interest held in SOLMIC GmbH, Burghausen amounting to TEUR

3,133 (December 31, 2007: TEUR 0, adjusted: TEUR 1,302).

19. Inventories

The reported inventory is composed as follows:

Inventories in TEUR

Raw materials and supplies 4,092 539Semi-finished goods and services 963 455Finished goods/products 774 64Total 5,829 1,058

30.06.2008 31.12.2007

20. Receivables relating to production orders

The following list contains receivables relating to production orders after netting with prepayments

received for progress billings:

Receivables relating to production orders in TEUR

Receivables relating to production orders (gross) 41,614 43,879Offset with progress billing amounts -15,602 -15,866Total 26,012 28,013

30.06.2008 31.12.2007


26

21. Trade receivables

Trade receivables in TEUR

Receivables 108,805 60,930Advance payments requested -89,366 -32,208Specific adjustments 0 -5General adjustments -202 -272Total 19,237 28,445

30.06.2008 31.12.2007

Necessary value adjustments measured according to probable default risk have been taken into ac-

count. All receivables are due within one year.

22. Receivables due from equity interests

The receivable of TEUR 503 reported as of June 30, 2008 (December 31, 2007: TEUR 0) relates

solely to SOLMIC GmbH, Burghausen.

23. Receivables due from associated companies

The following provides a list of receivables due from centrotherm Group companies that do not belong

to the Group:

Receivables due from related companies in TEUR

centrotherm Sud Europe SAS, France 269 44centrotherm thermal solutions GmbH &Co. KG 47 0Centrotherm L.P., USA 31 82Centrotherm Elektrische Anlagen GmbH & Co. KG 0 18Centrotherm Clean Solutions GmbH & Co. KG -7 0Total 340 144

30.06.2008 31.12.2007

24. Prepayments rendered

Prepayments rendered of TEUR 65,565 as of June 30, 2008 (December 31, 2007: TEUR 32,072)

have a residual maturity of up to one year. This item contains prepayments rendered to related com-

panies of TEUR 31,248 (December 31, 2007: TEUR 26,610).

25. Other assets

Other current assets consist of the following items as of June 30, 2008, all with a residual maturity of

up to one year:

Other current assets in TEUR

VAT receivables 11,771 6,352Income tax reimbursement claim 2,693 2,568Accruals item 416 616Receivables related to subsidies 122 0Receivable related to loan 46 10Derivative financial instruments 40 22Receivables related to securities 0 318Other 522 566Total 15,610 10,452

30.06.2008 31.12.2007


27

26. Securities

Shares in investment funds are reported among securities totaling TEUR 161,901 (December 31,

2007: TEUR 132,910). Unrealized gains of TEUR 2,630 (December 31, 2007: TEUR 727) arise from

the change in market values, take into account deferred tax, and have been reported in equity with no

impact on income.

27. Cash and cash equivalents

Cash and cash equivalents in TEUR

Cash and currency holdings 12 10Bank deposits 5,957 5,540Short-term investments 22,776 24,751Total 28,745 30,301

30.06.2008 31.12.2007

28. Changes in equity

The individual components of equity in the January 1 to June 30, 2007 and January 1 to June 30,

2008 reporting periods, and their changes, are presented in the statement of changes in equity.

Subscribed capital

The subscribed capital of CTPV AG consequently amounts to TEUR 16,000 as of June 30, 2007 (De-

cember 31, 2007: TEUR 16,000). The subscribed capital is split into 16,000,000 (December 31, 2007:

16,000,000) nil-par value ordinary shares, and is fully paid up.

Approved capital

The resolution of the Shareholders' General Meeting of September 26, 2007 authorized the Manage-

ment Board, with the approval of the Supervisory Board, to increase the company's share capital once

or on several occasions until October 11, 2012 by up to TEUR 4,000 in exchange for cash or payment

in kind (Approved Capital I). The resolution of the Shareholders' General Meeting of June 11, 2008

authorized the Management Board, with the approval of the Supervisory Board, to increase the com-

pany's share capital once or on several occasions until June 10, 2013 by up to TEUR 4,000 in ex-

change for cash or payment in kind (Approved Capital II).

Capital reserves

Capital reserves comprise mainly premiums from the capital increase performed as part of the flota-

tion. Besides this, the capital reserves also report the fair value of the obligation arising from the

share-based remuneration program. The capital reserves were reduced to reflect the balance between

the purchase price and the equity capital of the minority shareholders in GP Solar GmbH (TEUR

19,674), compared with December 31, 2007, and increased to reflect the obligation arising from the

stock option program (TEUR 118).

Revaluation reserve

The revaluation reserve reports changes in securities held for sale, and takes deferred tax into ac-

count.


28

Minority interest

The minority interest item reflects the share of ownership by third parties in the Group companies. The

individual components of minority interests, and their changes in January 1 to June 30, 2007 and

January 1 to June 30, 2008 reporting periods, are presented in the statement of changes in equity.

29. Tax provisions

Tax provisions amounted to TEUR 3,123 as of June 30, 2008 (December 31, 2007: TEUR 1,624).

These comprise mainly income tax liabilities that have been incurred but not yet paid.

30. Other current provisions

Other current provisions amounted to TEUR 1,768 as of June 30, 2008 (December 31, 2007: TEUR

1,752). These provisions relate to follow-up costs of TEUR 1,010 for orders that have been delivered

(December 31, 2007: TEUR 1,135), and guarantee provisions of TEUR 758 (December 31, 2007:

TEUR 617).

31. Liabilities arising from construction contracts

As of June 30, 2008 there were liabilities arising from construction contracts outstanding of TEUR

23,256 (December 31, 2007: TEUR 1,884).

32. Trade payables

The total amount of trade payables of TEUR 33,595 was due within one year (previous year: TEUR

25,845).

33. Prepayments received

Prepayments received amounting to TEUR 129,696 (December 31, 2007: TEUR 67,047) relate to

advances received that are independent of the output of goods and services. There is consequently

no netting with the asset or liability balance arising from production orders.

34. Liabilities due to equity interests

Liabilities to equity interests of TEUR 279 as of June 30, 2008 (December 31, 2007: TEUR 0) relate

solely to SOLMIC GmbH, Burghausen.

35. Payables due to related companies and parties

The following provides a list of payables due to centrotherm Group companies that do not belong to

the Group:

Liabilities towards related companies and parties in TEUR

centrotherm thermal solutions GmbH & Co. KG 2,180 848Rolf Hartung 557 510centrotherm Management Services GmbH & Co. KG 464 13Robert M. Hartung 316 290Hartung Beteiligungs GmbH 205 203Authenrieth Beteiligungs GmbH 51 51Other 16 25Total 3,789 1,940

30.06.2008 31.12.2007


29

Liabilities due to centrotherm thermal Solutions GmbH & Co. KG primarily relate to liabilities arising

from supply relationships.

The liabilities to Rolf Hartung and Robert M. Hartung relate to a restitution claim of TEUR 800 plus

interest of 6% per annum (TEUR 73) (December 31, 2007: TEUR 800). The shareholders' cash con-

tribution was rendered for a second time for reasons of legal formality.

36. Other current liabilities

Other current liabilities are composed as follows:

Other current liabilities in TEUR

Liabilities arising from payment of the purchase price for GP Solar 8,112 900Obligations arising from commissions 2,708 5,230Personnel liabilities 1,869 1,010VAT liabilities 1,612 480Insurance premiums outstanding 447 178Travel and entertainment expenses 262 153Liabilities to minority shareholders of GP Solar GmbH 0 528Other 537 143Total 15,547 8,622

30.06.2008 31.12.2007

Liabilities arising from commissions in 2007 include as yet unpaid liabilities relating to 2006.

37. Finance debt

As of June 30, 2008, there were guarantee bonds of TEUR 118,850 outstanding (December 31, 2007:

TEUR 63,066).

Other notes

38. Related parties

Materials, inventories, and services are procured from numerous business partners as part of the oper-

ating business. These include companies in which CTPV AG holds shares, as well as companies con-

nected with members of the management and supervisory boards of CTPV AG.

The following key transactions occurred between the centrotherm photovoltaics Group and these re-

lated parties during the reporting period:

- The company has concluded a long-term exclusive cooperation agreement with centrotherm

Thermal Solutions GmbH & Co. KG, Blaubeuren ("CTTS KG") relating to the supply and pur-

chase of key equipment, as well as regarding cooperation in particular development areas.

The agreement may not be cancelled on a regular basis until 10 years have expired. CTTS

KG supplied plant and services worth TEUR 58,991 to CTPV AG in the first six months of the

2008 financial year.

- Centrotherm Elektrische Anlagen GmbH & Co. KG, Blaubeuren, and Centrotherm Manage-

ment Services GmbH & Co. KG, Blaubeuren, render services for the company, in particular in

the areas of legal documentation, insurance, vehicle management, personnel, order process-

ing, purchasing, warehousing and dispatch, facility management, IT, and telecommunications.

These services entailed a volume of TEUR 1,045 in the first half-year.

- There is a rental agreement until 2015 for rented premises concluded with centrotherm Besitz

GmbH & Co. KG, Blaubeuren ("CTB-KG"). The monthly rent amounts to TEUR 10.


30

- Volksbank Blaubeuren e.G. has also made a group credit line available to the company and

certain sister companies for a total amount of TEUR 2,600. The company is not liable for the

utilization of the credit line by the sister companies.

- In the first half of 2008, the company generated revenue from service and supply of replace-

ment parts of TEUR 358 with Centrotherm Technologies LP, California, Centrotherm Sud Eu-

rope SAS, France, centrotherm Clean Solutions GmbH & Co. KG, Blaubeuren, and centro-

therm thermal solutions GmbH & Co. KG.

- The company concluded licensing and demarcation agreements with certain sister companies

whereby the centrotherm photovoltaics Group companies are permitted to use the brands and

corporate identifiers of "centrotherm photovoltaics" and "centrotherm SiQ" on an unlimited and

unremunerated basis.

- The company is included as a co-insured company in individual insurance agreements con-

cluded by its sister companies.

All transactions were performed, and are performed, on normal market terms. The centrotherm photo-

voltaics Group participated in no key transactions for these related companies and parties that were

unusual in terms of type or nature, and it shall continue to pursue this policy in the future.

39. Events following the reporting date

No key events have occurred since the accounting reporting date that might have effects on the com-

pany's assets, liabilities, and earnings.

40. Corporate bodies

The following members of the Management Board held office during the first six months of 2008:

- Robert M. Hartung, Business Executive/Engineer (Spokesperson for the Management

Board),

- Hans Autenrieth, Graduate in Business Administration,

- Oliver Albrecht, Business Executive,

- Dr. Peter Fath, Physicist (since May 1, 2008).

The following members of the Supervisory Board held office during the first six months of 2007:

- Prof. Brigitte Zürn, Auditor/tax consultant (Chairperson),

- Rolf Hans Hartung, Engineer (Deputy Chairperson),

- Rolf Breyer, Auditor/Tax consultant

41. Assurance of the legal representatives

To the best of our knowledge, and in accordance with the applicable reporting principles for interim

reporting, these interim consolidated financial statements provide a true and fair view of the assets,

liabilities, financial position, and profit or loss of the Group, and the Group interim management report

includes a fair review of the development and performance of the business and the position of the

Group, together with the description of the principal opportunities and risks associated with the ex-

pected development of the Group for the remainder of the financial year.

Blaubeuren, August 2008



31

The Management Board

Robert M. Hartung Hans Autenrieth Oliver Albrecht Dr. Peter Fath

Certification following auditor's review

We have subjected the abbreviated interim consolidated financial statements to an auditor's review-

consisting of an abbreviated balance sheet, an abbreviated interim statement, an abbreviated state-

ment of changes in equity, as well selected explanatory notes to the financial statements - and the

interim Group management report of centrotherm photovoltaics AG for the period between January 1

and June 30, 2008, which form components of the half-year the financial report pursuant to § 37w of

the German Securities Trading Act (WpHG). The preparation of the abbreviated interim consolidated

financial statements pursuant to IFRS, as applicable in the EU, and of the interim Group management

report according to the regulations of the German Securities Trading Act (WpHG) applicable for in-

terim group management reports, is the responsibility of the company's legal representatives. Our task

is to issue certification for the abbreviated interim consolidated financial statements and the interim

Group management report on the basis of our auditor's review.

We have performed our auditor's review of the abbreviated interim consolidated financial statements

and of the interim Group management report while taking into account the German principles for audi-

tors' reviews of financial statements approved by the Institut der Wirtschaftsprüfer (IDW). These stipu-

late that auditors' reviews should be planned and conducted in such a way that, following critical as-

sessment, we can exclude with a certain degree of security that the abbreviated interim consolidated

financial statements have been prepared in such a way, and with respect to key matters, that they do

not conflict with IFRS interim reporting requirements, as applicable in the EU, and that the interim

Group management report does not conflict in key areas with the applicable regulations of the German

Securities Trading Act (WpHG) for interim group management reports. An auditor's review primarily

restricts itself to questioning company employees and analytical assessments, and therefore fails to

achieve the degree of security offered by the auditing of financial statements. We are unable to issue

an audit certificate since our mandate did not require us to perform an audit of financial statements.

We are not aware of any matters, on the basis of our auditor's review, that would cause us to believe

that the abbreviated interim consolidated financial statements, in key matters, is not in harmony with

IFRS interim reporting requirements, as applicable in the EU, or that the interim Group management

report, in key matters, is not in harmony with the regulations for interim group management reports of

the German Securities Trading Act (WpHG)."

Berlin, August 12, 2008

RÖVERBRÖNNER KG

Certified Public Auditing Company


32

empowering photovoltaics

Finanzkalender 2008

12. November 2008 Veröffentlichung Zwischenbericht zum 30. September 2008

Alle Angaben ohne Gewähr

Disclaimer:

We have prepared this report with the greatest care. It contains forecasts and/or information relating to forecasts. Forecasts are based

on facts, expectations, and/or past figures. As with all forward-looking statements, forecasts are connected with known and unknown

uncertainties, which may mean the actual result deviates significantly from the forecast. Forecasts prepared by third parties, or data or

evaluations used by third parties and mentioned in this communication, may be inappropriate, incom-plete, or falsified. We cannot as-

sess whether information, evaluations, or forecasts made by third parties are appropriate, com-plete, and not misleading. To the extent

that information in this report has been taken from third parties, or these provide the basis of our own evaluations, such use is made

known in this report. As a result of the above-mentioned circumstances, we can provide no warranty regarding the correctness, com-

pleteness, and up-to-date nature of information taken, and declared as being taken, from third parties, as well as for forward-looking

statements, irrespective of whether these derive from third parties or ourselves.

Rounding differences may arise.

Editorial details

Published by:


Johannes-Schmid-Strasse 8

89143 Blaubeuren

Telephone: +49 (0)7344 9188-0

Telefax: +49 (0)7344 9188-388

[email protected]

Contact

Saskia Schultz-Ebert

Senior Manager

Investor Relations

Telephone: +49 (0)7344 9188-890

Telefax: +49 (0)7344 9189-389

This report is also available in a

German language version. Both

versions can be downloaded

from the Internet.

Documents

Interim report · centrotherm photovoltaics AG Zwischenbericht zum 30