09.10.2006 – 18:03

Thielert AG

Thielert: Further rebuttals to fraud allegations

  ots-CorporateNews transmitted by euro adhoc.
  The issuer is responsible for the content of this announcement.

On Thursday, 5 October 2006, fraud allegations against Thielert AG
were made public by the Schutzgemeinschaft der Kapitalanleger - SdK
(Capital Investors' Protection Association). The source of the
allegations concerned are criminal charges that have been filed
anonymously and still remain anonymous. They were leaked not only to
the SdK but also to selected media. Thielert AG denied the
allegations that very same day and announced further rebuttals.

The basis of the accusations against Thielert AG is a special audit
carried out on its accounts receivable. As described correctly by the
SdK, the document concerned is an interim report prepared dated 27
May 2005. This interim report was incomplete and provisional.
Naturally, the audit activities in respect of the accounts receivable
went ahead within the framework of the audit of the financial
statements for 2004 and were concluded with the award of the
auditors’ approval by BDO Deutsche Warentreuhand auditors as at 30
August 2005. The audit was therefore in no way interrupted, it was
merely decided to forgo the preparation of a final report. This final
report was replaced by the auditors’ unqualified opinion. As a
requirement for issues an unqualified opinion, the auditor has to
have adequate security of the accounts receivables concerned.

In the case of the allegedly fictitious accounts receivable, we have
achieved a realisation ratio of 87 per cent, as can be seen from the
following table (all amounts in EUR thousand.):

Net position of accounts receivable as at 31.12.2004 as per balance
sheet:      24,036  ./. unfinished products reported according to PoC
method*: 5,786 Net position of accounts receivable as at 31.12.2004
without unfinished products: 18,250 Position of account receivables
from 2004 and earlier as at 31.12.2005: 6,422 Position of accounts
receivable from 2004 and earlier as at 30.09.2006: 2,309 Ratio of
realisation: 87%

The accounts receivable and other assets shown in the half-year
report for 2006 amounting to EUR 67.4 million include cash at banks
of EUR 15.1 million as well as other accounts receivable and assets
totalling EUR 4.4 million. Trade receivables thus amount to EUR 47.9
million (including percentage of completion) and not in excess of EUR
50 million, as reported by the SdK. As far as the development of the
accounts receivable between 31 December 2005 and 30 June 2006 is
concerned, we can herewith state that the amount concerned has only
risen by EUR 2.6 million.

In contrast to the assumption expressed by the SdK, the company did
not have an influx of capital amounting to EUR 62 million from its
flotation. As can be seen from the annual report for 2005, the
company generated net funds of EUR 55.5 million from its flotation
after the deduction of all costs. After the repayment of its
consortium loan and various participating interests, the company was
left with net cash at banks amounting to EUR 18.2 million with effect
of 31 December 2005 (all details can be seen in the annual report for
2005).

Frank Thielert comments: "We are confident that our good products and
excellent market position will enable us to press ahead with our
successful strategy in both our civil and military sectors. We regret
that our shareholders have suffered losses due to the distribution of
these unfounded accusations. We will do everything in our power to
defuse the allegations as quickly as possible." To this end, the
company and its auditors will be cooperating closely with the state
prosecutor’s office and the German Financial Services Supervisory
Authority (BaFin).

Furthermore, Thielert AG has filed charges against persons unknown as
the company’s shareholders have suffered significant losses as a
result of the dissemination of the allegations. The possibility of
taking legal action against the SdK is also currently being examined
as the SdK’s irresponsible publication of its statement, without
naming or even knowing the source concerned, triggered the sharp fall
in the price of Thielert shares.

Further information on this matter can be found on our website.

* In accordance with the so-called percentage-of-completion method
prescribed by the International Financial Reporting Standards, such
products as have been ordered but are still unfinished are to be
reported under accounts receivable, despite the fact that no invoice
may have been issued yet and, as such, no payment can have been
received.

end of announcement                               euro adhoc 09.10.2006 18:02:31

Further inquiry note:

Sebastian Wentzler
Head of Corporate Communications
Tel: +49(40)69695035
E-Mail: press@thielert.com

Branche: Market research
ISIN: DE0006052079
WKN: 605207
Index: SDAX, CDAX, Prime All Share, Classic All Share
Börsen: Frankfurter Wertpapierbörse / official dealing/prime standard
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