Siegfried Annual Report 2009

Siegfried
Annual Report 2009

2009 Overview
The Siegfried Group achieved sales of CHF 283 million, a
2.2% decrease over the previous year. Sales of active ingredients
(Siegfried Actives) grew 15.3% to CHF 220.9 million.
The Siegfried Generics Division reported sales of CHF 62.1
million, a drop of 36%.
Operative cash flow was a bright spot: increasing by 69.4%
to CHF 45.5 million. Net working capital were reduced by
CHF 39 million to CHF 133 million, which had a positive
effect on cash flow, but reduced our operative results. Net
debt was reduced by CHF 7.9 million to CHF 63.3 million.
The EBITDA of CHF 25.3 million (excl. the “Deliver” program
restructuring costs) for the Siegfried Group is 8.9% of total
revenue. The “Deliver” restructuring project achieved savings
of about CHF 10 million.
For 2009, the Siegfried Group increased sales of the core
business active pharmaceutical ingredients by 15.3% over
the previous year and achieved an EBITDA of CHF 25.9 million
and an EBITDA margin of 11.7%; compared to the
industry average, these are solid results.
Generics sales in 2009 were, once again, strongly affected
by the profound changes in the German market. However,
the shortfall to 2008 was successively reduced during the
year.
In 2009, CHF 4.2 million were dedicated toward our
“Deliver” restructuring program. Various balance sheet items
were reviewed and adjusted. Including the investments in
the PulmoJet ® inhalation technology, a net loss of CHF 35.3
million was resulting.
Comparisons with 2008 are set apart by two exceptional
factors: a one-time license payment of CHF 13.5 million for
a biogeneric and an accounting profit of CHF 13.4 million
resulting from the sale of the Zofingen pharmaceutical
production facility to Arena.
The balance sheet of the Siegfried Group remains robust
with a 68.6% self-financing level.
A quick implementation of our growth strategy demands
measures for both organic and external growth, and will
have a profound effect on the different Siegfried Group
facilities. Both will require substantial financial resources,
which is why the Board of Directors recommends that the
General Meeting of Shareholders approve a capital increase
of CHF 80 million.
Our majority stockholder, the Camellia Group (U.K.)
will not participate in the capital stock increase.
Due to the recommended capital increase and the result
for 2009, the Board of Directors recommends that the
General Meeting of Shareholders abstain from issuing a
dividend.
After 43 years of service to the company, Dr. Bernard
Siegfried, Honorary Chairman of the Siegfried Group,
has retired from the Board of Directors.

Key numbers
Siegfried Group 2009 2008 Change
Net sales (million CHF) 283.0 289.3 –2.2%
Net loss (million CHF) –35.3 –74.9 –52.9%
Gross profit (million CHF) 47.5 62.4 –23.9%
Operating result before special charges (million CHF) –7.3 14.8 n.a.
Operating margin before special charges (%) –2.6% 5.1%
Operating result (EBIT) (million CHF) –27.7 –84.7 –67.3%
Operating margin (EBIT) (%) –9.8% –29.3%
Cash flow from operating activities (million CHF) 45.5 26.8 69.4%
EBITDA before special charges (million CHF) 25.3 52.0 –51.4%
EBITDA margin before special charges (%) 8.9% 18.0%
EBITDA (million CHF) 21.0 52.0 –59.6%
EBITDA margin (%) 7.4% 18.0%
Shareholder’s equity (million CHF) 327.3 352.0 –7.0%
Total assets (million CHF) 477.1 539.5 –11.6%
Equity as a % of total assets 68.6% 65.2%
Capital expenditure (million CHF) 20.8 30.5 –31.7%
Personnel expenses (million CHF) 101.3 98.4 3.0%
Employees 1 823 826 –0.4%
Dividend (million CHF) 2 – 5.9
Dividend (CHF per share) 2 – 2.10
Development of base business 3
Net sales (million CHF) 283.0 275.8 2.6%
Operating result before special charges (million CHF) 6.1 2.2 138.6%
Operating margin before special charges (%) 2.1% 0.8%
EBITDA before special charges (million CHF) 37.1 38.4 –3.5%
EBITDA margin before special charges (%) 13.1% 13.9%
1
at balance sheet date
2
For 2009 as per proposal to the general meeting of shareholders on a maxiumum of 2 800 000 shares ranking for dividend (dividends on treasury shares not
paid to shareholders will be carried forward)
3
Development of base business excluding expenses for the build up of the Inhalation technology. Prior year additionally excluding gain from sale of fixed assets
(Arena) and nonrecurring licensing fees.

Table of Contents
2009 Overview
Letter from Chairman & CEO 2
Corporate Governance
0. Foreword and General Framework 13
1. Structure of the Siegfried Group 14
2. Capital Structure 17
3. Board of Directors 18
4. Executive Management 29
5. Compensation, Investments and Loans 33
6. Voting rights and proxy 35
7. Control changes and defensive measures 36
8. Auditors 36
9. Information policy 37
Sustainability Report
Introduction 41
Compliance 46
Safety, Health & Environment (SHE) 48
Siegfried as an Employer 60
Social Responsibility 63
Consolidated Financial Statements Siegfried Holding AG
Editorial 66
Consolidated Balance Sheet 68
Consolidated Income Statements 69
Consolidated Cash Flow Statements 68
Consolidated Income Statement 69
Consolidated Statement of Comprehensive Income 69
Consolidated Statement of Cash Flows 70
Consolidated Statement of Changes in Equity 71
Notes to the Consolidated Financial Statements 72
Employee Benefits 77
Risk Management 78
Financial Risk Management 79
Report of the Statutory Auditor 104
Five-year overview 2005–2009, consolidated figures 105
Financial Statements Siegfried Holding AG
Balance Sheet of Siegfried Holding AG 108
Income Statement of Siegfried Holding AG 109
Notes to the Financial Statements of Siegfried Holding AG 109
Proposal for the appropriation of accumulated losses and free reserves 112
Report of the Statutory Auditors 113
Stock market data 114
Share price development 114
Cautionary statement regarding forward-looking statements 115
Publisher’s note 116

Letter from the Chairman & CEO
Dear Shareholders,
In 2009, Siegfried achieved sales of CHF 283 million (core
business), an increase of 2.6% over the previous year. Group
income decreases by 2.2% when compared to the total
Group income in 2008, i.e. including a one-time license payment
of CHF 13.5 million for a bio-generic. The Siegfried
Actives Division grew sales by 15.3% to CHF 220.9 million.
The Siegfried Generics Division noted a 26.2% decline (core
business), or 36.4% with the above noted license payment.
Faced with unfavorable economic conditions and the finance
crisis, Siegfried focused primarily on managing both cash
and net current assets in 2009. As a result, current assets
were reduced by over 20% (CHF 39 million) to CHF 133 million
over the year. This resulted in a positive cash flow of
CHF 45.5 million, 69.4% above the cash flow of 2008. Net
debt was reduced by CHF 8 million and is at a reasonable
level (ca. CHF 63 million).
The EBITDA of CHF 37.1 million (excl. special costs) corresponds
to an EBITDA margin of 13.1%. Siegfried posted an
EBIT of CHF 6.1 million (excl. special costs) for 2009. A new
review of projects in both Divisions made an adjustment of
CHF 16.2 million for activated development costs necessary.
Including special costs and the costs of the “Deliver” project,
the company noted a loss of CHF 14.4 million.
The financial results include interest costs. Further, during
the second half of the year our holdings in Arena Pharmaceuticals
(U.S. company) were adjusted by almost CHF 7 million.
Overall, the net losses from our share holdings amounted
to CHF 35.3 million. These shares were acquired in 2008
as partial payment for the Zofingen production facility sold
to Arena. Despite the positive trial results released in the fall
of 2008 for its key Lorcaserin product, the share price continued
to decline. We decided to adjust the value of our
holdings although we firmly believe in the huge potential of
this product (which is produced in Zofingen). The shares held
by Siegfried are locked until the end of 2010.
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As a supplier to the Life Science industry, Siegfried is active
in three market segments. Our most important market is
customized synthesis of patent-protected ingredients to
support the research efforts of the pharmaceutical industry.
Siegfried also offers active pharmaceutical ingredients with
expired patents to various customers. These ingredients
include controlled substances (incl. opiates), such as
methadone and nicotine, used in addiction treatments, and
other substances that must meet specific guidelines. In the
U.S. they are strictly controlled by the American regulatory
agencies. The third market is for finished medications,
mostly for the generics industry.
In the discussion concerning the company strategy, the
Board of Directors and executive management looked to
identify competitive advantages for Siegfried. Because the
custom synthesis market is very fragmented, with only a 5%
share for the market leader, answering this question is of
critical importance. Further, there is little room for revolutionary
technological innovations in this market, with experience,
absolute reliability and the greatest possible degree of
flexibility being the most desirable traits for an outsourcing
partner. As a previously fully integrated pharmaceutical company,
Siegfried is one of the few suppliers in this market that
offers capabilities on both the primary and secondary production
levels. We are able to produce not only the active ingredient
but also the finished medication. Such a decadesold
tradition of know-how and experience is truly unique for
a supplier of production services – and this “everything under
one roof” approach forms the bedrock for our new
strategic direction. Because the benefits of this strategy can
only be realized when both competencies are available at
the same site, the implementation of our new “Transform”
strategy will have profound affects on our various production
facilities. Currently, only our Zofingen site offers both
types of development services.
In addition to the ability to both develop and manufacture
active pharmaceutical ingredients, “Transform” also looks to
expand our range of production technologies. For example,
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3

preconditioning the physical characteristics of active ingredients
during the end production phase (by spray drying with
mixing of additives) is how Siegfried can manage projects for
innovative pharmaceutical clients. The needed expertise is
now being ramped up for integration in various situations.
We are also investing in the management of special class
substances, such as the spray drying of active ingredients
and a micro-reactor that were introduced and used successfully
in a number of projects. A further example is a significant
process optimization for a large pharmaceutical account
in Switzerland. In addition to the already mentioned commercial
systems, the pilot systems were also upgraded for
highly active ingredients. Now a full range of substances up
to sample sizes of 1μg can be safely handled. Upgrading of
our formulation capabilities is also planned; and we already
have access to our commercial formulation system in Malta.
We also see great potential in this area by combining API
and formulation, as foreseen by the new corporate strategy.
The new strategic decisions led to a number of corresponding
structural changes. Since maintaining two independent
divisions was no longer part of our strategy, the Board of
Directors and executive management chose a new Group
management structure that was launched on March 1,
2010. While Dr. Rudolf Hanko (CEO), Michael Huesler (CFO),
Hanspeter Brun (Head of HR), all continue in their previous
responsibilities, Marianne Spaene was appointed Head of
Business Development & Sales and Dr. Hubert Stueckler is
responsible for Global Technical Operations. Peter Gehler
assumed responsibility for the Corporate Center, which includes
Communications, the legal department, Facility
Management and the Chairman’s Office. The Development
department is once again an independent unit and will be
temporarily led by Dr. Rudolf Hanko. The new organization
will enable Siegfried to clearly position the competencies of
both Divisions as a unit – both in the market and internally
with our processes. Our efforts, both internally and externally,
will continue to focus on the most important customer
segments.
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From left to right:
Markus Altwegg, Ph.D., President of the Board of Directors
Rudolf Hanko, Ph.D., CEO
Parallel to the new strategic direction, extensive efforts were
made to keep the “Deliver” turnaround project on track.
The chemical production department was split into three
“focused factories” to better realize key efficiency gains;
each factory now processes a specific type of customer contract.
The new development lab building in Zofingen (built
at a cost of CHF 17 million) brought the analytic teams together
under a single management to reduce complexity
and allow considerable synergies. Overhead costs were also
markedly reduced and we even surpassed our cost-savings
goal of CHF 9 million. An additional CHF 10 million in
savings is planned for 2010 and will be visible in the financial
results.
In 2009, the Siegfried Actives Division increased both sales
and output. Sales grew by 15% and a larger number of exclusive
synthesis customers placed mid-sized to large orders.
This is the first step toward reducing the average age of our
product portfolio with active pharmaceutical ingredients and
intermediates for new drugs at the beginning of their life
cycle. These are products that just were, or are about to be
launched on the market by the client. The improvements in
the product portfolio are complemented by a qualitative and
quantitative upgrade of our development pipeline, which
currently features 40 exclusive synthesis projects. In the controlled
substances market in the U.S., we continue to focus
on the development of our opiate products, i.e. active pharmaceutical
ingredients used in analgesics for pain therapy.
After delays in the past years, an important contract was
signed with a large U.S. account; initial deliveries are set for
2010. A second contract was signed at the start of 2010;
the registration phase for this key account is being initiated
as quickly as possible, with initial sales expected by the second
half of 2011. Despite the positive outlook, we’ve taken
a new financial accounting approach and depreciated CHF 9
million in activated opiate development costs.
The generics business in 2009 was strongly influenced by the
profound changes in the German market. However, the
shortfall to 2008 was successively reduced during the year,
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5

eaching 25% by the end of 2009. Progress was made in diversifying
and increasing sales to countries that were previously
ignored or only minimally served, but this did not fully
compensate for the sales shortfall in Germany. As part of the
revised “Transform” strategy, the Siegfried Generics Division
was already actively conducting development work in 2009
for numerous exclusive customers. The Division’s pipeline
was basically realigned, which led to depreciation of CHF 7
million in activated development costs. In the future,
Siegfried will expand development technology for finished
medications beyond tablets and capsules. To minimize risk,
projects are being carried out and financed only with external
partners since mid-2009.
Development of the PulmoJet ® inhalation device advanced
to the point that a pharmaceutical product study could be
started in October 2009. Expert reports are very optimistic
and we expect the study results by the end of March 2010.
Because of the extensive product know-how and financial
resources needed to quickly move through the next development
phases for the PulmoJet ® , the Board of Directors and
executive management are looking for a partner that can
take this device through the clinical study phase. Discussions
with numerous interested parties are already at an advanced
stage.
Since 2008, Siegfried has increasingly dedicated itself to issues
of sustainability in all aspects of our business. The integration
of our Sustainability Report in our annual report also
underlines the importance of this topic. For us, sustainability
means doing our work carefully and with a long-term view.
Carefully, because we deal with demanding substances and
need to ensure the safety of both our employees and the environment.
Long-term, because our commercial success also
secures jobs. Siegfried has performed well in the areas of
compliance and quality, safety, health & environment, and
as an employer. Compliance was spotless in 2009; even with
the numerous inspections and audits, there were no complaints.
Levels of employee safety were clearly raised, confirmed
by the decline in accidents; two sites posted perfect
6 Annual Report

ecords with no accidents. The insurance company, HDI Gerling
rated Siegfried among the global ‘Top 10’ of inspected
companies. Health awareness was promoted through various
activities, such as participation in the “Bike to Work”
campaign and nutritional workshops for shift workers. The
overall reduction of our CO 2
emissions and the close cooperation
with the “Climate Cents” Foundation highlighted our
environmental efforts.
The Board of Directors met seven times in 2009, including
an off-site 2-day strategy workshop and an assessment
meeting to review their performance. Also, the different
committees closely accompanied the new strategic priorities
and structural changes.
We would like to sincerely thank the members of the Board
of Directors, the executive management, and every employee
around the world for their enormous commitment.
The gravity of the current situation has been recognized and
we are confident that we can count fully on the support of
our people during these difficult times. We greatly value
this quality, as it forms the inner strength of our company.
During the global financial crisis, financing the corporate
strategy – and the future of the company – is of particular
importance. During the strategy discussions, the Board of
Directors and executive management saw the risk of financing
the new strategy with the available financial means.
Neither a robust balance sheet nor a high equity ratio will
ensure a loan. This is why the Board of Directors advises executive
management to secure a capital infusion of CHF 80
million. At the same time, the Camellia Plc., Linton (UK), the
largest single shareholder in Siegfried Holding AG, informed
the company that it was unwilling to participate in a new
share issue for portfolio reasons and would seek to sell its
holdings. Camellia has asked the Board of Directors and
executive management for support in this endeavor.
The Siegfried Group honorary Chairman, Dr. Bernard A.
Siegfried, informed us that he would not be available for re-
Annual Report
7

election. Bernard Siegfried first joined the company in 1967
after graduating from the University of St. Gall and furthering
his professional development overseas. He introduced a
comprehensive corporate planning process and managed
the company reorganization. He was promoted to executive
management in 1973 and elected to the Board of Directors
and made CEO of Siegfried AG in 1977. After a memorable
Shareholder’s Meeting in 1991 he transformed the company
and built a specialized company for manufacturing of active
pharmaceutical ingredients and finished dosage forms. In
the anniversary year 1998 he was elected Chairman. In
2000, he withdrew from all operative functions and in 2003
he also resigned as Chairman of the Board of Directors. He
remained a member of the Board and was appointed Honorary
Chairman of Siegfried Holding AG.
Important points for you as shareholder:
– In 2009, Siegfried grew core business activities and posted
good overall sales results.
– Operative cash flow was gaining 69.4% to CHF 45.5 million
in 2009; net debt was reduced to CHF 63 million.
– Both the operative results and net profit are characterized
by a consistent reduction of net working capital and depreciation
of the activated development costs and other
adjustments.
– During the year a new corporate strategy (“Transform”)
was adopted; the new strategy will affect the company
structure at the different sites.
– A capital infusion to finance our new strategy is unavoidable
despite a robust balance sheet. The Board of Directors
recommends that the General Meeting of Shareholders
approve a capital increase of CHF 80 million. Our
majority shareholder (Camellia Plc.) will not participate in
the share issue; its holdings in Siegfried are now for sale.
8 Annual Report

– Due to the recommended capital increase and the result
for 2009, the Board of Directors recommends that the
General Meeting of Shareholders waive the annual
dividend.
– After over 40 years of service to the company, Honorary
Chairman Bernard A. Siegfried is resigning from the Board
of Directors.
We thank you for your interest and trust in Siegfried.
Markus Altwegg, Ph.D.
Chairman of the Board of Directors
Rudolf Hanko, Ph.D.
Chief Executive Officer
Annual Report
9

Roland Schuermann
Head Chemical Operations / Runner and Mid-Size Factories
For me, efficiency is more than just
finishing something quickly. It combines
speed with a sense of effortlessness
and the determination to eliminate
anything unnecessary. It’s about
constant improvement and enjoying
your work. Often, increasing efficiency
is really many small steps that add up
to very noticeable progress. It’s also not
always a matter of saving time; a welldesigned
workflow that is safe and not
hectic is equally important. A lot of this
can be learned, but primarily you need
a drive, an inner “fire” and lots of experience
to be able to recognize what’s
important. The perfect workflow is
swift, easy and it can be a lot of fun.
Since starting at Siegfried as an Operations
Manager about 12 years ago,
I was always able to influence and
make a direct contribution to my work
environment. My decisiveness was also
highly valued by my superiors. Being
responsible for three production lines
demands that decisions are made –
constantly. Only rarely do you have
time to carefully weigh the pros and
cons of a situation. This is where experience
– my own and that of my closest
and most important colleagues, the
plant foremen – makes the difference,
because a decision will always be
made.
Our organization’s matrix structure
also facilitates sharing know-how with
others. One of the most satisfying aspects
of my job is start a new process
with the product chemist. This includes
discussing possible procedural and
chemical stumbling blocks, point out
more efficient possibilities, and ensure
that the offline and waste flows are
not forgotten. When you work with
the production planners, the safety
specialists, and also with the whole
regulatory area and the analytical
team, no day is like the other. In addition,
we have customer and regulatory
audits almost every week. They, too,
should feel the “fire” that drives us
and our commitment to doing a job
well.
I also enjoy teaching. For the past
11 years I’ve taught ‘chemical technology’
every week at a vocational school.
The budding chemical and pharmaceutical
specialists there appreciate my
enthusiasm and not insignificant experience.
As president of my community’s
school board I am also involved
in making the most of the available
school budget for the good of the
children.
When my family – my wife, Eveline and
our sons, 5 and 7 years old – is out
swimming, riding bikes or hiking, the
boys set the pace. I enjoy our time together
immensely, even when my wife
is on a multi-day birding expedition,
taking care of bats or leading an excursion
while the boys and I have our time
together and I immerse myself in their
world. My wife also leaves me time for
my fastest hobby, which is not mountain-biking
or skiing, but takes place
on various racetracks across Europe.
Numerous times every year I convert
my KTM 1000 Superduke motorbike
from street to race trim, put it on the
trailer and head for the track – to see
just how fast I can go. The performance
of today’s bikes can only be fully
enjoyed on the track and when a day
of turning in laps goes well and without
a spill, I’m in the “flow,” where I
feel as one with the machine, my concentration
is optimal and the effort
seems almost playful. My sense of satisfaction
after a successful day is huge
and, similar to other hobbies (and my
family), is a large part of my positive
‘work/life balance.’
11

Corporate Governance
Table of contents
0. Foreword and general framework
1. Siegfried Group management structure & shareholders
2. Capital structure
3. Board of Directors
4. Executive management
5. Compensation, investments and loans
6. Participatory rights of shareholders
7. Controlling and defensive measures
8. Auditors
9. Information policy
12 Corporate Governance

0. Foreword and general framework
Regarding corporate governance, the Siegfried Group takes
an integrated approach and is fully committed to mutual
trust and clarity toward shareholders, employees, business
journalists and financial analysts.
Our experience with the SIX Swiss Exchange guidelines has
shown the importance of stable and long-term relationships
with all shareholders and stakeholders, and a sensible application
of corporate governance instruments.
Cooperate governance at Siegfried is based on the statutes
of Siegfried Holding AG, the rules of procedure of the
Siegfried Group, and the structure of the Group and the two
Divisions, Siegfried Actives and Siegfried Generics. This report
describes the principles of management and control of
the Siegfried Group. Corporate governance of the Siegfried
Group substantially follows the “Swiss Code of Best Practice”
of March 2002. In accordance with the Transparency
law (Transparenzgesetz Art. 663b and Art. 663c) the remunerations,
stock ownership by the members of the Board of
Directors and executive management are now disclosed in
the notes of the statutory financial statements of Siegfried
Holding AG.
Corporate governance of the Siegfried Group is regularly
reviewed and adjusted by the Board of Directors.
Corporate Governance
13

1. Structure of the Siegfried Group
1.1 Management structure of the Siegfried Group (until February 28, 2010)
Siegfried Holding
Markus Altwegg, Ph. D.
Chairman
Siegfried Group
Rudolf Hanko, Ph. D.
CEO (since 05/01/09)
Corporate Communications
Peter A. Gehler
CCO, Secretary to the BoD
Human Resources
Hanspeter Brun
Head Human Resources
Division Actives
Hubert Stückler, Ph. D.
President Siegfried Actives
Division Generics
Marianne Späne
President Siegfried Generics
Finance
Michael Hüsler
CFO (since 07/01/09)
14
Corporate Governance

Participation structure of Siegfried Holding AG
Currency Share Capital in LC Participation Comments
1. Switzerland
Siegfried Ltd, Zofingen CHF 20 000 000 100.00%
Siegfried Pharma Int. AG CHF 100 000 100.00%
Siegfried Generics International AG, Zofingen CHF 2 000 000 100.00%
Siegfried Finance AG, Zofingen CHF 14 000 000 100.00%
Sigamed AG, Zug CHF 500 000 100.00%
2. Europe
Siegfried GmbH, Munich EUR 25 000 100.00%
Siegfried Pharma Development GmbH, Munich EUR 25 000 100.00%
Siegfried Generics (Malta) Ltd., Valletta EUR 100 000 100.00%
Siegfried Deutschland Holding GmbH, Bad Säckingen EUR 1 790 000 100.00%
Paid-in nominal capital:
[Siegfried B.V., Amsterdam (in Liq.)] EUR 80 000 100.00% NLG 35,000 (20%)
3. North and Central America
Siegfried (USA), Inc., Pennsville USD 500 000 100.00%
Penick Holding Company, Pennsville USD 2 100.00%
Penick Corporation, Pennsville USD – 100.00%
4. Asia
SCI Pharmatech Inc., Taiwan TWD 361 617 420 16.11%
Alpine Dragon Pharmaceuticals Ltd, Huangyang, Gansu Province, China USD 1 453 061 49.00%
Corporate Governance 15

1.2 Shareholders
Major shareholders
The following table describes the shareholder structure of
Siegfried Holding AG and lists shareholders reporting holdings
of 3% or more of the voting rights of Siegfried Holding
AG. In addition, the shareholdings of the Board of Directors
and of the Group Management are shown.
Shares held
Shares held
as of 31.12.2009 % as of 31.12.2008 %
With holdings over 3%
Camellia Group (consisting of
Camellia Holding AG, Glarus; Affish Ltd, Linton) 933 680 33.35 933 680 33.35
Siegfried Shareholders’ Group (consisting of
descendants of Dr. h.c. Hans Siegfried and Sigamed AG, Zug) 103 630 3.70 102 897 3.67
Tweedy, Browne Company LLC, New York 1 275 361 9.83 287 532 10.27
Bayerninvest Kapitalgesellschaft mbH, Munich
(100% subsidiary of Kreissparkasse Biberach) 2 106 106 3.79 – –
Total 1 418 777 50.67 1 324 109 47.29
Board of Directors and Group Management
Board of Directors, non-executive 3 23 971 0.86 16 491 0.59
Board of Directors, executive and Group Management 2 945 0.10 7 257 0.26
Total 26 916 0.96 23 748 0.85
Others
Public shareholders 1 342 385 47.94 1 443 381 51.55
Shares held by Siegfried Holding AG 11 922 0.43 8 762 0.31
Total 1 354 307 48.37 1 452 143 51.86
Grand total 2 800 000 100.00 2 800 000 100.00
The Camellia Group and the Siegfried Shareholders Group have granted each other the right of first refusal relative to the sale of shares held by them.
1
By its own account, Tweedy Brown LLC, New York, held 9.83% of the shares of Siegfried Holding AG; 3% of these shares are registered in the share register
with voting rights.
2
By its own account, Bayerninvest, Munich, Germany held 3.79% of the shares of Siegfried Holding AG; Bayerninvest has not applied to register these shares
in the share register.
3
Excluding the shareholdings of Dr. Bernard A. Siegfried, which are included under “Siegfried Shareholders’ Group.”
1.3 Crossholdings
The Siegfried Group has not entered into any crossholdings
with other companies involving capital or voting.
16
Corporate Governance

2. Capital structure
2.1 Capital
The share capital of Siegfried Holding is CHF 5,600,000 and
is divided into 2,800,000 fully paid-up registered shares with
a par value of CHF 2 each.
2.2 Changes in capital during the past three
reporting years
There were no changes in capital during the last three years.
2.3 Limitations on transferability and registration
Only persons entered in the share register can exercise the
right to vote and the privileges related thereto. Registration
is subject to the following statutory restrictions:
– Registration requests are considered granted if the company
has not denied them within 20 days after receipt.
– Petitioners must declare in writing that they have acquired
the shares in their own name and account.
– The Board of Directors must deny the request if the petitioner
alone or together with associated persons controls
more than 3% of the voting rights after approval.
– Upon presentation of relevant reasons,
the Board of Directors may approve exceptions.
– To the extent that federal regulations require that the
company be controlled by Swiss citizens, the Board of
Directors must deny the request if the registered foreigner
already controls over 10% of the voting rights or would
do so after registration.
No exceptions were granted during the reporting year.
Corporate Governance
17

3. Board of Directors
The tasks of the Board of Directors are governed by law and
are set forth in the statutes and company regulations of the
Siegfried Group.
3.1 Members of the Board of Directors
The Board of Directors of Siegfried Holding AG comprises
seven persons. The members of the Board of Directors have
no significant business relationships with Siegfried Holding
AG or the Siegfried Group.
The following table gives information about the name, age,
position, and date of entry and duration of term in office of
the members of the Board of Directors:
Board of Directors
From left to right:
Bernard A. Siegfried, Ph.D., Susy Brüschweiler,
Markus Altwegg, Ph.D., Thomas Staehelin, Ph.D.,
Prof. Felix Gutzwiller, M.D., Felix K. Meyer, Ph.D.
(Malcolm Perkins is not included in the photo)
18
Corporate Governance

Name Birthyear Position Entry Elected until
Markus Altwegg 1941 Chairman, non executive 2002 2011
Thomas Staehelin 1947 Vice-Chair, non-executive 1991 2012
Bernard A. Siegfried 1934 Honarary Chair and member, non-executive 1977 2010
Susy Brüschweiler 1947 Member, non-executive 1999 2011
Felix Gutzwiller 1948 Member, non-executive 1999 2011
Felix K. Meyer 1953 Member, non-executive 2006 2012
Malcolm Perkins 1945 Member, non-executive 2008 2011
Secretary to the Board of Directors:
Peter A. Gehler 1958 2000
Corporate Governance
19

3.2 Profiles
Markus Altwegg, Ph.D., Chairman
Markus Altwegg (1941) joined the Board of Siegfried
Holding AG in 2002 and became Chairman in 2003. At the
Roche Group, he was responsible for the worldwide operations
of the Vitamin & Fine Chemicals Division from 1999
until his retirement in 2003. Prior to that he held various
positions within different departments at Roche since 1968
and was appointed to the Executive Committee in 1986.
Markus Altwegg serves on the Board of the Energiedienst
Holding AG and the private bank Sal. Oppenheim AG.
Furthermore, he is a member of numerous industry associations
and scientific and charity organizations. He is Chairman
of the committee of the Basel Museum of Art, a committee
member of the Basel Museum of Ancient Art and Chairman
of the committee of the Technology Transfer Organization
(WTT) of the University of Basel.
He has a Ph.D. in Economics from the University of Basel.
Markus Altwegg is a Swiss citizen.
Thomas Staehelin, Ph.D., Vice Chairman
Thomas Staehelin (1947) was appointed Vice Chairman
of Siegfried Holding AG in 1999; prior to that he served
as the company’s Chairman from 1991 and 1998. Thomas
Staehelin is a partner in Fromer, Schultheiss und Staehelin,
a law firm in Basel. As a lawyer, he specializes in tax,
corporate, and contract law.
Thomas Staehelin is Chairman of the Basel Chambers of
Commerce and a board member and chairman of the tax
and finance committee of the Swiss Business Federation
(economiesuisse). He is a member of the Board of the Association
of Private Joint Stock Companies and a member of
the Expert Committee on Financial Reporting (SWISS GAAP
FER). Thomas Staehelin serves on the Board of Directors of
the following companies: Chairman of Swissport International
AG, Kühne Holding AG, and Scobag Private Bank AG,
Board member of Kühne & Nagel International AG, Lantal
Textiles, and Inficon Holding. In a few of these companies he
also chairs the auditing committee.
Thomas Staehelin is a Swiss citizen.
20 Corporate Governance

Bernard A. Siegfried, Ph.D., Honorary Chairman
Bernard A. Siegfried (1934) was Chairman of Siegfried
Holding AG from 1998 to 2003. After furthering his professional
development in Mexico and the USA, he joined the
family-owned company in 1967. In 1977 Bernard A.
Siegfried was appointed Chief Executive Officer, and on
January 1, 2001 he withdrew from all operative functions.
In recognition of his services to the company, the Board of
Directors appointed him Honorary Chairman in 2003. He
continues as a regular member of the Board of Directors.
Bernard A. Siegfried has a Ph.D. in Economics from the
University of St. Gall (HSG) in Switzerland. He is a member
of the Board of Directors of Camellia, PLC, Linton (UK).
Bernard A. Siegfried is a Swiss citizen.
Susy Brüschweiler
Susy Brüschweiler (1947) was appointed to the Board of
Siegfried Holding AG in 1999. A trained nurse, she studied
economics and business management at the University of
Neuchâtel. From 1986 to 1990 she directed the Bois-Cerf
Nursing School in Lausanne, Switzerland; and from 1990
to 1994 she was headmistress of the School for Nursing
Management in Aarau, Switzerland. In 1995 she joined the
former SV-Service (market leader in Swiss catering services)
as CEO, transforming the association into the SV GROUP
Inc., which she heads as CEO today.
Susy Brüschweiler is a member of the Boards of Schweizerische
Mobiliar Holding AG and the Schweizerische
Mobiliar Association (an insurance company), and Movis AG.
She serves on the Board and the Board Committee of the
Swiss Employers’ Association. In December 2009, she joined
the Board of the Swiss Paraplegic Foundation, Nottwil.
Susy Brüschweiler is a Swiss citizen.
Corporate Governance 21

Prof. Felix Gutzwiller, M.D.
Felix Gutzwiller (1948) joined the Board of Siegfried Holding
AG in 1999. Since 1988 he is a professor and head of the
Preventive Medicine Department at the University of Zurich.
He is a member of the Swiss Parlament (Senate).
Felix Gutzwiller completed his studies at the universities
of Basel, Harvard, and Johns Hopkins (U.S.A.).
In addition to Siegfried Holding AG, Felix Gutzwiller is also
on the Boards of Rahn AG, Medi-Clinic (Switzerland) AG,
Bank Clariden Leu AG, Axa Winterthur Schweiz AG, and
Osiris Therapeutics, Inc. He serves on the Board of Trustees
of numerous charity, scientific and public health foundations.
Felix Gutzwiller is a Colonel in the Swiss Army.
Felix Gutzwiller is a Swiss citizen.
Felix K. Meyer, Ph.D.
Felix K. Meyer (1953) joined the Board of Siegfried Holding
AG in 2006. He worked for Ciba-Geigy AG (later Ciba
Specialty Chemicals) from 1981-2004, and held various positions
in Switzerland and abroad, ultimately, as a Segment
Manager and member of the Board. During this time he focused
corporate strategy and marketing issues, representing
the company in joint ventures in Europe and Asia (China and
Japan). From 2004 to 2009, Felix K. Meyer was CEO of the
Baerlocher Group, a global specialty chemicals company
with headquarters in Munich, Germany.
Since January 2010, he is a member of the advisory board
of the Baerlocher Group.
He received his Ph.D. in Chemical Engineering from the
ETH in Lausanne, Switzerland and spent a year in Stanford
University (U.S.A.) as a Post-doctoral Fellow.
Felix K. Meyer is a Swiss citizen.
22 Corporate Governance

Malcolm Perkins
Malcolm Perkins (1945) joined the Board of Siegfried Holding
AG in 2008. He was Managing Director since 1974 and
Chairman since 1996 of Linton Park Plc, a listed company
within the Camellia Plc Group. In 1999, he joined the Board
of Camellia and was elected Chairman in 2001. His responsibilities
for the Camellia Group have necessitated him working
in the UK, East and Southern Africa, the U.S.A. and the
Indian subcontinent.
Malcolm Perkins is a British citizen.
Corporate Governance
23

3.3 Linking directorates
3.3.1 Corporate linking directorates
Malcolm Perkins is Chairman of the Board of Directors and
Bernard A. Siegfried is a member of the Board of Camellia,
Plc, Linton.
There is no other mutual representation between the
Boards of Siegfried Holding AG and those of other listed
companies.
3.3.2 Linking directorates within the Board
All directorates in other listed companies of the members
of the Board of Siegfried Holding AG are described under
Section 3.2 “Profiles”.
3.4 Election and period of office
The Board of Directors of Siegfried Holding AG is elected
by the General Meeting of Shareholders and subsequently
constitutes itself. Members of the board are elected in a
staggered sequence for a period of three years and can be
re-elected. Regulations specify that members must retire
from the Board of Directors at the General Meeting of
Shareholders following their 68th birthday. A special ruling
can be made for the Chairman or the Honorary Chairman.
Decisions are made by the entire Board of Directors.
Four committees assist them:
– Audit & Finance
– Human Resources
– Nomination & Compensation
– Products & Market
The responsibilities and competencies of the committees
are set forth in the adjoining excerpt from the company
regulations of the Siegfried Group.
During the business year, the Board of Directors met for six
meetings, an assessment meeting and a strategy seminar.
All members of the Board of Directors (with one exception)
were present. The assessment meeting analyzed the
cooperation within the Board and evaluated how goals were
achieved.
During the year, the Audit & Finance committee met four
times, the HR committee, the Nomination & Compensation
committee, and the Products & Markets committee all met
two times. The following table shows the composition of
the Board committees:
3.5 Internal organization
The Board of Directors is responsible for supervision of the
Group and the Divisions. The Board determines group
strategy, the allocation of resources and the structure of the
Group. It is also responsible for setting the organizational
structure, accounting, financial control, and financial planning.
To the extent it does not exercise these duties itself or
delegate them to the Chairman of the Board of Directors,
the Board delegates management of the business to the
CEO of the Siegfried Group, who is responsible for management
and for all matters not otherwise delegated to another
company body by law, statutes or organizational regulations.
Committee Chair Members
Audit and Finance Thomas Staehelin Susy Brüschweiler
Human Resources Susy Brüschweiler Felix K. Meyer
Nomination & Compensation Markus Altwegg Thomas Staehelin
Felix K. Meyer,
Products & Market Felix Gutzwiller Malcolm Perkins
24 Corporate Governance

3.6 Executive management information
and control instruments
Information is based on monthly reporting that is structured
as follows: results for the Group, the Divisions, and individual
sites are presented in detail and compared with the
budget and the previous year’s results – including a results
forecast for the entire year. Monthly comments focus on any
deviations from plan, important business incidents, and key
performance indicators. A fully consolidated financial statement
is prepared every quarter.
The results are discussed and evaluated with the CEO,
the CFO, and with the Division managers at the Board
of Directors meetings.
Excerpt from the company regulations of the Siegfried Group
3.3.3 Committees appointed by the Board of Directors
The Board of Directors may appoint committees, at least for such topics as
personnel (HR committee), products / market (Products & Markets committee),
nomination and compensation (Nomination & Compensation committee) and
audit and finance (Audit & Finance committee). Such committees also determine,
at an early stage, the risks in various business activities through contact
with the responsible authorities, and informing the Board of Directors. They
do not have powers of decision (exception: the Nomination & Compensation
committee on the compensation for the Group Management), but do have
a comprehensive right of information as well as issuing recommendations to
the Board of Directors. They may request items to be included on the agenda
at the next meeting of the Board of Directors, and report on their activities at
the Board meetings. As a rule, two members of the Board shall be included
on a committee, one of whom shall be the Chairperson. The committees
meet as often as is necessary, at least, however, twice a year.
The issues to be covered include:
Human Resources:
– Personnel policies of the Group and the Divisions
– Maintaining company know-how, training and continued education
– Being an attractive employer
– Parameters for negotiations between management and labor
– Employee surveys and their evaluation
– Talent promotion, management development
– All pension plans and other social benefits
provided by the Group companies
– Supply structure, services, products
– Market processing, instruments, geographic presence
– Market coverage, market data, market evaluation
Nomination/compensation
– Nominations to the Board, the Board of Director committees,
Division heads and Holding functions
– Compensation policy of the Siegfried Group
– Compensation recommendations for Board members,
submitted to the entire Board
– Setting the employment conditions and compensation for Division heads,
Holding functions, and members of the executive management
– Bonus systems and stock and option programs
Auditing/finances
– Accounting
– External and internal auditing
– Budget, medium-term and long-term planning
– Financial planning
– Monitoring management accounting (controlling)
Products/markets
– Pipelines
Corporate Governance
25

Dr. Birgit Timischl
Project Manager / Development
When I speak people hear that I’m
from Austria. And like many of my –
often very famous – fellow countrymen,
I’ve seen a good bit of the world
too. My interest in foreign countries
began when I was a young student
and traveled a lot by train. Thanks to
the “Erasmus” European student exchange
program I was able to spend a
semester in Sweden. I wrote my degree
thesis in Fribourg, Switzerland. The first
part of my graduate work was done in
Stanford, California; from there I went
to Regensburg in Bavaria, Germany to
complete my dissertation. After graduating
I returned to Switzerland to work
at Siegfried in Zofingen. Finally, I now
live in Zurich, so I still get to travel a bit
– it’s a daily two-hour commute with
the train. And I like to use this time for
one of my favorite hobbies: reading.
I read everything from fantasy and science
fiction, to the classic works and
non-fiction books on philosophy and
molecular biology.
Of course, I don’t just live in a fantasy
world. I am fascinated by all there is to
explore in the real world too – on foot,
on my bike, or with snowshoes in the
winter.
When I get to Zofingen, my time is
dedicated to analytical development,
an area that ensures the high quality of
our formulas. Sometimes we implement
our clients’ test methods on our
systems, optimize these methods or
develop our own, once in a while with
new analysis instruments. I greatly enjoy
learning how to use and test new
instruments, what can be achieved
with the processes and where the limits
are. In fact, I really like developing
and optimizing new things, and later
during the validation processes and in
daily use, show how well they work.
It’s not a good thing when problems
pop up – it often means more stress.
But the challenge to work hard on a
solution is also gratifying – especially
when you’ve unraveled a particularly
tough problem.
I appreciate my job as an interface between
many different departments and
people. For example, we discuss the
pending jobs and results with the analytical
development lab specialists.
Then there are the colleagues on the
Quality Center team that make sure
the methods we’ve developed run reliably
in daily operation. Quality is a very
important aspect that I have come to
appreciate and try to integrate in the
method development and documentation.
We also work closely with the colleagues
in Synthesis; it’s important that
we also understand their requirements
for a chemical process, so we can develop
and optimize our processes.
Last but not least, a good working relationship
with the people in production
helps ensure that scaling up to
pilot production and finally, to full
commercial production is successful.
This is the actual goal of our development
efforts: when a project goes into
production, it’s key that we can follow
the process exactly and provide support
by quickly analyzing and solving
any problems that arise. Other important
partners include the Quality Assurance
team that oversees the creation
of our documents according to GMP
guidelines. Of course, I also enjoy the
contact to our customers, where we
reconcile their oftentimes very different
demands with the realities at Siegfried.
All in all, it’s exciting to work on different
projects with so many people. It
motivates me to keep learning anew
and stay attuned to emerging challenges.
I can never complain about
boredom! Often I go to the lab early in
the morning, hoping to tackle the next
item on my “to do” list. But then, an
urgent call from a customer, or something
is amiss at the facility, or the
chromatogram readouts look a bit
strange – and already the day goes by
where I’m busy with completely different
things.
27

Group Management
From left to right:
Peter A. Gehler, Michael Hüsler, Rudolf Hanko, Ph.D., Marianne Späne,
Hubert Stückler, Ph.D., Hanspeter Brun
28 Corporate Governance

4. Executive management
The Chief Executive Officer is responsible for managing the
operations and performance of the Group and its Divisions.
Subject to the competencies and instructions of the Board
of Directors and/or the President, the CEO reports to the
Board of Directors and is responsible for implementing and
achieving the corporate objectives and for management and
control of the Group Divisions and subsidiary companies
(with responsibility for earnings and the balance sheet).
The powers and tasks of the CEO are set forth in detail
in the organizational regulations of the Siegfried Group.
4.1 Members of Group Management
Name Birthyear Position Start In current position since
Rudolf Hanko 1955 Chief Executive Officer 2009 2009
Hanspeter Brun 1948 Head Human Resources 1989 1989
Peter Gehler 1958 Chief Communications Officer, Secretary to the BoD 2000 2002
Michael Hüsler 1972 Chief Financial Officer 2009 2009
Marianne Spähne 1962 President Siegfried Generics Division 2004 2008
Hubert Stückler 1953 President Siegfried Actives Division 2004 2004
Corporate Governance 29

4.2 Portraits
Dr. Rudolf Hanko, CEO
On May 1, 2009, Dr. Rudolf Hanko (1955) took over as CEO
of Siegfried. He worked previously in the chemical-pharmaceutical
industry in various management positions, prior to
Siegfried with the German company, Evonik Industries AG as
head of Custom Synthesis and Amino Acids division. Rudolf
Hanko also headed the Pharmaceutical division of Bayer AG
as head of Chemical Research and as General Manager of
the Fine Chemicals division.
Rudolf Hanko received his Ph.D. in Chemistry from the
University of Goettingen, Germany and completed postdoctoral
studies at the Max Planck Institute (Germany).
Hanspeter Brun, Head Human Resources
Hanspeter Brun (1948) joined the Siegfried Group in 1989
as Head of Human Resources, and since 2005, is also the
Zofingen Site Manager. Previously, he was responsible for
Human Resources and Training at an electrotechnical company
in Zurich. He completed an apprenticeship as a lab assistant,
and then graduated from the Institute for Applied
Psychology (IAP) in Zurich with a degree in Industrial Psychology.
Hanspeter Brun is on the Board of Directors of Parkhaus
AG, Zofingen and the Housing Association (Wohnbau-
Genossenschaft) Zofingen, and the Landenhof Foundation
(Swiss School for the Hearing Impaired), Unterentfelden.
Hanspeter Brun is a Swiss citizen.
Rudolf Hanko is a German citizen.
30 Corporate Governance

Peter A. Gehler, CCO and Secretary to the Board of Directors
Peter Gehler (1958) has been Chief Communications Officer
of the Siegfried Group since 2000 and also head of the
Chairman’s Office since 2002. As Chief Communication Officer,
he heads the Corporate Communications Department.
Prior to joining Siegfried; he was a marketing and sales
manager in the textile industry (1988-92) and an independent
consultant for marketing and communications from
1992 until 1999, mainly for industrial and commercial
clients. Peter Gehler graduated from the University for
Applied Sciences, St Gall with a Business Administration
degree (major in Marketing); in 2006 he received his Master
degree in Economics and Marketing from the University of
Basel. He is a member of the Board of Directors of the
Aargau Chamber of Commerce & Industry (AIHK), and
Chairman of the Zofingen Regional Chamber of Commerce
& Industry (WRZ). Further, he is also member of the Advisory
Board to the New Aargauer Bank (NAB) and of the Nische
Foundation (for hearing impaired) in Zofingen, and member
of the Board of the Soliday Foundation.
Michael Hüsler, CFO
Michael Hüsler (1972) joined Siegfried as Chief Financial Officer
on July 1, 2009. He completed his studies in Economics
in 1997 at the University of Basel and worked at PricewaterhouseCoopers
as an Economic Planner until 2000. From
2000-2005 he was Corporate Controller and finally, Head of
Corporate Controlling at Straumann Holding AG. In addition,
he completed his studies as a Certified IFRS Accountant
in 2004. Michael Hüsler was CFO and member of the executive
management at Bachem Holding AG from 2005-2009.
Michael Hüsler is a Swiss citizen.
Peter Gehler is a Swiss citizen.
Corporate Governance 31

Marianne Späne, President Siegfried Generics
Marianne Späne (1962) joined Siegfried in 2004. She has
headed the Siegfried Generics Division since October 2008
and was previously responsible for the Classical Generics
business unit. Between 2004 and January 2008, Marianne
Späne managed the Business Development department
and the Supply Chain for Generics.
Prior to joining Siegfried, she worked for Boucheron, a
cosmetics company, in logistics, business development and
as site manager. Later, she changed to the pharmaceutical
industry and joined Schweizerhall as a head of the sales
and marketing department of the Pharma Division. Later,
she joined Aceto, a U.S. company, where she developed
European expansion strategies. Marianne Späne holds a
degree in finance, business administration and marketing
from the Kaufmännische Führungsschule KFS in Basel and
the Marketing & Business School in Zurich.
Hubert Stückler, Ph.D., President Siegfried Actives
Hubert Stückler (1953) took over as Head of the Siegfried
Actives Division in 2004 (then a Business Unit).
Before joining Siegfried, he worked for Chemie Linz in
various functions, where he was appointed member of the
executive management responsible for R&D, Marketing &
Sales, Purchasing and PR. He was promoted to New Business
Development Manager after the company was acquired by
DSM (The Netherlands) in 1996; he was also member of
the ‘Acquisition and Integration’ team during the purchase
of the Roche Vitamin Division (2003). He graduated with
a Ph.D. from the University of Graz, Austria.
Hubert Stückler is an Austrian citizen.
Marianne Späne is a German citizen.
32 Corporate Governance

Corporate Governance 33

4.3 Management Contracts
Siegfried Holding AG and the companies of the Group have
not concluded management contracts with any third parties.
of each year. Since September 2005, the investment amount
set by each employee is automatically deducted from his
or her salary.
5. Compensation, Investments and Loans
5.1 Contents and process for compensation
and participation
The members of the Board of Directors are compensated
at the level set by the Board of Directors, as recommended
by the Board’s Nomination & Compensation committee.
Siegfried Group managers receive compensation based on
performance, which can range from 5% to 40% of the base
salary. The actual component depends on the achievement
of business targets within the particular area of responsibility
and individual objectives. Achievement of the business
targets influences the variable component by a factor of 0
(worst case) and up to a factor of 1.75 (best case). The factors
for attaining personal goals lie between 0 and 1.25. The
variable component can achieve a maximum factor of 1.5.
The Nomination & Compensation committee sets the levels
of compensation for executive management.
The period of notice for executive management is six
months.
5.2. Employee Stock Option Plan (ESOP)
In August 2005 the Siegfried Group introduced a stock option
plan for all Swiss employees. They can invest up to 10%
of their income in this option plan to buy Siegfried shares.
Board of Director members can participate in the option plan
with their entire salary. The subscription rights are subject
to a lock-up period of three years. The company contributes
a supplement of 30% of the employee’s amount. Employees
may opt out or adjust their investment amount in August
A total of 123 employees and 6 members of the Board
participated in the stock option plan in 2009.
5.3 Compensation of current and former members
of governing bodies
See report on page 110.
5.4 Distribution of shares during 2009
As part of his total compensation, a member of the executive
management received 500 shares of Siegfried Holding
AG in September 2009, which are locked-in for 3 years. In
December 2009, a further member of the executive management
received 100 shares as a bonus for the successful
project implementation, also with a locked-in period of three
years. No further Siegfried Holding AG shares were allotted
to any other members of the Board of Directors, Group
management, or to persons associated with them during the
2009 business year.
5.5 Share ownership
Ownership of shares by members of the Board of Directors
or executive management is listed in the consolidated
financial statement of Siegfried Holding AG in this report
on page 111.
34 Corporate Governance

5.6 Additional fees and compensation
No members of the Board of Directors, Group Management,
or persons associated with them billed either Siegfried
Holding AG or any of its Group companies for additional
services that equal or exceed by 50% their compensation
as a Board member during the 2009 business year.
5.7 Loans to corporate bodies
Members of the Board of Directors or executive management
and/or persons closely associated with them are/were
not previously involved in any business activities beyond the
usual activities of Siegfried Holding AG or any of its Group
companies, or in other extraordinary business activities that
are essential to Siegfried Holding AG during the current or
the previous business year.
As of 31 December 2009, Siegfried Holding AG and its
Group companies have provided no guarantees, loans,
advances or credits to members of the Board or Group
Management, or to any person associated with them.
6. Voting rights and proxy
6.1 Voting rights and proxy
Each voting share registered at the General Meeting of
Shareholders of Siegfried Holding AG is accorded one vote.
Registered shareholders can choose to be represented by
a legal representative or by another registered shareholder,
which requires a written power of attorney.
6.2 Statutory quorums
Decisions are made at the General Meeting of Shareholders
by absolute majority of the shares voted, unless otherwise
required by law or the statutes. In a tie vote, the President
casts the deciding vote.
At least a two-thirds majority of the shares voted and an
absolute majority of the share value is required for decisions
concerning:
– Amendment of the corporate purpose
– Introduction of voting shares
– Amendment of the provisions concerning
the transfer of registered shares
– Conversion of registered shares into bearer shares
– An authorized or conditional increase in capital
– An increase in capital from shareholder’s equity,
from a non-cash capital contribution or asset acquisition,
or from the granting of special privileges
– Restriction or cancellation of stock options
– Transfer of the company’s legal place of business
– Company closure without liquidation
6.3 Calling a General Meeting of Shareholders
and setting the agenda
The calling of a General Meeting of Shareholders and setting
of the agenda are subject to the applicable legal regulations.
Corporate Governance 35

Shareholders with at least 250,000 shares with voting rights,
amounting to a total nominal capital of CHF 500,000 are
authorized to propose agenda items for the General Meeting,
when submitted at least 45 days prior to the General
Meeting of Shareholders. Siegfried Holding AG also inquires
if these stockholders intend to submit any particular agenda
items.
6.4 Entry into the share register/invitation
to the General Meeting of April 14, 2010
For the General Meeting the Board of Directors has set a
deadline (Wednesday, April 7, 2010, 8:00 a.m.) to determine
the eligible shareholders. All participants must be registered
in the share register by this time. Admission tickets and
voting materials can be ordered with the response card
(Siegfried Holding AG, Share Register, c/o Nimbus AG, Postfach,
CH-8866 Ziegelbrücke, Switzerland) by April 9, 2010.
Upon receipt of the response card, an admission ticket and
the voting materials are sent to the shareholder. No entries
will be made into the share register from April 7, 2010,
8 a.m. until April 15, 2010. Shareholders who sell their
shares prior to the General Meeting of Shareholders forfeit
their voting rights.
The invitation to the General Meeting, the minutes of the
previous General Meeting, and the proposals of the Board of
Directors can be viewed on the website of Siegfried Holding
AG (www.siegfried-holding.com) as of March 23.
7. Control changes and defensive measures
7.1 Duty to offer
There are no statutory regulations regarding opting out
or opting up (Art. 22 BEHG).
7.2 Control change clauses
There are no control change clauses.
8. Auditors
8.1 Period of the contract and length of service
of the lead auditor
PricewaterhouseCoopers AG (PwC), Basel (or predecessor
organizations) has been the auditor of Siegfried Holding AG
since 1920. The lead auditor, Dr. M. Jeger, carried out the
audits of both mandates for the seventh time in 2009.
8.2 Audit fees and additional fees
PwC billed the Siegfried Group CHF 377,400 during 2009
for services in connection with auditing of the financial
statement of Siegfried Holding AG and of the Group
companies and the consolidated financial statement of the
Siegfried Group. PricewaterhouseCoopers also received
CHF 36,000 for tax services. For the auditing of foreign subsidiaries
CHF 37,000 was paid to other auditing companies;
these companies received over CHF 133,000 for further
services in 2009.
8.3 Supervision and control instruments
related to the audit
As mandated by the Board of Directors, the Audit & Finance
committee oversees and evaluates the performance of the
external auditors, and advised if PwC should be nominated
for re-election at the General Meeting. The parameters used
to judge auditor services include technical and operative
competency, an independent and objective point of view,
application of sufficient resources, a focus on areas of higher
risk for Siegfried, presentation of effective and practical recommendations,
and open and efficient communication and
coordination with the Finance & Audit committee. In 2009,
the committee met three times with the PwC representatives.
Usually, all members of the Finance & Audit committee,
the partner and senior PwC manager, our CEO, CFO,
and the Chief Communications Officer/Secretary to the
Board of Directors attend these meetings. The auditors present
the auditing plans and test results to the committee and
submit a comprehensive report to the Board of Directors
(as specified by Art. 728b of the Swiss Code of Obligations).
36 Corporate Governance

The Finance & Audit committee approves, together
with the CFO, the remuneration of PwC for auditing and
related services.
9. Information policy
The Siegfried Group is committed to an open and consistent
information policy. The media, financial analysts and other
interest groups are kept up to date on important developments
and events. Shareholders are informed semi-annually
on the state of the business and receive the annual report
and the semi-annual report upon request. The annual report,
minutes of the previous General Meeting, media releases,
important contacts, and current share price can be found
at www.siegfried-holding.com. A news conference is held
annually for the media and financial analysts.
Siegfried Holding strictly observes the SIX Swiss Exchange’s
duty of disclosure (ad hoc notification) regarding events that
could affect the stock price.
In 2010, the company will inform about the course of
business as follows:
– March 5, 2010: Publication of results for the 2009 business
year at a media and analyst conference in Zofingen
– April 14, 2010: General Assembly of Shareholders
in Zofingen
– August 27, 2010 (tentative): Publication of semi-annual
figures at a telephone conference at 9:30 a.m.
– October 28, 2010 (tentative): Publication of business
figures for the first nine months of the 2010 business year
Corporate Governance
37

Dr. Tanja Westphal
Manager Pharmaceutical Development
I’ve been a Project Manager with Pharmaceutical
Development in Zofingen
since September 2008. For Siegfried
(and also other companies) I develop
medications together with my colleagues
from other departments. We
do everything, from the initial feasibility
study to formula development, clinic
sample production, and up to transfer
to pharmaceutical production.
That I would end up specializing in
pharmaceutical technology came to
me relatively late in my studies. At the
time I was doing an internship at a
galenical development department and
because my school had considered this
subject as something minor, I soon realized
there was much more to it than I
had previously suspected. And it hasn’t
changed since then – I remain fascinated
by how many different medications
you can produce out of a relatively limited
number of materials. After all, it’s
these medications that enable a medical
treatment.
At Siegfried, I enjoy the interdisciplinary
and international cooperation
with the team. The company is just the
right size and very manageable, which
allows me to accompany the development
process of a medication from
start to finish – and, at the same time,
gain remarkable insights into the different
areas my colleagues work in.
And my colleagues helped me when I
first arrived here, and they continue to
make Zofingen feel so “right.” That’s
not as easy as it sounds; I come from
the big city of Hamburg, Germany,
about 900 km (560 miles) further
north. Suddenly finding myself in a
small town was a big change, but now
I enjoy the luxury of having everything
I need just a short walk away. Fortunately
for me, the reserved manner of
the Swiss here is also very similar to my
Northern German style.
I like to do sports and meet people
outside the office world too. Since
moving here I’ve taken up the game of
badminton again. Right now I do it just
for fun, but I’m improving my technique
to get to a more ‘competitive’
level. I’ve taken a break from my second
hobby – salsa dancing – until my
partner moves to Switzerland and
we’re together again.
The only thing that I miss in Zofingen
besides him is the ocean and walking
on the beach, where you have to lean
into the wind to get anywhere. But I’ll
admit that the mountains are increasingly
attractive and I am now taking
time to get to know them better. For
example, this winter I decided to learn
how to ski.
39

Siegfried Sustainability Report 2009
Content
Introduction
Situation
Priorities and scope of action
What guides us
Corporate principles
Siegfried as a competitive player
Siegfried as a profitable company
Siegfried as employer
Code of Conduct
Corporate Governance
Structural foundation
Our stakeholders
Markets
About the report
Compliance
Introduction
Policies
Inspections and audits
Cooperation with public officials
Customer satisfaction
Goals and outlook
Safety, Health and Environment (SHE)
Introduction
Guidelines
Safety and health
Process safety
Workplace safety
External audits
Internal audits
Workplace accidents and illnesses
Health
Goals & outlook
Corporate environmental protection
General observations
Energy consumption
Emissions
Water consumption
Waste
Reclaimed solvents
Waste solvents
Fines and non-monetary penalties
Goals and outlook
Siegfried as an Employer
Focus on the employee
Working conditions
Employee development
Apprentices
Family-friendly policies
Mutual respect
Compensation
Satisfaction index
Social Responsibility
Introduction
Social responsibility
Competition
Sustainable procurement / Personal rights
40 Sustainability Report

IntroductionSituation
‘Sustainability’ is more than a buzzword in the Life Science
industry. Regulatory authorities, customers, and users closely
watch the activities of every company in this market. Sustainability
is a central competitive and reputation factor for
Siegfried, and carries a high economic value.
We take the expectations of all stakeholders for transparency
and honesty seriously. The Board of Directors and Group
management contributed to the Report, and they will continue
to implement improvements to ensure a high standard
of information.
Priorities and scope of action
Within the range of relevant sustainability topics, Siegfried
focuses on Compliance, Quality, Safety, Health & Environment
(SHE), and our responsibility as an employer. As a relatively
modest sized company in the Life Science industry,
Siegfried has little influence in how the ingredients produced
at our facilities are used and consequently, has little contact
with the end user. This limits our scope of action.
What guides us
Siegfried offers a capability unique in our market: the development
and production of active ingredients and dosage
forms under one roof. Both competencies are based on the
same compliance system. The combination of synthesis
and formulation represents an attractive market opportunity
for the long-term viability of the company (and jobs). These
strengths form the key element of our new “Transform”
strategy. It will also become evident with the significant
infrastructure investments that are planned.
Corporate principles
Siegfried as a competitive player
– We intend to remain an independent company.
– We strive for market leadership in clearly defined market
segments – by differentiating ourselves from the competition
and gaining a sustainable competitive advantage
through the intelligent use of our resources.
– We want to be seen as a service-oriented company;
targeted development of technology and know-how serve
to enhance our ties to the customer.
Siegfried as a profitable company
– We strive for profit rather than sales growth; especially
by sustainably increasing our return on investment.
– We intend to grow from an internationally active company
to a global operation.
Siegfried as employer
– We strive to avoid risks to the health and well-being
of our employees.
– We want to be an attractive employer for highly
motivated and talented people that are results-oriented,
self-motivated, and work efficiently in a team.
Code of Conduct
In 2008 Siegfried introduced a Code of Conduct policy that
specifies our most important policies, such as the role of the
employee in ensuring the success of the company, how to
deal with conflicts of interest, honesty and trust, bribery and
corruption. The Code was distributed to every employee
and is part of the introductory program for new employees
and valid for all Siegfried sites.
See:
www.siegfried.ch/en/siegfried/company/code-of-conduct
Corporate Governance
The Siegfried Group takes an integrated approach to Corporate
Governance and is committed to mutual trust and clari-
Sustainability Report
41

ty toward shareholders, employees, journalists and financial
analysts. Our experience with the SWX Swiss Exchange
guidelines has shown the importance of sustainable and
long-term relationships with all shareholders and stakeholders,
and a sensible application of corporate governance instruments.
Corporate governance at Siegfried is based on
the statutes of Siegfried Holding AG, the rules of procedure
of the Siegfried Group, and the structure of the Group and
the two Divisions, Siegfried Actives and Siegfried Generics.
The corporate governance report (on page 12) describes the
principles of management and control of the Siegfried
Group. Corporate governance in the Siegfried Group mainly
follows the “Swiss Code of Best Practice” of March 2002.
It is regularly reviewed and revised by the Board of Directors,
the ultimate institution responsible for the content and implementation
of the corporate governance guidelines.
Markets
Siegfried serves the Life Science industry worldwide. This industry
includes international chemical and pharmaceutical
companies that outsource their development and production
projects or producers of finished products that have their
active ingredients produced by Siegfried.
About the report
Whenever possible and relevant, this report is based on the
guidelines of the Global Reporting Initiative (GRI). If not noted
elsewhere, the comments made in this Report are valid
for all of the Siegfried Group, exclusive of its holdings in
Taiwan and China. The Sustainability Report is part of the
Annual Report; important amendments will be published on
our website at www.siegfried.ch. Links to the website locations
are listed throughout the Annual Report.
See:
www.siegfried.ch/en/siegfried/company/organizationalregulations
Structural foundation
The Board of Directors and executive management are the
highest institutions responsible for the implementation and
maintenance of all sustainability policies and guidelines. The
Compliance Committee, along with the Chief Compliance
Officer, is responsible for the implementation of compliance
and quality standards, and for the area of Safety, Health and
Environment. The Secretary of the Board of Directors supervises
the Code of Conduct.
Our stakeholders
For Siegfried, our most important stakeholders are our customers,
employees, investors, and the public authorities and
regulators. Further stakeholders are the general public and
our suppliers. They are all equally important, which is why
an open and honest information policy is very important to
Siegfried.
42 Sustainability Report

2009
Audits
Site
Inspections (Customers / Suppliers)
Siegfried Generics Switzerland, Malta, Germany 6 65
Siegfried Actives U.S.A. 4 15
Siegfried Actives Switzerland 3 37
Any questions and comments about the Report can be submitted
to the Secretary of the Board of Directors:
Peter Gehler, CCO
c/o Siegfried Holding AG
Untere Brühlstrasse 4
CH-4800 Zofingen
Switzerland
Tel: +41 62 746 11 48
peter.gehler@siegfried.ch
Sustainability Report
43

Lindsey Pruitt
Business Development Manager – U.S. Multi-clients
I will never forget the time I was completely
fascinated with the dissection
of a cow’s eyeball at a children’s museum.
I was five years old, and my passion
for a life filled with discovery was
born.
Although my love for science started at
an early age, I had an equally strong
interest in the arts. In an effort to
break me out of my shy disposition, my
mother encouraged me to audition for
a musical theater production as a
young teenager. I made the show, and
my love for singing, performing, and
yes – the spotlight – was born. The
next several years were characterized
by various roles in theater productions,
and I continued to sharpen my performance
skills through vocal training
and acting classes.
Despite the influence of the arts, I
could not ignore the growing desire to
impact others in the healthcare field.
At one point I co-hosted a local television
show which focused specifically
on health and medical issues in the
community. I worked as a medical assistant
for a prominent dermatologist
and developed a passion for educating
others on important healthcare issues.
I even created a website for skin cancer
awareness and spoke to local civic organizations
about cancer awareness
and prevention.
In college, I completed a B.A. in Psychology
along with several advanced
level Biology, Chemistry, and Physics
courses with the intent of pursuing
medical school. In addition to my studies,
I worked as a microbiology lab assistant
in my undergraduate program.
Upon graduation, I accepted a job as
a Sales & Marketing Associate at Chattem
Chemicals, Inc. while waiting on
the next step of my medical school
application.
My introduction to the generic API
industry during the next two years
sparked an unexpected interest in the
production and sale of fine chemicals,
and I decided to pursue this new career
path with enthusiasm. I found it
rewarding to utilize my scientific background
along with my communication
and leadership skills to enhance the
lives of patients through pharmaceutical
manufacturing.
In January of 2007 I accepted a sales
position at Siegfried with the intent of
expanding my knowledge and influence
within the fine chemicals industry.
I am currently a Business Development
Manager for our U.S. Multi-clients
business and manage at least half of
our commercial API product line in the
U.S. Product management includes the
communication of forecast requirements
between the customer and
operations as well as the facilitation
of internal activities to optimize our
processes and meet our customers
needs.
With our continually expanding opiates
portfolio, I also focus on business development
activities for the opiates as
well as key customer activities involving
product qualifications. As Siegfried
continues to become a market leader
for the supply of generic APIs in the
U.S., it is exciting to be a company representative
and join in the efforts to increase
our influence in the marketplace
and with our customers.
When I am not traveling for business,
I enjoy spending time with my husband
at home and singing worship music at
my church. Cooking is my favorite pastime,
and this hobby allows me to
blend creativity with chemistry. I enjoy
the challenge of combining new ingredients
and creating new recipes, and it
is satisfying when others enjoy my
homemade treats. Although I cook
many different types of dishes, I love
making desserts. At our Siegfried picnic
last summer in Pennsville, I received
the “Best Dessert” award for my apple
streusel cheesecake. Next year I hope
to hold the title of “Best Dessert” once
again with my chocolate truffle recipe!
My favorite college professor once told
me I had “the mind of a scientist and
the soul of an artist.” My passion for
life is balanced by my intense curiosity
for learning and pursuing new challenges,
and I hope these two aspects
will continue to enhance my professional
and personal experiences in
the future.
45

Compliance
Introduction
Siegfried is committed to quality oriented management and
permanent improvement of all company processes and activities.
Our quality policy is an integral part of the corporate
policy.
Audits and inspections make the value of compliance/quality
evident. The results of customer audits and regulatory inspections,
in particular by the U.S. Food & Drug Administration
(FDA) and the Swiss Health Ministry (Swissmedic) confirm
our capabilities and are not only an indication of our
high quality standards, but also represent a solid competitive
advantage.
Policies
Siegfried has an overall quality management system
throughout our value chain. Based on the procedures set by
ISO 9001 (quality management) and ISO 14001 (environmental
management) www.iso.org, this system covers all
valid international guidelines:
– Current Good Manufacturing Practice (cGMP)
www.ema.europa.eu or www.fda.gov
– International Conference on Harmonization (ICH),
used to define standards by the pharmaceutical authorities
and industry associations in the U.S., Europe, and Japan
www.ich.org
– World Health Organization (WHO) www.who.int
The Compliance Board has a total of 24 members at the end
of 2009 and participants from executive management
(ExeCom). The Board meets every other month on the behalf
of the CEO and under the direction of the Chairman of
the Compliance Board to discuss quality issues at Siegfried.
Decisions on quality policy are made by the Compliance
Board, which also approves Siegfried Group policies.
While dealing mainly with quality issues, the Board also
influences areas of finance, safety, health and environment
(SHE), and pharmaceutical co-vigilance, and employee
conduct (Code of Conduct at www.siegfried.ch/en/siegfried/
company/code-of-conduct).
Inspections and audits
As is customary in the pharmaceutical industry, all Siegfried
sites are constantly monitored, through inspections (by regulatory
authorities), audits (by customers at Siegfried, or by
Siegfried at suppliers), and internal audits. Customer and
supplier audits are planned weeks and months in advance,
inspections and internal audits can occur without notice.
In general, regulatory inspections are carried out:
– In the U.S. by the Food and Drug Administration (FDA),
and by the Drug Enforcement Administration (DEA)
when narcotics are involved; for the first time the Japanese
Pharmaceuticals and Medical Devices Agency (PMDA)
carried out an inspection in 2009
– In Switzerland by Swissmedic, the Swiss Northeast Regional
Drug Inspection Agency (RHI) and the American FDA
– In Malta by the Medicines Authority Malta (MAM)
and the American FDA
– In Germany by the Federal Executive Committees
(Regierungspräsidien) and the American FDA
46 Sustainability Report

Since 2002, the FDA has issued clear “No Action Indicated”
approvals for our sites; all licenses have been approved or
renewed.
www.siegfried.ch/en/siegfried/compliance/inspection-history
Undergoing over 100 successful inspections and audits over
the past years gives Siegfried the chance to measure itself
against other company systems and regulatory demands –
and draw instructive conclusions about our application of
the guidelines. This confirms our quality system and is a persuasive
argument with our customers.
2010 is expected to be another intense year for inspections:
– For Siegfried Generics in Switzerland, possibly Swissmedic/
RHI; in Malta the Maltese health inspectors and perhaps
the American FDA
– For Siegfried Actives in the U.S. the FDA and DEA,
and possibly the Korean FDA
– For Siegfried Actives in Switzerland (in the active ingredients
area) the American FDA, and the Japanese Pharmaceuticals
and Medical Devices Agency (PMDA)
Customer audits will continue to take place frequently
in 2010.
Cooperation with public officials
Anti-counterfeit (product piracy): Siegfried works closely
with the American FDA to prevent product piracy and ensure
the safety of the end user. Siegfried provides material, certificates
and labels to enable the FDA to make comparisons
with potential counterfeit products.
Pharmaceutical co-vigilance (reporting system for
side effects):
The ongoing and systematic surveillance of drug safety is
done not only during clinical tests, but also after registration
to identify, evaluate, and understand any undesirable side effects,
as well as to implement the necessary risk minimizing
measures. The registration team within the Siegfried Generics
Division (in Munich, Germany) is responsible for these
issues and registered as the contact with the regulatory
authorities. Inquiries about undesirable side effects (ca.
1-2 annually) are usually made by our customers (customer
complaint) and not by the end user, who does not recognize
Siegfried as a producer. Siegfried’s pharmaceutical co-vigilance
system is being prepared and implemented for the
new inhalation technology product line.
Customer satisfaction
Siegfried is a service-oriented company that focuses on the
customer and cultivates close, long-term relationships. This is
why Siegfried has an established customer complaint system
(also stipulated in the pharmaceutical industry) to process
all inquiries and complaints. All external questions and complaints
are systematically registered, whether justified or not,
and evaluated. The type and number of complaints are systematically
recorded and the individual cases are evaluated
and discussed on a monthly basis by a quality-assurance
committee under the direction of subject matter experts
from Siegfried Actives and Siegfried Generics. If necessary,
changes are implemented. The Compliance Board is consulted
for critical or strategic questions. The results of the investigation,
or intermediate reports, are sent to the customer
within 30 days.
Sustainability Report
47

Our goal is to cultivate a quality system that strives to eliminate
customer complaints; for customer audits our goal is to
eliminate any critical issues or observations that could endanger
the Siegfried-customer relationship. In addition, we
also try to avoid any significant issues during regulatory inspections
and ‘warning letters’ from the American FDA (see
next section). We succeeded in this endeavor in 2009.
Goals and outlook
Our Good Manufacturing Practice (GMP) status and reputation
for quality are recognized around the world. All our facilities
work hard to uphold this standard and are recognized
as a dependable and high quality partner.
For 2010, the number of audits and inspections will remain
high. Despite these distractions, it is important that we
remain focused on remaining quick, flexible, and customerfriendly.
Safety, Health and Environment (SHE)
Introduction
Safety, Health and Environment (SHE) are the central elements
of our success. Guided by this principle, our employees
and specialist teams strive daily to improve safety and
minimize adverse affects on our environment.
Approximately 3% of our global personnel is active in the areas
of SHE. They are responsible for the risk management of
processes, systems and the workplace, as well as implementation
of the environmental regulations. A team of subject
matter experts, engineers and chemists work closely together
and are in constant contact with other sites and partner
companies.
The following chapters describe the details of our SHE policies,
workplace safety, and accident statistics. Environmental
protection is summarized in a separate report.
Guidelines
As a member of the Swiss Society of the Chemical Industry
(SGCI), Siegfried in Zofingen committed to the Responsible
Care ® program since 1992. Based on these principles, our internal
SHE guidelines were adapted and completed. As part
of the Siegfried Quality Management system, ISO 14001
was successfully introduced and certified in 1998. Our
Pennsville production site qualified for the SOCMA Chem-
Steward ® program in 2006. By 2006, the various programs
and systems were unified in a global SHE policy and implemented
at all sites. This policy describes the Siegfried SHE
philosophy to our employees, third party companies, customers,
shareholders, authorities and the public.
Our SHE policy commits Siegfried to very stringent levels of
environmental protection and responsibility for the health
and safety of our employees, customers and the general
public. The goal of the policy is to reduce waste and emis-
48 Sustainability Report

sions, decrease accidents, and promote awareness of SHE
issues among our employees, customers and the general
public.
For further information:
www.siegfried.ch/en/siegfried/compliance/
safety-health-environment
Safety and health
Process safety
Efficient and safe chemical processes are two central elements
of process development. Siegfried introduced a comprehensive
procedure for all aspects of chemical process
development. Our internal safety lab has well-trained specialists
and the newest measuring instruments for the physical
and thermal testing of materials. Flammability, danger
of explosion, and performance during daily use and in case
of accident are tested and evaluated.
As part of the precautionary measures, the process systems
and the chemical materials they handle are subjected to
a comprehensive risk analysis. The results are summarized in
a report and reviewed by the regulatory authorities during
their annual inspection.
Siegfried maintains an internal emergency team to respond
to explosions, fires or chemical incidents. In a first for the
canton Aargau, in 2009, this team was merged with the fire
brigade of Ringier Print AG (an adjacent company) to form
a Zofingen HAZMAT and fire fighting organization. Over
100 employees from both companies volunteer for fire fighting
service – ensuring the safety of far more than 1,000 jobs
in both facilities. As mandated by the canton, this new
organization is also the official HAZMAT response team for
incidents outside our facility.
Workplace safety
Substantial efforts were made by the workplace safety department
to promote a safety-oriented way of working.
Campaigns, audits and training sessions were used to instill
greater safety awareness among the employees, and to
avoid unsafe practices at the workplace. These efforts resulted
in an encouraging decline in accidents. For the first time,
two production sites reported no accidents or workdays lost
due to accidents.
Making the wearing of helmets compulsory in 2008 once
again proved sensible and effective, as no head injuries were
reported in 2009. Also, serious eye injuries (and any subsequent
damage) from contact with chemicals were avoided
through the introduction of portable eye rinse solutions.
The topic of fire prevention received renewed attention in
2009, based on the results from customer audits and regulatory
inspections. Together with the production and engineering
teams, safety specialists launched a “No Chance for Fire”
initiative for fire doors and fire stop measures. Doors were
checked at all storage, lab, and production buildings and,
where necessary, marked as fire doors. At the same time,
defective or missing fire stop measures were updated or installed
and employees received training on active fire prevention
procedures.
Sustainability Report
49

External audits
During 2009, national and international regulatory agencies,
insurance companies, and various customers inspected the
Siegfried facilities. The inspectors and customers certified
that Siegfried has a good and integrated risk and environmental
management system. For example, the HDI-Gerling
insurance company rated our Zofingen facility in the top
10% of all inspected companies around the world.
SHE Audits (number) Swiss facility (Zofingen) &
U.S. facility (Pennsville)
250
200
150
the SHE safety patrols by the employees confirm that safety,
health and environment measures are taken seriously and also
applied.
Workplace accidents and illnesses
Our accident reduction goals were achieved – or clearly surpassed
– at most of our sites. The production facilities in
the U.S. and Malta reported a year without accidents and
absences. For the first time, Switzerland registered under
10 accidents per 1,000 employees, reducing the accident
quota by half over the last 5 years. Höchstadt (Germany)
reported one accident. The number of sick days in Zofingen,
however, grew over the previous year. Two accidents (with
a forklift, and torn ligaments from a fall) and the resulting
leg injuries led to absences of many weeks, for a total
of 89 days lost. Our goal of less than 130 sick days per
1,000 employees was achieved.
100
50
0
2009 2008 2007
Zofingen Pennsville
2006 2005
Whenever possible, interim ‘light duty’ work is offered to
injured personnel to enhance an accelerated reintegration
into the job. This lies in the interest of the employees, the
employer, and the insurer; such cost-saving options helps
Siegfried employees contribute towards keeping healthcare
costs under control.
GR_SHE_Audits
Internal audits
Over the past few years a system of internal audits and safety
patrols has been used at our Zofingen and Pennsville facilities.
These safety management procedures are very important
for both locations because, unlike in Germany or Malta,
chemical substances are produced there. This results in a
very high number of audits – with numerous improvement
possibilities, of which already 90% have been implemented.
This procedure has proven to be simple, very efficient, and
supported by the people involved. The often extremely creative
improvement recommendations and active support of
50 Sustainability Report

Workplace accidents with sick days: 2005–2009
Workplace accidents with sick days per 1,000 employees 2009 2008 2007 2006 2005
Zofingen (Switzerland) 9 10 11 13 18
Pennsville (U.S.A.) 0 11 11 12 44
Hal Far (Malta) 0 0 0 0 n.a.
Munich / Höchstadt (Germany) 19 0 n.a. n.a. n.a.
Sick days per 1,000 employees 2009 2008 2007 2006 2005
Zofingen 104 68 47 158 190
Pennsville 0 17 155 53 179
Hal Far 0 0 0 0 n.a.
Munich / Höchstadt 11 0 n.a. n.a. n.a.
Total workplace accidents and sick days
(reported to SUVA) per 1,000 employees
100
90
80
70
60
50
40
30
20
10
0
Chemie/Pharma Schweiz
2009
GR_Berufsunfaelle
2008
Siegfried Zofingen
2007
2006
2005
The number of workplace accidents and illnesses in Zofingen
dropped by 1/3 in 2009. The 36 accidents per 1,000 employees
corresponds to the perennial average, with a slight
downward trend. The number of reported injuries and
illnesses remains slightly above the industry average. The
injuries required treatment outside the facility (Siegfried has
no on-site MD). These treatments are covered by SUVA and
reported in the insurer’s statistics as accidents; the severity
of the accident is not reported.
Health
“Promoting Employee Health” was the theme of numerous
activities at Siegfried. The SHE department organized a nutrition
workshop (together with the specialists from Nutrition
Bern) about “Eating Healthy at the Workplace” with valuable
information on the right diet; the lunch that followed
gave practical examples of how a healthy and balanced diet
can also taste good and is easy to prepare. The workshop
was a resounding success with very positive feedback.
A ‘theraband’ course was offered to promote flexibility.
A gymnastics instructor showed small groups of interested
employees how the theraband is used in simple workplace
exercises to promote well-being, health and improve performance.
Our in-house ‘Sportclub’ offers the more sportsminded
employee further possibilities for movement: soccer,
tennis and even target shooting or bowling are offered.
For the third time, Siegfried Zofingen (44 employees in
11 teams) participated in the Swiss “Bike to Work” campaign
along with 1098 other companies. During one month,
Sustainability Report
51

the Siegfried teams pedaled the distance of almost 13,000
km (over 8,000 miles), a notable distance that, unfortunately,
did not reach the internal “Siegfried bikes around the
world” goal. But the goal that every participant bikes to
work at least 50% of the time during the month was clearly
met – a valuable contribution to personal health and the
environment.
In Q4/2009, an ergonomics presentation (part of the “Preventive
Healthcare at the Workplace” program) was made
by the in-house Workplace Safety team. They offered employee
consultations and personal checklists to evaluate the
workplace.
Siegfried also organized an annual free flu vaccination campaign;
over 100 people participated. The campaign was
expanded due to the threat of an H1N1 pandemic, which
also saw many employees participate.
Medical consultations and (SUVA-mandated) check-ups for
about 200 employees were made possible again this year
through our cooperation with the Institute for Workplace
Medicine (ifa Baden).
A workplace hygienist answers questions about workplace
hygiene; this includes workplace evaluations and classification
of production systems. When necessary, technical, organizational,
and personnel (TOP) measures ensure that the
workplace is laid out well and job processes are established
for every employee; their effectiveness is tested by our
in-house SHE lab.
Goals & outlook
The activities and goals for our SHE program for 2010
include:
– Less than 8 accidents with sick days per 1,000 employees
– Less than 120 sick days resulting from workplace accidents
per 1,000 employees
– Less than 30 accidents per 1,000 employees
– Availability of interim ‘light duty’ work for
quick reintegration of injured employees
– Carry out informational campaigns to promote
health awareness and reduce accidents
– Implement a Global Harmonized System
as part of our EPR system
– Optimize resources at our fire fighting / HAZMAT unit
– Modernize the production systems
to safely handle solid and gas materials
52 Sustainability Report

Corporate environmental protection
The preservation of our environment is an urgent goal for
Siegfried. The company and its employees strive constantly
to minimize our environmental impact. Using more environmentally
friendly energy sources, minimizing water consumption
and emissions, and reducing (and recycling) waste
– these are all part of our efforts to make a difference.
The following chapters show the results from our facilities
in Switzerland, U.S.A., Malta, and Germany.
In 2009, a VOC balance sheet was created for local authorities.
In addition, Zofingen was registered with the SwissPRTR
(Swiss Register for Pollutant Emissions & Transfers), which
was introduced in Switzerland in 2007.
In 2009 the new development lab building with our analytical
and synthesis labs was inaugurated, replacing labs that
were previously scattered across three different buildings.
We are confident that the new building technology will
result in relatively low energy consumption.
General observations
Looking at the trends over the years shows remarkable
progress: heavy fuel oil has been almost wholly replaced by
significantly cleaner natural gas and fuel sources recovered
from our own production facilities. The emission of greenhouse
gases into the atmosphere, especially VOCs, was
markedly reduced; CO 2
emissions were also slightly reduced.
In contrast, water consumption increased, making further
conservation efforts absolutely necessary in order to reach
our goals.
The amount of waste generated remains stable, i.e. not
much change over the past few years. A positive trend is the
increased recycling of wastes. The largest source of waste in
pharmaceutical production is solvents. Here the amount was
reduced thanks to an in-house solvent reclaiming process.
Unfortunately, regulations often forbid such measures and
we have looked for an external recycling solution. In many
cases we were able to recycle (instead of incinerate) the
solvents.
For 2009, the emissions of CO 2
at Zofingen were further
reduced. 1,210 tons of CO 2
reduction was sold to the
“Climate Cents” (Klimarappen) Foundation.
See:
http://klimarappen.ch/
Sustainability Report
53

Energy consumption
2009 2008 2007 2006 2005 Unit
Total energy 378 300 362 500 385 800 364 800 371 800 GJ
Natural gas 198 700 183 000 187 500 197 700 179 800 GJ
Heating oil 5 900 7 400 22 000 20 500 12 000 GJ
Alternate fuels (solvents) TAR 29 900 34 400 29 400 14 000 56 500 GJ
Electricity 131 500 124 800 132 500 125 600 118 000 GJ
Compared to the previous year, total energy consumption
for 2009 increased. The Zofingen site reported only a moderate
(1.1%) increase, but the Pennsville site jumped by
11.9%. The improved production utilization levels compared
to the previous year led to the increase. Energy use at
Pennsville actually dropped by 1.3% when compared to
the 5-year average.
Energy consumption total (1,000 Giga Joules)
500
400
300
More natural gas and electricity were consumed In Zofingen;
the increase in electricity usage was due to a different product
portfolio. More products were produced that demand
centrifuges and cooling systems, which are more energy intensive
systems. The use of natural gas climbed as less alternative
fuels were available.
200
100
0
2009
2008
2007
2006
2005
Natural gas accounted for most of the increase in energy
in Pennsville, but the use of electricity also increased and
fuel oil was further reduced, to only 0.24% of the total
energy use.
GR_Gesamtverbrauch_Energie
54 Sustainability Report

Emissions
2009 2008 2007 2006 2005 Unit
CO 2
emissions 15 300 15 000 15 800 15 000 16 600 Tons
VOC emissions 26 39 48 62 57 Tons
The CO 2
emissions for 2009 remained stable compared to
2008. Increased use of natural gas in Zofingen replaced alternative
fuels and extra light heating oil, resulting in lower
overall CO 2
emissions. The reduction in Zofingen was compensated
by the increase in Pennsville (due to higher production
utilization levels in the U.S.). The CO 2
reduction sold to
the “Climate Cents” (Klimarappen) Foundation; the amount
sold increased from 390 tons in 2008 to 1,210 tons in 2009.
CO 2
emissions (1,000 tons)
18
16
14
12
10
8
The VOC emissions (hydrocarbons) again decreased over
the year, due mainly to the product portfolio in the U.S. The
VOC emissions in Zofingen decreased somewhat less than
in the previous year. The thermal exhaust cleaning system
posted a consistently high availability.
6
4
2
0
2009 2008
GR_CO 2
_Emissionen
2007
2006
2005
VOC emissions (tons)
70
60
50
40
30
20
10
0
2009
2008
2007
2006
2005
GR_VOC_Emissionen
Sustainability Report
55

Water consumption
Water consumption 2009 2008 2007 2006 2005 Unit
Siegfried Group 1 998 000 1 790 000 1 586 000 1 921 000 1 746 000 Malta 3
Zofingen 1 887 000 1 679 000 1 490 000 1 828 000 1 661 000 Malta 3
Pennsville 104 700 104 700 91 100 89 300 85 300 Malta 3
TOC emissions 2009 2008 2007 2006 2005 Unit
Siegfried Group 650 495 521 643 658 Tons
Zofingen 528 415 431 532 566 Tons
Pennsville 122 80 90 111 92 Tons
Our goal to reduce cooling water consumption by modernizing
our heating and cooling systems was not met. Despite
the inauguration of the new development lab building,
which is cooled with a circulating water system rather than
fresh water, consumption in Zofingen increased by almost
200,000 m 3 , an 11.4% jump. This increase is due to the
growing use of water in chemical processes and also for
cooling purposes; both categories are directly related to production.
During the year an increasing number of products
with a high level of water usage (such as cooling) were produced.
Only the health area saw a slight decrease. Water
consumption in Pennsville was slightly lower than the previous
year, but could not compensate overall for the increase
in Zofingen.
Water consumption (1,000 m 3 )
2500
2000
1500
1000
500
0
2009 2008 2007
GR_Wasserverbrauch
2006
2005
The substance levels in wastewater grew in parallel to water
consumption. The total load of organic carbon rose by
155 tons from 2008. Most of this increase originated in
Zofingen; the increase in Pennsville was moderate. Similar
to the level of water consumption, the TOC emissions are
directly related to the type of products being produced.
Decreasing the amount of wastewater would also provide
a financial savings, as the pollution loads are charged to
Siegfried. The annual wastewater costs for Zofingen are
currently over CHF 1.5 million.
The goal of reducing the amount of active ingredients in
wastewater could be partially met by introducing or optimizing
wastewater treatments. However, processes that emit
active ingredients must be improved in the coming years.
56 Sustainability Report

Waste
2009 2008 2007 2006 2005 Unit
Total amount of waste 1 26 800 24 900 21 600 30 400 24 000 Tons
Chemical waste 14 200 12 400 11 200 16 300 13 100 Tons
Waste for external recycling 1 840 1 820 1 370 1 210 310 2 Tons
1
Without sewage sludge
2
Number was not raised
The total amount of waste increased over the previous year
by 1,900 tons, or 7.5%, due mainly to a sharp increase of
waste from chemical production, where the amount of
waste is directly related to the substances produced. The remaining
waste amounts not immediately related to chemical
production decreased slightly. A positive trend is the total
amount of recycled waste – increased 6 times over the past
five years.
Chemical Waste (1,000 tons)
18
16
14
12
10
8
6
4
2
0
2009
2008
2007
2006
2005
Waste (1,000 tons)
Recycled GR_Chemieabfaelle waste outsourced (tons)
35
2000
30
25
1500
20
15
1000
10
500
5
0
2009
2008
2007
2006
2005
0
2009
2008
2007
2006
2005
GR_Abfaelle_fuer_externe_Recycling
GR_Abfaelle
Sustainability Report
57

Reclaimed solvents
2009 2008 2007 2006 2005 Unit
Siegfried Group 2 240 3 160 2 230 3 290 2 570 Tons
Zofingen 1 906 2 880 1 880 1 790 1 290 Tons
Waste for external recycling 336 280 350 1 270 1 270 Tons
The goal to optimize the reclaiming of solvents was not
achieved. The amount of solvents recycled internally
decreased notably in 2009. This is due to the products that
were produced. For many production processes it is not
possible to recycle solvents either because of regulatory
limitations (product quality) or technical reasons.
Reclaimed solvents (1,000 tons)
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2009 2008 2007
GR_Regenerierte_Loesungsmittel
2006
2005
58 Sustainability Report

Waste solvents
2009 2008 2007 2006 2005 Unit
Siegfried Group 12 500 11 900 10 500 15 800 12 900 Tons
Zofingen 9 900 10 100 8 380 12 340 10 000 Tons
Pennsville 2 600 1 740 2 130 3 510 2 820 Tons
The amount of waste solvents in Zofingen decreased slightly
in 2009. This positive trend, however, was more than compensated
by the increase in Pennsville, a result of improved
production utilization during the year.
Waste solvents (1,000 tons)
18
16
14
12
10
8
6
4
2
0
2009
2008
2007
2006
2005
GR_Abfallloesungsmittel
Sustainability Report
59

Fines and non-monetary penalties
Siegfried had no fines levied in the SHE area. Two incidents
were reported to the authorities: hydrogen chloride gas
emissions and the emission of an active ingredient into the
wastewater. The necessary repair measures have already
been implemented.
Goals and outlook
Siegfried will strive to reduce the level of water and energy
consumption to 2008 levels, and to increase the amount of
reclaimed solvents. This will save resources and money. Further
goals and activities for 2010 include:
– Decreasing water consumption in Zofingen to 2008 levels
– Decreasing energy consumption in Zofingen and Pennsville
to 2008 levels
– Raise the proportion of recycled in-house solvents
to outsourced waste solvents to >0.27
– Reduce the amount of waste solvents generated by the
three largest products in Pennsville through re-circulation
or recycling, either in-house or outsourced
– Introduce an emergency energy concept in Hal Far (Malta)
with savings of >10%
Note: We are working towards a more precise articulation of
goals through a goal-setting process now in development.
Siegfried as an Employer
Focus on the employee
The commercial success of Siegfried is based primarily on
the commitment of our employees. Siegfried is dedicated to
employee relationships based on partnership and an open
exchange of information. Various dialogue channels between
employees and management are available, such as
the CEO session, management and employee meetings,
Summer Night Festival, etc. The procedures described below
were created to enable each employee to perform optimally.
Only with the wide range of experience, profound technical
know-how, and reliability of our employees can our company
master the growing complexity of the customer contracts
and meet the increasingly stringent regulations.
See: www.siegfried.ch/siegfried/human-resources-jobs/
personalpolitik (German only)
Working conditions
Qualified and experienced staff is particularly important
in the chemical and pharmaceutical industries. Lost knowhow
is difficult to replace and the ramp-up phase for new
employees is significantly longer than in other industries.
This is why Siegfried pays special attention to good working
conditions for its employees:
– Employment contracts are basically unlimited
– Zofingen and Pennsville each have collective labor agreements;
Malta has individualized employment contracts
– Zofingen has an agreement with the labor union
– Flexible work hours (or ‘flex time’) consider both the interests
of the company and needs of the individual, promoting
a sense of job responsibility; upper management
adheres to open work hours
60 Sustainability Report

– Our ‘Fraud Policy’ combats internal fraud in all regions
and is reviewed annually by the Board of Directors and
the company auditors
See:
www.siegfried.ch/en/siegfried/human-resources-jobs/fraud
Employee development
The quality of management is crucial for the success of a
company and to ensure positive levels of employee satisfaction
and motivation. Our management provides an entrepreneurial
approach to meeting job requirements. Siegfried also
promotes an openness to change, employee flexibility and
project-based tasks. We offer versatile training opportunities
and continuing education programs (at all levels and at all
sites) to secure the indispensable know-how of our personnel
and to give them the chance to enhance their skills. Our
programs focus on individual strengths and specific group
goals. Every employee has an annual performance and
career assessment review to better identify specific development
plans. Each manager is responsible for the ongoing
training and development of his/her staff. In addition to the
comprehensive job-specific training programs, personnel development
is another key focal point; i.e. early identification
and development of talented, high-potential candidates.
Ongoing & management training: 29 hours /
employee
Incl. GMP training: 4 hours /
employee
stay with Siegfried after completing their training confirms
the value of our efforts.
Family-friendly policies
Siegfried is one of the most important employers in the
Zofingen region. About 60% of our employees live in and
around Zofingen. They can, for example, take advantage of
day care services (operated together with Ringier, a neighboring
company); men can also apply for an unpaid paternity
leave of up to 12 months.
Mutual respect
Working in a multi-cultural environment, Siegfried is a globally
active company in an international market. Diversity is
considered an enrichment for the company and discrimination
based on gender, race or ethnic origin, religion, worldview
or disability is not tolerated. Our regulations (“Respect
and Responsible Towards Each Other”) show how victims
and witnesses can respond to discrimination and how we
support them. We strive to prevent sexual harassment and
mobbing at the workplace; various trusted internal and external
representatives have been designated as contacts.
See:
www.siegfried.ch/siegfried/human-resources-jobs/respekt
(German only)
Apprentices
In Zofingen for 2009, there were 38 apprentices in training:
13 chemical technologists, 15 lab specialists (synthetic and
analytical), 7 business apprentices, and 3 logisticians. In addition
to the technical education, we also promote team spirit,
social skills, and self-confidence during the apprenticeship.
The fact that usually over half of our apprentices choose to
Sustainability Report
61

Total workforce by region as of December 31, 2009:
Switzerland 559
Germany 52
Malta 39
U.S.A. 163
Annual employee turnover 12.3%
Women (% total workforce)
(in Zofingen) 26%
Women (% management)
(in Zofingen) 26%
Compensation
The compensation policy at Siegfried considers individual
and technical competencies as well as overall performance.
The policy outlines a modern and market-driven framework
that promotes diversity and equal opportunity. Salaries are
set according to function, rather than gender; they are
based on a contractually set monthly or annual salary, and
variable components (bonuses, premiums, and allowances),
as well as social and employee benefits. Compensation for
all Siegfried locations is set according to the job classification,
individual performance and job experience, as well as
overall corporate success and the marketplace situation.
Satisfaction index
Giving each employee a voice on company issues is a goal
set by Group management. Accordingly, every three years a
comprehensive questionnaire is distributed across all departments
to gain information on current work situations, the
level of satisfaction and identification with the company, and
strengths and possibilities for improvement (regarding
processes, leadership, resolving conflicts and communication).
The most recent questionnaire, distributed in late
2008, gave a remarkably high rating of 49.4% “progressively
satisfied” (based on an overall satisfaction scale ranging
from “satisfied” to “good”). Two of the main reasons for
this positive level of satisfaction are ‘work environment’
(4.6 rating) and ‘work content’ (4.5), which are both rated
as ‘good.’ The immediate supervisors also received good ratings,
as did the social benefits package (4.7) and efforts of
the Safety, Health & Environment (SHE) department. Our
employees identify themselves strongly with the company
and are prepared for an above average commitment.
The next employee questionnaire is planned for 2011.
62 Sustainability Report

Social Responsibility
Introduction
Siegfried’s responsibility goes beyond the immediate influence
of the company. Within our scope of possibilities, we
contribute to a sustainable development of society.
Social responsibility
As a responsible economic force and employer, Siegfried is
committed socially, culturally, and in sports across Switzerland,
and in particular in the Zofingen/Aargau region. For
example, the company sponsors:
– Social/civic projects in Switzerland
– Political activities of our employees
(through flexible work hours)
– Regional cultural and sports organizations
Competition
Siegfried stands for a fair competitive environment and contributes
to lower medicinal costs through the manufacture
of generic products. To prevent corruption and price fixing,
Siegfried trains its sales teams in fair competitive practices.
Currently there are no pending suits concerning anti-competitive
practices, cartel or monopolistic activities.
Sustainable procurement/Personal rights
Regular and systematic on-site audits of our suppliers are
part of our quality management. Our presence in Shanghai
puts us close to suppliers in high-risk areas, allowing us to
respond quickly and effectively to defects or shortcomings.
Employee safety and environmental protection are an important
aspect of such audits.
Siegfried also takes a clear stand against child labor and human
rights violations of any kind. However, such cases are
extremely rare in the chemical and pharmaceutical sectors.
– Youth-oriented projects
Siegfried dedicates a substantial sum every year to sponsor
such activities. The company is a member of the Swiss
Chemical Pharmaceutical Society (SCGI) and the Swiss Society
for Healthcare Policy. In addition, an executive management
member is on the Board of Directors of the Aargau
Chamber of Industry & Commerce (AIHK) and president of
the Business Association of the Zofingen Region (WRZ).
Together with the University of Zurich, Siegfried organizes
the international Siegfried Symposium every two years and
awards the Siegfried Medal in recognition of extraordinary
achievements in the field of process chemistry.
Sustainability Report
63

Ken Zrebiec
Director of Operations
Having been with Siegfried for over
nine years I have held a number of
roles. In my current position as Director
of Operations for the Pennsville site
I am responsible for all activities from
sourcing of the raw material through
manufacturing and finally to customer
fulfillment. It is exciting to be able to
see the entire operation and get a
sense of achievement when a delivery
is made to the customer. Responsible
for all aspects of the supply chain also
lets me interact with people from all
aspects of the industry. Whether I am
working with our customer, an internal
project team, or a raw material supplier,
I really enjoy collaborating with
others on a new project.
Siegfried has also given me the chance
to experience Europe. For two years
I worked at our headquarters in Zofingen,
Switzerland. The experience I had
there was as rewarding personally as it
was professionally. I had the pleasure
of sharing this experience with my
wife, Barbara, and our three children,
Sarah, Ashley, and Stephen. Living in a
different country really taught me to
evaluate issues with a fresh perspective.
As for my family, there was no
better way to teach my children about
the diversity of the world than to let
them experience it for themselves.
I know this experience will stay with
them and influence them throughout
their lives.
When I am not shuttling the children
between soccer, swimming lessons,
and ballet, I try to find the time to enjoy
my favorite activity: playing the
drums. Drumming has been a part of
my life since I was eight years old. I began
studying percussion in third grade
and continue my pursuit through college.
I have had the opportunity to
play in concert bands, marching bands,
symphonic orchestras, and rock bands.
It is an exhilarating feeling to relax into
a solid rhythm. This is a passion that I
know will remain with me throughout
my life.
By nature, I am a “fixer” and an
“organizer.” I enjoy puzzles and logic
problems and am drawn to finding
solutions and making complex issues
manageable. Perhaps this is what
drove me to study Chemical Engineering
in the first place and ultimately led
me into manufacturing.
My family plays a central role in my
free time outside of work. I enjoy
spending time with my children as they
try out new activities in sports, music,
and the arts. Since they are all still
young they have yet to pick a favorite
activity. But, this makes it even more
fun to try new things with each of
them! As a family, we also enjoy traveling,
something we really took advantage
of while living in Switzerland.
65

Consolidated Financial Statements Siegfried Holding AG
Editorial
Sales increase in core business despite
difficult market conditions
In 2009 Siegfried achieved sales of CHF 283.0 million, a
2.6% increase over 2008 base business (CHF 275.8 million),
or a 3.8% increase in local currencies. Compared to the
industry, this is a favorable result for the year. Overall Group
sales declined by 2.2% in CHF, in local currencies by 1.1%;
this includes the one-time license payment of CHF 13.5 million
for a bio-generic product in 2008.
Sales for the Siegfried Actives Division posted a strong
increase of 15.3% to CHF 220.9 million. However, the
Siegfried Generics Division showed a decline of 26.2%
(base business), or 36.4% when including the 2008 license
payment for a bio-generic. This drop is due mainly to the
changes in the Germany generics market. The shortfall
was clearly reduced during the second half of 2009, when
the sales decline was only 3.9%.
When comparing the first half of the year with the second
half, income of CHF 121.0 million for the first six months
rose to CHF 162.0 million for the last six months, corresponding
to a 17.2% drop in the base business for the first half,
then a 25.0% jump during the second half. Particularly the
Siegfried Actives Division turned in a strong second half performance,
increasing income by 34.8% over the same previous
year period.
Operating results
The EBITDA before special effects was CHF 25.3 million,
or 8.9% of sales. EBITDA was CHF 21.0 million with special
effects (incl. one-time costs for the “Deliver” reorganization
project). Excluding the investments in the inhaler (CHF 11.9
million), EBITDA for the core business is CHF 37.1 million
(before special effects), corresponding to a 13.1% EBITDA
margin. These results show the EBITDA and EBITDA margin
to be slightly lower than the previous year. All inhaler development
costs were booked against earnings.
For 2009, the Siegfried Actives Division achieved an EBITDA
of CHF 25.9 million and an 11.7% EBITDA margin, while
Siegfried Generics (excl. inhaler) contributed an EBITDA of
CHF 14.8 million to the Group results, with a 23.9% EBITDA
margin. EBITDA is CHF 3.0 million when inhaler costs are
included.
The Siegfried base business posted 2009 an operative profit
(EBIT) of CHF 6.1 million. In 2009, adjustments of CHF 16.2
million were made to the activated development costs after
a review of the earnings potential. This revaluation included
and costs of project “Deliver” as well, an operating loss of
CHF 14.4 million resulted. Including the inhaler development
costs of CHF 13.4 million, the operating loss amounted to
CHF 27.7 million.
The “Deliver” project surpassed expectations with savings of
about CHF 10 million achieved already for 2009. Further savings
of approximately CHF 10 million are expected for 2010.
These savings will have a sustainable effect on our results.
Costs of CHF 235.5 million for products sold, or 83.2% of
sales, resulted in a gross profit of CHF 47.5 million for 2009,
which translates to a 16.8% gross profit margin.
Marketing and distribution costs for 2009 were CHF 9.5 million,
about CHF 2 million less than the previous year. R&D
costs decreased from CHF 40.3 to CHF 31.5 million. The special
effect (activated development costs) noted above is separately
disclosed as impairment costs. Administrative costs
increased to CHF 22.5 million and include the one-time costs
66 Financial Statements Siegfried Group

elated to the Deliver project. In addition, the previous
year figure included a positive effect from changes to the
pension scheme.
Non-operative results
The financial results include the interest costs for the bank
loan of CHF 4.9 million. In this figure, the costs for the
re-negotiation are included as well. Further, the value of our
Arena shares was adjusted downward by CHF 6.9 million.
Siegfried received these shares in 2008 as part of the sales
price for production equipment in Zofingen. Despite positive
clinical results published last fall by Arena, the share price
continued to go down and the value of our stock holdings
reached CHF 5.5 million by end 2009. The shares are locked
until the end of 2010. Further, a biotech fund investment
made some time ago was impaired by CHF 0.5 million.
In addition, financial income of CHF 0.9 million and foreign
currency losses of CHF 0.8 million are booked in the
financial result.
Siegfried holds a minority share in SCI Pharmtech, Inc.
This company continues to prosper, resulting in CHF 0.9 million
result from associated companies for 2009.
Because pre-tax income remains negative, there was a tax
income for 2009 of CHF 5.1 million.
Overall, the sum of these effects led to a net loss of
CHF 35.3 million for 2009. Despite the negative results,
our equity ratio grew somewhat to 68% (2008: 65%).
Balance sheet – cash flow
For 2009, Siegfried focused on net working capital management,
which was reduced by CHF 39.4 million (from
CHF 172.3 million to CHF 132.9 million) – a reduction of
more than 20%. (Net working capital includes trade
accounts receivable, inventory, and trade accounts payable.)
The “Focused Factories” and “Joint Analytics” initiatives of
our “Deliver” program enabled substantial progress through
optimized processes in production and analytics. Tighter
control of overdue receivables also contributed notably to
the reduction in net working capital. By the end of 2009, net
working capital was 47.0% of sales and we expect further
improvements for 2010. The positive cash flow from operating
activities of CHF 45.5 million for 2009, an increase of
69.4% over the previous year, is in large part a result of the
clearly reduced level of net working capital. However, this
reduction also led to a drop in operating results because of
reduced absorption of fixed costs.
Cash flow from investing activities was CHF 32.3 million for
2009, including capitalized development costs of CHF 12.4
million and capital expenditure of CHF 20.8 million. CHF 4.1
million was dedicated towards new production equipment in
Pennsville and CHF 1.6 million was distributed among our
remaining facilities. CHF 15.1 million relate to Zofingen. The
new lab building, inaugurated in September 2009, represents
our single largest investment.
In 2009, net debt was reduced by CHF 7.9 million to
CHF 63.3 million, thanks to strong operating cash flow
and reduced investment activities. Ultimately, a dividend of
CHF 5.7 million (CHF 2.10 per share) was paid out in 2009
for the 2008 financial year. Due to the capital increase and
the current earnings situation, the Board of Directors proposes
to the Annual General Meeting of Shareholders to
renounce paying a dividend for the business year 2009.
Michael Hüsler, CFO
Financial Statements Siegfried Group
67

Consolidated Balance Sheet
In 1000 CHF (as of December 31) Notes * 2009 2008 1 1.1.2008 1
Assets
Non-current assets
Property, plant and equipment 2 235 613 241 729 317 673
Intangible assets 3 44 248 51 252 66 665
Investments in associated companies and joint ventures 4 5 971 6 024 5 477
Financial and other non-current assets 5, 6 15 661 20 391 1 123
Non-current pension assets 19 – – 18 815
Deferred tax assets 7 – – 8 698
Total non-current assets 301 493 319 396 418 451
Current assets
Inventories 8 111 055 130 841 148 022
Trade receivables 5, 9 45 462 63 143 68 737
Other current assets 5, 10 10 393 10 720 19 408
Current taxes 7 582 13 –
Derivative financial instruments 11 – 434 527
Cash 12 8 083 14 937 4 714
Total current assets 175 575 220 088 241 408
Non-current assets held for sale – – 19 600
Total assets 477 068 539 484 679 459
Liabilities and Equity
Equity
Share capital 5 600 5 600 5 600
Treasury shares 13 –4 867 –5 039 –4 950
Reserves and retained earnings 326 613 351 452 486 971
Total equity 327 346 352 013 487 621
Non-current liabilities
Non-current financial liabilities 5, 14 71 336 86 127 75 824
Non-current provisions 15 6 350 10 911 9 166
Deferred tax liabilities 7 436 573 34 126
Other non-current liabilities 16 5 645 6 530 6 910
Pension liabilities 19 2 471 18 943 6 280
Total non-current liabilities 86 238 123 084 132 306
Current liabilities
Trade payables 17 23 581 21 657 15 156
Other current liabilities 18 25 942 33 048 38 070
Derivative financial instruments 11 3 854 4 300 –
Pension liabilities 19 921 922 954
Current provisions 15 8 866 4 420 3 735
Current income tax liabilities 7 320 40 1 617
Total current liabilities 63 484 64 387 59 532
Total liabilities 149 722 187 471 191 838
Total liabilities and equity 477 068 539 484 679 459
*
The notes on pages 72–103 are an integral part of the Group Financial Statements
1
Balance sheet 1.1.2008 and 31.12.2008 restated, see page 73
68 Financial Statements Siegfried Group

Consolidated income statement
In 1000 CHF (for the year ended December 31) Notes * 2009 2008 1
Net sales 29 283 041 289 309
Cost of goods sold 8 –235 529 –226 865
Gross profit 47 512 62 444
Marketing and sales –9 478 –11 220
Research and development –31 515 –40 336
Administration and general overhead –22 476 –14 609
Other operating income 20 4 425 18 537
Operating result before impairment –11 532 14 816
Impairment 2, 3 –16 209 –99 551
Operating result –27 741 –84 735
Share of results of associated companies 4 906 1 252
Financial income 21 857 1 125
Financial expenses 21 –13 519 –6 068
Exchange rate differences 21 –823 243
Loss before income taxes –40 320 –88 183
Income taxes 7 5 057 13 299
Net loss group –35 263 –74 884
Net loss per share
Undiluted net loss per share 22 –12.79 –27.02
Diluted net loss per share 22 –12.79 –27.02
*
The notes on pages 72–103 are an integral part of the Group Financial Statements
1
Income statement 2008 restated, see page 74
Consolidated statement of comprehensive income
In 1000 CHF (for the year ended December 31) Notes * 2009 2008
Net loss –35 263 –74 884 1
Other comprehensive income
Cash Flow Hedges
– gains (losses) taken to equity 781 –2 717
– deferred taxes thereon –62 213
Available-for-sale financial assets
– losses taken to equity –1 247 –6 000
– deferred taxes thereon 300 1 440
– losses transferred to income statement 7 420 –
– deferred taxes thereon –1 788 –
Actuarial gains (losses) from defined benefit plans 19 14 721 –41 827
– deferred taxes thereon –3 313 9 034
Siegfried’s share in the equity of associated companies –564 100
Exchange rate differences –1 052 –9 026
Other comprehensive income (net) 15 196 –48 783
Total comprehensive income for the year –20 067 –123 667
*
The notes on pages 72–103 are an integral part of the Group Financial Statements
1
Statement of comprehensive income restated, see page 74
Financial Statements Siegfried Group 69

Consolidated statement of cash flows
In 1 000 CHF (for the year ended December 31) Notes * 2009 2008 1
Net loss –35 263 –74 884
Adjustments:
Depreciation and impairment PP&E and Intangibles 2, 3 48 778 136 762
Change in provisions (2008 excl. Impact of Arena transaction) 15, 20 63 –446
Other non-cash items –3 415 ** –26 358
Expenses for share-based payments 504 226
Exchange rate differences 21 823 –243
Financial income 21 –857 –1 125
Financial expenses 21 13 519 6 068
Income taxes 7 –5 057 –13 299
Share of result of associated companies 4 –906 –1 252
Net result on disposal of property, plant and equipment –13 103
Net result from sale of non-current assets held for sale 20 – –13 537
Cash flow from operating activities before change in net current assets 18 176 12 015
Change in trade receivables 17 704 5 310
Change in other current assets 301 8 163
Change in inventories 19 627 14 777
Change in trade payables 2 929 2 008
Change in other current liabilities –7 976 –7 762
Payments out of provisions 15 –179 –1 005
Interest paid and bank charges –4 876 –4 255
Income taxes paid –241 –2 413
Cash flow from operating activities 45 465 26 838
Purchase of property, plant and equipment –20 840 –30 511
Proceeds from disposal of property, plant and equipment 531 1 430
Proceeds from sale of non-current assets held for sale 20 – 21 822
Purchase of intangible assets –12 368 –12 434
Investments in associated companies and joint ventures – –240
Purchase of available-for-sale financial assets 145 –196
Sale of available-for-sale financial assets 36 –
Interest received 125 614
Dividend received 83 2
Cash flow from investing activities –32 288 –19 513
Increase in non-current financial liabilities 14 8 014 30 000
Redemption of non-current financial liabilities 14 –22 635 –15 000
Increase in current financial liabilities – 23
Redemption of current financial liabilities – 181
Change in other non-current liabilities –593 –
Purchase/disposal of treasury shares, net 1 042 –230
Dividend paid to shareholders of Siegfried Holding AG –5 739 –11 647
Cash flow from financing activities –19 911 3 327
Net change in cash –6 734 10 652
Cash at the beginning of the year 14 937 4 714
Net effect of exchange rate changes on cash –120 –429
Cash at the end of the year 8 083 14 937
1
Cash flow statement 2008 restated, see page 74
*
The notes on pages 72–103 are an integral part of the Group Finanical Statements
**
Other non-cash items mainly include capitalized own development.
70 Financial Statements Siegfried Group

Consolidated statement of changes in equity
Value
Capital surplus fluctuations Cumulative
Share Treasury and legal of financial Retained translation
In 1000 CHF capital shares reserves * instruments * earnings * adjustments * Total equity
As of January 1, 2008 5 600 –4 950 18 483 –123 507 587 –38 976 487 621
Restatement – – – – – – –
As of January 1, 2008 (after restatement) 5 600 –4 950 18 483 –123 507 587 –38 976 487 621
Comprehensive income – – – –7 064 –107 577 –9 026 –123 667
Dividends – – – –11 647 – –11 647
Employee share plan – – – – –63 – –63
Change in treasury shares – –89 – – –142 – –231
As of December 31, 2008 5 600 –5 039 18 483 –7 187 388 158 –48 002 352 013
Comprehensive income – – – 5 404 –24 419 –1 052 –20 067
Dividends – – – – –5 739 – –5 739
Employee share plan – – – – 97 – 97
Change in treasury shares – 172 – – 870 – 1 042
As of December 31, 2009 5 600 –4 867 18 483 –1 783 358 967 –49 054 327 346
*
in the Group’s Consolidated Balance Sheet these items are combined as reserves and retained earnings.
There are no minority interests in the Siegfried Group
(as in the prior year).
The share capital of the Siegfried Group remains unchanged
at CHF 5.6 million and is divided into 2 800 000 registered
shares (par value CHF 2).
Financial Statements Siegfried Group 71

Notes to the Consolidated Financial
Statements
Accounting principles Group
Financial Statements The Consolidated Financial Statements
of the Siegfried Group (Siegfried) comply with the
International Financial Reporting Standards (IFRS). The Consolidated
Financial Statements are based on historical costs,
except the revaluation of specific financial assets and liabilities,
such as derivative financial instruments and availablefor-sale
financial assets. As described in the following policies,
these are assessed at fair value. The Siegfried registered
shares are listed on the Swiss stock exchange SIX. The Board
of Directors approved the Consolidated Financial Statements
on March 3, 2010.
Estimates and Valuations In compliance with IFRS, the
compilation of the Consolidated Financial Statements
requires estimates and the use of company-wide accounting
and valuation procedures by management. Estimates and
assumptions for activities of key importance to the Group
Financial Statements and those judged more complex and
needing additional leeway are explained under these Notes
under the caption “Significant accounting judgments and
estimates”. Actual results may vary from the estimates.
Revised accounting standards In 2008 the Siegfried
Group early adopted IFRS 8 “Operating segments”, which
was required to be implemented from 1 January 2009 at
the latest. Therefore there have been no further adjustments
to this Year-end report.
IAS 1 (revised) «Presentation of financial statements» –
effective January 1, 2009 Amongst other matters, the
revised standard requires some changes to the format of
the statement of comprehensive income, the statement of
changes in equity and additional disclosures in the notes to
the consolidated financial statements. The changes from the
implementation of the revised standard are purely presentational
and have no impact on the results and financial position
of the Siegfried Group.
IAS 23 (revised) «Borrowing costs» The revised standard
requires capitalization of borrowing costs relating to qualifying
assets as part of the cost of these assets. Previously the
Group immediately recognized all borrowing costs as an
expense. In the reporting period 2009, no material qualifying
assets for capitalizing borrowing cost were identified, so that
the revised Standard (IAS 23) had no impact on the consolidated
financial statements ended 31 December 2009.
IFRS 7 «Financial instruments – Disclosures» (amendment)
- effective January 1, 2009 The amendment
requires enhanced disclosures about fair value measurement
and li-quidity risk. As the change only results in additional
disclosures, there is no impact on the results and the financial
position of the Siegfried Group.
IFRS 2 (amendment) «Share-based payments» - effective
January 1, 2009, deals with vesting conditions and
cancellations. The amendment had no impact on the group’s
financial statements.
Future changes in accounting principles
The Group is currently assessing the potential impact of the
new and revised standards and interpretations that are effective
from January 1, 2010 and later and have not been
applied early. This applies in particular to IFRS 3 (revised)
“Business Combinations”, IAS 27 (revised) “Consolidated
and Separate Financial Statements”, IAS 38 (amended),
“Intangible Assets”, IFRS 5 (amendment), “Measurement of
non-current assets (or disposal groups). It is anticipated that
these and further revised and amended standards will have
no significant impact on the results and the financial position
of the Siegfried Group.
Changes in accounting principles
Development costs for Generic dossiers are capitalized
according to the stage of the project, if all relevant capitalization
criteria’s are fulfilled. In the past capitalized project
costs were recorded under inventories and as a rule separately
compensated by the clients during the development
phase. Over the past years, the business environment has
continuously changed. The projects are more and more complex,
with longer development periods and higher amounts
involved. Further the projects costs are now recovered mainly
by future margins on production. Management has decided
to adapt the accounting treatment to the changed business
model, as this will result in more relevant information to the
users of the financial statements. Development costs are
new capitalized as intangibles and amortized over the duration
of the contract. The amortization starts with the market
entry (start of production). Down-payments during the
development phase are recorded as a liability (deferred
income) in the Balance Sheet, they are recognized in the
income statement on an accrual basis over the duration of
the production contract. The opening Balance Sheet as of
January 1, 2008 has been restated accordingly. The impact
on earnings per share for the year 2008 is immaterial. The
following table shows the impact on the Balance Sheets,
the Income statements and Cash flow statements previously
presented:
72 Financial Statements Siegfried Group

Reclassification of
Balance sheet January 1, 2008 capitalized costs for January 1, 2008
In 1000 CHF (before restatement) development projects (restated)
Intangible assets 48 870 17 795 66 665
Total non-current assets 400 656 17 795 418 451
Inventories 160 523 –12 501 148 022
Total current assets 253 909 –12 501 241 408
Non-current assets held for sale 19 600 – 19 600
Total assets 674 165 5 294 679 459
Total equity 487 621 – 487 621
Other non-current liabilities 2 940 3 970 6 910
Other current liabilities 36 746 1 324 38 070
Total liabilities 186 544 5 294 191 838
Total liabilities and equity 674 165 5 294 679 459
Reclassification of December 31,
Balance sheet December 31, 2008 capitalized costs for 2008
In 1000 CHF (before restatement) development projects (restated)
Intangible assets 30 353 20 899 51 252
Total non-current assets 298 497 20 899 319 396
Inventories 147 066 –16 225 130 841
Total current assets 236 313 –16 225 220 088
Total assets 534 810 4 674 539 484
Reserves and retained earnings 351 502 –50 351 452
Total equity 352 063 –50 352 013
Deferred tax liabilities 579 –6 573
Other non-current liabilities 3 124 3 406 6 530
Other current liabilities 31 724 1 324 33 048
Total liabilities 182 747 4 724 187 471
Total liabilities and equity 534 810 4 674 539 484
Financial Statements Siegfried Group 73

Reclassification of
2008 capitalized costs for
Income statement before restatement development projects 2008 restated
Net sales 288 745 564 289 309
Cost of goods sold –226 301 –564 –226 865
Research and development –42 836 2 500 –40 336
Impairment –96 995 –2 556 –99 551
Loss before income taxes –88 127 –56 –88 183
Income taxes 13 293 6 13 299
Net loss group –74 834 –50 –74 884
Reclassification of
2008 capitalized costs for
Cash flow Statement before restatement development projects 2008 restated
Net loss group –74 834 –50 –74 884
Depreciation and impairment PP&E and intangible assets 132 882 3 880 136 762
Other non-cash items –23 354 –3 004 –26 358
Income taxes –13 293 –6 –13 299
Cash flow from operating activities before change in net current assets 11 195 820 12 015
Change in inventories 11 053 3 724 14 777
Cash flow from operating activities 22 294 4 544 26 838
Purchase of intangible assets –7 890 –4 544 –12 434
Cash flow from investing activities –14 969 –4 544 –19 513
Method and scope of consolidation The Consolidated
Financial Statements include all Swiss and foreign companies
in which Siegfried Holding AG controls directly or indirectly
(generally over 50% of voting interest) the financial and
operating policy. Assets and liabilities, income and expenses
are included according to the full consolidation method.
Minority interests in the net assets and income of consolidated
companies are recorded separately in the Consolidated
Balance Sheet and the Consolidated Income Statement.
Investments in associated companies are accounted for by
the equity method. These are companies over which the
Group exercises significant influence, but which it does not
control. This is normally the case with a voting rights share
of 20%-50%. An exception is the investment in SCI
Pharmtech Inc. This has been accounted for by the equity
method since April 1, 2007 although the share of voting
rights is 16.11% because, as a result of the representation in
the Board of Directors, the opportunity for significant influence
exists. Investments in joint ventures are also accounted
for by the equity method.
Group companies acquired or disposed of during the reporting
period are included in or excluded from the Consolidated
Financial Statements from the date of acquisition or disposal.
The individual financial statements on which the Consolidated
Financial Statements are based are drawn up in accordance
with accounting principles applied consistently
throughout the Group. All intercompany Group accounts
receivable and payable, expenses and income and unrealized
intercompany profit are eliminated in the consolidation.
The annual reporting period for all Group companies ends
on December 31.
Business combinations The acquisition of subsidiary companies
is reported according to the purchase method. The
purchase costs of an acquisition include the sum of the fair
market value of the acquired assets, current and contingent
liabilities, and issued equity instruments on the acquisition
date, plus the directly attributable transaction costs of the
acquisition. Goodwill is the excess of the acquisition cost
over the fair value of the identified net assets of the acquired
company. If the fair value of the net assets exceeds the
acquisition costs, this surplus is credited to net profit.
Segment reporting Operating segments are reported in
line with the internal reporting (management approach).
Foreign currency translation The positions of the Balance
Sheets are valued on a functional currency basis. The
Consolidated Financial Statements are denominated in Swiss
francs. The functional currency of the Group companies is
the respective local currency. Balance sheets stated in foreign
currencies are translated at the year-end exchange rates, the
corresponding income statements at the average annual
exchange rates, which do not differ significantly from the
74 Financial Statements Siegfried Group

exchange rates prevailing on the transaction dates. The
exchange rate differences arising from the translation of the
Financial Statements are recognized directly in consolidated
equity. Exchange rate differences arising on intercompany
loans that, in substance, form part of the net investment in
that subsidiary as well as financial liabilities that are designated
as hedges of these investments, are also recognized in
equity. Intercompany loans are regarded as part of a net
investment in a subsidiary, if the settlement of these loans is
neither planned nor likely to occur in the foreseeable future.
All other exchange rate differences are included in the
Income Statement.
Translation differences on non-monetary financial assets and
liabilities such as equities held at fair value through profit or
loss are recognized in the income statement as part of the
fair value gain or loss. Translation differences on non-monetary
financial assets such as equities classified as availablefor-sale
are included in the reserve for value fluctuations of
financial instruments in equity.
The exchange rates applied to the Group’s most important
foreign currencies are as follows:
Balance Sheet
Year-end rates 2009 2008
1 USD 1.038 1.056
1 EUR 1.488 1.489
Income Statement
Average rates 2009 2008
1 USD 1.0857 1.0831
1 EUR 1.5102 1.5874
Property, plant and equipment are valued at acquisition
or production cost less accumulated depreciation. Land is
not depreciated. Depreciation is charged on a straight-line
basis over the following estimated useful life of the assets:
Buildings
Machinery and equipment
Vehicles
IT equipment
10–45 years
8–15 years
8–10 years
3–5 years
or losses on disposal are recorded in the Income Statement.
In determining the recoverable value for items of property,
plant and equipment, expected future cash flows are discounted
to their present value. Maintenance and repair costs
are recognized in the Income Statement. Subsequent purchase
and production costs are capitalized, only if a future
economic benefit is expected and the costs of the asset can
be reliably determined. All other repair and maintenance
costs are recorded in the Income Statement in the financial
year in which these costs are incurred.
Leasing Leased property, plant and equipment for which
the significant risks and rewards are transferred to the Group
are disclosed as Financial leases. All other lease agreements
are classified as Operating leases. Financial leasing contracts
are capitalized at the beginning of the leasing period at the
lower of fair value of the leased property and the net present
value of the minimum lease payments. The corresponding
liability is disclosed under Financial Liabilities (after
deduction of the financing costs). The depreciation period
for leased objects corresponds to the guidelines for the
depreciation of property, plant and equipment (see above)
or the period of the lease if shorter. Leasing instalments are
divided into a repayment and an interest portion. The interest
portion is charged at a constant rate (for the remainder
of the liability) against financial expenses.
Intangible assets Intangible assets consist of licenses,
patents, trademarks, technology, customer base, software
and capitalized development costs for Siegfried products and
generic dossiers. Goodwill from an acquisition is allocated to
the cash-generating units on the date of the acquisition that
benefit from future cash flow as a result of the acquisition.
Goodwill is the excess of the cost of the acquisition over the
Group’s interest in the fair value of the identifiable net assets
acquired. Goodwill is carried in the local currency of the
Group company, which has performed the purchase.
Patents, licenses, trademarks and other intangible assets
acquired through acquisitions are recorded at fair value at
the acquisition date, or if separately acquired at cost.
If parts of a fixed asset have different useful lives, they are
recognized and depreciated as separate assets. The useful
lives of assets are evaluated at least once a year at the
reporting date and, if necessary, amended. Property, plant
and equipment are excluded from the Balance Sheet on
retirement or when no value in use can be expected. Gains
Financial Statements Siegfried Group 75

Goodwill from acquisitions and intangible assets with indefinite
useful lives are not amortized. Instead these items are
tested for impairment at least once a year, or if indications
for possible impairment are evident. After the impairment of
Goodwill in the year 2008, the Siegfried Group’s Balance
Sheet contains no assets with indefinite useful lives.
All intangible assets having a finite useful life and are
amortized systematically on a straight-line basis over their
economic or legal life, whichever is shorter:
Licenses, patents
Trademarks, technology
client base
Capitalized development costs
Software
The shorter of economic or legal life,
as a rule 5 – 20 years
The shorter of economic or legal life,
as a rule 5 – 20 years
5–10 years
3–5 years
Impairment tests are carried out whenever there are indications
that intangible assets may be impaired. If the carrying
amount is greater than the recoverable amount, equal to
the greater of the two amounts market value less costs of
disposal and value in use, the carrying amount is reduced
to the recoverable amount. This reduction is recognized
in the Consolidated Income Statement as expense. Intangible
assets also include capitalized development costs
for Siegfried products and for Generic projects as well as
Actives. Assets are capitalized only if all relevant capitalization
criteria are fulfilled. These costs are capitalized according
to the stage of the project. The capitalized development
costs are regularly assessed for “recoverability” and impaired
if the recoverable amount is below the carrying amount.
Impairments of capitalized development costs are recognized
in the Income Statement under Research and development.
Impairment of non-financial non-current assets An
assessment whether the value of Property, plant and equipment
and other non-current assets with finite useful life may
be impaired is undertaken if as a result of events or changed
circumstances it appears possible that the carrying amounts
are too high. If the carrying amount exceeds the recoverable
amount, then a special impairment is recorded to this
amount. The recoverable amount is the higher of the asset’s
fair value less costs to sell and the value in use. When an
impairment loss arises the useful life of the asset in question
is reviewed and, if necessary, the future depreciation charge
is accelerated. The recoverability of assets with an indefinite
life is reviewed at least once a year.
Financial assets Financial assets are classified into the
following categories:
– Financial investments at ”fair value through profit and
loss“. These include financial investments that are held for
trading purposes and derivative and financial instruments
that on initial recognition are designated as at ”fair value
through profit and loss”. These are acquired for the purpose
of generating a profit from short-term fluctuations in
price. These assets are included under current assets, if
they are held for trading purposes or will probably be
realized within 12 months.
– Loans and receivables. These contain loans, trade and
other receivables and cash and cash equivalents with fixed
payments that are not listed on a capital market. With
a due date of 12 months or less, they are classified as
current assets; anything over that period is classified
as a non-current asset at discounted value.
– Financial investments “available for sale” are non-derivative
instruments, which either were allocated to this category
or belong to neither of the other categories. They are
disclosed under non-current assets in Financial and other
non-current investments, except when it is planned to sell
them within the coming 12 months.
The classification of the financial assets is reviewed at every
reporting date.
All purchases and disposals of financial assets are recognized
on the trade date. All financial assets are initially recorded at
fair value, including transaction costs, except for “fair value
through profit and loss” assets (no transaction costs).
Changes in the fair value of “fair value through profit and
loss“ assets are recorded in the financial result of the reporting
period. Available-for-sale financial assets are subsequently
carried at fair value, with all unrealized changes in fair value
(after tax) recorded in equity. When the available-for-sale
financial assets are sold, impaired or otherwise disposed of,
the cumulative gains and losses previously recognized in
equity are transferred to the result for the current period.
The fair value of financial assets is based in principle on
current market prices. If the market for a financial investment
is not active and no current market prices are available,
the fair value is determined by means of suitable valuation
techniques such as reference to comparable instruments
and transactions or the application of Discounted Cash Flow
analyses.
At each balance sheet date financial assets are assessed for
impairment. Financial assets are impaired only if there is
objective evidence of impairment as a result of events that
occurred after the initial recognition of the asset. If the carrying
value exceeds the net recoverable amount, the asset is
impaired to the recoverable amount calculated on the basis
76 Financial Statements Siegfried Group

of discounted future cash flows. Various criteria are applied
to determine if there is objective evidence of an impairment
loss. These criteria include significant financial difficulty of
the issuer, a breach of contract, danger of bankruptcy, disappearance
of an active market, etc. In the case of equity
investments classified as available-for-sale, a significant or
prolonged decline in the fair value of the security below its
cost is evidence that the assets are impaired.
Inventories Inventories are carried in the Balance Sheet at
the lower of acquisition/production costs and net realizable
value. Production costs comprise all manufacturing costs
including an appropriate share of production overheads.
Costs are assigned to inventory based on the “first-in, firstout”
method. Appropriate valuation allowances are made
for obsolete and slow-moving inventory items. Net realizable
value is the estimated selling price in the ordinary course of
business, less applicable variable selling expenses. Intercompany
profits on inventories of goods produced in the Group
are eliminated from net profit.
Trade receivables Trade receivables are included initially
at fair value and subsequently at amortized cost; this is equal
to the amounts invoiced after deducting allowances for
doubtful accounts. Indications for possible impairment are
given if payment is delayed, the customer is experiencing
financial difficulties or recapitalization or bankruptcy is likely.
Allowances for doubtful accounts are established based on
the difference between the net present value of the nominal
amount of the receivables and the estimated net collectible
amount. The expected loss is recognized in the Income
Statement in the caption “Marketing and sales”. When a
trade receivable becomes uncollectible, it is written off
against the allowance for doubtful accounts.
Other current assets Other current assets consist of
advance payments for deliveries of goods or services,
prepayments and accrued income and other amounts
receivable. They are recorded at net realizable value.
Cash Cash consists of cash, balances held in postal and
bank accounts and short-term deposits with a maturity
of three months or less from the date of acquisition. Cash is
the defined fund of the Consolidated Cash Flow Statement.
Non-current assets held for sale Non-current assets
are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than
through continuing use. Non-current assets held for sale are
measured at the lower of their carrying amount and fair value
less costs to sell.
Equity/Treasury shares A purchase of treasury shares
by a Group company, including all costs (net after taxes), is
recorded against equity, until the shares are redeemed,
issued again or sold. If treasury shares are issued or sold at a
later date, the net consideration less directly attributable
transaction costs and income taxes is recorded in equity.
Transactions with minority interests are treated using the
Economic Entity method like treasury share transactions.
Therefore all payments for the purchase of minority interests
or sales proceeds on the sale of minority interests are recorded
over equity. Any differences compared with the minority
interests carried in the Balance Sheet are eliminated through
the reserves.
Financial liabilities All financial liabilities are recorded
under current or non-current financial liabilities. They are
valued at amortized cost and any difference between the
amount received (less transaction costs) and the settlement
amount is recognized in the Income Statement over the
period of the loan using the effective interest method.
The non-current financial liabilities include all liabilities
with a residual duration of more than one year. The current
financial liabilities include all liabilities with a duration of less
than one year, including the current portion of non-current
liabilities. If at the reporting date there is a binding commitment
to extend a maturing loan, it is classified according
to the new duration.
Provisions Provisions are calculated according to uniform,
consistent operating criteria. They are intended to cover
identifiable risks of loss and payment liabilities. Provisions are
recorded if the Group has, as a result of a past event, a present
obligation (legal or constructive) that will probably (more
likely than not) result in an outflow of economic resources
and if a reasonable estimate of that obligation can be made.
Provisions are discounted to their net present value. Increases
in provisions due to interest effects are recorded as interest
expenses. Possible obligations that are dependent on
future events or where no reasonable estimate of the obligation
can be made, are not recorded, but disclosed as contingent
liabilities.
Financial Statements Siegfried Group 77

Employee benefits
Pension plans The expense and the net present value of
pension commitments of the material defined benefit plans
and other long-term employee benefits are determined
based on various economic and demographic assumptions
using the Projected Unit Credit Method. This takes into
account insurance years up to the valuation date. The major
assumptions involved in the calculation are expectations
about future salary increases, return on pension assets,
turnover and life expectancy.
The fair value of the shares corresponds to the fair value at
the grant date. Costs for the employee share plan are
recorded as personnel expenses in the period in which the
employee performed his services. The costs for the shares
are adjusted to fair value on the grant date and also booked
as personnel expenses.
Profit sharing/Bonus plans Bonus obligations and profit
sharing are recognized on an accrual basis as a liability and
expense, if there is a contractual commitment or past business
practice constitutes a de facto commitment.
The valuation of the pension commitments of the material
defined benefit plans is performed on an annual basis by
independent qualified actuaries. The last valuation of the
pension commitments of the material defined benefit plans
was performed as of Decemberr 31, 2009. Pension assets
are valued annually, at market value. The calculation is based
on November 30, 2009 figures with an expansion to year
end.
Current service cost is recorded in the Income Statement in
the period in which it is incurred. Past-service costs resulting
from plan changes are recognized in income on a straightline
basis over the average period until vesting. If deferred
benefits vest immediately, they are recognized in income
immediately.
Differences in experience and changes in actuarial assumptions
result in actuarial gains and losses. The Group has
adopted the policy to recognize these actuarial gains and
losses directly in equity in the Statement of comprehensive
income. As the differences may be significant, this method
may have a material impact on the Group’s equity.
Surpluses in pension plans are recognized to the extent of
their future economic benefit for the Siegfried Group.
Taxes The tax expense for the period comprises current and
deferred tax. Tax is recognized in the income statement,
except to the extent that it relates to items recognized in
other comprehensive income or equity. In this case tax is also
recognized there. Provisions are made for all tax liabilities at
the balance sheet date, irrespective of the date on which
they are payable. Provisions are made for deferred taxes on
all temporary differences between amounts determined for
tax purposes and those reported for Group accounting purposes
at the actual local tax rates likely to be applied (liability
method), except for those temporary differences related to
entities, where the timing of their reversal can be controlled
and it is probable that the difference will not reverse in the
foreseeable future. These differences are mainly due to the
application of declining balance depreciation allowed for tax
purposes and to the creation of reserves on inventories and
receivables. Deferred tax assets arising from temporary timing
differences and tax loss carry-forwards are recognized
if it is probable that future taxable profits will be available
against which the deferred tax asset can be utilized.
Changes in deferred taxes are measured against net profit
unless the tax relates to an item recognized under equity. No
provisions are made for deferred income taxes on potential
future dividends out of retained earnings, as these sums are
deemed permanently reinvested.
Other non-current employee benefits Other non-current
employee benefits represent amounts to be provided by
Group companies under deferred compensation arrangements
mandated by certain jurisdictions or regulations. In
the Siegfried Group these are mainly benefits related to long
service awards. The commitments calculated by the expert
are included in Other non-current liabilities. Benefit costs are
recognized on an accrual basis in the Income Statement.
Share-based payments In September 2005 the Siegfried
Group implemented an Employee Share Plan to allow
employees and the Board of Directors to buy shares at a discounted
rate (30% below market value). The share plan is
considered as an equity-settled share-based payment plan.
Net sales Net sales represent amounts received and receivable
for goods and services supplied to customers after
deducting discounts and volume rebates and excluding sales
and value added taxes. Revenue from the sale of goods is
recognized when the significant risks and rewards of ownership
have passed to the buyer, usually upon shipment. Raw
materials supplied by the customer or raw materials, on
which the customer carries the risk, are not recognized as
sales. Income from services is recognized on an accrual basis
in accordance with the underlying service agreements.
Cost of goods sold The production costs of the goods
and services sold include the direct production costs and the
78 Financial Statements Siegfried Group

production overheads related to the goods sold and the
services rendered.
Other operating income Royalties are recognized in
Other operating income on an accrual basis in accordance
with the terms of the underlying agreement. Payments
linked to milestones are recognized as income on achievement
of the agreed objectives, provided in management’s
judgment the applicable risks and rewards have passed to
the purchaser and there are no other obligations in respect
of the milestones. The remainder of the Other operating
income also includes gains on the sale of fixed assets and
income from activities that are not part of the Siegfried
Group’s core business.
Research and development Research and development
costs include wages and salaries, cost of materials, depreciation
of property, plant and equipment, amortization of capitalized
development costs and overheads. Development
costs for own products and Generic projects are capitalized
as intangible assets. Costs are capitalized only if all relevant
capitalization criteria are fulfilled. Research costs are not capitalized,
but charged to the Income Statement in the period
in which they are incurred.
Borrowing costs Borrowing costs that are directly attributable
to the acquisition, construction or production of a qualifying
asset are capitalized as part of the cost of that asset.
All other credit and financing costs are expensed in the period
in which they are incurred.
Dividends Dividends to shareholders are recorded as liabilities
at the time the resolution to pay a dividend is passed.
Public subsidies In connection with investment projects
some foreign companies of the Siegfried Group receive public
subsidies, which are capitalized at their fair value only if
there is a high probability that the conditions will be met.
Government grants related to assets are deducted in arriving
at the carrying amount of the asset. The grant is recognized
as income over the life of a depreciable asset by way of a
reduced depreciation charge.
Financial Statements Siegfried Group 79

Risk management
Siegfried’s business involves risks which should be identified
by the Risk Management. By identifying risks at an early
stage it is possible to take early action. The Board of Directors
has delegated the responsibility for the organization and
maintenance of a risk management system to the management.
A distinction is made between “operating risks” and
“risks on strategic projects” as significant risk classes.
The operating risks were determined separately for the
Business Units, Actives, Generics and the Corporate Center.
Responsibility for documenting, communicating and managing
the current operating risks lies with the Operational
Leaders of the Business Units and of the Corporate Center.
The operating risks are evaluated and classified according
to the probability that they will occur and the amount of
damage. The ten most important risks per division are
regularly reviewed.
Major projects of a strategic nature are subject within the
Siegfried Group to systematic project management. Part of
the project management is the ongoing recognition, monitoring
and proactive correction of risks. Risks associated with
strategic projects are documented and evaluated in the
dimensions External Risk (Market/Regulatory) and Internal
Risk (Execution/Technology Risk). Responsibility for Strategic
Projects and therefore also for the risk management always
lies with a member of management.
Operating risks that are expected or have occurred are communicated
in monthly reports to the management. Risks of
greater consequence are also communicated in monthly
reports to the Board of Directors. The progress of strategic
projects is communicated monthly to the management and
at least quarterly also to the Board of Directors. This reporting
also includes an up-to-date risk assessment.
At its strategy meeting on July 7 and 8, 2009 the Board of
Directors considered in depth the strategic projects and their
inherent risks. When there were significant changes, it also
called for information at other meetings about risks associated
with strategic projects. Operating risks were discussed in
the Board of Directors at its regular meetings. When approving
the internal control system at its meeting on December
4, 2009 the documentation and classification of the
ten most important operating risks by division were also
approved.
80 Financial Statements Siegfried Group

Financial risk management
Financial risk management within the Group is governed by
policies and guidelines approved by management. These
policies cover foreign exchange risk, interest rate risk, market
risk, credit risk and liquidity risk. Group policies also cover
the investment of excess funds and the raising of debts.
Both the investment of excess funds and the raising of current
and non-current debts are centralized. Risk management
strives to minimize the potential negative effects on
the Group‘s financial position.
Market risk Siegfried is exposed to market risks which consist
mainly of foreign exchange risk, interest rate risk and
market value risk.
Foreign exchange risk Siegfried operates across the world
and is exposed to movements in foreign currencies affecting
its reporting in Swiss francs. Foreign exchange risks arise on
business transactions that are not conducted in the Group‘s
functional currency. Siegfried continues to monitor its currency
exposures and, when appropriate, uses forward contracts,
swaps or currency options to hedge its risks. Specific
net investments in Group companies are hedged through
bank credits in the same foreign currencies.
The Siegfried Group is exposed principally to currency risk in
respect of the Euro and the USD. The following table illustrates
the sensitivity of a possible change in the USD and
Euro exchange rates on the after tax profit and on other
equity components, assuming that all other variables remain
constant.
Impact on other
Impact on
components
Increase/decrease post-tax profit of equity
Currency in FX rate (in CHF 1000) (in CHF 1000)
2009 2008 2009 2008 2009 2008
EUR + 3% + 3% 135 –412 – –
– 3% – 3% –135 412 – –
USD + 8% + 8% 1 516 1 588 –2 258 –2 298
– 8% – 8% –1 516 –1 612 2 258 2 298
Interest rate risk Interest rate risks arise from movements
in interest rates, which could have adverse effects on the
Group’s net profit or financial position. Interest rate movements
can result in changes in interest income and expense
on interest bearing assets and liabilities. In addition they can
also, as described under the market value risks below,
impact specific assets, liabilities and financial instruments.
Within the Siegfried Group interest rate management is centralized.
The Siegfried Group does not own significant interest
bearing assets and therefore the effects of movements in
the market interest rate on interest income are not material.
More important are the effects of interest rate movements
on the interest expense. The interest bearing liabilities
amounted on the reporting date 31.12.2009 to CHF 71.3
million (2008: CHF 86.1 million), the average interest rate on
the CHF, Euro and USD borrowings was 4.0 %
(2008: 5.3%).
The following table illustrates the sensitivity of a possible
movement in the interest rates in the CHF, Euro and USD
environment on the after tax profit and on other equity
components, assuming all other variables remain constant.
Impact on other
Increase/decrease Impact on components
of interest rate post-tax profit of equity
Currency (basis points) (in 1000 CHF) (in CHF 1000)
2009 2008 2009 2008 2009 2008
CHF + 50bp + 50bp 304 482 – –
– 50bp – 50bp –304 –482 – –
EUR + 50bp + 50bp 34 –81 – –
– 50bp – 50bp –34 81 – –
USD + 50bp + 100bp 57 71 344 1 027
– 50bp – 100bp –57 –71 –344 –1 027
Financial Statements Siegfried Group 81

Financial instruments, such as interest rate swaps, are used
by the Group to hedge in part the risks from interest rate
movements, by exchanging fixed and floating rate risks
(see Note 11).
Market value risk Changes in the market value of financial
assets and derivative financial instruments can affect the
financial position and net profit of the Group. Non-current
financial investments, such as investments in subsidiaries,
are held primarily for strategic reasons. Risks of loss in value
are minimized by thorough analysis before purchase and
by continuously monitoring the performance and risks of
the investments. The financial assets consist essentially of
the shares in Arena Pharmaceuticals Inc., San Diego, USA
(see Note 6). They are listed on NASDAQ and are therefore
subject to general market movements and company specific
risks (in particular realization of the “Lead compound
Lorcaserin”).
Liquidity risk Group companies need to have sufficient
access to cash to meet their obligations. The corporate
finance department manages the raising of current and noncurrent
debt. Cash flow forecasting is performed in the
operating entities of the Group and aggregated and monitored
by group finance. The management of excess liquidity
is also centralized.
At the reporting date the available liquidity was as follows:
2009 2008
Liquidity reserves and credit limits
Cash 8 083 14 937
Credit limit under the syndicated loan 120 000 200 000
./. Credit line drawn –71 210 –86 127
Total liquidity reserves and
unused credit line 56 873 128 810
With the 2006 prolonged syndicated loan adapted in spring
2009, which is due for repayment in 2012, the funds for
normal operating activities should be available in adequate
amount. In the event of a major acquisition or of extraordinary
investments in property, plant and equipment, additional
financing would be considered. The following table contains
an overview of the maturities of the financial liabilities.
The interest bearing financial liabilities and information
regarding covenants are explained in more detail in Note 14.
In 1000 CHF 2009
Between Between Between Between
Less than 1 and 3 3 and 12 1 and 2 2 and 5 Over
1 month months months years years 5 years Total
Interest bearing financial liabilities 218 436 1 960 2 614 71 646 – 76 874
Other non-current liabilities – – – 2 157 1 679 1 933 5 769
Trade payables 19 679 2 323 1 579 – – – 23 581
Other current liabilities 1 023 4 908 20 011 – – – 25 942
Derivative financial instruments – 589 1 766 2 118 1 410 – 5 883
In 1000 CHF 2008
Between Between Between Between
Less than 1 and 3 3 and 12 1 and 2 2 and 5 Over
1 month months months years years 5 years Total
Interest bearing financial liabilities – – 1 889 1 889 88 332 – 92 110
Other non-current liabilities – – 11 – – 3 113 3 124
Trade payables 19 338 1 341 978 – – – 21 657
Other current liabilities 1 818 3 190 26 716 – – – 31 724
Derivative financial instruments – – 1 163 1 163 1 837 – 4 163
Forward contracts – inflow – 1 170 3 529 – – – 4 699
Forward contracts – outflow – 1 056 3 168 – – – 4 224
Credit risk/Counter-party risk Credit risk arises from the
possibility that the counter-party to a transaction may be
unable or unwilling to meet their obligations, causing a
financial loss to Siegfried. Trade receivables are subject to
active risk management focusing on the monitoring and
controlling of risks.
The Siegfried Group’s business model contains mainly project
transactions. As partner in the development and production
of medicaments Siegfried collaborates intensively with
individual customers for a specific period. As a result concentrations
of risks may be built up at a specific date. At
31.12.2009 receivables from one large customer amounted
82 Financial Statements Siegfried Group

to 20.5% (2008: 17.7%) and 13.4% (2008: 11.3%) of
the aggregate trade receivables. The customers concerned
are major pharmaceutical companies with first class credit
ratings.
Credit risks on other financial assets are controlled by a
policy of limiting the exposure only to partners with high
credit ratings, by on-going review of credit ratings and
by limiting individual aggregate balances. At 31.12.2009
CHF 5 million/62% in cash was invested with a single
financial institution (2008: CHF 8.1 million/55%).
Capital risk The capital of the Siegfried Group is managed
with a view to ensuring the continuation of operations,
to earning an adequate yield for the shareholders and to
optimizing the capital structure in order to reduce the cost
of capital.
The capital structure can be influenced by changing the dividend
distribution, by repayments of capital, capital increases,
by sales of assets and repayment of liabilities.
Similarly to other companies the Siegfried Group monitors
the capital structure by reference to the net debt ratio. The
net debt is expressed as a percentage of the aggregate capital.
The net debt is calculated as the sum of the interest
bearing liabilities, the trade payables, the on-account payments
and the other current liabilities less cash. The aggregate
capital is calculated as the sum of the net debt and the
reported equity. Overall the net debt has increased slightly
compared with the prior year.
In 1 000 CHF 2009 2008
Net debt ratio
Financial liabilities 71 336 86 127
Trade payables 23 581 21 657
On account payments 1 100 302
Other current liabilities 7 756 6 221
./. Cash –8 083 –14 937
Net debt 95 690 99 370
Equity 327 346 352 013
Aggregate capital 423 036 451 383
Net debt ratio (percent) 22.6% 22.0%
Derivative financial instruments To manage currency
and interest rate exposure Siegfried uses forward exchange
contracts as well as interest rate and currency swaps or put
options. All derivative financial instruments are measured at
their fair value when the contract is concluded and subsequently.
For qualifying cash flow hedges the portion of fair
value changes that is determined to be an effective hedge is
recognized in equity, the remaining ineffective portion in the
financial result. Gains and losses on cash flow hedges that
were initially recognized directly in equity are transferred to
the Income Statement in the period when the hedge transaction
is recognized in the Income Statement. Any changes
in the fair value of other financial instruments are recognized
in the Income Statement of the reporting period.
Fair value estimation Effective 1 January 2009, the
Siegfried Group adopted the amendment to IFRS 7 for financial
instruments that are measured at fair value. This requires
disclosure of fair value measurements by level of the following
fair value measurement hierarchy:
The fair value of financial instruments traded in active markets
is based on quoted market prices at the balance sheet
date (level 1). The fair value of financial instruments that are
not traded in an active market is determined by using valuation
techniques. The use of observable market data is preferred
compared to entity specific estimates. If all significant
inputs are observable, the instrument is included in level 2. If
one or more of the significant inputs is not based on observable
market data, other valuation techniques, such as discounted
cash flow analysis are used and the instrument is
included in level 3.
Financial Statements Siegfried Group 83

The following table presents the group’s assets and liabilities
that are measured at fair value at 31 December 2009:
In 1000 CHF Level 1 Level 2 Level 3 Total
Financial assets
Derivative financial instruments for hedging –
Available-for-sale financial assets
– Securities held long-term 5 484 926 10 6 420
Liabilities
Financial liabilities – at fair value through profit and loss
– interest rate swaps (CHF) 1 519 – 1 519
Financial liabilities – «Hedge accounting»
– interest rate swaps (USD) 2 335 – 2 335
Significant accounting judgments and estimates
Preparing the Consolidated Financial Statements requires a
certain degree of discretionary decision making and estimates
by management. The most important forward looking
assumptions, from which a substantial risk may arise, that
could lead to a material adjustment to assets and liabilities
within a year are listed below.
– Impairment test of non-financial non-current assets
In compliance with the above accounting principles the
recoverability of the net assets is tested if there is any indication
for impairment. In the year 2008 the Goodwill was
completely impaired. The recoverable amount of the cashgenerating
unit is calculated using the Discounted Cash Flow
method, based on approved mid-range plans. These calculations
require management to make forward looking assumptions
and estimates.
For the Division Actives (cash-generating unit actives) the
value in use calculation with a discount rate (before taxes)
of 9.6% and a for the industry conservative growth of the
residual value of 1.25% resulted in a surplus of CHF 10.9
million. A growth rate of only 0.25% would have resulted in
an impairment of CHF 15.9 million. The annual growth rate
over the years 2009–2014 is 5.7% in average. An increase
of the WACC by 0.3% would have resulted in an impairment
of CHF 3.6 million.
For the Division Generics (Cash generating unit classical
generics) the value in use calculation with a discount rate
(before taxes) of 9.4% and a for the industry conservative
growth of the residual value of 1.25% resulted in a surplus
of CHF 34.3 million in 2009. A growth rate of only 0.25%
would have resulted in a surplus of CHF 24.8 million. The
annual growth rate over the years 2009–2014 is 5.1% in
average. An increase of the WACC by 0.3% would have
resulted in a surplus of CHF 30.0 million.
The recoverability of the non-financial non-current assets of
the CGU Inhalation technology in the amount of CHF 14.9
million was tested based on plans. The management is convinced
that these plans can be realized. Deviations from
these plans could have an impact on the valuation of these
non-current assets.
– Capitalized development costs Development costs for
both own developments and customer projects are capitalized
if the corresponding criteria are met. At December 31,
2009, intangible assets include CHF 28.7 million of capitalized
development costs. Management reviews the capitalized
development costs on a monthly basis for impairment.
For this purpose discounted cash-flow calculations are prepared.
These calculations are based on assumptions such as
discount rates and forecasts of future earnings, costs and
investments attributable to the individual projects. Due to
changes in the economic and market conditions the assumptions
used may differ from the actual results. These differences
could have a significant impact on capitalized development
costs in future periods.
– Potential deferred tax assets At December 31, 2009,
Siegfried has available unrecognized tax losses and tax credits
of CHF 268.1 million. Any substantial change in the
financial position of the subsidiary companies, especially in
the USA, would enable the use of these unrecognized tax
assets and capitalization of the corresponding tax receivables.
Management assesses the capitalization of tax losses
and tax credits on an annual basis based on the taxable
profits expected in the future (see also Note 7).
– Environmental provisions Provisions relate to obligations
to eliminate environmental pollution. Future decontamination
costs depend on the regulatory status and management
decisions on future construction projects. Depending
on the nature and scope of the construction projects
84 Financial Statements Siegfried Group

ealized, the obligation to eliminate detrimental effects on
the environment is increased or reduced. The environmental
provision amount (CHF 9.9 million) would as a consequence
be higher or lower (see also Note 15).
– Pensions and other post-employment benefits The
calculations of the recognized assets and liabilities from such
plans are based upon statistical and actuarial assumptions
such as discount rates, future increases in salaries and future
pension indexations. In addition the actuaries use statistically
based data for their assumptions such as future withdrawals
of participants from the plan and estimates on life expectancy.
Due to changes in the market and economic conditions,
the actuarial assumptions used may differ materially from
actual results. These differences could significantly impact
the assets or liabilities recognized in the Balance Sheet in
future periods (see also Note 19).
Financial Statements Siegfried Group 85

1. Scope of consolidation
The consolidation includes the following companies:
Group companies Share capital in local currencies %
Operating:
Siegfried Ltd, Zofingen (CH) 20 000 000 CHF 100.00
Siegfried (USA), Inc., Pennsville, NJ (USA) 500 000 USD 100.00
Penick Corporation, NJ (USA) – USD 100.00
Siegfried Generics International AG, Zofingen (CH) 2 000 000 CHF 100.00
Siegfried Generics (Malta) Ltd., Valletta (MT) 100 000 EUR 100.00
Siegfried Pharma Development GmbH, Munich (D) 25 000 EUR 100.00
Siegfried GmbH, Munich (D) 25 000 EUR 100.00
Siegfried Pharma International AG, Zofingen (CH) former Siegfried Biologics AG 100 000 CHF 100.00
Finance and administration:
Siegfried Holding AG, Zofingen (CH) 5 600 000 CHF 100.00
Siegfried Finance AG, Zofingen (CH) 14 000 000 CHF 100.00
Sigamed AG, Zug (CH) 500 000 CHF 100.00
Siegfried Deutschland Holding GmbH, Bad Säckingen (D) 1 790 000 EUR 100.00
Penick Holding Company, NJ (USA) 2 USD 100.00
Siegfried BV, Amsterdam (NL) in liquidation 80 000 EUR 100.00
Associated company
SCI Pharmtech Inc., Taoyuan (Taiwan) 361 617 420 TWD 16.11
Joint venture
Alpine Dragon Pharmaceuticals Ltd., Huangyang Gansu Province (China) 1 453 061 USD 49.00
Changes in the scope of consolidation
Compared with the prior year the scope of consolidation
is unchanged. The share in SCI Pharmtech Inc. decreased
from 16.67% to 16.11% as the company implemented a
management participation program with respective dilutive
effect.
86 Financial Statements Siegfried Group

2. Property, plant and equipment
Land and Machinery and Assets under
In 1000 CHF buildings equipment construction Total
Acquisition costs
As of January 1, 2008 155 502 465 871 39 927 661 300
Translation differences –2 759 –7 889 –1 259 –11 907
Additions – 6 044 29 272 35 316
Disposals –2 391 –5 360 –2 501 –10 252
Reclassifications 6 963 34 976 –41 939 –
As of December 31, 2008 157 315 493 642 23 500 674 457
Translation differences –673 –1 388 –31 –2 092
Additions 44 2 713 18 862 21 619
Disposals – –5 767 –209 –5 976
Reclassifications 13 357 12 156 –25 513 –
As of December 31, 2009 170 043 501 356 16 609 688 008
Accumulated depreciation and impairments
As of January 1, 2008 74 302 269 325 – 343 627
Impairments 20 354 48 000 – 68 354
Translation differences –1 145 –3 999 – –5 144
Depreciation charge 3 890 28 592 – 32 482
Disposals –2 165 –4 426 – –6 591
Reclassifications –60 60 – –
As of December 31, 2008 95 176 337 552 – 432 728
Translation differences –378 –1 069 – –1 447
Depreciation charge 3 144 22 285 – 25 429
Disposals – –4 315 – –4 315
Reclassifications –235 235 – –
As of December 31, 2009 97 707 354 688 – 452 395
Net book value December 31, 2009 72 336 146 668 16 609 235 613
Net book value December 31, 2008 62 139 156 090 23 500 241 729
Insurance value December 31, 2009 889 055
Insurance value December 31, 2008 852 133
As of 31.12.2009 commitments for the purchase of
Property, plant and equipment amounted to CHF 1.7 million
(2008: CHF 2.6 million).
Siegfried Generics Malta Ltd. received in 2008 investment
subsidies of CHF 6.0 million. Partially these government
grants were attached to certain conditions such as minimum
number of employees or minimum duration of operating
activity. The subsidies were deducted directly from the acquisition
cost of the assets and are recognized as income over
the useful life of the depreciable asset by way of a reduced
depreciation charge. As of 31.12.2009 capital investment
subsidies in the amount of CHF 6.0 million (2008: CHF 6.0
million) were directly deducted from the acquisition cost and
CHF 1.5 million (2008: CHF 1.0 million) from accumulated
depreciation. The depreciation charge of the reporting period
was reduced by CHF 0.5 million (2008: CHF 0.5 million).
In 2009 no additional investment subsidies were received.
Financial Statements Siegfried Group 87

3. Intangible assets
Trademarks, Capitalized
Licenses, Technology, Development
In 1000 CHF Goodwill Patents Client base costs Software Total
Acquisition cost
As of January 1, 2008
(before restatement) 22 150 15 081 7 442 7 512 6 545 58 730
Restatement – – – 23 637 – 23 637
As of January 1, 2008
(after restatement) 22 150 15 081 7 442 31 149 6 545 82 367
Translation differences –1 338 –739 –450 –631 –74 –3 232
Additions – 829 – 20 309 1 783 22 921
Disposals – –1 169 – – – –1 169
As of December 31, 2008 20 812 14 002 6 992 50 827 8 254 100 887
Translation differences –361 –199 –121 –459 –55 –1 195
Additions – 748 – 14 298 1 555 16 601
Disposals – – – – –22 –22
As of December 31, 2009 20 451 14 551 6 871 64 666 9 732 116 271
Accumulated amortization and impairments
As of January 1, 2008
(before restatement) – 2 750 1 922 1 140 4 047 9 859
Restatement – – – 5 843 – 5 843
As of January 1, 2008
(after restatement) – 2 750 1 922 6 983 4 047 15 702
Impairments 20 812 2 086 992 6 635 671 31 196
Translation differences – –161 –159 –152 –39 –511
Depreciation charge – 589 717 2 329 1 095 4 730
Disposals – –1 169 – –313 – –1 482
As of December 31, 2008 20 812 4 095 3 472 15 482 5 774 49 635
Impairments 1 – – – 16 209 – 16 209
Translation differences –361 –92 –87 –366 –33 –939
Depreciation charge – 481 612 4 647 1 400 7 140
Disposals – – – – –22 –22
As of December 31, 2009 20 451 4 484 3 997 35 972 7 119 72 023
Net book value December 31, 2009 – 10 067 2 874 28 694 2 613 44 248
Net book value December 31, 2008 2 – 9 907 3 520 35 345 2 480 51 252
1
Based on changed market expectations and corresponding adjustments of the plan figures impairments on Development projects were
recognized, this on a basis of value in use calculation with a pre-tax discount rate of 8.1%: In the Division Siegfried Actives CHF 9.1 million and in the Division
Siegfried Generics CHF 7.1 million.
2
Net book value January 1, 2008, see restatement on page 73
88 Financial Statements Siegfried Group

4. Investments in associated companies
and joint ventures
The share of the Siegfried Group in the assets, liabilities
and results of associated companies is set out in the
following table:
In 1000 CHF 2009
Country Assets Liabilities Net sales Profit/(Loss) Share in percent Carrying amount
Associate
SCI Pharmtech Inc. Taiwan 6 760 1 698 4 711 918 1 16.11% 5 238
Joint ventures
Alpine Dragon Pharmaceuticals Ltd. China 736 3 – –12 49.00% 733
Total 906 5 971
In 1000 CHF 2008
Country Assets Liabilities Net sales Profit/(Loss) Share in percent Carrying amount
Associate
SCI Pharmtech Inc. Taiwan 6 191 926 5 410 1 293 1 16.67% 5 265
Joint ventures
Alpine Dragon Pharmaceuticals Ltd. China 784 25 – –41 49.00% 759
Total 1 252 6 024
1
Based on expected results
In 1000 CHF 2009 2008
Change in Investments in associated
companies and Joint Ventures
As of January 1 6 024 5 477
Share in results 906 1 252
Other equity movements –941 –311
Translation differences –18 –394
As of December 31 5 971 6 024
The investment in SCI Pharmtech is included as an associated
company, because as a result of the seat in the Board of
Directors the opportunity for significant influence exists.
The shares in this company are listed on the stock exchange
in Taiwan. Calculated on the stock market quotation the
fair value of Siegfried’s interest in this company amounted
at 31.12. 2009 to about CHF 15.4 million (31.12.2008:
CHF 10.5 million). Because at the time of preparing this
Annual Report the annual accounts were not yet available,
estimates of the result, based on publicly available reports
and estimates by independent financial analysts, were used.
Alpine Dragon Pharmaceuticals Ltd. was incorporated during
2007 as a joint venture with the Chinese company, Gansu
Medical Alkaloids, Inc. The joint venture company is at present
in the development stage and therefore no sales have
yet been made and the impact on the financial statements
is immaterial. There are no contingent liabilities or payment
commitments in connection with this joint venture.
The investments in associated companies and joint ventures
include no goodwill at the reporting date.
Financial Statements Siegfried Group 89

5. Financial instruments
Financial assets and liabilities are classified in the following
categories:
Carrying amount Carrying amount Fair value Fair value
In 1000 CHF 2009 2008 2009 2008
Financial assets
Financial assets – at fair value through profit and loss
– derivative financial instruments – 434 – 434
Total Financial assets – at fair value through profit and loss – 434 – 434
Loans and receivables
– trade receivables 45 462 63 143 45 462 63 143
– other receivables 19 634 23 376 19 634 23 376
– cash 8 083 14 937 8 083 14 937
Total Loans and receivables 73 179 101 456 73 179 101 456
Available-for-sale financial assets
– Investments and securities held long-term 6 420 7 735 6 420 7 735
Total available-for-sale financial assets 6 420 7 735 6 420 7 735
Financial liabilities
At amortized cost
– trade payables 23 581 21 657 23 581 21 657
– other current liabilities 7 756 6 221 7 756 6 221
– non current financial liabilities 71 336 86 127 71 336 86 127
Total financial liabilities at amortized costs 102 673 114 005 102 673 114 005
Financial liabilities – at fair value through profit and loss
– interest rate swaps (CHF) 1 519 1 183 1 519 1 183
Total financial liabilities at fair value through profit and loss 1 519 1 183 1 519 1 183
Financial liabilities – “hedge accounting”
– interest rate swaps (USD) 2 335 3 117 2 335 3 117
Total financial liabilities – “hedge accounting” 2 335 3 117 2 335 3 117
90 Financial Statements Siegfried Group

6. Financial and other non-current assets
Financial assets are classified in the following categories:
In 1000 CHF 2009 2008
Shares Arena Pharmaceuticals Inc.,
San Diego, USA 5 484 6 555
Burill Life Sciences Capital Fund,
San Francisco, USA 926 1 025
Other non-current receivables 9 241 12 656
Other non-current liabilities 10 155
Total financial and other
non-current assets 15 661 20 391
Available-for-sale financial assets are measured at fair value.
In connection with the sale transaction with Arena Pharmaceuticals
GmbH in 2008 the Siegfried Group received
1 488 482 shares in this company. The shares are subject to
a non-disposal period of three years. The Arena shares are
measured at fair value, based on the stock exchange quotations
on the reporting date. The Arena shares are classified
as financial assets “available-for-sale”. Changes in the fair
value (after tax) were previously recognized in equity. As the
share price of the Arena shares has been significantly and for
prolonged period below its cost value, the shares were
impaired as of December 31, 2009. The cumulative loss was
removed from equity and an impairment loss of CHF 6.9 million
was recognized in the income statement.
The amount capitalized in the Burrill Fund represents the
market value of the capital portion according to valuation
documents received from the fund. Further investments in
the amount of USD 0.1 million (2008: USD 0.2 million) can
be withdrawn from the fund. At December 31, 2009, an
impairment loss of CHF 0.5 million was recognized as the
fair value of the investment in the Burrill Fund has been significantly
below cost for a prolonged period. Other securities
include various long-term investments, which are not traded
in an active market. Management determines the fair value
in these cases applying specific valuation methods, including
comparable transactions at market conditions and Discounted
Cash-Flow analyses.
Other non-current receivables include CHF 9.2 million due
from Arena Pharmaceuticals GmbH in connection with the
sale transaction in 2008.
Financial Statements Siegfried Group 91

7. Income taxes
Income taxes in the Consolidated Financial Statements
In 1000 CHF 2009 2008 1
Current income taxes –108 322
Deferred income taxes –4 949 –13 621
Total –5 057 –13 299
1
restated, see page 74
Analysis of expected and actual (effective)
income taxes
In 1000 CHF 2009 2008
Loss before taxes –40 320 –88 183
Expected tax rate (percent) 21.5 38.8
Expected tax income –8 684 –34 198
Non-taxable income –6 –274
Effect of expenses not tax deductible – 10 211
Effect of unrecognized deferred tax assets 4 044 17 615
Reversal of deferred tax liabilities –428 –6 391
Effect of different effective tax rates – –3
Previous years’ adjustments and other items 17 –259
Actual tax income –5 057 –13 299
As percentage of pre-tax loss 12.5 15.1
The expected average tax rate is calculated by multiplying
the taxable results of the individual group companies by the
applicable tax rate. In the previous year the expected Group
tax rate was comparatively high as companies with high
local tax rates suffered losses. The lower expected tax rate in
the reporting period is due to comparatively high losses in
countries with low tax rates.
The effective taxable income differs from the expected taxable
income mainly as a result of unrecognized deferred tax
assets deriving from local tax losses in the reporting period.
The deferred tax liabilities comprise the following significant
elements:
The deferred tax liabilities 2009 will for the most part be
realized after more than 12 months.
Tax losses not recognized Tax losses carried forward, tax
credits and deferred tax assets on temporary differences are
recognized only to the extent that it is probable that future
taxable profits will be available against which they can be
utilized. Management reviews annually the financial position
and the profit expectations of the group companies concerned.
Based on the loss situation in earlier years tax assets
deriving from accumulated tax losses have not been recognized.
The following unrecognized tax losses are available to
Siegfried:
In 1000 CHF 2009 2008
Expiry of unrecognized
tax losses and tax credits
Within one year 1 532 417
Between one and five years 21 723 12 021
More than five years 244 805 154 736
Total unrecognized tax losses
and tax credits 268 060 167 174
Taxes on retained earnings of Group companies As of
December 31, 2009 the total retained earnings of all Group
companies were CHF 91.1 million (2008: CHF 110.9 million).
In CHF 1000 2009 2008
Movements in recognized
deferred income taxes, net
Deferred tax liabilities, net, as of January 1 573 25 428
Credited to the consolidated income statement –4 949 –13 621
Charged/credited to equity 4 863 –10 687
Foreign currency translation and other –51 –547
Deferred tax liabilities, net,
as of December 31 436 573
1
restated, see page 73
In 1000 CHF 2009 2008
Deferred tax liabilities
Property, plant and equipment 190 860
Intangible assets –108 –479
Financial assets 85 332
Inventories 200 2 067
Provisions 152 1 069
Pension liabilities –82 –3 306
Other –1 30
Total deferred tax liabilities 436 573
92 Financial Statements Siegfried Group

8. Inventories
In 1 000 CHF 2009 2008 1 1.1.2008 1
Raw materials 21 166 29 885 30 566
Work in progress 44 449 56 554 61 819
Finished goods
and trade merchandise 45 440 44 402 55 637
Total inventories 111 055 130 841 148 022
1
restated, see page 73
Work in progress includes capitalized development costs of
service projects of the Siegfried Actives Division to be sold to
third parties in the total amount of CHF 1.6 million (2008:
CHF 3.9 million).
The carrying amount of inventories includes valuation
allowances of CHF 13.3 million (2008: CHF 14.3 million)
for slow-moving and obsolete inventory items.
In the Income Statement CHF 6.8 million (2008: CHF 8.2
million) was written off as impairments to costs of goods
sold.
The allowances for doubtful accounts are calculated using
the difference between the nominal amount of the receivables
and the estimated net amount collectible. The net
amount collectible is estimated on the basis of experience.
Receivables more than 6 months overdue in the amount of
CHF 0.3 million (2008: CHF 2.0 million) are included in the
allowance. 2009 already impaired receivables in the amount
of CHF 1.9 million (2008: CHF 0.1 million) are booked out.
In 1000 CHF 2009 2008
Change in the allowances
for doubtful accounts
Allowance at January 1 –2 327 –2 738
Allowances utilized 1 906 89
Cash received from receivables
provided for in prior years 170 527
Changes in allowances
charged against income –20 –257
Currency translation –18 52
Allowance at December 31 –289 –2 327
The trade receivables are denominated in the following
currencies:
9. Trade receivables
In 1000 CHF 2009 2008
Trade receivables 45 751 65 470
Provision for impairment –289 –2 327
Total trade receivables 45 462 63 143
In 1000 CHF 2009 2008
Currency
CHF 10 197 29 226
USD 26 890 25 877
EUR 8 375 8 040
Total trade receivables 45 462 63 143
The ageing structure of the trade receivables is as follows:
In 1000 CHF 2009 2008
Ageing structure
of the trade receivables
Not yet due 40 111 53 892
Overdue up to 1 month 4 483 5 699
Overdue between 1 and 3 months 840 3 509
Overdue between 3 and 6 months – 389
Overdue between 6 and 12 months – 62
Overdue more than 12 months 317 1 919
Total trade receivables 45 751 65 470
Allowances for doubtful accounts –289 –2 327
Total trade receivables 45 462 63 144
10. Other current assets
In 1 000 CHF 2009 2008
Other receivables 6 981 6 842
Prepaid expenses 3 412 3 878
Total other current assets 10 393 10 720
Other current assets include Value Added Tax receivables of
CHF 2.6 million (2008: CHF 3.7 million) as well as a receivable
from the sale of a license of CHF 4.0 million. Prepaid
expenses include miscellaneous prepayments and accruals.
Financial Statements Siegfried Group 93

11. Derivative financial instruments
The principles of Siegfried’s financial risk management are
described in the accounting principles. Within the framework of
these principles, Siegfried uses derivative financial instruments
to hedge foreign exchange and interest rate risks. The contract
value discloses the outstanding transaction volume.
Derivative financial instruments
Contract value Positive fair value Negative fair value
In 1000 CHF 2009 2008 2009 2008 2009 2008
Foreign currency swaps – 4 699 – 434 – –
Interest rate swaps
at fair value through profit and loss 40 000 40 000 – – 1 519 1 183
Interest rate swaps “CF hedges” 33 210 33 795 – – 2 335 3 117
Total 73 210 78 494 – 434 3 854 4 300
Foreign exchange contracts: At the balance sheet date there
were no open foreign exchange forward contracts. In the
previous year expected cash inflows of USD 4.7 million were
hedged with the aid of foreign exchange forward contracts.
Fair value changes in foreign exchange contracts are recognized
in the financial result.
A loan of USD 32 million raised in the Group in 2005 is to
be regarded as a hedge of the net investment in the US
subsidiary, Penick Holding Company (hedge of a net investment).
The exchange gain resulting from translating the
liability into CHF at the reporting date of CHF 0.6 million
(2008: CHF 2.2 million) has been recognized directly in
equity.
Interest rate swaps: Interest rate swaps were used to fix variable
interest loans in CHF and USD in the amount of CHF
73.2 million (2008: CHF 73.8 million). The fixed interest rates
at 31.12.2009 vary between 2.6% and 4.5% (2008: 2.6%
and 4.5%), the most important variable interest rates are
CHF LIBOR 3 months 0.3% (2008: 0.7%), USD LIBOR 0.3%
(2008: 1.4%) and EURIBOR 3 months 0.7% (2008: 2.9%).
The fair value changes of the interest rate swaps of CHF 40
million are recognized in the financial result. The interest rate
swap of USD 32 million qualifies as a hedge and therefore
the portion effective for hedging is recognized in equity.
12. Cash
Cash balances of CHF 8.1 million (2008: CHF 14.9 million)
are primarily current accounts with banks.
94 Financial Statements Siegfried Group

13. Treasury shares
Treasury shares are deducted at transaction value directly
from Equity. At 31.12. 2009 the nominal amount of the
treasury shares was CHF 65 476 (2008: CHF 59 156).
2008 Change 2009
Treasury shares
Shares reserved for
Employee Share Plan 8 762 3 160 11 922
Treasury shares not reserved 20 816 – 20 816
Total treasury shares 29 578 3 160 32 738
Total shares in issue 2 770 422 –3 160 2 767 262
Total Siegfried shares 2 800 000 – 2 800 000
and the financing of expected growth. As of 31.12.2009
CHF 71.2 million (2008: CHF 86.1 million) of this credit line
has been drawn; the covenants were met. In connection
with the decision not to capitalize development costs related
to the inhalation technology, an amendment of the
covenants was discussed with the banks in the reporting
period. The covenants were adapted to the new situation.
In addition the credit line of CHF 200 million was reduced
to CHF 120 million. At year-end, the company was again
negotiating with the banks to adjust the covenants, but the
credit line is unchanged. The company is confident that
these discussions will be concluded in the first quarter 2010.
The syndicated bank loan will be due for repayment in 2012.
Siegfried has the right to draw up to CHF 30.0 million in
additional debt capital outside this facility.
14. Financial liabilities
In 1000 CHF 2009 2008
Loans from banks 71 210 86 127
Other non-current liabilities 126 –
Total non-current interest bearing liabilities 71 336 86 127
Maturity and average interest rates of bank loans:
2009 2008
In the year 2012 71 210 86 127
Ø Interest rate in % 4.0% 5.4%
Total 71 210 86 127
15. Provisions
Environmental Other
In 1000 CHF provisions provisions Total
Statement of changes
As of December 31, 2008 10 522 4 809 15 331
Costs incurred –178 – –178
Additions, interest 601 1 717 2 318
Releases (unused provisions) –1 000 –1 255 –2 255
As of December 31, 2009 9 945 5 271 15 216
Of which current 3 595 5 271 8 866
of which non-current 6 350 – 6 350
Variable interest rate bank loans of CHF 40.0 million and
USD 32.0 million (2008: CHF 40.0 million and USD 32 million)
were fixed with interest rate swaps. The remaining
financial liabilities are subject to interest rate risks.
The financial liabilities are denominated in the following
currencies:
In 1000 CHF Total CHF EUR USD
As of
December 31, 2009
Bank loans 71 210 38 000 – 33 210
Other non-current
liabilities 126 –
Total 71 336 38 000 – 33 210
As of
December 31, 2008
Bank loans 86 127 30 000 22 332 33 795
Total 86 127 30 000 22 332 33 795
In August 2006 a credit line of a syndicated bank loan of
CHF 200 million was opened. This credit line was arranged
with a group of banks to secure planned capital expenditure
Environmental provisions The Siegfried Group produces
chemicals at various locations. As part of the manufacturing
process, undesirable incidents may arise that result in an
obligation to remedy pollutant effects on the environment.
Such obligations are recognized in the period when they
become apparent. A provision is recorded if it is expected
that the obligation results in an outflow of economic
resources in the medium term and if a reasonable estimate
of that obligation can be made. By their nature the amounts
and timing of any outflows are difficult to predict. In connection
with planned construction projects, environmental
investigations were performed. Possible remediation obligations
of CHF 9.9 million have been provided for. The start of
the planned construction projects is anticipated within the
next 15 years; in connection with the construction of a laboratory
building CHF 0.2 million of the provision was used;
the unused portion of the provision foreseen for this purpose
of CHF 1.0 million has been released to income. The
environmental provision was discounted to the present value
of the expected expenditures. Management reviews the provisions
annually based on regulatory changes or changes in
planned investments.
Financial Statements Siegfried Group 95

Other provisions relate to transfer costs and other costs
totaling CHF 5.3 million (2008: CHF 3.9 million) in direct
connection with the sale transaction with Arena Pharmaceuticals
GmbH in 2008 and provisions for other operating risks.
16. Other non-current liabilities
In 1000 CHF 2009 2008 1 1.1.2008 1
Employee benefits 1 712 3 113 2 932
Other non-current liabilities 3 933 3 417 3 978
Total other 5 645 6 530 6 910
1
restated see page 73
The liabilities for employee benefits relate to long service
awards foreseen in regulations. In the reporting period the
regulations were adapted, which resulted in a decrease of
the liabilities.
17. Trade payables
In 1000 CHF 2009 2008
Trade payables 23 581 21 657
Total 23 581 21 657
Trade payables are denominated in the following currencies:
In 1000 CHF 2009 2008
Currency
CHF 8 595 12 479
USD 9 703 4 139
EUR 5 273 4 980
Other 10 59
Total trade payables 23 581 21 657
18. Other current liabilities
In 1000 CHF 2009 2008 1.1.2008 1
Other liabilities 7 756 6 221 9 922
On account payments 1 100 302 429
Accrued expenses 17 086 26 525 27 719
Total other current liabilities 25 942 33 048 38 070
1
restated see page 73
Under other current liabilities are recorded reimbursements
to customers, Value Added Tax liabilities and other liabilities.
The accrued expenses include goods received, but not yet
invoiced, sales commissions, accruals for personnel costs and
social security charges as well as a number of expense and
income accruals.
96 Financial Statements Siegfried Group

19. Employee benefits and personnel
expenses
[In 1000 CHF] 2009 2008
Wages and salaries 82 003 81 963
Pension expense defined contribution plans 575 760
Pension expense/-income defined benefit plans 4 045 –4 230
Income/-expense other long-term
employee benefits –1 115 440
[Sozial- und übriger Personalaufwand] 15 800 19 423
Total personal expenses 101 308 98 356
In the year under review the average personnel strength
(in full time positions) was 823 (2008: 826).
IFIRC 14 (The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction) applies to all
post-employment defined benefits and other long-term
employee defined benefits. It addresses the question when
refunds or reductions in future contributions should be
regarded as available as an economic benefit to the company
and when a minimum funding requirement might give
rise to a supplemental liability. As already at December 31,
2008 the interpretation had no impact on the equity of the
Group at December 31, 2009.
The following amounts have been recorded in the profit and
loss account as personnel expense:
Staff pension schemes and other long-term employee
benefits The Group operates various employee benefit
plans in and outside of Switzerland for employees that satisfy
the participation criterions. Among these plans are
defined benefit plans and defined contribution plans that
cover the majority of employees for death, disability and
retirement. There are also plans for jubilee benefits or other
year of service depending plans which qualify as plans for
other long-term employee benefits.
Benefits are usually dependent on one or more factors such
as the number of years the employee was covered in the
plan, age, pension able salary and on the accumulated old
age capital. The assets of the funded pension plans are held
within separate foundations or insurances and may not
revert to the employer.
In Switzerland, the benefits are provided through the
autonomous pension fund “Pensionskasse Siegfried” and
four pension plans affiliated to a collective foundation. As of
January 1, 2009, three of these four schemes have been
merged with the “Pensionskasse Siegfried”. The “Pensionskasse
Siegfried” and the plan provided through the collective
foundation qualify under IAS 19 as defined benefit
plans.
During fiscal year 2009 a restructuring occurred in Switzerland.
For certain employees the restructuring program provided
enhanced early retirement benefits. Moreover, certain
retirement and jubilee benefits have been reduced. The pension
plan in the US was closed for new entries and frozen for
the current employees. In total a curtailment gain of CHF 2.3
million and an expense of CHF 1.4 million for termination
benefits resulted for the pension plans. For the other longterm
employee benefits the reduction in the benefits resulted
in a prior service income of CHF 1.6 million.
Employee benefits expense
Pension plans
Other long-term
employee benefits
In CHF million 2009 2008 2009 2008
Current service cost 6.1 6.6 0.3 0.3
Interest on obligation 8.4 8.7 0.1 0.1
Expected return on plan assets –9.6 –10.7 – –
Curtailments –2.3 –11.1 – –
Termination benefits 1.4 – – –
Amortization of unvested
past service cost – 2.3 –1.6 –
Recognized actuarial losses – – 0.1 –
Total employee benefits expense 4.0 –4.2 –1.1 0.4
Actual return on plan assets 24.8 –33.2
The following amounts are recognized in the statement of
comprehensive income for the pension plans.
Statement of comprehensive income
Pension plans
In CHF million 2009 2008
Opening recognized (gains)/losses as of 1.1. 31.9 –9.8
Actuarial (gains)/losses during the year 0.5 –2.1
Asset (gains)/losses –15.2 43.9
Exchange differences on foreign plans – –0.1
Closing recognized (gains)/losses as of 31.12. 17.2 31.9
Financial Statements Siegfried Group 97

Changes in the present value of the defined benefit
obligation
Pension plans
Other long-term
employee benefits
In CHF million 2009 2008 2009 2008
Opening defined benefit
obligation as of 1.1. 248.2 256.7 3.1 2.9
Current service cost 6.1 6.6 0.3 0.3
Plan participants’ contributions 3.4 3.3 – –
Interest on obligation 8.4 8.7 0.1 0.1
Benefit payments and net
transferals through pension assets –16.2 –15.0 – –
Benefit payments by employer –0.3 –0.3 –0.3 –0.2
Past service cost –0.2 2.0 –1.6 –
Curtailments –2.3 –11.2 – –
Termination benefits 1.4 – – –
Actuarial (gains) or losses 0.5 –2.0 0.1 –
Exchange differences
on foreign plans –0.1 –0.6 – –
Closing defined benefit
obligation as of 31.12. 248.9 248.2 1.7 3.1
Changes in the fair value of plan assets
[Vorsorgepläne]
In CHF million 2009 2008
Opening fair value of plan assets as of 1.1. 226.7 266.3
Plan participants’ contributions 3.4 3.3
Contributions by employer 5.6 5.6
Benefit payments and net transferals
through pension assets –16.2 –15.0
Expected return on plan assets 9.6 10.7
[Gewinn/(Verlust) aus Vermögensertrag] 15.2 –43.9
Exchange differences on foreign plans –0.2 –0.3
Closing fair value of assets as of 31.12. 244.1 226.7
The pension assets on 31.12.2009 include shares of the
Group with a market value of CHF 1.2 million (previous year:
CHF 1.2 million). The assets do not include any property or
assets used by the Group.
Expected employer contributions and expected benefit payments
by the employer for 2009 amount to CHF 5.7 million
for defined benefit plans and CHF 0.3 million for other longterm
benefits.
The net position of pension obligations in the balance sheet
can be summarized as follows:
Amount recognized in the Balance Sheet
Other long-term
In CHF million Pension plans employee benefits
Valuation date 31.12. 2009 2008 2009 2008
Present value of funded obligation 246.4 245.7 – –
Fair value of plan assets –244.1 –226.7 – –
Under-/(Over-)funding 2.3 19.0 – –
Present value of non-funded
obligation 2.5 2.5 1.7 3.1
Present value of
unfunded obligations –1.4 –1.6 – –
Recognized pension liabilities/-assets 3.4 19.9 1.7 3.1
Net liability
Amounts in the balance sheet 3.6 19.9 1.7 3.1
Liabilities –0.2 – – –
Recognized pension liabilities/-assets 3.4 19.9 1.7 3.1
of which current 0.9 0.9
of which non-current 2.5 18.9
The following principal assumptions form the basis for the
actuarial calculation:
Other long-term
In % Pension plans employee benefits
Valuation date 31.12. 2009 2008 2009 2008
Calculation of defined
benefit obligations
Discount rate 3.3 3.5 3.3 3.4
Future salary increases 2.5 2.5 2.5 2.5
Future pension indexations 0.5 0.6
Average life expectancy
man at age 65 18 years 18 years
Calculation of expense 2009 2008 2009 2008
Discount rate 3.5 3.5 3.4 3.5
Expected return on plan assets 1 4.3 4.2
1
The expected return on plan assets is based on actual interest rates of
bands and historical risk premiums for other classes of assets.
The pension assets are composed of the following significant
asset classes:
Asset classes pension plans
In %
Asset classes pension plans
Valuation date 31.12. 2009 2008
Equities 22 21
Bonds 33 35
Real estate 19 20
Qualified insurance policies 2 7
Others including cash 24 17
98 Financial Statements Siegfried Group

The following table shows how the actual development of
obligations and assets for the benefit plans deviates from
their expected development.
In million CHF
Valuation date 31.12. 2009 2008 2007 2006
Defined benefit obligation 248.9 248.2 256.7 277.2
Fair value of assets –244.1 –226.7 –266.3 –277.8
[Unter-/(Über-)deckung] 4.8 21.5 –9.6 –0.6
Experience adjustments
on plan liabilities 3.1 1.9 –4.8 6.4
Experience adjustments
on plan assets 15.2 –43.9 –2.9 7.5
Defined Contribution Plans The Group sponsors defined
contribution plans in the USA. The pension expense for
these plans is CHF 0.5 million and CHF 0.7 million in 2009
and 2008.
20. Other operating income
In 1000 CHF 2009 2008
Gain on asset sale 59 13 537
Royalty income 1 730 1 708
Income from firefighting courses 1 416 1 587
Sundry other income 1 220 1 705
Total other operating income 4 425 18 537
Financial Statements Siegfried Group 99

21. Financial result
Total
Total
In 1000 CHF 2009 2008
Interest income from banks 90 655
Interest income from
non-current receivables 684 468
Income from investment 83 2
Financial income 857 1 125
Interest expense on
financial liabilities –4 949 –3 883
Interest expense on
non-current provisions –412 –154
Impairment on «AFS»-Financial assets –7 420 –
Change in value of derivative –336 –1 752
Bank charges and arranger fees –402 –279
Financial expenses –13 519 –6 068
Exchange rate differences –823 243
The arranger fees for the renewal of the syndicated bank
loan are charged to expenses over the duration of the
facility.
22. Loss/Earnings per share
Earnings per share are calculated by dividing the net
profit/loss attributable to the shareholders of Siegfried Holding
AG of CHF –35.3 million (2008: CHF –74.8 million) by
the weighted average number of shares outstanding, total
2 758 104 shares (2008: 2 771 432). Treasury shares are
deducted in calculating the weighted average number of
shares outstanding. There are no equity instruments outstanding
to dilute the amounts disclosed.
23. Dividend per share
On April 8, 2009, the shareholders approved in respect of
the financial year 2008 the distribution of a gross dividend
of CHF 2.10 per nominal share (previous year: CHF 4.20).
For 2009 it will be proposed to the Annual General Meeting
on April 14, 2010, to renounce a dividend payment.
24. Commitments and contingencies
The operations of the Group companies continue to be
exposed to risks from political, legal, fiscal and regulatory
developments, including those related to environmental protection.
The nature and frequency of these developments
and events, which are not covered by insurance, are not predictable.
Possible obligations that are dependent on future
events are disclosed as contingent liabilities. As of December
31, 2009, contingent liabilities amount to CHF 1.0 million
(2008: CHF 1.5 million).
On April 30, 2007, the Siegfried Group sold the Business
Unit Sidroga to Santo Holding AG, resident in Zollikon
(Switzerland). Following the closing differences arose
between the parties. On November 30, 2007, Santo Holding
AG initiated an arbitration procedure and made several
claims (damages, partial nullity and rescission action). The
Siegfried Group considers the claims brought by the purchaser
to be unjustified. Because the procedure is still in
process, no further information will be given.
Contingent liabilities for additional purchase price payments
and royalty payments in connection with the acquisition of
the Penick companies in May 2005 are as follows:
If annual sales of the acquired products exceed USD 30 million
prior to 2013, an additional payment of USD 14 million
is due to the seller. Royalty payments of 5% are due on
annual sales exceeding USD 45 million until 2014. It is not
expected that these sales limits will be exceeded.
25. Maturity of rental and lease payments
Operating
leases
Operating
leases
In 1000 CHF 2009 2008
Due under 1 year 1 296 593
Due between 1 and 2 years 1 109 456
Due between 2 and 3 years 975 257
Due between 3 and 4 years 660 414
Due between 4 and 5 years 512 402
Due after 5 years 43 2 917
Total payments 4 595 5 039
Of the leasing payments CHF 1.7 million (2008: CHF 4.3 million)
relate to the production facility in Malta.
26. Transactions with related parties
As the parent company, Siegfried Holding AG directly or
indirectly owns all investments in the Siegfried Group. The
Camellia Group is the largest shareholder, with interests of
33.35% in Siegfried Holding AG. During the year under
review there were no transactions between the two groups.
The companies belonging to the Siegfried Group are listed
under “Scope of consolidation“ (Note 1). During the reporting
period products to the value of CHF 1.1 million (2008:
100 Financial Statements Siegfried Group

CHF 1.2 million) were purchased from the associated company,
SCI Pharmtech Inc., Taiwan. All transactions between
fully consolidated companies have been eliminated as part
of the consolidation and are not described in this note.
Compensation of the members of the Board of Directors
and management: For the reporting year the members
of the Board of Directors were paid a total of CHF 0.7
million (2008: CHF 0.7 million).
were purchased from the plan. The total funds accumulated
as of December 31, 2009 entitle plan participants to receive
3 938 shares (2008: 3 407 shares).
28. Subsequent events
No events requiring disclosure occurred between the balance
sheet date and the date of the audit report.
In 2009 the remuneration of the members of management
was CHF 3.3 million (2008: CHF 4.4 million). The total remuneration
includes pension fund contributions of CHF 0.4 million
(2008: CHF 0.4 million).
At the end of the year there were no amounts receivable
from the members of the management team (2008:
CHF 16 000), otherwise there were no outstanding receivables
or liabilities from transactions with related parties.
The expense related to the Employee Share Plan was for the
Board of Directors CHF 39 600 (2008: CHF 73 900) and for
management CHF 55 600 (2008: CHF 40 300).
In 2008, the total remuneration of CHF 4.4 million included
wage continuation of CHF 499 015 and termination pay of
CHF 500 000 to the former CEO. The mandatory disclosures
of remuneration paid to executive bodies under Swiss law
(CO 663b bis ) are an integral part of the financial statements
of Siegfried Holding AG.
27. Employee Share Plan
The total costs for the Employee Share Plan in the year under
review amounted to CHF 0.4 million (2008: CHF 0.3 million).
In the reporting period 14 193 shares (2008: 7 265 shares)
29. Segment information
The Siegfried Group applied early the new standard IFRS 8,
Operating segments, which became compulsory from
1.1.2009, in 2007. The operating segments, which form the
basis for the segment information, conform with the internal
reporting and are based on two divisions:
The Division Siegfried Actives comprises the contract specific
patented pharmaceutical ingredients for researching
pharmaceutical companies (exclusive synthesis) and own out
of patent active ingredients for various customers (multiclient
products).
The Division Siegfried Generics includes finished pharmaceutical
products and the corresponding registration dossiers
for generics and development costs in connection with the
development of inhalation technology.
Management monitors the performance by using the operating
results of the divisions and this information also forms
the basis for taking decisions about the allocation of
resources.
Transactions between the divisions are on the basis of
comparable prices with third parties.
Financial Statements Siegfried Group 101

Financial year 2009
Corporate and
Siegfried Actives Siegfried Generics Eliminations Group
Net sales 220.9 62.1 – 283.0
Operating result before special charges and impairment –1.5 –2.1 1 –3.7 –7.3
Operating result after special charges and impairment –10.9 –8.9 1 –7.9 –27.7
Financial result, net –12.6
Profit before taxes –40.3
Segment assets 365.4 85.8 4.2 455.4
Unallocated assets – – 21.7 21.7
Total assets 365.4 85.8 25.9 477.1
Segment liabilities 51.5 20.4 1.9 73.8
Unallocated liabilities – – 75.9 75.9
Total liabilities 51.5 20.4 77.8 149.7
Segment investments 29.7 8.5 – 38.2
Segment depreciation 27.4 5.1 0.1 32.6
Segment impairment 9.4 6.8 – 16.2
1
In the reporting period the opeating result includes CHF 13.4 million development costs related to the build-up of inhalation technology
Financial year 2008
Corporate and
Siegfried Actives Siegfried Generics Eliminations Group
Net sales 191.6 97.7 – 289.3 2
Operating result before impairment –5.5 26.7 1 –6.4 14.8
Operating result after impairment –85.4 7.1 1 –6.4 –84.7
Financial result, net –3.5
Profit before taxes –88.2
Segment assets 415.2 93.4 4.0 512.6 2
Unallocated assets – – 26.9 26.9
Total assets 415.2 93.4 30.9 539.5
Segment liabilities 69.7 22.6 4.2 96.5 2
Unallocated liabilities – – 91.0 91.0
Total liabilities 69.7 22.6 95.2 187.5
Segment investments 37.4 13.9 – 51.3
Segment depreciation 31.2 6.0 – 37.2 2
Segment impairment 79.9 19.6 – 99.5 2
1
The opeating result includes CHF 11.8 million development costs related to the build-up of inhalation technology
2
restated see page 74
102 Financial Statements Siegfried Group

In addition to sales of products net sales include development
services invoiced and compensation for services
provided under cooperation agreements with customers
and royalties.
Net sales to third parties
In CHF million 2009 2008 1
Sales of products 273.6 264.5
Development services 1.6 3.5
Services 7.8 21.3
Total net sales 283.0 289.3
1
restated see page 74
Sales between the divisions are eliminated in the Consolidated
Income Statement. The segment assets include property,
plant and equipment, intangible assets, inventories, trade
receivables and operating cash. Tax assets and financial
assets are excluded.
The segment liabilities include operating liabilities.
Tax liabilities and financial liabilities are excluded.
Segment investments include additions to fixed assets
and intangible assets.
Geographic information The most important production
facilities are located in Switzerland and the USA. The key
markets are Western Europe and the USA.
Net sales to third parties 1
In CHF million 2009 2008 2
USA 115.7 76.5
Switzerland 60.5 58.3
Other regions 106.8 154.5
Total 283.0 289.3
1
by market location
2
restated see page 74
In 2009 the Division Siegfried Actives generated with one
customer a turnover of CHF 38.8 million (2008: with one
customer CHF 44.3).
Segment assets 1
In CHF million 2009 2008 2
Europe (excluding Switzerland) 36.3 36.9
USA 120.0 127.5
Switzerland 299.2 348.2
Total 455.5 512.6
1
by production location
2
restated see page 73
Financial Statements Siegfried Group 103

Report of the Statutory Auditor
to the General Meeting of Siegfried Holding AG, Zofingen
Report of the statutory auditor on the consolidated
financial statements
As statutory auditor, we have audited the consolidated
financial statements of Siegfried Holding AG, which comprise
the balance sheet, income statement, statement
of comprehensive income, cash flow statement, statement
of changes in equity and notes (pages 68 to 103), for the
year ended December 31, 2009.
Board of Directors’ Responsibility
The Board of Directors is responsible for the preparation and
fair presentation of the consolidated financial statements in
accordance with the International Financial Reporting Standards
(IFRS) and the requirements of Swiss law. This responsibility
includes designing, implementing and maintaining an
internal control system relevant to the preparation and fair
presentation of consolidated financial statements that are
free from material misstatement, whether due to fraud or
error. The Board of Directors is further responsible for selecting
and applying appropriate accounting policies and making
accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We conducted
our audit in accordance with Swiss law and Swiss Auditing
Standards as well as the International Standards on
Auditing. Those standards require that we plan and perform
the audit to obtain reasonable assurance whether the
consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on
the auditor’s judgment, including the assessment of the risks
of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk
assessments, the auditor considers the internal control system
relevant to the entity’s preparation and fair presentation
of the consolidated financial statements in order to design
audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control system. An audit
also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of accounting estimates
made, as well as evaluating the overall presentation of
the consolidated financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements for the
year ended December 31, 2009 give a true and fair view of
the financial position, the results of operations and the cash
flows in accordance with the International Financial Reporting
Standards (IFRS) and comply with Swiss law.
Report on other legal requirements
We confirm that we meet the legal requirements on licensing
according to the Auditor Oversight Act (AOA) and independence
(article 728 CO and article 11 AOA) and that there
are no circumstances incompatible with our independence.
In accordance with article 728a paragraph 1 item 3 CO and
Swiss Auditing Standard 890, we confirm that an internal
control system exists which has been designed for the preparation
of consolidated financial statements according to the
instructions of the Board of Directors.
We recommend that the consolidated financial statements
submitted to you be approved.
PricewaterhouseCoopers AG
Dr. Matthias Jeger
Audit expert
Auditor in charge
Basel, March 3, 2010
Thomas Illi
Audit expert
104 Financial Statements Siegfried Group

Five-year overview 2005 – 2009, consolidated figures
2009 2008 2007 2006 2005
Net sales 3 CHF million 283.0 289.3 318.3 359.8 318.3
Change vs. previous year Percent –2.2 –9.1 –11.5 13.0 –1.0
Operating profit (EBIT) 1,3 CHF million –7.3 12.3 30.5 41.1 42.9
Change vs. previous year Percent n.a. –70.2 –25.8 –4.2 28.4
Operating margin Percent n.a. 4.2 9.6 11.4 13.5
EBITDA 1,3 CHF million 25.3 52.0 69.0 78.9 79.0
Change vs. previous year Percent –73.4 –44.1 –22.5 –0.1 18.6
EBITDA margin Percent 8.9 18.0 21.7 21.9 24.8
Net profit CHF million –35.3 –74.9 49.7 32.4 36.5
Change vs. previous year Percent n.a. n.a. 63.4 –21.2 152.6
Cash flow from operating activities 3 CHF million 45.5 26.8 9.2 53.7 47.6
Change vs. previous year Percent 394.2 –50.0 –82.9 12.8 –34.1
As % of net sales 16.1 9.3 2.9 14.9 15.0
Total assets CHF million 477.1 539.5 658.7 690.8 677.4
Change vs. previous year Percent –27.6 –21.9 –4.6 2.0 15.6
Equity CHF million 327.3 327.3 479.8 445.5 435.4
Change vs. previous year Percent –31.8 –26.5 7.7 2.3 12.2
Current assets CHF million 175.6 220.1 253.9 250.5 227.8
Change vs. previous year Percent –30.8 –12.1 1.4 10.0 13.2
Non-current assets CHF million 301.5 319.4 385.2 435.5 449.6
Change vs. previous year Percent –21.7 –26.7 –11.5 –3.1 16.9
Current liabilities CHF million 63.5 64.4 56.7 76.7 65.7
Change vs. previous year Percent 12.0 –16.1 –26.1 16.7 21.2
Non-current liabilities CHF million 86.2 123.1 122.2 168.7 176.4
Change vs. previous year Percent –29.4 –27.0 –27.6 –4.4 22.8
Capital expenditure 3 CHF million 21.6 35.3 35.5 35.8 29.6
Change vs. previous year Percent –39.1 –1.4 –0.8 20.9 12.5
As % of net sales 7.6 12.2 11.2 9.9 9.3
Depreciation charge/impairment 3 CHF million 48.8 136.8 38.5 37.8 36.1
Change vs. previous year Percent 26.7 261.8 1.9 4.7 3.1
As % of net sales 17.2 47.3 12.1 10.5 11.3
Personnel expenses 3 CHF million 101.3 98.4 108.6 121.9 119.0
Change vs. previous year Percent –6.7 –19.3 –10.9 2.4 –7.4
As % of net sales 35.8 34.0 34.1 33.9 37.4
Employees 2,3 Number 823 826 867 967 913
Change vs. previous year Percent –5.1 –14.6 –10.3 5.9 –5.7
Sales per employee CHF million 343 900 350 300 367 000 372 000 349 000
Change vs. previous year Percent –6.3 –5.8 –1.3 6.6 5.1
1
2004* excluding restructuring costs of CHF 10.2 million
2
Annual average
3
2007 Continuing operations
Financial Statements Siegfried Group 105

John Odilon Scerri, Malta
Technical Coordinator
I’ve worked in the pharmaceutical
branch for over 32 years, really since
the day I finished school. During
this time I’ve done almost everything
you can do in this business. I spent
12 years as an analyst in quality control,
12 years in production, and the
other eight years as a formulation
scientist in R&D, in business development,
and now, as a product manager
for product transfers.
In 2008, I began at Siegfried in Malta,
the most beautiful island in the
Mediterranean Sea. At the time, I
thought my know-how and experience
were enough to continue at Siegfried
as I had done before. To my surprise,
I had to deal with completely different
and new procedures and technologies.
Once again I realized how true it is
that “you never stop learning in life.”
The moments of greatest job satisfaction
are when we successfully transfer
a product from one site to another,
especially considering the differences
in equipment and – yes, why not –
the climate.
Next to my job, which I love very
much, my private life with my wife is
very important. A typical, very fulfilling
weekend starts on Friday evening with
a long, relaxing walk, going to the cinema,
or enjoying a fine meal at one of
the great restaurants close to where
we live. I like to split Saturdays into
two parts. The mornings are for doing
what I was unable to do during the
week, then a nice lunch, rest, and off
we go around 9 p.m. In the summer
we are often in the “Numero Uno,”
a fantastic place to relax, dance and
meet friends – until the early hours of
the morning. Some people might
think, “What’s the old guy doing in a
disco” But I really believe that you are
as old as you feel. And why should I
stop dancing in discos just because
I’m now over 50
I enjoy music a lot and have collected
thousands of tracks of all types of music
over the years: dance music, pop,
country, techno, trance, house and so
on. I keep myself up-to-date with the
latest Top 100 charts and take pleasure
in working as a DJ for parties, weddings,
and other events. It’s a lot of fun
– and also lets me earn something for
my vacation fund.
That’s important because I love to travel
abroad with my wife. It’s fun and
keeps mind and body fit. You learn
about new places, people and cultures.
But you can also discover a lot right
here at home in Malta. I am a member
of a group called “Ramblers.” We organize
hikes on our beautiful islands to
learn more about our long and exciting
history and how our culture was
formed by many different influences.
During these outings I always bring my
camera. I also enjoy showing visitors
the scenic parts of our islands, taking
people for day cruises on a boat to our
sister island, Gozo. There they experience
unforgettable moments and
fantastic views of caves that you can’t
see from anywhere else.
I’m interested in a lot of things and
have had many hobbies in my life.
Many came and went but a few
remain. For example, for years I built
models of ships, cars and airplanes,
even winning some competitions.
Some of the models that I still have are
from the 1950’s. When I was younger
I also restored cars. Getting them to
run and make them look good was a
passion – but also too expensive to do
for long.
Maybe when I retire I’ll start restoring
cars again. But for the time being
I really like my work.
107

Financial Statements Siegfried Holding Ltd
Balance Sheet of Siegfried Holding AG
In CHF 31.12.09 31.12.08
Assets
Non-current assets
Fixed assets 5 597 8 452
Intangible assets 61 846 55 160
Investments in subsidiaries and affiliates 78 139 650 76 139 761
Loans to subsidiaries 248 005 432 302 944 452
Total non-current assets 326 212 525 379 147 825
Current assets
Other accounts receivable from third parties 6 382 7 564
Other accounts receivable from subsidiaries 0 586 139
Prepaid expenses 2 239 949 1 859 198
Securities 1 067 360 952 757
Cash and cash equivalents 348 042 241 965
Total current assets 3 661 733 3 647 623
Total assets 329 874 258 382 795 448
In CHF 31.12.09 31.12.08
Liabilities and shareholders‘ equity
Shareholders‘ equity
Share capital 5 600 000 5 600 000
Legal reserves 2 800 000 2 800 000
Reserves for treasury shares 4 866 725 5 040 859
Free reserves 283 311 631 363 517 293
Accumulated retained earnings/losses 17 851 330 –74 640 462
Total shareholders‘ equity 314 429 686 302 317 690
Liabilities
Financial liabilities to third parties 0 63 795 200
Financial liabilities to subsidiaries 8 451 080 3 117 020
Other liabilities to third parties 82 656 204 648
Other liablities to subsidiaries 920 306 0
Accrued expenses 5 990 530 13 360 890
Total liabilities 15 444 572 80 477 758
Total liabilities and shareholders‘ equity 329 874 258 382 795 448
108 Financial Statements Siegfried Holding AG

Income Statement of Siegfried Holding AG
In CHF 2009 2008
Income
Income from investments 26 000 000 0
Financial income 5 472 667 25 569 594
Management service fees 7 337 759 9 065 961
Total income 38 810 426 34 635 555
Expenses
Administrative expenses 3 284 380 3 060 650
Financial expenses 17 578 423 19 530 784
Taxes 62 623 66 399
Depreciation 33 670 41 241
Impairment investments in subsidiaries 0 87 122 548
Total expenses 20 959 096 109 821 622
Net profit/loss 17 851 330 –75 186 067
Notes to the Financial Statements
of Siegfried Holding AG (in accordance
with Art. 663b and c of the Swiss Code
of Obligations)
Guarantees and securities: CHF 134.5 million (2008:
CHF 222.5 million). To secure the syndicated loan drawn
down Siegfried Holding AG has assigned receivables from
subsidiary companies in favor of the lending banks. At
December 31, 2009, there was no amount drawn down
(2008: CHF 63.8 million) and therefore no receivables were
assigned.
For risks in connection with the sale of the Business Unit
Sidroga refer to Note 24 of the Consolidated Financial
Statements.
According to its own statement, Tweedy, Browne Company
LLC, New York, USA, holds an interest of 9.83% of the
shares in Siegfried Holding AG. 3% of these shares are registered
with voting rights, the remaining shares – as far as
notified – without voting rights.
According to its own statement, the Bayerninvest Kapitalgesellschaft
mbH, München, a 100% subsidiary of the Kreissparkasse
Biberach, holds an interest of 3.79% of the shares
in Siegfried Holding AG. These shares are not registered and
are therefore without voting rights.
Treasury shares During the reporting period Siegfried
Holding AG and one of its subsidiaries have purchased and
sold Siegfried shares, resulting in a net increase of 3 160
shares.
Insurance value of fixed assets: CHF 0.1 million
(2008: CHF 0.2 million).
All subsidiaries of significance for an assessment of the
Group’s financial position and earnings are listed on
page 86.
Shareholders representing more than 3% of the votes
included in the shareholder‘s register are: The Camellia
Group (consisting of Camellia Holding Ltd., Glarus and
Affish Ltd, Linton) holds an interest of 33.35% (933 680
shares) and the Siegfried Shareholders Group (consisting of
the heirs of Dr. h.c. Hans Siegfried and Sigamed AG, Zug)
3.70% (103 630 shares). These Groups have entered into
agreements entitling each other with preemption rights for
shares which the other Group may wish to sell.
CHF Number of shares Average prices
At January 1, 2008 26 891 184.1
Purchases Jan.–Dec. 08 11 652 147.1
Sales Jan.–Dec. 08 8 965 165.6
At December 31, 2008 29 578 170.4
Purchases Jan.–Dec. 09 103 601 70.9
Sales Jan.–Dec. 09 100 441 83.6
At December 31, 2009 32 738 148.7
General information Siegfried Holding AG holds directly
or indirectly all subsidiaries of the Siegfried Group. The
Financial Statements of Siegfried Holding AG are prepared in
accordance with Swiss company law.
Financial Statements Siegfried Holding AG 109

Transparency Law Art. 663b and Art. 663c CO
Content and procedure for determining remuneration
and profit participation scheme
The members of the Board of Directors receive for their work
remuneration, which is determined by the entire Board on
motion of the Nomination and Compensation Committee.
The management of the Siegfried Group is remunerated on
a performance basis. The variable component foreseen is
between 5% and 40% of the base salary. The effective variable
component depends on achieving business targets in
their area of responsibility and individual objectives. The
achievement of business targets influences the variable component
with a factor of 0 in the worst case and of 1.75 in
the best case. The personal achievement factor lies between
0 and 1.25. The variable component can achieve a maximum
factor of 1.5. The Nomination & Compensation Committee
of the Board of Directors determines the remuneration
of the members of management.
Employee share plan In August 2005 the Siegfried Group
initiated for all employees in Switzerland a share savings
plan. Employees may invest at most 10 percent of their base
salary in this share plan and with this purchase Siegfried
shares. Board members may participate in this share plan up
to a maximum of 90% of their total remuneration. The
shares are subject to a holding period of three years. The
company contributes 30% to the employees’ paid in
amount. The employees may in August of each year withdraw
from the plan or change their participation amounts.
Since September 2005 the amounts fixed by the employees
themselves each August are deducted monthly from their
pay.
In aggregate, in 2009 123 (2008: 153) employees and
6 (2008: 6) board members participated in the share
savings plan.
Compensation to members of executive bodies in
office The members of the Board of Directors receive annual
compensation of CHF 50 000 plus a lump-sum CHF 5 000
for expenses, the Chairman of the Board CHF 270 000 plus
CHF 20 000 lump-sum expenses and the Deputy Chairman
CHF 60 000, plus CHF 10 000 lump-sum expenses. The
compensation paid to members of the Board of Directors
therefore amounts to CHF 635 000 (2008: CHF 635 000).
Under the terms of the Employee Share Plan board members
were also entitled to purchase shares with a rebate of 30%
financed by the firm. The individual members receive compensation
as follows:
Contribution for Expenditure for
share savings social security
Board of Directors Position Remuneration plan (AHV) Total 2009 Total 2008
Markus Altwegg Chairman 290 000 15 713 13 580 319 293 335 729
Thomas Staehelin Deputy chairman 70 000 6 226 2 682 78 908 83 471
Bernard A. Siegfried Honorary Chairman and member 55 000 9 384 2 150 66 534 76 438
Susy Brüschweiler Member 55 000 1 061 3 088 59 149 60 235
Felix Gutzwiller Member 55 000 2 119 3 153 60 272 62 443
Felix K. Meyer Member 55 000 5 070 3 331 63 401 64 517
Malcolm Perkins Member 55 000 0 3 035 58 035 57 525
Total 635 000 39 573 31 019 705 592 740 358
Contribution for Expenditure for
share savings social security
Executive management Position Remuneration plan (AHV/pension) Total 2009 Total 2008
Executive management 2 783 569 55 636 426 673 3 265 878 4 366 751
Highest individual compensation:
President
Hubert Stückler Siegfried Actives 553 063 2 509 148 803 704 375
Highest individual compensation:
Douglas C. Günthardt former CEO 1 525 607 8 999 175 916 1 710 522
Compensation paid to former members of executive
management The above remuneration of CHF 4.4 million
for the year 2008 included also wage continuation of
CHF 0.5 million and a termination pay of CHF 0.5 million
to the former CEO.
Share ownership On December 31, 2009, the non-executive
members of the Board of Directors and persons closely
related to them owned 70 742 (2008: 62 529) registered
shares in Siegfried Holding AG. This represents 2.5% (2008:
2.23%) of the entire share capital of Siegfried Holding AG.
The members of the management (including persons closely
110 Financial Statements Siegfried Holding AG

elated to them) owned at the same date 2 945 (2008:
7 257 including executive member of the Board of Directors)
registered shares, 0.11% (2008: 0.26%) of the share capital
of Siegfried Holding AG.
Year 2009
Board of Directors Position Number of shares of which blocked 1
Markus Altwegg Chairman of the Board 6 350 2 685
Thomas Staehelin Deputy chairman of the Board 7 309 860
Bernard Siegfried 2 Honorary chairman and member 55 531 1 490
Susy Brüschweiler Member 269 207
Felix Gutzwiller Member 767 360
Felix K. Meyer Member 516 516
Malcolm Perkins Member 0 0
Executive management
Rudolf Hanko CEO 500 500
Michael Hüsler CFO 0 0
Hanspeter Brun Head HR 945 761
Peter A. Gehler CCO 409 409
Marianne Späne President Siegfried Generics 594 482
Hubert Stückler President Siegfried Actives 497 398
1
blocked shares in connection with the Employee Share Plan
2
Bernard A. Siegfried is a member of the shareholders’ group Siegfried, which owns 3.70% or 103 630 shares, and
together with the Camellia Group with an interest of 33.35% or 933 680 shares form a shareholders’ group.
Year 2008
Board of Directors Position Number of shares of which blocked 1
Markus Altwegg Chairman of the Board and CEO 5 122 2 122
Thomas Staehelin Deputy chairman of the Board 6 823 623
Bernard Siegfried 2 Honorary chairman and member 54 798 1 131
Susy Brüschweiler Member 186 186
Felix Gutzwiller Member 601 401
Felix K. Meyer Member 121 121
Malcolm Perkins Member 0 0
Executive management
Richard Schindler CFO 660 660
Hanspeter Brun Head HR 555 545
Peter A. Gehler CCO 375 375
Marianne Späne President Siegfried Generics 244 244
Hubert Stückler President Siegfried Actives 301 301
1
blocked shares in connection with the Employee Share Plan
2
Bernard A. Siegfried is a member of the shareholders’ group Siegfried, which owns 3.67% or 102 897 shares, and
together with the Camellia Group with an interest of 33.35% or 933 680 shares form a shareholders’ group.
Loans to members of executive bodies The members of
the Board of Directors or of management and persons closely
related to them are, or were, in the current or preceding
financial year not interested in transactions beyond the
normal business activity of Siegfried Holding AG or of one
of its group companies or in other transactions that in form
or substance were unusual, but important for Siegfried
Holding AG.
At December 31, 2009, Siegfried Holding AG and its group
companies have not granted securities, loans, advances or
credits to the members of the Board of Directors or of the
management or to persons closely related to them. There
were no expense advances to members of the management
(2008: CHF 16 000).
Risk management The Board of Directors and management
are responsible for the risk management process of the
Financial Statements Siegfried Holding AG 111

Siegfried Group, in which the risks of Siegfried Holding AG
are included. In this connection the business risks and their
development are analyzed and it is ensured that the measures
necessary for their limitation are taken. Special attention
is paid to financial reporting risks. A more detailed
description of the risk assessment can be found in the Notes
to the Consolidated Financial Statements under “Risk management”
on page 80.
Balance Sheet
Non-current assets Investments in subsidiaries and affiliates
include those companies in which Siegfried Holding AG
has an interest of more than 50% and the minority interests
in SCI Pharmtech Inc. Taoyuan, Taiwan and Alpine Dragon
Pharmaceuticals Ltd., Huangyang, China. In the reporting
period, Siegfried Holding AG has taken over the investment
in Siegfried Generics International AG from Siegfried Ltd.
The investments are valued at acquisition cost less valuation
allowances. The long-term loans to affiliates were used for
the financing of capital expenditures and other operational
activities. The intangible assets include capitalized software.
Current assets Prepaid expenses include the arranger fee
for the renewal of the syndicated bank loan, which is
charged to expense over the duration of the loan, as well as
the accrual accounting for several items of income. Securities
are stated at the lower of cost or market value at the
balance sheet date.
Shareholders‘ equity The share capital of CHF 5.6 million
comprises 2,800,000 registered shares of CHF 2 nominal value
each.
Ordinary reserves are unchanged at CHF 2.8 million. The
accumulated deficit of CHF 74.6 million of the previous year
was charged against free reserves. In addition the reserves
for treasury shares were reduced by CHF 0.2 million in favor
of the free reserves, reflecting the net value of purchases
and sales during the reporting period, measured at cost.
Liabilities As of December 31, 2009, the syndicated bank
loan of the Siegfried Group with a credit line of CHF 120
million (2008: 200 million) was solely utilized by a subsidiary
company. In the previous year, Siegfried Holding AG had
drawn down CHF 63.8 million. The syndicated bank loan
expires in February 2012.
Accrued expenses include the deferrals and accruals of
various income and expense items.
Income Statement Income from investments includes
CHF 26.0 million of dividends received from subsidiaries.
Financial income consists of interest on receivables from
subsidiaries, foreign exchange gains and income from
the securities portfolio. Management service fees relate to
services provided to subsidiaries.
Financial expenses include interest on loans from third parties
and subsidiaries, exchange losses and valuation adjustments
on loans to subsidiaries.
Including the balance from the prior year of CHF 0.0 million
and the net profit for the year of CHF 17.9 million, total
available earnings for the year amount to CHF 17.9 million.
Proposal for the appropriation of earnings
In CHF 2009
Net profit 17 851 330
Balance brought forward 0
Total earnings available for appropriation 17 851 330
Balance to be carried forward 17 851 330
In CHF 2008
Net loss –75 186 067
Balance brought forward 545 605
Accumulated deficit –74 640 462
Charged against free reserves 74 640 462
Balance to be carried forward 0
Free reserves available for appropriation 288 876 831
Gross dividend of CHF 2.10
per registered share of CHF 2
on 2 800 000 dividend entitled shares 5 739 334
Free reserves carried forward 283 137 497
112 Financial Statements Siegfried Holding AG

Report of the statutory auditors
To the General Meeting of Siegfried Holding AG, Zofingen
Report of the statutory auditor on the financial
statements
As statutory auditor, we have audited the financial statements
of Siegfried Holding AG, which comprise the balance
sheet, income statement and notes (pages 108 to 112),
for the year ended December 31, 2009.
Board of Directors’ Responsibility
The Board of Directors is responsible for the preparation of
the financial statements in accordance with the requirements
of Swiss law and the company’s articles of incorporation.
This responsibility includes designing, implementing
and maintaining an internal control system relevant to the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error. The Board
of Directors is further responsible for selecting and applying
appropriate accounting policies and making accounting estimates
that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with Swiss law and Swiss Auditing Standards.
Those standards require that we plan and perform the audit
to obtain reasonable assurance whether the financial statements
are free from material misstatement.
effectiveness of the entity’s internal control system. An audit
also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of accounting estimates
made, as well as evaluating the overall presentation of
the financial statements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion, the financial statements for the year ended
December 31, 2009 comply with Swiss law and the company’s
articles of incorporation.
Report on other legal requirements
We confirm that we meet the legal requirements on licensing
according to the Auditor Oversight Act (AOA) and independence
(article 728 CO and article 11 AOA) and that there
are no circumstances incompatible with our independence.
In accordance with article 728a paragraph 1 item 3 CO and
Swiss Auditing Standard 890, we confirm that an internal
control system exists which has been designed for the preparation
of financial statements according to the instructions
of the Board of Directors.
We further confirm that the proposed appropriation of available
earnings complies with Swiss law and the company’s
articles of incorporation. We recommend that the financial
statements submitted to you be approved.
PricewaterhouseCoopers AG
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to
fraud or error. In making those risk assessments, the auditor
considers the internal control system relevant to the entity’s
preparation of the financial statements in order to design
audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the
Dr. Matthias Jeger
Audit expert
Auditor in charge
Basel, March 3, 2010
Thomas Illi
Audit expert
Financial Statements Siegfried Holding AG 113

Stock market data
2009 2008 2007 2006 2005
Registered shares of CHF 2 800 000 2 800 000 2 800 000 2 800 000 2 800 000
Dividend bearing capital CHF million 5.6 5.6 5.6 5.6 5.6
Gross dividend per registered share 2 CHF 0 2.10 4.20 4.20 4.20
Total dividend paid CHF 0 5 880 000 11 760 000 11 760 000 11 760 000
Market prices registered share high CHF 107.0 183.0 206.9 211.0 165.4
low CHF 54.4 84.0 173.0 161.0 138.0
Year-end CHF 93.5 91.0 193.0 183.0 164.5
Gross yield per registered share high % 0 2.5 2.4 2.6 3.0
low % 0 1.1 2.0 2.0 2.5
Consolidated net result per registered share 1 CHF –12.8 –27.0 18.0 11.7 13.2
Consolidated operating cash flow
per registered share 1 CHF 16.5 8.0 3.3 19.4 17.4
Consolidated equity and reserves
per registered share 1 CHF 118.7 127.0 176.5 160.9 157.0
P/E ratio (year-end) 1 –7.3 –3.4 10.7 15.6 12.4
Market capitalization at year-end CHF million 262 255 540 512 461
1
Calculated on the weighted average number of shares outstanding, deducting treasury shares
2
For 2009 as per proposal to the General Meeting of Shareholders
Siegfried shares are traded on the SIX Swiss stock exchange:
Sec. No. 239546
Stock symbols Reuters SFZZn
Telekurs
SFZN
Transfer restrictions: shareholders are registered with at most
3% of the registered share capital.
Share price development
Period from January 1, 2003 to December 31, 2009
70 %
225
52 %
200
33 %
175
14 %
150
– 5 %
125
– 24 %
100
– 43 %
75
– 62 % 50
2002 2003 2004 2005 2006 2007 2008 2009
Siegfried
SMI
114 Financial Statements Siegfried Holding AG

Cautionary statement regarding forward-looking statements
This Annual Report contains certain forward-looking statements identified by
words such as ‘believes’, ‘expects’, ‘anticipates’, ‘projects’, ‘intends’, ‘should’,
‘seeks’, ‘estimates’, ‘future’ or similar expressions or by discussion of, among
other things, strategy, goals, plans or intentions. Various factors may cause
actual results to differ materially in the future from those reflected in forwardlooking
statements contained in this Annual Report, among others: (1) pricing
and product initiatives of competitors; (2) legislative and regulatory developments
and economic conditions; (3) delay or inability in obtaining regulatory
approvals or bringing products to market; (4) fluctuations in currency exchange
rates and general financial market conditions; (5) uncertainties in the
discovery, development or marketing of new products or new uses of existing
products, including without limitation negative results of clinical trials or research
projects, unexpected side-effects of pipeline or marketed products;
(6) increased government pricing pressures; (7) interruptions in production;
(8) loss of or inability to obtain adequate protection for intellectual property
rights; (9) litigation; (10) loss of key executives or other employees; and (11)
adverse publicity and news coverage.
The statement regarding earnings per share growth is not a profit forecast
and should not be interpreted to mean that Siegfried’s earnings or earnings
per share for 2010 or any subsequent period will necessarily match or exceed
the historical published earnings or earnings per share of Siegfried.
Financial Statements Siegfried Group 115

Publisher’s note
This annual report is also available in
German, being the original version.
Annual General Meeting of Shareholders
Wednesday, April 14, 2010, 11 a.m.
in the Stadtsaal, Zofingen
Siegfried Holding AG
Untere Brühlstrasse 4
CH-4800 Zofingen
Phone + 41 62 746 11 11
Fax + 41 62 746 11 03
www.siegfried-holding.com
Editor:
Peter A. Gehler
Marcel Gremaud
Idea, Concept, Layout:
Seiler Communications AG, Zurich
Fotos:
Dan Cermak, Zurich
Albert Zimmermann, Zurich
Markus Senn, Biel
Production:
MDD Management Digital Data AG, Schlieren
Print:
NZZ Fretz AG, Schlieren
116 Publisher’s note