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Innovative Thermal Solutions.

ANNUAL REPORT2015

KEY FIGURES

centrotherm photovoltaics

Annual Report 2015

in TEUR01.01.2015-31.12.2015-

01.01.2014-31.12.2014-

Revenue 138,555 189,193

Total operating performance 141,115 184,127

EBITDA 22,501 25,298

EBIT 18,979 19,565

Consolidated net income 6,963 1,188

Earnings per share in EUR 0.33 0.06

Weighted average number of shares in T 21,162 21,162

Total expenses R&D 7,349 6,153

Order intake 91,382 107,391

31.12.2015 31.12.2014

Total assets 215,799 261,909

Equity 50,297 43,113

Equity ratio in % 23.3 16.5

Number of employees (as of reporting date) 640 745

Order book 113,498 150,282

Key figures for centrotherm photovoltaics Group

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TO OUR SHAREHOLDERS GROUP MANAGEMENTREPORT

CONSOLIDATEDFINANCIAL STATEMENTS

CONTENTS


Contents

Chairman‘s Letter 14

Highlights 2015 16

The Share 18

Supervisory Board Report 20

The centrotherm Group 28

Market Trends and 30 Economic Environment

Group Strategy and Targets 33

Analysis of the Financial Position 34

Net Assets 37

Company-Specific 39Performance Indicators

Research and Development 41

Report on Opportunities 44and Risks

Events after the Reporting Date 53

Outlook 54

Consolidated Income Statement 60

Consolidated Statement 61of Comprehensive Income

Consolidated Balance Sheet 62

Statement of Changes 64in Consolidated Equity

Consolidated 66Cash Flow Statement

Notes to the Consolidated 68Financial Statements

Independent Auditor‘s Report 130

Glossary 132

Financial Calendar | Imprint 136

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Annual Report 2015

PHOTOVOLTAICS SEMICONDUCTOR MICROELECTRONICS

c-Si Solar Cells

Polysilicon

Thin Films

Power Semiconductor

Logic | Memory

MEMS | NEMS

Optoelectronics

Sensor Technology

Thick Film

Sensor Technology

DCB | Packaging

Hybrids

Passives

Ceramics (MLCC | LTCC)

centrotherm has been developing and realizing innovative thermal solutions for over 50 years. As a leading and globally operating technology group, we offer production solutions for the photovoltaic, semiconductor and microelectronic industries, with a special focus on the following applications:

SiTec GmbH is a leading company providing integrated engineering and technology solutions for polysilicon production.

Its reliable, innovative and low energy consuming production technology achieves competitive manufacturing cost for polysilicon.

FHR Anlagenbau GmbH is an innovative and recognized company focused on vacuum process technology and special plant construction with a global customer base in research and industry. Founded in 1991 by a group of Dresden-based engineers with many years of experience in thin film technology, the company aims to realize both state-of-the-art solutions for thin film applications and tailor-made plant designs.

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QUALITYTOTAL

OPERATING COSTSPROCESS- STABILITY

INVESTMENT SECURITY

Since its foundation centrotherm has distinguished itself by providing specific and tailor-made solutions to the customers.In order to do so we are working with a strong focus on four maximes, representing the centrotherm brand:

Our around 700 staff at our worldwide branches do their best to continuously improve equipment performance and to meet our customers‘ specific requirements.

centrotherm photovoltaics USA Inc. |Atlanta, USA

centrotherm photovoltaics India Pte. Ltd. |Bangalore, India

centrotherm photovoltaics AG | Blaubeuren, Germany

SiTec GmbH | Augsburg, Germany

FHR Anlagenbau GmbH |Ottendorf-Okrilla, Germany

centrotherm photovoltaics Technology Shanghai Co. Ltd. | Shanghai, China

centrotherm photovoltaics Asia Pte. Ltd. |Singapore

centrotherm photovoltaics Asia Pte. Ltd. Taiwan Branch | Zhubei, Taiwan

centrotherm photovoltaics Korea Ltd. Suwon, Korea

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Annual Report 2015

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QUALITY represents an essential per-

formance characteristic that is firmly anchored within

centrotherm's guiding principles and philosophy.

In this context, our high-quality aspirations and

claim extend well beyond our production systems'

performance and operational safety.

Our aim is to meet, and also exceed, our customers'

expectations in terms of reliability, delivery and

response times, as well as the durability and service life

of our systems. We ensure this through a continuous

improvement process based on verifiable quality

targets and, not least, expert international presence.

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Annual Report 2015

A system's TOTAL OPERATING COSTSare just as important for our customers as are high productivity and high-quality end-products. This not only takes the initial investments into account, but also the ongoing operating costs for repair, consumables, energy and maintenance.

Our production systems have been developed for low maintenance, long-term operation entailing minimal energy and resource consumption, and impress with the lowest total operating costs within the sector. We are also continuously working on minimizing costs across the total lifecycle.

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Annual Report 2015

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PROCESS STABILITY and reproducibility play a critical role both in the solar industry, as well as in microelectronics. Focusing on these parameters, we ensure end-product quality and optimize customers' production cost structures and yields. Since our company’s early days in the demanding semiconductor industry, centrotherm has placed the utmost significance on the stability of its thermal processes, and commands the best atmospheric and low-pressure processes on the market.

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Annual Report 2015

We create INVESTMENT SECURITY, that our customers expect for their projects – as a pioneer in developing thermal processes, and based on our strong market presence, as well as the worldwide installed production capacity. Over decades, our systems have been operational around the clock.

Constant, ongoing further developments and system upgrades ensure that our customers are always able to continuously manufacture at the most advanced, leading edge of technology. Moreover, our global service network ensures that our customers are supplied quickly and reliably with replacement parts and service offerings.

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Annual Report 2015

Chairman‘s Letter 14

Highlights 2015 16

The Share 18

Supervisory Board Report 20

TO OUR

SHAREHOLDERS

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>> WITH A NEW STRATEGIC INVESTOR WE WANT TO STEER

CENTROTHERM INTO A SECURE FUTURE <<

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Annual Report 2015

CHAIRMAN‘S LETTER

DEAR SHAREHOLDERS,DEAR LADIES AND GENTLEMEN,

In mid-December 2015 we reached an important mile-stone in our company‘s history. Our previous majority shareholder Sol Futura announced the forthcoming sale of its interest in our company to new investor Solarpark Blautal. When the purchase agreement was completed on January 8, 2016, an 80 percent interest in centrotherm photovoltaics AG was transferred to Solarpark Blautal. We have had a new shareholder since the start of the 2016 financial year as a consequence.

A new course has been set for centrotherm‘s future with Solarpark Blautal. We have successfully utilized the insolvency protection proceedings that we passed through in 2012 for a new start for our company, and have recently also repaid the liabilities of centrotherm photovoltaics AG to the creditors. The same holds true for the liabilities of the former subsidiary centrotherm thermal solutions GmbH & Co. KG.

Now, together with our new shareholder and our em-ployees, we are writing a new chapter in centrotherm‘s history. We aim to utilize the strengths of the centrotherm brand and our innovative production solutions within a dynamic photovoltaic market to benefit from market growth. Although solar cell manufacturers are currently making significant investments in new production technology, we are remaining on our path of further diversification. Expanding our business that is centered on production solutions for the semiconductor and microelectronics industry remains an important part of our strategy. Equally, our aftersales services such as system upgrades, customer service and spare parts art to comprise a greater proportion of our sales revenues in the future. To secure our company‘s sustainable future, we aim to exploit our core competences in thermal processes and system building for further future technologies. We will work on this in a targeted approach, driving forward our business model‘s diversification medium- term.

In the 2016 financial year, we aim to strengthen our operating profitability and achieve breakeven at the net consolidated result level. In the financial year elapsed, we exceeded our 2015 forecast due to one-off effects. This represented the second positive consolidated net result following our restructuring in 2012 and 2013, and confirms to us that we have adopted the right path, and that we can also lead the way ahead of our competitors. We have set our sights firmly on the target of being profitable, and aim to reach this through further consistent efficiency enhancement in manufacturing and optimizing our internal processes, among other measures. Stringent cost management will also help us achieve this objective. We aim to further expand our strong market position with our research & development investments.

The signs are positive for the new 2016 financial year, and for the new chapter in our company‘s history that has started at the same time. In our „Photovoltaics & Semiconductor“ core segment, we have booked EUR 40 million of new orders during the first two months of the new financial year alone. With an order book position of around EUR 115 million as of December 31, 2015, production capacities at our Blau-beuren site enjoy very high utilization.

We believe that solar cell manufacturers‘ investment activities will continue this year, contributing further to a very good order book position in our „Photovoltaics & Semiconductor“ segment. We expect sales revenue between EUR 120 million and EUR 150 million at Group level. Based on market forecasts and solar cell manufacturers‘ expansion plans, we also anticipate that the production technology market will remain buoyant during the 2017 financial year.

Dear shareholders, I would like to thank you, also on behalf of my Management Board colleagues and all our staff, for the confidence and trust that you have placed in our work.

Yours sincerely,Peter Augustin

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To Our Shareholders

Chairman's Letter

With Solarpark Blautal as new investor the course for centrotherm‘s future is set. We are now writing a new chapter in centrotherm‘s history together.

We aim to utilize the strengths of the centrotherm brand and our innovative production solutions to participate in a dynamic market and to benefit from its growth.

PETER AUGUSTINMember of the Management Board

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Annual Report 2015

Q12015

HIGHLIGHTS 2015

CHINA raises its 2015 expansion goals for photovoltaic systems from 15 GW to 17.8 GW in Marchand futher to 23 GW in September.

FHR notches up sales success of four inline systems to a US-based customer.

First order from VIETNAM for a large bundle of diffusion and PECVD equipment for a 300 MW solar cell plant. This was, at the same time, the largest individual order in the Photovoltaics division in 2015.

At SNEC PV in Shanghai centrotherm presents advanced products and processes for high-efficiency solar cell manufacturing.

Q22015

Delivery of the first two c.REG regeneration furnaces to a Taiwanese customer.

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USA prolong tax concession programme for photovoltaic systems (ITC).

Signing of a FINANCINGAGREEMENT for securing the Group‘s liquidity.

Q32015

Q42015

INDIA announces expansion goal of 100 GW until 2020 for photovoltaics.

Agreement between Sol Futura and Solarpark Blautal on the

ACQUISITION of the majority stake in centrotherm.

Successful upgrade of a multi-crystalline solar cell line with BiSoNTechnology in cooperation with ISC Konstanz. These bifacial solar cells reach conversion efficiencies with an average of 20.3%

Restructuring of the system-supported production planning and scheduling and implementation of a value chain optimized production layout for further

EFFICIENCY ENHANCEMENTSat the headquarters in Blaubeuren.

Delivery of first production solution for multi-crystalline

PERC solar cells to Taiwanese customer.

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Annual Report 2015

THE SHARE

CENTROTHERM PHOTOVOLTAICS SHARE PRICE PERFORMANCE

The bearer shares with German Securities Identification Number (WKN) A1TNMM (ISIN: DE000A1TNMM9) are listed in the Open Market, Entry Standard of the Frank-furt Stock Exchange. The centrotherm share is traded on the Frankfurt Stock Exchange, as well as on regional stock exchanges such as those in Stuttgart or Berlin.

The share traded at EUR 3.31 on January 5, 2015, reaching its high for the year of EUR 5.30 on March 25, 2015. After touching its low for the year of EUR 3.13, it recovered slightly by the year-end, quoting at EUR 3.60. The Photovoltaic Global 30 Index started 2015 at EUR 22.83, and closed the year on December 30, 2015 at a level of EUR 26.07, thereby recovering over the course of the year. The Photovoltaic Global 30 Index reached its high for the year in mid-April 2015 at EUR 32.97.

SHARE CAPITAL AND SHAREHOLDER STRUCTURE

The share capital of centrotherm photovoltaics AG amounted to an unchanged volume of EUR 21,162,380 during the 2015 reporting year, and is divided into 21,162,380 ordinary no par bearer shares, each with a notional value of EUR 1.00.

The shareholder structure was also unchanged in 2015, and is as follows:

Sol Futura Verwaltungsgesellschaft

mbH 80%

Number of shares21,162,380

TCH GmbH 10%

Free float 10%

Shareholder structure as of December 31, 2015

No changes to voting rights were announced and published during the 2015 financial year.

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After the balance sheet date, the shareholder structure changed due to Sol Futura Verwaltungsgesellschaft selling its interest to Solarpark Blautal GmbH (Solarpark Blautal). As part of executing the purchase agreement that was concluded in December 2015, Sol Futura transferred 80% of the shares in centrotherm photovoltaics AG to Solarpark Blautal GmbH on January 8, 2016. Solarpark Blautal has thereby become the new majority shareholder of CT AG. Along with PMDL GmbH, Qatar Solar Technologies, Doha/Qatar, holds a significant interest in Solarpark Blautal. After the reporting date, the free float remains unchanged at 10%.

To Our Shareholders

The Share

SHAREHOLDERS‘ GENERAL MEETING

The Ordinary Shareholders‘ General Meeting was held on June 23, 2015 in Ulm, Germany. The Shareholders‘ General Meeting discharged the Management and Supervisory Boards for the 2014 financial year, and elected Roever Broenner Susat Mazars GmbH & Co. KG Wirtschaftsprüfungs- gesellschaft Steuerberatungsgesellschaft (Mazars), Hamburg, as the auditor for the separate and consolidated financial statements for the 2015 financial year, and as auditor for an auditor‘s review of interim financial reports, to the extent that these are mandated by the company.

CAPITAL MARKET COMMUNICATIONS

centrotherm held no roadshows in the 2015 reporting period, and did not participate in any capital market conferences. Our shareholders were informed frequently through company announcements, financial reports and our website at www.centrotherm.de, within the Investor Relations area. The Chief Financial Officer and the Investor Relations department also engaged in dialog with institu-tional and private investors.

Solarpark Blautal GmbH 80%

Number of shares21,162,380

TCH GmbH 10%

Free float 10%

Shareholder structure as of March 31, 2016

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Annual Report 2015

SUPERVISORY BOARD REPORT

On behalf of the entire Supervisory Board, I would like to thank the Management Board members as well as all staff members for the work that they have performed in 2015.

I would also like to thank our share-holders for the confidence and trust that they have placed in us.

ROBERT M. HARTUNGSupervisory Board Chairman

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SUPERVISION OF OPERATING ACTIVITIES

We performed with great care the supervisory and consultative activities that are incumbent upon us pursuant to the law and the company‘s bylaws, convening regularly with the Management Board for meetings or telephone conferences. In addition to this, we held further telephone conferences between the regular meeting dates. The Management Board fulfilled its information duties, also informing us outside the scope of the fixed calendar of meetings extensively in both written and verbal form about events and measures of relevance for the company. We were directly included in all decisions of fundamental importance. We passed our resolutions at Supervisory Board meetings, and in individual cases also by way of written circular.

In the first quarter 2015, pursuant to the Supervisory Board rules of business procedure, we conducted an audit of our activities‘ since.

On August 3, 2015, the Management Board and the second management level members informed us at an extraordinary market and technology date about new cell concepts such as PERC, in particular.

To promote constructive dialog with the employee representatives of centrotherm photovoltaics AG, former Supervisory Board Chairman Tobias Wahl and the Works Council Chairman continued their meetings during the year under review.

COMMITTEE COMPOSITION

SUPERVISORY BOARD CHAIR AND COMMITTEES

Supervisory Board Chairman• Tobias Wahl

Deputy Supervisory Board Chairman• Robert M. Hartung

Chairman‘s committee • Tobias Wahl (Chair) • Robert M. Hartung (Deputy Chair)• Hans-Hasso Kersten• Wolfgang Schmid

Audit committee • Hans-Hasso Kersten (Chair)• Wolfgang Schmid (Deputy Chair)• Prof. Dr. Brigitte Zürn

Nomination committee • Tobias Wahl (Chair) • Robert M. Hartung (Deputy Chair)• Hans-Hasso Kersten• Wolfgang Schmid

To Our Shareholders

Supervisory Board Report

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Annual Report 2015

MAIN CONTENTS OF SUPERVISORY BOARD MEETINGS AND RESOLUTIONS

As in the past financial year, our consultative and supervisory activities focused on securing the company‘s future, and the related measures that were launched in 2014 to boost efficiency and cut costs, as well as to reduce person-nel. Key financial data trends and the company‘s liquidity formed the particular focus of Supervisory Board meetings in this context. Supervising compliance with the insolvency plan of CT AG, the subsidiaries‘ business trends, and the Group’s participating interests comprised regular contents of our consultations with the Management Board. A fixed agenda item of every Supervisory Board meeting remains the Management Board‘s report on the current market, business and order intake situation, liquidity, the progress of the large-scale silicon project in Qatar, and the status of the current lawsuit relating to the Algeria project. Monthly Group reporting forms the basis for this regular Management Board report, which also comprises business trends at the subsidiaries SiTec and FHR Anlagenbau. Group reporting was developed further in the 2015 reporting year.

A total of 10 regular Supervisory Board meetings were held in the 2015 financial year, four of which were conducted as telephone conferences. The presence of all Supervisory Board members at meetings was very high. Only two Super- visory Board members were unable to attend one attendance meeting; at two further attendance meetings and one telephone conference, one Supervisory Board member was prevented from attending. Among other matters, the Chairman‘s committee concerned itself with successor planning for Management Board members Hans Autenrieth and Peter Augustin, who were leaving at the 2015 year-end, as well as with the appointment of Boris Klebensberger as a Management Board member. The audit committee convened five times in 2015. The nomination committee held no meetings in the year under review.

Along with the separate and consolidated 2014 financial statements, meetings in the first quarter of 2015 addressed the tapping of new markets in the MENA region, and optimizing the sale structure of the Asian sales and service companies. The subject of complying with the insolvency plan was also discussed.

On March 23, 2015, the audit committee reported to the Supervisory Board on its meeting to prepare for the plenary board‘s review of the consolidated and separate annual financial statements. The auditor also informed the Super-visory Board about the type and scope, as well as results, of its audit. Following in-depth discussion, the Supervisory Board approved the separate and consolidated financial statements for the 2014 financial year.

At its meeting on April 27, 2015, the Supervisory Board discussed the results of its efficiency audit, which is to be repeated on a voluntary basis in two years‘ time. Further topics at this meeting included business trends at subsidiary FHR Anlagenbau and the approval of the invitation to the Ordinary Annual General Meeting on June 23, 2015.

On May 18, 2015, a managing director of FHR provided the Supervisory Board with a comprehensive overview of the company‘s business areas. The fluidized bed reactor technology GenesisTM of the SiTec subsidiary was a further topic at this Supervisory Board meeting. The outlook for CT AG for the current financial year comprised an additional subject of consultations between the Supervisory and Management Boards.

After the AGM, the Supervisory Board discussed the extension, which the creditor committee approved on June 22, 2015, for the resale period for the shares in centrotherm photovoltaics AG held by Sol Futura, as well as the repayment period for the deferred insolvency liabilities. At the same meeting, the Supervisory and Management boards consulted about the centrotherm production solution for the manufacturing of PERC solar cells, as well as about the large-scale project in Qatar.

On September 29, the Supervisory Board conferred with the Management Board about a 100-day plan to transfer the Management Board responsibilities of Hans Autenrieth and Peter Augustin to Management Board members Florian von Gropper and Boris Klebensberger who would be remaining as of January 1, 2016. The Management Board also explained to the Supervisory Board members the statuses of the lawsuit in the Algeria project, the large-scale Qatar project, and compliance with the insolvency plan.

In October, the Supervisory Board approved the Management Board areas of responsibility from January 1, 2016, which were adopted into the Management Board rules of business procedure at the end of November 2015.

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On November 30, 2015, the Management Board presented its corporate planning and budget for the 2016 financial year. Following in-depth consultations, the Supervisory Board approved the plan for CT AG. In addition, the Management and Supervisory boards conferred about a potential major project in the photovoltaic area in India.

COMMITTEE WORK

The audit committee convened in Blaubeuren for five meetings together with the Management Board during the 2015 financial year. In addition to this, the audit committee chair was in constant contact with the Management Board. Along with handling questions relating to accounting and the supervision of the financial accounting process, committee work focused on the opportunities and risk management system, as well as the topic of compliance.

At its meeting on March 16, 2015, the audit committee consulted about the consolidated and separate financial statements for the 2014 financial year. The Management Board and auditors explained the financial statements, and responded to Supervisory Board members‘ queries about financial accounting, and the presentation of risks in the consolidated and separate financial statements.

The following meeting on April 27, 2015 focused on the centrotherm photovoltaics Group‘s opportunity & risk management system. The Management Board and the risk management officer explained the current opportunity & risk report. Opportunities to boost the effectiveness of this important corporate management instrument were discussed. The half-year consolidated financial statements as of June 30, 2015 formed the focus of the audit committee meeting on August 3, 2015. As these financial statements had been subjected to an auditor‘s review, the auditor explained the review‘s results.

On January 26 and September 29, 2015, the audit committee discussed the risk management topic, focusing on its development status. This included the Management Board presenting examples of how it manages risk supervision within the Group. After being appointed by the 2015 Share- holders‘ General Meeting, Roever Broenner Susat Mazars GmbH & Co. KG Wirtschaftsprüfungsgesellschaft Steuer-beratungsgesellschaft (Mazars), Hamburg, was mandated to audit the separate annual and consolidated financial statements for 2015.

APPOINTMENTS TO THE SUPERVISORY AND MANAGEMENT BOARDS

The Management Board of CT AG consists of six members pursuant to the company‘s bylaws. The Supervisory Board consisted of the following members in the 2015 financial year:

• Tobias Wahl (Chairman)• Robert M. Hartung (Deputy Chairman)• Dr. Christoph Herbst• Hans-Hasso Kersten• Wolfgang Schmid • Prof. Dr. Brigitte Zürn

The composition of the Supervisory Board of CT AG complies with the requirements of Section 100 (5) of the German Stock Corporation Act (AktG). Among others, Prof. Dr. Zürn, a professional auditor and tax adviser, fulfills the requirements of an independent financial expert in the meaning of Section 100 (5) of the German Stock Corporation Act (AktG).

After the December 31, 2015 reporting date, the following changes occurred to the Supervisory Board‘s composition. Previous Supervisory Board Chairman Tobias Wahl, as well as Supervisory Board members Dr. Christoph Herbst and Wolfgang Schmid, relinquished their Supervisory Board mandates on January 11, 2016.

Subsequently, the Supervisory Board of CT AG reorganized itself, and has been composed as follows since January 11, 2016:

• Robert M. Hartung (Chairman)• Hans-Hasso Kersten (Deputy Chairman)• Prof. Dr. Brigitte Zürn

The Management Board of CT AG consists of four members as of the balance sheet date.

• Hans Autenrieth, Speaker of the Board, Chief Sales Officer (until December 31, 2015 inclusive)• Peter Augustin, Chief Operating Officer (until December 31, 2015 inclusive)• Florian von Gropper, Chief Financial Officer• Boris Klebensberger, Chief Operating Officer

To Our Shareholders


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Annual Report 2015

The following changes occurred to the Management Board‘s composition during the period under review:

• Boris Klebensberger, Chief Operating Officer (since September 1, 2015)

After the December 31, 2015 reporting date, the following changes occurred to the Management Board‘s composition:

At its January 11, 2016 meeting, the Supervisory Board of CT AG appointed Peter Augustin as a member of the company‘s Management Board.

At the end of February 2016, Florian von Gropper relinquished his mandate by way of mutual and amicable agreement with the Supervisory Board.

By way of amicable agreement with the Supervisory Board, Boris Klebensberger relinquished his Management Board mandate on February 29, 2016 due to differing ideas about the company‘s future strategic orientation.

The Supervisory Board of CT AG appointed Jan von Schuck- mann to the Management Board. The Management Board will consequently consist of the members Peter Augustin and Jan von Schuckmann from May 1, 2016.

CONFLICTS OF INTEREST

No conflicts of interest occurred in relation to Management and Supervisory board members that would need to be disclosed immediately to the Supervisory Board, and about which the Shareholders‘ General Meeting is to be informed.

With Supervisory Board assent pursuant to Section 114 (1) of the German Stock Corporation Act (AktG), CT AG concluded an agreement with PMDL GmbH on September 16, 2013 on standard market terms that comprises consultancy services within the MENA region. Robert M. Hartung is Managing Director of PMDL.

Supervisory Board member Prof. Dr. Brigitte Zürn is, among other positions held, Managing Director of Dr. Horn Unternehmensberatung GmbH, Ulm, which regularly renders consultancy services for CT AG and individual subsidiaries.

AUDITING OF THE SEPARATE AND CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

The Ordinary AGM on June 23, 2015 appointed Roever Broenner Susat Mazars GmbH & Co. KG Wirtschaftsprüfungs- gesellschaft Steuerberatungsgesellschaft (Mazars), Hamburg, as the auditor of the separate and consolidated financial statements for the 2015 financial year. Mazars audited the separate financial statements and management report for the January 1 to December 31, 2015 financial year, which the Management Board had prepared pursuant to the regulations of the German Commercial Code (HGB), and the consolidated financial statements and Group management report for the aforementioned period, which had been prepared pursuant to Section 315a of the German Commercial Code (HGB) on the basis of International Financial Reporting Standards (IFRS).

The auditor issued an unqualified audit certificate for both the separate annual financial statements and the corresponding management report, as well as the consolidated financial statements and Group management report. The auditor participated at the Supervisory Board accounts meeting on April 19, 2016, which concerned the separate and consolidated financial statements as of December 31, 2015, and provided an in-depth report pursuant to Section 171 (1) Clause 2 of the German Stock Corporation Act (AktG). The auditor was also available for additional questions and information during the discussion of the specifics of the financial statements and management reports. After submitting a statement to the Supervisory Board concerning professional, financial and other relationships between the auditor and centrotherm, no doubt arise concerning the auditor‘s independence. Following in-depth analysis, the Supervisory Board determined that no objections were to be raised in relation to the result of the audit as conducted by the auditor, and gave its assent to this result. The Supervisory Board approved the financial statements that had been prepared by the Management Board. The separate and consolidated financial statements of centrotherm photovoltaics AG are adopted as a consequence.

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Pursuant to Section 312 of the German Stock Corporation Act (AktG), the Management Board has prepared a report on relationships with associated companies (dependent companies report) for the January 1 to December 31, 2015 reporting period. This report includes the summary statement by the Management Board that the company received appropriate consideration for each legal transaction according to the circumstances of which the Management Board was aware at the time when the legal transactions were performed. Measures at the instigation, or in the interests, of the controlling individual, or a company associated with this individual, have not been implemented, or omitted.

The Supervisory Board received the dependent companies report in good time, and examined it. The auditor participated in corresponding negotiations, reported on its key audit findings, and was available to provide extra information. The Supervisory Board shares the opinion of the auditor, Roever Broenner Susat Mazars GmbH & Co. KG Wirtschafts- prüfungsgesellschaft Steuerberatungsgesellschaft (Mazars), Hamburg, which furnished this report with the following audit certificate on April 19, 2016:

In view of the fact that – following the conclusive result of the audit that is incumbent upon us – no objections are to be raised against the report by the Management Board of centrotherm photovoltaics AG, Blaubeuren, concerning the company‘s relationships with associated companies in the January 1 to December 31, 2015 financial year, we issue the following audit certificate pursuant to Section 313 (3) of the German Stock Corporation Act (AktG):

On the basis of the audit and appraisal that is incumbent upon us, we confirm that

1. the actual disclosures made in the report are correct,

2. in the case of the legal transactions listed in the report, the performance or payment of centrotherm photovoltaics AG was not inappropriately high.

Also following the conclusive result of the Supervisory Board review, no objections are to be raised against the Manage- ment Board‘s declaration at the end of the dependent companies report.

To Our Shareholders


On behalf of the entire Supervisory Board, I would like to thank the Management Board members as well as all staff members for the work that they have performed in the 2015 financial year. I would also like to thank my former Supervisory Board colleagues Tobias Wahl, Christoph Herbst and Wolfgang Schmid, who stepped down in early January 2016. I would like to thank our shareholders for the con-fidence and trust that they have placed in us.

Blaubeuren, April 19, 2016

On behalf of the Supervisory Board

Robert M. Hartung Supervisory Board Chairman

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Annual Report 2015

The centrotherm Group 28

Market Trends and Economic Environment 30

Group Strategy and Targets 33

Analysis of the Financial Situation 34

Net Assets 37

Company-Specific Performance Indicators 39

Research and Development 41

Report on Opportunities and Risks 44

Events after the Reporting Date 53

Outlook 54

GROUP

MANAGEMENT REPORT

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>> THANKS TO ONE-OFF EFFECTS AND COST-CUTTING EFFORTS

WE SURPASSED

OUR GUIDANCE ON THE CONSOLIDATED RESULT <<

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Annual Report 2015

GROUP MANAGEMENT REPORT


The centrotherm photovoltaics share

GROUP MANAGEMENT REPORT

PRELIMINARY REMARK ABOUT REPORTING

"centrotherm photovoltaics" is abbreviated below as "cen-trotherm" or "CT AG".

THE CENTROTHERM GROUP

GROUP STRUCTURE AND OPERATING ACTIVITIES

centrotherm is a globally leading provider of technology and equipment to the photovoltaic industry. The Group commands a broad and well-founded technology base, key equipment for the silicon and solar cell value chain, and integration know-how for module production. Since the restructuring and reorganization during 2012 and 2013, the centrotherm Group has realigned itself strategi-cally within its existing business areas, focusing on produc-tion technology for thermal surface processes in crystalline solar cell manufacturing, as well as for the semiconductor and microelectronics industries. The development of new technologies and production solutions is intended to ena-ble centrotherm customers to manufacture at competitive prices silicon and highly efficient solar cells, or power semi-conductors and microelectronic components for future ap-plications such as e-mobility and steering systems for in-car solutions. The service and spare parts business rounds out the Group product and service range.

OPERATING SEGMENTS AND ORGANIZATION

The operating activities of the centrotherm Group are cur-rently divided into the following three segments:

• Silicon • Photovoltaics & Semiconductor • Thin Film & Customized Equipment

The Management Board of CT AG is responsible for the strategic steering and development of all operating seg-ments. Along with its strategic tasks, the Group headquar-ters also operates as an interface to further areas of the corporate environment, including the capital market and shareholders, policymakers and the broader interested public, for example. CT AG performs all central Group

functions, supported by local service and sales companies in Asia and the USA.

The management teams of the operating segments and lo-cal subsidiaries bear operational responsibility for projects and daily business, thereby allowing rapid and individual responses to customer wishes.

Silicon

In the Silicon segment, the SiTec subsidiary offers engi-neering, technology and services for integrated process and system packages for polysilicon manufacturing. SiTec specializes in both process technologies based on tri-chlorosilane (TCS) and monosilane. The photovoltaic and semiconductor industries manufacture polysilicon in differ-ent purity grades to produce crystalline solar cells or semi-conductors. SiTec's service range includes process engi-neering packages that enable existing silicon production locations to be optimized in terms of cost reduction, ca-pacity expansion and product quality. Its product portfolio also includes systems that it has developed itself such as Siemens CVD reactors and Lab CVD Reactors, among oth-ers.

Along with its own, improved CVD reactor technology based on the Siemens process, SiTec is endeavoring, in co-operation with a pilot customer, to continue working on the development of its fluidized bed reactor (FBR) technol-ogy. Compared with the Siemens CVD process that is es-tablished in the polysilicon industry, FBR enables considera-ble cost reductions due to lower electricity consumption in polysilicon production. SiTec completes its product portfo-lio for the monosilane FBR area with the introduction of its new innovative STARTM (SiTec Applied Research) monosilane process technology that reduces energy re-quirements through modified process control, and conse-quently manufacturing costs, by more than 10 %.

Photovoltaics & Semiconductor

The Photovoltaics & Semiconductor segment particularly comprises the development, construction, production and sale of individual systems to produce monocrystalline and

29


Group management report

multicrystalline solar cells. These include production sys-tems for atmospheric and low-pressure diffusion, PECVD, fast firing and regeneration. Depending on customer re-quirements, we also offer integrated production solutions for the competitive manufacturing of high-performance solar cells with corresponding process, technology and ser-vice packages. centrotherm is one of the leading providers of integrated production solutions, with a track record of more than 50 projects realized worldwide. The long-term sustainable design of integrated centrotherm production solutions offers maximum flexibility to solar cell producers: new technologies and systems can be integrated into exist-ing production lines according to requirements, production capacities can be quickly added, and the degree of auto-mation can be boosted. Individual systems can also be ret-rofitted with upgrade packages. centrotherm thereby ena-bles its customers to manufacture state-of-the-art solar cells on a basis that is cost-efficient long-term, and re-spond flexibly to changing market requirements. Thanks to its integration expertise along the value chain, the Group also offers its customers solutions for common module production problems.

The Photovoltaics & Semiconductor segment additionally comprises a range of services relating to the semiconduc-tors and microelectronics area. As one of the leading de-velopers and producers of production systems for the semiconductor and microelectronics industries, cen-trotherm is offering a broad process spectrum for various technologies and applications such as logic and memory components (e.g. Flash, DRAM), power semiconductors (e.g. Si, SiC based), LED, SMT, MEMS and sensor technol-ogy. Our product range for the semiconductor industry in-cludes horizontal and vertical furnaces, and single wafer systems, as well as high-temperature furnaces for silicon carbide processes. Serving the microelectronics industry, we supply vacuum soldering furnaces, as well as conveyor furnaces constructed according to customer requirements.

Thin Film & Customized Equipment

The Thin Film & Customized Equipment segment focuses on the development, construction, production and sale of customized system concepts and special systems for mod-ern coating technologies. The FHR Anlagenbau GmbH (FHR) subsidiary operates in this segment as an innovative company in vacuum process technology and the special system construction area. FHR's strategic product focus ar-eas include film coating systems for the production of flex-ible solar cells, organic solar cells, energy-efficient OLED displays and insulation foils, as well as inline systems for small and large series production that are set up to coat

wafer substrates, display and solar glasses, and optical and electronic components. FHR has established a leading technology and market position in this area together with renowned industrial partners and research institutions. FHR's customer base includes Sunshine PV, Solarion, SoloPower, Heliatek, European universities, and research institutions at the Fraunhofer Society and the Helmholtz Association.

SALES MARKETS AND MARKET POSITION

Recording an export share of 85.9 % in the 2015 financial year (previous year: 93.1 %), international business re-mains of central importance to us. Our main sales markets are located in the Asia region with a 75.9 % share (previ-ous year: 87.1 %). Our production solutions and technol-ogy in the Photovoltaics & Semiconductor segment en-joyed particular demand from Asia. In the Silicon segment, business focused mainly on Qatar in connection with a large-scale project involving the construction of a polysili-con factory there. In regional terms, we include Qatar as part of Asia.

The German market accounted for 14.1 % of consolidated revenue (TEUR 19,510), compared with 6.9 % in the previ-ous year (revenue: TEUR 13,023).

Our customers in the Photovoltaics & Semiconductor seg-ment include renowned international solar cell manufac-turers such as Gintech, Hyundai, Inventec, Jinko Solar, Motech, Neo Solar Power, LG, REC, Solarworld, and TSEC. In the semiconductor area, they include Ascatron, Bosch, Schott, Siemens, Philips, Vishay and X-FAB, among others.

Qatar Solar Technologies (QST) is our largest and most im-portant customer in our Silicon segment. centrotherm sub-sidiary SiTec GmbH is involved in building a polysilicon fac-tory in Qatar for QST.

centrotherm remains a market leader with more than 50 crystalline solar cell production lines constructed world-wide. For the diffusion, PECVD and firing process steps, centrotherm supplies production systems and related pro-cess technology, and is very well established on the photo-voltaic market with more than 2,500 installed systems worldwide. centrotherm ranks as a market leader in PECVD systems. In the area of single photovoltaic systems for the production of solar cells, besides some Chinese manufacturers such as Shenzen SC, the companies Meyer Burger (Germany) AG, Gebr. Schmid GmbH as well as Semco, Amtech-Tempress and Despatch Industries rank among our most important competitors.

Group Management Report

The centrotherm Group

30


Annual Report 2015centrotherm photovoltaics

Annual Report 2015

NATIONAL AND INTERNATIONAL LOCATIONS

ORGANIZATION AND MANAGEMENT STRUCTURE

The Management Board manages the centrotherm Group. At the end of 2015, the Management Board's areas of re-sponsibility were distributed as follows:

The following changes occurred to the Management Board's composition during the 2015 financial year:

• Boris Klebensberger, Chief Operating Officer (since September 1, 2015)

Management Board members Hans Autenrieth and Peter Augustin stepped down at the end of December 31, 2015.

Changes occurred to the management structure after the reporting date that are listed in the report on events after the balance sheet date.

LEGAL STRUCTURE

CT AG is the parent company of the centrotherm Group. A total of eight consolidated companies were included within the Group as of December 31, 2015, as was also

the case as of the prior-year reporting date. No changes occurred to the scope of consolidation during the year un-der review. Section 2.3 of the notes to the consolidated fi-nancial statements provides details about the consolidation scope.

MARKET TRENDS AND ECONOMIC ENVIRONMENT

MACROECONOMIC TRENDS

In its spring forecast published in March 2016, the Kiel In-stitute for the World Economy (IfW) estimates that the global economy will expand by 2.9 % in 2016 and by 3.5 % in 2017. This compares with 3.0 % growth in 2015. The world economy will thereby remain at its 2015 level for the time being, and will not recover momentum until 2017. In advanced economies (USA, Japan, the United Kingdom and the Eurozone), the economy is supported by continued expansive monetary policy, the low oil price, and advancing private sector deleveraging processes. Ex-pansion in emerging economies (China, Latin America, In-dia, East Asia and Russia) is being dampened by the fur-ther fall in raw materials prices and structural problems. An economic plunge in China remains a significant risk to the world economy.

The economic recovery of the Eurozone continues at a moderate rate. Eurozone gross domestic product will ex-pand by 1.5 % in 2016, and by 1.9 % in 2017, according to the IfW forecast, compared with 1.5 % in 2015.

Gross domestic product in Germany registered 1.8 % growth in 2015. German economic growth thereby re-mains stable compared with past years (2014: +1.5 %). The IfW's economic experts expect growth rates of 2.0 % and 2.2 % in 2016 and 2017 respectively. Private con-sumption and momentum in economic activity remain the driving force behind Germany's economic upturn.

Gross domestic product growth contracted again in our most important market of China, registering 6.9 % growth in 2015, compared with 7.4 % in 2014. In 2015, the Chinese government implemented monetary policy measures to stimulate the economy. As before, structural change towards an economy that is financially and ecolog-ically more sustainable, as well as more oriented to private consumption is not at hand. Further reductions in gross domestic product growth rates to 6.5 % and 6.0 % re-spectively for 2016 and 2017 are forecast for China by the IfW. India's economic growth proved more dynamic, by contrast, with gross domestic product expanding by 7.3 % in 2015, compared with 5.9 % in the previous year. The IfW's economic researchers assume growth rates of 7.2 %

Europe

North America

Asia

Germany: Blaubeuren (Headquarters), Augsburg (SiTec), Dresden (Service semiconductor), Hanover (Process technology semiconductor), Ottendorf-Okrilla (FHR)

USA: Atlanta (Sales/Service North America),Seattle (R&D SiTec)

China: Shanghai (Sales/Service/Process technology)India: Bangalore (Sales/Service)Korea: Suwon (Sales/Service)Singapore: Singapore (Sales/Service)Taiwan: Zhubei City (Sales/Service/Process technology)

31



for both 2016 and 2017 for India. In East Asia, the cumu-lative growth rates of gross domestic product amounted to 4.6 % in 2015. The same growth rate is expected for the East Asian region for 2016, and 4.7 % for 2017.

The decline in China's economic growth rate that has been underway for some years, and turbulence in the Chinese equity market had no impact on Chinese customers' pre-paredness to invest in 2015. Instead, rising competition from Chinese system builders is impacting centrotherm's business in Asia. Such competitors are increasingly able to win orders with standard systems.

SILICON MARKET

The polysilicon market continued to grow with constantly rising demand for photovoltaic modules and newly in-stalled output of around 59 GW worldwide as of the end of 2015. Polysilicon production rose to more than 300,000 metric tons in 2015 (previous year: approximately 250,000 metric tons). A further increase in polysilicon production is anticipated for the coming year due to further PV market growth.

Tier 1 polysilicon producers built up and commissioned new production capacities in 2015. Chinese producers, too, have activated idle production plants and also ex-panded capacities. The Chinese government is helping them in this context to not only boost capacity, but also product quality, in order to thereby reduce polysilicon im-ports long-term.

The polysilicon spot market price declined further in 2015, falling below the 15 USD/kg level at the year-end. This is mainly attributable to a sharp increase in supply due to re-commissioned plants as well as newly created capacities.

Given a further rise in pricing pressure, industry is focusing not only on the established Siemens process but also on new technologies such as fluidized bed reactor (FBR) tech-nology (including SMP projects in Korea, and the joint ven-ture between Shaanxi Tian Hong and RECSilicon in Yulin, China). FBR technology offers producers the potential to reduce energy consumption costs in the manufacturing process.

PHOTOVOLTAIC SECTOR

GTM Research analysts assume that newly installed mod-ule capacity of 67 GW worldwide will be reached by the end of 2016, before rising further to 78 GW by the end of 2017. Photovoltaic capacity totaling 59 GW was added worldwide in 2015, according to preliminary data from

GTM, with worldwide cumulative output from all photo-voltaic plants amounting to 321 GW as of the year-end. GTM Research forecasts almost 800 GW worldwide by the end of 2020. Double-digit global photovoltaic capacity ex-pansion growth rates continue to be expected for the coming years. Analysts believe that the targets agreed at the Paris World Climate Summit in December 2015 will ac-celerate photovoltaic expansion.

The main drivers expanding photovoltaic as an energy source are of a state policy-driven nature. Many govern-ments wish to boost photovoltaics for energy-policy or so-cioeconomic motives, and foster or further enhance pho-tovoltaic shares in their energy mix. So-called "local con-tent" acts can also promote the creation of new local pro-duction sites, as they require a fixed scope of value crea-tion within the country.

China has defined the solar industry as one of its focus in-dustries in its Five-Year Plan, and aims to have installed a total of 150 GW of photovoltaic output by 2020. A total of 20 GW needs to be added per year in order to reach this target. The USA might develop to become a further growth driver. With the extension of the US Investment Tax Credit (ITC) support system, the stage has been set for sustained growth in the US module and installation mar-ket. Having been limited to date until the end of 2016, the national support scheme for solar energy users based on 30 percent tax relief was extended for a further five years in December 2015. The US photovoltaic market might grow by 16 GW in 2016, according to GTM Research. The Indian government has set an ambitious target with 100 GW of installed module capacity by 2022. It supplemented this in early February 2016, stating that it regards 10 GW of local production capacity as possible within three to four years.

Besides national expansion targets, support schemes for feed-in compensation, and "local content" regulations, import and penalty tariffs nevertheless also exert a signifi-cant impact on the sector. The latter can negatively affect the investment activities of solar cell and module manufac-turers at times, as in mid-2014, when the expansion and intensification of punitive US tariffs on solar products from China and Taiwan sometimes resulted in a collapse of in-vestments in new systems. Manufacturers from these im-portant markets postponed their expansion plans as a con-sequence, and examined potential scenarios to avoid puni-tive tariffs.


Market Trends and Economic Environment

32



Annual Report 2015

Besides political growth drivers, lower photovoltaic costs are advancing further solar module demand growth. Ex-perts anticipate that energy generation costs can be cut further, thereby corresponding to the cost of generating energy from fossil fuel sources by the 2020 to 2030 pe-riod. This is already possible today in some countries that enjoy particularly high solar irradiation. Photovoltaics will indisputably make a significant contribution to covering fu-ture global energy demand growth. Significant benefits of-fered by photovoltaics include the fact that it can be de-ployed flexibly and on a decentralized basis, that the tech-nology is silent, and emission-free.

Given the expanding end-market and growth forecasts, solar cell and module manufacturers are investing in build-ing up new production capacities and/or in new cell con-cepts. Especially Chinese and Taiwanese producers are seeking new locations predominantly in Asia, including in order to avoid punitive tariffs on their solar cell and mod-ule sales in the growth US market. The relocation of exist-ing production capacities is also on the agenda for some manufacturers, however. To these are added impulses from the Indian market to expand local production capaci-ties. Indian solar cell and module producers are expected to deliver part of module demand for the national expan-sion program.

The sector remains characterized by very high pricing pres-sure, accompanied by continued market consolidation at all steps along value chain. Competition in the photovol-taic industry has intensified as it has developed into a growing mass market. The same also applies for mechani-cal engineering and machine building. Along with compe-tition from Europe and the USA, local providers are ad-vancing onto the market with production plants, especially in China, although pricing pressure remains high on the solar cell and module producers' side, too. They need to reduce their costs further, such as through optimizing pro-duction processes, or through higher system throughput, or through integrating into existing production new cell concepts such as p-type PERC and bifacial n-type cells. These cells offer significant potential to improve efficiency, and consequently energy yield, compared with widely uti-lized standard p-type solar cells.

centrotherm is benefiting from solar cell manufacturers' current investments in new production capacities and new cell concepts. Firstly, centrotherm can also counter grow-ing cost pressure and maintain its competitiveness through cost reduction measures that it has launched and already implemented. Secondly, centrotherm must maintain its ad-vance position in relation to its competitors with new products and cost-reducing process solutions and systems

to produce highly efficient solar cells. The further develop-ment of new cell concepts in cooperation with research in-stitutions and through participating in supported and sub-sidized research projects plays an important role in this context. centrotherm can prove its innovative capabilities with new processes and products such as the c.REG regen-eration furnace, low-pressure boron diffusion for bifacial n-type cells, and the PECVD AlOx process to produce PERC solar cells.

Along with China, Taiwan ranks as one of our most im-portant sales markets in Asia. Japan, Korea, Thailand and Vietnam are also gaining greater significance. Our main sales markets will continue to be situated in Asia. New markets in the MENA region (Middle East and North Af-rica), and in Central and South America can arise as the re-sult of political decisions or "local content" regulations.

The Management Board is of the opinion that solar cell manufacturers' investment activities will continue during the 2016 financial year, resulting in a very good order book position in the Photovoltaics & Semiconductor seg-ment. For 2017, based on market forecasts and solar cell manufacturers' future expansion plans, the Management Board anticipates that the market for production technol-ogy will remain at a high level. The annual expected global photovoltaic capacity expansion is to be seen in the con-text of solar cell and module manufacturers' production capacity availability of more than 50 GW to date. In addi-tion, significantly fewer production plants are required to-day to create new production capacities than just a few years ago. This is due to the fact that the latest-generation solar cell production systems offer significantly better per-formance. For example, whereas five diffusion systems were required in 2007 for annual production capacity of around 100 MW, a centrotherm diffusion system today achieves more than 100 MW.

SEMICONDUCTOR SECTOR

Along with production technology for the photovoltaic in-dustry, the semiconductor sector also comprises a core business for the centrotherm Group, and is to be ex-panded further. The market for production technology for the semiconductor industry is divided essentially into the two segments of power and CMOS. The power segment comprises power semiconductors for the automotive in-dustry and the engineering sector, and the CMOS segment covers semiconductors for the mass and end-customer markets. centrotherm operates and is well-positioned in the power segment based on silicon as a base material. This market is registering continuous growth as the result

33



of renewable energies and emergent e-mobility. With re-gard to production solutions for power semiconductors based on silicon carbide and gallium nitride, which are see-ing rising demand, centrotherm is fielding an appropriate and effective product portfolio with its c.E series products, c.ACTIVATOR 150, c.OXIDATOR 150 and c.RAPID 200.

We are addressing the CMOS logic and memory market with our new c.PLASMOX LT product for non-thermal oxi-dation, thereby planning access to 300 mm applications for renowned IDMs. We also serve the logic, discretes and mixed-signal market areas with our product portfolio.

THIN FILM & CUSTOMIZED EQUIPMENT

The core business of FHR Anlagenbau GmbH focuses on building systems for thin film applications, especially for the photovoltaic, optical and electronic segments.

Demand for renewable energies is growing worldwide. With a focus on CIGS/CIS, TCO, as well as promising or-ganic technologies that can be combined with flexible sub-strates, photovoltaics forms a stable market segment for FHR that is exhibiting growth trend signs. Serving the thin film solar application area, FHR offers vacuum coating so-lutions with sputtering and evaporation technology.

Customized equipment construction for the optical and electronics industries as a further core competency offers the opportunity of stable revenues. We anticipate moder-ate growth here. The further advance of miniaturization, rising productivity, and growing integration of electro-opti-cal applications among end-users comprise significant mar-ket drivers. FHR is seeing growing demand in the insula-tion and sensor technology areas. Serving the thin film so-lar area, FHR offers vacuum coating solutions with sputter-ing and evaporation technology.

GROUP STRATEGY AND TARGETS

The centrotherm Group restructured itself in 2012 and 2013, focusing on its strengths in production technology and processes for thermal surface coating for the photo-voltaic, semiconductor and microelectronics industries. We have been further expanding the product and service port-folio consistently since then, investing in new process solu-tions, as well as upgrade and service packages.

Equally, centrotherm is continuing to focus on pursuing the efficiency enhancement path that it started on as part of its restructuring. Along with measures to reduce the costs of materials, production and equipment, business processes are being optimized, especially in administration and production.

Research and development work remains one of the most important pillars within the Group to maintain and expand our market position, and thereby secure our corporate suc-cess and profitability. We will continue to make targeted investments in research and development as a conse-quence. centrotherm is also involved in several sponsored research programs at national level, with the aim of devel-oping new technologies, and of optimizing processes and related production equipment.

In the Silicon segment, SiTec is endeavoring to advance further development work for its fluidized bed reactor (FBR) technology with a future beta customer. In the semi-conductor area, our investments next year will focus on the silicon carbide area and on launching new products in the mass production area. Investments in the photovoltaic area will be concentrated especially on developing pro-cesses and system concepts, as well as on new upgrade products. More details about our research and develop-ment activities are presented on page 43.

The centrotherm Group is positioned successfully along the photovoltaic value chain, from silicon through to crys-talline solar cells. We pursue the objective of reducing our customers' production costs through new product devel-opments and innovations. We aim to provide growth im-pulses for the photovoltaic sector with these cost-reduc-tions, and drive our own corporate development forward at the same time. Besides this, we also access further sales potentials and new customer groups through a broad range of services, which, along with new products, also in-cludes upgrade packages and service offerings, for exam-ple. centrotherm is diversifying its offering further in the Semiconductor & Microelectronics area in order to tap new applications for its production solutions. Revenue in this area should help to better smooth future market fluc-tuations in the photovoltaic industry.

Expanding aftersales business and improving service qual-ity comprise a further important building block of Group strategy. The installed base of more than 50 production lines and more than 2,500 production systems worldwide forms the foundation for this expansion.

As part of our long-term growth strategy, we aim to grow together with existing customers, acquire new customers, and tap growth markets further. We analyze new markets and regions, and develop market entry strategies at an early stage. We are represented with service and sales companies in the most important sales markets such as China, Taiwan, South Korea and India, in order to thereby


Group Strategy and Targets

34



Annual Report 2015

secure customer loyalty and market presence. These for-eign companies endow us with a strong market position in East Asia, and also form the basis for expanding our ser-vice activities, a business area that offers great future po-tential. Tapping the MENA region, where we have identi-fied strong interest in renewable energies technologies, forms a further focus of our expansion strategy. We are well positioned to exploit this business potential as the re-sult of our early market entry, and our integrated product and technology portfolio.

ANALYSIS OF THE FINANCIAL POSITION

IMPORTANT NOTES AND PRELIMINARY REMARKS

All figures refer to the centrotherm Group with its consoli-dated subsidiaries. Unless noted otherwise, margins and ratios relate to revenue.

No changes occurred to the scope of consolidation during the year under review. Section 2.3 of the notes to the con-solidated financial statements provides details about the consolidation scope.

For improved readability, the 2014 financial year is also re-ferred to as the "previous year" or "prior year".

Further information can be found in the notes to the con-solidated financial statements.

NEW ORDER INTAKE TRENDS

The Group received new orders worth a total of TEUR 91,382 in the 2015 financial year (previous year: TEUR 107,391).

Our subsidiary SiTec GmbH, which forms part of the Sili-con segment, focused its activities in 2015 on completing the large-scale construction project to establish polysilicon production in Qatar.

In its Photovoltaics & Semiconductor segment, cen-trotherm recorded TEUR 68,762 of new order intake (pre-vious year: TEUR 94,221). More intense competition and

cost pressure affected new order intake especially during the first half of 2015. Along with business with PECVD sys-tems, new products for solar cell regeneration and low pressure diffusion enabled CT AG to increasingly win or-ders during the second half of 2015. New order intake registered a significant uptick at the end of 2015, with so-lar cell manufacturers placing orders for extensive system packages.

In the photovoltaic area, we received a first customer order for an extensive system package for diffusion and PECVD from Vietnam in the 2015 financial year, thereby achieving entry into a new PV market.

Our subsidiary FHR Anlagenbau GmbH, which operates in the Thin Film & Customized Equipment segment, gener-ated TEUR 22,453 of new order intake in 2015, compared with TEUR 12,418 in the previous year. Especially a large-scale order to supply four inline systems contributed to this segment's marked new order intake growth.

The Group order book position amounted to TEUR 113,498 as of December 31, 2015, compared with TEUR 150,282 as of the previous year's reporting date. The re-duction in the order book position mainly reflects project progress with the polysilicon factory project in Qatar.

35



REVENUE AND EARNINGS TRENDS

Brief overview

• Consolidated revenue of TEUR 138,555 lies slightly be-low the forecast for the 2015 financial year (between EUR 150 million and EUR 200 million)

• Another positive EBIT results of TEUR 18,979 was achieved particularly due to one-off effects. The Group thereby exceeded its 2015 forecast of an approxi-mately breakeven result.

• Consolidated net income improves to TEUR 6,963.

Revenue and total operating performance

In the 2015 financial year, centrotherm generated TEUR 138,555 of consolidated revenue (previous year: TEUR 189,193), slightly below its 2015 forecast revenue target of between EUR 150 million and EUR 200 million. Besides a lack of new business in the Silicon segment, this was chiefly due to the postponement of the large-scale polysili-con factory project in Qatar.

Analyzed by region, revenue of TEUR 105,221 was at-tributable to our main market of Asia. The Group's second

most important sales market was Germany with TEUR 19,510 of revenue, followed by the rest of Europe with revenue of TEUR 7,743. The export ratio declined slightly from 93.1 % to 85.9 %.

In terms of the split of revenue by product, around 81.7 % derives from the single equipment sales. This product group's revenue amounted to TEUR 113,137, compared with TEUR 154,928 in the previous year. Revenue gener-ated from services and spare parts reported further growth in the year under review, amounting to TEUR 21,887, compared with TEUR 19,820 in the previous year. In per-centage terms, revenue from this product group stood at 15.8 %, compared with 10.5 % in the previous year. Rev-enue of TEUR 1,738 was generated with consulting and engineering in 2015. Almost no revenue was generated from turnkey production lines in the 2015 reporting year.

Consolidated total operating performance amounted to TEUR 141,115 in 2015 (previous year: TEUR 184,127). Other operating income stood at TEUR 34,994, compared with TEUR 36,360 in the previous year. This includes mainly the TEUR 20,601 release of a provision for contin-gent liabilities arising from the insolvency, which was not implemented due to an amended appraisal of litigation based on new information. This item also includes other operating income of TEUR 3,911 from the release of provi-sions and obligations, as well as TEUR 2,873 from the re-lease of value allowances on receivables.

Expense and earnings trends

In the 2015 financial year, the cost of materials connected with total operating performance (including expenses for purchased services) amounted to TEUR 85,108, compared with TEUR 107,506 in the previous year. The cost of mate-


Analysis of the Financial Position

36



Annual Report 2015

rials ratio (in relation to total operating performance) rose from 58.4 % in the previous year to 60.3 % in the report-ing year.

Personnel expenses reduced to TEUR 41,446 in the 2015 financial year, compared with TEUR 47,506 in the previous year. The personnel expense ratio stood at 29.9 %, com-pared with 25.1 % in the previous year. The marked year-on-year reduction in personnel expenses of TEUR 6,060 is primarily attributable to socially compatible staff reduc-tions at the Blaubeuren headquarters, which was imple-mented in early 2015. The number of individuals employed by the Group consequently fell to 640 as of the December 31, 2015 reporting date, compared with 745 as of the previous year's reporting date (number of heads). The lower number of employees reflects not only the staff re-duction measure, but also natural employee turnover. The personnel measure was an element of the package of measures approved in September 2014 to optimize the cost structure and boost efficiency at CT AG.

Other operating expenses amounted to a total of TEUR 27,054 in the 2015 financial year, compared with TEUR 40,177 in the previous year. The related expense ratio stood at 19.5 % in relation to revenue, compared with 21.2 % in the previous year. Other operating expenses in-cluded legal and consulting costs of TEUR 5,477 (prior-year period: TEUR 7,889).

The centrotherm Group again reported positive EBITDA (earnings before interest, tax, depreciation and amortiza-tion), generating TEUR 22,501 (previous year: EBITDA of TEUR 25,298). The EBITDA margin improved from 13.4 % to 16.2 %. Besides the cost cutting measures launched in 2014, the attainment of this result especially reflects other operating income from the release of provisions and spe-cific valuation allowances, as well as the final invoicing of a legacy project.

Depreciation, amortization and impairment losses stood at TEUR 3,522 in the 2015 financial year (previous year: TEUR 5,733), of which TEUR 3,522 was attributable to deprecia-tion and amortization (previous year: TEUR 3,944), and TEUR 0 to impairment losses (previous year: TEUR 1,789). The ratio of depreciation, amortization and impairment losses to revenue amounted to 2.5 %, compared with 3.0 % in the previous year.

Operating profit (EBIT) reduced from TEUR 19,565 in the prior period to TEUR 18,979 in the 2015 financial year.

Due to the aforementioned effects, the EBIT margin in-creased by 3.4 percentage points year-on-year, from 10.3 % to 13.7 %.

The financial result amounted to TEUR -5,790 in the 2015 financial year, compared with TEUR -3,704 in the previous year. Financial expenses totaled TEUR 5,867 in the report-ing year, and particularly included interest of TEUR 5,430 on liabilities and provisions for contingent liabilities arising from the insolvency (previous year: TEUR 5,277).

Financial income in 2015 derived from interest income and amounted to TEUR 77 (previous year: TEUR 2,282). The previous year's financial income included mainly income from the discounting of provisions for contingent liabilities arising from the insolvency.

Earnings before tax (EBT) in the 2015 financial year amounted to TEUR 13,189 (previous year: TEUR 15,861). Taking into account TEUR 6,226 of taxes on income, cen-trotherm generated TEUR 6,963 of consolidated net profit for the period (previous year: TEUR 1,188 consolidated net profit for the period). Given an average number of 21,162,380 shares in issue, earnings per share improved by EUR 0.27 in the 2015 financial year to EUR 0.33 (previ-ous year: EUR 0.06).

SEGMENT REPORTING

centrotherm Group operating activities continued to be di-vided into three operating segments. Please refer to sec-tion 3 of the notes to the consolidated financial state-ments for an extensive presentation of segment reporting.

Silicon

Revenue in the Silicon segment amounted to TEUR 43,722 in the 2015 financial year, compared with TEUR 86,252 in the previous year. Revenue derived from the large-scale project to construct a polysilicon factory in Qatar and the final invoicing of a legacy project. It was no longer possible in the reporting period to clearly determine, and reliably gage, the total costs attributable to the large-scale project in Qatar. As a consequence, the cumulative sales revenues were reported to the level of the incurred contract costs in an amount of TEUR 227,208, applying the zero profit method (previous year, pro forma zero profit method: TEUR 174,400). The cumulative revenue that was still re-ported according to the percentage of completion method in the previous year amounted to TEUR 191,760. EBIT stood at TEUR -11,735, especially due to the revaluation of the Qatar project (previous year: TEUR 11,014). The EBIT

37



margin in the Silicon segment was -26.8 %, compared with 12.8 % in the previous year.

Photovoltaics & Semiconductor

The Group generated TEUR 79,290 of revenue in this seg-ment compared with TEUR 90,637 in the previous year.

EBIT improved from TEUR 9,250 to TEUR 31,309 in the 2015 financial year. Besides the cost-cutting measures in-troduced in 2014, especially one-off effects in other oper-ating income have contributed to this result.


Revenue in the Thin Film & Customized equipment seg-ment grew from TEUR 12,304 in the previous year to TEUR 15,543 in the 2015 financial year.

EBIT was slightly negative at TEUR -595 in the reporting year (previous year: TEUR -699). A TEUR 531 impairment loss that was applied to a system that is recognized under work in progress accounted for most of the negative re-sult.

NET ASSETS

BRIEF OVERVIEW

• Total assets fell from TEUR 261,909 (previous year) to TEUR 215,799 as of December 31, 2015

• Positive equity of TEUR 50,297 as of December 31, 2015 (previous year: TEUR 43,113)

SIGNIFICANT BALANCE SHEET EFFECTS IN THE REPORTING PERIOD

Total assets reduced to TEUR 215,799 as of December 31, 2015 (previous years reporting date: TEUR 261,909).

In relation to total assets, the share of non-current assets increased from 27.6 % to 29.6 % when comparing the re-spective year-end reporting dates. In absolute terms, non-current assets fell from TEUR 72,236 in the previous year to TEUR 63,829. This arose particularly from the decline in deferred tax assets.

Current assets reduced by TEUR 37,703, equivalent to around 20.0 %, from TEUR 189,673 as of the previous year's reporting date to TEUR 151,970 on December 31, 2015. They comprised 70.4 % of total assets (December 31, 2014: 72.4 %). The TEUR 9,190 reduction in prepay-ments rendered results mainly from processing of the Qa-tar project in the Silicon segment. A decrease in cash and cash equivalents arising from the TEUR 20,132 repayment of collateralized insolvency liabilities were the main reason for the reduction in current assets.

Cash and cash equivalents comprise the largest item in terms of value on the assets side of the balance sheet, ac-counting for 61.1 % of current assets as of the reporting date. They reported a position of TEUR 92,792 as of De-cember 31, 2015, compared with TEUR 114,067 as of the prior-year reporting date. On the credit side as of Decem-ber 31, 2015, are TEUR 6,351 of lien assets provided as a so-called "artificial" insolvency estate loan (December 31, 2014: TEUR 26,080). Due to the continued need for cash deposits for guarantees at individual centrotherm Group companies, as well as a deposit that has been assigned, freely available liquidity amounted to TEUR 84,925 as of the reporting date (December 31, 2014: TEUR 106,474).

On the equity and liabilities side of the balance sheet, equity increased from TEUR 43,113 as of December 31, 2014, to TEUR 50,297 as of the balance sheet date, mainly due to the consolidated net profit of TEUR 6,963 (previous year: TEUR 1,188). The equity ratio improved to 23.3 % (December 31, 2014: 16.5 %).

Non-current liabilities reduced by TEUR 92,348 and amounted to TEUR 9,008 as of the December 31, 2015 re-porting date (prior-year reporting date: TEUR 101,356), comprising 4.2 % of total equity and liabilities (December 31, 2014: 38.7 %). The reclassification of non-current fi-nancial liabilities arising from the insolvency proceedings to


Net Assets

38



Annual Report 2015

current financial liabilities arising from insolvency proceed-ings (current debts) was the chief contributor to the reduc-tion in non-current liabilities. This reclassification was ne-cessitated as a result of the insolvency liabilities' short term on the reporting date (see section 5.16 in the notes to the consolidated financial statements). Insolvency obligations of TEUR 20,132 were also repaid to a bank at the year-end. In the previous year, the provisions for contingent lia-bilities arising from insolvency proceedings (TEUR 28,197) included, inter alia, a provision for litigation that was al-ready released in an amount of TEUR 20,601 in the year under review due to an amended appraisal based on new information.

Current liabilities grew mainly as a consequence of the re-classification of insolvency liabilities and provisions for con-tingent liabilities arising from the insolvency from non-cur-rent liabilities, and due to interest applied to liabilities and provisions recognized at present value in the previous year.

Other current financial liabilities fell from TEUR 10,159 in the previous year to TEUR 5,288 in the 2015 financial year. They decreased from TEUR 7,676 in the previous year to TEUR 2,902 in the reporting year, mainly due to a reduc-tion in personnel liabilities. The latter in the 2015 financial year comprised TEUR 1,250 of liabilities from restructuring measures (previous year: TEUR 3,933).

LIQUIDITY AND FINANCING

The main objective of the centrotherm Group financial management function is to ensure that the Group contin-ues to enjoy sufficient liquidity backing, and that the Group's intrinsic financial value is preserved.

The Group had access to a bill guarantee line of TEUR 31,300 as of the December 31, 2015 balance sheet date. Of this amount, TEUR 11,300 is attributable to FHR Anla-genbau GmbH, and a further TEUR 20,000 to CT AG and a further subsidiary. The latter can be utilized only against cash deposit. Of these bill guarantee lines, a total of TEUR 3,346 was utilized as of the December 31, 2015 balance sheet date.

Cash flow from operating activities amounted to TEUR - 2,799 in the 2015 financial year, compared with TEUR 15,354 in the previous year. The negative operating cash flow in 2015 arose mainly from the large-scale project in Qatar, where more cash outflows were incurred in the re-porting year for the project than customer prepayments were received.

The net cash flow from investing activities amounted to TEUR 1,656, compared with TEUR -1,087 in the previous year's equivalent period, and resulted predominantly from the disposal of an operating and administration building, along with equipment, in an amount of TEUR 2,090. In-vestments in property, plant and equipment, and in intan-gible assets, amounted to TEUR 724 (previous year: TEUR 1,462).

The negative cash flow from financing activities of TEUR -20,132 (previous year: TEUR 0) arises from the repayment of financial liabilities arising from the insolvency proceed-ings.

Financial resources as of December 31, 2015 exclusively comprised the cash and cash equivalents of TEUR 92,792 as reported in the consolidated balance sheet (December 31, 2014: TEUR 114,067). A total of TEUR 7,867 of the cash on the balance sheet date is subject to restricted availability (December 31, 2014: TEUR 7,593) due to TEUR 2,867 of cash deposits required for guarantees of bills (previous year: TEUR 2,593), and due to a subsidiary as-signing TEUR 5,000 of assets (December 31, 2014: TEUR 5,000). Freely available liquidity consequently amounted to TEUR 84,925 as of the reporting date (December 31, 2014: TEUR 106,474). On the credit side as of December 31, 2015, are TEUR 6,351 of lien assets provided as a so-called "artificial" insolvency estate loan (December 31, 2014: TEUR 26,080). Changes occurred to Group liquidity after the reporting date that are commented upon in the report on events after the balance sheet date.

In December 2015, the Management Board of CT AG con-cluded a financing agreement for TEUR 25,000 with a term until December 31, 2018, which secures the compa-ny's funding.

PROFIT FOR THE PERIOD AND APPLICATION OF EARNINGS OF CENTROTHERM PHOTOVOLTAICS AG

As the Group parent company, CT AG reports a net profit of TEUR 32,573 for the year as of December 31, 2015 in its separate financial statements, which are prepared ac-cording to the German Commercial Code (HGB) (Decem-ber 31, 2014: net profit for the year of TEUR 14,536). The entirety of this amount is to be carried forward to the new account.

39



COMPANY-SPECIFIC PERFORMANCE INDICATORS

VALUE MANAGEMENT AND FINANCIAL PERFORMANCE INDICATORS

The centrotherm Management Board, in coordination with the Supervisory Board, determines Group strategy and the Group targets that derive from it. These targets are moni-tored, steered and developed further at regular meetings together with the subsidiaries' management teams and managing directors.

centrotherm utilizes revenue and earnings as key financial performance indicators for Group steering purposes. These key indicators are submitted in the context of institutional-ized monthly reports to the Management Board, along with further key indicators such as EBIT, cash flow, liquid-ity, as well as new order intake. A significant focus was again placed on securing liquidity and its further growth in the 2015 financial year.

The order book position, and with it new order intake, are important key indicators for us. These are reported in de-tail to the Management Board by business area, as well as by order type and content. We derive our budgeted reve-nue from the period that is expected to be required to pro-cess the existing order book position, and from forecast future new order intake.

NON-FINANCIAL PERFORMANCE INDICATORS

Market and competition

The early identification of opportunities and risks is im-portant to us in order to react promptly and flexibly to market trends, and to actively identify and exploit poten-tials. For this reason, we not only observe macroeconomic indicators, but also utilize company-specific leading indica-tors. In particular, continuous contact with customers, sup-pliers and market research institutions allows us to identify market and competitive structural trends, and to gauge their impact on our future sales and earnings positions. We also use international trade fairs as a platform to enter into dialog with policymakers, associations, technology ex-perts and, not least, customers. In doing so, we systemati-cally survey market appraisals, development activities, and solar cell and module manufacturers' investment plans.

Political influence on market trends forms an important indicator. This includes the approval of solar subsidy programs and feed-in tariffs (FiTs), "local content" regulations, as well as punitive tariffs such as those imposed by the USA on Chinese and Taiwanese solar

products. Although we are not directly affected by adjustments to subsidy programs, we integrate any resultant considerations into our international sales strategy.

Employees

Employee numbers and structure

The number of Group employees stood at 640 as of the December 31, 2015 reporting date, compared with 745 employees at the 2014 year-end. The number of employ-ees reduced especially due to socially compatible staff re-ductions at the Blaubeuren headquarters as well as at our foreign branch operations in the 2015 financial year. The personnel measure was an element of the package of measures approved in September 2014 to optimize the cost structure and boost efficiency at CT AG. Natural em-ployee turnover was a further reason for the reduced num-ber of employees within the Group. A total of 77 staff were employed at our international branch operations as of the reporting date (December 31, 2014: 91 staff). The number of employees is stated by heads.

Number of employees by function

The sickness rate at CT AG was slightly below 5.0 % in 2015 (previous year: 5.0 %).

The short-time working instrument was not deployed in 2015, by contrast with the prior-year period.

Personnel development and trends

As a technology group, the primary objective behind our employee development is to retain our staff members' val-uable expertise and excellent knowledge within the com-pany, to develop it further, and to secure it for the future. For this purpose, we conduct an annual appraisal of our


Company-Specific Performance Indicators

Administration 163

Technology and Research 159

Production 205

640 Employees

Apprentices28

Management Board 4

Sales 81

Number of employees by functions

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Annual Report 2015

employees' individual qualification requirements, from which we derive important further-training measures. Our ct academy program generally offers various communica-tion and method-oriented training courses, such as on the topics of project and time management, presentation and speaking skills, English lessons, and Microsoft Office soft-ware training, for example. Managers are offered further trading seminars on employee management and motiva-tion, and mediation skills. They also undergo intensive training in how to handle change processes in order to support our change management process. With these measures, and our "Employees Train Employees" training program, we offer our staff a highly varied range of per-sonnel development measures.

Training and promoting up-and-coming staff

In order to secure our demand for specialist staff, we place a special focus on promoting young and upwardly mobile employees. As of the December 31, 2015 reporting date, we were training a total of 28 apprentices in commercial and technical professions, including five apprentices at the FHR subsidiary. Not least due to their high qualification level, we hired eight apprentices as permanent employees.

In order to promote young and up-and-coming staff, cen-trotherm offers training in the following professions:

Industrial clerks (m/f)

• Mechatronics technicians/industrial mechanics (m/f) • Technical product designers (m/f) • Warehouse logistics specialists (m/f) • System integration or application development IT spe-

cialists (m/f) • Ulm Model studies • Cooperative study program (industry, business IT)

We also continuously offer attractive internships, and op-portunities to conduct challenging diploma work.

In 2016, we are offering 10 training places in various pro-fessions.

Occupational healthcare management

With our ct fit occupational healthcare management scheme, we aim to continuously improve the working con-ditions and health-related lifestyle of our workforce.

Our regular healthcare management scheme in 2015 in-cluded extensive health checks, bowel cancer prevention, flu immunization, and detailed travel medical advice. An

online drugstore enables our employees to buy medica-tions at reduced prices and have them be delivered to their place of work. In addition, we offer group leisure-time courses where we aim to boost our employees' fitness and team spirit. Our staff are also entitled to discounts at many fitness studios, and subsidies for massages that are offered within the company.

Works Council

The staff of CT AG last elected a new Works Council in the 2014 financial year. The Works Council has formed a Busi-ness Committee that is involved in important corporate matters.

Purchasing & procurement

The primary objective of our purchasing and procurement department is to secure the Group's competitiveness in re-lation to technology, quality, supplier loyalty and costs within a market environment that is typically cyclical for the photovoltaic, semiconductor and microelectronics in-dustries. We continued to achieve this in 2015 by consist-ently applying our "make-and/or-buy process", and through supplier management.

As part of supplier management, we are constantly ex-panding our relationships with our long-standing, experi-enced and quality-certified suppliers, and we are also iden-tifying new and very effective suppliers, including in the context of our global sourcing strategy. This also enables us to further develop our products in technological terms. Through second-source and third-source suppliers, we not only ensure that supplies of components or component groups remain uninterrupted by supply bottlenecks or stoppages, but also minimize potential dependency risks. We continuously monitor not only our suppliers but also the quality of the goods that they deliver to us.

The purchasing area is structured organizationally so as to efficiently support dynamic procurement requirements.

Production

The efficiency and flexibility of the operational production area exerts a significant influence on the centrotherm Group's competitiveness. For this reason, we consistently pursue the objective of securing and continuously boosting both quality and supplier loyalty, while keeping production costs as low as possible.

To further boost manufacturing efficiency, in the second half of 2015 we not only realigned system-supported pro-

41



duction planning and steering, including materials plan-ning, but also set up a production layout that is optimized for materials flows. The reorganization of production was implemented in early January 2016.

This manufacturing realignment along with more flexible structuring of parts lists made it possible to install a make-and/or-buy process that enable CT AG to respond flexibly to order peaks.

Sales and marketing

Sales structures within the centrotherm Group are oriented to our dominant international business. We are locally rep-resented with service and sales companies on all important markets, which allows us to be close to current market ac-tivity at all times. This provides optimal customer service through personal consulting, and rapid response and deliv-ery times. We achieve a high degree of customer satisfac-tion as the result of our local presence and our spare parts offering. Our sales team was also active on new markets in 2015, such as the MENA region and South America, as these regions are experiencing increasingly growing inter-est in creating local photovoltaic industries.

Our customer base includes large premium manufacturers from the photovoltaic industry, as well as from the semi-conductor and microelectronics industries, and some large companies that are entering the PV market.

We can respond rapidly and efficiently to our customers' requirements through our flexible sales structures, and ac-tively identify and exploit new business potentials. Sales occur mainly through our local service and sales compa-nies, and are managed centrally from Blaubeuren.

Our marketing and communication activities remain ori-ented to the centrotherm brand, as well as innovative technologies and products for the photovoltaic, semicon-ductor and microelectronics industries. Our presence as ex-hibitors at trade fairs and conferences comprises an im-portant marketing instrument that allows us to present our range of products and services to a broad specialist public, and to enter into direct dialog with potential customers. We were represented at a total of 10 trade fairs and exhi-bitions both in Germany and abroad in 2015, seven of which comprised specialist trade fairs in Asia. The main fo-cus here was on the most important photovoltaic trade fair, SNEC, which was held in May 2015 in Shanghai. Our product and process novelties included our newly devel-oped regeneration furnace, the c.REG, which significantly minimizes light-induced degradation (LID) in solar cells. We also presented our PECVD AlOx process for the production

of highly efficient PERC solar cells, and our time and cost saving process for the high-efficiency boron doping of n-type solar cells.

To meet continued strong demand for silicon carbide ap-plications, our trade fair presence in the semiconductor & microelectronics area focused not only on horizontal fur-naces and our c.RAPID RTP system, but also on our c.ACTIVATOR 150 and c.OXIDATOR 150 high-temperature furnaces.

We also offer specialist information about our technolo-gies, products and production solutions through the Inter-net and by way of direct contact with customers. This mix allows us not only to inform potential customers about our company and products, but also to bolster the cen-trotherm brand both nationally and internationally.

RESEARCH AND DEVELOPMENT

Research and development (R&D) work remains one of the most important pillars within the Group to maintain and expand our market position, and thereby secure our cor-porate success and profitability. In this context, our teams both in Germany and abroad focus especially on optimiz-ing and further developing our production systems and processes to manufacture solar cells, semiconductors and microelectronic components. Our Photovoltaic segment concentrates on the consistent efficiency enhancement of solar cells and continuous production cost reduction in or-der to generate solar electricity ever more competitively compared with conventional electricity sources. As a pio-neer and technology leader, this has been, and remains, our objective.

During the period under review, centrotherm continued to consistently pursue its development objectives with its technology specialists, process engineers and integration experts. The Group invested a total of TEUR 7,349 in re-search & development (prior-year period: TEUR 6,153). The Group employed a total of 159 technology and research staff as of the end of the 2015 financial year.

SILICON

Optimizing and developing existing and alternative process technologies to produce polysilicon in relation to costs, productivity and quality represent the core aspects of our SiTec subsidiary's development activities.

SiTec focused its R&D activities on further developing more cost beneficial fluidized bed reactor (FBR) technology in 2015. It constructed the second generation FBR to large


Research & Development

42



Annual Report 2015

scale according to an initial prototype from 2013, and commissioned it at the SiTec R&D laboratory in Seattle. As the next development step, an initial pilot plant is to be built to test industrial volume manufacturing with a beta customer. A further focus of our R&D work was on further developing our STARTM monosilane process technology. A licensing agreement to utilize STARTM was signed with a first industrial customer at the end of 2015. This technol-ogy can be integrated into both new and existing monosilane factories. It enables considerable energy and cost savings, as well as significantly higher productivity compared to existing processes.

PHOTOVOLTAICS & SEMICONDUCTOR

Our research and development work aims, firstly, to opti-mize and further develop existing technologies, processes and production systems. Secondly, we are developing the production processes of tomorrow for the photovoltaic and semiconductor industries, and implementing them in the respective system concepts. In order to achieve even more competitive solar cell production, we also imple-mented new cell concepts, processes and technologically further developed production systems at selected custom-ers' mass production operations. This allows us to rapidly derive meaningful results about our new developments, and optimally fulfill customer requirements.

Our international team of technology specialists and inte-gration experts at our sites abroad support the central re-search and development area at our Blaubeuren location. We also make recourse to collaborative work with estab-lished institutes and research facilities for quick and effi-cient development work.

Focal aspects of R&D for the photovoltaic industry

As part of its "BiSoN Alliance" with the International Solar Energy Research Center (ISC) in Constance, centrotherm pushed further ahead with testing and developing new cell concepts for the mass production of bifacial n-type solar cells in 2015. This also included developing a new low pressure process for high-efficiency boron doping. This process enables efficiency enhancement and production cost reduction for n-type solar cells. Together with the ISC, a multicrystalline solar cell production line was successfully retrofitted with an upgrade to monocrystalline BiSoN solar cells. In contrast to p-type solar cells, n-type solar cells of-fer greater efficiency potential and exhibit no light-induced degradation even without subsequent treatment. The In-ternational Technology Roadmap for Photovoltaic (ITRPV)

sees the efficiency of n-type cells rising to over 24 % over the next the years (p-type mono-Si cells only up to 22 %).

centrotherm is also involved in several sponsored research programs at national level, with the aim of developing new technologies, and of further developing processes and related production equipment.

As solar cell and module manufacturers increasingly com-mand expertise of entire production steps and processes, cooperation with them provides us with important im-pulses for our development work. We develop solutions for their problems with our integration expertise at all steps of the value chain for crystalline solar cells and mod-ules. Examples include the development of important pro-cess steps in cell manufacturing for downstream module production, such as avoiding PID losses (PID = Potential In-duced Degradation), where a PV system can suffer re-duced performance as a result of excessively negative volt-age. To avoid light-induced degradation (LID), we transi-tioned the prototype that we developed in 2014 to our first generation c.REG regeneration furnace following a demo phase, and launched it on the market. A short, fur-ther process step after drying and sintering the metal con-tacts regenerates the crystalline solar cells, thereby pre-venting sunlight-induced performance loss.

With this extensive technology expertise, we are able to not only assist existing customers, but also help new en-trants – to create integrated production lines, for example – and assemble customized state-of-the-art equipment packages for these players.

We have also entered into more in-depth dialog with our customers in the single equipment business, placing a top priority on their requirements in the further development of core processes.

Following the market launch of our c.REG regeneration furnace in mid-2015, we developed the c.FIRE fast-firing furnace with integrated regeneration furnace.

We offer upgrade packages to optimize processes and sys-tem running times for our c.PLASMA PECVD system. We further developed our PECVD process for aluminum oxide coating (AlOx) in 2015, and installed it at its first custom-ers. AlOx coating is utilized in PERC solar cell production. This process supplements our centaurus technology that we have already launched on the market. centaurus is a PERC cell concept developed by centrotherm which, with production capacity of more than 800 MW, is already de-ployed very successfully in mass production at our custom-ers. The centrotherm Group consequently possesses two

43



PERC solar cell technologies that can be utilized depending on wafer material and process steps. Both passivation stacks deliver comparable performance with peak results of up to 21 % in industrial manufacturing.

In the business year elapsed, we also developed a new generation of our PECVD production system that we are launching on the market in 2016. With both PECVD sys-tems, centrotherm possesses the highest installed capacity worldwide, with an approximately 50 percent market share.

We have continuously improved the diffusion process for our c.DIFF LP low-pressure diffusion furnace. Customers can deploy this optimized process in combination with conventional and especially new metallization pastes or se-lective emitters to achieve significant efficiency enhance-ments. Outstanding homogeneity is achieved with emitter resistances of up to 150 Ω/square.

R&D focus areas for the semiconductor and microelectron-ics industries

In order to expand our semiconductor business, we are concentrating on optimizing existing processes and sys-tems, as well as on developing new solutions, for our cus-tomers from the semiconductor and microelectronics in-dustries. We conduct development work for these indus-tries at our sites in Blaubeuren and Hannover.

In our cleanroom research lab in Blaubeuren (cleanroom class 100-1000 with a Class 1 mini-environment), we con-duct demonstration test runs for our customers with our high-temperature furnaces for silicon carbide applications, our low-temperature c.PLASMOX LT plasma oxidization system, and our c.RAPID RTP system. We further devel-oped the c.ACTIVATOR 150 and c.OXIDATOR 150 for sili-con carbide applications in 2015. Demo test series allow us to demonstrate our systems' technological performance and characterize current processes, as well as access fur-ther new applications. Leading semiconductor manufactur-ers have already achieved good test results with the c.PLASMOX LT for future top-performing logic and memory elements on 200 and 300 mm wafers.

Moreover, we ran demonstrations with our c.ACTIVATOR 150 and c.OXIDATOR 150 high-temperature furnaces for silicon carbide applications in 2015, and further developed the processes.

Following delivery of our c.RAPID 200 (Rapid Thermal Pro-cessing System, RTP) to its first customer in 2013, we transferred the knowledge gained from integrating it into

the production process into its further development. We see increasing interest for our c.RAPID 200 in the 200 mm semiconductor equipment market.

THIN FILM & CUSTOMIZED EQUIPMENT

In our development partnership with the Solar Energy Re-search Institute of Singapore (SERIS), our subsidiary FHR Anlagenbau GmbH further developed functional films from transparent conductive oxides (TCO) in 2015. As part of this cooperation, FHR is deepening its process expertise in order to affect optical and electric film properties on a targeted basis. TCO vacuum deposition plays a key role in the areas of flat screens, touch screens, flexible electronics and renewable energies. With its roll-to-roll systems, FHR is already offering industrial partners and research institu-tions film coating solutions, and supplies process-opti-mized sputter targets as consumables. In addition, FHR is working constantly on further developing the company's own expertise in fully automated system and process man-agement.

SUSTAINABILITY

The principle of sustainability is anchored in our vision. With our solutions for the silicon and photovoltaic indus-tries, we can help electricity derived from solar energy to become a viable alternative to electricity generated from conventional energy sources. Serving the semiconductor and microelectronics industries, we offer production solu-tions that enable the new and more complex applications of tomorrow to become reality. These applications also make a significant contribution to saving resources.

We regard sustainability as a prerequisite for the successful structuring of the future: for our customers and suppliers, our shareholders, employees, and consequently for cen-trotherm. Our activities are oriented to securing ecologi-cally, economically and socially sustainable growth and de-velopment. We offer environmentally compatible products and solutions that improve our own net ecological impact, and those of our customers. We also consciously take envi-ronmental aspects into account when selecting our tech-nologies.

Sustainable and responsible activity plays a major role in our daily business, whether in the reduction of the CO2 greenhouse gas through technical innovations or process sequences, in the selection of, and cooperation with, busi-ness partners, or in our strong commitment to employees' social concerns. Information about how we support our employees can be found in the "Employees" section on page 39.


Sustainability

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Annual Report 2015

OCCUPATIONAL HEALTH & SAFETY

We take due care to ensure a safe working environment for our employees. In the occupational safety area, cen-trotherm has a process to evaluate workplace risks, as well as an accident recording and reporting system. The sys-tematic processing and evaluation of accidents enables us to identify new or previously unidentified risk sources, and reduce accident risk. Depending on the area in which they work, our employees are informed preventatively about potential risk sources, and the safety regulations and measures that are derived from them. We have prepared a handout with safety instructions for visitors to our Blau-beuren site. Our employee healthcare scheme also offers many differ-ent healthcare maintenance opportunities to our work-force. Details about healthcare management are presented on page 40.

Separate safety regulations and instructions that are docu-mented in manuals also apply for the installation, starting, and ongoing operation of production systems at custom-ers' premises. Our systems' safety is inspected and certified by TÜV.

The number of occupational accidents at CT AG of 15.0 per thousand full-time employees during the period under review lies significantly below the average for the relevant professional cooperative, the BG-ETEM, of 18.4 for 2014.

BUSINESS RESPONSIBILITY

Our business activities pursue the principle of responsible activity with respect to future generations. As a provider of technology and equipment to the photovoltaic industry, we make an important contribution to further developing the sector, and are making solar electricity competitive (without subsidies) compared with conventional and other renewable energy sources. centrotherm products and solu-tions support efforts to establish energy supplies that are as CO2 neutral as possible. We must be commercially suc-cessful in order to act responsibly. Close cooperation with our customers and suppliers results in economically effi-cient working methods. With our energy-efficient prod-ucts, we enable our customers to manufacture on an envi-ronmentally compatible basis. We invest in research and development in order to ensure that we will further im-prove our products and processes in the future.

REPORT ON OPPORTUNITIES AND RISKS

The identification and systematic management of opportu-nities and risks makes a considerable contribution to a company's success and profitability. As a consequence, a central importance is given to risk and opportunity man-agement as an integral component of all core Group pro-cesses. In order to identify, measure and consistently man-age risks and opportunities at an early stage, we deploy an effective and standard Group risk & opportunity manage-ment system, which is presented below. The Management Board, supported by technical and specialist staff, manag-ers and legal advisers (at minimum annually), assess the risk position, and launch and follow up on risk reduction measures. Opportunities are reported upon on the basis of the same schedule.

Risk policy and strategy

Developing new technologies and implementing them in efficiently functioning production systems and efficient processes rank among the strengths of CT AG. CT AG and its subsidiaries are constantly developing new products and processes in order to remain among the pioneers and leaders in thermal solutions and process technology for photovoltaics, semiconductors and microelectronics in in-dustry, research and development in the future. Besides further developing products and processes for markets where CT AG is already active, the Group is also expand-ing its product portfolio and tapping new markets. Devel-opments' success prospects are not always one hundred percent evident, especially in the initial stages. CT AG is aware that developing new processes and products and entering new markets entail risks. From the perspective of CT AG, it can nevertheless make sense to enter into busi-ness risks in order to maintain the company's high innova-tive capability and to exploit market opportunities.

RISK & OPPORTUNITY MANAGEMENT SYSTEM

Objectives

The objective of the risk & opportunity management sys-tem is to identify important opportunities and risks at an early stage, and to utilize such identification to create scope for action.

Prompt communication and early identification of recog-nized risk matters enhances a company's speed of re-sponse. Risk management is intended to create awareness in relation to the management and handling of risk. Ana-lyzing identified risks and launching forward-looking

45



measures is aimed at a fully planned handling and tar-geted management of risks. Systematic risk management is also intended to strengthen a company's risk-awareness. It is aimed at making employees more aware of risks, thereby fostering risk-conscious and autonomous self-reg-ulation. This helps to create a positive risk and controlling culture within the company.

Systematic management of risks is aimed at early identifi-cation and adaptation of potential competitive ad-vantages, thereby helping to secure the Group long-term as a going concern. For CT AG, such opportunities arise from new customer requirements and new products, inno-vations and quality improvements, as well as changing market structures, among other areas.

Risk & opportunity management process

Along with formulating the risk & opportunity strategy, the risk & opportunity management process consists of the following process steps

• Identification, • Evaluation and • Management.

Efficient risk & opportunity management depends on treating this management instrument not as an isolated process, but rather as an integral component of all our company's core processes. The company conducts the management of risks and opportunities continuously.

Risk & opportunity identification

Cross-Group risk categories and areas, as well as reporting officers (risk officers), are defined in order to ensure that risks are reported as comprehensively as possible. These categories comprise:

• Environment and sector risks • Corporate strategy risks • Commercial performance risks • Personnel risks • Information technology risks • Financial risks • Legal risks • Other risks

The risk officers use a risk reporting form to identify and report risks on a regular basis. Opportunities are identified on the basis of the same categories, which the risk manag-ers summarize in opportunity reports.

Risk measurement

Risk evaluation aims to rank risks in terms of risk potential, and to model them within a proprietary risk portfolio.

Risk officers measure risks in the risk reporting question-naires applying an expected value derived from multiplying a potential loss value by a potential event risk. Risks are al-located to one of three risk classes with the help of this es-timated value. Risk class 1 comprises risks with an ex-pected value from EUR 1 million. Risk class 2 groups risks with an expected value from over EUR 250,000. Risk class 3 covers lower expected values below EUR 250,000. Risk class 1 risks are subject to permanent controlling, and risk class 2 risks are subject to regular monitoring. Risk reduc-tion measures are prepared and implemented for risks in risk classes 1 and 2. In addition, emergency plans are also developed for going concern risks, so that implementation can commence as soon as a loss of event occurs.

Risk steering

A list of all risks structured according to risk class is submit-ted regularly to the Management Board to allow it to as-sess the current risk position. To steer risk, the Manage-ment Board, risk managers and divisional heads work to-gether to define, implement and follow up on measures to reduce potential loss level and/or event risk. General Group-internal risk steering measures include reporting, measuring, controlling, and steering, using an internal re-porting system, as well as the limitation of potential claims and liability risks through contractual liability limitation or through taking out corresponding insurance. This allows us to make the financial effects calculable.

The Supervisory Board and its audit committee placed a special focus on the risk & opportunity management pro-cess as well as reporting in the 2015 financial year.

Key characteristics of our internal controlling and risk man-agement system in relation to the financial accounting process

The aim of risk management in relation to the financial ac-counting processes is to identify, measure and steer risks that could have a negative effect on the accounting con-formity of the consolidated financial statements. This is to ensure that accountancy-related matters and their appro-priate transfer to individual accountancy tools are appro-priately reported, compared and assessed. The formation of provisions also forms part of this. Key structures, pro-cesses and controls that are of significance for Group ac-counting and consolidation are listed below:


Report on Opportunities and Risks

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Annual Report 2015

• Functions and responsibilities are clearly allocated within all accounting process areas.

• A set of internal guidelines for financial accounting and the preparation of financial statements is in place, which are adapted and expanded as required.

• The Group's individual companies utilize standard IT systems as far as possible. Access is protected through corresponding systems and regulations.

• The individual companies' data that are included in the consolidated financial statements are calculated locally, and checked for completeness and correctness by the Group's central area applying random sample tests and plausibility checks.

• Based on the individual companies' data, the central area prepares the consolidated financial statements through consolidating the legal entities.

Opportunities management system

Business activity also consists of identifying and exploiting opportunities in order to thereby secure competitiveness and tap market potentials.

Opportunities are identified systematically in this context as part of daily processes and market monitoring. Oppor-tunities and attendant risks are analyzed with scenario analyses and detailed feasibility studies.

Ongoing monitoring and analysis of relevant product, technology, market and competitive developments within the Group's environment from central elements of its op-portunity management.

Opportunities also arise especially from our highly varied research and development activities.

OPPORTUNITIES

Sales & marketing

The general photovoltaic sector trend generates opportu-nities for centrotherm. Global demand for solar modules is growing continuously, and solar cell manufacturers have made a return to investing in new production equipment since the end of 2013. Due to continued high cost pres-sure, such manufacturers also need to invest in highly effi-cient technologies and upgrades to realize process optimi-zations in order to remain competitive and expand market shares. In addition, production sites are being relocated to other countries, primarily in Asia, especially as the result of the imposition of punitive US tariffs on Chinese and Tai-wanese solar products. This presents us with an oppor-tunity to win new orders for process upgrades, as well as

for both replacement and new investments. We occupy a very good market position internationally, and expect that demand will continue in 2016, especially from Asian coun-tries such as China and Taiwan, and will also start in other important sales markets such as India. Moreover, with the extension of the US Investment Tax Credit (ITC) support system, the stage has been set for sustained growth in the US module and installation market. Having been limited to date until the end of 2016, the national support scheme for solar energy users based on 30 percent tax relief was extended for a further five years in December 2015. The US photovoltaic market might grow by 16 GW in 2016, according to GTM Research.

New processes and products such as the c.REG regenera-tion furnace, low-pressure boron diffusion for bifacial n-type cells, and the PECVD AlOx process for the production of PERC solar cells, generate positive sales opportunities, especially in the context of the growing significance of high-efficiency solar cells.

The c.ACTIVATOR 150 and c.OXIDATOR 150 high-temper-ature process systems for power semiconductors based on silicon carbide and gallium nitride generate new sales op-portunities for centrotherm as a result of e-mobility growth.

With regard to a further high-growth market, the CMOS logic and memory market on 300 mm wafers, centrotherm is fielding a product for nonthermal oxidation with its c.PLASMOX LT. Together with pilot customers, cen-trotherm is evaluating this production system for highly different applications. Successful evaluations open up long-term sales opportunities for us for c.PLASMOX LT.

Overall, given the growth market especially in the Photo-voltaics & Semiconductor segment, the aftersales business with service and upgrade products generates additional sales revenue potential.

FHR Anlagenbau

Our FHR subsidiary focused on important strategic cus-tomer projects in the 2015 financial year, improving sales opportunities for new products such as roll-to-roll and in-line systems.

Currency exchange rate

The euro's depreciation against US dollar creates opportu-nities to beat our US competitors in winning orders for production systems, especially in Asian markets.

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RISKS

Preliminary remarks

In 2014 annual report we already noted sector risks, some of which have already materialized, and some of which continue to exist. These comprise, in particular:

• Consolidation activity within the photovoltaic industry; • Fluctuations in solar cell manufacturers' investments in

technological retrofitting of existing production lines or in new lines due to political influences or a lack of their own financial resources;

• Uncertainty relating to governments' solar subsidies, and the effects of punitive tariffs imposed on solar products, as well as the potential expansion of punitive tariffs;

• Greater competition among technology and produc-tion system suppliers;

• High production capacities remain available worldwide to cover most demand for solar cells and modules.

Environment and sector risks

The business growth and trends of centrotherm are signifi-cantly affected by both sector and economic trends on rel-evant sales markets. This is particularly true of the photo-voltaic sector, as centrotherm continues to generate a con-siderable proportion of its revenue with production sys-tems and services.

The photovoltaic industry suffered a tough consolidation phase in 2012 and 2013 that was characterized by overca-pacities for solar cell production, especially in Asia. Since December 2013, solar cell producers have been investing again in retrofitting existing production lines or in creating new production capacities due to strong global demand for modules. In addition, many manufacturers' financial positions have improved in line with higher demand, thereby enabling them to make new investments. As ex-plained in the preliminary remarks, political factors never-theless continue to exert of a significant bearing on photo-voltaics. Chinese and Taiwanese solar cell manufacturers as far as possible postponed their investment plans in the second half of 2014 due to heavier punitive tariffs. We be-lieve that our PV customers' investment activities continue to bear the risk of volatility, although the current invest-ment climate is to be appraised as positive in general.

Pricing pressure continues to be high, along with ongoing market consolidation at all steps of the photovoltaic value chain. Larger competitors are increasingly entering the market as the result of mergers and strategic alliances, and

existing competitive relationships are undergoing funda-mental change. As photovoltaics have developed into a growing mass market, competition has intensified. The same also applies for machine engineering. Along with competition from Europe and the USA, local providers are advancing onto the market with production plants, espe-cially in China. centrotherm counters such environment and sector risks primarily through corporate strategy, oper-ational and financial measures. The following section co-vers these and other topics.

Corporate strategy risks

The centrotherm Group continues to generate most of its revenue with photovoltaic sector customers. Since the Group's restructuring in 2012 and 2013, the Management Board of CT AG has instituted strategic measures to coun-ter the related market risk through diversification and ex-pansion of the semiconductor and microelectronics area. As a matter of principle, however, the risk of an erroneous assessment of future sales potentials continues to exist.

The company will continue to consistently pursue the cost-cutting measures and sales initiatives that were launched during the financial year elapsed, in particular. The objec-tive is to grow sustainably and profitably with a stream-lined and efficient organizational structure, and a strategic focus on crystalline silicon. Along with a focus on business entailing production systems and technologies to manu-facture crystalline solar cells and to produce silicon, a fur-ther significant component of Group strategy will be the expansion of the Semiconductor & Microelectronics area. The risk generally exists that these objectives are imple-mented later than planned, thereby delaying the diversifi-cation of CT AG.

Rapid technological progress in both the photovoltaic and the semiconductor industries can lead to research and de-velopment risks. Firstly, the risk exists that centrotherm de-velops products and processes for which no market de-mand exists in the future. Secondly, it is possible that cen-trotherm fails to meet market needs, or only with addi-tional cost. The Group counters such risks through se-lected investments in research and development, as well as through cooperation ventures with universities, colleges, renowned research institutions and, not least, pilot cus-tomers. All product development programs are also sub-jected to standardized appraisal procedures that constantly review and question the extent to which they are still of strategic and financial worth.



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Annual Report 2015

Our strong international presence also requires that we ad-here to relevant political, legal and economic conditions. This may give rise to risks in connection with the non-com-pliance with prevailing regulations and local circumstances. centrotherm counters such risks through engaging experi-enced technical staff and managers locally, and through practical support from external specialists with extensive local market knowledge.

Commercial performance risks

Purchasing and materials management

centrotherm procures not only components but also com-plete component groups from its suppliers. Some of these items comprise specialty and key equipment that only cer-tain suppliers are able to provide. Suppliers are continu-ously monitored and appraised as part of supplier manage-ment in order to ensure that deliveries are always available in sufficient volume and quality as required. This also holds true in terms of delivery deadline compliance. Suppliers failing to meet delivery deadlines can result in higher pro-duction labor expenses, and consequently to delayed deliv-ery deadlines and contractual penalties from customers.

Relationships with second-source and third-source suppli-ers are established consistently in order to ensure that sup-plies can be maintained if any supply relationship is inter-rupted. Ongoing standardization of construction elements and components supports this flexibilization. Suppliers' fi-nancial positions could also represent a risk, especially where prepayments are required. We counter such risk through monitoring suppliers' credit ratings and through prepayment guarantees and escrow arrangements. At pre-sent, dependency risks due to long-term procurement agreements with suppliers currently exist to only a minor extent.

Sales & marketing

On the sales side, risks range from delayed delivery dates through to the cancellation of contracts. This generates an inventory risk relating to systems that have already been produced and components that have been ordered, and a liquidity risk deriving from payment delays or defaults. De-pending on progress achieved with projects, payment plans are defined for all projects and compliance with them is monitored in order to minimize such risk. Credit checks are conducted, and commercial letters of credit are obtained, in order to avoid defaults on receivables.

Further risks in the sales area also emanate from construc-tion, assembly or installation errors in the form of product

liability claims and reputational damage. We counter such risks with extensive quality checks when goods are re-ceived, as well as permanent production monitoring as part of quality management. Qualified service technicians and engineers install our production systems locally. We take out corresponding insurance to minimize liability risk, and to provide cover against claims.

Customers' short planning horizons result in very short de-livery deadlines, which comprise a decision-making crite-rion for the awarding of orders. Such risk is countered through standardization, module preproduction, and pro-curement process optimization.

Large-scale project in Qatar

The large-scale project in Qatar (in the Silicon segment) comprises a total order volume of EUR 271 million. The re-alization of the Qatar project can generate the following risks, in particular, that are characteristic of large-scale plant engineering projects:

• Defects in contract structure; • Errors in order calculation; • Additional costs due to technical modifications and

process experience ("lessons learned"; technology risk);

• Failure to deliver product specifications that have been committed to;

• Risk of project delays on the customer side; • Supplier risk (supply delays, insufficient quality, rising

material costs); • Tax and transfer price risks.

Such risks can delay project completion, triggering high penalties. To reduce these risks, centrotherm relies on pro-ject organization that systematically identifies and measures such risks, and that implements any counter-measures that are required.

The liability risk of the SiTec GmbH subsidiary is contractu-ally limited to an amount equivalent to 45 % of the total order volume. Ongoing delays have occurred with this large-scale project that have resulted in additional costs for SiTec GmbH. SiTec GmbH cannot bear these additional costs without raising additional liquidity that extends above and beyond the agreed purchase price. To ensure that this project is continued, the customer provided a let-ter of comfort in March 2016 with the assurance that it will provide SiTec GmbH with the financial resources it re-quires to complete the contract, although without thereby declaring an increase in the total purchase price.

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Given the additional costs that the project delays generate, SiTec's significant dependency on this customer, as well as further outstanding new contracts, the risk exists that SiTec GmbH faces a threat to its existence as a going con-cern.

To secure the prepayments and the completion of the con-tract, CT AG had guarantees of TEUR 31,615 provided by a bank as of the balance sheet date. After the balance sheet date, the customer returned these guarantees, and exchanged them for a new bank guarantee of TEUR 22,100. CT AG for its part has in turn received a counter-guarantee of TEUR 7,500 from one of its shareholders.

Large-scale project for CEEG Algeria

With a letter dated June 13, 2013, CEEG, a subsidiary of Société Nationale de l'Electricité et du Gaz (Sonelgaz), notified the consortium consisting of centrotherm and Kinetics Germany GmbH that it was terminating the con-tract to construct a fully integrated solar module factory (Silicon and Photovoltaics & Semiconductor segments) in Algeria. The original project volume amounted to around EUR 290 million. The consortium doubts the legality of this termination and has brought a lawsuit against CEEG for compensation of losses. Proceedings are being arbitrated at the International Court of Arbitration (ICC) in Geneva. centrotherm does not anticipate an ICC ruling before the end of 2016. To secure the TEUR 21,926 of prepayments received, and the completion of the contract, CT AG has provided guarantees of TEUR 45,471 through EulerHermes Kreditversicherungs-AG. Potential utilization of the guar-antees, and any loss compensation claims brought against CT AG, would be included in the regulations of the insol-vency plan. Were the consortium and CT AG to lose the case, the pledged loss compensation claims and the guar-antees (in the respective level of the utilization) would fall due for payment at the 30 % rate level. Based on the cur-rent status of proceedings, centrotherm ascribes a high probability to a ruling in the consortium's favor.

Personnel risks

centrotherm requires qualified technical and management staff to achieve its objectives. centrotherm's attractiveness as an employer is still affected by the insolvency phase that concluded in May 2013 and uncertainty about the sustain-ability of the photovoltaic industry's recovery. Jobcutting at the Blaubeuren site in early 2015 also made it more diffi-cult to recruit qualified staff on the labor market over the business year elapsed. To reduce the risk of a shortage of qualified staff, centrotherm focuses not only on intensive

dialog with applicants and personal agencies, but also on cultivating contacts with local colleges and high schools. On-the-job training as a way of fostering up and coming young talent plays an important role in centrotherm's per-sonnel policy, and helps reduce a lack of specialist staff.

The strong labor market also generates a greater risk of employee turnover. The departure of key individuals would generate the risk of negative effects on business opera-tions and the loss of valuable know-how. centrotherm re-lies on improved employee communication and infor-mation to promote a good working climate and bolster employee motivation. The workforce receives information especially at regular employee meetings, thereby being in-volved in the company's affairs.

In connection with the intended further diversification of CT AG, the risk can arise that key positions are not filled in line with future requirements. Implementing talent man-agement and successor planning is aimed at countering risks deriving from a shortfall and requisite qualification of key individuals.

Information technology risks

The reliability and security of information technology to support our business processes, as well as internal and ex-ternal communication, are of great significance. A serious disruption to these systems or data loss could result in a disruption of business and communication processes. Po-tential causes could include elementary events, technical problems, criminal influences, and viral or nuisance at-tacks. A central objective of our IT organization is to en-sure data availability and data security at all times.

Two redundant computing centers are available to mini-mize and avoid system outage risks, which are adapted constantly to current requirements, and which are based on superior market standards. Automated IT system moni-toring and emergency call systems have been set up. Com-mon security mechanisms such as antivirus software, fire-walls and data encryption are utilized and improved con-stantly. The existing electronics insurance policy replaces physical losses to IT and communications technology equipment and devices. Business interruption insurance covers losses arising from fire, lightning, explosion, storm and hail, thereby resulting in production outage.

Access control systems, frequently modified system access data, data owner management and regular data backup with defined archiving periods represent important measures to reduce the likelihood of theft, manipulation or loss of corporate data.



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Annual Report 2015

Financial risks

As a globally operating group, centrotherm is exposed to credit, liquidity, interest-rate, currency and raw materials risks as part of its normal operating activities. Such risks may exert a considerable impact on our financial position and performance.

Financial risk management aims to identify and measure fi-nancial risks emanating from the operating business, and to counter them through the development and implemen-tation of strategies. Where required, centrotherm deploys corresponding financial instruments to compensate risk. The company was not deploying any derivative financial in-struments as of the balance sheet date, and as of the date when these financial statements were released.

Credit risk

Credit risk, also referred to as counterparty risk or default risk, exists when a contractual partner's liquidity position may give rise to the risk of a partial or complete default on contractually agreed payments or services. In order to avoid receivables default, we examine our business part-ners' credit ratings before entering into contracts. To pro-vide further cover, we frequently agree payment terms with our customers according to the progress of work and services, which are secured by way of commercial letter of credit. No notable concentration of credit risk exists. The management is consequently convinced that no further risk provisioning is required above and beyond the impair-ment losses that have already been recognized.

Our receivables management function is responsible for supervising open items. Individual positions are monitored at regular meetings between the finance area and sales and project managers, in order to institute receivables col-lection measures at an early stage. Default risk on cash in-vestments and the cash position is reduced by distributing such positions among different financial service-providers. Their credit ratings are monitored regularly.

Liquidity and financing risk

Liquidity risk generally comprises a situation where the Group might be unable to meet its financial obligations – such as the repayment of operating trade payables – on time or sufficiently. Transparency in relation to future cash flows is required in order to counter liquidity bottlenecks at an early juncture through liquidity management measures or appropriate financing activities. Our liquidity requirements are calculated on the basis of our Group-

wide, short-term rolling liquidity planning, which is gener-ally updated weekly, and monitored constantly by the risk management function.

In order to secure liquidity during and following the dis-continuation of insolvency proceedings, the Group entered into agreements concerning the extension of so-called arti-ficial insolvency estate loans that regulate control over ex-isting bank deposits (bank liens). The arrangements relat-ing to artificial insolvency loans had a contractual, non-cancellable term until December 31, 2015. The collateral-ized insolvency liabilities were repaid at the end of 2015 and in early January 2016 respectively, which discontinued not only the bank liens, but also the arrangements relating to the artificial insolvency loans.

With the sale by Sol Futura Verwaltungsgesellschaft mbH (Sol Futura) of its 80 % interest in CT AG to new investor and majority shareholder Solarpark Blautal GmbH, which became effective with the closing of the agreement in early January 2016, the collateralized insolvency liabilities from the insolvency phase of CT AG and of one of its for-mer subsidiaries fell due for payment at the end of one month after the closing. Pursuant to the insolvency plans and the creditor committee resolution passed in June 2015, the creditors had deferred without interest some of their insolvency liabilities until the end of 2017 at the lat-est. To secure the liquidity of CT AG, a financing agree-ment was concluded as part of the disposal of the interest by Sol Futura.

When new orders are received, the refinancing of orders of materials and parts of the production process is fre-quently necessary. With a newly issued cover note from a credit insurer in the 2015 reporting year, longer payment targets can be implemented with suppliers again. Some customers have demanded bill guarantees that still need to be collateralized with cash deposits. A high level of new order intake could create liquidity gaps due to the requisite prefinancing or cash deposits which might delay the pro-cessing of orders, and which might need to be closed through external working capital financing lines. The Man-agement Board of CT AG assumes that the liquidity availa-ble as part of the existing financing arrangement is suffi-cient to cover such prefinancing requirements.

Interest-rate risk

Only minor interest-rate risk exists currently in relation to the financial obligations. New interest-rate risks might nev-ertheless emerge in the future from a utilization of the fi-nancing arrangement concluded in December 2015, any

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future external debt financing of new operating business, or investment spending on selected development projects.

Foreign currency risk

Foreign currency risks arise if receivables, liabilities, debt, cash and cash equivalents, and planned transactions are denominated, or will be denominated, in a currency that is not the company's local currency (the euro). The quite pre-dominant portion of our customer orders outside the Euro-zone are also invoiced in euros, while significant compo-nents and raw materials are also purchased on the basis of the euro currency. In the case of large-scale projects – as currently with the Qatar project in the Silicon segment – the need exists in some individual cases to purchase mate-rials or services locally, and to pay in a currency other than the euro.

centrotherm regularly monitors local currency trends for large-scale projects, taking them into account in ongoing calculations. Where significant foreign currency risks arise in specific cases, such risks relating to individual projects are hedged by deploying forward currency transactions. No related currency transactions existed as of the reporting date.

Raw materials price risk

centrotherm requires various metals, in particular, copper, iron, silver and platinum, as well as raw materials such as quartz, silicon and energy, for its production processes. Risks arise particularly from the high volatility of energy and raw materials prices. Price changes can affect our manufacturing costs. In order to minimize risks, we con-stantly conduct analyses of raw material price trends and their effects on our value chain. No hedging requirements existed in the past, and our market appraisal suggests that none exist currently.

Legal risks

Changes to the political and regulatory environment in countries where we are present, such as regulations relat-ing to import and export controls, customs regulations or other trade barriers, as well as price and currency controls, could negatively impact our business on various national markets, negatively impact our revenues and profitability, and make it difficult for us to repatriate earnings. Legal uncertainties existing in some countries could also greatly restrict the centrotherm Group's ability to enforce its claims and rights. As an internationally operating Group, we conduct business activities with customers in countries that are subject to export control regulations, sanctions or

other forms of trade restrictions that are imposed by the USA, the European Union, or other countries or organiza-tions. We could be exposed to the risk of penalties, sanc-tions or reputational damage as a consequence.

Revenue generated in emerging economies makes a con-siderable contribution to our total revenue. We are assum-ing that this will remain the case in the future. Business ac-tivities in emerging economies entail various risks such as political and economic instability, and the failure to respect cultural differences – such as business practices and work-ing conditions – GDP volatility, the potential nationaliza-tion of private assets, uncertainties surrounding legal and tax systems, and the imposition of currency restrictions. Our operating activities in emerging economies could also be hampered by state support for respective local indus-tries. Especially in China and the MENA region, legal sys-tems are still in development, and are subject to very dif-fering types of change. The occurrence of these or similar risks arising from our international business activities could exert a considerable negative impact on our business posi-tion, net assets, financial position and results of opera-tions.

Complex tax regulations both in Germany and abroad, and potential differing interpretation of them by German and foreign tax authorities, can result in taxation that differs from the Group's expectation. A risk also exists when pro-cessing orders abroad in relation to the appropriate notifi-cation and accounting processing of fiscal operations. Fur-ther tax consequences could also arise from the reorgani-zation remission if – contrary to expectations – not all of the preconditions of the remission that are connected with the tax deferral and tax remission were to be met. In such instances, the actual tax expense would differ from the ac-counting tax expense, and additional provisions or ex-penses that were previously unrecognized in the financial statements would be required for supplementary taxation and penalty payments. We counter such risks through en-gaging German and foreign advisers on all business trans-actions of relevance to taxation. Recourse is made to such advisers at an early stage in order to already integrate tax aspects into contract structures.

Litigation and regulatory proceedings

Risks from litigation and regulatory procedures in which we are currently involved, or which might occur in the fu-ture, exist for the centrotherm Group. These include, for example, litigation and/or similar proceedings, regulatory investigations and procedures due to the occurrence of typical corporate and project risks such as, in particular,



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Annual Report 2015

the non-contractual delivery of goods or services, product liability, product defects, quality problems, the infringe-ment of intellectual property, infringements against envi-ronmental and/or occupational health and safety law regu-lations, non-compliance with tax regulations, and/or al-leged or presumed infringements of prevailing law. Cases where centrotherm is entitled to its justified claims also de-pend on enforcement by the opposing party. We are in-volved in a legal dispute over determining receivables relat-ing to the insolvency schedule, as well as a court case in Taiwan, for instance. We have taken these cases into ac-count through the formation of provisions. In addition, an incident occurred at a customer's production facility where centrotherm systems are also deployed, which has resulted in considerable losses in terms of equipment and opera-tional interruption. The question as to the responsibility and liability for the loss that has occurred has become a matter of judicial dispute. We are of the current opinion that centrotherm is not responsible for this loss, and not li-able accordingly. Cover under product liability insurance otherwise exists for most of the losses. The remaining re-sidual risk is reflected through a provision. For information about risks relating to the two large-scale projects, Qatar and CEEG, please refer to our remarks in the section "Commercial performance risks".

In general, it cannot be excluded that the results of such litigation and procedures entail considerable damage to our business, reputation or brand. The centrotherm Group forms provisions for obligations arising from litigation and proceedings in line with the likelihood and level of utiliza-tion, to the extent that this can be determined sufficiently precisely. Following the conclusion of the respective litiga-tion proceedings, it might nevertheless be established that our provisions prove insufficient to cover resultant losses or expenses. We might also be required to bear lawyers' fees and other legal defense costs to a considerable extent, de-spite having won the main action in such litigation and proceedings.

Patent management

Staff members, customers or suppliers gain an insight into technical details and specifications when manufacturing and selling our products. In order to protect our intellec-tual property and know-how, our developments are suffi-ciently patented, and confidentiality agreements are gen-erally concluded with all parties.

Patent law infringements can arise in the process of devel-oping new products that can lead to the payment of li-

censing fees or, in the worst case, to a prohibition on utili-zation. Our patent management function counters such risk through in-depth patent research and recourse to legal firms.

The risks listed in the legal category could exert considera-ble disadvantageous effects on our business position, net assets, financial position and results of operations.

Other risks

In the systems we manufacture, some hazardous sub-stances are used in production. Our systems incorporate high safety standards to prevent accidents and related in-juries. The TÜV inspection group also certifies our systems. We provide our customers with corresponding system op-erating manuals, including explanations about potential hazards from input materials.

We regularly provide our staff with extensive training in the handling of hazardous substances and related risks. We also employ a safety officer.

We generally conclude insurance cover against the effects of liability risks or loss claims on the company's net assets, financing position and results of operations.

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FINANCIAL MANAGEMENT

The main objective of the centrotherm Group's financial management function is to ensure that the Group contin-ues to enjoy sufficient liquidity backing, and that the Group's intrinsic financial value is preserved. To secure the liquidity of CT AG, a financing agreement was concluded as part of the disposal of the interest by Sol Futura.

Liquidity flows and trends, in particular, were followed closely during the period under review as a consequence. Along with revenue and earnings, for steering purposes the Group utilities further key financial indicators such as cash loan liquidity, EBIT and new order intake, which are reported regularly to management as part of various insti-tutionalized reports. centrotherm Group financial manage-ment is currently giving priority to short-term cash availa-bility over interest-optimized investment forms.

SIGNIFICANT RELATED PARTIES TRANSACTIONS

Transactions occurred between CT AG and related compa-nies during the reporting period. Section 7.4 of the notes to the consolidated financial statements presents a list of such transactions. Pursuant to Section 312 of the German Stock Corporation Act (AktG), the Management Board has prepared a report on relationships with associated compa-nies (dependent companies report) for the January 1 to December 31, 2015 reporting period. This report includes the summary statement by the Management Board that the company received appropriate consideration for each legal transaction according to the circumstances of which the Management Board was aware at the time when the legal transactions were performed. Measures at the insti-gation, or in the interests, of the controlling individual, or a company associated with this individual, have not been implemented, or refrained from.

EVENTS AFTER THE REPORTING DATE

New majority shareholder

As part of completing the purchase agreement that it con-cluded in December 2015, Sol Futura Verwaltungsgesell-schaft mbH (Sol Futura) transferred an 80 % interest in centrotherm photovoltaics AG to Solarpark Blautal GmbH (Solarpark Blautal) on January 8, 2016. Solarpark Blautal has thereby become the new majority shareholder of CT AG. Along with PMDL GmbH, Qatar Solar Technologies, Doha/Qatar, holds a significant interest in Solarpark Blau-tal. As part of the sale of its interest by former majority shareholder Sol Futura, the Management Board of CT AG concluded a TEUR 25,000 financing arrangement with a term until December 31, 2018, which secures the compa-ny's funding. CT AG has not utilized this credit line to date, including after the balance sheet date.

After the balance sheet date, centrotherm serviced collat-eralized insolvency liabilities of TEUR 4,971 and financial li-abilities of TEUR 44,003 arising from the insolvency pro-ceedings of CT AG and of its former subsidiary cen-trotherm thermal solutions GmbH & Co. KG, pursuant to the insolvency plan regulations. On January 8, 2016, the insolvency liabilities became due for repayment in early February 2016 (with a one-month notice period) as a result of executing the purchase agreement between Sol Futura and Solarpark Blautal, which was concluded in December 2015.

Guarantees by centrotherm photovoltaics AG in connec-tion with the Qatar project

To secure the prepayments and the completion of the con-tract, CT AG had guarantees of TEUR 31,615 provided by a bank as of the balance sheet date. After the balance sheet date, the customer returned these guarantees, and exchanged them for a new bank guarantee of TEUR 22,100. CT AG for its part has in turn received a counter-guarantee of TEUR 7,500 from one of its shareholders.

Composition of the Supervisory Board

Given the planned disposal of the participating interest in the company on January 8, 2016 and the resultant new shareholder structure, former Chairman Tobias Wahl and Supervisory Board members Dr. Christoph Herbst and Wolfgang Schmid relinquished their Supervisory Board mandates on January 11, 2016.

After these members had relinquished their mandates, the Supervisory Board of CT AG reorganized itself, electing


Events after the Reporting Date

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Annual Report 2015

from among its members Robert M. Hartung as its Chair-man and Hans-Hasso Kersten as its Deputy Chairman. Prof. Dr. Brigitte Zürn continues to be a member of the Su-pervisory Board.

Composition of the Management Board

After the reporting date, the Supervisory Board of CT AG, at its January 11, 2016 meeting, appointed Peter Augustin to be a member of the company's Management Board.

At the end of February 2016, Florian von Gropper relin-quished his mandate by way of mutual and amicable agreement with the Supervisory Board.

By way of amicable agreement with the Supervisory Board, Boris Klebensberger relinquished his Management Board mandate on February 29, 2016 due to differing ideas about the company's future strategic orientation.

The Supervisory Board of CT AG appointed Jan von Schuckmann to the Management Board. The Management Board will consequently consist of the members Peter Augustin and Jan von Schuckmann from May 1, 2016.

Besides this, no further events occurred after the Decem-ber 31, 2015 reporting date that are of key significance for the centrotherm Group, and which could lead to a differ-ent assessment of business progress.

OUTLOOK

MACROECONOMIC AND SECTOR TRENDS

The global economy is set to grow by 2.9 % and 3.5 % in 2016 and 2017 respectively (2015: 3.0 %), according to the spring forecast published by the Kiel Institute for the World Economy (IfW). The world economy will thereby re-main at its 2015 level for the time being, and will not re-cover momentum until 2017. In advanced economies (USA, Japan, the United Kingdom and the Eurozone), the economy is favored by continued expansive monetary pol-icy, the low oil price, and progressing private sector delev-eraging processes. Expansion in emerging economies (China, Latin America, India, East Asia and Russia) is being dampened by the further depreciation in raw materials prices and structural problems. An economic plunge in China remains a significant risk to the world economy.

With regard to 2016 and 2017, the IfW forecast for China anticipates further reductions in gross domestic product growth rates to 6.5 % and 6.0 % respectively, compared with 6.9 % in 2015. India's economic growth proved more dynamic, by contrast, with gross domestic product ex-panding by 7.3 % in 2015, compared with 5.9 % in the previous year. The IfW's economic researchers assume growth rates of 7.2 % for both 2016 and 2017 for the In-dian economy. In East Asia, the cumulative growth rates of gross domestic product amounted to 4.6 % in 2015. The same growth rate is expected for the East Asian region for 2016, and 4.7 % for 2017.

Asia remains the most important sales market for the cen-trotherm Group with a revenue share of more than 75.9 % in the 2015 financial year. We anticipate a simi-larly high export ratio in this region for the coming finan-cial year.

GTM Research analysts assume that newly installed mod-ule capacity of 67 GW worldwide will be reached by the end of 2016, before rising further to 78 GW by the end of 2017. Photovoltaic capacity totaling 59 GW was added worldwide in 2015, according to preliminary data from GTM, with worldwide cumulative output from all photo-voltaic plants amounting to 321 GW as of the year-end. GTM Research forecasts almost 800 GW worldwide by the end of 2020. Double-digit global photovoltaic capacity ex-pansion growth rates continue to be expected for the coming years. The main drivers promoting the expansion of photovoltaics as an energy source are of a state policy-driven nature. Many countries such as China, the USA and India would like to boost photovoltaics for energy-policy or

55



socio-economic motives, and foster or further enhance the photovoltaic share in their energy mix. Analysts believe that the targets agreed it the Paris World Climate Summit in December 2015 will accelerate photovoltaic expansion. At the same time, cost reductions in photovoltaics are re-sulting in a further increase in the end-market. Experts an-ticipate that energy generation costs can be cut further, thereby corresponding to the cost of generating energy from fossil fuel sources by the 2020 to 2030 period.

Given the growing end-market and growth forecasts, solar cell and module manufacturers are investing in expanding new production capacities and new cell concepts. Espe-cially Chinese and Taiwanese producers are seeking new locations predominantly in Asia, also to avoid punitive tar-iffs on their solar cell and module sales in the US growth market. The relocation of existing production capacities is also on the agenda for some manufacturers, however. In addition, further impulses are emanating from the endeav-ors on the Indian market geared to expanding local pro-duction capacities.

The Management Board is of the opinion that solar cell manufacturers' investment activities will continue during the 2016 financial year, resulting in a very good order book position in the Photovoltaics & Semiconductor seg-ment. With regard to 2017, based on market forecasts and solar cell manufacturers' future expansion plans, the Management Board anticipates that the market for pro-duction technology will remain at a high level.

REVENUE AND EARNINGS

centrotherm exceeded its goal of a breakeven consolidated net result in the 2015 financial year. Revenue and results in the Silicon segment fell short of budget due to a lack of new business, and a delay to the large-scale polysilicon factory project in Qatar. In the Photovoltaics & Semicon-ductor segment, contributing factors not only included the photovoltaic industry's high demand for new manufactur-ing equipment for high-efficiency solar cells, but also busi-ness with production systems for the semiconductor and microelectronics industries, as well as servicing and spare parts.

Along with cost-reduction measures that were already launched in 2014, other operating income made a particu-lar further contribution to this result. At the same time, the Group fell slightly short of expectations with regard to the sales revenue forecast that it had formulated for 2015.

In our forecast for 2016, we assume year-on-year business trend growth in the Photovoltaics & Semiconductor and

Thin Film & Customized Equipment segments. In the Sili-con segment, 2016 revenue is expected to lie significantly below the revenue level that we realized in 2015 due to the lack of new business to date, and a delay to a large-scale project. The revenue target for the centrotherm Group lies between EUR 120 million and EUR 150 million. The Management Board also anticipates at least breakeven at the consolidated net result level. The company contin-ues to aim to achieve the latter through consistent effi-ciency enhancement and cost structure optimization.

FINANCIAL POSITION AND INVESTMENTS

As explained in the report on events after the balance sheet date, after the reporting date centrotherm utilized Group liquidity to service collateralized insolvency liabilities and financial liabilities from the insolvency proceedings of CT AG and its former subsidiary centrotherm thermal solu-tions GmbH & Co. KG. The cash and cash equivalents of the centrotherm Group amounted to TEUR 36,949 as of March 31, 2016.

A financing arrangement that was concluded in December 2015 exists to secure the funding of CT AG. CT AG has not utilized this credit line to date, including after the bal-ance sheet date.

Research and development work remains one of the most important pillars to maintain and expand our market posi-tion, and thereby secure our corporate success and profita-bility. The centrotherm Group plans to invest in new pro-cess technologies and production systems in the 2016 fi-nancial year in order to expand its leading position as a technology supplier.

No significant capital expenditures on property, plant and equipment and intangible assets are planned for the 2016 financial year.

OPPORTUNITIES

The general photovoltaic sector trend generates opportu-nities for centrotherm. Global demand for solar modules is growing continuously, and solar cell manufacturers have made a return to investing in new production equipment since the end of 2013. Due to continued high cost pres-sure, such manufacturers also need to invest in highly effi-cient technologies and upgrades to realize process optimi-zations in order to remain competitive and expand market shares. In addition, production sites are being relocated to other countries, primarily in Asia, especially as the result of the imposition of punitive US tariffs on Chinese and Tai-


Outlook

56



Annual Report 2015

wanese solar products. This presents us with an oppor-tunity to win new orders for process upgrades, as well as for both replacement and new investments. We occupy a very good market position internationally, and expect that demand will continue in 2016, especially from Asian coun-tries such as China and Taiwan, and will also start on other important sales markets such as India.

New processes and products such as the c.REG regenera-tion furnace, low-pressure boron diffusion for bifacial n-type cells, and the PECVD AlOx process to produce PERC solar cells, generate positive sales opportunities, especially in the context of the growing significance of high-effi-ciency solar cells. In the semiconductor area, new sales op-portunities arise from a growing e-mobility, especially with high-temperature process systems and power semiconduc-tors based on silicon carbide and gallium nitride.

Overall, the aftersales business with service and upgrade products offers additional sales revenue potential in light of the photovoltaics market's growth.

Our FHR subsidiary focused on important strategic cus-tomer projects in the 2015 financial year, improving sales opportunities for new products such as roll-to-roll and in-line systems.

OVERALL STATEMENT

A new course has been set for the future of centrotherm with new majority shareholder Solarpark Blautal. In early February 2016, centrotherm deployed Group liquidity to service insolvency liabilities. The Group holds around EUR 37 million of liquidity as of the March 31, 2016 reporting date. The financing and securing of the operating business are ensured as a result of available credit lines and a credit insurer's cover note. Above and beyond this, centrotherm will continue to make targeted research & development in-vestments to maintain and extend its market position.

In our forecast for 2016, we assume year-on-year business trend growth in the Photovoltaics & Semiconductor and Thin Film & Customized Equipment segments. In the Sili-con segment, 2016 revenue is expected to be recorded significantly below the revenue level that was realized in 2015 due to the lack of new business to date, and a delay to a large-scale project. The revenue target for the cen-trotherm Group is pegged between EUR 120 million and EUR 150 million. The Management Board also anticipates at least breakeven at the consolidated net result level. The company continues to aim to achieve the latter through consistent efficiency enhancement and cost structure opti-mization.

The Management Board is of the opinion that solar cell manufacturers' investment activities will continue during the 2016 financial year, resulting in a very good order book position in the Photovoltaics & Semiconductor seg-ment. With a look to 2017, based on market forecasts and solar cell manufacturers' future expansion plans, the Man-agement Board anticipates that the market for production technology will remain at a high level.

Photovoltaics will indisputably make a significant contribu-tion to covering future global energy demand growth. A significant target of our strategy is to help to structure this trend technologically, and to advance it further. Above and beyond this, we enjoy a growth potential that we would like to realize with our new innovative products for the power semiconductor and microelectronics industries, and with our FHR subsidiary's product range.

As with all forward-looking statements, forecasts are con-nected with known and unknown uncertainties, which may mean that actual results differ significantly from fore-casts.

Blaubeuren, April 2016

centrotherm photovoltaics AG

The Management Board

57


Outlook

58


Annual Report 2015

Consolidated Income Statement 60

Consolidated Statement of Comprehensive Income 61

Consolidated Balance Sheet 62

Statement of Changes in Consolidated Equity 64

Consolidated Cash Flow Statement 66

Notes to the Consolidated Financial Statements 68

Independent Auditor‘s Report 130

Glossary 132

Financial Calendar | Imprint 136

CONSOLIDATED

FINANCIAL STATEMENTS

60



Annual Report 2015

CONSOLIDATED INCOME STATEMENT FOR THE FINANCIAL YEAR FROM JANUARY 1 UNTIL DECEMBER 31, 2015

1/1/2015- 1/1/2014-

in TEUR Note 12/31/2015- 12/31/2014-

Revenue 4.1 138,555 189,193

Change in inventory of finished goods and work-in-progress 4.2 2,451 -5,188

Capitalized services rendered to own account 4.3 109 122

Total operating revenue 141,115 184,127

Other operating income 4.4 34,994 36,360

Cost of materials 4.5 -85,108 -107,506

Personnel expenses 4.6 -41,446 -47,506

Other operating expenses 4.7 -27,054 -40,177

Earnings before interest, tax, depreciation and amortization (EBITDA) 22,501 25,298

Depreciation, amortization and impairment losses 4.8 -3,522 -5,733

Earnings before interest and tax (EBIT) 18,979 19,565

Financial income 77 2,282

Financial expenses -5,867 -5,986

Net financial result 4.9 -5,790 -3,704

Earnings before tax (EBT) 13,189 15,861

Income tax 4.10 -6,226 -14,673

Earnings after tax (EAT) 6,963 1,188

Of which attributable to:

Shareholders of CT AG (consolidated profit) 6,963 1,188

Average number of shares in '000 21,162 21,162

Earnings per share in EUR 4.11 0.33 0.06

61


Consolidated financial statements

63

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR FROM JANUARY 1 TO DECEMBER 31, 2015

1/1/2015- 1/1/2014- in TEUR 12/31/2015- 12/31/2014-


Items that can be recycled to profit or loss in future periods

Currency translation difference 199 308

Other comprehensive income after tax 199 308

Total comprehensive income after tax 7,162 1,496

of which attributable to CT AG shareholders 7,162 1,496

Consolidated Financial Statements

Consolidated Statement of Comprehensive Incomecentrotherm photovoltaics


63

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR FROM JANUARY 1 TO DECEMBER 31, 2015

1/1/2015- 1/1/2014- in TEUR 12/31/2015- 12/31/2014-


Items that can be recycled to profit or loss in future periods

Currency translation difference 199 308


Total comprehensive income after tax 7,162 1,496

of which attributable to CT AG shareholders 7,162 1,496

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Annual Report 2015

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2015

Assets

in TEUR Note 12/31/2015 12/31/2014

Non-current assets

Intangible assets 5.1

Goodwill 637 637

Internally generated intangible assets 55 60

Other intangible assets 1,902 2,349

Property, plant and equipment 5.2 46,681 48,795

Financial assets 5.3 45 45

Non-current income tax receivables 5.4 16 32

Deferred tax assets 14,493 20,318

Total 63,829 72,236

Current assets

Inventories 5.5 48,330 45,228

Receivables relating to construction contracts 5.6 1,172 1,618

Trade receivables 5.7 4,179 9,593

Other receivables

Receivables due from associates 5.8 456 225

Receivables due from related parties 0 5

Prepayments rendered 5.9 1,567 10,757

Non-current income tax receivables 48 300

Other current financial assets 5.10 631 948

Other current non-financial assets 5.11 2,795 4,588

Cash and cash equivalents 5.12 92,792 114,067

Non-current assets and groups of assets held for sale 5.13 0 2,344

Total 151,970 189,673

Total assets 215,799 261,909

63



65

Equity and liabilities

in TEUR Note 12/31/2015 12/31/2014

Equity 5.14

Equity attributable to parent company shareholders

Subscribed capital 21,162 21,162

Capital reserves 77,799 77,777

Group reserves -56,294 -57,482

Other reserves 667 468

Consolidated net profit 6,963 1,188

Total 50,297 43,113

Non-current liabilities

Provisions for contingent liabilities arising from the insolvency 5.15 0 28,197

Financial liabilities arising from the insolvency proceedings 5.16 0 63,196

Other non-current non-financial liabilities 5.17 588 648

Deferred tax liabilities 8,420 9,315

Total 9,008 101,356

Current liabilities

Tax provisions 5.18 3,135 3,159

Other current provisions 5.19 5,598 5,326

Provisions for contingent liabilities arising from the insolvency 5.20 3,465 0

Liabilities arising from construction contracts 5.21 38,142 45,194

Trade payables 5.22 9,262 10,072

Prepayments received 5.23 36,179 36,922

Liabilities to associates 283 127

Liabilities to related parties 5.24 45 45

Financial liabilities arising from the insolvency proceedings 5.25 53,155 4,475

Other current financial liabilities 5.26 5,288 10,159

Other current non-financial liabilities 5,27 1,942 1,961

Total 156,494 117,440

Total equity and liabilities 215,799 261,909


Consolidated Balance Sheet

64



Annual Report 2015

STATEMENT OF CHANGES IN CONSOLIDATED EQUITY FROM JANUARY 1, 2015 TO DECEMBER 31, 2015

in TEUR

Note

Subscribed capital Capital reserves

from 1/1/2014 – 12/31/2014 5.14

As of 1/1/2014 21,162 77,777

Earnings after tax (EAT) 0 0


Total comprehensive income after tax 0 0

Reclassification to Group reserves 0 0

As of 12/31/2014 21,162 77,777

from 1/1/2015 – 12/31/2015 5.14

As of 1/1/2015 21,162 77,777

Earnings after tax (EAT) 0 0


Total comprehensive income after tax 0 0

Reclassification to Group reserves 0 0

Transfer to capital reserves 0 22

As of 12/31/2015 21,162 77,799

1) Items that can be subsequently recycled to profit or loss

65



67

Group reserves

Other

reserves1)

Consolidated net profit Consolidated equity

-49,835 160 -7,647 41,617

0 0 1,188 1,188

0 308 0 308

0 308 1,188 1,496

-7,647 0 7,647 0

-57,482 468 1,188 43,113

-57,482 468 1,188 43,113

0 0 6,963 6,963

0 199 0 199

0 199 6,963 7,162

1,188 0 -1,188 0

0 0 0 22

-56,294 667 6,963 50,297


Statement of Changes in Consolidated Equity

66



Annual Report 2015

CONSOLIDATED CASH FLOW STATEMENT FROM JANUARY 1 TO DECEMBER 31, 2015

1/1/2015- 1/1/2014-

in TEUR Note 12/31/2015- 12/31/2014-

Earnings before tax (EBT) 13,189 15,861

+ Depreciation and amortization 3,522 5,733

+ Losses from disposal of property, plant and equipment 26 11

-/+ Gains/losses from intangible asset disposals -145 1

+ Loss on held-for-sale non-current assets and asset groups 254 0

+ Decrease in inventories, future receivables from construction contracts, and prepayments rendered 6,138 26,621

+ Decrease in trade receivables 5,414 9,175

+ Decrease in other assets not allocated to investing or financing activities 1,884 21,568

- Decrease in other current provisions -830 -1,015

- Decrease in trade payables -810 -2,633

- Decrease in prepayments received and liabilities relating to construction contracts -7,796 -30,243

- Decrease in other liabilities not allocated to investing or financing activities -1,138 -13,092

- Payments rendered for income taxes -114 -12

- Other non-cash expenses/income -22,393 -16,621

= Cash flow from operating activities 6.1 -2,799 15,354

+ Payments received from disposal of property, plant and equipment 126 185

+ Payments received from intangible asset disposals 164 0

+ Payments received from disposals of held-for-sale non-current assets and asset groups 2,090 0

- Outgoing payments for investments in property, plant and equipment -588 -1,147

- Outgoing payments for investments in intangible assets -136 -315

+ Payments received from disposal of fully consolidated subsidiaries 0 190

= Cash flow from investing activities 6.2 1,656 -1,087

- Outgoing payments to repay financial liabilities -20,132 0

= Cash flow from financing activities 6.3 -20,132 0

= Net change in cash and cash equivalents -21,275 14,267

67



69

1/1/2015- 01/01/2014-

in TEUR Note 12/31/2015- 12/31/2014-

+ Cash and cash equivalents at start of period 114,067 99,800

= Cash and cash equivalents1) at end of period 6.4 92,792 114,067

1) Bank deposits as of December 31, 2015 include TEUR 6,351 of cash lines arising from insolvency estate lending agreements (December 31, 2014: TEUR 26,080). Cash and cash equivalents are subject to availability restrictions as of the balance sheet date due to cash-advanced guarantees of bills in an amount of TEUR 2,867 (December 31, 2014: TEUR 2,593), and in an amount of TEUR 5,000 (December 31, 2014: TEUR 5,000) arising from pledged deposits for the insolvency estate lending agreement for a subsidiary.


Consolidated Cash Flow Statement

68



Annual Report 2015

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR FROM JANUARY 1 TO DECEMBER 31, 2015

1 GENERAL INFORMATION

centrotherm photovoltaics AG (hereinafter referred to in brief as "CT AG") is a public stock corporation under German law, and was formed on December 28, 2005.

CT AG has its headquarters in Blaubeuren, Germany, and is entered in the commercial register of Ulm/Danube under commercial register sheet number 720013. The company's shares are included in the Open Market, Entry Standard, of the Frankfurt Stock Exchange. The bearer shares are listed under securities code ISIN DE000A1TNMM9, and the unlisted shares arising from the non-cash capital increase that are held by Sol Futura Verwaltungsgesellschaft mbH carry securities code ISIN DE000A1TNMN7.

The centrotherm Group is a globally leading provider of technology and equipment to the photovoltaic industry. The Group has a broad and well founded technology base, key equipment for the silicon and solar cell value creation steps, and integration know-how for module production. In its Silicon segment, the Group offers engineering, technology and services for integrated process and system packages for polysilicon manufacturing. The Photovoltaics & Semiconductor segment particularly comprises the development, construction, production and sale of individual systems to produce monocrystalline and multi-crystalline solar cells. The Photovoltaics & Semiconductor segment additionally comprises a range of services relating to the semiconductors and microelectronics area. The Thin Film & Customized Equipment segment focuses on the development, construction, production and sale of customized system concepts and special systems for modern coating technologies. Since acquiring the new shares from the non-cash capital increase on July 19, 2013, Sol Futura Verwaltungsgesellschaft mbH, with headquarters in Ulm, is the new majority shareholder and parent company in the meaning of IAS 27 (see section 5.14 Equity).

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 BASIS ON WHICH THE FINANCIAL STATEMENTS ARE PREPARED

On July 10, 2012, CT AG submitted an application to institute protective insolvency proceedings pursuant to Section 270 b of the German Insolvency Directive (InsO). The proceedings, which transitioned to insolvency plan proceedings under the company's own administration on October 1, 2012, were discontinued by the Ulm District Court with effect as of May 31, 2013. Insolvency proceedings for the subsidiaries centrotherm thermal solutions GmbH & Co. KG and centrotherm SiTec GmbH were discontinued at the same time.

The financial statements of CT AG, and of the foreign and domestic subsidiaries, have been prepared according to uniform accounting principles, as a matter of principle. Due to the scheduled liquidation of centrotherm SiTec GmbH, some assets are recognized at disposal values.

The reporting dates of the separate financial statements of companies included in the consolidated financial statements are identical with the reporting date of the consolidated financial statements (December 31, 2015).

69


Notes to the consolidated financial statements

71

The income statement has been prepared according to the nature of expense method. Various items in both the income statement and the balance sheet have been summarized in order to provide greater clarity. These items are reported and commented upon separately in the notes to the financial statements.

The balance sheet is categorized by maturity. Assets and liabilities are reported as current if they fall due within one year, or within a business cycle, or are mainly held for trading. Assets and liabilities are correspondingly reported as non-current if they remain for longer than one year within the Group, or for longer than one business cycle. Trade accounts payable and receivable, accounts payable and receivable arising from construction contracts, and inventories, are always reported as current items. Deferred tax assets and liabilities are reported as non-current. Assets and liabilities, and income and expenses, are not offset with each other unless IFRS prescribes offsetting.

For improved transparency, the insolvency liabilities of TEUR 4,475 (December 31, 2015: TEUR 3,750) that were reported in the previous year under "other current financial liabilities" are reported under the item "financial liabilities from the insolvency proceedings" (current liabilities) in the year under review, together with insolvency liabilities of TEUR 63,196 (December 31, 2015: TEUR 49,405) that were reported as non-current in the previous year. The adjustment occurred due to the reallocation of insolvency liabilities from non-current to current liabilities as a consequence of the insolvency liabilities' short term on the reporting date.

The previous year's comparable figures were restated.

The consolidated financial statements are based on the historical cost principle, with the exception of financial instruments, such as financial assets held for sale, and derivative financial instruments, which are measured at fair value on the balance sheet date.

Fair value is the price that would be received for the sale of an asset, or would be paid for the transfer of a liability, in a normal transaction between market participants on the measurement date. This applies irrespective of whether the price is directly observable, or estimated applying a measurement method.

When measuring the fair value of an asset or liability, the Group takes certain characteristics of the asset or liability into account (such as condition and location of the asset, or restrictions on sale and utilization), if market participants would also take such characteristics into account when determining the price for the sale of the respective asset or the transfer of the liability on the measurement date. In these consolidated financial statements, fair value is generally measured on this basis for the purposes of measurement and/or disclosure obligations. Exceptions include:

• Leases that fall under the application scope of IAS 17 Leases, and

• Measurement benchmarks that are similar to fair value but do not correspond to it, such as net realizable value in IAS 2 Inventories, or value-in-use in IAS 36 Impairment of Assets.

Fair value is not always available as a market price. It must frequently be measured on the basis of various valuation parameters. Depending on the availability of observable parameters, and the significance of such parameters for fair value measurement overall, fair value is allocated to the Levels 1, 2 or 3. Allocation is performed on the following basis:

• Level 1 – Listed (unadjusted) prices on active markets for similar assets or liabilities,

• Level 2 – Valuation methods where fair value is measured by means of inputs that are directly or indirectly observable, and that do not comprise listed prices in the meaning of Level 1,

• Level 3 – Recognized valuation methods if no fair value measurement is possible according to Level 1 or 2, if this ensures appropriate approximation of market value.

The preparation of IFRS consolidated financial statements requires the application of estimates. In addition, the application of standard accounting policies across the company requires management assessments. Section 2.24 lists areas entailing greater


Notes to the Consolidated Financial Statements

70



Annual Report 2015

scope of discretion in such assessments, or where the related areas are more complex, and where assumptions and estimates are of critical importance to the consolidated financial statements.

As a consequence, these consolidated financial statements as of December 31, 2015 have been prepared under the going concern assumption (see section 2.24).

These consolidated financial statements have been prepared in euros. Unless stated otherwise, all amounts are commercially rounded up or down to thousands of euros (TEUR).

The following section explains the main accounting policies.

2.2 APPLICATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

The consolidated financial statements as of December 31, 2015 have been prepared in accordance with International Financial Reporting Standards (IFRS), which have been published by the International Accounting Standards Board (IASB) and approved by the European Union. All International Financial Reporting Standards (IFRS), which require mandatory application as of the reporting date, as well as all interpretations of the International Financial Reporting Standards Interpretations Committee (IFRS IC) have been complied with.

Pursuant to Section 315a of the German Commercial Code (HGB), these consolidated financial statements are in harmony with Article 4 of the Regulation (EEC) No. 1606/2002 of the European Parliament and Council of July 19, 2002 concerning the application of the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB). They have been supplemented by certain disclosures, as well as the management report in connection with Section 315a of the German Commercial Code (HGB).

2.2.1 New and amended standards applied for the first time in the January 1 to December 31, 2015 financial year

The IASB has approved new standards and interpretations, as well as amendments to existing standards, which must be applied for financial years commencing on or before January 1, 2015. The following standards and amendments to standards which are to be applied for the first time in the 2015 financial year have no significant effect on the centrotherm Group, however:

• IFRIC 21 Levies IFRIC 21 clarifies, firstly, which government-imposed levies fall into the interpretation's application scope, and, secondly, when corresponding levies are to be recognized.

• Annual improvements IFRS 2011–2013 The IASB published annual improvements to its IFRS 2011 to 2013 Cycle on December 12, 2013, including amendments to the following standards: IFRS 1 First-Time Adoption of International Financial Reporting Standards (meaning of "coming into force" in relation to IFRS), and IFRS 3 (scope exceptions for joint ventures).

2.2.2 Published IFRS that are not yet applicable

Some new standards exist, as well as amendments to standards, that are to be applied as of the earliest for financial years commencing after January 1, 2015. These did not yet require mandatory application in the reporting period, however, or the European Commission had not yet approved them, and they have not been applied voluntarily:

• IFRS 9 Financial Instruments IFRS 9 Financial Instruments replaces the previous regulations of IAS 39 relating to the classification measurement of financial assets and financial liabilities. The final version of IFRS 9 was published in July 2014, and is applicable for reporting periods commencing on or after January 1, 2018. It has yet to be endorsed by the EU.

71



73

• IFRS 15 Revenue from Contracts with Customers IFRS 15 is the new standard relating to revenue recognition, and replaces standards IAS 18 and IAS 11 and corresponding interpretations. IFRS 15 prescribes when and in what amount IFRS reporting entities are required to recognize revenue. Preparers of financial statements are also required to provide users of financial statements with more informative and more relevant disclosures than has previously been the case. For this, the standard provides a single, principles-based, five-step model that is to be applied to all contracts with customers. IFRS 15 was published in May 2014, and is applicable for reporting periods commencing on or after January 1, 2018. It has yet to be endorsed by the EU.

• IFRS 16 Leases IFRS 16 replaces previously valid standard IAS 17 and three lease-related interpretations. Application of IFRS 16 is mandatory for all IFRS users, and is applicable to all leases, as a matter of principle. The new regulation requires lessees to recognize all leases, as a matter of principle, in the form of a utilization right and a corresponding lease liability. IFRS 16 was published in January 2016, and is applicable for reporting periods commencing on or after January 1, 2019. EU endorsement is still outstanding.

• Amendments to IAS 1 Presentation of Financial Statements These amendments originate from the Disclosure Initiative Project, and are intended to comprise improvements to financial reporting by placing a particular focus on the materiality principle. The amendments are applicable for financial years commencing on or after January 1, 2016.

• IAS 12 Income Taxes The amendments to IAS 12 aim particularly to clarify the accounting treatment of deferred tax assets arising from unrealized losses on assets measured at fair value, which is currently treated differently in practice. The amendments are applicable for financial years commencing on or after January 1, 2017. They have yet to be endorsed by the EU.

• IAS 7 Statements of Cash Flows The amendments pursuing the objective that companies must provide disclosures that make it possible for readers of financial statements to assess changes to liabilities arising from financing activities. The amendments are applicable for financial years commencing on or after January 1, 2017. They have yet to be endorsed by the EU.

• Amendments to IAS 16 Property, Plant and Equipment/IAS 38 Intangible Assets These amendments to IAS 16 clarify that revenue-based depreciation methods are inappropriate for property, plant and equipment. The regulations of IAS 38 were amended in order to include a rebuttable assumption that a revenue-based depreciation method is inappropriate for the same reasons as in IAS 16. The amendments are applicable for financial years commencing on or after January 1, 2016.

• Amendments to IAS 16 Property, Plant and Equipment/IAS 41 Agriculture These amendments bring bearer plants that are utilized only to generate agricultural produce into the application scope of IAS 16, allowing them to be treated in the same way as property, plant and equipment. The amendments are applicable for financial years commencing on or after January 1, 2016.

• Amendments to IAS 19 Employee Benefits The new regulations relating to the accounting treatment of contributions that employees make to pension commitments are to be applied for the first time for financial years commencing on or after February 1, 2015.

• Amendments to IAS 27 Separate Financial Statements These amendments re-allow the application of the equity method as an optional accounting treatment for interests in subsidiaries, joint ventures and associates in separate financial statements. The amendments are applicable for financial years commencing on or after January 1, 2016.

• Amendments to IFRS 10/IFRS 12 and IAS 28 These amendments clarify the application of the consolidation exemption if the parent entity meets the definition of an investment entity. The amendments are applicable for financial years commencing on or after January 1, 2016. They have yet to be endorsed by the EU.



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• Amendments to IFRS 11 Joint Arrangements These amendments to IFRS 11 contain guidelines for the accounting treatment of purchases of interests in jointly controlled operations if they comprises operations in the meaning of IFRS 3. The amendments are applicable for financial years commencing on or after January 1, 2016.

• Annual improvements IFRS 2010–2012 The IASB published its annual improvements to the IFRS 2010 to 2012 Cycle on December 12, 2013, including amendments to the following standards: IFRS 3 Business Combinations (accounting for contingent consideration in a business combination), IFRS 13 Fair Value Measurement (current receivables and liabilities), and IAS 24 Related Party Disclosures (disclosures about management members). The EU endorsed these in December 2014. The amendments are applicable in the EU for financial years commencing on or after February 1, 2015.

• Annual improvements IFRS 2012–2014 The IASB published annual improvements to its IFRS 2012 to 2014 Cycle on September 25, 2014, including amendments to the following standards: IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (changes in methods of disposal), IFRS 7 Financial Instruments: Disclosures (adoption of additional guidelines relating to servicing contracts), and IAS 34 Interim Financial Reporting (disclosures in interim financial statements). The amendments are applicable for financial years commencing on or after January 1, 2016.

The centrotherm Group is currently examining what effects the first-time application of the standards will have on the Group's financial position and performance. It is currently still impossible to reliably determine the precise scope of the effects on the Group. The future application of other standards and interpretations will prospectively have no significant effects on the Group's financial position and performance. The Group intends to apply the IFRS on the mandatory date, if corresponding recognition has occurred as part of the endorsement process.

2.3 SCOPE OF CONSOLIDATION

Along with CT AG, the consolidated financial statements generally comprise all entities that CT AG controls. Control exists if the centrotherm Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Inclusion occurs at the time when control becomes possible; it ends when control is no longer possible.

2.3.1 Subsidiaries

No changes have occurred to the consolidation scope compared with December 31, 2014.

Voting rights interest of CT AG in companies included in the consolidated financial statements

12/31/2015 12/31/2014

in % Consolidation scope

Direct interest

Indirect interest

Quota interest Quota

interest

centrotherm cell & module GmbH, Blaubeuren 100.00 0.00 100.00 100.00

centrotherm photovoltaics Asia Pte. Ltd., Singapore 100.00 0.00 100.00 100.00

centrotherm photovoltaics technology Shanghai Co. Ltd., Shanghai, China 100.00 0.00 100.00 100.00

centrotherm SiTec GmbH i.L., Blaubeuren 100.00 0.00 100.00 100.00

FHR Anlagenbau GmbH, Dresden/Ottendorf-Okrilla 100.00 0.00 100.00 100.00

Photovoltaics Asia Invest Pte. Ltd., Singapore 0.00 100.00 100.00 100.00

SiTec GmbH, Augsburg 100.00 0.00 100.00 100.00

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Besides CT AG, the consolidated financial statements as of December 31, 2015 include four German and three foreign subsidiaries where CT AG directly or indirectly holds the majority of the voting rights.

2.3.2 Non-consolidated companies

The following list shows direct or indirect interest of CT AG in the voting rights of companies that were not consolidated as of December 31, 2015:

Voting rights interest of CT AG in companies not included in the consolidated financial statements

12/31/2015 12/31/2014

in % non-consolidated companies

Direct interest

Indirect interest

Quota interest Quota

interest

centrotherm Management GmbH i.L., Blaubeuren 0.00 0.00 0.00 100.00

centrotherm photovoltaics India Pte. Ltd., Bangalore, India 0.00 99.00 99.00 99.00

centrotherm photovoltaics Korea Ltd., Suwon, Korea 100.00 0.00 100.00 100.00

centrotherm photovoltaics USA Inc., Atlanta, USA 100.00 0.00 100.00 100.00

centrotherm Power Solutions GmbH i.L., Vienna, Austria 0.00 100.00 100.00 100.00

centrotherm Solar Innovations GmbH, Wels, Austria 100.00 0.00 100.00 100.00

centrotherm Thermal Solutions Verwaltungs GmbH i.L., Blaubeuren 0.00 0.00 0.00 100.00

Changers GmbH i.L., Berlin 50.00 0.00 50.00 50.00

cruSible GmbH i.L., Berching 0.00 0.00 0.00 30.00

SolMic GmbH, Burghausen 0.00 0.00 0.00 100.00

Sunshine PV Corp., Hsinchu Industrial Park, Taiwan 0.00 19.32 19.32 21.20

TOV photovoltaics industries Ukraine, Zaporozhye, Ukraine 100.00 0.00 100.00 100.00

centrotechnics Automation Equipment Co. Ltd., Suzhou 0.00 15.00 15.00 15.00

Compared with December 31, 2014, the following changes have occurred to the non-consolidated companies and participating interests.

SolMic GmbH, Burghausen, was merged with centrotherm cell & module GmbH, Blaubeuren, as the result of a contract dated December 16, 2014. Following the registration of the merger, centrotherm cell & module GmbH assumed all of the rights and obligations of SolMic GmbH by way of universal succession. No effects occurred to the Group's financial position and performance in 2015. The transaction was entered in the commercial register on February 26, 2015.

Following successful liquidation, the winding down of centrotherm cruSible GmbH i.L. is complete, and the company was deleted from the commercial register on August 3, 2015.

Following successful liquidation, the winding down of centrotherm Management GmbH i.L. is complete, and the company was deleted from the commercial register on April 13, 2015.

Following successful liquidation, the winding down of centrotherm Thermal Solutions Verwaltungs GmbH i.L. is complete, and the company was deleted from the commercial register on December 14, 2015.

The non-consolidated companies relate to subsidiaries and interests in companies that strengthen sales and service activities in the relevant regions. We decided not to include the above-listed companies in the consolidated financial statements as of



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December 31, 2015, due to their immaterial impact on the company's financial position and performance, both individually and considered together.

2.4 CONSOLIDATION

Subsidiaries

Business combinations from January 1, 2010 are accounted for applying the purchase method pursuant to IFRS 3 (2008). In this context, cost is derived from the sum of the consideration transferred, measured at fair value as of the acquisition date, and non-controlling interests' consideration in the acquired company. Non-controlling interests may be measured either at fair value (full goodwill method) or at the proportionate fair value of the identifiable net assets. The centrotherm Group generally applies the second alternative, proportionate fair value. Incidental acquisition costs are expensed as of the date when they arise. Costs are offset with acquired identifiable assets and acquired liabilities. Assets, liabilities, and contingent liabilities are recognized at fair value in this context. Remaining positive differences are recognized in the balance sheet as goodwill. Following a critical review, negative differences are recognized in profit or loss. Any hidden reserves and liabilities that are identified are carried forward in proportion to the related assets and liabilities during subsequent consolidation.

In step acquisitions, shares already held in the acquired company are remeasured at fair value on the acquisition date. Resultant gains or losses are recognized in profit or loss.

Agreed contingent purchase price components are reported as liabilities at fair value on the acquisition date. Adjustments to contingent purchase price components are recognized in profit or loss.

The following divergent measurement principles applied to corporate mergers before January 1, 2010: Transaction costs that were directly attributable to the corporate acquisition represented a portion of acquisition costs. Non-controlling interests were measured at the proportionate fair value of the identifiable net assets of the acquired company. Contingent purchase price components were reported only if a current obligation on the part of the company existed, if an outflow of resources entailing economic benefit to satisfy the obligation was probable, and its fair value could be measured reliably. Subsequent adjustments to contingent purchase price components were reported as part of goodwill.

Intragroup earnings and losses, revenues, expenses and income, as well as receivables and liabilities between consolidated companies, are eliminated. The subsidiaries' accounting policies are modified where required in order to ensure standard Group financial accounting.

The consolidated financial statements include the companies that CT AG controls, as long as their effect on the financial position and performance is not immaterial.

Associates

Associates comprise entities over which the Group exercises significant influence, but where it does not possess control, frequently accompanied by a voting rights interest of between 20 % and 50 %. The assumption of significant influence is rebuttable. Joint ventures and interests in associates are equity accounted. According to the equity method, interests in associates are to be carried in the consolidated balance sheet at acquisition cost adjusted to reflect changes in the Group's interest in the associates' profit or loss and other comprehensive income following the acquisition date.

Any surplus of the cost of acquiring the interest above the Group's interest in the fair values of the associate's identifiable assets, liabilities and contingent liabilities on the acquisition date is recognized as goodwill. Goodwill is included in the carrying amount of the participating interest, and is neither amortized nor tested separately for impairment.

Unrealized gains and losses on transactions between Group entities and associates are eliminated according to the Group's interest in the associate.

Deriving from the regulations of IAS 39, the Group examines on each balance sheet date whether objective indications exist that the interest in an associate might be impaired. If this is the case, the carrying amount of the participating interest is tested

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for impairment in accordance with IAS 36 by comparing the recoverable amount of the interest with its carrying amount. Any requirement for impairment that is ascertained comprises part of the carrying amount of the participating interest, and is to be offset against its carrying amount.

Application of the equity method is to be discontinued given the loss of significant influence over an associate, and the shares are to be measured at fair value according to IAS 39. Such shares are recognized at cost where fair value cannot be calculated reliably.

2.5 CURRENCY TRANSLATION

The euro is the functional currency of CT AG, and of its German subsidiaries, as well as being the Group reporting currency. The financial statements of the foreign subsidiaries included in the consolidated financial statements are not prepared in euros. The financial statements are translated from local currency into the Group currency (the euro) on the reporting date. The financial statements are translated applying the modified reporting date rate method whereby balance sheet items except equity are reported at the rate prevailing on the balance sheet date, and income statement items are translated at the average rate for the reporting period. Equity is translated applying historical rates. Translation differences arising from the currency translation are recognized directly in equity.

In the separate financial statements, foreign currency transactions are measured applying the daily middle rate prevailing on the date of initial recognition. Currency gains and losses that occur until the balance sheet date from the measurement of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss (within other operating income or other operating expenses) at the daily middle rates applying on the balance sheet date.

No forward transactions for currency hedging purposes existed as of December 31, 2015.

The following comprise the important exchange rates for the centrotherm Group:

Exchange rate to the euro

Reporting date rate

Average rate

1 EUR =

12/31/2015 12/31/2014

1/1/2015- 12/31/2015- 1/1/2014-

12/31/2014-

Chinese renminbi (CNY) 7.09 7.54 6.97 8.17

Qatar riyal (QAR) 3.98 4.43 4.04 4.83

Singapore dollar (SGD) 1.54 1.61 1.53 1.68

Taiwan dollar (TWD) 35.97 38.50 35.24 40.23

US dollar (USD) 1.09 1.21 1.11 1.33

2.6 REVENUE RECOGNITION

Pursuant to IAS 18, revenue is recognized if it is probable that economic benefits will accrue to the Group, and the level of revenue can be determined reliably, independently of the payment date. Revenue is measured at the fair value of the consideration received, or of the consideration demanded, while taking into account contractually determined payment terms, whereby taxes and other deductibles are not included. The Group has analyzed its business relationships in order to determine whether it acts as contractor or mediator. The Group has arrived at the conclusion that it acts as contractor in all its revenue transactions. Revenue recognition also presupposes the satisfaction of the following recognition criteria.

Revenue from the sale of turnkey production lines is recognized with the rendering of the contractually determined performance parameters following final customer acceptance.



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In the case of revenue generated from the sale of single equipment, revenue is generally recognized when customers accept related deliveries. As part of product standardization, single equipment orders relate increasingly less to construction contracts in the meaning of IAS 11, but rather to inventories in the meaning of IAS 2.

Revenue from engineering services is recognized according to contractually-specified milestones.

Sales revenues are reported less discounts, price rebates, customer bonuses, and deductions.

Construction contracts regulated by IAS 11 are reported according to either the percentage of completion method or the zero profit method. If the result from the construction contract can be estimated reliably, income and costs are reported applying the percentage of completion method as of the reporting date. This is calculated by comparing contract costs incurred as of the reporting date with estimated total contract costs. When the outcome of a contract cannot be estimated reliably, but the contract overall is expected to be profitable, revenue is recognized to the extent of recoverable expenses. This is described as the "zero profit method". Contract costs are expensed in the period in which they arise. Construction contracts are reported among receivables and liabilities related to construction contracts.

To the extent that, in specific cases, cumulative performance (contract costs incurred and reported profits) exceeds prepayments received, such construction contracts are reported on the assets side of the balance sheet under receivables from construction contracts. A negative balance remaining after deducting prepayments is reported among Liabilities from construction contracts. Advances received where no services have been rendered are reported on a gross basis as prepayments received.

Anticipated losses on orders are calculated during the entire production period while taking into account identifiable risks, are immediately fully included in the contract profit or loss, and are adjusted to reflect impairments and obligations carried as liabilities.

2.7 INTEREST INCOME

Interest is recognized applying the effective interest method.

2.8 DIVIDEND INCOME

Dividend income is recognized on the date on which the right to receipt of the payment arises.

2.9 INTANGIBLE ASSETS

Intangible assets include goodwill, capitalized development costs, and purchased patents, software, licenses, and similar rights of limited or indefinite useful life.

Goodwill

Goodwill arising from the consolidation (elimination) of the investment account is not amortized. Pursuant to IFRS 3 Business Combinations, goodwill and intangible assets of indefinite useful life, and intangible assets that cannot yet be utilized, are tested annually for impairment. An impairment should be reported if the recoverable amount of the asset is less than its carrying amount. If the asset forms part of a cash-generating unit, the impairment review is performed on the basis of the cash-generating unit (abbreviated as "CGU"). If events or indications suggest that impairment may have occurred, further impairment tests are performed.

At the centrotherm Group, cash-generating units generally comprise its individual companies. Value-in-use is calculated applying the discounted cash flow method. A three-phase measurement model was applied to test the goodwill that is fully attributable to FHR. Accordingly, estimated cash flows are based on estimated cash flows until 2020 on the basis of current budgets for FHR for the next five years, and reflect management estimates. Annual cash flow growth of 2 % p.a. is assumed for the years 2021 to 2022. An annual growth rate of 1 % p.a. is imputed from 2023. The growth rates are derived from sector estimates and external studies, less a risk discount. A pretax weighted average cost of capital of 8.51 % was applied. The

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previous year's measurement model applied a 9.34 % pretax weighted average cost of capital. The other parameters were unchanged.

As of the balance sheet date, the goodwill of TEUR 637 is fully attributable to FHR Anlagenbau GmbH.

Internally generated intangible assets

The centrotherm Group invests in research and development in order to secure its continued existence in the research and technology intensive markets in which the centrotherm Group operates.

For accounting purposes, the Group defines research as an activity that is intended to deliver new scientific or technical knowledge and insight. Research costs are expensed in the period in which they are incurred.

Development is defined as the application of research results or specialist knowledge in production, production processes, and services or goods before the start of commercial production or utilization. According to IAS 38 Intangible Assets, development costs can be capitalized if (1) the development costs can be measured reliably, the product or process can be realized (2) technically and (3) commercially, and (4) future economic benefits are probable. Above and beyond this, the Group must have (5) the intention, and (6) sufficient resources to complete development, and to utilize or sell the asset.

Capitalized development costs are measured at production cost. Production costs comprise all costs incurred from the time when the intangible asset at first satisfies the recognition criteria, and which can be directly attributed to the creation, production, and preparation of the asset for its intended use. Development costs are capitalized until the time when the internally generated intangible asset is ready for operational use for its intended purpose. Straight-line amortization is applied to capitalized development costs over their respective useful life of between three and five years from the time when they become ready for operational use, to the extent that no impairment charges are required. All capitalized development costs have limited useful lives.

Separately purchased intangible assets

Purchased intangible assets are recognized at cost. They are subsequently amortized over their useful lives. With the exception of goodwill and intangible assets of indefinite useful life, intangible assets are amortized straight-line over a period of three to five years, unless the recognition of an impairment loss is required. In the case of intangible assets of indefinite useful life, and intangible assets that are not yet available for use, an impairment test is conducted at least every year, and whenever indications of impairment exist.

With the exception of one brand, intangible assets have limited useful lives. The appraisal of the brand is based on permanent utilization of the purchased brand name. A high level of impairment losses was applied in the financial statements for the abbreviated financial year ending on September 30, 2012, due to the market collapse, continued cost pressure, and falling prices, as well as technological change in the photovoltaic sector. The current situation on the photovoltaic market does not yet necessitate a reappraisal of the impairments that have been applied.

Gauging the extent to which the centrotherm brand has retained its value was performed on the basis of value-in-use as measured applying the license price analogy. This calculation was based on a pretax discount rate of 8.51 %, unchanged compared with the previous year. A license rate equivalent to 2.0 % of revenue was imputed. The growth rate beyond the planning horizon was imputed at 1.0 %. The product revenues of CT AG were applied as the revenue base. This asset is allocated to the Photovoltaics & Semiconductor segment.

If actual business trends underperform the assumptions included in the calculation, impairment losses might be required for the brand rights in the future.



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2.10 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is generally recognized at cost less straight-line depreciation, as well as any requisite impairment losses (cost method).

Purchase costs are composed of the purchase price, incidental purchase costs, and subsequent purchase costs, less any reductions to purchase price received.

Besides specific costs, production costs include appropriate portions of essential fixed and variable materials and production overhead costs, to the extent that they are incurred in connection with the production process. They also include costs for the operation's social facilities and the company's voluntary social benefits, to the extent that they are allocated to the production area. Administrative costs are also included if they are attributable to the production area.

Only if it is probable that the Group will generate future economic benefits from this asset, and the costs can be measured reliably, can subsequent expenses be included in the assets' carrying amounts, or, if this is appropriate, be reported as separate assets. All other repair or maintenance expenses are to be expensed in the financial year in which they are incurred. Replacement parts, provision materials and service materials relating to property, plant and equipment are capitalized under this item if they themselves are to be classified as property, plant and equipment pursuant to IAS 16.

Costs contain no borrowing costs.

Land is not depreciated, as a matter of principle. The depreciation of all other property, plant, and equipment applies the straight-line method as long as no requirement exists for utilization-related depreciation on the basis of actual use. The Group applies impairment losses if the asset's "recoverable amount" has fallen below its carrying amount.

Given negative trends on the photovoltaic market, experts revalued real estate, as well as technical plant and machinery, in the financial statements for the abbreviated financial year ending on September 30, 2012. For measurement purposes, the assets were generally differentiated according to future utilization: Assets to be utilized further continued to be carried at carrying amounts derived from cost less depreciation. Assets that are no longer to be utilized were written down to their lower fair value based on surveys taking into account an approximately 70 % capacity to be utilized by third parties. Impairment losses were applied to real estate (which the company has utilized itself to date, and which is no longer required as a result of the further restructuring measures introduced in the 2014 financial year) in order to reflect its lower fair value as derived from valuation surveys that take into account the possibility for third parties to utilize the related assets. The current situation on the photovoltaic market does not yet necessitate a reappraisal of the impairments that have been applied.

If property, plant, and equipment is sold, decommissioned, or scrapped, the gain or loss arising from the difference between net disposal proceeds and residual carrying amount is reported among other operating income or expenses.

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Depreciation is based on the following Group-standard useful lives:

Useful life applied

in years

Buildings 2 to 55

Outside facilities 2 to 25

Leasehold improvements 2 to 14

Technical plant 3 to 21

Cars 3 to 6

Office equipment 3 to 13

Other operating and business equipment 2 to 18

Residual carrying amounts, useful lives and depreciation methods are reviewed annually, and adjusted at the start of the corresponding reporting period, where required.

2.11 LEASES

Leases are classified as finance leases as per IAS 17 if the lease agreement essentially transfers opportunities and risks connected with the property to the lessee.

If the opportunities and risks connected with the ownership of the asset essentially remain with the lessor, the lease is classified as an operating lease. Lease installments from operating leases are expensed through the income statement on a straight-line basis over the duration of the lease, unless another systematic basis better corresponds to the progression of utilization for the lessee.

Only operating leases where Group companies act as lessees existed within the centrotherm Group as of the reporting date.

2.12 IMPAIRMENT OF NON-FINANCIAL ASSETS

A review is performed on every reporting date to establish whether indications exist that assets have become impaired in the meaning of IAS 36 (Impairment of Assets). If such indications exist, or if an annual impairment test is required, the recoverable amount of the asset is calculated. An annual impairment test is required for goodwill and intangible assets of indefinite useful life, or intangible assets that cannot yet be utilized.

An impairment exists if the carrying amount of an asset, or of a cash-generating unit, exceeds the recoverable amount. The impairment loss is to be recognized in profit or loss. The Group generally defines each operating company as a separate cash-generating unit.

The recoverable amount is the higher of either net realizable value or value-in-use. Value-in-use comprises the present value of future cash flows expected from the continued utilization of an asset, and from its disposal at the end of the period of use. If no cash flows can be directly attributed to an asset, the recoverable amount of the cash-generating unit to which the asset belongs is measured.

If the assumptions relating to the recoverable amount undergo change, the valuation losses arising from the impairment are neutralized by way of a reversal. Reversals are performed up to the carrying amount that would have resulted if the asset had been depreciated without impairment.



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2.13 INVENTORIES

In accordance with IAS 2 (Inventories), inventories include those assets held for sale as part of normal business (finished goods and products), assets in the process of being manufactured for sale (semifinished goods and services), or assets consumed as part of manufacturing or the rendering of services (raw materials and supplies).

Inventories are measured at the lower of cost or net realizable value, in other words, the sales proceeds achievable in the normal course of business less estimated production and sales costs. The cost of raw materials and supplies is calculated applying the average method.

Purchase costs include all costs incurred to deliver inventories to their current location, and in their current condition. Besides specific costs, production costs include appropriate portions of essential fixed and variable materials and production overhead costs, to the extent that they are incurred in connection with the production process. They also include costs for the operation's social facilities and the company's voluntary social benefits, to the extent that they are allocated to the production area. Administrative costs are also included if they are attributable to the production area. Costs contain no borrowing costs.

2.14 FINANCIAL ASSETS

Classification and measurement

Financial assets are recognized if the Group company becomes the contractual party to a financial instrument.

Financial assets are allocated to the following categories:

• At fair value through profit or loss

• Held to maturity

• Available for sale

• Loans and receivables

Classification depends on the respective purpose for which the financial assets are purchased. The Group determines classification of its financial assets when they are recognized for the first time, and reviews such allocation at the end of each financial year, where permissible and appropriate. Subsequent measurement of financial assets depends on their classification.

Financial assets are measured at fair value on initial recognition. If financial assets are not measured at fair value through profit or loss, transaction costs that are directly attributable to the purchase of the financial asset are also included.

Assets measured at fair value through profit or loss

Assets measured at fair value through profit or loss comprise financial assets that are held for trading, or that are designated as measured at fair value through profit or loss. A financial asset is allocated to this category if it was acquired in principle with the intention to sell it in the short term.

The Group has no financial assets held for trading, and has designated no assets as measured at fair value through profit or loss.

Held-to-maturity investments

Held-to-maturity investments comprise non-derivative financial assets with fixed or determinable payments, as well as a fixed term, where the Group has the intention and ability to hold them until maturity. After first-time recognition, held-to-maturity investments are measured at amortized cost applying the effective interest method, less any impairment losses.

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The Group has designated no financial assets as held-to-maturity.

Available-for-sale financial assets

Available-for-sale financial assets comprise non-derivative financial assets which are either allocated to this category, or which were not allocated to any of the other categories presented. They are allocated to non-current assets if the Group does not have the intention of selling them within twelve months after the balance sheet date, and the asset is not due within this period.

On initial recognition, they are measured at fair value less incidental purchase costs. Subsequent measurement is at fair value if fair value can be measured reliably. Fair value changes are recognized directly in equity, less any deferred tax. If such an asset is derecognized, the accumulated gain or loss within equity is recycled in profit or loss. If fair value cannot be measured reliably, such assets are recognized at cost. If, when recognizing at cost, an objective indication exists that an available-for-sale asset is impaired (corresponding to IAS 39.59, for example), the impairment amount (difference between the carrying amount and the present value of estimated future cash flows) is recognized in profit or loss. Subsequent reversals of impairment losses are not permitted (IAS 39.66).

Financial assets include shares in non-consolidated subsidiaries and interests in companies that are classified as available-for-sale pursuant to IAS 39. These are reported at their respective amortized cost due to a lack of an active market, and as fair value cannot be measured reliably.

When subsidiaries are sold, the difference between sale price and net assets plus cumulative foreign currency differences is recognized in profit or loss.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. Loans and receivables, such as trade receivables, other receivables and cash, are measured at amortized cost applying the effective interest method following first-time recognition. Default risks must be recognized as impairments, and to an appropriate level.

Other assets contain loans, which are measured at amortized cost. Loans bearing a market rate of interest are reported at nominal value. Non-interest-bearing and low-interest-bearing loans are discounted applying a rate of interest appropriate to their risk.

With the exception of current receivables where the discounting effect would be immaterial, interest income is recognized applying the effective interest method.

2.15 IMPAIRMENT OF FINANCIAL ASSETS

With the exception of financial assets measured at fair value through profit or loss, financial assets are impairment-tested on each balance sheet date. A financial asset is regarded as impaired if, as a result of one or several events occurring after first-time recognition of the asset, objective indications suggest that expected future cash flows from the financial asset have suffered a negative change.

In the case of equity instruments that have been classified as held for sale, a significant or sustained reduction in the fair value of the assets to below the purchase costs comprises an objective indication of impairment.

In the case of all other financial assets, the following can comprise objective indications of impairment:

• significant financial difficulty of the issuer or counterparty,

• a breach of contract, such as a default or delinquency in interest or principal payments,



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• it becoming probable that the borrower will enter bankruptcy or other financial reorganization, or

• the disappearance of an active market for that financial asset because of financial difficulties.

With the exception of derivative financial instruments, receivables and other assets are recognized at amortized cost applying the effective interest method. Requirements for specific value allowances are calculated depending on the receivables' age structure, and information about customer-specific credit and default risk (such as probability of insolvency or significant financial difficulties on the part of the debtor). An itemized provision for doubtful receivables accounts is sufficient to reflect general credit risk. Uncollectible receivables are derecognized.

• An impairment results in a direct reduction of the carrying amount of all affected financial receivables, with the exception of trade receivables whose carrying amounts are reduced through a valuation allowance account. If an impaired trade receivable is deemed uncollectible, consumption is applied against the valuation allowance account. Subsequent receipts for amounts that have already been written down are also booked against the valuation allowance account. Changes to the fair value of the valuation allowance account are recognized in profit or loss.

• If the level of the impairment of financial assets measured at amortized cost reduces in one of the subsequent financial years, and if such a reduction can be objectively attributed to an event that occurs after the recognition of the impairment, the previously recognized impairment is reversed in profit or loss. In this context, the reversal of the impairment loss cannot exceed the amortized cost that would have arisen without the impairment loss.

2.16 DERECOGNITION OF FINANCIAL ASSETS

• The Group only derecognizes financial assets if the contractual rights to the cash flows from the financial assets expire, or if it transfers the financial asset, as well as all opportunities and risk connected with ownership of the asset, to a third party.

• When a financial asset is derecognized, the difference between its carrying amount and the sum of payments received or to be received, as well as all cumulative gains or losses that are reported in other comprehensive income and accumulated within equity, is recognized in profit or loss.

2.17 DERIVATIVE FINANCIAL INSTRUMENTS

In the centrotherm Group, financial instruments such as forward currency transactions and interest-rate swaps, which do not form part of hedging relationships, are categorized as held for trading pursuant to IAS 39. Derivative financial instruments are consequently measured at fair value. Fair value changes are recognized in profit or loss. In the case of derivative financial instruments that are classified as hedging instruments, reporting fair value changes depends on whether the derivative financial instrument is deployed to hedge balance sheet assets and liabilities (fair value hedge), or to hedge risks pertaining to fluctuating cash flows (cash flow hedge).

When entering into the transaction, the Group documents the hedging relationship between the hedging instrument and the underlying transaction, the objective of the risk management, and the underlying strategy. Both at the start of the hedging relationship and during it, documentation also appraises whether the derivatives deployed in the hedge prove highly effective in compensating for the changes to the fair value or the cash flows of the underlying transactions. Changes to the fair values of derivatives that were allocated to hedge fair value are reported in the income statement together with the fair value changes of the hedged assets and liabilities that are attributed to the hedged risk. If the preconditions for a hedging relationship are no longer satisfied, and the previously designated underlying transaction is measured applying the effective interest method, the outstanding carrying amount adjustment to the underlying transaction should be applied over its residual duration.

The effective part of the changes to the fair values of derivatives that are designated as cash flow hedges is reported in equity. The ineffective portion of such value changes is recognized in profit or loss, by contrast. Amounts that are deferred or accrued in equity are rebooked through the income statement, and reported as income or expense in the period in which the hedged transaction becomes earnings-effective. If a hedging transaction expires, is disposed of, or no longer satisfies hedge accounting criteria, the gains and losses that have accumulated until that point within equity remain within equity, and are not reported

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through the income statement until the future transaction that was originally hedged occurs, or the occurrence of the expected transaction is no longer anticipated.

No derivative financial instruments existed during the period under review.

2.18 CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash holdings, bank accounts in credit, and time deposit investments with a residual term on acquisition of up to three months. Cash and cash equivalents are subject as of the balance sheet date to plan short-term availability restrictions due to cash-advanced guarantees of bills in an amount of TEUR 2,867 (previous year: TEUR 2,593), and in an amount of TEUR 5,000 (previous year: TEUR 5,000) arising from pledged deposits for the insolvency state lending agreement for a subsidiary. They are measured at their nominal amounts.

2.19 NON-CURRENT ASSETS AND GROUPS OF ASSETS HELD FOR SALE

The centrotherm Group classifies non-current assets or groups of assets as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This is only the case if the asset or group of assets can be sold immediately in its current condition, and disposal is highly probable. Non-current assets and groups of assets held for sale are measured at the lower of carrying amount and fair value less costs of disposal unless the items presented within the disposal group fall under the measurement rules of IFRS 5. Property, plant and equipment that are held for sale are not depreciated, and intangible assets that are held for sale are not amortized.

Due to the intention to sell in the short term an operating and administrative building that belongs to the Silicon segment, along with its fixtures and equipment, it was classified and measured as a non-current asset held for sale as of December 31, 2014, pursuant to IFRS 5. For this reason, the building, along with plant, was reported in the balance sheet as of December 31, 2014 under the "non-current assets and groups of assets held for sale" item with a fair value less costs of disposal of TEUR 2,344. Cumulative losses of TEUR 254 were generated as a result of the complete disposal in 2015.

2.20 PROVISIONS

Provisions are formed for obligations to third parties resulting from past events that will probably result in an economic burden on the Group, and whose extent can be reliably determined.

Provisions are measured according to IAS 37 (Provisions, Contingent Liabilities and Contingent Assets) applying the best possible estimate of expenses required to satisfy the obligation as of the reporting date. If cash outflows for obligations are not anticipated to occur until after one year after the balance sheet date, provisions are measured applying the present value of prospective cash outflows. The pretax interest rate that is to be applied is calculated according to the specific risk for the liability. Reimbursements by third parties are capitalized separately from provisions if their realization is probable.

If a reduction to the scope of an obligation results from a change to an assessment, the provision is released proportionately, and the income is reported in other operating income.

No pension obligations existed as of the balance sheet date.

2.21 FINANCIAL LIABILITIES

Financial liabilities are recognized if a Group company becomes the contractual party to a financial instrument. They are categorized either as financial liabilities measured at fair value through profit or loss, or as financial liabilities measured at amortized cost.

Financial liabilities are measured at fair value on initial recognition. If financial liabilities are not measured at fair value through profit or loss, transaction costs are also included that are directly attributable to the purchase of the financial liabilities.



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Financial liabilities measured at fair value through profit or loss

Financial liabilities are categorized as liabilities measured at fair value through profit or loss if they are either held for trading, or have been designated voluntarily as measured at fair value through profit or loss.

No financial liabilities measured at fair value through profit or loss existed during the period under review.

Financial liabilities measured at amortized cost

Following initial recognition, financial liabilities that are classified as measured at amortized cost are measured at amortized cost according to the effective interest method. Current liabilities are recognized at their repayment or satisfaction amount.

To the extent that installments liabilities are deferred without interest until December 31, 2015, they were recognized initially at their present value accordingly. Discounting was applied using a debt interest rate of 7.5 % p.a., which is derived from a basic interest rate of 2.5 % p.a. and an average credit spread of 5.0 % p.a.

Derecognition of financial liabilities

Financial liabilities are derecognized if the corresponding obligations have been settled or canceled, or have expired. The difference between the carrying amounts of the derecognized financial liabilities and the considerations received, or to be received, is recognized in profit or loss.

2.22 TAXES

Current tax reimbursement claims and current tax liabilities for current and earlier periods are measured applying the amount at which a reimbursement is expected from the tax authority, or at the amount that is expected to be paid to the tax authority. Calculation of the amount is based on the tax rates and tax laws that are published as of the balance sheet date.

Income tax includes all taxes levied on the taxable earnings of Group companies. The management regularly examines tax declarations, especially in relation to matters that are susceptible to interpretation, forming provisions where required based on the amounts that are anticipated to be paid to the tax authority.

Deferred taxes are formed applying the balance sheet-oriented liability method (IAS 12) to temporary differences existing on the balance sheet date between the value recognized for an asset or liability in the balance sheet, and the fiscal valuation.

The carrying amount of deferred tax assets is reviewed on each balance sheet date, and reduced to the extent that it is no longer probable that sufficient taxable earnings will be available against which the deferred tax assets can be at least partially utilized. Unrecognized deferred tax assets are reviewed on each balance sheet date, and recognized to the extent to which it has become probable that future taxable earnings will enable the deferred tax assets to be realized.

Deferred tax assets and deferred tax liabilities are measured applying the tax rates that are expected to be valid for the period in which the asset is to be realized or the liability satisfied. This is based on the tax rates and tax laws that are published as of the balance sheet date.

Deferred taxes relating to items that are recognized directly in equity are not recognized in profit or loss, but instead directly in equity.

2.23 GOVERNMENT GRANTS

Government grants are only reported if appropriate certainty exists that the company will satisfy the related conditions, and that the grants will be awarded. As far as the accounting treatment of grants is concerned, IAS 20 stipulates that a differentiation should be made between non-monetary grants, grants for assets, and profit-related grants.

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Expense-related grants are booked through the income statement in the period in which they are received, and corresponding to the expenses that they are intended to offset. They are reported in the income statement as other operating income. If subsidies are awarded for expenses not incurred until subsequent periods, they are reported as deferred income, and released pro rata temporis.

Government grants are to be deducted from acquisition or production costs, or are to be recognized as deferred liabilities. At the centrotherm Group, investment subsidies are recognized as deductions from acquisition of production costs. For investment allowances, a deferred liability is formed that is released pro rata temporis.

In the year under review, the centrotherm Group received profit-related subsidies in the form of expense subsidies, and released, pro rata, grants for assets in the form of investment allowances.

2.24 ESTIMATES AND DISCRETIONARY DECISIONS

When preparing consolidated financial statements, the management is required pursuant to IFRS to make discretionary decisions in the application of accounting policies, as well as assessments and estimates, as well as make assumptions, which affect the level and reporting of recognized assets and liabilities, income and expenses, and contingent liabilities. Estimates are based on empirical data and other assumptions that are regarded as appropriate under the given circumstances, which are sustainably characterized by uncertainties about market trends in the photovoltaic sector.

Actual outcomes may differ from estimates. Significant estimates and assumptions are reviewed constantly, and adjusted where required.

Accounting methods are regarded as significant that have a major impact on the presentation of the financial position and performance, as well as the cash flows of the centrotherm Group, and which require an assessment of matters that are by their nature uncertain, which may change in subsequent reporting periods, and whose results are consequently difficult to gauge.

The following section explains the main application areas for assumptions and estimates, as well as discretionary decisions, that have a significant impact on the centrotherm Group's financial position and performance.

Going concern

The Management Board is required to gauge the entity's going concern capacity when preparing consolidated financial statements. In the 2015 financial year, the foundations were laid for centrotherm's new future. As part of the insolvency plan, the former majority shareholder, Sol Futura Verwaltungsgesellschaft mbH, sold its interest in CT AG to Solarpark Blautal GmbH by December 31, 2015, with the transaction closing on January 8, 2016. As part of the transaction, centrotherm settled from its own funds the minimum rates as set out in the insolvency plans, repaid the existing insolvency loans, and secured the Group's future financing, firstly through a EUR 25.0 million financing arrangement and, secondly, through a letter of comfort from customer QSTec concerning the continuation of its polysilicon project. The going concern forecast for the centrotherm Group is based on short- and medium-term planning. Due to a global increase in photovoltaic expansion plans, especially in China and India, solar cell manufacturers have been realizing greater investments in expanding existing and new production capacities since mid-2015. It is assumed that the revenue targets for 2016 in the core business of Photovoltaics & Semiconductor can be achieved. The photovoltaic market continues to respond in a volatile manner to general policy conditions. For this reason, the company consistently implemented during the 2015 financial year the cost structure optimization measures that it had already introduced in 2014, in order to thereby secure the company's success and profitability and maintain its competitiveness. The company also identified further efficiency enhancement measures that it will continue to pursue in 2016. Due to the existing worldwide price level, the silicon area remains affected by excessive production costs. The dearth of market investment activity is reflected through consistent capacity adjustments in this segment. No indications currently exist that Group planning might not be met. For this reason, the Management Board assumes that the company comprises a going concern. As a consequence, these consolidated financial statements as of December 31, 2015 have been prepared under the going concern assumption.



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Development costs

Development costs are capitalized if the criteria of IAS 38.57 have been met cumulatively. The first-time capitalization of costs requires estimates provided by the technology area and by management. In particular, this entails an examination of the technical viability and future economic benefit of the development project.

Revenue recognition on construction orders

Revenue recognition for construction orders is generally according to the percentage of completion method, whereby revenue and costs are reported in line with the progress of completion as of the balance sheet date. This method requires that completion progress be estimated reliably. Completion progress is calculated by comparing contract costs incurred as of the reporting date with estimated total contract costs. Risks pertaining to orders must also be gauged. When the outcome of a contract cannot be estimated reliably, but the contract overall is expected to be profitable, revenue is recognized to the extent of recoverable expenses. This is described as the "zero profit method". When applying the percentage of completion method, such modifications to estimates can also result in an increase or reduction in the revenue for the corresponding reporting period.

The attributable total costs for an existing large-scale project could no longer be determined clearly, and calculated reliably, during the reporting period. As a consequence, the cumulative sales revenues were reported to the level of the incurred contract costs in an amount of TEUR 227,208 (previous year, pro forma zero profit method: TEUR 174,400). The cumulative revenue that was still reported according to the percentage of completion method in the previous year amounted to TEUR 191,760.

The carrying amount from the percentage of completion method stood at TEUR 8,547 as of the 2015 reporting date (previous year: TEUR 271,940), and the carrying amount from the zero profit method was reported at TEUR 227,208 (previous year: TEUR 0).

Impairment losses

Goodwill

The centrotherm Group conducts goodwill impairment tests at least once every year. According to appraisal by the Group, no events exist that indicate a need for the application of further impairment losses to FHR Anlagenbau GmbH above and beyond the impairment losses that have already been applied during previous periods.

Impairment exists if the carrying amount of an asset, or of a cash-generating unit, exceeds its recoverable amount. Determining a CGU's recoverable amount, which is allocated to goodwill, is connected with management estimates. The recoverable amount is the higher of either the net realizable value or value-in-use. The Group calculates value-in-use by applying the discounted cash flow procedure. A three-phase measurement model was applied to test the goodwill that is fully attributable to FHR.

The most important assumptions on which the value-in-use calculations are based include estimated cash flows or growth rates, and weighted average costs of capital.

Property, plant and equipment and other intangible assets

In previous periods, impairment losses were applied to other intangible assets and property, plant and equipment due to the significant market downturn in the photovoltaic sector. Due to the current situation in sales markets and a resumption of new order intake growth, the Management Board assumes that no further need exists for impairment losses in this set of consolidated financial statements.

A two-phase measurement model is applied for impairment testing of the purchased brand right that is attributable to CT AG.

Associates

Associates comprise entities over which the Group exercises significant influence, but where it does not possess control – frequently accompanied by a voting rights interest of between 20 % and 50 %.

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Financial assets

By way of exception, interests in non-consolidated subsidiaries and participating interests are recognized at acquisition cost in the consolidated financial statements because these comprise equity instruments that are not traded on an active market, and whose fair value cannot be measured reliably. Impairment losses are applied if substantial indications of impairment exist. Estimation uncertainties can arise especially from uncertainties deriving from the current market environment in relation to cash flow forecasts for the subsidiaries.

Inventories

Due to positive impulses on the photovoltaic market and the resultant order book position at the centrotherm Group, no indications exist currently that any need exists for further impairments to be applied to inventories. This assumption, which takes into account all utilization and sale possibilities for inventories, can be connected with uncertainty.

Receivables

Receivables are impaired if their present value lies below their carrying amount. Determining the extent of need for the application of impairment losses requires extensive evaluation. As part of this evaluation, the Group appraises, along with other factors, the duration and extent of divergence of fair value from acquisition cost. It also appraises the business partner's short-term business prospects taking into account factors such as industry and sector trends.

Calculating impairments to doubtful trade and other receivables depends on term structure, as well as estimates and assessments of individual receivables through customer-specific credit and default risk.

Non-current assets and groups of assets held for sale

Non-current assets and groups of assets held for sale are measured at the lower of carrying amount and fair value less costs of disposal unless the items presented within the disposal group fall under the measurement rules of IFRS 5. The measurement of fair value and disposal costs is based on management estimates and assumptions that are connected with a certain degree of uncertainty.

Provisions

Provisions are measured according to IAS 37 (Provisions, Contingent Liabilities and Contingent Assets) using the best possible estimate of expenses required to satisfy the obligation as of the reporting date.

In order to enhance the meaningfulness of estimates, the effects of changes in parameters on reported provisions are assessed for selected key types of provision, which are of particular significance for the Group's financial position and performance.

As part of the discontinuation of insolvency proceedings in 2013, the tax authorities approved a waiver of tax receivables due to the reorganization gains that were realized. The corresponding tax receivables were fixed in advance, and were issued in finalized form for the 2014 and 2015 calendar years after the conclusion of the taxation process. Given this, no related liabilities were recognized.

Insolvency liabilities

The insolvency liabilities deferred without interest until December 31, 2015 are measured at their repayment amount as of the balance sheet date.

Deferred tax

Deferred tax assets are recognized if the deferred tax item to be recognized can be offset prospectively with tax charges on future earnings. This presupposes a forecast as to whether taxable earnings can be generated with sufficient probability. Uncertainties inherent in forecasting cannot be excluded.

Further information about assumptions and estimates can be found in the remarks about accounting policies, as well as in individual items of the financial statements.



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2.25 CASH FLOW STATEMENT

The cash flow statement shows how the cash and cash equivalents position of the centrotherm Group has changed as a result of cash inflows and outflows during the reporting year. In accordance with IAS 7 (Cash Flow Statements), a differentiation is made between cash flows from operating activities, investing activities, and financing activities. The liquidity position reported in the cash flow statement comprises cash holdings, bank accounts, and short-term time deposit investments. These include deposits arising from insolvency estate lending agreements in an amount of TEUR 6,351 (December 31, 2014: TEUR 26,080). Cash and cash equivalents are subject as of the balance sheet date to planned short-term availability restrictions due to cash-advanced guarantees of bills in an amount of TEUR 2,867 (December 31, 2014: TEUR 2,593), and in an amount of TEUR 5,000 (December 31, 2014: TEUR 5,000) arising from pledged deposits for the insolvency estate lending agreement for a subsidiary.

3 SEGMENT REPORTING

The Group's activities are concentrated on the following operating segments: Segment delineation by product area is applied largely in accordance with the internal reporting and management system, as well as internal organizational structure.

The Silicon segment comprises the planning, design, sale and creation of plants to manufacture silicon, and its related process steps.

The Photovoltaics & Semiconductor segment mainly comprises the development, construction, production and sale of individual systems to produce monocrystalline and multi-crystalline solar cells. During the year under review, the planning, design, as well as sale and creation of customized and turnkey production lines remained of only subordinate importance. As in previous years, this segment also includes the range of services relating to the semiconductor area, which is to be expanded further. In the semiconductor area, we develop and produce high-tech production systems to manufacture a broad range of semiconductor components.

The Thin Film & Customized Equipment segment focuses on the development, construction, production and sale of customized system concepts and special systems for modern coating technologies.

According to the requirements of IFRS 8, individual annual financial statement data must be presented by operating segment. Business divisions where separate financial information is available for internal management, and which in turn is reported regularly to the highest management level for resource allocation and evaluation of profitability, are regarded as operating segments. The operating segments of Silicon, Photovoltaics & Semiconductor, and Thin Film & Customized Equipment are presented under segmental reporting in line with this definition.

IFRS 8.23 requires the disclosure of assets and liabilities for each reporting segment, if such items are reported regularly to the uppermost management level. Segment information about assets, liabilities and investments are not reported, as management in these areas occurs only at overall corporate level.

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2015 segment reporting

1/1/2015-12/31/2015

in TEUR Silicon

Photovoltaics &

Semiconductor


centrotherm

Group

Revenue with third parties 43,722 79,290 15,543 138,555

Segment revenue 43,722 79,290 15,543 138,555

EBITDA -11,648 34,008 141 22,501

EBITDA as % of revenue -26.6 42.9 0.9 16.2

Depreciation, amortization and impairment losses -87 -2,699 -736 -3,522

EBIT -11,735 31,309 -595 18,979

EBIT as % of revenue -26.8 39.5 -3.8 13.7

In its Silicon segment, the Group generated TEUR 43,722 of revenue (previous year: TEUR 86,252), of which TEUR 35,448 (previous year: TEUR 83,920) is primarily attributable to the Qatar project. No other single customer generated 10 % or more to consolidated revenue in either 2015 or 2014.

Further revenue of TEUR 8,164 relates to the final invoicing of an old project, the entirety of which is recognized through profit or loss.

It was no longer possible in the reporting period to clearly determine, and reliably gauge, the total costs attributable to the large-scale project in Qatar. As a consequence, the cumulative sales revenues were reported to the level of the incurred contract costs in an amount of TEUR 227,208, applying the zero profit method (previous year, pro forma zero profit method: TEUR 174,400). The cumulative revenue that was still reported according to the percentage of completion method in the previous year amounted to TEUR 191,760.

Other operating income includes TEUR 2,000 of income from impaired receivables (previous year: TEUR 0), and income of TEUR 793 from the release of provisions for foreign and domestic taxes (previous year: TEUR 0).

Other operating expenses include a disposal loss of TEUR 254 from the sale of an operating and administrative building, along with fixtures and equipment, which was to be reported under non-current assets available for sale as of December 31, 2014 pursuant to IFRS 5.

The Silicon segment generated EBIT of TEUR -11,735 (previous year: TEUR 11,014).

The Photovoltaics & Semiconductor segment reported a fall in revenue from TEUR 90,637 to TEUR 79,290.

Changes in the inventory of finished goods and work-in-progress include TEUR 435 (previous year: TEUR 1,357) of write-downs of work-in-progress and finished products to their lower net realizable values.

Other operating income of TEUR 30,560 (previous year: TEUR 34,398) includes TEUR 20,601 (previous year: TEUR 0) of income from the release of a provision for contingent insolvency liabilities as part of a modified appraisal of a lawsuit based on new information. This item also includes TEUR 3,066 of subsequent income connected with the insolvency (previous year: TEUR 0), income of TEUR 2,706 from the release of provisions and obligations (previous year: TEUR 5,095), and TEUR 2,332 (previous year: TEUR 0) of income from the reversal of value allowances applied to receivables. The previous year included TEUR 20,131 of income from the derecognition of unnotified liabilities due to a plea on grounds of statutes of limitation, and TEUR 5,132 of additional income from assets and asset groups previously held for sale.



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Other operating expenses include expenses from the formation of provisions for litigation risks of TEUR 671 (previous year: TEUR 550), TEUR 390 (previous year: TEUR 3,227) of value allowances applied to receivables and loans, TEUR 104 of subsequent costs connected with the insolvency (previous year: TEUR 3,145), and TEUR 3,517 of legal and consulting costs (previous year: TEUR 5,412).

No impairment losses were applied to non-current assets in the period under review (previous year: TEUR 1,789 for property, plant and equipment).

EBIT improved from TEUR 9,250 in the previous year to TEUR 31,309 in the year under review. This was particularly due to higher other operating income.

The Thin Film & Customized Equipment segment generated a slight EBIT loss of TEUR -595 (previous year: TEUR 699).

Other operating income includes TEUR 530 (previous year: TEUR 0) of income from utilizing impairment losses from construction contracts, and TEUR 206 of income from the release of provisions (previous year: TEUR 405). Changes in the inventory of finished goods and work-in-progress include TEUR 531 (previous year: TEUR 152) of impairment losses applied to work-in-progress. Other operating expenses relate mainly to TEUR 44 (previous year: TEUR 740) of valuation allowances applied to receivables and construction contracts, as well as TEUR 104 (previous year: TEUR 118) of legal and consultancy costs.

The following table shows the figures for the previous year:

2014 segment reporting

1/1/2014-12/31/2014

in TEUR Silicon

Photovoltaics &

Semiconductor


centrotherm Group

Revenue with third parties 86,252 90,637 12,304 189,193

Segment revenue 86,252 90,637 12,304 189,193

EBITDA 11,133 14,152 13 25,298

EBITDA as % of revenue 12.9 15.6 0.1 13.4

Depreciation, amortization and impairment losses -119 -4,902 -712 -5,733

EBIT 11,014 9,250 -699 19,565

EBIT as % of revenue 12.8 10.2 -5.7 10.3

Revenue and non-current assets by region for the 2015 financial year and the 2014 financial year are as follows according to IFRS 8.33:

Revenue and non-current assets

in TEUR

Germany Rest of Europe

Asia

ROW Total

FY 2014 revenue 13,023 5,777 164,777 5,615 189,193

Non-current assets 2014 51,752 0 121 0 51,873

FY 2015 revenue 19,510 7,743 105,221 6,081 138,555

Non-current assets 2015 49,204 0 87 0 49,291

The regional distribution of revenue reflects the customers' countries of origin. Non-current assets are composed of intangible assets, property, plant and equipment, non-current income tax receivables, and other non-current assets.

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Revenues by product are as follows:

Revenue by products

1/1/2015- 1/1/2014-

Share

Share

in TEUR 12/31/2015- 12/31/2014- FY 2015 FY 2014

Turnkey production lines 305 11,016 0.2% 5.8%

Single equipment 113,137 154,928 81.6% 81.9%

Service and replacement parts 21,887 19,820 15.8% 10.5%

Consulting and engineering 1,738 0 1.3% 0.0%

Other revenue 1,488 3,429 1.1% 1.8%

Total 138,555 189,193 100.0% 100.0%

4 NOTES TO THE CONSOLIDATED INCOME STATEMENT

Expenses are presented according to the nature of expense method in the consolidated income statement.

4.1 REVENUE

Revenue amounted to TEUR 138,555 in the 2015 financial year (previous year: TEUR 189,193). Of this total, TEUR 39 was attributable to related companies (previous year: TEUR 116), and TEUR 1,586 was attributable to non-consolidated subsidiaries (previous year: TEUR 794). Contract revenue as per IAS 11.39 (a) amounted to TEUR 52,241 in the year under review (previous year: TEUR 89,467). Of this amount, TEUR 79,938 (previous year: TEUR 91,876) is attributable to revenue from the sale of goods. Revenue from the rendering of services amounted to TEUR 4,888 (previous year: TEUR 4,421).

4.2 CHANGE IN INVENTORY OF FINISHED GOODS AND WORK-IN-PROGRESS

The increase in the inventory of finished goods and work-in-progress stood at TEUR 2,451 (previous year: TEUR 5,188). Impairment losses of TEUR 966 were applied (previous year: TEUR 1,509). Impairment losses of TEUR 106 were reversed in the reporting period (previous year: TEUR 0).

4.3 CAPITALIZED SERVICES RENDERED TO OWN ACCOUNT

Capitalized services rendered to own account were recognized in an amount of TEUR 109 in the 2015 financial year (previous year: TEUR 122).



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4.4 OTHER OPERATING INCOME

Other operating income in the 2015 financial year is composed as follows:

Other operating income

1/1/2015- 1/1/2014- in TEUR 12/31/2015- 12/31/2014-

Releases of provisions for litigation risks 20,601 0

Income from the release of provisions and obligations 3,911 5,526

Subsequent income connected with the insolvency 3,066 0

Income from release of specific and general impairments 2,873 737

Income from impaired receivables 2,000 0

Foreign currency gains 746 526

Income from government grants 361 166

Income relating to other accounting periods 245 780

Monetary benefit 133 185

Management services charged on 91 112

Income from suppliers' liability waivers 0 28

Derecognition of unnotified liabilities due to plea on grounds of statutes of limitation 0 20,403

Release of contractual obligations that are no longer probable 0 1,200

Additional income from non-current assets and groups of assets 0 5,132

Miscellaneous other income 967 1,565

Total 34,994 36,360

The TEUR 20,601 of income generated in the financial year under review arises from the release of a provision for contingent insolvency liabilities as part of a modified appraisal of a lawsuit, reflecting new information.

Other operating income includes payments to related parties amounting to TEUR 88 (previous year: TEUR 105).

4.5 COST OF MATERIALS

Cost of materials was composed as follows in the 2015 financial year:

Cost of materials

1/1/2015- 1/1/2014- in TEUR 12/31/2015- 12/31/2014-

Expenses for raw materials and supplies, and for purchased goods 57,386 90,572

Expenses for purchased services 27,722 16,934

Total 85,108 107,506

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The cost of materials includes TEUR 13 of impairment losses (previous year: TEUR 50).

Of the expenses for raw materials and supplies, and purchased goods, TEUR 73 (previous year: TEUR 19) was attributable to related companies, and TEUR 2,048 to non-consolidated subsidiaries (previous year: TEUR 208).

4.6 PERSONNEL EXPENSES

The following table provides a breakdown of the personnel expenses:

Personnel expenses

1/1/2015- 1/1/2014- in TEUR 12/31/2015- 12/31/2014-

Wages and salaries 35,806 40,868

Social contributions and expenses for pensions and benefits 5,366 6,330

of which for pensions 119 92

Other personnel expenses 274 308

Total 41,446 47,506

Personnel expenses include TEUR 1,250 of expenses for restructuring measures. In the previous year, the personnel measures that were approved for the Blaubeuren site (needed to enhance efficiency due to recent market weakness) generated one-off expenses that affected the wages and salaries item in an amount of TEUR 3,128, and the social contributions and expenses for pensions and benefits item in an amount of TEUR 212.

Expenses of TEUR 2,190 (previous year: TEUR 2,440) arising from defined contribution pension plans were incurred in the period under review.

The number of employees, and its year-on-year comparison, is as follows:

Employees

Average

Reporting date

1/1/2015- 12/31/2015- 1/1/2014-

12/31/2014- 12/31/2015 12/31/2014

Management Board 3 3 4 3

Administration 190 205 180 206

Sales 87 89 81 92

Production 231 262 216 261

Technology and research 169 195 159 183

Total 680 754 640 745



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4.7 OTHER OPERATING EXPENSES

Other operating expenses are composed as follows:

Other operating expenses

1/1/2015- 1/1/2014- in TEUR 12/31/2015- 12/31/2014-

Legal and consultancy costs 5,477 7,889

Travel expenses 4,088 2,719

Freight and packaging 2,707 3,766

Third-party services 2,032 2,555

Premises expenses 1,960 1,805

Foreign currency losses 1,368 630

Insurance and contributions 955 1,276

Incidental personnel costs 682 662

Sales commissions 662 1,612

Software maintenance 553 626

Temporary help 528 565

Procurement and incidental costs 519 1,005

Advertising costs 468 404

Impairment losses applied to receivables and construction contracts 435 3,091

Telephone and communications 416 524

Vehicle costs 405 538

Bank charges 315 460

Storage costs 271 913

Costs connected with the insolvency 104 3,145

Asset disposals 53 83

Litigation costs and penalties 24 19

Impairment losses applied to other assets 0 1,142

Management services 0 324

VAT repayment relating to sale of building in Constance 0 2,121

Miscellaneous operating expenses 3,032 2,303

Total 27,054 40,177

Other operating expenses include services of related companies in an amount of TEUR 18 (previous year: TEUR 53) and of non-consolidated subsidiaries in an amount of TEUR 646 (previous year: TEUR 136).

Miscellaneous operating expenses of TEUR 3,032 (previous year: TEUR 2,303) concern mainly TEUR 671 of provisions for litigation risks (previous year: TEUR 550), and a disposal loss of TEUR 254 (previous year: TEUR 0) arising from the sale of an

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operating and administration building, along with its fittings, which was reported as of December 31, 2014 as a non-current asset held for sale, pursuant to IFRS 5.

4.8 DEPRECIATION, AMORTIZATION AND IMPAIRMENT LOSSES

Depreciation, amortization (excluding goodwill amortization) and impairment losses amounted to a total of TEUR 3,522 in the 2015 financial year (previous year: TEUR 5,733), of which TEUR 3,522 comprised depreciation and amortization (previous year: TEUR 3,944), and TEUR 0 comprised impairment losses (previous year: TEUR 1,789). The previous year's impairment losses were applied to property, plant and equipment.

Of the amortization and depreciation, TEUR 570 comprises amortization (previous year: TEUR 866), and TEUR 2,952 entails depreciation (previous year: TEUR 3,078).

4.9 NET FINANCIAL RESULT

The net financial result is composed as follows:

Net financial result

1/1/2015- 1/1/2014-

in TEUR 12/31/2015- 12/31/2014-

Financial income 77 2,282

Financial expenses -5,867 -5,986

Net financial result -5,790 -3,704

Financial income includes TEUR 77 of interest income (previous year: TEUR 368). In the previous year, this item included TEUR 1,914 of income from the discounting of provisions for contingent liabilities from the insolvency (see section 5.15).

The main items under financial expenses include TEUR 5,430 (previous year: TEUR 5,277) of interest arising from unwinding discounts applied to liabilities and provisions for contingent liabilities arising from the insolvency, TEUR 360 of utilization payments (previous year: TEUR 360), which are to be classified in economic terms as interest (see 5.16), TEUR 0 of amortization charges applied to financial assets (previous year: TEUR 274), and TEUR 77 of bill guarantee interest payments (previous year: TEUR 71).

As in the previous year, no financial income or expenses in relation to related parties occurred.



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4.10 INCOME TAX

The following section contains a presentation of deferred tax items. The following deferred tax items entered in the balance sheet relate to recognition and measurement differences for individual balance sheet items:

Deferred tax positions

in TEUR

12/31/2015 12/31/2014

Deferred tax liabilities

Intangible assets 70 22

Property, plant and equipment 23 82

Construction contracts 8,312 8,001

Provisions and liabilities 68 604

Offsetting -53 606

Total 8,420 9,315

Deferred tax assets

Property, plant and equipment 4,688 4,979

Inventories 4,405 4,072

Provisions and liabilities 457 6,175

Tax loss carryforwards 22,186 14,271

Reduction due to lack of offsetting possibility -17,190 -9,785

Offsetting -53 606

Total 14,493 20,318

The deferred tax assets are based mainly on extraordinary write-downs, which were not applied in the tax accounts by way of exercising of a tax option, and on valuation differences in the area of provisions and liabilities, as well as subsidiaries' tax loss carryforwards, which can be utilized in the future on the basis of existing hidden reserves pursuant to Section 8 c of the German Corporation Tax Act (KStG).

If it is anticipated that an existing deferred tax item cannot be utilized, the deferred tax assets that have been calculated are reduced due to a prospective lack of offsetting possibilities over the subsequent five years.

Due to the change of ownership (Section 8 c of the German Corporation Tax Act [KStG]) at the parent company as of January 8, 2016, tax loss carryforwards existing as of this date at both the parent company and the subsidiaries lapse, unless hidden reserves can be evidenced through a so-called "Section 8 c KStG Valuation Survey". This can only be assumed for two subsidiaries. Deferred tax assets of EUR 9.4 million have been capitalized for existing corporation tax and trade tax loss carryforwards of EUR 74.0 million. No deferred tax assets have been capitalized for corporation tax and trade tax loss carryforwards of EUR 42.6 million.

Overall, a surplus of deferred tax assets of EUR 6.1 million exists above the amount of recognized deferred tax liabilities. This relates in an amount of EUR 4.9 million to CT AG, and in an amount of EUR 1.2 million to another company that incurred a tax loss in the period under review. The tax assets are nevertheless regarded as having retained their value, as, following the successful restructuring, it is to be assumed that the companies will generate sufficiently high tax profit over the coming five years.

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With a corporation tax assessment dated May 19, 2015, the tax office has assessed the tax for centrotherm photovoltaics AG at a total of TEUR 13,842 for the 2013 assessment period. On the same date, the trade tax measurement assessment in an amount of TEUR 3,046 was received for the 2013 assessment period. The level of the assessed taxes reflects the reorganization gain that was achieved in the 2013 assessment year. Binding information is available from the tax office and the respective local authorities that the preconditions for an exemption of the taxes applying to the reorganization gain have been met. An application has been made, and approved, for suspension of enforcement and interest-free deferral until the final decision concerning the exemption of the assessed taxes. As part of the discontinuation of insolvency proceedings in 2013, the tax authorities approved a waiver of tax receivables due to the reorganization gains that were realized. The corresponding tax receivables were fixed in advance, and were issued in finalized form for the 2014 and 2015 calendar years after the conclusion of the taxation process. Given this, no related liabilities were recognized.

No notable deferred tax liabilities due to outside basis differences arose as of December 31, 2015 and December 31, 2014.

Corporation tax plus the Solidarity Surcharge amounts to 15.83 %. Trade tax amounts to approximately 14.0 %, which results in a total tax rate in Germany unchanged at around 30.0 %. The latter was used for the accrual and deferral of tax in the consolidated financial statements.

Tax income is as follows:

Income tax

1/1/2015- 1/1/2014- in TEUR 12/31/2015- 12/31/2014-

Deferred tax 4,930 14,306

Current income tax 1,296 367

Total 6,226 14,673

The reconciliation between the expected and the current tax expense is as follows:

Income tax

1/1/2015- 1/1/2014- in TEUR 12/31/2015- 12/31/2014-

Net profit/loss for the year before income tax 13,189 15,861

Expected income tax expense (30 %) 3,957 4,758

Tax relating to other accounting period 297 6

Effects from loss valuation

Recognition of previously unrecognized deferred taxes -6,067 -1,029

Non-recognition of deferred tax assets 7,523 10,807

Tax attributions and deductions 163 143

Other effects 354 -12

Total 6,226 14,673



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4.11 EARNINGS PER SHARE

In accordance with IAS 33 (Earnings per Share), earnings per share are calculated by dividing consolidated net earnings by the weighted average number of shares.

No measures occurred during the reporting period that resulted in dilution effects.

Earnings per share is calculated as follows:

Earnings per share

1/1/2015- 1/1/2014-

in EUR 12/31/2015- 12/31/2014-

Consolidated net profit/loss 6,962,805 1,187,637

Weighted average number of shares 21,162,380 21,162,380

Earnings per share 0.33 0.06

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5 NOTES TO THE CONSOLIDATED BALANCE SHEET

5.1 INTANGIBLE ASSETS

Intangible assets reported the following changes:

Changes in intangible assets:

in TEUR

Goodwill

Internally generated

intangible assets Other intangible

assets

Total

Cost

1/1/2014 113,129 1,339 78,447 192,915

Investments 0 0 290 290

Reclassifications 0 0 25 25

Disposals 0 0 -3 -3

12/31/2014 113,129 1,339 78,759 193,227

Investments 0 62 75 137

Disposals 0 0 -1,447 -1,447

12/31/2015 113,129 1,401 77,387 191,917

Amortization and impairment losses

1/1/2014 112,492 1,135 75,691 189,318

Additions 0 144 722 866

Disposals 0 0 -3 -3

12/31/2014 112,492 1,279 76,410 190,181

Additions 0 67 503 570

Disposals 0 0 -1,428 -1,428

12/31/2015 112,492 1,346 75,485 189,323

Net values

12/31/2014 637 60 2,349 3,046

12/31/2015 637 55 1,902 2,594

The goodwill is fully attributable to FHR Anlagenbau GmbH. Other intangible assets primarily include software patents of limited useful life.

Amortization and impairment losses relating to intangible assets comprise only TEUR 570 of amortization (previous year: TEUR 866), and no impairment losses. No reversals of impairment losses occurred (see section 2.24).

Patents and other industrial property rights at the FHR subsidiary are assigned.

Expenses for research and development amounted to a total of TEUR 7,349 in the period under review (previous year: TEUR 6,153).



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5.2 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment reported the following changes:

Changes in property, plant and equipment

in TEUR

Land and buildings

Technical plant

Operating and office

equipment

Plant under

construction

Total

Cost

1/1/2014 71,142 22,581 13,650 732 108,105

Investments 27 741 678 759 2,205

Reclassifications 0 732 0 -732 0

Reclassified as held for sale -4,414 0 -205 0 -4,619

Disposals -761 -2,034 -774 0 -3,569

12/31/2014 65,994 22,020 13,349 759 102,122

Investments 93 86 388 20 586


Transfers 0 806 0 0 806

Disposals -191 -759 -1,271 0 -2,221

12/31/2015 65,896 22,913 12,465 20 101,294

Depreciation and impairment losses

1/1/2014 23,308 19,092 11,127 594 54,121

Additions 3,143 883 841 0 4,867

Reclassified as held for sale -2,089 0 -186 0 -2,275


Disposals -759 -1,904 -723 0 -3,386

12/31/2014 23,603 18,665 11,059 0 53,327

Additions 1,328 926 699 0 2,952

Transfers 0 411 0 0 411

Disposals -173 -754 -1,151 0 -2,077

12/31/2015 24,758 19,248 10,607 0 54,613

Net values

12/31/2014 42,391 3,355 2,290 759 48,795

12/31/2015 41,138 3,665 1,858 20 46,681

The additions to property, plant and equipment relate mainly to technical plant, and to operating and business equipment.

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Of the depreciation and impairment losses, TEUR 2,951 comprises depreciation (previous year: TEUR 3,078), and TEUR 0 comprises impairment losses (previous year: TEUR 1,789). No reversals of impairment losses occurred (see section 2.24).

Land owned by FHR included in property, plant and equipment is encumbered with a land charge. Land charges of TEUR 5,282 (previous year: TEUR 5,282) serve to collateralize the company's guarantee and cash credit lines. Two charges on the land of CT AG are also registered. A partial amount of TEUR 7,500 of a TEUR 10,000 land charge served to collateralize a special-purpose real estate load. The loan that this collateralized was repaid in the reporting period. It was valued at TEUR 7,143 on the previous year's reporting date. A second subordinated land charge of TEUR 25,000 and the partial amount of TEUR 2,500 from the senior land charge of TEUR 10,000 served to collateralize the artificial insolvency loan agreements. These artificial insolvency loan agreements expired on December 31, 2015.

The due dates of the future minimum lease payments arising from the leased buildings are as follows:

Due dates of rental and lease payments arising from operating leases

in TEUR from 12/31/2015 from 12/31/2014

Up to one year 125 223

Longer than one year and up to five years 85 171

Longer than five years 0 0

5.3 FINANCIAL ASSETS

Financial assets relate exclusively to the carrying amounts of non-consolidated subsidiaries. These are as follows:

Financial assets

in TEUR

12/31/2015

12/31/2014

centrotechnics Automation Equipment Co. Ltd., Suzhou, China 0 0

centrotherm Management GmbH i.L., Blaubeuren 0 0

centrotherm photovoltaics India Pte. Ltd., Bangalore, India 8 8

centrotherm photovoltaics Korea Ltd., Suwon, Korea 29 29

centrotherm photovoltaics USA Inc., Atlanta, USA 1 1

centrotherm Power Solutions GmbH i.L., Vienna, Austria 0 0

centrotherm Solar Innovations GmbH, Wels, Austria 0 0

centrotherm Thermal Solutions Verwaltungs GmbH i.L., Blaubeuren 0 0

Changers GmbH i.L., Berlin 0 0

cruSible GmbH i.L., Berching 0 0

SOLMIC GmbH, Burghausen 0 0

Sunshine PV Corp., Hsinchu Industrial Park, Taiwan 0 0

TOV photovoltaics industries Ukraine, Zaporozhye, Ukraine 7 7

Total 45 45

SolMic GmbH, Burghausen, was merged with centrotherm cell & module GmbH, Blaubeuren, as the result of a contract dated December 16, 2014. Following the registration of the merger, centrotherm cell & module GmbH assumed all of the rights and



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obligations of SolMic GmbH by way of universal succession. No effects occurred to the Group's financial position and performance in 2015. The transaction was entered in the commercial register on February 26, 2015.

Following successful liquidation, the winding down of centrotherm cruSible GmbH i.L. is complete, and the company was deleted the from the commercial register on August 3, 2015.

Following successful liquidation, the winding down of centrotherm Management GmbH i.L. is complete, and the company was deleted the from the commercial register on April 13, 2015.

Following successful liquidation, the winding down of centrotherm Thermal Solutions Verwaltungs GmbH i.L. is complete, and the company was deleted the from the commercial register on December 14, 2015.

To secure the insolvency lending agreement, the lending bank was provided with an assignment commitment concerning the company's shares in its subsidiaries.

5.4 NON-CURRENT INCOME TAX RECEIVABLES

With the coming into force of the German Act concerning Accompanying Fiscal Measures to the Introduction of European Companies and the Modification of Further Fiscal Regulations on December 13, 2006, an unconditional claim to the refund of corporation tax credits arising from the period of the fiscal imputation procedure has arisen for the first time since the end of December 31, 2006 (Section 37 of the German Corporation Tax Act [KStG] new version). Since 2008, the credit has been paid out in ten equal annual installments every October. The present value of the corporation tax credit totaled TEUR 34 on the balance sheet date (previous year: TEUR 50), of which TEUR 16 was non-current (previous year: TEUR 32).

5.5 INVENTORIES

The reported inventory is composed as follows:

Inventories

in TEUR 12/31/2015 12/31/2014

Raw materials and supplies 15,498 14,452

Semi-finished goods and services 32,188 29,969

Finished goods 644 807

Total 48,330 45,228

The carrying amount of the impaired inventories, which are to be recognized at their lower net realizable value less costs yet to be incurred, totals TEUR 7,326 (previous year: TEUR 14,733). The balance of impairment losses amounted to TEUR 16,891 as of the balance sheet date (previous year: TEUR 32,557).

Work-in-progress and finished products in an amount of TEUR 540 (previous year: TEUR 1,009) were reclassified to property, plant and equipment in the reporting period. A reclassification of TEUR 145 (previous year: TEUR 0) from property, plant and equipment to work-in-progress also occurred in the year under review.

Inventories of CT AG and FHR have been assigned to collateralize credit claims. These comprise raw materials and supplies, work-in-progress, finished goods, services, and merchandise in segregated warehouses in an amount of TEUR 12,575 (previous year: TEUR 9,585).

5.6 RECEIVABLES RELATING TO CONSTRUCTION CONTRACTS

Receivables from construction contracts amounted to a total of TEUR 235,755 gross (previous year: TEUR 271,940), before impairment losses, and before offsetting with prepayments received. Receivables from construction contracts include TEUR 135

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of impairment losses (previous year: TEUR 815). No impairments that were expensed occurred in the 2015 financial year (previous year: TEUR 732). Impairment losses relating to receivables arising from construction contracts were consumed in an amount of TEUR 540 in the period under review (previous year: TEUR 376).

The attributable total costs for an existing large-scale project could no longer be determined clearly and calculated reliably in the reporting period. As a consequence, the cumulative sales revenues were reported to the level of the incurred contract costs in an amount of TEUR 227,208 (previous year, pro forma zero profit method: TEUR 174,400). The cumulative revenue that was still reported according to the percentage of completion method in the previous year amounted to TEUR 191,760.

The carrying amount from the percentage of completion method studied TEUR 8,547 as of the 2015 reporting date (previous year: TEUR 271,940), and the carrying amount from the zero profit method was reported at TEUR 227,208 (previous year: TEUR 0).

No reversals of impairment losses occurred in the 2015 financial year (previous year: TEUR 0).

Collateral retentions received from customers for construction contracts amounted to TEUR 0 (previous year: TEUR 0).

Under the receivables arising from construction contracts item, incurred order costs including related earnings contributions were offset with respective prepayments where positive balances arose in individual cases. The following list shows receivables from construction contracts both before and after offsetting with prepayments:

Receivables relating to construction contracts

in TEUR 12/31/2015 12/31/2014

Receivables from construction contracts (gross) 6,053 77,959

Impairment losses -135 -815

Offset with prepayments -4,746 -75,526

Total 1,172 1,618

If the offsetting of contract costs including related earnings contributions results in a negative balance including the advance payments received, the net amounts are reported among Liabilities from construction contracts (see also section 5.21).

5.7 TRADE RECEIVABLES

Trade receivables

in TEUR 12/31/2015 12/31/2014

Trade receivables (gross) 14,244 21,773

Specific adjustments -10,037 -12,122

General adjustments -28 -58

Total 4,179 9,593

In the 2015 financial year, specific adjustments were formed through estimating the respective individual case. General credit risk was reflected through a 1 % general itemized valuation allowance.

All trade receivables are due within one year.



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No standard payment targets are defined within the centrotherm Group due to the particularities of contractual regulations involved in construction contracts.

To secure the insolvency lending agreement, a global assignment of all of the company's trade receivables due from all third-party debtors was agreed with the lending bank.

As of the balance sheet date, no receivables existed beyond their agreed payment targets, but for which no valuation losses had been formed. The age structure of trade receivables as of December 31, 2015 is as follows:

Age structure of trade receivables

Overdue but not impaired

in TEUR

Total Neither overdue nor

impaired 1 to 30 days

31 to 60

days

61 to 90

days

More than

90 days

12/31/2015 4,207 2,218 840 124 158 867

12/31/2014 9,651 5,626 912 443 208 2,462

As of December 31, 2015, no indications existed that defaults had occurred to trade receivables that were neither overdue nor impaired. The following table presents the changes in both specific and general valuation allowances applied to the trade receivables position:

Changes in valuation allowances

in TEUR

Individual valuation

allowances

General valuation

allowances

Total

As of 1/1/2014 10,926 178 11,104

Recognized valuation allowances 1,196 -120 1,076

Addition 2,333 27 2,360

Reversal/consumption -1,137 -147 -1,284

As of 12/31/2014 12,122 58 12,180

Recognized valuation allowances -2,085 -30 -2,117

Addition 384 10 393

Reversal/consumption -2,469 -40 -2,510

As of 12/31/2015 10,037 28 10,063

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5.8 RECEIVABLES DUE FROM ASSOCIATES

Receivables due for associates relate exclusively to receivables due from subsidiaries that are not included in the consolidation scope. The receivables and valuation allowances are composed as follows as of the reporting date:

Receivables due from associates

in TEUR 12/31/2015 12/31/2014

TOV photovoltaics industries Ukraine, Zaporozhye, Ukraine 564 564

centrotherm photovoltaics Korea Ltd., Suwon, Korea 68 63

centrotherm photovoltaics India Pte. Ltd., Bangalore, India 158 137

centrotherm photovoltaics USA Inc., Atlanta, USA 195 22

Miscellaneous 35 3

Specific adjustments -564 -564

Total 456 225

These relate to receivables arising from clearing transactions. Valuation allowances were applied in the scope of identifiable default risks. Receivables have a residual term of up to one year.

To secure the insolvency lending agreement, a global assignment of all of the company's receivables due from associated companies was agreed with the lending bank.

5.9 PREPAYMENTS RENDERED

Prepayments of TEUR 1,567 as of December 31, 2015 (previous year: TEUR 10,757) include TEUR 10 of prepayments to non-consolidated subsidiaries (previous year: TEUR 24). The prepayments were primarily rendered for inventories.

5.10 OTHER CURRENT FINANCIAL ASSETS

Other current financial assets of TEUR 631 (previous year: TEUR 948) relate mainly to deposits of TEUR 193 (previous year: TEUR 670) and TEUR 50 of creditor accounts in debit (previous year: TEUR 136).

Valuation adjustments of TEUR 1,500 (previous year: TEUR 1,500) for identifiable default risks have been applied to TEUR 1,500 of loan receivables.



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5.11 OTHER CURRENT NON-FINANCIAL ASSETS

Other current non-financial assets with a residual term of up to one year as of the balance sheet date are composed as follows:

Other current non-financial assets

in TEUR 12/31/2015 12/31/2014

Non-deductible input tax 1,009 1,024

Accruals item 941 680

VAT receivables 773 2,802

Foreign tax receivables 44 2

Receivables due from staff 27 80

Miscellaneous 1 0

Total 2,795 4,588

The non-deductible input tax relates mainly to insolvency liabilities, and cannot be claimed until after the balance sheet date. Valuation allowances relating to input tax amounts based on insolvency liabilities amount to TEUR 816 (previous year: TEUR 816).

5.12 CASH AND CASH EQUIVALENTS

Cash and cash equivalents

in TEUR 12/31/2015 12/31/2014

Cash and currency holdings 24 34

Bank deposits 81,239 77,587

Short-term cash investments 11,529 36,446

Total 92,792 114,067

Bank deposits include TEUR 6,351 of cash lines arising from insolvency estate lending agreements (previous year: TEUR 26,080). Cash and cash equivalents are subject as of the balance sheet date to availability restrictions due to cash-advanced guarantees of bills in an amount of TEUR 2,867 (previous year: TEUR 2,593), and in an amount of TEUR 5,000 (previous year: TEUR 5,000) arising from pledged deposits for the insolvency estate lending agreement for a subsidiary. (see 7.1.3 Liquidity risk).

5.13 NON-CURRENT ASSETS AND GROUPS OF ASSETS HELD FOR SALE

Due to the intention to sell it in the short term, an operating and administrative building, along with fixtures and equipment, which belongs to the Silicon segment, was classified and measured as non-current assets held for sale pursuant IFRS 5 as of December 31, 2014. For this reason, the building, along with plants, was reported in the balance sheet as of December 31, 2014 under the "non-current assets and groups of assets held for sale" item with fair value less costs of disposal of TEUR 2,344. Cumulative losses of TEUR 254 were generated as a result of the complete disposal in 2015.

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5.14 EQUITY

The statement of changes in consolidated equity present the individual components of equity, and their changes during the period under review.

Subscribed capital

The subscribed capital of CT AG amounted to TEUR 21,162 as of December 31, 2015 (previous year: TEUR 21,162). It is split into 21,162,380 no par value ordinary shares (previous year: 21,162,380).

Approved capital

The Management Board is authorized to increase the company's issued share capital by August 17, 2016, with the assent of the Supervisory Board, once or on several occasions by a total of up to EUR 2,837,618 through issuing new ordinary bearer shares against cash or non-cash capital contributions (Approved Capital 2011/I). As a matter of principle, the new shares must be offered to shareholders for subscription (including by way of indirect subscription pursuant to Section 186 (5) Clause 1 of the German Stock Corporation Act [AktG]).

Subject to Supervisory Board approval, the Management Board is also authorized by the bylaws to exclude shareholders' statutory subscription rights in the following cases:

1. in the event of a capital increase carried out against cash capital contributions if the amount of the new shares does not substantially fall below the stock exchange price of already quoted shares of the same type and terms of issue within the meaning of Sections 203 (1) and (2), 186 (3) Clause 4 of the German Stock Corporation Act (AktG) at the time of final determination of the issuing amount. This exclusion of subscription rights shall be limited to a maximum total of 10 % of the company's share capital in existence when this authorization becomes effective, or, if this amount is less, when this authorization is exercised. To this limit shall be added shares sold or issued during the term of this authorization in direct or corresponding application of Section 186 (3) Clause 4 of the German Stock Corporation Act (AktG) under exclusion of statutory subscription rights. Also to be added are shares that are issued to service warrant and/or conversion rights arising from convertible bonds or bonds with warrants, or from participation rights, to the extent that these bonds or participation rights are issued during the duration of this authorization in corresponding application of Section 186 Paragraph 3 Clause 4 of the German Stock Corporation Act under exclusion of subscription rights;

2. in the case of a capital increase against non-cash capital contributions, in particular for the purchase of companies, interests in companies or parts of companies;

3. in order to reconcile residual amounts;

4. to grant subscription rights to bearers of conversion or warrant rights arising from debentures to be issued by the company or an associated company; and

5. in order to issue shares as employee shares to staff of the company or its associated companies.

The bylaws also authorize the Management Board, with the approval of the Supervisory Board, to specify the further details of capital increases from approved capital.

Capital reserves

The capital reserves amounted to TEUR 77,799 as of December 31, 2015 (previous year: TEUR 77,777). In the 2015 financial year, the majority shareholder added TEUR 22 to capital reserves due to a receivables waiver in accordance with the regulations of the insolvency plan.

Other reserves

The other reserves include items that can be recycled subsequently to the income statement. The other reserves exclusively comprise the currency reserve as of the balance sheet date.



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Currency reserve

The currency reserve of TEUR 667 (previous year: TEUR 468) comprises differences arising from the translation of foreign subsidiaries' financial statements.

Application of the earnings of CT AG

In its separate financial statements prepared according to the German Commercial Code (HGB), CT AG reports net income of TEUR 32,572 for the 2015 financial year, which is to be carried forward to a new account.

The net loss included in the retained earnings of CT AG showed the following changes during the period under review:

Change in the deficit

in TEUR Amount

Balance as of 1/1/2014 -57,552

Net profit/loss for the year 14,536

Balance as of 12/31/2014 -43,016

Net profit/loss for the year 32,572

Balance as of 12/31/2015 -10,444

5.15 PROVISIONS FOR CONTINGENT LIABILITIES ARISING FROM THE INSOLVENCY

The reduction in contingent liabilities from the insolvency is mainly due to a modified appraisal of a lawsuit due to new information, which resulted in a TEUR 20,601 release of the related provision.

The contingent liabilities from the insolvency that continue to exist as of December 31, 2015 were reclassified to current liabilities as a result of the payment obligation becoming due short-term as a result of the finding (see section 5.20).

5.16 FINANCIAL LIABILITIES ARISING FROM THE INSOLVENCY PROCEEDINGS

The financial insolvency liabilities were reclassified from non-current to current liabilities in the 2015 financial year. In June 2015, the creditors' committee of CT AG approved the proposal of Sol Futura Verwaltungsgesellschaft mbH (Sol Futura), which holds 80 % of the shares in CT AG, to extend until December 31, 2017, as a matter of principle, the realization period for the shares that it holds in CT AG. As a consequence, the previous deferral until December 31, 2015 of the insolvency receivables of the unsubordinated creditors pursuant to the respective insolvency plan, has also been extended until December 31, 2017, as a matter of principle. By way of divergence from the aforementioned regulation, the extension of the realization period, and consequently also the deferral of the insolvency receivables, ends one month after execution of the agreement concerning the realization or disposal of the administration assets, which could also occur short-term, with the resultant liabilities thereby requiring qualification as short-term (current). This materialized as a result of Sol Futura's disposal of an 80 % interest in centrotherm photovoltaics AG to Solarpark Blautal GmbH on January 8, 2016. The financial liabilities from the insolvency proceedings of CT AG and its former subsidiary centrotherm thermal solutions GmbH & Co. KG were serviced from the liquidity of CT AG in early February 2016 (see section 5.25).

5.17 OTHER NON-CURRENT NON-FINANCIAL LIABILITIES

Other non-current non-financial liabilities relate to government grants in the form of investment allowances that are unwound pro rata temporis.

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5.18 TAX PROVISIONS

Tax provisions amounted to TEUR 3,135 as of December 31, 2015 (previous year: TEUR 3,159). These comprise mainly income tax liabilities that have been incurred but not yet paid.

5.19 OTHER CURRENT PROVISIONS

Other current liabilities are composed as follows:

Other current provisions

in TEUR Follow-up

costs Warranty Litigation costs Impending

losses Total

As of 1/1/2014 583 5,312 402 44 6,341

Utilization / release FY 2014 -474 -4,922 -240 -44 -5,680

Addition FY 2014 411 3,344 902 8 4,665

Balance 12/31/2014 / 1/1/2015 520 3,734 1,064 8 5,326

Utilization / release FY 2015 -491 -1,797 -119 -8 -2,415

Addition FY 2015 42 299 1,208 0 1,549

Transfer 0 0 1,138 0 1,138

As of 12/31/2015 71 2,236 3,291 0 5,598

The warranty provisions were generally calculated by applying an unchanged rate of between 0.25 % and 2.0 % to the guarantee-related revenues over the warranty period, as well as from the measurement of specific risks. Provisions for litigation costs were formed mainly for litigation. The provisions the pending losses arise particularly from already anticipated project losses.

The provisions generally result in outgoing payments in the following year.

5.20 PROVISIONS FOR CONTINGENT LIABILITIES ARISING FROM THE INSOLVENCY

Contingent liabilities that might require servicing as part of the insolvency plans are recognized. Such contingent liabilities were treated as non-current liabilities in the previous year's financial statements (see section 5.15). The obligations were measured according to the probability of their being utilized, and recognized at fair value, which corresponds to the carrying amount on the reporting date. The unwinding of the discount as of the reporting date resulted in TEUR 1,108 (previous year: TEUR 767) of interest expenses.



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Annual Report 2015

5.21 LIABILITIES ARISING FROM CONSTRUCTION CONTRACTS

All of the costs including related earnings contributions are reported under this item, which are offset with the corresponding prepayments that are received in order to create a net balance on the liabilities side of the balance sheet. Obligations of TEUR 38,142 existed as of December 31, 2015 (previous year: TEUR 45,194).

Liabilities arising from construction contracts

in TEUR 12/31/2015 12/31/2014

Receivables from construction contracts (gross) 229,702 193,981

Impairment losses 0 0

Offset with prepayments -267,844 -239,175

Total 38,142 45,194

Please refer to note 5.6 concerning receivables relating to construction orders.

5.22 TRADE PAYABLES

Trade payables amounted to TEUR 9,262 as of December 31, 2015 (previous year: TEUR 10,072).

The trade payables have a remaining term of up to one year.

5.23 PREPAYMENTS RECEIVED

Prepayments received of TEUR 36,179 (previous year: TEUR 36,922) relate to prepayments that the Group has received in advance of future rendering of services. As a consequence, no offsetting occurs with the positive or negative balance arising from construction orders.

5.24 LIABILITIES TO RELATED PARTIES

Liabilities to related parties are composed as follows as of the balance sheet date:

Liabilities to related parties

in TEUR 12/31/2015 12/31/2014

centrotherm Elektrische Anlagen GmbH & Co. KG 3 3

centrotherm clean solutions GmbH & Co. KG 32 32

Miscellaneous 10 10

Total 45 45

Liabilities to related parties have a residual term of up to one year, and relate to supply and service relationships.

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113

5.25 FINANCIAL LIABILITIES ARISING FROM THE INSOLVENCY PROCEEDINGS

After the creditors and shareholders accepted the insolvency plans, the Ulm District Court confirmed the plans with legal efficacy of the court ruling on May 14, 2013. The regulations contained in the insolvency plans, separate agreements with individual creditors, as well as other contractual arrangements and restructuring measures are decisive in determining the recognition and measurement of the insolvency liabilities. The insolvency liabilities are composed as follows:

Financial liabilities arising from the insolvency proceedings

in TEUR 12/31/2015 12/31/2014

Determined insolvency liabilities 48,184 4,475

Liabilities determined for default 4,971 0

Total 53,155 4,475

Determined insolvency liabilities

The determined insolvency liabilities are deferred without interest until December 31, 2015 inclusive. The TEUR 43,709 increase in the insolvency liabilities is based mainly on the TEUR 39,724 (see section 5.16) reclassification from non-current liabilities, and the accrued interest of TEUR 3,094 applied to liabilities recognized at present value in the previous year.

Pursuant to the insolvency plan of CT AG, Sol Futura can make early call on a partial amount of TEUR 5,000 of the determined and deferred receivables in order to cover current costs. As of the balance sheet date, TEUR 1,250 of this amount had been called upon (December 31, 2014: TEUR 525).

Liabilities determined for default

Liabilities determined for default in an amount of TEUR 4,971 relate to liabilities that are to be satisfied separately on the basis of existing collateral. These relate primarily to financial liabilities where the lenders waive assertion of bankers' rights of lien (arising from their general terms and conditions of business) against CT AG until December 31, 2015 inclusive, pursuant to the amendment agreements to the insolvency estate lending agreement dated April 12, 2013.

Total interest in an amount of TEUR 4,322 was unwound in the period under review (previous year: TEUR 4,510). This was reported under financial expenses.



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Annual Report 2015

5.26 OTHER CURRENT FINANCIAL LIABILITIES

Other current financial liabilities are composed as follows:

Other current financial liabilities

in TEUR 12/31/2015 12/31/2014

Personnel liabilities 2,902 7,676

Liabilities arising from commissions 822 1,178

Supervisory Board 249 194

Costs for creditors' committee 229 0

Insurance premiums outstanding 177 193

Debtor accounts in credit 121 56

Travel and entertainment expenses 82 147

Guarantee credit interest payments 0 229

Miscellaneous 706 486

Total 5,288 10,159

Personnel liabilities of TEUR 1,250 (previous year: TEUR 3,933) relate to current liabilities arising from restructuring measures.

The liabilities have a residual term of up to one year.

5.27 OTHER CURRENT NON-FINANCIAL LIABILITIES

Other current non-financial liabilities are composed as follows:

Other current non-financial liabilities

in TEUR 12/31/2015 12/31/2014

Personnel obligations 1,884 1,364

Value added tax 15 99

Miscellaneous 43 498

Total 1,942 1,961

Personnel liabilities primarily comprise obligations arising from vacation entitlements, overtime and social security contributions. The liabilities have a residual term of up to one year.

5.28 ADDITIONAL INFORMATION ABOUT FINANCIAL INSTRUMENTS

The following tables present the carrying amounts and fair value of individual financial assets and liabilities for the various measurement categories as per IAS 39. The tables also show their allocation to corresponding balance sheet items. Apart from the non-current insolvency liabilities, all of the reported carrying amounts of the financial assets and liabilities that are measured at amortized cost and reported in the consolidated balance sheet as of December 31, 2015 are equivalent to their fair values.

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Financial instruments as of 31.12.2015

Measurementcategory

as defined inIAS 39

Carryingamount

12/31/2015Fair Value

12/31/2015

in TEUR Amortized costFair Value

Assets

Financial assets AfS 45 45 45

Receivables relating to construction contracts 1,172 1,172

Trade receivables LaR 4,179 4,179 4,179

Receivables due from associates LaR 456 456 456

Other current financial assets LaR 631 631 631

Cash and cash equivalents LaR 92,792 92,792 92,792

Liabilities

Liabilities arising from construction contracts 38,142 38,142

Trade payables FLAC 9,262 9,262 9,262

Liabilities to associates FLAC 283 283 283

Liabilities to related parties FLAC 45 45 45

Other current financial liabilities FLAC 14,634 14,634 14,634

of which aggregated according to IAS 39measurement categories:

Loans and Receivables (LaR) 124,838 124,838 124,838

Available for Sale (AfS) 45 45 45

Financial Liabilities Carried at Amortised Cost (FLAC) 88,074 88,074 91,045

Measurement acc. to IAS 39

recognised in equity

Measurementcategory

as defined inIAS 39

Carryingamount


12/31/2015


Assets







Liabilities












Measurementcategory

as defined inIAS 39

Carryingamount


12/31/2015


Assets







Liabilities












Measurementcategory

as defined inIAS 39

Carryingamount


12/31/2015


Assets







Liabilities












Measurementcategory

as defined inIAS 39

Carryingamount

31.12.2015Fair Value

31.12.2015


Assets

Investments AfS 45 45 45

Receivables relating to production orders 1,172 1,172


Receivables due from equity interests LaR 456 456 456



Liabilities




Financial liabilities arising from insolvency proceedings FLAC 53,155 53,155 53,155







recognised in equityMeasurement

categoryas defined in

IAS 39

Carryingamount


12/31/2015


Assets







Liabilities












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Annual Report 2015

Measurementcategory

as defined inIAS 39

Carryingamount


12/31/2014


Assets





Receivables due from related parties LaR 5 5 5



Liabilities

Financial liabilities arising from insolvency proceedings (non-current) FLAC 63,196 63,196 66,167












Financial instruments as of 31.12.2014Measurement


IAS 39

Carryingamount


12/31/2014


Assets








Liabilities












(non-current)

Measurementcategory

as defined inIAS 39

Carryingamount

31.12.2014Fair Value

31.12.2014


Assets

Investments AfS 45 45 45

Receivables relating to production orders 1,618 1,618


Receivables due from equity interests LaR 225 225 225

Receivables due from related companiesand persons LaR 5 5 5



Liabilities

Long-term insolvency liabilities FLAC 63,196 63,196 66,167



Liabilities to equity interests FLAC 127 127 127









Measurementcategory

as defined inIAS 39

Carryingamount


12/31/2014


Assets








Liabilities













Measurementcategory

as defined inIAS 39

Carryingamount


12/31/2014


Assets








Liabilities












recognised in equityMeasurement


IAS 39

Carryingamount


12/31/2014


Assets








Liabilities













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117

Fair value measurement

No financial instruments that are measured at fair value exist as of the balance sheet date.

The following table shows to which hierarchy level the non-current assets and liabilities belong which are not regularly measured at fair value, but for which fair value is to be additionally stated:

Measurement hierarchy for non-current financial assets and liabilities

in TEUR

Level 1 Level 2

Level 3

Total

Insolvency liabilities (FLAC) 12/31/2015 0 0 0 0

12/31/2014 0 66,167 0 66,167

Level 2

The fair values of financial instruments that are not traded on active markets are measured applying valuation methods. These are based on observable inputs such as credit spreads and yield curves. The financial instrument is to be allocated to Level 3 if one or several of the significant inputs are based on non-observable market data.

Level 3

Level 3 fair values are calculated with the help of valuation methods with non-observable inputs based on management's assumptions about expected future cash flows and appropriate risk-adjusted interest rates.

The TEUR 45 of financial assets classified as "available-for-sale financial assets (AfS)" relate to shares in incorporated entities. These interests are measured at cost as no prices are quoted for them on active markets, as a consequence of which fair value cannot be determined reliably. For this reason, measurement is at the lower of acquisition cost, or the present value of estimated future cash flows (IAS 39.66).

The carrying amounts of the current financial assets and liabilities recognized in the consolidated balance sheet provide a good approximation of their fair values.



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Annual Report 2015

Expenses, income, losses and gains from financial instruments are allocated to the individual IAS 39 measurement categories as follows:

Expenses, income, losses and gains from financial instruments

in TEUR

Arising from interest and

distribution claims

Impairment

losses

Reversals of impairment

losses

Other net gains/losses

FY 2015

Loans and receivables (including cash and cash equivalents) 0 -2,131 3,822 0

Assets in the available-for-sale category 0 0 0 0

Liabilities measured at amortized cost -4,322 0 395 0

FY 2014

Loans and receivables (including cash and cash equivalents) 0 -4,190 1,481 0

Assets in the available-for-sale category 0 -274 0 -3

Liabilities measured at amortized cost -4,510 0 821 0

Pursuant to IFRS 7.20, the expenses, income, losses and gains by category of financial instrument include interest, impairment losses, reversals of impairment losses, and other net gains and losses. The net financial result (see section 4.9) includes the net interest result on loans and receivables, and liabilities that are measured at amortized cost.

Impairments in the available for sale financial assets category relate to associated companies that are not consolidated (see section 5.3 Financial assets).

6 NOTES TO THE CASH FLOW STATEMENT

6.1 CASH FLOW FROM OPERATING ACTIVITIES

Cash flow from operating activities is derived indirectly from the profit or loss before tax (EBT). This indirect calculation entails making adjustments to balance sheet items in connection with changes to the scope of consolidation. The negative cash flow from operating activities amounts to TEUR 2,799 (previous year positive cash flow of: TEUR 15,354).

Cash flow from operating activities includes TEUR 445 of interest paid (previous year: TEUR 445) and TEUR 68 of interest received (previous year: TEUR 55).

6.2 CASH FLOW FROM INVESTING ACTIVITIES

The centrotherm Group employed funds of TEUR 724 to acquire property, plant and equipment, and intangible assets (previous year: TEUR 1,462). Payments received from the disposal of intangible assets and of property, plant and equipment amounted to TEUR 290 (previous year: TEUR 185). Payments received from the disposal of non-current assets held for sale amounted to TEUR 2,090 (previous year: TEUR 0). Payments received for the disposal of fully consolidated subsidiaries of TEUR 190 in 2014 relate to a purchase price payment for GP Solar GmbH, which was sold with effect as of April 30, 2013. The positive cash flow from operating activities amounts to TEUR 1,656 (previous year: negative cash flow of: TEUR 1,087).

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119

6.3 CASH FLOW FROM FINANCING ACTIVITIES

Bank loans of TEUR 20,132 were repaid in the reporting period (previous year: TEUR 0).

6.4 CASH AND CASH EQUIVALENTS AT END OF PERIOD

Financial resources exclusively comprised the cash and cash equivalents of TEUR 92,792 as reported in the consolidated balance sheet (previous year: TEUR 114,067). These comprise cash and currency positions, bank deposits and short-term time deposits. Cash and cash equivalents are subject as of the balance sheet date to availability restrictions due to cash-advanced guarantees of bills in an amount of TEUR 2,867 (previous year: TEUR 2,593), and in an amount of TEUR 5,000 (previous year: TEUR 5,000) arising from pledged deposits for the insolvency estate lending agreement for a subsidiary. Cash and cash equivalents include deposits arising from insolvency estate lending agreements in an amount of TEUR 6,351 (previous year: TEUR 26,080) (see section 5.12).

7 OTHER NOTES

7.1 RISK MANAGEMENT REPORT

7.1.1 Management of financial risks

As a globally operating group, centrotherm is exposed to credit, liquidity, interest-rate, currency and raw materials risks as part of its normal operating activities. These can exert a considerable impact on financial position and performance.

Financial risk management aims, firstly, to identify and measure financial risks emanating from the operating business, and to counter them through the development and implementation of strategies. Where necessary, centrotherm deploys appropriate financial instruments in order to offset risk. No derivative financial instruments existed as of the balance sheet date, and as of the date when these financial statements were released.

The following section considers individual risk, as well as risk management. The risk report included in the management report provides further information about the management of financial risks.

7.1.2 Foreign currency risk

Currency risks arise if receivables, liabilities, debt, cash and cash equivalents, and planned transactions are denominated, or will be denominated, in a currency that is not the company's local currency (the euro). The quite predominant portion of our customer orders outside the Eurozone are also invoiced in euros, while significant components and raw materials are also purchased on the basis of the euro currency. In the case of large-scale projects – such as currently with the Qatar project in the Silicon segment – the necessity exists in some cases to purchase materials or services locally, and to pay in a currency other than the euro. centrotherm regularly monitors local currency trends for large-scale projects, taking these into account in its ongoing calculations. Where significant foreign currency risks arise in specific cases, such risks relating to individual projects are hedged by deploying forward currency transactions. No corresponding forward transactions existed as of the reporting date.

Apart from some of the cash, trade payables and trade receivables, the significant non-derivative financial instruments are denominated mainly in the company's functional currency. For this reason, currency exchange rate changes affect results mainly only in relation to these foreign currency items.

If the euro were to appreciate (depreciate) by 10 % against the Taiwan dollar, a negative (positive) effect of TEUR 327 (TEUR 399) would arise for earnings before interest and tax (EBT). The corresponding previous year's figures were TEUR 226 (TEUR 276).

If the euro were to appreciate (depreciate) by 10 % against the Chinese renminbi, a negative (positive) effect of TEUR 134 (TEUR 164) would arise for earnings before interest and tax (EBT). The corresponding previous year's figures were TEUR 119 (TEUR 146).



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Annual Report 2015

If the euro were to appreciate (depreciate) by 10 % against the Qatari riyal, a positive (negative) effect of TEUR 152 (TEUR 185) would arise for earnings before interest and tax (EBT). The corresponding previous year's figures were TEUR 0 (TEUR 0).

7.1.3 Liquidity risk

Liquidity risk generally comprises a situation where the Group might be unable to meet its financial obligations – such as the repayment of operating trade payables – on time and sufficiently. Transparency in relation to future cash flows is required in order to counter liquidity bottlenecks at an early juncture through liquidity management measures or appropriate financing activities. Our liquidity requirements are calculated on the basis of Group-wide, short-term rolling liquidity planning, which is generally updated weekly, and monitored constantly by the risk management function.

In order to secure liquidity during and following the discontinuation of insolvency proceedings, the Group entered into agreements concerning the extension of so-called artificial insolvency estate loans that regulate control over existing bank deposits (bank liens). The arrangements relating to artificial insolvency loans had a contractual, non-cancellable term until December 31, 2015. The collateralized insolvency liabilities were repaid at the end of 2015 and in early January 2016 respectively, which discontinued not only the bank liens, but also the arrangements relating to the artificial insolvency loans.

With the sale by Sol Futura Verwaltungsgesellschaft mbH (Sol Futura) of its 80 % interest in CT AG to the new investor and majority shareholder Solarpark Blautal GmbH, which became effective with the closing of the agreement in early January 2016, the collateralized insolvency liabilities from the insolvency phase of CT AG and of one of its former subsidiaries fell due for payment at the end of one month after the closing. Pursuant to the insolvency plans and the creditor committee resolution passed in June 2015, the creditors had deferred without interest some of their insolvency liabilities until the end of 2017 at the latest. To secure the liquidity of CT AG, a financing agreement was concluded as part of the disposal of the interest by Sol Futura.

After the reporting date, CT AG met its financial obligations arising from its insolvency plan and the insolvency plan of its former subsidiary centrotherm thermal solutions GmbH & Co. KG. This did not necessitate utilization of funds from the financing facility arranged in December 2015.

When a new order is received, it is frequently necessary to refinance orders of materials and part of the production process. With a newly issued cover note from a credit insurer in the 2015 reporting year, longer payment targets can be implemented with suppliers again. Some customers have demanded bill guarantees that still need to be collateralized with cash deposits. As of the balance sheet date, TEUR 2,867 of the cash was subject to restricted availability due to cash deposits required for guarantees of bills (previous year: TEUR 2,593), as well as TEUR 5,000 arising from assigned deposits for the insolvency estate lending agreement for a subsidiary (December 31, 2014: TEUR 5,000). A high level of new order intake could create financing gaps which might delay the processing of orders, and which might need to be closed through external working capital financing lines. The Management Board of CT AG assumes that the liquidity available as part of the EUR 25 million financing facility that was arranged in December 2015 is sufficient to cover such prefinancing requirements.

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Notes to the Consolidated Financial Statementscentrotherm photovoltaics


121

The contractual due dates of the Group's financial liabilities are as follows:

Contractual due dates as of 12/31/2015

in TEUR up to 3

months 4 to 12 months 1 to 5

years more

than 5 years

Total

Financial liabilities arising from the insolvency proceedings 53,155 0 0 0 53,155

Trade payables 9,262 0 0 0 9,262

Liabilities to associates 283 0 0 0 283

Liabilities to related parties 45 0 0 0 45

Other current financial liabilities 5,288 0 0 0 5,288

Total 68,033 0 0 0 68,033

Contractual due dates as of 12/31/2014

in TEUR up to 3

months 4 to 12 months 1 to 5 years

more than 5

years

Total

Financial liabilities arising from the insolvency proceedings 0 0 63,196 0 63,196

Trade payables 10,072 0 0 0 10,072

Liabilities to associates 127 0 0 0 127

Liabilities to related parties 45 0 0 0 45

Other current financial liabilities 14,634 0 0 0 14,634

Total 24,878 0 63,196 0 88,074

7.1.4 Interest-rate risk

Only minor interest-rate risk exists currently in relation to the financial obligations. New interest-rate risks might nevertheless emerge in the future from a utilization of the financing arrangement concluded in December 2015, any future external debt financing of new operating business, or investment spending on selected development projects.

The company has refrained from a sensitivity analysis as required by IFRS 7, as a change to the market interest-rate level as of the reporting date would have exerted only a minor effect on results and/or equity.

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7.1.5 Raw materials price risk

centrotherm requires various metals, in particular, copper, iron, silver and platinum, as well as raw materials such as quartz, silicon and energy, for its production processes. Risks arise particularly from the high volatility of energy and raw materials prices. Price changes can affect our manufacturing costs. In order to minimize risks, the centrotherm Group constantly conducts analyses of raw material price trends and their effects on its value chain. No hedging requirements existed in the past, and the market appraisal of the centrotherm Group suggests that none exist currently.

7.1.6 Credit risk

Credit risk, also referred to as counterparty risk or default risk, exists when a contractual partner's liquidity position may give rise to the risk of a partial or complete default on contractually agreed payments or services. In order to avoid receivables default, the centrotherm Group examines its business partners' credit ratings before entering into contracts. To provide further cover, the centrotherm Group frequently agrees payment terms with its customers according to the progress of work and services, which are secured by way of commercial letter of credit. No notable concentration of credit risk exists. The management is consequently convinced that no further risk provisioning is required above and beyond the impairment losses that have already been recognized.

The receivables management function is responsible for supervising open items. Individual positions are monitored at regular meetings between the finance area and sales and project managers, in order to institute receivables collection measures at an early stage. Default risk on cash investments and the cash position is reduced by distributing such positions among different financial service-providers. Their credit ratings are monitored regularly.

The Group's maximum default risk corresponds to the carrying amount of the financial assets on the balance sheet date.

7.1.7 Legal risks

Changes to the political and regulatory environment in countries where we are present, such as regulations relating to import and export controls, customs regulations or other trade barriers, as well as price and currency controls, could negatively impact our business on various national markets, negatively impact our revenues and profitability, and make it difficult for us to repatriate earnings. Legal uncertainties existing in some countries could also greatly restrict the centrotherm Group's ability to enforce its claims and rights. As an internationally operating Group, we conduct business activities with customers in countries that are subject to export control regulations, sanctions or other forms of trade restrictions that are imposed by the USA, the European Union, or other countries or organizations. We could be exposed to the risk of penalties, sanctions or reputational damage as a consequence.

Revenue generated in emerging economies makes a considerable contribution to our total revenue. We are assuming that this will remain the case in the future. Business activities in emerging economies entail various risks such as political and economic instability, and the failure to respect cultural differences – such as business practices and working conditions – GDP volatility, the potential nationalization of private assets, uncertainties surrounding legal and tax systems, and the imposition of currency restrictions. Our operating activities in emerging economies could also be hampered by state support for respective local industries. Especially in China and the MENA region, legal systems are still in development, and are subject to very differing types of change. The occurrence of these or similar risks arising from our international business activities could exert a considerable negative impact on our business position, net assets, financial position and results of operations.

Complex tax regulations both in Germany and abroad, and potential differing interpretation of them by German and foreign tax authorities, can result in taxation that differs from the Group's expectation. A risk also exists when processing orders abroad in relation to the appropriate notification and accounting processing of fiscal operations. Further tax consequences could also arise from the reorganization remission if – contrary to expectations – not all of the preconditions of the remission that were connected with the tax deferral and tax remission were to be met. In such instances, the actual tax expense would differ from the accounting tax expense, and additional provisions or expenses that were previously unrecognized in the financial statements would be required for supplementary taxation and penalty payments. We counter such risks through engaging German and foreign advisers on all business transactions of relevance to taxation. Recourse is made to such advisers at an early stage in order to already integrate tax aspects into contract structures.

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123

Risks from litigation and regulatory procedures in which the Group is currently involved, or which might occur in the future, exist for the centrotherm Group. These include, for example, litigation and/or similar proceedings, regulatory investigations and procedures due to the occurrence of typical corporate and project risks such as, in particular, the non-contractual delivery of goods or services, product liability, product defects, quality problems, the infringement of intellectual property, infringements against environmental and/or occupational health and safety law regulations, non-compliance with tax regulations, and/or alleged or presumed infringements of prevailing law.

The Qatar project comprises total order volume of EUR 271 million. The realization of the Qatar project can generate the following risks, in particular, that are characteristic of large-scale plant engineering projects:

• Defects in contract structure

• Errors in order calculation

• Additional costs due to technical modifications and process experience ("lessons learned"; technology risk)

• Failure to deliver product specifications that have been committed to

• Risk of project delays on the customer side

• Supplier risk (supply delays, insufficient quality, rising material costs)

• Tax and transfer price risks

Such risks can delay project completion, triggering high penalties. To reduce these risks, centrotherm relies on project organization that systematically identifies and measures such risks, and that implements any countermeasures that are required. The liability risk of the SiTec GmbH subsidiary is contractually limited to an amount equivalent to 45 % of the total order volume. Ongoing delays have occurred with this large-scale project that have resulted in additional costs for SiTec GmbH. SiTec GmbH cannot bear these additional costs without raising additional liquidity that extends above and beyond the agreed purchase price. To ensure that this project is continued, the customer issued a letter of comfort in March 2016 assuring that it will provide SiTec GmbH with the financial resources it requires to complete the contract, while not declaring an increase in the total purchase price as a consequence, however. Given the additional costs that the project delays generate, SiTec's significant dependency on this customer, as well as further outstanding new contracts, SiTec GmbH faces a going concern risk. To secure the prepayments and the completion of the contract, guarantees by CT AG of TEUR 31,615 existed via a bank as of the balance sheet date. After the balance sheet date, the customer returned these guarantees, and exchanged them for a new bank guarantee of TEUR 22,100. CT AG for its part has in turn received a counter-guarantee of TEUR 7,500 from one of its shareholders.

With a letter dated June 13, 2013, CEEG, a subsidiary of Société Nationale de l'Electricité et du Gaz (Sonelgaz), has notified the consortium consisting of centrotherm and Kinetics Germany GmbH that it was terminating the contract to construct a fully integrated solar module factory in Algeria. The original project volume amounted to around EUR 290 million. The consortium doubts the legality of this termination, and centrotherm has brought a lawsuit against CEEG for loss compensation. Proceedings are being arbitrated at the International Court of Arbitration (ICC) in Geneva. centrotherm does not anticipate an ICC ruling before the end of 2016. To secure the TEUR 21,926 of prepayments received, and the completion of the contract, CT AG has provided guarantees of TEUR 45,471 through EulerHermes Kreditversicherungs-AG. Potential utilization of the guarantees, and any loss compensation claims brought against CT AG, would be included in the regulations of the insolvency plan. If the consortium and CT AG were to lose the case, the awarded loss compensation claims and guarantees (in the respective level of the utilization) would fall due for payment at the level of 30 %. Based on the current status of proceedings, centrotherm does not describe a high probability to a decision in favor of the consortium.

The results of such litigation and proceedings could inflict considerable damage on the company's business, reputation, or on the centrotherm brand. The centrotherm Group forms provisions for obligations arising from litigation and proceedings in line with the likelihood and level of utilization, to the extent that this can be determined sufficiently precisely. Following the conclusion of the respective litigation proceedings, it might nevertheless be established that the Group's provisions prove insufficient to cover all losses or expenses. The Group might also be required to bear lawyers' fees and other legal defense costs to a considerable extent, despite it having won the main action in such litigation and proceedings.



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Staff members, customers or suppliers gain an insight into technical details and specifications when manufacturing and selling centrotherm products. In order to protect the intellectual property and know-how of the centrotherm Group, its developments are sufficiently patented, and confidentiality agreements are generally concluded with all parties.

Each of these risks could exert considerable disadvantageous effects on the business position, financial position and performance of the centrotherm Group.

Please refer to the report on opportunities and risks contained in the management report concerning further risks arising from individual segments.

7.1.8 Capital management

The Group manages its capital with the objective of ensuring that it continues in the future to be able to pay its debts, have sufficient liquidity available, and maintain its intrinsic financial value, as well as grow the company's long-term value. To secure the liquidity of CT AG, a financing agreement was concluded as part of the disposal of the interest by Sol Futura. The centrotherm Group utilizes important key indicators such as the equity ratio and leverage in order to manage the Group. The Group is endeavoring to increase its equity ratio. The Group is currently giving priority to short-term cash availability over interest-optimized investment forms. This entails ensuring that all Group companies can operate under the going concern assumption, as a matter of principle. The overall strategy is unchanged compared with the 2014 financial year.

The capital that the Group manages consists of liabilities, cash and cash equivalents, and equity. This is composed of subscribed capital, the capital reserves, the Group reserves, other reserves, and the consolidated net loss. The capital structure can be managed by way of adjusting dividends, capital reductions, issuing new shares, and issuing financial instruments that qualify as equity according to IFRS. The centrotherm Group endeavors to achieve a capital structure that is appropriate to its business risk. The debt positions of individual Group are monitored by observing the relationship between net debt (total liabilities less cash and cash equivalents) and equity. In certain circumstances, Group land that is not required for operational purposes is sold in order to reduce debt or increase liquidity.

Leverage is calculated as follows:

Leverage

in TEUR 12/31/2015 12/31/2014

Total liabilities 165,502 218,796

Cash and cash equivalents 92,792 114,067

Net debt 72,710 104,729

Equity 50,297 43,113

Net debt to equity ratio 1.45 2.43

The parent company is subject to minimum capital requirements for public stock corporations. The Group constantly monitors compliance with these requirements. These requirements were complied with during the 2015 financial year.

7.2 CONTINGENT LIABILITIES AND OTHER FINANCIAL OBLIGATIONS

7.2.1 Guarantee credits

As of the reporting date, the Group had access to a bill guarantee facility of TEUR 31,300 (previous year: TEUR 30,400 as well as a credit line of TEUR 25,000 (previous year: TEUR 900).

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125

In addition to this, TEUR 77,086 of guarantees of bills existed, mainly guarantees of prepayments and warranties, deriving from the period preceding July 12, 2012, of which TEUR 45,471 relate to the large-scale CEEG project, and TEUR 31,615 to the large-scale project in Qatar.

A total of TEUR 79,872 of guarantee credit existed as of December 31, 2015 (previous year: TEUR 82,036).

As of the reporting date, the existing guarantees of bills and other guarantees existed exclusively in relation to third parties.

7.2.2 Rental and lease agreements, order obligations

Other financial obligations arise especially from rental agreements for office premises, as well as car lease agreements. No rental extension or purchase options exist.

The future payments arising from other financial obligations relate mainly to rental and lease agreements for the foreign subsidiaries, and are due as follows:

Due dates of rental and lease payments

in TEUR from 12/31/2015 from 12/31/2014

Up to one year 455 589

Longer than one year and up to five years 168 137

Longer than five years 0 198

Rental payments of TEUR 532 were rendered as part of operating leases in the 2015 financial year (previous year: TEUR 526).

Order obligations

Order obligations amounted to TEUR 20,006 as of December 31, 2015 (previous year: TEUR 37,992), most of which are attributable to inventories, and in an amount of TEUR 123 to properly, plant and equipment (previous year: TEUR 26). No order obligations exist for intangible assets.

7.2.3 Litigation

Large-scale project in Algeria

With a letter dated June 13, 2013, CEEG, a subsidiary of Société Nationale de l'Electricité et du Gaz (Sonelgaz), has notified the consortium consisting of centrotherm and Kinetics Germany GmbH that it was terminating the contract to construct a fully integrated solar module factory in Algeria. The original project volume amounted to around EUR 290 million. The consortium doubts the legality of this termination, and centrotherm has brought a lawsuit against CEEG for loss compensation. Proceedings are being arbitrated at the International Court of Arbitration (ICC) in Geneva. centrotherm does not anticipate an ICC ruling before the end of 2016. To secure the TEUR 21,926 of prepayments received, and the completion of the contract, CT AG has provided guarantees of TEUR 45,471 through EulerHermes Kreditversicherungs-AG. Potential utilization of the guarantees, and any loss compensation claims brought against CT AG, would be included in the regulations of the insolvency plan. If the consortium and CT AG were to lose the case, the awarded loss compensation claims and guarantees (in the respective level of the utilization) would fall due for payment at the level of 30 %. Based on the current status of proceedings, centrotherm does not describe a high probability to a decision in favor of the consortium.



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Other litigations

An incident occurred at a customer's production facility where centrotherm systems are also deployed, which has resulted in considerable losses in terms of equipment and operational interruption. The question as to the responsibility and liability for the loss that has occurred has now become a matter of judicial dispute. We are of the current opinion that centrotherm is not responsible for this loss, and not liable accordingly. Cover under product liability insurance otherwise exists for most of the losses. The remaining residual risk is reflected through a provision.

In addition, some centrotherm Group companies are involved in litigation due to the determination of receivables relating to the insolvency schedule. In particular, one creditor has brought a lawsuit relating to the determination of disputed receivables in the schedule. The centrotherm Group has taken these cases into account through the formation of provisions.

7.2.4 Income tax

As part of the discontinuation of insolvency proceedings in 2013, the tax authorities approved a waiver of tax receivables due to the reorganization gains that were realized. The corresponding tax receivables of EUR 24.3 million were fixed in advance, and are not to be issued in finalized form for the 2014 and 2015 calendar years until after the taxation process is concluded. Given this, no related liabilities were recognized.

7.3 AUDITOR'S FEE

The fee rendered for the services of the auditor of the consolidated financial statements, Roever Broenner Susat Mazars GmbH & Co. KG, Wirtschaftsprüfungsgesellschaft, Berlin, was expensed in the reporting year, and is composed as follows:

Auditor's fee

in TEUR FY 2015 FY 2014

Auditing of financial statements 258 283

of which for previous year 9 13

Other certification services 80 81

Other services 34 73

7.4 RELATED PARTY DISCLOSURES

Materials, inventories, and services are procured from numerous business partners as part of the operating business. These include companies in which CT AG holds shares, as well as companies connected with members of the management and supervisory boards of CT AG. In the balance sheet, transactions with non-consolidated subsidiaries are reported under the items of receivables due from associates and liabilities due to associates. The income statement items include notes relating to transactions with associates. Please refer to section 7.5 the information about total compensation of the Management and Supervisory boards.

The following significant transactions occurred between the centrotherm Group and related parties during the reporting period:

During the 2015 financial year, centrotherm Elektrische Anlagen GmbH & Co. KG, Blaubeuren, and centrotherm clean solutions GmbH & Co. KG, Blaubeuren, delivered no raw materials and supplies to Group companies (previous year: TEUR 0).

Rental agreements with indefinite durations exist between CT AG and clean solutions GmbH & Co. KG, Blaubeuren. CT AG charged for rents of TEUR 76 during the 2015 financial year (previous year: TEUR 105).

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The Group generated TEUR 39 of revenue from the rendering of services and the delivery of replacement parts in the 2015 financial year (previous year: TEUR 116) with centrotherm clean solutions GmbH & Co. KG, Blaubeuren.

The Group procured TEUR 74 (previous year: TEUR 31) of intercompany services from centrotherm clean solutions GmbH & Co. KG, Blaubeuren, and laflow Reinraumtechnik GmbH + Co. KG, Blaubeuren. During the prior-year period, centrotherm Elektrische Anlagen GmbH & Co. KG, Blaubeuren, was also a supplier of these services.

Revo Besitz GmbH & Co. KG, Blaubeuren, was charged for proportionate electricity costs of TEUR 13 during the period under review (previous year: TEUR 8).

Rental agreements with indefinite durations exist between centrotherm clean solutions GmbH, Blaubeuren, and CT AG. CT AG was charged for rents of TEUR 16 during the 2015 financial year (previous year: TEUR 33).

Sol Futura Verwaltungsgesellschaft mbH, Ulm, drew down TEUR 725 from CT AG in the 2015 financial year to cover its operating activities (previous year: TEUR 375) (see section 5.25 Financial liabilities from the insolvency proceedings).

Dr. Horn Unternehmensberatung GmbH, in which one Supervisory Board member holds an interest, rendered consulting and tax declaration services in an amount of TEUR 104 (previous year: TEUR 86).

CT AG concluded an agreement with PMDL GmbH on September 16, 2013 on standard market terms that comprises consultancy services within the MENA region. Robert M. Hartung is Managing Director of PMDL. No consultancy fees were incurred during the period under review (previous year: TEUR 76).

7.5 TOTAL COMPENSATION OF THE MEMBERS OF THE MANAGEMENT AND SUPERVISORY BOARDS, INCLUDING ADVANCES AND LOANS

The Management Board drew TEUR 1,744 of compensation in the reporting period (previous year: TEUR 2,636)

The Supervisory Board drew TEUR 230 of compensation in the reporting period (previous year: TEUR 202)

As in previous year, no payments were rendered to former Management Board members during the period under review.

No loans were granted to members of the Management or Supervisory boards during the 2015 financial year.

7.6 EVENTS AFTER THE REPORTING DATE

New majority shareholder

On January 8, 2016, as part of executing the purchase agreement was concluded in December 2015, Sol Futura Verwaltungsgesellschaft mbH (Sol Futura) transferred an 80 % interest in centrotherm photovoltaics AG to Solarpark Blautal GmbH (Solarpark Blautal). Solarpark Blautal GmbH has thereby become the new majority shareholder of CT AG. Along with PMDL GmbH, Qatar Solar Technologies of Doha/Qatar holds a significant interest in Solarpark Blautal. As part of the disposal of the interest of former majority shareholder Sol Futura, the Management Board of CT AG concluded a EUR 25 million financing agreement to secure the funding of the company's operating business. The financial liabilities of TEUR 48,974 from the insolvency proceedings of CT AG and its former subsidiary centrotherm thermal solutions GmbH & Co. KG were serviced from the liquidity of CT AG in early February 2016 (see section 5.25).

Guarantees issued by centrotherm photovoltaics AG in connection with the Qatar project

To secure the prepayments and the completion of the contract, CT AG had guarantees of TEUR 31,615 provided by a bank as of the balance sheet date. After the balance sheet date, the customer returned these guarantees, and exchanged them for a new bank guarantee of TEUR 22,100. CT AG for its part has in turn received a counter-guarantee of TEUR 7,500 from one of its shareholders.



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Composition of the Supervisory Board

Given the scheduled disposal of the interest in the company on January 8, 2016 and resultant new ownership structure, former Chairman Tobias Wahl and Supervisory Board members Dr. Christoph Herbst and Wolfgang Schmid relinquished their Supervisory Board mandates on January 11, 2016.

Following these resignations, the Supervisory Board of CT AG elected from among its members Robert M. Hartung as its Chairman and Hans-Hasso Kersten as its Deputy Chairman. Prof. Dr. Brigitte Zürn remains a member of the Supervisory Board.

Composition of the Management Board

Following the reporting date, the Supervisory Board of CT AG at its January 11, 2016 meeting reappointed Peter Augustin as a member of the company's Management Board.

Florian von Gropper stood down from office at the end of February 2016 on the best terms with the Supervisory Board.

Boris Klebensberger relinquished his Management Board mandate on February 29, 2016 by way of mutual agreement with the Supervisory Board due to differing ideas about the company's future strategic orientation.

The Supervisory Board of CT AG appointed Jan von Schuckmann to the Management Board. The Management Board will consequently consist of members Peter Augustin and Jan von Schuckmann from May 1, 2016.

Besides this, no further events occurred after the December 31, 2015 reporting date that are of key significance for the centrotherm Group, and which could lead to a different assessment of business progress.

7.7 APPROVAL FOR PUBLICATION

On April 15, 2016, the Management Board of CT AG approved the consolidated financial statements for forwarding to the Supervisory Board of the company. The Supervisory Board has the task of examining the consolidated financial statements, and of declaring whether it approves them.

The consolidated financial statements and the Group management report are being submitted for the financial year ending on December 31, 2015 to the German Federal Gazette (Bundesanzeiger), where they will be published.

7.8 VOTING RIGHTS NOTIFICATIONS PURSUANT TO SECTION 160 (1) NO. 8 OF THE GERMAN STOCK CORPORATION ACT (AKTG)

In accordance with Section 160 (1) No. 8 of the German Stock Corporation Act (AktG), the following announcements that have been forwarded to the company are reproduced concerning shareholdings in the company requiring mandatory reporting, to the extent that the shareholding requiring mandatory reporting continues to exist as of the balance sheet date. It should be noted in this respect that all such communications relate to the reporting date mentioned in the announcement. The shareholdings of those entities obligated to make related announcements may have changed as of the balance sheet date, without a renewed announcement pursuant to the German Stock Corporation Act (AktG) being required if no relevant announcement threshold has been breached. Further modifications to shareholdings that must be reported may also have occurred following the balance sheet date that are not included in the announcements reproduced below.

7.8.1 Voting rights announcement by Qatar Solar Technologies, Doha/Qatar, February 2016

Qatar Solar Technologies, with headquarters in Al Nasr Tower, West Bay, Doha/Qatar, notified us pursuant to Section 20 (1), (3) and (4) of the German Stock Corporation Act (AktG), that it owns a majority interest in the meaning of Section 16 (1) AktG, and with it also more than one quarter of the shares in centrotherm photovoltaics AG, with headquarters in Blaubeuren.

7.8.2 Voting rights announcement by Solarpark Blautal GmbH, Blaubeuren, January 2016

Solarpark Blautal GmbH, with headquarters in Blaubeuren, notified us pursuant to Section 20 (1), (3) and (4) of the German Stock Corporation Act (AktG), that it owns a direct majority interest in the meaning of Section 16 (1) AktG, and with it also more than one quarter of the shares in centrotherm photovoltaics AG, with headquarters in Blaubeuren.

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PMDL GmbH, with headquarters in Blaubeuren, notified us pursuant to Section 20 (1), (2) and (4) of the German Stock Corporation Act (AktG), that it owns an indirect majority interest in the meaning of Section 16 (1) AktG, and with it also more than one quarter of the shares in centrotherm photovoltaics AG, with headquarters in Blaubeuren.

Mr. Robert M. Hartung, resident in Blaubeuren, notified us pursuant to Section 20 (1), (2) and (4) of the German Stock Corporation Act (AktG), that he owns an indirect majority interest in the meaning of Section 16 (1) AktG, and with it also more than one quarter of the shares in centrotherm photovoltaics AG, with headquarters in Blaubeuren.

7.8.3 Voting rights notification by Sol Futura Verwaltungsgesellschaft mbH, Ulm, January 2016

Sol Futura Verwaltungsgesellschaft mbH, with headquarters in Ulm, informed us pursuant to Section 20 (5) of the German Stock Corporation Act (AktG) that an interest of more than one quarter of the shares pursuant to Section 20 (1) AktG and a majority interest in the meaning of Section 20 (4) in combination with Section 16 (1) AktG in centrotherm photovoltaics AG, with headquarters in Blaubeuren, no longer exist.

Mr. Tobias Wahl, resident in Heidelberg, informed us pursuant to Section 20 (5) of the German Stock Corporation Act (AktG) that an indirect interest of more than one quarter of the shares pursuant to Section 20 (1) AktG, and an indirect majority interest in the meaning of Section 20 (4) in combination with Section 16 (1) AktG in centrotherm photovoltaics AG, with headquarters in Blaubeuren, no longer exist.

Sol Futura Verwaltungsgesellschaft mbH and Mr. Tobias Wahl no longer hold any shares in centrotherm photovoltaics AG.

7.8.4 Voting rights notification by Sol Futura Verwaltungsgesellschaft mbH, Ulm, on August 6, 2013

On August 6, 2013, Sol Futura Verwaltungsgesellschaft mbH, referring to its voting rights notification of July 19, 2013 relating to the objectives pursued with the purchase of the voting rights in centrotherm photovoltaics AG, additionally informed us pursuant to Section 27a (1) Clauses 1 and 3 of the German Securities Trading Act (WpHG) that the investment as part of implementing the non-cash capital increase planned as part of the legally effective insolvency plan of centrotherm photovoltaics AG had occurred, serving the subsequent best possible satisfaction of the creditors of centrotherm photovoltaics AG through selling the interest acquired by Sol Futura Verwaltungsgesellschaft mbH, and thereby the implementation of strategic objectives,

• that Sol Futura Verwaltungsgesellschaft mbH does not intend to acquire, or to otherwise obtain, further voting rights within the next twelve months,

• that Sol Futura Verwaltungsgesellschaft mbH was endeavoring to gain influence over the composition of the administrative, executive and supervisory bodies of centrotherm photovoltaics AG, and

• that Sol Futura Verwaltungsgesellschaft mbH was not aiming for any significant modification to the capital structure of centrotherm photovoltaics AG, especially concerning the relationship between equity and debt financing, and dividend policy.

• Relating to the origin of the funds applied for the acquisition of the voting rights, Sol Futura Verwaltungsgesellschaft mbH informed us pursuant to Section 27a (1) Clauses 1 and 4 of the German Securities Trading Act (WpHG), that Sol Futura Verwaltungsgesellschaft mbH acquired the voting rights as part of a non-cash capital increase at centrotherm photovoltaics AG against the contribution of receivables as non-cash capital contributions. It stated that no other equity or debt funds had been utilized to finance the acquisition of the voting rights.

7.8.5 Voting rights notification by Tobias Wahl on August 6, 2013

On August 6, 2013, Mr. Tobias Wahl, referring to his voting rights notification of July 19, 2013 relating to the objectives pursued with the purchase through Sol Futura Verwaltungsgesellschaft mbH of the voting rights in centrotherm photovoltaics AG that are attributable to him pursuant to Section 22 (1) Clause 1 No. 1 of the German Securities Trading Act (WpHG), additionally informed us pursuant to Section 27a (1) Clauses 1 and 3 of the German Securities Trading Act (WpHG) that the investment through Sol Futura Verwaltungsgesellschaft mbH in the voting rights that are attributable to him pursuant to Section 22 (1) Clause 1 No. 1 of the German Securities Trading Act (WpHG) as part of implementing the non-cash capital increase planned as part of the legally effective insolvency plan of centrotherm photovoltaics AG had occurred, serving the subsequent



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best possible satisfaction of the creditors of centrotherm photovoltaics AG through selling the interest acquired by Sol Futura Verwaltungsgesellschaft mbH, and thereby the implementation of strategic objectives,

• that he does not intend to acquire, or to otherwise obtain, further voting rights within the next twelve months,

• that through Sol Futura Verwaltungsgesellschaft mbH he was endeavoring to gain influence over the composition of the administrative, executive and supervisory bodies of centrotherm photovoltaics AG, and

• that he was not aiming for any significant modification to the capital structure of centrotherm photovoltaics AG, especially concerning the relationship between equity and debt financing, and dividend policy.

• Relating to the origin of the funds utilized to purchase the voting rights, Mr. Tobias Wahl informed centrotherm photovoltaics AG pursuant to Section 27 (1) Clauses 1 and 4 of the German Securities Trading Act (WpHG) that the purchase of the voting rights had occurred solely as a result of the attribution of the voting rights through Sol Futura Verwaltungsgesellschaft mbH pursuant to Section 22 (1) Clause 1 No. 1 of the German Securities Trading Act (WpHG), and that he had utilized no funds to finance the acquisition of the voting rights.

7.8.6 Voting right notification by Robert Michael Hartung, Germany, of July 19, 2013

On July 22, 2013, Mr. Robert Michael Hartung, Germany, notified us pursuant to Section 21 (1) in combination with Section 22 (1) Clause 1 No. 1 of the German Securities Trading Act (WpHG), that his percentage of voting rights in centrotherm photovoltaics AG, Blaubeuren, Germany, had fallen below the thresholds of 50 %, 30 %, 25 %, 20 % and 15 %, and had reached 10 % of the voting rights on July 19, 2013. The voting rights interest amounted to 10 % on this date (corresponding to 2,116,238 voting rights). These 10 % (2,116,238 voting rights) are to be attributed to Mr. Robert Michael Hartung through TCH GmbH pursuant to Section 22 (1) Clause 1 No. 1 of the German Securities Trading Act (WpHG).

7.8.7 Voting rights notification by TCH GmbH, Blaubeuren, on July 19, 2013

On July 22, 2013, TCH GmbH, Blaubeuren, Germany, notified us pursuant to Section 21 (1) in combination with Section 22 (1) Clause 1 No. 1 of the German Securities Trading Act (WpHG), that its percentage of voting rights in centrotherm photovoltaics AG, Blaubeuren, Germany, had fallen below the thresholds of 50 %, 30 %, 25 %, 20 % and 15 %, and had reached 10 % (corresponding to 2,116,238 voting rights) of the voting rights on July 19, 2013. The voting rights interest amounted to 10 % on this date (corresponding to 2,116,238 voting rights).

7.8.8 Voting rights notification by Sol Futura Verwaltungsgesellschaft mbH, Ulm, on July 19, 2013

On July 19, 2013, Sol Futura Verwaltungsgesellschaft mbH, Ulm, Germany, notified us pursuant to Section 21 (1) in combination with Section 22 (1) Clause 1 No. 1 of the German Securities Trading Act (WpHG), that its percentage of voting rights in centrotherm photovoltaics AG, Blaubeuren, Germany, had exceeded the thresholds of 3 %, 5 %, 10 %, 15 %, 20 %, 25 %, 30 %, 50 % and 75 %, and had reached 80 % (corresponding to 16,929,904 voting rights) of the voting rights on July 19, 2013.

7.8.9 Voting rights notification by Tobias Wahl on July 19, 2013

On July 19, 2013, Mr. Tobias Wahl, Germany, notified us pursuant to Section 21 (1) in combination with Section 22 (1) Clause 1 No. 1 of the German Securities Trading Act (WpHG), that his percentage of voting rights in centrotherm photovoltaics AG, Blaubeuren, Germany, had exceeded the thresholds of 3 %, 5 %, 10 %, 15 %, 20 %, 25 %, 30 %, 50 %, and 75 % of the voting rights on July 19, 2013. The voting rights interest amounted to 80 % on this date (corresponding to 16,929,904 voting rights). This 80 % (16,929,904 voting rights) is to be attributed to Mr. Tobias Wahl through Sol Futura Verwaltungsgesellschaft mbH pursuant to Section 22 (1) Clause 1 No. 1 of the German Securities Trading Act (WpHG).

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8 CORPORATE BODIES

8.1 MANAGEMENT BOARD

The Management Board of CT AG consisted of four members as of the balance sheet date.

• Hans Autenrieth, Chief Executive Officer, Chief Sales & Marketing Officer (until December 31, 2015 inclusive)

• Peter Augustin, Chief Operating Officer (until December 31, 2015 inclusive)

• Florian von Gropper, Chief Financial Officer

• Boris Klebensberger, Chief Operating Officer

The following changes occurred to the Management Board's composition during the period under review:

• Boris Klebensberger, Chief Operating Officer since September 1, 2015

During the reporting period, no Management Board members were members of other statutory supervisory boards or comparable German or domestic controlling bodies of business entities during the period under review.

8.2 SUPERVISORY BOARD

The following Supervisory Board members held office during the 2015 financial year:

• Tobias Wahl (Chairman)

• Robert M. Hartung (Deputy Chairman)

• Dr. Christoph Herbst

• Hans-Hasso Kersten

• Wolfgang Schmid

• Prof. Dr. Brigitte Zürn

The Supervisory Board has formed the following committees that continue to comprise the following unchanged membership as of the reporting date:

• Chairman's committee: Tobias Wahl (Chair), Robert M. Hartung (Deputy Chair), Hans-Hasso Kersten, Wolfgang Schmid

• Audit committee: Hans-Hasso Kersten (Chair), Wolfgang Schmid (Deputy Chair), Prof. Dr. Brigitte Zürn

• Nomination committee: Tobias Wahl (Chair), Robert M. Hartung (Deputy Chair), Hans-Hasso Kersten, Wolfgang Schmid

Blaubeuren, April 15, 2016


The Management Board

Peter Augustin



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9 INDEPENDENT AUDITOR'S REPORT

We have audited the consolidated financial statements, consisting of consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of changes in equity, consolidated cash flow statement and the notes to the consolidated financial statement, as well as the Group management report for the financial year from January 1, 2015 to December 31, 2015, as prepared by centrotherm photovoltaics AG, Blaubeuren. The preparation of the consolidated financial statements and the Group management report in accordance with IFRS, as adopted by the EU, and the additional requirements of German commercial law pursuant to Section 315a (1) of the German Commercial Code (HGB) is the responsibility of the legal representatives of the company. Our responsibility is to express an opinion on the consolidated financial statements and on the Group management report based on our audit.

We conducted our audit of the consolidated financial statements in accordance with Section 317 of the German Commercial Code (HGB) and German generally accepted standards for the audit of financial statements as promulgated by the Institut der Wirtschaftsprüfer (IDW). These standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the financial position and performance in the consolidated financial statements in accordance with the applicable financial reporting framework, and in the Group management report, are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group, and expectations as to possible misstatements, are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the Group management report are examined primarily on a test basis within the framework of the audit.

The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used, and significant estimates made by the legal representatives, as well as evaluating the overall presentation of the consolidated financial statements and Group management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRS, as adopted by the EU, the additional requirements of German commercial law pursuant to Section 315 a (1) of the German Commercial Code (HGB) and full IFRS, and provide a true and fair view of the Group's financial position and performance in accordance with these requirements. The Group management report is consistent with the consolidated financial statements and as a whole provides a true and fair view of the Group's position, and appropriately presents the opportunities and risks of future development.

Berlin, April 19, 2016

Roever Broenner Susat Mazars GmbH & Co. KG

Wirtschaftsprüfungsgesellschaft

Steuerberatungsgesellschaft

Udo Heckeler Frank Pannewitz

Certified Public Auditor Certified Public Auditor

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FINANCIAL GLOSSARY

AktG German Stock Corporation Act

BaFin German Federal Financial Supervisory Authority

Capex Capex is an abbreviation of „capital expenditure“. This relates to a company‘s investment expenditure in long-term items of fixed assets such as new machinery, plant, and production buildings.

Cash flow Net inflow of cash and cash equivalents generated from sales and other current activities during a period.

Compliance Compliance relates to actions in harmony with prevailing rules of behavior, laws, and guidelines.

Coverage Coverage of a listed stock corporation with studies and research produced by banks and financial analysts.

CTN Stock exchange abbreviation for the centrotherm photovoltaics share.

DAX German stock market index. It reflects the changes in share prices for the 30 largest German shares in terms of size and turnover.

DAXsubsector The DAXsubsector Renewable Energies index comprises companies that operate in the sector that develops plant for alternative and/or renewable energy sources (solar technology, wind power plants etc).

DCG Code / A set of rules developed by a governmentGerman Corporate commission of the Federal Republic of GermanyGovernance Code primarily that contains recommendations for good corporate governance, in other words, ethical behavior on the part of corporate management and organizations.

EBIT / Earnings Before Operating earnings.Interest and Taxes Key corporate figure corresponds to profit from ordinary business activities after depreciation and amortization, and before interest and tax.

EBITDA / Earnings EBITDA comprises a key corporate figure thatBefore Interests, Taxes, shows a company‘s operating profitabilityDepreciation and irrespective of its capital structure or propensity Amortization to invest. It is comprised of profit before tax, the net interest result, and the company‘s depreciation and amortization charges.

GLOSSARY

General Standard The General Standard is a stock market segment under private law of Deutsche Börse AG, which is based on the statutory Regulated Market.

GEX Index for owner-managed, medium-sized companies in the Prime Standard.

HGB German Commercial Code

HRB Commercial register, Department B (corporations)

IAS International Accounting Standards

IASB International Accounting Standards Board

IFRS / International Firstly, the overall term for all accounting stan-Financial Reporting dards published by the International AccountingStandards Standards Committee. Secondly, accounting standards that the International Accounting Standards Board (IASB) has newly issued since 2003. Stan- dards approved until 2002 are still published under the designation of International Accounting Standards (IAS). Existing IAS are only renamed IFRS if the related standards undergo fundamental amendments.

InsO German Insolvency Directive

InvG German Investment Act

ISIN Abbreviation for „International Security Identifi- cation Number“. The ISIN serves to clearly identify securities on an international basis, and is issued by the relevant national authority.

MENA The MENA acronym is frequently utilized by Wes- tern financial experts and economic specialists to refer to „Middle East & North Africa“.

MEUR Millions of euros

Order book The company allocates an order to its order book as soon as the related agreement has been signed by both parties, and the realization of the agreement is sufficiently likely in the assessment of the company‘s Management Board. This usually requires the rendering of a significant prepayment, and/or the opening of a commercial letter of credit by the contractual partner.

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Outside Basis Temporary valuation differences between the taxDifferences valuation of a investment in a participating interest and its net assets or equity carrying amount.

TecDAX Index that reflects the share price development of the 30 largest technology stocks in the Prime Standard below DAX shares.

TEUR Thousands of euros

Total operating Key operating figure derived from sales for a performance given period, the net balance of changes to stock, and own work capitalized.

WKN German abbreviation for „Wertpapierkenn- nummer“ (securities identification number). The WKN is a six-figure alphanumeric code to enable a security to be identified clearly. It is issued by the Institut für die Ausgabe und Verwaltung von Wertpapieren in Deutschland (Institute for the Issuance and Administration of Securities in Germany).

WpHG German Securities Trading Act

WpPG German Securities Prospectus Act

ABBREVIATIONS OF NAMES

CT AG centrotherm photovoltaics AG

FHR Subsidiary FHR Anlagenbau GmbH

IDW Institute of Public Auditors in Germany, Düsseldorf

IFW Kiel Institute for the World Economy

ISC International Solar Energy Research Center, Constance

SIC Solar Innovation Center, Constance

SiTec Subsidiary SiTec GmbH, Augsburg

Sol Futura Sol Futura Verwaltungsgesellschaft mbH, Ulm


Glossary

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PECVD / Plasma Also known as “Plasma Assisted Chemical Vapor Enhanced Chemical Deposition”. Term for a special form of Chemical Vapour Deposition Vapor Deposition (CVD), in which the deposition of thin films results from a chemical reaction. The process is also supported by a plasma. For this a strong electric field is applied between the substrate to be coated and a counter electrode to ignite a plasma. The plasma causes a breakdown of the bonds in the reaction gas and the formation of radicals which precipitate onto the substrate and effect the deposition reaction there. This allows a high deposition rate to be achieved at a low deposition temperature.

Phosphorus diffusion Phosphorus diffusion refers to the equalization of concentration differences up to practically complete mixing, which results from the movement of the phosphorus atoms. This particle movement derives from the energy of the particles and is temperature dependent.

Photovoltaics / PV Photovoltaics refers to the direct conversion of radiant energy, in particular solar energy, into electrical energy. The name is constructed from the components ‘photos’ - the Greek word for light - and ‘Volta’ - after Alessandro Volta, one of the pioneers of electrical technology.

Photovoltaic module Photovoltaic modules are used either singly or wired in group in photovoltaic systems for the generation of electricity by the direct conversion of the sunlight into electrical energy. As important components they contain numerous solar cells wired in series and in parallel.

Polysilicon Please refer to silicon

PVD process The PVD (physical vapor deposition) process refers to a group of coating processes or thin film technologies in which the film is formed directly by the condensation of a material vapor of the source material.

Roadmap Synonym for strategy or project plan often used in research and development.

Semiconductor Solid substance whose electrical conductivity can be changed markedly by the targeted introduction of other atoms (doping). This allows the production of electronic components like diodes, transistors and solar cells.

TECHNICAL GLOSSARY

BiSoN technology Bifacial solar cells developed by ISC Constance with n-doped (n-type) crystalline silicon wafers as basis.

centaurus technology Our centaurus technology is based on back surface passivation with a dielectric layer as well as a local aluminum back surface field (Al-LBSF). This improved cell structure leads to a significant reduction in recombination losses and thus to higher efficiency of the solar cells.

CIGS Abbreviation for Copper Indium Gallium Diselenide.

Crystalline solar cells Solar cells on the basis of crystalline silicon

CVD reactor Reactor for conversion of trichlorosilane into polysilicon with the Siemens process.

Diffusion furnace In a diffusion furnace, the wafers are exposed at 900°C to gas containing phosphorus with the addition of oxygen, which results in the formation of an oxide containing phosphorus on the surface. The n-type emitter is produced from these phosphorus atoms which diffuse into the silicon.

Drying furnace For drying the metal contacts on the wafers, centrotherm offers drying furnaces specially developed for mass production.

EE Renewable energies

EEG Renewable energies law, legislation giving priority to renewable energies in Germany.

Efficiency Ratio between electric power delivered to incident light power.

EUR per Wp VRatio of production costs (in EUR) per cell yield under normal conditions in watt peak (Wp).

Fast firing furnace After the contacts are dried in the drying furnace, they are thermally fired or “sintered” in the fast firing furnace to achieve contact with the silicon.

First silicon out Term for the putting into operation of the first polysilicon equipment and the initial production of polysilicon in own CVD reactors.

Grid Parity The point in time when electricity from a photovoltaic plant can be offered to the end user at the same price as conventional electricity.

GWp Gigawatt peak

MWp Megawatt peak

PERC solar cells Passivated Emitter Rear Cell; solar cell technology with optimized dielectric passivation layer on the rear side of the solar cell.

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Glossary

Siemens process Process for the production of high purity silicon for the semiconductor or solar industry. Here, the metallurgic silicon raw material is first converted into trichlorosilane with gaseous hydrogen chloride. After several distillation steps, the trichlorosilane is mixed with hydrogen and thermally decomposed in so-called CVD reactors into silicon and chlorous gases. High purity silicon rods are introduced here on which the silicon is deposited.

Silicon From the Latin silex = flint; silicon is a semi-metal which occurs on Earth in large quantities. However, for the production of solar cells the raw silicon must be purified further to polysilicon.

Silicon, amorphous Non-crystalline form of the semiconductor silicon. When combined with hydrogen (a-Si:H, hydrogenated amorphous silicon) usable as semiconductor material for thin-film solar cells.

Sintering In the production of solar cells, the metallic pastes are sintered. In this process, the organic materials are evaporated out of the metal pastes.

Sputtering High-vacuum-based coating technology for the production of thin-film solar modules.

STC-TCS converter The STC-TCS converter converts the silicon tetrachloride into trichlorosilane, which in turn can be used for the production of polysilicon.

TCO Functional layers made of transparent conducting oxides

Throughput Quantity produced per unit of time, e.g. solar cells per hour

Wafer In the semiconductor and photovoltaic industries, as well as in micromechanics, a wafer means a circular or square thin slice of mono- or poly- crystalline silicon on which electronic or micro- mechanical components or photoelectric coatings can be applies by various technical processes.

Wp Watt peak; unit of measurement for the standardized power (power rating) of a solar cell or a solar module. The value refers to the power in standard test conditions (25 °C module temperature and 1 kW/m² irradiance), which do not directly correspond to everyday operation.

Yield Relation between product output and the material consumed, e.g. number of solar cells produced to the wafers used.

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Annual Report 2015

FINANCIAL CALENDAR

14.06.2016

Ordinary Shareholders‘ General Meeting 2016

11.08.2016

Publication of the Interim Report as of June 30, 2016


Financial Calendar | Imprint

IMPRINT

PUBLISHER

centrotherm photovoltaics AGJohannes-Schmid-Str. 889143 BlaubeurenT +49 (0)7344 918 0F +49 (0)7344 918 [email protected]

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centrotherm photovoltaics AG, Blaubeurenandreas.graeter, Illerkirchberg PRINTED BY MEDIprint Geiselhart GmbH & Co. KG, Blaubeuren

DISCLAIMER

We have exercised utmost care in the preparation of this report. 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, incomplete, or falsified. We cannot assess whether information, evaluations, or forecasts made by third parties are appropriate, complete, 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, completeness, and up-todate 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.

This annual report is available in German and English, the English version being a translation from the German original document.The German version shall be legally binding.Both versions are available for download on the Internet.

Blaubeuren, April 2016


Johannes-Schmid-Str. 889143 BlaubeurenT +49 (0)7344 918 0F +49 (0)7344 918 [email protected]

www.centrotherm.de

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