GROUP struCturE And SegmentS

BUSINESS FIELDS UNCHANGED. The SolarWorld Group is one of the world leaders in the production of crystalline solar power technology. The emphasis of our business activity is on the production and international distribution of solar power applications and systems for roof installation through to large-scale solar plants. We operate both in the area of on-grid (grid-coupled) and off-grid (stand-alone) technology. SolarWorld AG and its subsidiaries are involved in research, development, production and distribution at all stages of the solar value chain. The materials cycle is completed by our group’s internal recycling facility.

ORGANIZATION STRUCTURE FOCUSED ON SYNERGIES. SolarWorld AG emerged from the sole proprietorship, Frank H. Asbeck, Ingenieurbüro für Industrieanlagen, founded in 1988. Entry as a joint stock company based on German law in the trade register of the local court in Bonn under the number HRB 8319 took place on 26 March 1999. Chronicle SolarWorld AG is listed in the Prime Standard of the Frankfurt Stock Exchange (TecDAX) in Germany.

SOLARWORLD AG IS THE PARENT COMPANY OF THE SOLARWORLD GROUP. As the holding company it provides in addition to sales central services for the group. These include service, steering and control functions in the areas of Corporate Business Management (strategic group development, M&A), Finance, Controlling, Investor Relations, Corporate Communications and Marketing. The coordination of production planning and controlling as well as investment planning is also performed centrally by SolarWorld AG on behalf of the subsidiaries. Sustainability Management as well as Internal Audit are, as staff functions, directly subordinated to the group Management Board, which in turn performs the task of managing the entire group.

In order to benefit from group-wide synergies and economies of scale we pooled our procurement function centrally at Deutsche Solar AG at our German production location of Freiberg. From there, procurement and purchasing are controlled for the entire group. Our research and raw materials activities are also pooled there in subsidiaries such as SolarWorld Innovations GmbH and Sunicon AG.

The company’s processes are supported by standard systems employed throughout the group. IT therefore has the entrepreneurial task of using the funds available to SolarWorld efficiently for the operational procedures and, in doing so, to secure and optimize the control of our business processes also, and especially, during growth processes.

LEGAL GROUP STRUCTURE CHANGED. At the cut-off date (31 December 2009) the SolarWorld Group consisted of 25 (previous year: 28) companies. In the year under review the legal group structure was changed as follows:

• As at 1 January 2009 we repositioned our US companies in terms of company law and tax law as well as with reference to their respective fields of activity. By this means we pooled our US business in SolarWorld Industries America Inc. (previously: SolarWorld Properties Inc.) as an operating parent company in a subgroup, thus creating a tax unit in the USA at the same time.
• According to the separation and takeover agreement of 7 April 2009 and the resolutions passed at the Annual General Meetings of the two legal entities, the SolarMaterial division was separated from Deutsche Solar AG with retrospective effect as of 1 January 2009 and transferred to Sunicon AG.
• As a wholly owned subsidiary of SolarWorld California LLC, we established SolarWorld Power Projects Inc. on 29 April 2009. The company, which is located in Camarillo, California, will be in charge of the development of large-scale projects in the USA, an important market for the future.
• A name change was introduced for Joint Solar Silicon Verwaltungs GmbH. The company located in Freiberg was renamed JSSi GmbH at a shareholders’ meeting on 5 February 2009.
• Through a share purchase and transfer agreement of 15 July 2009 we took over 100 per cent of our previous joint venture company, Scheuten SolarWorld Solicium GmbH. The company is now operated under the name of SolarWorld Solicium GmbH.
• In order to accelerate expansion of our Korean joint venture in the expanding Asian solar market, SolarWorld increased its share in SolarWorld Korea Ltd. in the third quarter of the year in the context of a capital increase of € 13.9 million to 76.5 (previously: 50) per cent. Within one year our joint venture partner has the right to buy 26.5 per cent of the shares held by SolarWorld so that, within a short period of time, equal ownership can be re-established.  Group structure modified
• We also established SolarPark M.E. Ltd. as a joint venture together with our partner, SolarPark Engineering Ltd., Seoul, South Korea. It designs and builds manufacturing plants for module production. The company, in which SolarWorld holds a 50 per cent stake, was consolidated at equity as of 1 January 2009 for the first time.
• In December 2009 we sold our 35 per cent stake in Gällivare PhotoVoltaic AB.

With the exception of the changes mentioned above there were no other modifications of our legal group structure.  Notes/SolarWorld Group as of 31 December 2009

In addition, we established a liaison office in Grenoble, France, on 15 September 2009.  www.solarworld-france.com The local employees will render technical support for Energyroof^® products, for which there is a particularly high demand. They will also train installers and distributors.

SEGMENT STRUCTURE ADJUSTED. With IFRS g 8 “Operating Segments” coming into force, an adjustment to group segment reporting was introduced in 2009, which now exclusively follows the management point of view and thus focuses on the “solar module” end product on the production and on the trade side. Notes/Basic principles, accounting policies As of 31 December 2009 the operational business was split into four segments that will take global business activities as well as the SolarWorld Group organization into account. Instead of the previous segments, there are now four operating segments, “Production Germany”, “Production USA”, “Trade” and “Other”, which reflect the strategic orientation as well as the predominant internal organization, reporting and control structure.  Segment structure and stages of the value chain

In the production field the segments include regionally coherent and fully integrated production activities in Germany as well as in the USA (segments “Production Germany” and “Production USA”). The goal we pursue is to tap synergy and efficiency potentials right across the entire value chain and, in doing so, to gain competitive advantages for the end product, i.e. “solar module”. The “Trade” operating segment ultimately includes the worldwide distribution of solar modules. Wafer sales to external customers have been placed in the “Production Germany” segment. In the “Other” business segment we have combined different business activities of the group whose financial influence is not, not yet, or no longer crucial to the assets, finance and earnings situation of the group. The comparative figures for the previous year were adjusted in line with the new segment structure.