FINANCIAL STATEMENTS AND REVIEW OF OPERATIONS

KPMG again audited SAP AG’s accounts in 2004. The Annual General Shareholders’ Meeting on May 5, 2004, elected that firm as the Company’s independent public accountant, and the Supervisory Board made the appointment immediately after the shareholders’ meeting. Before proposing KPMG to the annual shareholders' meeting as auditor for the year, the chairperson of the Supervisory Board had obtained confirmation from the firm that circumstances did not exist that might prejudice its independence as the auditor.

KPMG examined the SAP AG Financial Statements, the Consolidated Financial Statements, and the combined Review of SAP Group and SAP AG Operations, comparing them with the records on which they were based, and certified them without qualification. KPMG also confirmed that the Consolidated Financial Statements complied with U.S. GAAP and that the exemption in the German Commercial Code, section 292, applied. The auditor’s report for the SAP AG accounts includes a statement that the Company’s risk management system meets the statutory requirements.

The audit reports prepared by KPMG were sent to all Audit Committee and Supervisory Board members in good time.

The auditor attended the meeting of the Audit Committee on March 16, 2005 and the audit meeting of the full Supervisory Board on March 17, 2005, and reported the results of the audit in detail. The auditor then discussed the results with the Supervisory Board and satisfied the Supervisory Board it had conducted the audit properly.

The Supervisory Board approved the audit and gave its consent to the Consolidated Financial Statements, the SAP AG Financial Statements, and the combined Review of SAP Group and SAP AG Operations. The Financial Statements and Review of Operations were thus formally adopted. The Supervisory Board has checked the Executive Board’s proposal to recommend to the Annual General Shareholders’ Meeting that retained earnings be appropriated for a dividend of €1.10 per entitled
no-par ordinary share for 2004 and endorses the proposal.

Since SAP not only achieved the growth forecast for 2004 but exceeded it in terms of basic earnings per share, the Company more than satisfied the expectations of the shareholders. Thanks to the commitment of the employees and the Executive Board, the Company’s strategy has once again borne fruit. The Supervisory Board is very grateful to all of the employees and Executive Board members for their hard work.

Prof. Dr. h. c. Hasso Plattner
for the Supervisory Board
Walldorf, march 17, 2004