CODE OF BUSINESS CONDUCT FOR EMPLOYEES AND THE EXECUTIVE BOARD

The Code of Business Conduct for employees and the Executive Board expresses, in transparent terms, the high standards that SAP requires from all of its employees and how it conducts its business. The Code defines how employees should interact with customers, partners, competitors, and vendors. By implementing the Code, SAP safeguards against misleading SAP’s investors, partners, and customers and against unfair competitive practices and corruption.

RISK MANAGEMENT AT SAP

In German stock corporation and commercial law, there are special requirements for internal risk management that apply to SAP. SAP’s corporate management has therefore introduced a global risk management system that supports risk planning, identification, analysis, handling, and resolution. It also has company-wide processes to document and continually evaluate the effectiveness of the internal controls. The Company’s management is thereby able to identify the risks inherent to business processes at an early stage, manage them, and institute measures to resolve them. To this end, SAP developed a standard software offering, which it also uses internally for the management of internal controls (MIC). The software supports the individual processes for documenting and auditing internal controls and eliminating weaknesses. Another control mechanism that SAP has implemented is standardized reporting across the Group. The internal audit service and the Supervisory Board are also closely involved in risk management.

The risk management department set up by the Executive Board is responsible for SAP’s risk management processes.

IMPLEMENTATION OF THE NYSE’S CORPORATE GOVERNANCE RULES

According to the corporate governance rules of the NYSE, foreign companies listed on the NYSE must publish on their Web site the extent to which their corporate governance practices deviate from the rules of the NYSE. SAP fulfilled this requirement by publishing a corporate governance report in English on its Web site in May 2004. The report sets out in detail how SAP has implemented the recommendations of the German Corporate Governance Code, the requirements of the Sarbanes-Oxley Act, and its own Principles of Corporate Governance within the Company. It also compares SAP’s Principles with the NYSE’s rules. SAP’s corporate governance report extends beyond the NYSE’s requirements for corporate governance by analyzing the differences and similarities in detail rather than simply stating them.