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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM 20-F
 
  o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES
EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the fiscal year ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the transition period from  to
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
 Date of event requiring this shell company report
 Commission file number: 001-33195
 TRINA SOLAR LIMITED
   (Translation of Registrants Name Into English)
  (Jurisdiction of Incorporation or Organization)
 
 (Address of Principal Executive Offices)
 
  Securities registered or to be registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredAmerican Depositary Shares, each representing 
100 ordinary shares, par value $0.00001 per 
share
    
    New York Stock Exchange
 
 Securities registered or to be registered pursuant to Section 12(g) of the Act:
 None
 (Title of Class)
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
 None
 (Title of Class)
  2,958,183,059 ordinary shares, par value $0.00001 per share, as of December 31, 2008.
 Yes o No þ
 o þ
 þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
  þ
 o o
 *
    
    If Other has been checked in response to the previous question, indicate by check mark
which financial statement item the registrant has elected to follow. o  o
 o þ
  Yes o No o




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##### 



TABLE OF CONTENTS
 INTRODUCTION
    
    
    4PART I
    
    
    5Item 1. Identity of Directors, Senior Management and Advisers
    
    
    5Item 2. Offer Statistics and Expected Timetable
    
    
    5Item 3. Key Information
    
    
    5Item 4. Information on the Company
    
    
    34Item 4A. Unresolved Staff Comments
    
    
    49Item 5. Operating and Financial Review and Prospects
    
    
    49Item 6. Directors, Senior Management and Employees
    
    
    78Item 7. Major Shareholders and Related Party Transactions
    
    
    92Item 8. Financial Information
    
    
    96Item 9. The Offer and Listing
    
    
    97Item 10. Additional Information
    
    
    98Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    112Item 12. Description of Securities Other than Equity Securities
    
    
    114PART II
    
    
    114Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    114Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    114Item 15. Controls and Procedures
    
    
    115Item 16A. Audit Committee Financial Expert
    
    
    118Item 16B. Code of Ethics
    
    
    118Item 16C. Principal Accountant Fees and Services
    
    
    119Item 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    119Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    119Item 16F. Change in Registrants Certifying Accountant
    
    
    119Item 16G. Corporate Governance
    
    
    119PART III
    
    
    120Item 17. Financial Statements
    
    
    120Item 18. Financial Statements
    
    
    120Item 19. Exhibits
    
    
    120Exhibit 4.20Exhibit 8.1Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2Exhibit 15.1
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INTRODUCTION
  
    
    We, us, our, and our company refer to Trina Solar Limited, its predecessor
entities and its subsidiaries;
    
    Trina refers to Trina Solar Limited;
    
    Trina China refers to Changzhou Trina Solar Energy Co., Ltd.;
    
    ADSs refers to our American depositary shares, each of which represents 100
ordinary shares;
    
    China or PRC refers to the Peoples Republic of China, excluding, for the
purpose of this annual report, Taiwan, Hong Kong and Macau;
    
    RMB or Renminbi refers to the legal currency of China, $ or U.S. dollars
refers to the legal currency of the United States, and Euro refers to the legal
currency of the European Union; and
    
    shares or ordinary shares refers to our ordinary shares, par value $0.00001 per
share.
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PART I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 Selected Financial Data
   Year Ended December 31,2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008(in thousands, except for share, per share, operating data and percentages)Consolidated Statement of Operations
DataNet revenues
    
    $
    414
    
    
    $
    27,275
    
    
    $
    114,500
    
    
    $
    301,819
    
    
    $
    831,901Cost of revenues
    
    
    373
    
    
    
    20,986
    
    
    
    84,450
    
    
    
    234,191
    
    
    
    667,459Gross profit
    
    
    41
    
    
    
    6,289
    
    
    
    30,050
    
    
    
    67,628
    
    
    
    164,442Operating expenses:Selling expenses
    
    
    66
    
    
    
    521
    
    
    
    2,571
    
    
    
    11,019
    
    
    
    20,302General and administrative
Expenses
    
    
    40
    
    
    
    1,375
    
    
    
    8,656
    
    
    
    17,817
    
    
    
    41,114Research and development
Expenses
    
    
    262
    
    
    
    122
    
    
    
    1,903
    
    
    
    2,805
    
    
    
    3,039Total operating expenses
    
    
    368
    
    
    
    2,018
    
    
    
    13,130
    
    
    
    31,641
    
    
    
    64,455Income (loss) from continuing
operations
    
    
    (327
    )
    
    
    4,271
    
    
    
    16,920
    
    
    
    35,987
    
    
    
    99,987Foreign exchange loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,999
    )
    
    
    (11,802
    )Interest expense
    
    
    (73
    )
    
    
    (470
    )
    
    
    (2,137
    )
    
    
    (7,551
    )
    
    
    (23,937
    )Interest income
    
    
    4
    
    
    
    16
    
    
    
    261
    
    
    
    4,810
    
    
    
    2,944Gain (loss) on change in fair
value of derivative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    854
    
    
    
    (1,067
    )
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Year Ended December 31,2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008(in thousands, except for share, per share, operating data and percentages)Other (expense) income
    
    
    (35
    )
    
    
    (27
    )
    
    
    (82
    )
    
    
    1,554
    
    
    
    (156
    )Income (loss) before income taxes
    
    
    (431
    )
    
    
    3,790
    
    
    
    14,962
    
    
    
    33,655
    
    
    
    65,969Income tax (expense) benefit
    
    
    52
    
    
    
    (570
    )
    
    
    (1,788
    )
    
    
    1,707
    
    
    
    (4,609
    )Minority interest
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss) from continuing
operations
    
    
    (366
    )
    
    
    3,220
    
    
    
    13,174
    
    
    
    35,362
    
    
    
    61,360Net Income (loss) from
discontinued operations
    
    
    354
    
    
    
    91
    
    
    
    (753
    )
    
    
    368
    
    
    
    Net income (loss)
    
    $
    (12
    )
    
    $
    3,311
    
    
    $
    12,421
    
    
    $
    35,730
    
    
    $
    61,360Earnings per ordinary share from
continuing operations:Basic
    
    
    
    
    
    
    0.00
    
    
    
    0.01
    
    
    
    0.02
    
    
    
    0.02Diluted
    
    
    
    
    
    
    0.00
    
    
    
    0.01
    
    
    
    0.02
    
    
    
    0.02Earnings per ADS from continuing
operations:Basic
    
    
    (0.04
    )
    
    
    0.32
    
    
    
    0.98
    
    
    
    1.51
    
    
    
    2.45Diluted
    
    
    (0.04
    )
    
    
    0.32
    
    
    
    0.96
    
    
    
    1.49
    
    
    
    2.41Earnings per ordinary share:Basic
    
    
    
    
    
    
    0.00
    
    
    
    0.01
    
    
    
    0.02
    
    
    
    0.02Diluted
    
    
    
    
    
    
    0.00
    
    
    
    0.01
    
    
    
    0.02
    
    
    
    0.02Earnings per ADS:Basic
    
    
    (0.00
    )
    
    
    0.33
    
    
    
    0.92
    
    
    
    1.53
    
    
    
    2.45Diluted
    
    
    (0.00
    )
    
    
    0.33
    
    
    
    0.90
    
    
    
    1.51
    
    
    
    2.41Weighted average ordinary shares
outstanding:Basic
    
    
    1,000,000,000
    
    
    
    1,000,000,000
    
    
    
    1,038,316,484
    
    
    
    2,339,799,657
    
    
    
    2,501,202,680Diluted
    
    
    1,000,000,000
    
    
    
    1,000,000,000
    
    
    
    1,058,483,593
    
    
    
    2,370,685,156
    
    
    
    2,690,723,390Weighted average ADS outstanding:Basic
    
    
    10,000,000
    
    
    
    10,000,000
    
    
    
    10,383,165
    
    
    
    23,397,997
    
    
    
    25,012,027Diluted
    
    
    10,000,000
    
    
    
    10,000,000
    
    
    
    10,584,836
    
    
    
    23,706,852
    
    
    
    26,907,234Consolidated Financial DataGross margin
    
    
    9.8%
    
    
    
    23.1%
    
    
    
    26.2%
    
    
    
    22.4%
    
    
    
    19.8%Net margin of continuing operations
    
    
    (88.6)%
    
    
    
    11.8%
    
    
    
    11.5%
    
    
    
    11.7%
    
    
    
    7.4%Consolidated Operating DataPV modules shipped (in MW)
    
    
    0.12
    
    
    
    6.79
    
    
    
    27.39
    
    
    
    75.91
    
    
    
    201.01Average selling price ($/W)
    
    $
    3.45
    
    
    $
    4.02
    
    
    $
    3.98
    
    
    $
    3.80
    
    
    $
    3.92
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As of December 31,2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008(in thousands)Consolidated Balance Sheet DataCash and cash equivalents
    
    $
    3,395
    
    
    $
    1,224
    
    
    $
    93,380
    
    
    $
    59,696
    
    
    $
    132,224Restricted cash
    
    
    242
    
    
    
    527
    
    
    
    5,004
    
    
    
    103,375
    
    
    
    44,991Inventories
    
    
    541
    
    
    
    6,696
    
    
    
    32,230
    
    
    
    58,548
    
    
    
    85,687Accounts receivable, net
    
    
    81
    
    
    
    4,924
    
    
    
    29,353
    
    
    
    72,323
    
    
    
    105,193Other receivables
    
    
    238
    
    
    
    817
    
    
    
    1,228
    
    
    
    3,063
    
    
    
    4,380Property, plant and equipment, net
    
    
    758
    
    
    
    9,630
    
    
    
    51,419
    
    
    
    197,124
    
    
    
    357,594Total assets
    
    
    11,192
    
    
    
    32,298
    
    
    
    251,745
    
    
    
    600,674
    
    
    
    940,116Short-term borrowings
    
    
    3,656
    
    
    
    6,628
    
    
    
    71,409
    
    
    
    163,563
    
    
    
    248,558Accounts payable
    
    
    1,390
    
    
    
    3,845
    
    
    
    9,147
    
    
    
    42,691
    
    
    
    62,504Total current liabilities
    
    
    6,178
    
    
    
    12,715
    
    
    
    88,068
    
    
    
    220,485
    
    
    
    335,714Accrued warranty costs
    
    
    4
    
    
    
    272
    
    
    
    1,400
    
    
    
    4,486
    
    
    
    12,473Long-term borrowings
    
    
    
    
    
    
    4,957
    
    
    
    5,122
    
    
    
    8,214
    
    
    
    14,631Total shareholders equity
    
    
    5,010
    
    
    
    14,355
    
    
    
    157,154
    
    
    
    367,489
    
    
    
    433,057Total liabilities and shareholders equity
    
    $
    11,192
    
    
    $
    32,298
    
    
    $
    251,745
    
    
    $
    600,674
    
    
    $
    940,116
 Capitalization and Indebtedness
  Reasons for the Offer and Use of Proceeds
  Risk Factors
 Risks Related to Our Company and Our Industry
 As polysilicon supply increases, the corresponding increase in the global supply of Photovoltaic
(PV) modules may cause substantial downward pressure on the price of such products and reduce our
revenues and earnings.
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We may be adversely affected by volatile market and industry trends, in particular, the demand for
our solar products may decline, which may reduce our revenues and earnings.
   We continue to rely on a limited number of third-party suppliers for certain raw materials for our
products, which could prevent us from delivering our products to our customers within required time
frames, which could result in sales and installation delays, cancellations, liquidated damages and
loss of market share.
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Our costs and expenses may increase as a result of entering into fixed price, prepaid arrangements
with our suppliers.
  Some of the suppliers of polysilicon with whom we have entered into long-term contracts have
limited operating experience in polysilicon production and may not be able to produce polysilicon
of sufficient quantity and quality or on schedule to meet our manufacturing requirements.
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Prepayments we provide to our polysilicon suppliers and equipment suppliers expose us to the credit
risks of such suppliers and may increase our costs and expenses, which could in turn have a
material adverse effect on our liquidity.
  Failure to procure sufficient reclaimable silicon raw materials at reasonable prices may decrease
our gross margin and profitability.
  A significant reduction or elimination of government subsidies and economic incentives or change in
government policies may have a material adverse effect on our business and prospects.
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Demand for our products may be adversely affected by the effect of the current economic and credit
environment on our customers.
    10




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Because the markets in which we compete are highly competitive and many of our competitors have
greater resources than us, we may not be able to compete successfully and we may lose or be unable
to gain market share.
     11




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Our dependence on a limited number of customers may cause significant fluctuations or declines in
our revenues.
  
    
    reduction, delay or cancellation of orders from one or more of our significant
customers;
    
    selection by one or more of our significant customers of products competitive with ours;
    
    loss of one or more of our significant customers due to disputes, dissatisfaction with
our products or otherwise and our failure to attract additional or replacement customers;
and
    
    failure of any of our significant customers to make timely payment for our products.
  The practice of requiring customers to make advance payments when they place orders with us has
declined, and we have experienced and will continue to experience increased needs to finance our
working capital requirements and are exposed to increased credit risk.
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We have significant outstanding bank borrowings and capital expenditure needs, and we may not be
able to arrange adequate financing when our outstanding borrowings mature or when capital
expenditures are required.
  We may not be successful in manufacturing solar cells cost-effectively.
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We may experience difficulty in achieving acceptable yields and product performance as a result of
manufacturing problems.
   Problems with product quality or product performance could damage our reputation, or result in a
decrease in customers and revenues, unexpected expenses or loss of market share, and may cause us
to incur significant warranty expenses
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We may not be successful in the commercial production of new products, which could adversely affect
our business and prospects.
  Existing regulations and policies and changes to these regulations and policies may present
technical, regulatory and economic barriers to the purchase and use of solar power products, which
may significantly reduce demand for our products.
    15




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If solar power technology is not suitable for widespread adoption, or sufficient demand for solar
power products does not develop or takes longer to develop than we anticipate, our revenues may not
continue to increase or may even decline, and we may be unable to sustain our profitability.
  
    
    cost-effectiveness, performance and reliability of solar power products compared to
conventional and other renewable energy sources and products;
    
    availability of government subsidies and incentives to support the development of the
solar power industry;
    
    success of other alternative energy generation technologies, such as wind power,
hydroelectric power and biomass;
    
    fluctuations in economic and market conditions that affect the viability of conventional
and other renewable energy sources, such as increases or decreases in the prices of oil and
other fossil fuels;
    
    capital expenditures by end users of solar power products, which tend to decrease when
the economy slows down; and
    
    deregulation of the electric power industry and broader energy industry.
  Further development in thin-film technologies or other changes in the solar power industry could
render our products uncompetitive or obsolete, which could reduce our market share and cause our
sales and profit to decline.
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Noncompliance with present or future construction and environmental regulations may result in
potentially significant monetary damages and fines.
     17




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Our future success substantially depends on our ability to significantly expand both our
manufacturing capacity and output, which exposes us to a number of risks and uncertainties.
  
    
    the need to raise significant additional funds to purchase raw materials or to build
additional manufacturing facilities, which we may be unable to obtain on commercially
viable terms or at all;
    
    delays and cost overruns as a result of a number of factors, many of which are beyond
our control, such as increases in the price of polysilicon and problems with equipment
vendors, particularly with respect to major equipment such as ingot pulling or growing
machines;
    
    delays or denial of required approvals by relevant government authorities;
    
    diversion of significant management attention and other resources; and
    
    failure to execute our expansion plan effectively.
   Our business depends substantially on the continuing efforts of our executive officers, and our
business may be severely disrupted if we lose their services.
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If we are unable to attract, train and retain qualified technical personnel, our business may be
materially and adversely affected.
  If we fail to manage our growth effectively, our business may be adversely affected.
  We face risks associated with the marketing, distribution and sale of our solar power products
internationally, and if we are unable to effectively manage these risks, they could impair our
ability to expand our business abroad.
  
    
    fluctuations in currency exchange rates;
    
    difficulty in engaging and retaining distributors who are knowledgeable about, and can
function effectively in, overseas markets;
    
    increased costs associated with maintaining marketing efforts in various countries;
    
    difficulty and costs relating to compliance with the different commercial and legal
requirements of the overseas markets in which we offer our products;
 
    
    trade barriers such as export requirements, tariffs, taxes and other restrictions and
expenses, which could increase the prices of our products and make us less competitive in
some countries; and
 
    
    demand for solar products in overseas markets as influenced by the worldwide credit crisis and its
effects.
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We may be exposed to infringement or misappropriation claims by third parties, which, if determined
adversely to us, could cause us to pay significant damage awards.
  Our failure to protect our intellectual property rights may undermine our competitive position, and
litigation to protect our intellectual property rights or defend against third-party allegations of
infringement may be costly.
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We have limited insurance coverage and may incur losses resulting from product liability claims.
  If we fail to maintain an effective system of internal control over financial reporting, we may
lose investor confidence in the reliability of our financial statements.
   Trina or Trina China may be required by the PRC tax authorities to withhold capital gains tax
arising out of our restructuring in May 2006.
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Our principal shareholders have substantial influence over our company and their interests may not
be aligned with the interests of our other shareholders.
  Fluctuations in exchange rates could adversely affect our business.
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Risks Related to Doing Business in China
 Adverse changes in political and economic policies of the PRC government could have a material
adverse effect on the overall economic growth of China, which could reduce the demand for our
products and materially and adversely affect our competitive position.
  
    
    the amount of government involvement;
    
    the level of development;
    
    the growth rate;
    
    the control of foreign exchange; and
    
    the allocation of resources.
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Uncertainties with respect to the Chinese legal system could have a material adverse effect on us.
  Our ability to make distributions and other payments to our shareholders depends to a significant
extent upon the distribution of earnings and other payments made by Trina China.
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Restrictions on currency exchange may limit our ability to receive and use our revenues
effectively.
   Our business benefits from certain PRC government tax incentives, and expiration of, or changes to,
these incentives.
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The dividends we receive from our PRC subsidiaries and our global income may be subject to PRC tax
under the new EIT law, which would have a material adverse effect on our results of operations; our
foreign ADS holders may be subject to a PRC withholding tax upon the dividends payable by us and
upon gains realized on the sale of our ADSs, if we are classified as a PRC resident enterprise.
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The approval of the Chinese Securities Regulatory Commission might have been required in connection
with our initial public offering, and, if required, we could be subject to sanction, fines and
other penalties.
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Recent regulations relating to offshore investment activities by PRC residents may limit our
ability to acquire PRC companies and could adversely affect our business, financial condition and
results of operations. The regulations also establish more complex procedures for acquisitions by
foreign investors, which could make it more difficult to pursue growth through acquisitions.
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New labor laws in the PRC may adversely affect our results of operations.
  We face risks related to health epidemics and other outbreaks.
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Risks Related to Our Ordinary Shares and ADSs
 The market price for our ADSs has been and is likely to continue to be highly volatile.
  
    
    announcements of technological or competitive developments;
    
    regulatory developments in our target markets affecting us, our customers or our
competitors;
    
    announcements of studies and reports relating to the conversion efficiencies of our
products or those of our competitors;
    
    actual or anticipated fluctuations in our quarterly operating results;
    
    changes in financial estimates by securities research analysts;
    
    changes in the economic performance or market valuations of other solar power technology
companies;
    
    addition or departure of our executive officers and key research personnel;
    
    announcements regarding patent litigation or the issuance of patents to us or our
competitors;
    
    conditions affecting general economic performance in the United States;
    
    fluctuations in the exchange rates between the U.S. dollar, the Euro and Renminbi;
    
    release or expiry of lock-up or other transfer restrictions on our outstanding ordinary
 shares; and
    
    sales or perceived sales of additional ADSs.
  Holders of our ADSs do not have the same voting rights as the holders of our ordinary shares and
may not receive voting materials in time to be able to exercise their right to vote.
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We have adopted a shareholders rights plan, which, together with the other anti-takeover provisions
of our articles of association, could discourage a third party from acquiring us, which could limit
our shareholders opportunity to sell their shares, including ordinary shares represented by our
ADSs, at a premium.
   Holders of our ADSs may not be able to participate in rights offerings that are made available to
our shareholders, and may not receive cash dividends if it is impractical to make them available to
them.
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Holders of our ADSs may be subject to limitations on transfer of their ADSs.
  We are a Cayman Islands company and, because judicial precedent regarding the rights of
shareholders is more limited under Cayman Islands law than that under U.S. law, our shareholders
may have less protection for their shareholder rights than they would under U.S. law.
  You may have difficulty enforcing judgments obtained against us.
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Item 4. Information on the Company
 History and Development of the Company
    Business Overview
 Overview
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Products
   34




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Manufacturing
  Estimated MaximumAnnualAnnual
    
    
    
    
    
    
    ManufacturingManufacturing
    
    Manufacturing
    
    
    Production Output
    
    
    Capacity as ofManufacturing
    
    Commencement
    
    Capacity as of
    
    
    for the Year Ended
    
    
    December 31,Facility
    
    Date
    
    December 31, 2008
    
    
    December 31, 2008
    
    
    2009Silicon ingots
    
    August 2005
    
    350 MW
    (1)
    
    166 MW
    (2)
    
    550 MWSilicon wafers
    
    February 2006
    

    350 MW
    (1)
    
    194 MW
    (2)
    
    550 MWSolar cells
    
    April 2007

    
    350 MW
    (1)
    
    209 MW
    (2)
    
    550 MWPV modules
    
    November 2004
    
    350 MW
    (1)
    
    211 MW
    
    
    550 MW
 
 (1)
    
    These are approximate figures due to discrepancies of the manufacturing capacity for each
stage of our solar power value chain.(2)
    
    Includes modules produced but not shipped as of December 31, 2008. 
    
    Silicon feedstock. We purchase polysilicon and reclaimable silicon raw materials from
various suppliers, including silicon distributors, silicon manufacturers, semiconductor
manufacturers and silicon processing companies. We test and categorize reclaimable silicon
raw materials based on their technical properties. These reclaimable silicon raw materials
then undergo mechanical grinding and chemical cleaning before they are mixed using our
proprietary formula. Our ability to mix the materials in the right proportion is critical
to the production of high-quality silicon ingots. In the fourth quarter of 2008, we had an
average silicon usage of approximately 6.3 grams per watt, compared to approximately 8.0
grams per watt in the fourth quarter of 2007.
    
    Ingots. We began manufacturing monocrystalline ingots in August 2005 with pulling
machines. As of December 31, 2008, we had 110 pulling machines for manufacturing
monocrystalline ingots, which can yield 110 MW of modules annually based on current
manufacturing processes, and 45 directional solidification system (DSS) furnaces for the
manufacturing of multicrystalline ingots, which can yield 240 MW of modules annually based
on current manufacturing processes.
  35




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To produce monocrystalline silicon ingots, silicon raw materials are first melted in a
quartz crucible in the pulling furnace. Then, a thin crystal seed is dipped into the melted
material to determine the crystal orientation. The seed is rotated and then slowly
extracted from the melted material which solidifies on the seed to form a single crystal.We began commercial production of multicrystalline ingots in November 2007. To produce
multicrystalline ingots, molten silicon is changed into a block through a casting process in
a DSS furnace. Crystallization starts by gradually cooling the crucibles in order to create
multicrystalline ingot blocks. The resulting ingot blocks consist of multiple smaller
crystals as opposed to the single crystal of a monocrystalline ingot.
    
    Wafers. Currently, we slice monocrystalline wafers to a 170 micron or 180 micron thickness and
multicrystalline wafers to a 180 micron thickness, while maintaining a low breakage rate.
We began manufacturing wafers in February 2006. After the ingots are inspected,
monocrystalline ingots are squared by squaring machines. Through high-precision cutting
techniques, the squared ingots are then sliced into wafers by wire saws using steel wires
and silicon carbon powder. To produce multicrystalline wafers, multicrystalline ingots are
first cut into pre-determined sizes. After a testing process, the multicrystalline ingots
are cropped and the usable parts of the ingots are sliced into wafers by wire saws by the
same high-precision cutting techniques as used for slicing monocrystalline wafers. After
being inserted into frames, the wafers go through a cleansing process to remove debris from
the previous processes, and are then dried. Wafers are inspected for contaminants then
packed and transferred to our solar cell production facilities. Our annual wafer
manufacturing capacity as of December 31, 2008 was approximately 350 MW of modules based on
current manufacturing processes.
    
    Solar cells.We currently produce our own solar cells for use in our PV modules. We
have historically purchased solar cells from third-party solar cell manufacturers. After
we installed our ingot and wafer production lines, we began manufacturing ingots and wafers
in-house and outsourced the fabrication of solar cells to solar cell manufacturers. To
reduce our dependence on third-party solar cell manufacturers and to increase our
efficiencies both in solar cell and PV module manufacturing, we began the production of
monocrystalline cells in April 2007 and achieved a conversion efficiency of up to 17.5% as
of December 31, 2008. In November 2007, we began producing multicrystalline cells and
achieved a conversion efficiency of up to 16.3% as of December 31, 2008. In 2008, we were
able to meet our solar cell needs with our in-house production capabilities. We currently
have 14 production lines with an annual manufacturing capacity of approximately 350 MW.To manufacture solar cells, the crystalline silicon wafer is used as the base substrate.
After cleaning and texturing the surface, emitter is formed through a diffusion process.
The front and back sides of the wafer are then isolated using the plasma etching technique,
the oxide formed during the diffusion process is removed and thus an electrical field is
formed. We then apply an anti-reflective coating to the surface of the cell using plasma
enhanced chemical vapors to enhance the absorption of sunlight. The front and back sides of
the cell are screen printed with metallic inks and the cell
then undergoes a fire treatment in order to preserve its mechanical and electrical
properties. The cell is tested and classified according to its parameters.
  36




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
    
    PV modules. We began module manufacturing in November 2004. We increased our annual
manufacturing capacity of modules from approximately 6 MW per year as of November 2004 to
approximately 350 MW per year as of December 31, 2008. We currently have 26 production
lines.To assemble PV modules, we interconnect multiple solar cells by taping and stringing the
cells into a desired electrical configuration. The interconnected cells are laid out,
laminated in a vacuum, cured by heating and then packaged in a protective light-weight
aluminum frame. Through this labor-intensive process, our PV modules are sealed and become
weatherproof and are able to withstand high levels of ultraviolet radiation and moisture.PV module assembly remains a labor intensive process. We leverage Chinas lower labor costs
by using a greater degree of labor in our manufacturing process when it proves to be more
efficient and cost-effective than using automated equipment. We are in close proximity to
Chinese solar equipment manufacturers that offer many of the solar manufacturing equipment
we require at competitive prices compared to most similar machinery offered by international
solar equipment manufacturers.
  Silicon Raw Material Supplies
    37




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Quality Assurance
    38




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##### Table of Contents



Certification Test Date
    
    Certification or Test Standard
    
    Relevant ProductsDecember 2007
    
    ISO 9001:2000 quality system certification
    
    Manufacturing and sales
of silicon, ingots,
casting, silicon
wafers, solar cells and
PV modulesApril 2008
    
    Golden Sun product certification
    
    PV modules sold in ChinaAugust 2008
    
    UL 1703 certification
    
    PV modules sold in the
United StatesSeptember and
October 2008
    
    ASU-PTL product certification
    
    PV modules sold in
EuropeDecember 2008
    
    ISO14001:2004 environmental management

system
    
    Manufacturing and sales
of silicon, ingots,
casting, silicon
wafers, solar cells and
PV modulesDecember 2008
    
    VDE product certification
    
    PV modules sold in
EuropeOctober 2007,
November 2007,
December 2007 and
December 2008
    
    CE certification
    
    PV modules sold in
EuropeFebruary 2009
    
    South Korean module certificate
    
    PV modules sold in
South KoreaMarch 2008, May
2008, October 2008
and February 2009
    
    ICIM product certification
    
    PV modules sold in ItalyAugust 2006, June
2007, July 2007,
February 2009 and
April 2009
    
    TÜV product certification
    
    PV modules sold in
Europe
 Customers and Markets
     39




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##### Table of Contents



Year Ended December 31,2006
    
    
    2007
    
    
    2008Total Net
    
    
    
    
    
    
    Total Net
    
    
    
    
    
    
    Total NetRegion
    
    Revenues
    
    
    Percent
    
    
    Revenues
    
    
    Percent
    
    
    Revenues
    
    
    Percent(in thousands, except for percentages)EuropeGermany
    
    $
    49,052
    
    
    
    42.8
    %
    
    $
    94,733
    
    
    
    31.4
    %
    
    $
    198,529
    
    
    
    23.9
    %Spain
    
    
    43,448
    
    
    
    37.9
    
    
    
    120,831
    
    
    
    40.0
    
    
    
    270,549
    
    
    
    32.5Italy
    
    
    
    
    
    
    
    
    
    
    54,695
    
    
    
    18.1
    
    
    
    149,685
    
    
    
    18.0Others
    
    
    10,862
    
    
    
    9.6
    
    
    
    21,041
    
    
    
    7.0
    
    
    
    136,641
    
    
    
    16.4Europe Total
    
    
    103,362
    
    
    
    90.3
    
    
    
    291,300
    
    
    
    96.5
    
    
    
    755,404
    
    
    
    90.8China
    
    
    10,632
    
    
    
    9.3
    
    
    
    6,373
    
    
    
    2.1
    
    
    
    30,390
    
    
    
    3.7Others
    
    
    506
    
    
    
    0.4
    
    
    
    4,146
    
    
    
    1.4
    
    
    
    46,107
    
    
    
    5.5Total
    
    $
    114,500
    
    
    
    100.0
    %
    
    $
    301,819
    
    
    
    100.0
    %
    
    $
    831,901
    
    
    
    100.0
    %
     40




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##### Table of Contents



Sales and Marketing
  Intellectual Property
   
  41




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##### Table of Contents



Competition
  
    
    manufacturing efficiency;
    
    power efficiency and performance;
    
    price;
    
    strength of supplier relationships;
    
    aesthetic appearance of PV modules; and
    
    brand name and reputation.
    42




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##### Table of Contents



Environmental Matters
  Insurance
  Regulation
  Renewable Energy Law and Other Government Directives
    43




---



##### Table of Contents



Environmental Regulations
  Restriction on Foreign Ownership
  Tax
    44




---



##### Table of Contents



45




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##### Table of Contents



Foreign Currency Exchange
   Dividend Distribution
     46




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##### Table of Contents



Organizational Structure
  Name
    
    Country of Incorporation
    
    Ownership InterestTop Energy International Limited
    
    Hong Kong
    
    
    100
    %Changzhou Trina Solar Energy Co., Ltd.
    
    China
    
    
    100
    %Trina Solar Korea Limited
    
    South Korea
    
    
    100
    %
  Property, Plant and Equipment
   Manufacturing
    
    
    
    No. of Units in Operation as ofFacility
    
    Major Equipment
    
    December 31, 2008
    
    
    Source (Country)Silicon ingots
    
    Ingot pulling machines
    
    
    110
    
    
    ChinaDSS furnaces
    
    
    45
    
    
    United StatesSilicon wafers
    
    Wafer sawing machines
    
    
    62
    
    
    SwitzerlandSolar cells
    
    Diffusion furnaces
    
    
    54
    
    
    GermanyScreen print machine sets
    
    
    14
    
    
    ItalyPV modules
    
    Automatic laminators
    
    
    26
    
    
    China
  47




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Item4A. Unresolved Staff Comments
  
 Item 5. Operating and Financial Review and Prospects
 3⁄4
 Operating Results
 Overview
     48




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
    
    industry demand;
    
    government subsidies and economic incentives;
    
    availability and prices of polysilicon and reclaimable silicon raw materials;
    
    vertically integrated manufacturing capabilities; and
    
    product pricing.
 Industry Demand
   Government Subsidies and Economic Incentives
   49




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Availability and Prices of Polysilicon and Reclaimable Silicon Raw Materials
    50




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##### Table of Contents



51




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##### Table of Contents



Vertically Integrated Manufacturing Capabilities
   
    
    reduce excess costs, such as those associated with packaging and transportation, and the
breakage loss that occurs during shipment between various production locations;
    
    shorten production cycle and improve value chain coordination; and
    
    discontinue our reliance on toll manufacturing and capture upstream or downstream profit
margins.
  Product Pricing
    52




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Overview of Financial Results
  Net Revenues
     53




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Year Ended December 31,2006
    
    
    2007
    
    
    2008Total Net
    
    
    
    
    
    
    Total Net
    
    
    
    
    
    
    Total NetRegion
    
    Revenues
    
    
    Percent
    
    
    Revenues
    
    
    Percent
    
    
    Revenues
    
    
    Percent(in thousands, except for percentages)EuropeGermany
    
    $
    49,052
    
    
    
    42.8
    %
    
    $
    94,733
    
    
    
    31.4
    %
    
    $
    198,529
    
    
    
    23.9
    %Spain
    
    
    43,448
    
    
    
    37.9
    
    
    
    120,831
    
    
    
    40.0
    
    
    
    270,549
    
    
    
    32.5Italy
    
    
    
    
    
    
    
    
    
    
    54,695
    
    
    
    18.1
    
    
    
    149,685
    
    
    
    18.0Others
    
    
    10,862
    
    
    
    9.6
    
    
    
    21,041
    
    
    
    7.0
    
    
    
    136,641
    
    
    
    16.4Europe Total
    
    $
    103,362
    
    
    
    90.3
    
    
    $
    291,300
    
    
    
    96.5
    
    
    $
    755,404
    
    
    
    90.8China
    
    
    10,632
    
    
    
    9.3
    
    
    
    6,373
    
    
    
    2.1
    
    
    
    30,390
    
    
    
    3.7Others
    
    
    506
    
    
    
    0.4
    
    
    
    4,146
    
    
    
    1.4
    
    
    
    46,107
    
    
    
    5.5Total
    
    $
    114,500
    
    
    
    100.0
    %
    
    $
    301,819
    
    
    
    100.0
    %
    
    $
    831,901
    
    
    
    100.0
    %
 Cost of Revenues
  
    
    Silicon raw materials. Silicon raw materials comprise the majority of our cost of
revenues. We purchase polysilicon and reclaimable silicon raw materials from various
suppliers, including silicon distributors, silicon manufacturers, semiconductor
manufacturers and silicon processing companies.
    
    Other direct materials. Such materials include direct materials for the production of
PV modules such as plastic, metallic pastes, tempered glass, laminate material, connecting
systems and aluminum frames.
    
    Toll manufacturing. Prior to 2008, we entered into toll manufacturing arrangements by
providing wafers to toll manufacturers for processing and receiving solar cells from them
in return. The toll manufacturing cost is capitalized as inventory, and recorded as a part
of our cost of revenues when our finished PV modules are sold. In 2008, we were able to
meet our solar cell needs with our in-house production capabilities and we have
discontinued our reliance on toll manufacturers for processing solar cells. From time to
time, we purchase wafers to supplement any shortfalls as we rapidly increase our production
capacity.
    
    Overhead. Overhead costs include equipment maintenance and utilities such as
electricity and water used in manufacturing.
    
    Direct labor. Direct labor costs include salaries and benefits for our manufacturing
personnel.
  54




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
    
    Depreciation of facilities and equipment. Depreciation of manufacturing facilities and
related improvements is provided on a straight-line basis over the estimated useful life of
10 to 20 years and commences from the date the facility is ready for its intended use.
Depreciation of manufacturing equipment is provided on a straight-line basis over the
estimated useful life of five to ten years, commencing from the date that the equipment is
placed into productive use.
  Gross Margin
  Operating Expenses
   55




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Selling Expenses
  General and Administrative Expenses
  Research and Development Expenses
    56




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##### Table of Contents



Share-based Compensation Expenses
   For the Year Ended December 31,2006
    
    
    2007
    
    
    2008(in thousands, except for percentages)Cost of revenues
    
    $
    415
    (1)
    
    
    15.2
    %
    
    $
    35
    
    
    
    2.1
    %
    
    $
    111
    
    
    
    2.8
    %Selling expenses
    
    
    323
    (1)
    
    
    11.8
    
    
    
    394
    
    
    
    22.6
    
    
    
    512
    
    
    
    12.7General and administrative expenses
    
    
    389
    (1)
    
    
    14.3
    
    
    
    1,165
    
    
    
    66.9
    
    
    
    3,297
    
    
    
    81.9Research and development
    
    
    1,600
    (1)
    
    
    58.7
    
    
    
    146
    
    
    
    8.4
    
    
    
    105
    
    
    
    2.6Total share-based compensation expenses
    
    $
    2,727
    
    
    
    100.0
    %
    
    $
    1,740
    
    
    
    100
    %
    
    $
    4,025
    
    
    
    100
    %
 
 (1)
    
    In 2006, we recognized a one-time share-based compensation expense in connection
with the transfer of beneficial interests in our company from a shareholder and a founder of
our company to our administrative personnel. Discontinued Operations
 Accounting for
the
Impairment or Disposal of Long-lived Assets
  57




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Taxation
      58




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##### Table of Contents



Critical Accounting Policies
   Revenue Recognition
   59




---



##### Table of Contents



Warranty Cost
  Impairment of Long-lived Assets and Definite-lived Intangibles
  Allowance for Doubtful Accounts
    60




---



##### Table of Contents



Share-based Compensation
  Inventories
  Income Taxes
  Derivative Financial Instruments
 Foreign Currency Embedded Derivative in Supply Agreement
   61




---



##### Table of Contents



(1)
    
    Exchange forward rates for month one to 12 are available on the China on-shore
market. As such, for month one to 12, we obtained the exchange forward rates from the
China on-shore market.(2)
    
    Exchange forward rates for month 13 to 24 were computed by taking the 15th,
18th and 24th months exchange forward rates available from the China on-shore market
and applying linear interpolation to derive the other monthly forward rates.(3)
    
    Exchange forward rates for month 25 to 84 were estimated by applying linear
interpolation to the two- and seven-year exchange forward rates, available from the
China on-shore market.(4)
    
    Exchange forward rates for periods in excess of seven years were not available
from the China on-shore market. As such, for the periods beyond 84 months, we
forecasted the monthly exchange rates based on an assumption that the Renminbi will
appreciate at a fixed monthly rate, equivalent to the annual change in the exchange
rate projected by the International Monetary Fund.
   Derivative Assets Related to Foreign Currency Forward Contracts
    62




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##### Table of Contents



Results of Operations
  Year Ended December 31,2006
    
    
    2007
    
    
    2008(in thousands, except for percentages)Net revenues
    
    $
    114,500
    
    
    
    100.0
    %
    
    $
    301,819
    
    
    
    100.0
    %
    
    $
    831,901
    
    
    
    100.0
    %Cost of revenues
    
    
    84,450
    
    
    
    73.8
    
    
    
    234,191
    
    
    
    77.6
    
    
    
    667,459
    
    
    
    80.2Gross profit
    
    
    30,050
    
    
    
    26.2
    
    
    
    67,628
    
    
    
    22.4
    
    
    
    164,442
    
    
    
    19.8Operating expenses:Selling expenses
    
    
    2,571
    
    
    
    2.2
    
    
    
    11,019
    
    
    
    3.7
    
    
    
    20,302
    
    
    
    2.4General and administrative expenses
    
    
    8,656
    
    
    
    7.5
    
    
    
    17,817
    
    
    
    5.9
    
    
    
    41,114
    
    
    
    5.0Research and development expenses
    
    
    1,903
    
    
    
    1.7
    
    
    
    2,805
    
    
    
    0.9
    
    
    
    3,039
    
    
    
    0.4Total operating expenses
    
    $
    13,130
    
    
    
    11.5
    
    
    $
    31,641
    
    
    
    10.5
    
    
    $
    64,455
    
    
    
    7.8Income from continuing operations
    
    
    16,920
    
    
    
    14.8
    
    
    
    35,987
    
    
    
    11.9
    
    
    
    99,987
    
    
    
    12.0Foreign exchange loss
    
    
    
    
    
    
    
    
    
    
    1,999
    
    
    
    0.6
    
    
    
    11,802
    
    
    
    1.5Interest expense
    
    
    2,137
    
    
    
    1.8
    
    
    
    7,551
    
    
    
    2.5
    
    
    
    23,937
    
    
    
    2.9Interest income
    
    
    261
    
    
    
    0.2
    
    
    
    4,810
    
    
    
    1.6
    
    
    
    2,944
    
    
    
    0.4Gain (loss) on change in fair value of
derivative
    
    
    
    
    
    
    
    
    
    
    854
    
    
    
    0.3
    
    
    
    (1,067
    )
    
    
    (0.1
    )Other (expense) income
    
    
    (82
    )
    
    
    (0.1
    )
    
    
    1,554
    
    
    
    0.5
    
    
    
    (156
    )
    
    
    (0.0
    )Income before income taxes
    
    
    14,962
    
    
    
    13.1
    
    
    
    33,655
    
    
    
    11.2
    
    
    
    65,969
    
    
    
    7.9Income tax (expense) benefit
    
    
    (1,788
    )
    
    
    (1.6
    )
    
    
    1,707
    
    
    
    0.5
    
    
    
    (4,609
    )
    
    
    (0.5
    )Net income from continuing operations
    
    
    13,174
    
    
    
    11.5
    
    
    
    35,362
    
    
    
    11.7
    
    
    
    61,360
    
    
    
    7.4Net income (loss) from discontinued
operations
    
    
    (753
    )
    
    
    (0.7
    )
    
    
    368
    
    
    
    0.1
    
    
    
    
    
    
    
    Net income
    
    $
    12,421
    
    
    
    10.8
    %
    
    $
    35,730
    
    
    
    11.8
    %
    
    $
    61,360
    
    
    
    7.4
    %
  63




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Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
 Net Revenues.
 Cost of Revenues.
 Gross Profit.
 Operating Expenses.
 Selling Expenses.
  64




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General and Administrative Expenses
 Research and Development Expenses
 Exchange Gain and Loss
 Interest Expenses, Net.
 Gain (Loss) on the Change in Fair Value of Derivative
 Income Tax Expenses.
 Net Income from Continuing Operations.
 Net Income from Discontinued Operations
 Net Income.
  65




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Year Ended December 31, 2007 Compared to Year Ended December 31, 2006
 Net Revenues.
 Cost of Revenues.
 Gross Profit.
 Operating Expenses.
 Selling Expenses.
 General and Administrative Expenses
  66




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Research and Development Expenses
 Exchange Gain and Loss
 Interest Expenses, Net.
 Gain on the Change in Fair Value of Derivative
 Income Tax Expenses.
 Net Income from Continuing Operations.
 Net Income from Discontinued Operations
 Net Income.
  67




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Liquidity and Capital Resources
      68




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##### Table of Contents



Cash Flows and Working Capital
  Year Ended December 31,2006
    
    
    2007
    
    
    2008(in thousands)Net cash used in operating activities
    
    $
    (54,000
    )
    
    $
    (59,477
    )
    
    $
    (32,082
    )Net cash used in investing activities
    
    
    (46,556
    )
    
    
    (225,284
    )
    
    
    (118,523
    )Net cash provided by financing activities
    
    
    190,968
    
    
    
    249,899
    
    
    
    222,950Effect of exchange rate changes
    
    
    1,744
    
    
    
    1,178
    
    
    
    183Net increase (decrease) in cash and cash equivalents
    
    
    92,156
    
    
    
    (33,684
    )
    
    
    72,528Cash and cash equivalents at the beginning of the year
    
    
    1,224
    
    
    
    93,380
    
    
    
    59,696Cash and cash equivalents at the end of the year
    
    $
    93,380
    
    
    $
    59,696
    
    
    $
    132,224
 Operating Activities
    Investing Activities
   69




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Financing Activities
  Restrictions on Cash Dividends
  Borrowings
   70




---



##### Table of Contents



Capital Expenditures
   71




---



##### Table of Contents



Recent Accounting Pronouncements
      72




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##### Table of Contents



73




---



##### Table of Contents



Research and Development
    74




---



##### Table of Contents



Trend Information
   75




---



##### Table of Contents



Off-Balance Sheet Commitments and Arrangements
  Contractual Obligations and Commercial Commitments
  Payment Due by PeriodMoreLess than
    
    
    
    
    
    
    
    
    
    
    than 5Total
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    Years(in thousands)Long-term borrowings(1)
    
    $
    16,565
    
    
    $
    1,043
    
    
    $
    15,522
    
    
    
    
    
    
    
    Purchase obligations(2)
    
    
    7,337,270
    
    
    
    670,387
    
    
    
    2,844,374
    
    
    $
    2,649,176
    
    
    $
    1,173,333Convertible senior notes(3)
    
    
    147,252
    
    
    
    5,520
    
    
    
    141,732
    
    
    
    
    
    
    
    Other long-term liabilities reflected
on our balance sheet(4)
    
    
    23,466
    
    
    
    
    
    
    
    10,993
    
    
    
    
    
    
    
    12,473Total
    
    $
    7,524,553
    
    
    $
    675,950
    
    
    $
    3,012,621
    
    
    $
    2,649,176
    
    
    $
    1,185,806
 
 (1)
    
    Includes interests that are derived using an average rate of 7.13% per annum for long-term borrowings.(2)
    
    Consists of raw material and equipment purchase commitments and operating lease commitments.(3)
    
    Includes interests that are derived using the coupon rate of 4% per annum
for convertible senior notes. The convertible senior notes will
mature on July 15, 2013 and the holders may require us to early redeem the
convertible senior notes on July 15, 2011.(4)
    
    Consists of accrued warranty costs for solar modules.  3⁄4 3⁄4 3⁄4 3⁄4 3⁄4
 Safe Harbor
   76




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##### Table of Contents



77




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##### Table of Contents



Item 6. Directors, Senior Management and Employees
 Directors and Senior Management
  Directors and Executive Officers
    
    Age
    
    Position/TitleJifan Gao
    
    
    44
    
    
    Chairman and Chief Executive OfficerSean Hsiyuan Tzou
    
    
    52
    
    
    Director and Chief Operating OfficerLiping Qiu
    
    
    44
    
    
    DirectorJerome Corcoran
    
    
    59
    
    
    Independent DirectorJunfeng Li
    
    
    53
    
    
    Independent DirectorPeter Mak
    
    
    47
    
    
    Independent DirectorQian Zhao
    
    
    40
    
    
    Independent DirectorTerry Wang
    
    
    49
    
    
    Chief Financial OfficerSuping Chen
    
    
    44
    
    
    Vice President of Manufacturing, East CampusArturo Herrero
    
    
    37
    
    
    Vice President of Sales and MarketingQiang Huang
    
    
    37
    
    
    Vice President of TechnologyChunyan Wu
    
    
    40
    
    
    Vice President of System IntegrationChen Chung Yu
    
    
    44
    
    
    Vice President of ManufacturingYu Zhu
    
    
    34
    
    
    Vice President of Procurement and Business DevelopmentDiming Qiu
    
    
    68
    
    
    Head of Technology Committee
 Directors
 Mr. Jifan Gao
 Mr. Sean Hsiyuan Tzou
  78




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##### Table of Contents



Mr. Liping Qiu
 Independent Directors
 Mr. Jerome Corcoran
 Mr. Junfeng Li
 Mr. Peter Mak
  79




---



##### Table of Contents



Mr. Qian Zhao
 Executive Officers
 Mr. Terry Wang
 Mr. Arturo Herrero
 Dr. Suping Chen
  80




---



##### Table of Contents



Dr. Qiang Huang
 Ms. Chunyan Wu
 Mr. Chen Chung Yu
 Mr. Yu Zhu
  81




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##### Table of Contents



Mr. Diming Qiu
 Compensation of Directors and Executive Officers
 Compensation of Directors and Executive Officers
  Share Incentive Plan
   Administration.
 Awards.
 
    
    Options.Options provide for the right to purchase our ordinary shares at a
specified price, and usually will become exercisable at the discretion of our
compensation committee in one or more installments after the grant date. The option
exercise price may be paid in cash, by check, our ordinary shares which have been held
by the option holder for such time as may be required to avoid
adverse accounting treatment, other property with value equal to the exercise price,
through a broker assisted cash-less exercise or such other methods as our compensation
committee may approve from time to time.
  82




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##### Table of Contents




    
    Restricted Shares.A restricted share award is the grant of our ordinary shares at
a price determined by our compensation committee. A restricted share is
nontransferable, unless otherwise determined by our compensation committee at the time
of award and may be repurchased by us upon termination of employment or service during
a restricted period. Our compensation committee shall also determine in the award
agreement whether the participant will be entitled to vote the restricted shares or
receive dividends on such shares.
    
    Restricted Share Units.Restricted share units represent the right to receive our
ordinary shares at a specified date in the future, subject to forfeiture of such right.
If the restricted share unit has not been forfeited, then on the date specified in the
award agreement we shall deliver to the holder unrestricted ordinary shares, which will
be freely transferable.
 Termination of Plan.
 Restricted Shares
  Restricted Share Award Agreement
 Vesting Schedule
 Transfer Restrictions
  83




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##### Table of Contents



Dividend and Voting Rights
 Repurchase of Restricted Shares
 Third-Party Acquisition
  PurchaseRestricted
    
    
    Price
    
    
    
    
    
    
    End of VestingDirectors and Executive Officers
    
    Shares Held
    
    
    ($ per share)
    
    
    Date of Grant

    
    PeriodJifan Gao
    
    
    
    *
    
    
    0.00001
    
    
    April 11, 2008
    
    April 11, 2013Sean Hsiyuan Tzou
    
    
    
    *
    
    
    0.00001
    
    
    August 15, 2007/
    
    August 15, 2012/April 11, 2008
    
    April 11, 2013Jerome Corcoran
    
    
    
    *
    
    
    0.00001
    
    
    January 1, 2007/
    
    January 1, 2010October 1, 2007Junfeng Li
    
    
    
    *
    
    
    0.00001
    
    
    November 9, 2007
    
    November 9, 2010Peter Mak
    
    
    
    *
    
    
    0.00001
    
    
    January 1, 2007/
    
    January 1, 2010October 1, 2007Liping Qiu
    
    
    
    *
    
    
    0.00001
    
    
    July 24, 2006/
    
    July 24, 2009/July 7, 2008
    
    July 7, 2011Qian Zhao
    
    
    
    *
    
    
    0.00001
    
    
    October 1, 2007
    
    May 18, 2010Terry Wang
    
    
    
    *
    
    
    0.00001
    
    
    January 28, 2008
    
    January 28, 2013Suping Chen
    
    
    
    *
    
    
    0.00001
    
    
    November 1, 2008
    
    November 1, 2013Arturo Herrero
    
    
    
    *
    
    
    0.00001
    
    
    July 24, 2006/
    
    July 24, 2011/October 1, 2007/
    
    October 1, 2012/April 11, 2008
    
    April 11, 2013Qiang Huang
    
    
    
    *
    
    
    0.00001
    
    
    November 1, 2008
    
    November 1, 2013Chunyan Wu
    
    
    
    *
    
    
    0.00001
    
    
    July 24, 2006/
    
    July 24, 2011/April 11, 2008
    
    April 11, 2013Chen Chung Yu
    
    
    
    *
    
    
    0.00001
    
    
    August 15, 2007/
    
    August 15, 2012/April 11, 2008
    
    April 11, 2013Yu Zhu
    
    
    
    *
    
    
    0.00001
    
    
    July 24, 2006/
    
    July 24, 2011/April 11, 2008
    
    April 11, 2013Diming Qiu
    
    
    
    *
    
    
    0.00001
    
    
    July 24, 2006/
    
    July 24, 2011/April 11, 2008
    
    April 11, 2013Directors and executive officers as a group
    
    
    21,433,550
  84




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##### Table of Contents



PurchaseRestricted
    
    
    Price
    
    
    
    
    
    
    End of VestingDirectors and Executive Officers
    
    Shares Held
    
    
    ($ per share)

    
    Date of Grant
    
    PeriodOther individuals as a group
    
    
    8,294,625/
    
    
    
    0.00001
    
    
    July 24, 2006/
    
    July 24, 2011/60,000
    
    
    
    
    
    
    January 1, 2007/
    
    January 1, 2012/800,000/
    
    
    
    
    
    
    August 15, 2007/
    
    August 15, 2012/800,000/
    
    
    
    
    
    
    September 30, 2007/
    
    September 30, 2012/2,480,000/
    
    
    
    
    
    
    October 1, 2007/
    
    October 1, 2012/1,920,000/
    
    
    
    
    
    
    January 1, 2008/
    
    January 1, 2013/956,147/
    
    
    
    
    
    
    March 2, 2008/
    
    March 2, 2013/255,000/
    
    
    
    
    
    
    March 18, 2008/
    
    March 18, 2013/560,000/
    
    
    
    
    
    
    April 1, 2008/
    
    April 1, 2013/1,706,399/
    
    
    
    
    
    
    April 11, 2008/
    
    April 11, 2013/200,000/
    
    
    
    
    
    
    May 23, 2008/
    
    May 23, 2013/200,000/
    
    
    
    
    
    
    September 1, 2008/
    
    September 1, 2013/500,000/
    
    
    
    
    
    
    December 1, 2008/
    
    December 1, 2013/500,000
    
    
    
    
    
    
    April 1 ,2009
    
    April 1 ,2014
 
 *
    
    Upon vesting of all restricted shares, would beneficially own 1% or less of our ordinary
shares. Share Options
  Option Agreement.
 Vesting Schedule.
 Option Exercise.
 Termination of Options.
  85




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##### Table of Contents



OrdinarySharesUnderlying
    
    
    ExerciseOutstanding
    
    
    PriceDirectors and Executive Officers
    
    Options
    
    
    ($ per share)
    
    
    Date of Grant
    
    Final Expiration DateJifan Gao
    
    
    
    *
    
    
    32.55
    
    
    April 11, 2008
    
    April 11, 2013Sean Hsiyuan Tzou
    
    
    
    *
    
    
    32.55
    
    
    April 11, 2008
    
    April 11, 2013Jerome Corcoran
    
    
    
    
    
    
    
    
    
    
    
    Junfeng Li
    
    
    
    
    
    
    
    
    
    
    
    Peter Mak
    
    
    
    
    
    
    
    
    
    
    
    Liping Qiu
    
    
    
    
    
    
    
    
    
    
    
    Qian Zhao
    
    
    
    
    
    
    
    
    
    
    
    Terry Wang
    
    
    
    *
    
    
    43.42
    
    
    January 28, 2008
    
    January 28, 2013Suping Chen
    
    
    
    
    
    
    
    
    
    
    
    Arturo Herrero
    
    
    
    *
    
    
    32.55
    
    
    April 11, 2008
    
    April 11, 2013Qiang Huang
    
    
    
    
    
    
    
    
    
    
    
    Chunyan Wu
    
    
    
    *
    
    
    32.55
    
    
    April 11, 2008
    
    April 11, 2013Chen Chung Yu
    
    
    
    *
    
    
    32.55
    
    
    April 11, 2008
    
    April 11, 2013Yu Zhu
    
    
    
    *
    
    
    32.55
    
    
    April 11, 2008
    
    April 11, 2013Diming Qiu
    
    
    
    *
    
    
    32.55
    
    
    April 11, 2008
    
    April 11, 2013Directors and executive
officers as a group
    
    
    7,930,806Other individuals as a group
    
    
    565,251/
    
    
    
    34.14/
    
    
    March 2, 2008/
    
    March 2, 2013/4,035,422
    
    
    
    32.55
    
    
    April 11, 2008
    
    April 11, 2013
 *
    
    Upon exercise of all share options, would beneficially own 1% or less of our ordinary shares. Board Practices
 Board of Directors
  Committees of the Board of Directors
   86




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##### Table of Contents



Audit Committee
  
    
    selecting the independent auditors and pre-approving all auditing and non-auditing
services permitted to be performed by the independent auditors;
    
    reviewing with the independent auditors any audit problems or difficulties and
managements response;
    
    reviewing and approving all proposed related party transactions, as defined in Item 404
of Regulation S-K under the Securities Act;
    
    discussing the annual audited financial statements with management and the independent
auditors;
    
    reviewing major issues as to the adequacy of our internal controls and any special audit
steps adopted in light of material control deficiencies; and
    
    meeting separately and periodically with management and the independent auditors.
  Compensation Committee
  
    
    reviewing and recommending to the board the compensation of our directors; and
    
    reviewing periodically and approving any long-term incentive compensation or equity
plans, programs or similar arrangements, annual bonuses, employee pension and welfare
benefit plans.
   87




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##### Table of Contents



Corporate Governance and Nominating Committee
  
    
    identifying and recommending qualified candidates to the board for selection of
directors nominees for election or re-election to the board of directors, or for
appointment to fill any vacancy;
    
    reviewing annually with the board of directors the current composition of the board of
directors with regards to characteristics such as independence, age, skills, experience and
availability of service to us;
    
    advising the board of directors periodically with regard to significant developments in
the law and practice of corporate governance as well as our compliance with applicable laws
and regulations, and making recommendations to the board of directors on all matters of
corporate governance and on any remedial actions to be taken; and
    
    monitoring compliance with our code of business conduct and ethics, including reviewing
the adequacy and effectiveness of our procedures to ensure proper compliance.
  Duties of Directors
  Employment Agreements
   88




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##### Table of Contents



Employees
   Share Ownership
  
    
    each of our directors and executive officers; and
    
    each person known to us to own beneficially more than 5% of our shares.
 Ordinary SharesBeneficially Owned(1)(2)
    
    
    %Directors and Executive Officers:Jifan Gao(3)
    
    
    247,616,008
    
    
    
    8.37Sean Hsiyuan Tzou
    
    
    
    *
    
    
    
    *Liping Qiu(4)
    
    
    
    *
    
    
    
    *Jerome Corcoran
    
    
    
    *
    
    
    
    *Junfeng Li
    
    
    
    *
    
    
    
    *Peter Mak
    
    
    
    *
    
    
    
    *Qian Zhao
    
    
    
    *
    
    
    
    *Terry Wang
    
    
    
    *
    
    
    
    *Suping Chen
    
    
    
    *
    
    
    
    *Arturo Herrero
    
    
    
    *
    
    
    
    *Qiang Huang
    
    
    
    *
    
    
    
    *Chunyan Wu(5)
    
    
    247,616,008
    
    
    
    8.37Cheng Chung Yu
    
    
    
    *
    
    
    
    *Yu Zhu
    
    
    
    *
    
    
    
    *Diming Qiu(6)
    
    
    
    *
    
    
    
    *All Directors and Executive Officers as a Group(7)
    
    
    255,593,464
    
    
    
    8.64Principal Shareholders:Wonder World Limited(8)
    
    
    242,587,083
    
    
    
    8.20
  89




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##### Table of Contents



*
    
    The person beneficially owns less than 1% of our outstanding ordinary shares.(1)
    
    Beneficial ownership is determined in accordance with Rule 13d-3 of the General Rules and
Regulations under the Exchange Act and includes voting or investment power with respect to the
securities.(2)
    
    The percentage of beneficial ownership is calculated by dividing the number of shares
beneficially owned by such person or group by 2,958,398,059 ordinary shares, being the number
of shares outstanding as of April 21, 2009.(3)
    
    Includes 143,250 ordinary shares converted from restricted shares, 242,587,083 ordinary
shares held by Wonder World Limited, a Cayman Islands company wholly owned by The Gao Trust,
of which Mr. Gao is the settler and the sole member of the management committee, 1,795,675
ordinary shares held by Ms. Chunyan Wu, and 30,900 American depositary shares, representing
3,090,000 ordinary shares, held by Jewel Springs Limited, a Cayman Islands company wholly
owned by The Grace Wu Trust, of which Ms. Chunyan Wu is the settler and the sole member of the
management committee. Mr. Gaos business address is No. 2 Tian He Road, Electronics Park, New
District, Changzhou, Jiangsu 213031, Peoples Republic of China.(4)
    
    Represents ordinary shares held by Milestone Solar Holdings I Limited, a British Virgin
Islands company. Milestone Solar Holdings I Limited is controlled by Milestone Capital
Management Limited, a Cayman Islands company. Mr. Qiu, a member and director of Milestone
Capital Management Limited, shares the voting and investment power over the shares held by
Milestone Capital Management Limited with Ms. Yunli Lou, Mr. Hamilton Ty Tang and Mr. Simon
Murray. Mr. Qius business address is Unit A904-905, Huixin Plaza, No. 8 Beichen Road,
Beijing 100101, Peoples Republic of China. Mr. Qiu disclaims beneficial ownership except to
the extent of his pecuniary interest therein.(5)
    
    Includes 1,795,675 ordinary shares converted from restricted shares, 30,900 American
depositary shares, representing 3,090,000 ordinary shares, held by Jewel Springs Limited, a
Cayman Islands company wholly owned by The Grace Wu Trust, of which Ms. Chunyan Wu is the
settler and the sole member of the management committee, 143,250 ordinary shares held by Mr.
Gao, and 242,587,083 ordinary shares held by Wonder World Limited, a Cayman Islands company
wholly owned by The Gao Trust, of which Mr. Gao is the settler and the sole member of the
management committee. Ms. Wus business address is No. 2 Tian He Road, Electronics Park, New
District, Changzhou, Jiangsu 213031, Peoples Republic of China.(6)
    
    Represents ordinary shares held by Mr. Diming Qiu. Mr. Qiu holds 17.2% of the shares of
Perseverance International Investment Limited. Mr. Qiu disclaims beneficial ownership except
to the extent of his pecuniary interest therein. Mr. Qius business address is No. 2, Tian He
Road, Electronics Park, New District, Changzhou Jiangsu 213031, Peoples Republic of China.(7)
    
    The business address of directors and officers is No. 2, Tian He Road, Electronics Park, New
District, Changzhou Jiangsu 213031, Peoples Republic of China.(8)
    
    Wonder World Limited is a company incorporated in the Cayman Islands and wholly owned by The
Gao Trust. The management committee of The Gao Trust consists of the settlor, Mr. Jifan Gao.
The trustee of The Gao Trust is Merrill Lynch Bank and Trust Company (Cayman) Limited. Mr.
Gaos business address is No. 2 Tian He Road, Electronics Park, New District, Changzhou,
Jiangsu 213031, Peoples Republic of China.    90




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##### Table of Contents



Item 7. Major Shareholders and Related Party Transactions
 Major Shareholders
 3⁄4
 Related Party Transactions
 Restructuring
  Number of SharesEntity
    
    Relationship
    
    AllocatedTopower International Limited
    
    controlled by Mr. Jifan Gao, our chairman
    
    3,248 ordinary sharesSouth Great Investment Limited
    
    controlled by Mr. Jianwei Shi, one of
our directors
    
    1,896 ordinary sharesDivine Land International 
Investment Limited
    
    controlled by Mr. Canfang Liu, one of
our former directors
    
    1,896 ordinary sharesSino Base Investment Co. Ltd.
    
    controlled by Mr. Lai Shing Yip, one of
our directors
    
    1,896 ordinary sharesPerseverance International 
Investment Limited
    
    controlled by Ms. Chunyan Wu, one of
our executive officers and the wife of
Mr. Jifan Gao, our chairman
    
    1,064 ordinary shares
  Entity
    
    Relationship
    
    Consideration PaidChangzhou Tianhe Investment Co., Ltd.
    
    controlled by Mr.
Jifan Gao, our
chairman, and Mr.
Jiqing Gao, the
brother of our
chairman
    
    $2.365 millionChangzhou Wujin Nanfang Bearing
Co., Ltd
    
    controlled by Mr.
Jianwei Shi, one of
our directors
    
    $2.76 millionWai Tat (Hong Kong) Limited
    
    controlled by Mr.
Canfang Liu, one of
our former
directors
    
    $1.0Sino Super Investment Limited
    
    controlled by Mr.
Lai Shing Yip, one
of our directors
    
    $1.0Sun Era Industries Limited
    
    controlled by Ms.
Chunyan Wu, one of
our executive
officers and the
wife of Mr. Jifan
Gao, our chairman
    
    $1.0
   91




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##### Table of Contents



Issuance and Sale of Series A Preferred Shares
   Transactions with Certain Directors, Shareholders and Affiliates
 Director
and Shareholder Cash Advances
  Loans
and Guarantees
   92




---



##### Table of Contents




    
    In February, March and April 2006, Changzhou Fulai Property Development Co., Ltd.
provided guarantees for our short-term borrowings with an aggregate amount of RMB110.0
million ($16.1 million), which were fully repaid.
    
    In September and November 2006, Changzhou Jiuzhou Fuyuan Property Development Co.,
Ltd. and Changzhou Jiuzhou Plaza Property Development Co., Ltd., which are controlled
by Mr. Canfang Liu, one of our beneficial shareholders, provided guarantees for our
short-term facilities of RMB80.0 million ($11.7 million) and RMB60.0 million ($8.8
million), respectively. We have agreed to pay a guarantee fee of 2.0% of the loan
facility amount per annum to Jiangsu Jiuzhou Investment Group Co., Ltd. based on the
guarantee arrangement. These facilities have been fully repaid.
    
    In February 2006, Changzhou Fulai Property Development Co., Ltd. entered into an
agreement with Bank of Agriculture and us to guarantee up to RMB64.0 million ($9.4
million) for our short-term borrowings that expired in February 2008.
    
    In May 2007, Jiangsu Jiuzhou Investment Group Co., Ltd. entered into an agreement
with Agriculture Bank of China and us to guarantee up to RMB70 million ($10.3 million),
$5.0 million and EUR4.0 million ($5.6 million) for our short-term borrowings, which
expired in August 2007.
     93




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##### Table of Contents



Purchase Contract
  Sun Era
   Disposal of Assets Used in Discontinued Operation
   94




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##### Table of Contents



Employment Agreements
  Share Incentive Plan
  Related Party Transaction Policy
  Interests of Experts and Counsel
  
 Item 8. Financial Information
 Consolidated Statements and Other Financial Information
  Legal and Administrative Proceedings
  Dividend Policy
    95




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##### Table of Contents



Significant Changes
  
 Item 9. The Offer and Listing
 Offering and Listing Details.
    Sales PriceHigh
    
    
    LowAnnual High and Low2006 (from December 19, 2006)
    
    $
    26.75
    
    
    $
    18.822007
    
    
    73.06
    
    
    
    17.062008
    
    
    56.50
    
    
    
    5.61Quarterly High and LowFirst Quarter 2007
    
    
    50.94
    
    
    
    17.06Second Quarter 2007
    
    
    68.90
    
    
    
    38.76Third Quarter 2007
    
    
    73.06
    
    
    
    38.80Fourth Quarter 2007
    
    
    68.26
    
    
    
    32.55First Quarter 2008
    
    
    56.50
    
    
    
    25.88Second Quarter 2008
    
    
    53.50
    
    
    
    29.60Third Quarter 2008
    
    
    34.92
    
    
    
    22.05Fourth Quarter 2008
    
    
    24.73
    
    
    
    5.61First Quarter 2009
    
    
    13.80
    
    
    
    5.75Monthly High and LowOctober 2008
    
    
    24.73
    
    
    
    9.07November 2008
    
    
    15.24
    
    
    
    5.61December 2008
    
    
    10.39
    
    
    
    6.75January 2009
    
    
    10.65
    
    
    
    7.11February 2009
    
    
    9.13
    
    
    
    6.30March 2009
    
    
    13.80
    
    
    
    5.75April 2009 (through April 29, 2009)
    
    
    14.38
    
    
    
    10.18
  96




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##### Table of Contents



Plan of Distribution
  Markets
  Selling Shareholders
  Dilution
  Expenses of the Issue
  
 Item 10. Additional Information
 Share Capital
  Memorandum and Articles of Association
  Registered Office and Objects
   97




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##### Table of Contents



Board of Directors
  Ordinary Shares
 General
 Dividends
 Voting Rights
    98




---



##### Table of Contents



Transfer of Shares
  provided however
 Liquidation
 Calls on Shares and Forfeiture of Shares
 Redemption of Shares
  99




---



##### Table of Contents



Variations of Rights of Shares
 Inspection of Register of Members
 Designations and Classes of Shares
 Material Contracts
  Exchange Controls
  Taxation
 Cayman Islands Taxation
   100




---



##### Table of Contents



Peoples Republic of China Taxation
 , , .
    101




---



##### Table of Contents



U.S. Federal Income Taxation
   
    
    banks;
    
    financial institutions;
    
    insurance companies;
    
    broker dealers;
    
    regulated investment companies and real estate investment trusts;
    
    traders that elect to mark to market;
    
    tax-exempt entities;
    
    persons liable for alternative minimum tax;
    
    persons holding notes, ADSs or ordinary shares as part of a straddle, hedging,
constructive sale, conversion or integrated transaction;
    
    persons whose functional currency is not the U.S. dollar;
    
    persons that actually or constructively own 10% or more of our voting shares;
    
    persons who acquired notes, ADSs or ordinary shares pursuant to the exercise of any
employee share option or otherwise as consideration; or
    
    persons holding notes, ADSs or ordinary shares through partnerships or other
pass-through entities.
 U.S. Holders are urged to consult their tax advisors about the application of the U.S. federal tax
rules to their particular circumstances as well as the state and local and foreign tax consequences
to them of the purchase, ownership and disposition of notes, ADSs or ordinary shares.
  102




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
    
    a citizen or individual resident of the United States;
    
    a corporation (or other entity taxable as a corporation for U.S. federal income tax
purposes) organized under the laws of the United States, any State or the District of
Columbia;
    
    an estate whose income is subject to U.S. federal income taxation regardless of its
source; or
    
    a trust that (1) is subject to the supervision of a court within the United States
and the control of one or more U.S. persons or (2) has a valid election in effect under
applicable U.S. Treasury regulations to be treated as a U.S. person.
  Taxation of Notes
 Payment of Interest
  Additional Interest
    103




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Disposition of Notes
 Conversion of Notes Taxation of ADSs and Ordinary SharesPassive Foreign
Investment Company
 Taxation
of ADSs and Ordinary SharesPassive Foreign Investment Company,
 Premium
   104




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Market Discount
 de minimis
  Conversion of Notes
  Possible Effect of the Change in Conversion Consideration
   105




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Constructive Distributions
 bona fide bona fide Taxation of ADSs and Ordinary SharesTaxation of Dividends and other Distributions on the ADSs or
Ordinary Shares Taxation
of ADSs and Ordinary SharesTaxation of Dividends and other Distributions on the ADSs or Ordinary
Shares
 Taxation of ADSs and Ordinary Shares
   Taxation of Dividends and Other Distributions on the ADSs or Ordinary Shares
   106




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The dividends we receive from our PRC subsidiaries and our
global income may be subject to PRC tax under the new EIT law, which would have a material adverse
effect on our results of operations; our foreign ADS holders may be subject to a PRC withholding
tax upon the dividends payable by us and upon gains realized on the sale of our ADSs, if we are
classified as a PRC resident enterprise
  Taxation of Disposition of ADSs or Shares
   107




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Passive Foreign Investment Company
  
    
    at least 75% of its gross income is passive income, or the income test, or
    
    at least 50% of the value of its assets (based on an average of the quarterly values
of the assets during a taxable year) is attributable to assets that produce or are held
for the production of passive income, or the asset test.
    
    
    the excess distribution or gain will be allocated ratably over your holding period
for the ADSs or ordinary shares,
    
    the amount allocated to the current taxable year, and any taxable year prior to the
first taxable year in which we became a PFIC, will be treated as ordinary income, and
    
    the amount allocated to each other taxable year will be subject to the highest tax
rate in effect for that taxable year and the interest charge generally applicable to
underpayments of tax will be imposed on the resulting tax attributable to each such
taxable year.
   108




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de minimis
   Information Reporting and Backup Withholding
   109




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Dividends and Paying Agents
  Statement by Experts
  Documents on Display
     110




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Subsidiary Information
  
 Item 11. Quantitative and Qualitative Disclosures About Market Risk
 Inflation
  Foreign Exchange Risk
 Transaction Risk
    111




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Foreign Currency Translation Risk
     Risk Management
   112




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
 Interest Rate Risk
  
 Item 12. Description of Securities Other than Equity Securities
  
 PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
   113




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
    
    approximately $90 million to expand our manufacturing lines for the production
of silicon ingots, wafers, solar cells and PV modules;
    
    approximately $20 million to purchase raw materials; and
    
    the remaining amount for research and development and general corporate
purposes.
  
 Item 15. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   114




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Managements Report on Internal Control over Financial Reporting
    Remediation Process of Material Weaknesses Reported in 2007
  The Company did not have appropriate policies and procedures in place to effectively identify
and evaluate embedded derivative instruments in its long term raw material supply contracts.
  (i)
    
    established a new policy and a series of comprehensive procedures on control
activities of embedded derivative instruments for staffs to follow and management to
monitor;(ii)
    
    provided adequate training to our finance team and other relevant personnel in
respect of identification and treatment of possible embedded derivative instruments;
and(iii)
    
    reviewed all contracts by trained personnel and assessed the choice of
functional currency on the contracts and its potential risks that may associate with
carefully.
  115




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Managements Conclusion of Remediation
 Internal Control  Integrated Framework
  Attestation Report of the Registered Public Accounting Firm
   116




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Changes in Internal Control over Financial Reporting
  
 Item 16A. Audit Committee Financial Expert
  
 Item 16B. Code of Ethics
   117




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Item 16C . Principal Accountant Fees and Services
  2007
    
    
    2008Audit fees (1)
    
    $
    1,042,328
    
    
    $
    1,150,000Audit-related fees(2)
    
    
    455,837
    
    
    
    368,654Tax fees(3)
    
    $
    35,310
    
    
    $
    96,501All other fees
    
    
    
    
    
    
    
 
 (1)
    
    Audit fees means the aggregate fees billed in each of the fiscal years listed for
professional services rendered by our principal auditors for the audit of our annual financial
statements.(2)
    
    Audit-related fees means the aggregate fees billed in each of the fiscal years listed for
assurance and related services by our principal auditors that are reasonably related to the
performance of the audit or review of our financial statements and are not reported under
Audit fees. Services comprising the fees disclosed under the category of Audit-related
fees in 2007 involve principally the issuance of a comfort letter, providing listing advice
in connection with our follow-on public offering. Services comprising the fees disclosed under
the category of Audit-related fees in 2008 involve principally the issuance of a comfort
letter, providing listing advice in connection with our public offering of convertible senior
notes.(3)
    
    Tax fees means the aggregate fees billed in each of the fiscal years listed for
professional services rendered by our principal auditors for tax compliance, tax advice, and
tax planning. de minimus
 
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  
 Item 16F. Change in Registrants Certifying Accountant
  
 Item 16G. Corporate Governance
   118




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PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
  
 Item 19. Exhibits
 1.1
    
    Amended and Restated Memorandum and Articles of Association of the
Registrant (incorporated by reference to Exhibit 3.1 of our Registration
Statement on Form F-1 (file No. 333-142970) filed with the Securities and
Exchange Commission on May 15, 2007)2.1
    
    Registrants Form American Depositary Receipt (included in Exhibit 2.3)2.2
    
    Registrants Specimen Certificate for Ordinary Shares (incorporated by
reference to Exhibit 4.2 of our Registration Statement on Form F-1 (file
No. 333-142970) filed with the Securities and Exchange Commission on May
15, 2007)2.3
    
    Deposit Agreement among the Registrant, the depositary and holder of the
American Depositary Shares (incorporated by reference to Exhibit 1 of our
Post-Effective Amendment No. 1 to the Registration Statement on Form F-6
(file No. 333-139161) filed with the Securities and Exchange Commission on
November 21, 2008)2.4
    
    Form of Share Transfer Agreement relating to Trina China between the
Registrant and other parties therein dated March 28, 2006 (incorporated by
reference to Exhibit 4.4 of our Registration Statement on Form F-1 (file
No. 333-142970) filed with the Securities and Exchange Commission on May
15, 2007)2.5
    
    Amended and Restated Series A Preferred Share Purchase Agreement among the
Registrant, Trina China and other parties therein dated May 19, 2006
(incorporated by reference to Exhibit 4.5 of our Registration Statement on
Form F-1 (file No. 333-142970) filed with the Securities and Exchange
Commission on May 15, 2007)2.6
    
    Amended and Restated Shareholders Agreement among the Registrant, Trina
China and other parties therein dated May 30, 2006 (incorporated by
reference to Exhibit 4.6 of our Registration Statement on Form F-1 (file
No. 333-142970) filed with the Securities and Exchange Commission on May
15, 2007)2.7
    
    Amendment to the Amended and Restated Shareholders Agreement among the
Registrant, Trina China and other parties therein dated December 7, 2006
(incorporated by reference to Exhibit 4.7 of our Registration Statement on
Form F-1 (file No. 333-142970) filed with the Securities and Exchange
Commission on May 15, 2007)2.8
    
    First Supplemental Indenture dated as of July 23, 2008 between Wilmington
Trust Company and the Registrant (incorporated by reference to Exhibit 4.1
of the Report of Foreign Private Issuer on Form 6-K filed by Trina Solar
Limited on July 23, 2008).2.9
    
    Rights Agreement dated as of November 21, 2008 between Trina Solar Limited
and The Bank of New York Mellon, as Rights Agent (incorporated by
reference to Exhibit 4.1 of the Report of Foreign Private Issuer on Form
6-K filed by Trina Solar Limited on November 21, 2008).4.1
    
    Amended and Restated Share Incentive Plan (incorporated by reference to
Exhibit 10.1 of our Registration Statement on Form S-8 (file No.
333-157831) filed with the Securities and Exchange Commission on March 11,
2009)4.2
    
    Form of Indemnification Agreement between the Registrant and its officers
and directors (incorporated by reference to Exhibit 10.2 of our
Registration Statement on Form F-1 (file No. 333-142970) filed with the
Securities and Exchange Commission on May 15, 2007)4.3
    
    Form of Employment Agreement between the Registrant and a Senior Executive
Officer of the Registrant (incorporated by reference to Exhibit 10.3 of
our Registration Statement on Form F-1 (file No. 333-142970) filed with
the Securities and Exchange Commission on May 15, 2007)4.4
    
    Form of Tax Indemnification Agreement between the Registrant and Former
Shareholders dated as of September 15, 2006 (incorporated by reference to
Exhibit 10.4 of our Registration Statement on Form F-1 (file No.
333-142970) filed with the Securities and Exchange Commission on May 15,
2007)
  119




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4.5
    
    Form of Loan Agreement between Trina China and Bank of Communications
(incorporated by reference to Exhibit 10.5 of our Registration Statement
on Form F-1 (file No. 333-142970) filed with the Securities and Exchange
Commission on May 15, 2007)4.6
    
    Form of Guarantee Agreement between the Guarantor and Bank of
Communications for Long-term Loans (incorporated by reference to Exhibit
10.6 of our Registration Statement on Form F-1 (file No. 333-142970) filed
with the Securities and Exchange Commission on May 15, 2007)4.7
    
    Form of Guarantee Agreement between the Guarantor and Bank of
Communications for Short-term Loans (incorporated by reference to Exhibit
10.7 of our Registration Statement on Form F-1 (file No. 333-142970) filed
with the Securities and Exchange Commission on May 15, 2007)4.8
    
    Form of Short-term Loan Agreement between Trina China and Agriculture Bank
of China (incorporated by reference to Exhibit 10.8 of our Registration
Statement on Form F-1 (file No. 333-142970) filed with the Securities and
Exchange Commission on May 15, 2007)4.9
    
    Form of Guarantee Agreement between the Guarantor and Agriculture Bank of
China for Short-term Loans (incorporated by reference to Exhibit 10.9 of
our Registration Statement on Form F-1 (file No. 333-142970) filed with
the Securities and Exchange Commission on May 15, 2007)4.10
    
    Form of Maximum Guarantee Agreement between Guarantors and Agriculture
Bank of China for Short-term Loans (incorporated by reference to Exhibit
10.10 of our Registration Statement on Form F-1 (file No. 333-142970)
filed with the Securities and Exchange Commission on May 15, 2007)4.11
    
    Form of Counter-guarantee Agreement between Guarantors and Changzhou City
Hengtai Investment Co., Ltd. for Maximum Guarantee (incorporated by
reference to Exhibit 10.11 of our Registration Statement on Form F-1 (file
No. 333-142970) filed with the Securities and Exchange Commission on May
15, 2007)4.12
    
    Form of Security Agreement between Trina China and Changzhou City Hengtai
Investment Co., Ltd. for Maximum Guarantee (incorporated by reference to
Exhibit 10.12 of our Registration Statement on Form F-1 (file No.
333-142970) filed with the Securities and Exchange Commission on May 15,
2007)4.13
    
    Credit Line Agreement between Trina China and Bank of China dated August
28, 2007 (incorporated by reference to Exhibit 4.13 of our Annual Report
on Form 20-F filed with the Securities and Exchange Commission on June 26,
2008)4.14
    
    Maximum Amount Guarantee between Bank of China and Changzhou City Hengtai
Investment Co., Ltd., dated January 31, 2008 (incorporated by reference to
Exhibit 4.14 of our Annual Report on Form 20-F filed with the Securities
and Exchange Commission on June 26, 2008)4.15
    
    Counter-guarantee (Maximum Amount Guarantee Contract) between Jifan Gao
and Changzhou City Hengtai Investment Guarantee Co., Ltd. dated January
28, 2008 (incorporated by reference to Exhibit 4.15 of our Annual Report
on Form 20-F filed with the Securities and Exchange Commission on June 26,
2008)4.16
    
    Supply Contract and Distribution Agreement between Trina China and IBC
SOLAR AG dated May 26, 2007 (incorporated by reference to Exhibit 4.16 of
our Annual Report on Form 20-F filed with the Securities and Exchange
Commission on June 26, 2008)4.17
    
    Equipment Supply Contract between Trina China and Meyer Burger AG dated
May 30, 2007 and the amendment dated September 17, 2007 (incorporated by
reference to Exhibit 4.17 of our Annual Report on Form 20-F filed with the
Securities and Exchange Commission on June 26, 2008)4.18
    
    Equipment Supply Contract between Trina China and Meyer Burger AG dated
August 8, 2007 and the amendment dated September 17, 2007 (incorporated by
reference to Exhibit 4.18 of our Annual Report on Form 20-F filed with the
Securities and Exchange Commission on June 26, 2008)4.19
    
    Polysilicon Supply Agreement between Jiangsu Zhongneng Polysilicon
Technology Development Co., Ltd. and Trina China dated March 29, 2008
(incorporated by reference to Exhibit 4.19 of our Annual Report on Form
20-F filed with the Securities and Exchange Commission on June 26, 2008)4.20*
    
    Supplemental Polysilicon Supply Agreement between Jiangsu Zhongneng
Polysilicon Technology Development Co., Ltd. and Trina China dated August
19, 20084.21
    
    ADS Lending Agreement, dated July 17, 2008, among Credit Suisse Securities
(Europe) Limited, Credit Suisse, London Branch, and the Registrant
(incorporated by reference to Exhibit 99.1 of the Report of Foreign
Private Issuer on Form 6-K filed by Trina Solar Limited on July 23, 2008).
  120




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4.22
    
    Standstill Agreement dated as of November 21, 2008 between the Registrant
and Jifan Gao (incorporated by reference to Exhibit 4.2 of the Report of
Foreign Private Issuer on Form 6-K filed by Trina Solar Limited on
November 21, 2008).8.1
    *
    Subsidiaries of the Registrant11.1
    
    Code of Business Conduct and Ethics of the Registrant (incorporated by
reference to Exhibit 99.1 of our Registration Statement on Form F-1 (file
No. 333-139144) filed with the Securities and Exchange Commission on
December 19, 2006)12.1*
    
    CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2*
    
    CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1*
    
    CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2*
    
    CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200215.1*
    
    Consent of Deloitte Touche Tohmatsu CPA Ltd.
 
 *
    
    Filed with this annual report on Form 20-F
    
    Confidential treatment is being requested with respect to portions of these exhibits and such
confidential treatment portions have been deleted and replaced with **** and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 under the
Securities Act.  121




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SIGNATURES
  Trina Solar LimitedBy:
    /s/ Jifan GaoName:
    Jifan GaoTitle:
    Chairman and Chief Executive Officer   122




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TRINA SOLAR LIMITED
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Reports of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2006, 2007 and 2008
    
    
    F-4Consolidated Statements of Operations for the
Years Ended December 31, 2006, 2007 and 2008
    
    
    F-6Consolidated Statements of Shareholders Equity and
Comprehensive Income for the Years Ended
December 31, 2006, 2007 and 2008
    
    
    F-7Consolidated Statements of Cash Flows for the
Years Ended December 31, 2006, 2007 and 2008
    
    
    F-8Notes to Consolidated Financial Statements
    
    
    F-10Additional Information  Financial Statement Schedule I
    
    
    F-44
  F-1




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TRINA SOLAR LIMITED
 
  
    Internal ControlIntegrated Framework
  
  F-2




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TRINA SOLAR LIMITED
  
 Internal Control 
Integrated Framework
    Internal Control
 Integrated Framework
   
  F-3




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TRINA SOLAR LIMITED
 
 CONSOLIDATED BALANCE SHEETS
(In U.S. dollars, except share and per share data)
 As of December 31,2006
    
    
    2007
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    
    93,380,212
    
    
    
    59,695,932
    
    
    
    132,223,776Restricted cash
    
    
    5,003,871
    
    
    
    103,375,481
    
    
    
    44,991,233Inventories
    
    
    32,230,309
    
    
    
    58,547,531
    
    
    
    85,687,407Accounts receivable, net of allowance for doubtful accounts
of $Nil, $342,813 and $1,810,284 as of December 31, 2006, 2007
and 2008, respectively
    
    
    29,352,577
    
    
    
    72,322,559
    
    
    
    105,192,782Current portion of advances to suppliers
    
    
    34,606,226
    
    
    
    42,952,994
    
    
    
    42,247,209Amount due from related parties
    
    
    
    
    
    
    613,925
    
    
    
    Prepaid
expenses and other current assets, net
    
    
    2,875,257
    
    
    
    4,860,257
    
    
    
    9,540,972Current assets of discontinued operations
    
    
    352,654
    
    
    
    33,499
    
    
    
    Total current assets
    
    
    197,801,106
    
    
    
    342,402,178
    
    
    
    419,883,379Advances to suppliers
    
    
    
    
    
    
    53,737,412
    
    
    
    130,351,513Property, plant and equipment, net
    
    
    51,419,365
    
    
    
    197,123,875
    
    
    
    357,593,802Prepaid land use right, net
    
    
    2,372,362
    
    
    
    5,461,529
    
    
    
    26,915,217Deferred tax assets
    
    
    152,187
    
    
    
    1,094,893
    
    
    
    2,807,488Other noncurrent assets
    
    
    
    
    
    
    854,214
    
    
    
    2,564,428TOTAL ASSETS
    
    
    251,745,020
    
    
    
    600,674,101
    
    
    
    940,115,827
   F-4




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TRINA SOLAR LIMITED
 CONSOLIDATED BALANCE SHEETS
(In U.S. dollars, except share and per share data)
 As of December 31,2006
    
    
    2007
    
    
    2008LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Short-term borrowings
    
    
    71,408,653
    
    
    
    163,563,089
    
    
    
    248,557,724Accounts payable
    
    
    9,146,920
    
    
    
    42,690,835
    
    
    
    62,503,917Income tax payable
    
    
    849,891
    
    
    
    1,405,890
    
    
    
    3,648,772Accrued expenses and other current liabilities
    
    
    6,228,606
    
    
    
    12,625,904
    
    
    
    21,003,231Current liabilities of discontinued operations
    
    
    433,900
    
    
    
    199,441
    
    
    
    Total current liabilities
    
    
    88,067,970
    
    
    
    220,485,159
    
    
    
    335,713,644Long-term bank borrowings
    
    
    5,122,492
    
    
    
    8,214,002
    
    
    
    14,631,434Convertible note payable
    
    
    
    
    
    
    
    
    
    
    133,248,054Accrued warranty costs
    
    
    1,400,269
    
    
    
    4,486,135
    
    
    
    12,473,142Other noncurrent liabilities
    
    
    
    
    
    
    
    
    
    
    10,993,042Total liabilities
    
    
    94,590,731
    
    
    
    233,185,296
    
    
    
    507,059,316Commitments and contingencies (Note 19)Shareholders equityOrdinary shares ($0.00001 par value; 5,000,000,000 shares authorized,
2,121,534,728, 2,553,367,783 and 2,958,183,059
shares issued and outstanding as of December 31,
2006, 2007 and 2008, respectively)
    
    
    21,215
    
    
    
    25,533
    
    
    
    29,581Additional paid-in capital
    
    
    139,670,637
    
    
    
    304,877,619
    
    
    
    308,898,326Retained earnings
    
    
    15,622,250
    
    
    
    51,352,188
    
    
    
    112,712,460Accumulated other comprehensive income
    
    
    1,840,187
    
    
    
    11,233,465
    
    
    
    11,416,144Total shareholders equity
    
    
    157,154,289
    
    
    
    367,488,805
    
    
    
    433,056,511TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    
    251,745,020
    
    
    
    600,674,101
    
    
    
    940,115,827
   F-5




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TRINA SOLAR LIMITED
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(In U.S. dollars, except share data)
 Year ended December 31,2006
    
    
    2007
    
    
    2008Net revenues
    
    
    114,499,649
    
    
    
    301,819,197
    
    
    
    831,900,852Cost of revenues
    
    
    84,449,741
    
    
    
    234,190,737
    
    
    
    667,459,287Gross profit
    
    
    30,049,908
    
    
    
    67,628,460
    
    
    
    164,441,565Selling expenses
    
    
    2,570,882
    
    
    
    11,018,549
    
    
    
    20,302,251General and administrative expenses
    
    
    8,655,781
    
    
    
    17,817,581
    
    
    
    41,113,257Research and development expenses
    
    
    1,902,680
    
    
    
    2,805,089
    
    
    
    3,039,154Total operating expenses
    
    
    13,129,343
    
    
    
    31,641,219
    
    
    
    64,454,662Income from continuing operations
    
    
    16,920,565
    
    
    
    35,987,241
    
    
    
    99,986,903Foreign exchange loss
    
    
    
    
    
    
    (1,999,509
    )
    
    
    (11,801,559
    )Interest expense
    
    
    (2,137,221
    )
    
    
    (7,551,160
    )
    
    
    (23,936,455
    )Interest income
    
    
    260,614
    
    
    
    4,810,390
    
    
    
    2,943,611Gain (loss) on change in fair value of derivative
    
    
    
    
    
    
    854,214
    
    
    
    (1,067,079
    )Other (expense) income, net
    
    
    (82,206
    )
    
    
    1,554,133
    
    
    
    (155,614
    )Income from continuing operations
before income taxes
    
    
    14,961,752
    
    
    
    33,655,309
    
    
    
    65,969,807Income tax (expense) benefit
    
    
    (1,787,614
    )
    
    
    1,706,713
    
    
    
    (4,609,535
    )Net income from continuing operations
    
    
    13,174,138
    
    
    
    35,362,022
    
    
    
    61,360,272Discontinued operations:Income (loss) from discontinued operations
    
    
    (761,975
    )
    
    
    379,188
    
    
    
    Income tax (expense) benefit
    
    
    8,698
    
    
    
    (11,272
    )
    
    
    Net income (loss) on discontinued operations
    
    
    (753,277
    )
    
    
    367,916
    
    
    
    Net income
    
    
    12,420,861
    
    
    
    35,729,938
    
    
    
    61,360,272Earnings per ordinary share from continuing operationsBasic
    
    
    0.01
    
    
    
    0.02
    
    
    
    0.02Diluted
    
    
    0.01
    
    
    
    0.02
    
    
    
    0.02Earnings per ordinary share from discontinued operationsBasic
    
    
    0.00
    
    
    
    0.00
    
    
    
    Diluted
    
    
    0.00
    
    
    
    0.00
    
    
    
    Earnings per ordinary shareBasic
    
    
    0.01
    
    
    
    0.02
    
    
    
    0.02Diluted
    
    
    0.01
    
    
    
    0.02
    
    
    
    0.02Weighted average ordinary shares outstandingBasic
    
    
    1,038,316,484
    
    
    
    2,339,799,657
    
    
    
    2,501,202,680Diluted
    
    
    1,058,483,593
    
    
    
    2,370,685,156
    
    
    
    2,690,723,390
   F-6




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##### Table of Contents



TRINA SOLAR LIMITED
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
AND COMPREHENSIVE INCOME
(In U.S. dollars, except share data)
 OtherAdditional
    
    
    Retained
    
    
    comprehensive
    
    
    
    
    
    
    ComprehensiveOrdinary shares
    
    
    paid-in Capital
    
    
    earning
    
    
    income
    
    
    Total
    
    
    incomeBalance at January 1, 2006
    
    
    1,000,000,000
    
    
    
    10,000
    
    
    
    10,881,178
    
    
    
    3,201,389
    
    
    
    262,406
    
    
    
    14,354,973Share-based compensation
    
    
    
    
    
    
    
    
    
    
    2,727,452
    
    
    
    
    
    
    
    
    
    
    
    2,727,452Return of capital upon restructuring
    
    
    
    
    
    
    
    
    
    
    (5,115,003
    )
    
    
    
    
    
    
    
    
    
    
    (5,115,003
    )Conversion of Series A preferred shares
to ordinary shares
    
    
    545,808,968
    
    
    
    5,458
    
    
    
    39,163,040
    
    
    
    
    
    
    
    
    
    
    
    39,168,498Issuance of restricted shares to employees
    
    
    45,725,760
    
    
    
    457
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    457Capital contribution
    
    
    
    
    
    
    
    
    
    
    4,853,400
    
    
    
    
    
    
    
    
    
    
    
    4,853,400Issuance of ordinary shares, net of issue costs
    
    
    530,000,000
    
    
    
    5,300
    
    
    
    87,160,570
    
    
    
    
    
    
    
    
    
    
    
    87,165,870Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,420,861
    
    
    
    
    
    
    
    12,420,861
    
    
    
    12,420,861Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,577,781
    
    
    
    1,577,781
    
    
    
    1,577,781Balance at December 31, 2006
    
    
    2,121,534,728
    
    
    
    21,215
    
    
    
    139,670,637
    
    
    
    15,622,250
    
    
    
    1,840,187
    
    
    
    157,154,289
    
    
    
    13,998,642Share-based compensation
    
    
    
    
    
    
    
    
    
    
    1,740,388
    
    
    
    
    
    
    
    
    
    
    
    1,740,388Issuance of restricted shares to employees
    
    
    26,704,732
    
    
    
    267
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    267Repurchase of restricted shares
    
    
    (5,903,277
    )
    
    
    (59
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (59
    )Issuance of ordinary shares, net of issue costs
    
    
    411,031,600
    
    
    
    4,110
    
    
    
    163,466,594
    
    
    
    
    
    
    
    
    
    
    
    163,470,704Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,729,938
    
    
    
    
    
    
    
    35,729,938
    
    
    
    35,729,938Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,393,278
    
    
    
    9,393,278
    
    
    
    9,393,278Balance at December 31, 2007
    
    
    2,553,367,783
    
    
    
    25,533
    
    
    
    304,877,619
    
    
    
    51,352,188
    
    
    
    11,233,465
    
    
    
    367,488,805
    
    
    
    45,123,216Share-based compensation
    
    
    
    
    
    
    
    
    
    
    4,024,780
    
    
    
    
    
    
    
    
    
    
    
    4,024,780Issuance of restricted shares to employees
    
    
    17,866,289
    
    
    
    179
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    179Repurchase of restricted shares
    
    
    (20,370,413
    )
    
    
    (204
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (204
    )Issuance of ordinary shares under share
lending facility
    
    
    407,319,400
    
    
    
    4,073
    
    
    
    (4,073
    )
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,360,272
    
    
    
    
    
    
    
    61,360,272
    
    
    
    61,360,272Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    182,679
    
    
    
    182,679
    
    
    
    182,679Balance at December 31, 2008
    
    
    2,958,183,059
    
    
    
    29,581
    
    
    
    308,898,326
    
    
    
    112,712,460
    
    
    
    11,416,144
    
    
    
    433,056,511
    
    
    
    61,542,951
   F-7




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##### Table of Contents



TRINA SOLAR LIMITED
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. dollars)
 Year ended December 31,2006
    
    
    2007
    
    
    2008Operating activities:Net income
    
    
    12,420,861
    
    
    
    35,729,938
    
    
    
    61,360,272Adjustments to reconcile net income
to net cash used in operating activities:Depreciation and amortization
    
    
    1,444,360
    
    
    
    6,152,258
    
    
    
    20,139,856Share-based compensation
    
    
    2,727,452
    
    
    
    1,740,388
    
    
    
    4,024,780Gain (loss) on change in fair value of derivative
    
    
    
    
    
    
    (854,214
    )
    
    
    1,067,079Loss on disposal of property, plant and equipment
    
    
    93,216
    
    
    
    265,475
    
    
    
    341,911Allowance for (recoveries of) doubtful receivables
    
    
    156,958
    
    
    
    (200,224
    )
    
    
    1,586,038Inventory write-down
    
    
    2,600,380
    
    
    
    3,431,813
    
    
    
    21,516,138Allowance for (recovery of) advances to suppliers
    
    
    4,527,094
    
    
    
    (1,419,899
    )
    
    
    5,866,999Changes in operating assets and liabilities:Inventories
    
    
    (27,512,011
    )
    
    
    (26,738,519
    )
    
    
    (48,656,015
    )Accounts receivable
    
    
    (24,154,296
    )
    
    
    (38,783,819
    )
    
    
    (34,304,622
    )Prepaid expenses and other current assets
    
    
    (1,047,761
    )
    
    
    (2,082,183
    )
    
    
    (3,069,452
    )Advances to suppliers
    
    
    (34,725,178
    )
    
    
    (57,552,795
    )
    
    
    (81,775,315
    )Amount due from related parties
    
    
    
    
    
    
    (613,925
    )
    
    
    613,925Accounts payable
    
    
    3,283,618
    
    
    
    12,921,027
    
    
    
    4,503,708Accrued expenses and other current liabilities
    
    
    5,417,949
    
    
    
    5,769,648
    
    
    
    7,110,807Accrued warranty costs
    
    
    1,127,949
    
    
    
    2,871,722
    
    
    
    7,987,007Other noncurrent liabilities
    
    
    
    
    
    
    
    
    
    
    803,699Income tax payable
    
    
    312,902
    
    
    
    488,823
    
    
    
    2,242,882Deferred taxes
    
    
    (673,745
    )
    
    
    (602,552
    )
    
    
    (3,442,023
    )Net cash used in operating activities
    
    
    (54,000,252
    )
    
    
    (59,477,038
    )
    
    
    (32,082,326
    )Investing activities:Purchases of property, plant and equipment
    
    
    (41,372,493
    )
    
    
    (124,404,349
    )
    
    
    (165,420,697
    )Purchase of land use right
    
    
    (1,449,214
    )
    
    
    (2,854,283
    )
    
    
    (21,675,312
    )Subsidies of government for property, plant
and equipment
    
    
    
    
    
    
    
    
    
    
    10,189,345Proceeds from disposal of property,
plant and equipment
    
    
    742,761
    
    
    
    
    
    
    
    Increase in restricted cash
    
    
    (4,476,896
    )
    
    
    (98,025,253
    )
    
    
    58,384,248Net cash used in investing activities
    
    
    (46,555,842
    )
    
    
    (225,283,885
    )
    
    
    (118,522,416
    )
   F-8




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##### Table of Contents



TRINA SOLAR LIMITED
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. dollars)
 Year ended December 31,2006
    
    
    2007
    
    
    2008Financing activities:Return of capital upon restructuring
    
    
    (5,115,003
    )
    
    
    
    
    
    
    Proceeds from issuance of Series A preferred shares
    
    
    39,168,498
    
    
    
    
    
    
    
    Capital contribution from shareholders
    
    
    4,853,400
    
    
    
    
    
    
    
    Proceeds from issuance of restricted shares, net
    
    
    457
    
    
    
    208
    
    
    
    Proceeds from issuance of ordinary shares
    
    
    87,165,870
    
    
    
    163,470,704
    
    
    
    Proceeds from issuance of convertible
senior notes, net of issuance cost
    
    
    
    
    
    
    
    
    
    
    131,537,840Proceeds from short-term bank borrowings
    
    
    101,171,165
    
    
    
    257,170,914
    
    
    
    191,281,784Repayment of short-term bank borrowings
    
    
    (36,390,848
    )
    
    
    (173,373,427
    )
    
    
    (106,287,149
    )Proceeds from long-term bank borrowings
    
    
    
    
    
    
    7,752,859
    
    
    
    6,417,432Repayment of long-term bank borrowings
    
    
    
    
    
    
    (5,122,492
    )
    
    
    Return of advances to related parties
    
    
    114,769
    
    
    
    
    
    
    
    Net cash provided by financing activities
    
    
    190,968,308
    
    
    
    249,898,766
    
    
    
    222,949,907Effect of exchange rate changes
    
    
    1,743,766
    
    
    
    1,177,877
    
    
    
    182,679Net change in cash and cash equivalents
    
    
    92,155,980
    
    
    
    (33,684,280
    )
    
    
    72,527,844Cash and cash equivalents at the beginning of the year
    
    
    1,224,232
    
    
    
    93,380,212
    
    
    
    59,695,932Cash and cash equivalents at the end of the year
    
    
    93,380,212
    
    
    
    59,695,932
    
    
    
    132,223,776Supplemental disclosure of cash flow information:Interest paid
    
    
    2,023,763
    
    
    
    7,297,293
    
    
    
    20,199,372Income taxes paid
    
    
    2,139,759
    
    
    
    1,359,636
    
    
    
    6,605,810Supplemental schedule of non-cash investing activities:Property, plant and equipment received
in lieu of accounts receivable
    
    
    279,372
    
    
    
    
    
    
    
    Purchases of property, plant and equipment
included in accounts payable
    
    
    1,558,602
    
    
    
    18,571,505
    
    
    
    33,880,879
   F-9




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##### Table of Contents



TRINA SOLAR LIMITED
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES
  Place and date
    
    Attributableof incorporation/
    
    equityName of company
    
    establishment
    
    interest held
    
    Principal activityChangzhou Trina Solar
Energy Co., Ltd
    
    PRC 
December 26, 1997
    
    
    100
    %
    
    Manufacturing
and trading solar
modulesTop Energy International Limited
    
    Hong Kong 
July 18, 2006
    
    
    100
    %
    
    Procuring silicon and
and arranging tolling
manufacturingTrina Solar (Lianyungang)
Co., Ltd
    
    PRC 
December 17, 2007
    
    
    100
    %
    
    Construction of facility for
polysilicon productionTrina Solar Korea Limited
    
    Korea 
September 22, 2008
    
    
    100
    %
    
    Marketing in Korea
   F-10




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES  continued
  2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
 (a)
    
    Basis of presentationThe consolidated financial statements are prepared and presented in accordance
with accounting principles generally accepted in the United States of America
(US GAAP) and include the accounts of Trina, its subsidiaries and VIE. The
Company has eliminated all inter-company transactions and balances during
consolidation.(b)
    
    Use of estimatesThe preparation of financial statements in conformity with US GAAP requires
the Company to make estimates and assumptions that affect reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. Significant accounting estimates reflected in the
Companys financial statements include the allowance for doubtful accounts and
advances to suppliers, inventory valuation, the economic useful lives of
long-lived assets, asset impairments, fair value of foreign currency
derivative, provision for uncertain tax positions and tax valuation
allowances, accrued warranty expenses, and certain assumption used in the
computation of share-based compensation and related forfeiture rates.
  F-11




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  continued
 (c)
    
    Cash and cash equivalentsCash and cash equivalents consist of cash on hand and demand deposits, which
are unrestricted as to withdrawal and use, and which have maturities of three
months or less when purchased.Restricted cash is comprised of bank deposits letters of credit and amounts
held by counterparties under forward contracts. These deposits carry fixed
interest rates and will be released when the bank borrowings are repaid or the
related letters of credit are settled by the Company.(d)
    
    InventoriesThe Company reports inventories at the lower of cost or market. The Company
determines cost on a weighted-average basis. These costs include direct
material, direct labor, tolling manufacturing costs, and fixed and variable
indirect manufacturing costs, including depreciation and amortization.The Company regularly reviews the cost of inventory against its estimated fair
market value and records a lower of cost or market write-down if any
inventories have a cost in excess of estimated market value. In addition, the
Company regularly evaluates the quantity and value of its inventory in light
of current market conditions and market trends and record write-downs for any
quantities in excess of demand and for any product obsolescence. This
evaluation consider historic usage, expected demand, anticipated sales price,
new product development schedules, the effect new products might have on the
sale of existing products, product obsolescence, customer concentrations,
product merchantability and other factors. The Company also writes off silicon
materials that may not meet its required specifications for inclusion in its
manufacturing process. These materials are periodically sold for scrap.The Company has outsourced portions of its manufacturing process, including
cleaning silicon materials, cutting ingots into wafers, and converting wafers
into solar cells, to various third-party manufacturers. These outsourcing
arrangements may or may not include transfer of title of the raw material
inventory (silicon, ingots or wafers) to the third-party manufacturers.For those outsourcing arrangements in which title does not transfer, the
Company maintains the inventory in the balance sheet as raw materials
inventory while it is in physical possession of the third-party manufacturers.
Upon receipt of the processed inventory from the third-party manufacturers, it
is reclassified to work-in-progress inventory with the processing fee
capitalized as cost of inventory.
  F-12




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  continued
 (d)
    
    Inventories  continuedFor those outsourcing arrangements in which title (including risk of loss)
does transfer to the third-party manufacturer, the Company is constructively
obligated to repurchase the processed inventory. To accomplish this, it
enters into raw material sales agreements and processed inventory purchase
agreements simultaneously with the third-party manufacturer. In such
instances, the Company retains the inventory in the consolidated balance
sheets while it is in the physical possession of the third-party manufacturer.
The cash received from the third-party manufacturer is recorded as a current
liability on the balance sheet rather than revenue or deferred revenue. Upon
receipt of the processed inventory, it is reclassified from raw materials to
work-in-progress inventory and the processing fee paid to the third-party
manufacturer is added to inventory cost. Cash payments for outsourcing
arrangements which require prepayment for repurchase of the processed
inventory are classified as current assets on the balance sheet. There is no
right of offset in these arrangements and accordingly, the associated assets
and liabilities remain on the balance sheet until the processed inventory is
returned to the Company.(e)
    
    Property, plant and equipmentThe Company reports its property, plant and equipment at cost, less
accumulated depreciation. Cost includes the prices paid to acquire or
construct the assets, interest capitalized during the construction period and
any expenditure that substantially extends the useful life of an existing
asset. Interest capitalized into property, plant and equipment was $74,685,
$nil and $1,467,604 in 2006, 2007 and 2008, respectively. The Company expenses
repair and maintenance costs when they are incurred.The Company computes depreciation expense using the straight-line method over
the estimated useful lives of the assets presented below.
 YearsBuildings
    
    
    10-20Plant and machinery
    
    
    5-10Motor vehicles
    
    
    3-5Electronic equipment, furniture and fixtures
    
    
    3 -5
 (f)
    
    Prepaid land use rightThe Companys prepaid land use rights are reported at cost and are charged to
income ratably over 50 years, the term of the land use right agreement.
  F-13




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  continued
 (g)
    
    Long-lived assetsThe Company evaluates its long-lived tangible assets and definite-lived
intangible assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. These
events include but not limited to significant current period operation or cash
flow losses associated with the use of a long-lived asset or group of assets
combined with a history of such losses, significant changes in the manner of
use of assets and significant negative industry or economic trends. When these
events occur, the Company measures impairment by comparing the carrying amount
of the assets to future undiscounted net cash flows expected to result from
the use of the assets and their eventual disposition. If the sum of the
expected undiscounted cash flow is less than the carrying amount of the
assets, the Company would recognize an impairment loss equal to the excess of
the carrying amount over the fair value of the assets.(h)
    
    Income taxesThe Company accounts for income taxes using the asset and liability method
whereby it calculates a deferred tax asset or liability using current tax laws
and rates in effect at the balance sheet date. The Company establishes
valuation allowances, when necessary, to reduce deferred tax assets to the
extent it is more likely than not that such deferred tax assets will not be
realized. The Company does not provide deferred taxes related to the U.S. GAAP
basis in excess of the U.S. tax basis in the investment in the Companys
foreign subsidiaries to the extent such amounts relate to permanently
reinvested earnings and profits of such foreign subsidiaries.Income tax expense includes (i) deferred tax expense, which generally
represents the net change in the deferred tax asset or liability balance
during the year plus any change in valuation allowances and (ii) current tax
expense, which represents the amount of tax currently payable to or receivable
from a taxing authority. The Company only recognizes tax benefits related to
uncertain tax positions when such positions are more likely than not of being
sustained upon examination. For such positions, the amount of tax benefit that
the Company recognizes is the largest amount of tax benefit that is more than
fifty percent likely of being sustained upon the ultimate settlement of such
uncertain tax position.(i)
    
    Revenue recognitionThe Company recognizes revenue for product sales when persuasive evidence of
an arrangement exists, delivery of the product has occurred and title and risk
of loss has passed to the customer, the sales price is fixed or determinable
and the collectability of the resulting receivable is reasonably assured. Its
sales agreements typically contain customary product warranties but do not
contain any post-shipment obligations nor any return or credit provisions.
  F-14




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  continued
 (i)
    
    Revenue recognition  continuedThe Company recognizes sales of its solar modules based on the terms of the
specific sales contract. Generally, it recognizes sales when the Company has
delivered products to its customers designated point of shipment, which may
include commercial docks or commercial shipping vessels.The Company recognizes revenue related to long-term solar systems integration
on the percentage-of-completion method. The Company estimates its revenues by
using the cost-to-cost method, whereby it derives a ratio by comparing the
costs incurred to date to the total costs expected to be incurred on the
project. The Company applies the ratio computed in the cost-to-cost analysis
to the contract price to determine the estimated revenues earned in each
period. With respect to its short-term solar systems integration, the Company
recognizes the sales on a completed-contract method. The completed-contract
method recognizes income only when the contract is completed, or substantially
so. Accordingly, costs of contracts in process and current billings are
accumulated but there are no interim charges or credits to income other than
provisions for losses. A contract may be regarded as substantially completed
if remaining costs are not significant in amount. When the Company determines
that total estimated costs will exceed total revenues under a contract, it
records a loss accordingly.(j)
    
    Shipping and handling costsPayments received from customers for shipping and handling costs are included
in net revenues. Shipping and handling costs relating to solar module sales of
$194,948, $3,779,490 and $5,951,760 are included in selling expenses for the
years ended December 31, 2006, 2007 and 2008, respectively. Shipping and
handling costs relating to inventory purchases of $109,257, $869,798 and
$2,689,445 are included as a component of cost of revenues for the years ended
December 31, 2006, 2007 and 2008, respectively.(k)
    
    Research and developmentResearch and development costs are incurred during the period the Company is
developing new products or refining existing products or technologies. Its
research and development costs consist primarily of compensation and related
costs for personnel, material, supplies, equipment depreciation and laboratory
testing costs. These costs are expensed as incurred until the products have
been developed and tested and are ready for production and sale.The Company periodically qualifies for grants from the PRC government for
achieving certain research and development milestones. It records these grants
as an offset to its research and development expenses in the periods in which
the Company earns them. Grants that it receives prior to when the Company
achieves the specified milestone are reported as a liability. The Company
recorded $198,693, $112,431 and $975,824 of earned grants as reductions of
research and development expenses for the years ended December 31, 2006, 2007
and 2008, respectively.
  F-15




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  continued
 (l)
    
    Product warrantiesThe Company provides a limited warranty to the original purchasers of its
solar modules for two to five years following delivery for defects in materials and
workmanship. It provides a minimum power output warranty for up to 25 years
following delivery. The Company accrues warranty costs as it recognizes
revenues. Due to its limited solar module manufacturing history, the Company
does not have a significant history of warranty claims. The Company currently
accrues for product warranties at 1% of solar module sales based on its
assessment of industry norms which also represents its best estimate to date.
Should it begin to experience warranty claims differing from its accrual rate,
the Company would prospectively revise the warranty accrual rate.(m)
    
    Foreign currency translation and foreign currency riskThe United States dollar (US dollar), the currency in which a substantial
portion of the Companys transactions are denominated, is used as the
functional and reporting currency of the Company. Monetary assets and
liabilities denominated in currencies other than the US dollar are translated
into US dollar at the rates of exchange ruling at the balance sheet date.
Transactions in currencies other than the US dollar during the year are
converted into the US dollar at the applicable rates of exchange prevailing on
the date the transactions occurred. Transaction gains and losses are
recognized in the statements of operations.Prior to January 1, 2008, the financial records of the Companys principal
operating subsidiary in the PRC, Trina China, were maintained in Renminbi
(RMB), the local currencies. To response to the significant changes in
economic facts and circumstances, Trina China changed its functional currency
from RMB to the US dollar, effective January 1, 2008.The financial records of the Companys subsidiaries are maintained in local
currencies other than the US dollar, such as RMB, which are their functional
currencies. Assets and liabilities are translated at the exchange rates at the
balance sheet date, equity accounts are translated at historical exchange
rates and revenues, expenses, gains and losses are translated using the
average rate for the year. Translation adjustments are reported as cumulative
translation adjustments and are shown as a separate component of accumulated
other comprehensive income in the statement of shareholders equity.The RMB is not a freely convertible currency. The PRC State Administration
for Foreign Exchange, under the authority of the PRC government, controls the
conversion of RMB to foreign currencies. The value of the RMB is subject to
changes of central government policies and international economic and
political developments affecting supply and demand in the China foreign
exchange trading system market. The Companys cash and cash equivalents and
restricted cash denominated in RMB amounted to $6,359,816, $15,714,926 and
$71,936,716 as of December 31, 2006, 2007 and 2008, respectively.
  F-16




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  continued
 (n)
    
    Concentrations of credit riskFinancial instruments that potentially expose the Company to concentrations of
credit risk consist principally of accounts receivable and advances to
suppliers. The Company conducts credit evaluations of its customers and
requires customers to post letters of credit to secure payment or to make
significant down payments. The Company generally has not required collateral
or other security interests from its suppliers but it performs ongoing credit
evaluations of the suppliers financial condition. The Company raises an
allowance for doubtful accounts primarily based on the age of the receivables
or advances to suppliers, previous loss history and the counterparties
current ability to fulfill its obligation.The Company has not had significant collections issues for receivables
generated from sales of products or significant default issues related to
advances to suppliers.(o)
    
    Share-based compensationThe Companys share-based payment transactions with employees, such as restricted
 shares and share options, are measured based on the grant-date fair value of the
equity instrument issued. The fair value of the award is recognized as compensation
expense, net of estimated forfeitures, over the period during which an employee is
required to provide service in exchange for the award, which is generally the vesting
period.(p)
    
    Derivative financial instrumentsThe Companys primary objective for holding derivative financial instruments is to
manage currency risk. The Company records derivative instruments as assets or
liabilities, measured at fair value. The recognition of gains or losses resulting
from changes in fair values of those derivative instruments is based on the use of
each derivative instrument and whether it qualifies for hedge accounting.The Company entered into certain foreign exchange contracts to protect against
volatility of future cash flows caused by the changes in foreign exchange rates
associated with outstanding accounts receivable. The foreign exchange hedge
contracts do not qualify for hedge accounting and, as a result, the changes in fair
value of the foreign currency hedge contracts are recognized in the statement of
operations. As of December 31, 2006, 2007 and 2008, the Company recorded change in
fair value of forward foreign currency exchange contracts as $nil, $nil and
$1,067,079, respectively.(q)
    
    Income per shareBasic income per share is computed by dividing net income by the weighted average
number of ordinary shares outstanding during the period. Diluted income per ordinary
share reflects the potential dilution that could occur if securities or other
contracts to issue ordinary shares were exercised or converted into ordinary shares.
Ordinary share equivalents are excluded from the computation in loss periods as their
effects would be anti-dilutive.
  F-17




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  continued
 (q)
    
    Income per share  continuedThe following table sets forth the computation of the basic and diluted income from
continuing operations per share for the periods indicated:
 Year ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Net income from continuing operations attributable
to ordinary share holders  basic
    
    
    10,206,788
    
    
    
    35,362,022
    
    
    
    61,360,272Finance charge related to Convertible notes
    
    
    
    
    
    
    
    
    
    
    3,382,254Amount allocated to Series A Shares
for participating rights to dividends
    
    
    2,967,350
    
    
    
    
    
    
    
    Net income from continuing operations attributable
to ordinary share holders  diluted
    
    
    13,174,138
    
    
    
    35,362,022
    
    
    
    64,742,526Weighted average ordinary shares outstanding
    
    
    1,000,000,000
    
    
    
    2,339,799,657
    
    
    
    2,501,202,680Weighted average Series A shares outstanding
    
    
    38,316,484
    
    
    
    
    
    
    
    Weighted average number of
ordinary shares outstanding  basic
    
    
    1,038,316,484
    
    
    
    2,339,799,657
    
    
    
    2,501,202,680Unvested restricted shares
    
    
    20,167,109
    
    
    
    30,885,499
    
    
    
    3,158,126Convertible notes
    
    
    
    
    
    
    
    
    
    
    186,362,584Weighted average number of
ordinary shares outstanding  diluted
    
    
    1,058,483,593
    
    
    
    2,370,685,156
    
    
    
    2,690,723,390Per share income from continuing operations attributable
to ordinary shareholders  basic
    
    
    0.01
    
    
    
    0.02
    
    
    
    0.02Per share income from continuing operations attributable
to ordinary shareholders  diluted
    
    
    0.01
    
    
    
    0.02
    
    
    
    0.02
    F-18




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  continued
 (q)
    
    Income per share  continued
  (r)
    
    Recently issued accounting pronouncements
    F-19




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  continued
 (r)
    
    Recently issued accounting pronouncements  continued
      F-20




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  continued
 (r)
    
    Recently issued accounting pronouncements  continued
      F-21




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 2.
    
    SUMMARY OF PRINCIPAL ACCOUNTING POLICIES  continued
 (r)
    
    Recently issued accounting pronouncements  continued
  3.
    
    DISCONTINUED OPERATIONS
   Year ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Revenues
    
    
    1,141,315
    
    
    
    Income (loss) from discontinued operations
before income taxes
    
    
    (761,975
    )
    
    
    379,188
    
    
    
    Income tax (expense) benefit
    
    
    8,698
    
    
    
    (11,272
    )
    
    
    Net income (loss) from discontinued operations, net of tax
    
    
    (753,277
    )
    
    
    367,916
    
    
    
    
  F-22




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 3.
    
    DISCONTINUED OPERATIONS  continuedSummarized assets and liabilities from the discontinued operations included in the Companys
consolidated balance sheets were as follows:
 At December 312006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Current assets of discontinued operations:Accounts receivable, net
    
    
    324,462
    
    
    
    33,072
    
    
    
    Inventory
    
    
    
    
    
    
    
    
    
    
    Advance to suppliers
    
    
    
    
    
    
    
    
    
    
    Prepaid expenses and other current assets
    
    
    28,192
    
    
    
    427
    
    
    
    352,654
    
    
    
    33,499
    
    
    
    Current liabilities of discontinued operations:Accounts payable  trade
    
    
    (124,021
    )
    
    
    
    
    
    
    Accrued expenses and other current liabilities
    
    
    (309,879
    )
    
    
    (199,441
    )
    
    
    (433,900
    )
    
    
    (199,441
    )
    
    
    
 4.
    
    ALLOWANCE FOR DOUBTFUL RECEIVABLESAllowance for doubtful receivables are comprised of allowances for account receivables,
other receivables and advances to suppliers. An analysis of allowance for account
receivables at December 31, 2006, 2007 and 2008 is as follows:
 At December 312006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Balance, beginning of the year
    
    
    
    
    
    
    
    
    
    
    342,813Allowance made during the year
    
    
    
    
    
    
    342,813
    
    
    
    1,467,471Amount written-off against allowances
    
    
    
    
    
    
    
    
    
    
    Balance, end of the year
    
    
    
    
    
    
    342,813
    
    
    
    1,810,284
  At December 312006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Balance, beginning of the year
    
    
    80,182
    
    
    
    76,123
    
    
    
    125,400Allowance made during the year
    
    
    
    
    
    
    49,277
    
    
    
    118,567Amount written-off against allowances
    
    
    (4,059
    )
    
    
    
    
    
    
    Balance, end of the year
    
    
    76,123
    
    
    
    125,400
    
    
    
    243,967
  F-23




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 4.
    
    ALLOWANCE FOR DOUBTFUL RECEIVABLES  Continued
  At December 312006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Balance, beginning of the year
    
    
    
    
    
    
    3,497,050
    
    
    
    2,077,151Allowance made (recovery realized) during the year
    
    
    4,527,094
    
    
    
    (1,419,899
    )
    
    
    5,866,999Amount written-off against allowances
    
    
    (1,030,044
    )
    
    
    
    
    
    
    Balance, end of the year
    
    
    3,497,050
    
    
    
    2,077,151
    
    
    
    7,944,150
 5.
    
    INVENTORIESInventories consisted of the following:
 At December 312006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Raw materials
    
    
    15,630,192
    
    
    
    18,722,727
    
    
    
    30,697,470Work in progress
    
    
    13,697,052
    
    
    
    34,734,548
    
    
    
    26,796,504Finished goods
    
    
    2,903,065
    
    
    
    5,090,256
    
    
    
    28,193,433Total
    
    
    32,230,309
    
    
    
    58,547,531
    
    
    
    85,687,407
  6.
    
    PREPAID EXPENSES AND OTHER CURRENT ASSETSPrepaid expenses and other current assets consisted of the following:
 At December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Other debtors
    
    
    420,754
    
    
    
    2,610,651
    
    
    
    3,695,828Prepaid expenses
    
    
    883,261
    
    
    
    578,196
    
    
    
    927,979Value-added tax recoverable
    
    
    1,034,668
    
    
    
    1,417,143
    
    
    
    3,052,037Deferred tax assets
    
    
    612,711
    
    
    
    379,667
    
    
    
    2,109,095Less: Allowance for doubtful accounts
    
    
    (76,137
    )
    
    
    (125,400
    )
    
    
    (243,967
    )2,875,257
    
    
    
    4,860,257
    
    
    
    9,540,972
  F-24




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 7.
    
    PROPERTY, PLANT AND EQUIPMENT, NETProperty, plant and equipment, net, consisted of the following:
 At December 312006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Buildings
    
    
    5,924,618
    
    
    
    15,928,802
    
    
    
    33,815,202Plant and machinery
    
    
    16,824,811
    
    
    
    98,488,649
    
    
    
    233,846,906Motor vehicles
    
    
    249,010
    
    
    
    746,180
    
    
    
    1,132,838Electronic equipment, furniture and fixtures
    
    
    2,784,188
    
    
    
    11,941,262
    
    
    
    27,277,31425,782,627
    
    
    
    127,104,893
    
    
    
    296,072,260Less: Accumulated depreciation
    
    
    (1,717,804
    )
    
    
    (7,552,402
    )
    
    
    (27,453,759
    )24,064,823
    
    
    
    119,552,491
    
    
    
    268,618,501Construction in progress
    
    
    27,354,542
    
    
    
    77,571,384
    
    
    
    88,975,301Property, plant and equipment, net
    
    
    51,419,365
    
    
    
    197,123,875
    
    
    
    357,593,802
    8.
    
    PREPAID LAND USE RIGHT, NET
     F-25




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 9.
    
    DERIVATIVE FINANCIAL INSTRUMENTS
    10.
    
    FAIR VALUE MEASUREMENT
   
 
  F-26




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 10.
    
    FAIR VALUE MEASUREMENT  continued
 
  
  Fair Value Measurements at ReportingDate UsingQuoted PricesTotal Fair
    
    
    in Active
    
    
    SignificantValue and
    
    
    Markets for
    
    
    Other
    
    
    SignificantCarrying
    
    
    Identical
    
    
    Observable
    
    
    UnobservableValue on the
    
    
    Assets
    
    
    Inputs
    
    
    InputsBalance Sheet
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Liabilities:Foreign exchange forward contract
    
    $
    1,067,079
    
    
    $
    
    
    
    $
    1,067,079
    
    
    $
    Total liabilities
    
    $
    1,067,079
    
    
    
    
    
    
    $
    1,067,079
    
    
    
    
   F-27




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 10.
    
    FAIR VALUE MEASUREMENT  continued
  11.
    
    BANK BORROWINGS
  At December 312006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Bank borrowingsShort-term
    
    
    71,408,653
    
    
    
    163,563,089
    
    
    
    248,557,724Long-term, current portion
    
    
    
    
    
    
    
    
    
    
    Sub-total
    
    
    71,408,653
    
    
    
    163,563,089
    
    
    
    248,557,724Long-term, non-current portion
    
    
    5,122,492
    
    
    
    8,214,002
    
    
    
    14,631,434Total
    
    
    76,531,145
    
    
    
    171,777,091
    
    
    
    263,189,158
  At December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Short-term borrowings guaranteed by TSL
    
    
    
    
    
    
    
    
    
    
    31,047,999Short-term borrowings secured by deposit provided by Top
Energy International
    
    
    
    
    
    
    73,584,909Short-term borrowings secured by restricted cash
    
    
    
    
    
    
    
    
    
    
    20,846,779Short-term borrowings secured by raw materials of Trina China
    
    
    8,964,360
    
    
    
    9,583,002
    
    
    
    Short-term borrowings secured by plants of Trina China
    
    
    
    
    
    
    4,654,601
    
    
    
    14,485,120Short-term borrowings secured by machinery of Trina China
    
    
    
    
    
    
    38,093,066
    
    
    
    58,014,454Unsecured short-term borrowings
    
    
    20,183,737
    
    
    
    37,647,511
    
    
    
    64,569,207Short-term borrowings guaranteed by third parties(1)
    
    
    42,260,556
    
    
    
    
    
    
    
    57,794,165Short-term borrowings guaranteed by
accounts receivable
    
    
    
    
    
    
    
    
    
    
    1,800,000Total
    
    
    71,408,653
    
    
    
    163,563,089
    
    
    
    248,557,724
 (1)
    
    As of December 31, 2006, short-term bank borrowings of $42,260,556 were guaranteed
by Changzhou Fulai Property Development Co., Ltd., Changzhou City Heng Tai Investment
Guarantee Co., Ltd., Changzhou Jiuzhou Property Development Co., Ltd., and Changzhou Fuyuan
Property Development Co., Ltd. As of December 31, 2008, short-term bank borrowings of
$57,794,165 were guaranteed by Changzhou Fuhong Co., Ltd. and Changzhou City Heng Tai
Investment Guarantee Co., Ltd.  F-28




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 11.
    
    BANK BORROWINGS-continued
      12.
    
    CONVERTIBLE SENIOR NOTES
     F-29




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 12.
    
    CONVERTIBLE SENIOR NOTES  continued
         F-30




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 12.
    
    CONVERTIBLE SENIOR NOTES  continued
  13.
    
    ACCRUED WARRANTY COSTS
  For the year ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Beginning balance
    
    
    272,320
    
    
    
    1,400,269
    
    
    
    4,486,135Warranty provision
    
    
    1,127,949
    
    
    
    3,085,866
    
    
    
    7,987,007Warranty costs incurred
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    
    1,400,269
    
    
    
    4,486,135
    
    
    
    12,473,142
 14.
    
    SHAREHOLDERS EQUITY
   F-31




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 15.
    
    SHARE-BASED COMPENSATION
   2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Share options
    
    $
    
    
    
    $
    
    
    
    $
    483,546Restricted shares
    
    
    2,727,452
    
    
    
    1,740,388
    
    
    
    3,541,234Total share-based compensation expense
    
    $
    2,727,452
    
    
    $
    1,740,388
    
    
    $
    4,024,780
 Compensation related to 2006 Restructuring:
     F-32




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 15.
    
    SHARE-BASED COMPENSATION  continued
 Restricted shares
    Number of shares
    
    
    Weighted average grant date fair valueNonvested at January 1, 2008
    
    
    57,650,063
    
    
    $
    0.29Granted
    
    
    17,866,289
    
    
    $
    0.38Vested
    
    
    (11,550,469
    )
    
    $
    0.28Repurchased
    
    
    (20,370,413
    )
    
    $
    0.35Nonvested at December 31, 2008
    
    
    43,595,470
    
    
    $
    0.30
     F-33




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 15.
    
    SHARE-BASED COMPENSATION  continued
 Share Options
     WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateNumber of Options
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    Intrinsic ValueOptions outstanding
at January 1, 2008
    
    
    Granted
    
    
    14,512,157
    
    
    
    0.3356
    
    
    
    N/AExercised
    
    
    Cancelled or
Forfeited
    
    
    1,870,078
    
    
    
    0.3356
    
    
    
    N/AOptions outstanding
at December 31,
2008
    
    
    12,642,079
    
    
    
    0.3356
    
    
    
    2.75Options vested or
expected to vest at
December 31, 2008
    
    
    8,742,934
    
    
    
    0.3356
    
    
    
    2.75
    
    
    
    
  F-34




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 15.
    
    SHARE-BASED COMPENSATION  continued
 Share Options
   2008Risk free rate
    
    
    2.02
    %Average expected life
    
    
    3.5Volatility ratio
    
    
    90.40
    %Dividend yield
    
    
    0
    %
     F-35




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 16.
    
    TAX EXPENSE (BENEFIT)
  Years ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Profit (loss) before income taxPRC
    
    
    15,396,584
    
    
    
    37,357,505
    
    
    
    77,879,740Other jurisdictions
    
    
    (434,832
    )
    
    
    (3,702,196
    )
    
    
    (11,909,933
    )Total profit before income tax
    
    
    14,961,752
    
    
    
    33,655,309
    
    
    
    65,969,807Current tax expense/benefit:PRC
    
    
    2,519,834
    
    
    
    (997,051
    )
    
    
    8,051,558Deferred tax benefit:PRC
    
    
    (732,220
    )
    
    
    (709,662
    )
    
    
    (3,442,023
    )1,787,614
    
    
    
    (1,706,713
    )
    
    
    4,609,535
       F-36




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 16.
    
    TAX EXPENSE (BENEFIT)  continued
   Years ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Applicable enterprise income tax rate
    
    
    24.0
    %
    
    
    24.0
    %
    
    
    25.0
    %Different tax rate in other jurisdiction
    
    
    0.4
    %
    
    
    2.0
    %
    
    
    4.7
    %Benefit of tax holiday and export sales
    
    
    -15.2
    %
    
    
    -23.6
    %
    
    
    -21.1
    %Tax refund for purchase of domestic
equipment
    
    
    
    
    
    
    -8.5
    %
    
    
    -1.1
    %Impact of future tax rates on deferred taxes
    
    
    
    
    
    
    
    
    
    
    -9.4
    %Valuation allowance movement
    
    
    
    
    
    
    -1.2
    %
    
    
    8.9
    %Expenses not deductible for tax purposes
    
    
    2.7
    %
    
    
    2.3
    %
    
    
    11.9
    %
    
    
    -5.0
    %
    
    
    7.0
    %
  Year ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $The aggregate effect
    
    $
    2,274,186
    
    
    $
    7,772,453
    
    
    $
    13,896,436Per share effectbasic
    
    $
    0.01
    
    
    $
    0.01
    
    
    $
    0.01Per share effectdiluted
    
    $
    0.01
    
    
    $
    0.01
    
    
    $
    0.01
  F-37




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 16.
    
    TAX EXPENSE (BENEFIT)  continued
     Year ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Deferred tax assetsBad debts provision and
Other accrued expenses
    
    
    424,610
    
    
    
    412,627
    
    
    
    2,290,527Inventory provision
    
    
    596,339
    
    
    
    297,055
    
    
    
    4,842,997Advance to suppliers provision
    
    
    332,052
    
    
    
    153,014
    
    
    
    1,374,293Warranty provision
    
    
    336,063
    
    
    
    1,121,534
    
    
    
    2,807,489Total deferred tax assets
    
    
    1,689,064
    
    
    
    1,984,230
    
    
    
    11,315,306Valuation allowance on deferred tax assets
    
    
    (924,166
    )
    
    
    (509,670
    )
    
    
    (6,398,723
    )Net deferred tax assets
    
    
    764,898
    
    
    
    1,474,560
    
    
    
    4,916,583Analysis as:Current
    
    
    612,711
    
    
    
    379,667
    
    
    
    2,109,095Non-current
    
    
    152,187
    
    
    
    1,094,893
    
    
    
    2,807,488
   F-38




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 17.
    
    DISTRIBUTION OF PROFIT
     18.
    
    RELATED PARTY TRANSACTIONS AND BALANCES
    F-39




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 18.
    
    RELATED PARTY TRANSACTIONS AND BALANCES  continued
       19.
    
    COMMITMENTS AND CONTINGENCIES
 a)
    
    Capital commitments
   F-40




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 19.
    
    COMMITMENTS AND CONTINGENCIES  continued
 b)
    
    Materials purchase commitments
  c)
    
    Operating lease commitments
   Year ending December 312008
    
    $
    202,8172009
    
    
    76,916
 d)
    
    Contingencies
     F-41




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 20.
    
    SEGMENT INFORMATION
   Year ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Europe:- Germany
    
    
    49,051,717
    
    
    
    94,732,766
    
    
    
    198,529,460- Spain
    
    
    43,448,000
    
    
    
    120,831,232
    
    
    
    270,548,479- Italy
    
    
    
    
    
    
    54,694,747
    
    
    
    149,684,950- Belgium
    
    
    
    
    
    
    
    
    
    
    114,418,063- Others
    
    
    10,862,120
    
    
    
    21,041,085
    
    
    
    22,222,876Europe Total
    
    
    103,361,837
    
    
    
    291,299,830
    
    
    
    755,403,828China
    
    
    10,632,280
    
    
    
    6,373,106
    
    
    
    30,390,236Mongolia
    
    
    
    
    
    
    1,458,774
    
    
    
    South Africa
    
    
    111,925
    
    
    
    
    
    
    
    Others
    
    
    393,607
    
    
    
    2,687,487
    
    
    
    46,106,788Total net revenues
    
    
    114,499,649
    
    
    
    301,819,197
    
    
    
    831,900,852
  21.
    
    MAJOR CUSTOMERS AND SUPPLIERS
  Net revenue
    
    
    Accounts receivableYear ended December 31,
    
    
    December 31,2006
    
    
    2007
    
    
    2008
    
    
    2006
    
    
    2007
    
    
    2008Company A
    
    
    
    
    
    
    44,731,992
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    Company B
    
    
    16,489,649
    
    
    
    *
    
    
    
    *
    
    
    
    1,921,129
    
    
    
    
    
    
    
    Company C
    
    
    11,396,605
    
    
    
    *
    
    
    
    
    
    
    
    10,271,605
    
    
    
    
    
    
    
    
  F-42




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 21.
    
    MAJOR CUSTOMERS AND SUPPLIERS  continued
  Advance to suppliersDecember 31,2006
    
    
    2007
    
    
    2008Company I
    
    
    
    
    
    
    
    
    
    
    62,810,715Company II
    
    
    
    
    
    
    16,647,408
    
    
    
    *Company III
    
    
    
    
    
    
    14,400,000
    
    
    
    24,000,000Company IV
    
    
    
    
    
    
    13,690,004
    
    
    
    *Company V
    
    
    
    
    
    
    11,550,000
    
    
    
    Company VI
    
    
    7,005,000
    
    
    
    10,350,000
    
    
    
    *Company J
    
    
    5,835,218
    
    
    
    
    
    
    
    
 *
    
    Represents less than 10%. 22.
    
    SUBSEQUENT EVENTS
   F-43




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 
 Additional Information  Financial Statement Schedule I
 These financial statements have been prepared in conformity with Accounting Principles
Generally Accepted in the United States
 
   F-44




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 BALANCE SHEETS
(In U.S. dollars)
 As of December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $ASSETSCurrent assets:Cash and cash equivalents
    
    
    86,713,194
    
    
    
    20,749,062
    
    
    
    976,882Other receivables
    
    
    104,990
    
    
    
    302,092
    
    
    
    574,718Total current assets
    
    
    86,818,184
    
    
    
    21,051,154
    
    
    
    1,551,600Deferred convertible bond issuance cost
    
    
    
    
    
    
    
    
    
    
    1,710,214Amount due from group companies
    
    
    11,147,342
    
    
    
    155,826,973
    
    
    
    223,938,675Investment in subsidiaries
    
    
    61,750,553
    
    
    
    192,801,248
    
    
    
    343,897,225TOTAL ASSETS
    
    
    159,716,079
    
    
    
    369,679,375
    
    
    
    571,097,714LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accrued expenses
    
    
    2,561,790
    
    
    
    2,190,570
    
    
    
    4,793,149Total current liabilities
    
    
    2,561,790
    
    
    
    2,190,570
    
    
    
    4,793,149Convertible note payable
    
    
    
    
    
    
    
    
    
    
    133,248,054Total liabilities
    
    
    2,561,790
    
    
    
    2,190,570
    
    
    
    138,041,203Shareholders equity:Ordinary shares ($0.00001 par value; 5,000,000,000 shares
authorized, 2,121,534,728, 2,552,940,486 and 2,958,183,059
shares issued and outstanding as of
December 31, 2006, 2007 and 2008, respectively)
    
    
    21,215
    
    
    
    25,533
    
    
    
    29,581Additional paid-in capital
    
    
    139,670,637
    
    
    
    304,877,619
    
    
    
    308,898,326Retained earnings
    
    
    15,622,250
    
    
    
    51,352,188
    
    
    
    112,712,460Accumulated other comprehensive income
    
    
    1,840,187
    
    
    
    11,233,465
    
    
    
    11,416,144Total shareholders equity
    
    
    157,154,289
    
    
    
    367,488,805
    
    
    
    433,056,511TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    
    159,716,079
    
    
    
    369,679,375
    
    
    
    571,097,714
  F-45




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 STATEMENTS OF OPERATIONS
(In U.S. dollars)
 Year ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Operating expensesSelling expenses
    
    
    
    
    
    
    1,369,719
    
    
    
    1,742,429General and administrative expenses
    
    
    768,767
    
    
    
    5,922,767
    
    
    
    7,156,768Research and development expenses
    
    
    
    
    
    
    546,512
    
    
    
    257,948Total operating expenses
    
    
    768,767
    
    
    
    7,838,998
    
    
    
    9,157,145Operating loss
    
    
    (768,767
    )
    
    
    (7,838,998
    )
    
    
    (9,157,145
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    (3,740,207
    )Interest income
    
    
    91,829
    
    
    
    1,911,519
    
    
    
    544,325Equity in earnings of subsidiaries
    
    
    13,097,799
    
    
    
    41,657,417
    
    
    
    73,713,299Income before income taxes
    
    
    12,420,861
    
    
    
    35,729,938
    
    
    
    61,360,272Tax expense
    
    
    
    
    
    
    
    
    
    
    Net Income
    
    
    12,420,861
    
    
    
    35,729,938
    
    
    
    61,360,272
  F-46




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##### Table of Contents



TRINA SOLAR LIMITED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollars)
 STATEMENTS OF CASH FLOWS
(In U.S. dollars)
 Year ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Operating activities:Net income
    
    
    12,420,861
    
    
    
    35,729,938
    
    
    
    61,360,272Equity in earnings of subsidiaries
    
    
    (13,097,799
    )
    
    
    (41,657,417
    )
    
    
    (73,713,298
    )Adjustments to reconcile net income to net cash
provided by operating activities:Share-based compensation
    
    
    2,727,452
    
    
    
    1,740,388
    
    
    
    4,024,780Changes in operating assets and liabilities:Other deferred charges-
    
    
    
    
    
    
    
    
    
    
    (1,220,549
    )Other receivable
    
    
    (104,990
    )
    
    
    (197,102
    )
    
    
    (272,651
    )Accrued expenses
    
    
    2,561,790
    
    
    
    (371,220
    )
    
    
    3,823,128Net cash used in operating activities
    
    
    4,507,314
    
    
    
    (4,755,413
    )
    
    
    (5,998,318
    )Investing activities:Investment in subsidiaries, net of cash acquired
    
    
    (37,845,003
    )
    
    
    (80,000,000
    )
    
    
    (77,200,000
    )Amounts due from group company
    
    
    (11,147,342
    )
    
    
    (144,679,631
    )
    
    
    (68,111,702
    )Net cash used in investing activities
    
    
    (48,992,345
    )
    
    
    (224,679,631
    )
    
    
    (145,311,702
    )Financing activities:Proceeds from issuance of Series A preferred shares,
net of issuance costs
    
    
    39,168,498
    
    
    
    
    
    
    
    Capital contribution from shareholders
    
    
    4,863,400
    
    
    
    
    
    
    
    Proceeds from issuance of convertible note payable,
net of issuance cost
    
    
    
    
    
    
    
    
    
    
    131,537,840Proceeds from issuance of restricted shares to employees
    
    
    457
    
    
    
    208
    
    
    
    Proceed from issuance of IPO proceeds
net of deferred listing expenses
    
    
    87,165,870
    
    
    
    163,470,704
    
    
    
    Net cash provided by financing activities
    
    
    131,198,225
    
    
    
    163,470,912
    
    
    
    131,537,840Net change in cash and cash equivalents
    
    
    86,713,194
    
    
    
    (65,964,132
    )
    
    
    (19,772,180
    )Cash and cash equivalents at the beginning of the year
    
    
    
    
    
    
    86,713,194
    
    
    
    20,749,062Cash and cash equivalents at the end of the year
    
    
    86,713,194
    
    
    
    20,749,062
    
    
    
    976,882
   F-47




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##### Table of Contents



1.1
    
    Amended and Restated Memorandum and Articles of Association of the
Registrant (incorporated by reference to Exhibit 3.1 of our Registration
Statement on Form F-1 (file No. 333-142970) filed with the Securities and
Exchange Commission on May 15, 2007)2.1
    
    Registrants Form American Depositary Receipt (included in Exhibit 2.3)2.2
    
    Registrants Specimen Certificate for Ordinary Shares (incorporated by
reference to Exhibit 4.2 of our Registration Statement on Form F-1 (file
No. 333-142970) filed with the Securities and Exchange Commission on May
15, 2007)2.3
    
    Deposit Agreement among the Registrant, the depositary and holder of the
American Depositary Shares (incorporated by reference to Exhibit 1 of our
Post-Effective Amendment No. 1 to the Registration Statement on Form F-6
(file No. 333-139161) filed with the Securities and Exchange Commission on
November 21, 2008)2.4
    
    Form of Share Transfer Agreement relating to Trina China between the
Registrant and other parties therein dated March 28, 2006 (incorporated by
reference to Exhibit 4.4 of our Registration Statement on Form F-1 (file
No. 333-142970) filed with the Securities and Exchange Commission on May
15, 2007)2.5
    
    Amended and Restated Series A Preferred Share Purchase Agreement among the
Registrant, Trina China and other parties therein dated May 19, 2006
(incorporated by reference to Exhibit 4.5 of our Registration Statement on
Form F-1 (file No. 333-142970) filed with the Securities and Exchange
Commission on May 15, 2007)2.6
    
    Amended and Restated Shareholders Agreement among the Registrant, Trina
China and other parties therein dated May 30, 2006 (incorporated by
reference to Exhibit 4.6 of our Registration Statement on Form F-1 (file
No. 333-142970) filed with the Securities and Exchange Commission on May
15, 2007)2.7
    
    Amendment to the Amended and Restated Shareholders Agreement among the
Registrant, Trina China and other parties therein dated December 7, 2006
(incorporated by reference to Exhibit 4.7 of our Registration Statement on
Form F-1 (file No. 333-142970) filed with the Securities and Exchange
Commission on May 15, 2007)2.8
    
    First Supplemental Indenture dated as of July 23, 2008 between Wilmington
Trust Company and the Registrant (incorporated by reference to Exhibit 4.1
of the Report of Foreign Private Issuer on Form 6-K filed by Trina Solar
Limited on July 23, 2008).2.9
    
    Rights Agreement dated as of November 21, 2008 between Trina Solar Limited
and The Bank of New York Mellon, as Rights Agent (incorporated by
reference to Exhibit 4.1 of the Report of Foreign Private Issuer on Form
6-K filed by Trina Solar Limited on November 21, 2008).4.1
    
    Amended and Restated Share Incentive Plan (incorporated by reference to
Exhibit 10.1 of our Registration Statement on Form S-8 (file No.
333-157831) filed with the Securities and Exchange Commission on March 11,
2009)4.2
    
    Form of Indemnification Agreement between the Registrant and its officers
and directors (incorporated by reference to Exhibit 10.2 of our
Registration Statement on Form F-1 (file No. 333-142970) filed with the
Securities and Exchange Commission on May 15, 2007)4.3
    
    Form of Employment Agreement between the Registrant and a Senior Executive
Officer of the Registrant (incorporated by reference to Exhibit 10.3 of
our Registration Statement on Form F-1 (file No. 333-142970) filed with
the Securities and Exchange Commission on May 15, 2007)4.4
    
    Form of Tax Indemnification Agreement between the Registrant and Former
Shareholders dated as of September 15, 2006 (incorporated by reference to
Exhibit 10.4 of our Registration Statement on Form F-1 (file No.
333-142970) filed with the Securities and Exchange Commission on May 15,
2007)4.5
    
    Form of Loan Agreement between Trina China and Bank of Communications
(incorporated by reference to Exhibit 10.5 of our Registration Statement
on Form F-1 (file No. 333-142970) filed with the Securities and Exchange
Commission on May 15, 2007)4.6
    
    Form of Guarantee Agreement between the Guarantor and Bank of
Communications for Long-term Loans (incorporated by reference to Exhibit
10.6 of our Registration Statement on Form F-1 (file No. 333-142970) filed
with the Securities and Exchange Commission on May 15, 2007)4.7
    
    Form of Guarantee Agreement between the Guarantor and Bank of
Communications for Short-term Loans (incorporated by reference to Exhibit
10.7 of our Registration Statement on Form F-1 (file No. 333-142970) filed
with the Securities and Exchange Commission on May 15, 2007)4.8
    
    Form of Short-term Loan Agreement between Trina China and Agriculture Bank
of China (incorporated by reference to Exhibit 10.8 of our Registration
Statement on Form F-1 (file No. 333-142970) filed with the Securities and
Exchange Commission on May 15, 2007)
  123




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##### Table of Contents



4.9
    
    Form of Guarantee Agreement between the Guarantor and Agriculture Bank of
China for Short-term Loans (incorporated by reference to Exhibit 10.9 of
our Registration Statement on Form F-1 (file No. 333-142970) filed with
the Securities and Exchange Commission on May 15, 2007)4.10
    
    Form of Maximum Guarantee Agreement between Guarantors and Agriculture
Bank of China for Short-term Loans (incorporated by reference to Exhibit
10.10 of our Registration Statement on Form F-1 (file No. 333-142970)
filed with the Securities and Exchange Commission on May 15, 2007)4.11
    
    Form of Counter-guarantee Agreement between Guarantors and Changzhou City
Hengtai Investment Co., Ltd. for Maximum Guarantee (incorporated by
reference to Exhibit 10.11 of our Registration Statement on Form F-1 (file
No. 333-142970) filed with the Securities and Exchange Commission on May
15, 2007)4.12
    
    Form of Security Agreement between Trina China and Changzhou City Hengtai
Investment Co., Ltd. for Maximum Guarantee (incorporated by reference to
Exhibit 10.12 of our Registration Statement on Form F-1 (file No.
333-142970) filed with the Securities and Exchange Commission on May 15,
2007)4.13
    
    Credit Line Agreement between Trina China and Bank of China dated August
28, 2007 (incorporated by reference to Exhibit 4.13 of our Annual Report
on Form 20-F filed with the Securities and Exchange Commission on June 26,
2008)4.14
    
    Maximum Amount Guarantee between Bank of China and Changzhou City Hengtai
Investment Co., Ltd., dated January 31, 2008 (incorporated by reference to
Exhibit 4.14 of our Annual Report on Form 20-F filed with the Securities
and Exchange Commission on June 26, 2008)4.15
    
    Counter-guarantee (Maximum Amount Guarantee Contract) between Jifan Gao
and Changzhou City Hengtai Investment Guarantee Co., Ltd. dated January
28, 2008 (incorporated by reference to Exhibit 4.15 of our Annual Report
on Form 20-F filed with the Securities and Exchange Commission on June 26,
2008)4.16
    
    Supply Contract and Distribution Agreement between Trina China and IBC
SOLAR AG dated May 26, 2007 (incorporated by reference to Exhibit 4.16 of
our Annual Report on Form 20-F filed with the Securities and Exchange
Commission on June 26, 2008)4.17
    
    Equipment Supply Contract between Trina China and Meyer Burger AG dated
May 30, 2007 and the amendment dated September 17, 2007 (incorporated by
reference to Exhibit 4.17 of our Annual Report on Form 20-F filed with the
Securities and Exchange Commission on June 26, 2008)4.18
    
    Equipment Supply Contract between Trina China and Meyer Burger AG dated
August 8, 2007 and the amendment dated September 17, 2007 (incorporated by
reference to Exhibit 4.18 of our Annual Report on Form 20-F filed with the
Securities and Exchange Commission on June 26, 2008)4.19
    
    Polysilicon Supply Agreement between Jiangsu Zhongneng Polysilicon
Technology Development Co., Ltd. and Trina China dated March 29, 2008
(incorporated by reference to Exhibit 4.19 of our Annual Report on Form
20-F filed with the Securities and Exchange Commission on June 26, 2008)4.20*
    
    Supplemental Polysilicon Supply Agreement between Jiangsu Zhongneng
Polysilicon Technology Development Co., Ltd. and Trina China dated August
19, 20084.21
    
    ADS Lending Agreement, dated July 17, 2008, among Credit Suisse Securities
(Europe) Limited, Credit Suisse, London Branch, and the Registrant
(incorporated by reference to Exhibit 99.1 of the Report of Foreign
Private Issuer on Form 6-K filed by Trina Solar Limited on July 23, 2008).4.22
    
    Standstill Agreement dated as of November 21, 2008 between the Registrant
and Jifan Gao (incorporated by reference to Exhibit 4.2 of the Report of
Foreign Private Issuer on Form 6-K filed by Trina Solar Limited on
November 21, 2008).8.1*
    
    Subsidiaries of the Registrant11.1
    
    Code of Business Conduct and Ethics of the Registrant (incorporated by
reference to Exhibit 99.1 of our Registration Statement on Form F-1 (file
No. 333-139144) filed with the Securities and Exchange Commission on
December 19, 2006)12.1*
    
    CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2*
    
    CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1*
    
    CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2*
    
    CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200215.1*
    
    Consent of Deloitte Touche Tohmatsu CPA Ltd.
 
 *
    
    Filed with this annual report on Form 20-F
    
    Confidential treatment is being requested with respect to portions of these exhibits and such
confidential treatment portions have been deleted and replaced with **** and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 under the
Securities Act.  124