SAP 2009 Annual Report

8/8/2019 SAP 2009 Annual Report

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Upping the game06

meeting natUral

disasters head-on54

leading ith processesas ell as prodUction

60

streaming past thecompetition

50

slick integration58


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To our Shareholders LettertotheShareholders ExecutiveBoard

Transparency and IntegrityInvestorRelations

SustainabilityCorporateGovernanceReport

ReportbytheSupervisoryBoard CompensationReport

Declaration of the Executive Board

Independent Auditors Report

Review of Operations TheSAPGroupofCompanies

SoftwareandServicePortfolioPartnerEcosystem

ResearchandDevelopmentAcquisitions

CustomersEmployees

FinancialMeasuresCitedinthisReviewEconomicConditions

Income,Finances,andAssetsCorporateGovernance

InformationConcerningTakeoversRiskManagementandRiskFactors

BusinessintheNewYear:EarlyNewsOutlook

Financial Statements ConsolidatedFinancialStatementsIFRS

FinancialStatementofSAPAG(HGB)ShortVersion

Additional Information Five-YearSummary Addresses PublicationsforShareholders FinancialCalendar PublicationDetails

002004

008013019023036

058

059

063068079083092093095099108110125

126129145146

154256

260262263264265


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Letter to the SharehoLderS

Clarity fosters innovation

The past year was marked by changes to the business environment, as customers adaptedto a new market reality. Customer buying behavior shifted to an emphasis on smallertransactions and projects with immediate return; decision making moved increasingly to lineof business executives and away from the traditional IT power base of the CIO; and therewere increased requirements for solutions to help CEOs, COOs, and CFOs manage perfor-mance, compliance, and gain more business insight for faster decision making.

To respond quickly to this new normal of customer behavior, SAP began an ambitioustransformation to bring us closer to customers and to increase speed to value. We laid a newfoundation for sustainable growth, implemented lean principles and increased engagementwith employees our most powerful assets while paying close attention to costs, reducingthem by 662 million year-over-year, with a clear focus on improving our operating margin.

As 2009 drew to a close, these transformation eorts, combined with strong eld executionand a renewed focus on innovation, allowed SAP to nish the year with better-than-expectedfourth-quarter and full-year results as software and software-related service (SSRS) revenuewas down only 5% for 2009 (non-GAAP, constant currencies). Execution was strong in theAsia Pacic and Americas regions, with the BRIC countries, the United States, the UnitedKingdom, and Germany leading the pack. We won some outstanding customers in key indus-

tries, such as banking, insurance, public sector, and telecommunications. We also exceededour operating margin target for the year at 27.5% (non-GAAP, constant currencies).

Today, companies in all industries and of all sizes are looking to SAP to help them growagain. They want to be more innovative, agile, and competitive, and they are focused on tech-nology investments that can help them take full advantage of a more positive economicoutlook. As such, we expect 2010 to be a powerful year for SAP as we look to signicantlyexpand our leadership of the enterprise application software market with new innovativeproducts, new customer opportunities, and a focus on sustainable top-line and margin growth.

The changes in the SAP Executive Board made early this year were designed to intensifyand accelerate our business strategy. SAP is more focused than ever on delivering a fasterpace of innovation enabling customers to consume our solutions on-premise, on-demand,and on-device. We will help customers drive down their cost of operations by orchestratingtheir information technology, while providing consistency and security of data and businessprocesses. Moreover, we will leverage the latest technologies, such as virtualization, cloud,and in-memory to ensure that our business solutions are easy to implement, easy to use,and seamlessly integrate across SAP and non-SAP environments.

At the forefront is the SAP Business ByDesign solution, which we anticipate delivering mid-2010 as a volume-ready cloud suite. In addition, this year SAP will begin delivering on-demandextensions to our market-leading SAP Business Suite 7, giving customers a choice of on-premise, on-demand, or a hybrid of both. We will also bring to market innovations such as

Dear Shareholders, Customers, Partners, and Colleagues,

002 SAP Annual Report 2009


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LettertotheShareholders

networkedapplications,in-depthindustrysolutions,andapplicationsdesignedtohelpbusi-nessusersbemoreinformed,productive,andecient.Atthesametime,SAPwillmorefullyleveragetheindustryslargestecosystemtodrivegrowthforSAPandinnovationforourcustomers.Wewillprovideourpartnersthesupporttheyneedtohelpensuretheirsuccess

whenworkingandpartneringwithSAP.

Together,asco-CEOs,webelieveourstrongworkingrelationshipandcomplementaryskillscanhelpaccelerateSAPstransformation.Ourjointambitionistofosteracultureofinnova-tionatSAPthatengagesandinspiresourpeoplearoundonegoal:helpingourcustomersbebest-runbusinesses.Westandatthebeginningofanewerawhereinformationtechnologymeansmorethanjustindividualapplicationsorproductsitenablesallfacetsofsocietyto

ourish.WelookforwardtostrengtheningourstrongpartnershipswithallstakeholdersasweleadSAPintoanewgenerationofprotablegrowth.

Thesuccessfulconclusionto2009istestimonytothemarketleadershipofSAP,builtuponthetrustedadvisorstatuswehaveearnedwithmorethan95,000customers,andtotheinnovativepoweranddriveofSAPemployeesandpartners.Whilethelastyearhasbeendenedbyachangedmarketenvironmentandinternaltransformation,SAPisuniquelypreparedandpositionedtotakefulladvantageoftheopportunitiesthatareinfrontofus.

Bestregards,

BillMcDermott JimHagemannSnabeCo-CEO Co-CEOSAPAG SAPAG

Fromleftside:Jim Hagemann Snabe

(Co-CEO)Bill McDermott

(Co-CEO)


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eXecUtiVe BoardCoMMitteD to tHe sUCCess of oUr CUstoMers

a

B

c



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ExecutiveBoard

a Bill McDermott(48)Co-CEO

JoinedSAP:2002

B Jim Hagemann Snabe(44)Co-CEO

JoinedSAP:1990

c Werner Brandt(56)Chief Financial Ocer

JoinedSAP:2001

d Gerhard Oswald(56)Chief Operating Ocer

JoinedSAP:1981

e Vishal Sikka(42)Chief Technology Ocer

JoinedSAP:2002

d

e


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Upping the game

m .u./2009/

a sporting goods giant scores with sap apparel and foot-

wear.


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High performance matters in business as much as it does in sports.

To maintain its competitive edge, the leading sporting goods companyadidas Group leveraged the SAP Apparel and Footwear application to

improve the efficiency of its complex global supply chain and accelerate

future growth. The application helps companies in the apparel, foot-

wear, and lifestyle industries to manage products with multiple characte-

ristics such as style, color, and size along the fashion value chain. As a

result of the implementation of the SAP software, adidas has been able to

increase operational efficiency, improve its supply chain performance,

and introduce industry best practices across the organization.


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inVestor relationstransparent, open CoMMUniCation

Our dialog with investors focused on our strategy, our product portfolio, and SAP

Enterprise Support. SAP stock signicantly outperformed all of the international

benchmark stock indexes.

Thestockmarketsbegan2009inamoodofcautiousoptimism.Theheavylossesassociat-edwiththeprolongedinternationalnancialcrisishadmadethepreviousyearoneofthe

darkestchaptersinthehistoryofthecapitalmarkets,buttheworstnowseemedtobeover.Stockpricesstabilizedinthelasttwomonthsof2008,onlytoplungeagaininJanuaryandFebruary2009.Inthisperiod,theDAX,whichisthebenchmarkGermanstockindex,de-clined25%to3,666pointsitslowestlevelsinceAugust2004.Thisdownturnwascausedbyprot-taking,decliningcondenceinthenancialsectoramonginvestors,andthecon-tinuinganxietyofnancialmarketparticipantsaboutthestabilityoftheglobaleconomy.Butalthoughmosteconomicexpertsandcompanydirectorspredictedgloomyscenariosforthestockmarkets,withtheworldfacingthemostseriouseconomicandnancialcrisissincethe1930s,thestockmarketsboomed.

Optimisticinvestorsputtheirfaithinthegovernment-backedrescuepackagesworthbillionsofdollarsandinvestedinequitiesagain.Marketsremainedvolatileinthesecondquarterof2009uctuatingbetweenskepticismandcondenceandsharepricesretreatedworld-

wideinconsequence.Favorablebusinessresults,combinedwithincreasinghopesofrecovery,particularlyinthefast-growingemergingeconomiesoftheBRICcountries(Brazil,Russia,India,andChina),bolsteredsentimentonthestockmarketstowardthemiddleoftheyear.BetweenAprilandJune,theDAX30indexandtheDowJonesEUROSTOXX50indexofblue-chipstocksintheeuroarea,recordedgrowthof17.7%and16.0%,respectively.

Thisupwardtrendpersistedfrommid-yearuntiltheendoftheyear.Itwasreectedinagen-eralimprovementinstockmarketsentimentandinrisingstockprices,especiallyinthefourthquarter.TheBRICcountriessawstockprices(indollars)soarbyupto75%inmid-December.Thenancialmarketsretreatedagainattheendoftheyear,however,asaresultofconcernsovertheEmirateofDubaislevelofdebtandthedowngradingofeuro-areamemberGreecescreditrating.Theyearendedwitharally,whichattimesliftedtheDAXabove6,000inlateDecember.

AriseintheTechnologyPeerGroupIndex(TechPGI)oftenmajortechnologystockswasaclearpointerthatinvestorswerehopingthetechnologysectorwouldstageaquickrecovery.Theindexincreased60.7%overtheyearasawhole.TheDowJonesindexopenedat8,776pointsatthebeginningof2009andclimbedapproximately20%to10,548pointsinthecourseoftheyear.TheS&P500rose25.2%,andtheS&PNorthSoftware-SoftwareIndexTMrosealmosttwiceasfastasthat,byapproximately50%.



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SAP OTPERFORMS THE DAX

SAPstockstartedwellin2009andcontinuedtoperformstronglyovertheyear.Thepriceofthestockincreased30.7%inthecourseoftheyear,whiletheDAX30andEUROSTOXX50benchmarkindexesroseonly23.8%and21.1%,respectively.SAPstockoutperformedtheDAXandEUROSTOXXinthecrisisyearof2008aswell.Afterclosingat25.24ontheXetratradingsystemattheendof2008,thestockroseto29.64followingpublicationofthe2008resultsonFebruary9,2009itshighestlevelintherstquarter.Butconcernsovertheimpactoftheglobalnancialcrisisontheeconomycontinuedtoinuencestockmarketsentiment,andSAPstockwasaectedbythegeneraldownwardtrend.ItbottomedfortheyearonMarch6at25.01.GoodquarterlyresultsattheendofJulyputSAPstockbackontrack,andbyAugust7ithadrisento33.45.

Soonafterwards,onSeptember11,itreached35.26itshighestlevelin2009.ThelasttimeSAPstockhadbeenatthislevelwasinearlyOctober2008,beforetheglobalnancialcrisishitthestockmarkets.Prot-takingthencausedthestocktofallto33.28attheend

ofthethirdquarter.SAPstockwasvolatileinthefourthquarter:Positivestockmarketsenti-mentpushedthepricebackupto35.08onOctober14,promptinganotherroundofprot-taking.Thepricefellagainfollowingpublicationofourpreliminarythird-quarterresults,inwhichwerevisedouroutlookguidanceforsoftwareandsoftware-relatedservicerevenuein2009.SAPstockhititslowestfourth-quarterlevelat30.09onDecember9,whenstockmarketswerereactingtothedevelopmentsinDubaiandGreecementionedabove.Itendedthefourthquarterandtheyearasawholeat33.00.

SAP Share Price

OurinteractivestockchartwithdailyclosingpricesisavailableontheInternet.

www.sap.com/investor

SAP Share in Comparison with the DAX 30, the Dow Jones ERO STOXX 50

and the S&P North Software-Software Index January 1, 2009 to February 28, 2010

Percent

150.00

140.00

130.00

120.00

110.00

100.00

90.00

80.00

70.00

60.00

01 02 03 04 05 06 07 08 09 10 11 12 01 02

SAPShare(Xetra)

DAX30PerformanceIndex(Xetra)

DowJonesEUROSTOXX50PriceIndex

S&PNorthSoftware-SoftwareIndexPriceIndex

InvestorRelations


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PricemovementsofSAPstockwerecloselyparalleledbythoseofSAPAmericandepo-sitaryreceipts(ADRs)ontheNewYorkStockExchange.ThepriceoftheADRsdependslargelyonthepriceoftheunderlyingSAPstockandontheeuro-to-dollarexchangerate.TheADRsstoodatUS$35.62attheendof2008andatUS$46.81oneyearlater.LiketheSAPstock,theADRsthusrose31%overtheyear.

DIVIDEND AMONT NCHANGED

SAPhaspaidadividendeveryyearsincethestockwasoatedin1988.AttheAnnualGeneralMeetingofShareholders,theExecutiveBoardandtheSupervisoryBoardwillrecommendadividendforthe2009scalyearof0.50pershare.Thiswouldresultinatotaldistributeddividendof594 million.Thedividendpayoutratio(whichheremeanstotaldistributeddividendasapercentageofprotaftertax)wouldbe34%.Thisrepresentsanotherslightincrease(2008:32%).

NO SHARE BBACS

Wedidnotbuybackanysharesfortreasuryin2009.AmongthepurposestowhichweputourexcesscashwastherepaymentofthesyndicatedloanwehadtakentoacquireBusinessObjects.Formoreinformation,seetheNotestotheConsolidatedFinancialStatementssection.

CAPITA STOC NCHANGED

SAPscapitalstockis1,226,039,608.Itisissuedas1,226,039,608no-parshares,eachwithanattributablevalueof1inrelationtothecapitalstock.

ey Facts About SAP Stock /SAP ADRs

istings

Germany Berlin-Bremen,Frankfurt,Stuttgart

USA(ADRs) NewYorkStockExchange

IDs and symbols

WKN/ISIN 716460/DE0007164600

NYSE(ADRs) 803054204(CUSIP)

Reuters SAPG.For.DE

Bloomberg SAPGR

Quotron SAGR.EU.

Weighting on December 31, 2009

DAX30 5.29%

PrimeAllShare 4.40%

CDAX 4.43%

HDAX 4.58%

DowJonesSTOXX50 1.14%

DowJonesEUROSTOXX50 1.80%



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ARGER FREE FOAT

Theproportionofourstockinfreeoatincreasedagainslightlyin2009.ApplyingthenewdenitionacceptedontheFrankfurtStockExchangewhichexcludestreasurystockfromthefreeoatonFebruary28,2010,thefreeoatstoodat72.4%(2008:68.2%).

Approximately24.6%(2008:28.7%)ofthestockwasunderthecontrolofthethreefoundersandtheirtrustsandholdingcompanies.U.S.institutionsandindividualsremainedthenextlargestgroupofshareholders,holdingaround21.6%ofthestock.ContinentalEuropeaninvestorsoutsideGermanyheldabout11.7%,followedbyinstitutionsintheUKandIreland,whichheldapproximately9.1%.InstitutionsinGermanyheld8.2%andinvestorsfromtherestoftheworldheld1.7%ofthestockatthecloseoftheyear.Privateorunidentiedinvestorsheld20.1%.SAPheld3.0%ofthestockintreasury.

EMPOEES PROFIT FROM SCCESS

Asinpreviousyears,ouremployeesandmanagersprotedfromourbusinesssuccess.For

moreinformationaboutourstockawardprograms,seetheNotestoConsolidatedFinancialStatementssection.

COMMNICATION WITH INVESTORS

Ourdirectorsandseniorocersagainaimedforthegreatestpossibletransparencyandopennessintheircontinuousdialogwithourshareholders.Inmorethan600one-on-onemeetingsheldatSAP,duringinvestorroadshowsworldwide,andatinvestorevents,weansweredinstitutionalinvestorsandanalystsinquiriesaboutourbusiness.Wealsoheldtelephoneconferencesandanalystmeetingswhenwepublishedourquarterlyresults.Inves-torpresentationsattheSAPPHIREconferenceinOrlando,Florida,aswellasSAPInvestorDaysinWalldorf,GermanyandNewtownSquare,Pennsylvania,UnitedStates,wereotherkeyelementsofourcommunicationwiththenancialmarkets.Theseeventsfocusedonour

strategy,includingon-demandstrategy,themidmarketsegment,andSAPEnterpriseSup-port.WeheldaninvestorsworkshopinLondonandhostedaWebseminartoexplainwhat

wouldhappenwhenSAPsnancialreportingswitchedcompletelyfromU.S.GAAPtoIFRS.OurWebsitealsoprovidesmuchinformationonthatsubject.Inaddition,wegavepresen-tationsabouttheenvironment,socialissues,andcorporategovernancetosociallyresponsi-bleinvestors(SRIs)ataconferenceandanSRIroadshow.

Return on Common Stock WN 716460; ISIN DE0007164600

Initialinvestment:10.000

Dateofinvestment Dec.31,1999 Dec.31,2004 Dec.31,2008

Periodofinvestment 10years 5years 1yearValue()onDecember31,20091) 8,882 10,672 13,290

Average annual return 1.2% 1.3% 32.9%

Performancecomparators

DAX30Performancetotalreturnindex 1.5% 7.0% 23.8%

REXGeneralBondtotalreturnindex 5.4% 4.3% 4.9%

S&P500Compositetotalreturnindex 4.4% 0.7% 22.5%

S&PNorthSoftware-SoftwareIndexpriceindex 12.5% 1.3% 43.3%

1)AssumingalldividendswerereinvestedSource:Datastream

InvestorRelations


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COMPREHENSIVE SERVICE FOR INDIVIDA INVESTORS

ProvidingafullserviceforretailinvestorsisapriorityforSAP.WethereforebroadcastallkeyeventsatwhichmembersofourExecutiveBoardpresentnewsaboutSAPtonancialana-lystsandinstitutionalinvestorsliveontheInternetandpublishthepresentationmaterials.InvestorscanndawiderangeofinformationaboutSAPandSAPstockontheInternet.Weupgradedtheseoeringsin2009,addingnewfeatureslikeRSSfeedsandsocialmedialinkssuchasFacebook.Since2008wehavealsopublishedanoverviewofanalystscurrentassessmentsincollaborationwithVARAResearch.

ThequarterlySAPINVESTORmagazineisoneofthecornerstonesofSAPsserviceforindividualinvestors.Othersarethemonthlye-mailnewsletter,theshareholderhotline,andthee-mailcontactatinvestor@sap.com.OurinvestorrelationsteamheldpresentationsatinvestorfairsandshareholderconventionsinGermanyandtheUnitedStates,forexample,atTheWorldMoneyShowinOrlando,Florida,theBetterInvestingNationalConventionin

Atlanta,Georgia,InvestEdinSaltLakeCity,Utah,andtheconferenceoftheAmericanAs-sociationofIndividualInvestorsinOrlando,Florida.InadditiontointensifyingourcontactswithindividualU.S.investorsatnancialconventions,wealsocommunicatedindepthwithnancialadvisorsfromsmallandlargebrokerhousesservingretailinvestors,includingquarterlysquawkboxtelephoneconferences.

INTERNATIONA AWARDS FOR INVESTOR REATIONS

ThebusinessinformationcompanyThomsonReuterspresenteduswithitsExtelSurveyAward2009,afterSAPhadbeenvotedtheleadingPan-Europeancompanyforinvestorrelations.TheThomsonReutersawardisbasedondetailedsurveysofinstitutionalinves-torsandnancialanalysts.Wewon IRMagazinesawardforbestinvestorrelationsbyacontinentalEuropeancompanyintheU.S.market,andtheGermaninvestmentmagazineCapitalrankedSAPeighthoutoftheEUROSTOXXcompanies.PrivateinvestorsalsoratedSAPfavorablytheBIRD(BestInvestorRelationsDeutschland)rankingofDAXcompaniesputusinsecondplace.

SAP INVESTOR

Subscribetoourprintedmagazineforinvestors.

www.sap.com/investor

Return on SAP ADRs 803054204 (CSIP)

InitialinvestmentUS$10,000

Dateofinvestment Dec.31,1999 Dec.31,2004 Dec.31,2008

Periodofinvestment 10years 5years 1year

Value()onDecember31,20091) 9,590 11,101 13,089

Average annual return 0.4% 2.1% 30.9%

Performancecomparators

S&P500Compositetotalreturnindex 0.9% 0.4% 26.5%

1)AssumingalldividendswerereinvestedSource:Datastream



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sUstainaBilitylong-terM, strategiC CoMMitMent to sUstainability

At SAP, we are committed to being an enabler and exemplar of sustainability

from running our company in sustainable manner to helping our customers

holistically manage their sustainability strategy. We are focused on programs

that help build a sustainable future.

BuildingonSAPs38-yearheritageofprovidingsolutionsthathelpcompaniesaddressbusi-nesseciency,SAPcontinueddownthispathbyelevatingsustainabilityintoastrategic,long-termcorporateinitiativein2009.Wedeclaredourcommitmenttoenablingsustainablebusiness,bothforcustomersthroughoursoftwareSAPasanenablerofsustainability

aswellasinternallyasasustainabilitypractitionerSAPasanexemplarofsustainability.Ourgoalwastofocusonaddressingeconomic,social,andenvironmentalimpactoppor-tunitiesthatleveragethestrengthsofSAP.ThisstrategiccommitmentwasfurtherdemonstratedinMarch2009whenthecompanyannouncedanewcross-functionalsustainabilityorganizationledbySAPsrstchiefsustain-abilityocer.TheorganizationwascreatedtodriveandcoordinateSAPsinternalandexternalsocial,economic,andenvironmentalsustainabilityeortsfromthecreationofsolutionsthatenablesustainablebusinessprocessesforcustomerstoSAPsownsustainabilityoperations.TheorganizationformsamatrixwithSAPsexistingcorporatefunctionsandthusensuresconsistentexecutionofallsustainabilityprogramsandeorts.

Asapractitionerofsustainability,SAPalsolivesuptoitssocialresponsibilitiesthrough

IT-ledinnovationthatcandriveeconomicdevelopmentandparitythroughresource-ecientgrowth.

SAP AS AN ENABER

Supporting Customers with a Holistic Approach to Sustainability ManagementSAPsmorethan95,000customersacrossmorethan25industriesrepresentasignicantportionoftheglobalgrossdomesticproduct(GDP)andaccountforsignicantmanmadegreenhousegasemissions.Thus,SAPisinauniquepositiontohelptheseorganizationsmeettheirsustainabilitygoalsthroughthecreationanddeliveryofsoftwaresolutionsthatautomatesustainablebusinesspractices.Asaleadingproviderofbusinessprocessesandanalyticsforbusinessintelligence,SAPisleveragingtheirstrengthsinsupportingcustomersbyoeringaholisticandintegratedportfolioofsustainabilitysolutionsthatallowcompanies

worldwidetotrack,measure,andreportsustainabilitymetricsacrosstheentireenterprise.In2009,thisengagementincludedthelaunchoftheSAPBusinessObjectsSustainabilityPerformanceManagementapplication,whichautomatesdatacollectionandreportcompi-lation,andthereleaseofanenhancedversionoftheSAPEHSManagementapplication,willhelpsmanageoperational,nancial,andreportingrisksinenvironment,health,andsafety.

The SAP sustainability

mapcanbefoundonlineatwww.sap.com/solutions/executiveviewsustainability/sustain-ability-map.

Sustainability


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Asaframeworktoactivelyencouragecontinuedstakeholdercollaborationaroundfuturesustainabilitysolutions,SAPalsoreleasedanextensivesustainabilitymap.Forthersttime,themapcatalogstheentirelandscapeofthecustomersbusinessprocessesandITactivitiesrelatedtosustainability.SAPinvitedstakeholderstocollaborateinimprovingthemapgoingforwardadistinctivemovetargetedatredeningthewaycustomersbuildtheirstrategiesandITcompaniesbuildtheirsolutionsintheareaofsustainability.

InsupportofSAPscommitmenttodeliveringinnovativeandcomprehensivesustainabilitysolutions,werecognizedthatonecannotgoitalone.SAPembracedcollaborationandco-innovationacrossthecustomerandpartnerecosystem.Additionally,SAPpursuedstrategictuck-inacquisitions,suchasClearStandardsinMay2009,whichcontributedtoSAPsover-allrobustportfolio.

SAP AS AN EXEMPAR

Managing Internal Operations in a Sustainable Way

InMarch2009,SAPannouncedanaggressivecommitmenttoreduceitstotalgreenhousegas(GHG)emissionsbacktothelevelsof2000by2020,cuttingitsemissionsapproxi-matelyinhalffromitsyear-2007peaklevelsof540kilotonsCO 2.ThiswillreturnSAPtoitsapproximateyear-2000emissionslevelof275kilotonsCO 2.SAPinitiateditsrstglobalGHGinventoryin2008.

InJanuary2010,SAPannounceditspreliminaryreportofGHGemissionsfor2009.ThecompanysworldwideCO2emissionsfor2009totaled425kilotons,a15%decreasefromthe500kilotonslevelof2008.Thisequatestoamonetarysavingsofapproximately90 mil-lion,inuencedbybothdirectinternalprogramsaswellasthe2009globaleconomicslowdown.Theemissionsdecreasewasachieveddirectlywithouttheapplicationofosets.

SAPwillreportin-depthcarbonfootprintdetailsinits2009SustainabilityReport,which

willbeindependentlyveried,tobeissuedinspring2010.

Embracing EED StandardsWorldwide,SAPiscommittedtoincorporatingsustainabledesignfeaturesintoallitsnewbuildingprojects,withthegoalofdesigningnewbuildingstoatleastaLEED(LeadershipinEnergy&EnvironmentalDesign)Silverstandard.InMay2009,SAPopenedanewadditiontoitsU.S.headquartersinNewtownSquare,Pennsylvania,designedtoLEEDPlatinumstandards.Thenewbuildinghasavarietyofenergy-ecientfeatures.Geothermalwellsusetheconstantgroundtemperatureofthe

EED

FurtherinformationonLEEDstandardscanbefoundonlineat

www.usgbc.org/leed.



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earthtobothheatandcoolareasofthebuilding.Lightingsystemsbasedontheconceptofdaylightharvestingarecontrolledbysensorsthatdimthelightinglevelsandraiseorlower

windowshadesbasedonthelevelofsunlightcomingthroughthetriple-glazedglassexteriorwall.Ahybridairconditioningsystemproducesiceduringtheovernighthourswhenenergydemandsandelectricratesarelowest,withthechilledwaterfromthemeltingiceusedtocoolthebuildingduringtheheatoftheday.

InApril2009,SAPinstalledasolarpanelsystematitsPaloAltocampusinCalifornia,whichisexpectedtoreducethecampuscarbonemissionsby154metrictonsannually.Itwillalsoeliminatethepeak-loadenergyconsumptionoftheregionalcomputingcenterontheelectricalsupplygridduringdaylighthours,providingbothenvironmentalandnancialbenets.

SAPsopenedanewcampusinBrazilinJune2009thatisawaitingLEEDGoldcertication.Thebuildingfeaturesitsownsewagetreatmentplantthatprovidesclean,recycledwaterfortoiletsandirrigationforthecampusgardenanddevicessuchasautomaticsensortapsanddualushtoiletsthatreducewaterconsumptionbymorethan50%.Thecampusis

alsorunningon100%renewableenergyprovidedbyahydroelectricpowerplant.

Sustainability ReportInMay2009,SAPreleasedits2008SustainabilityReport,thecompanysrstindependently

veriedreport,achievingaB+GlobalReportingInitiative(GRI)adherencelevel.Thereportfeaturedauniquerole-basedinterfacethatusedXcelsiussoftwarefromtheSAPBusiness-ObjectsportfoliotoallowreaderstointeractwithanduseSAPsdatainanintuitiveandengagingway.

Recognizedbyexternalindependentorganizationsfortheireorts,SAPwasnamedastheleaderofthesoftwaresectoroftheDowJonesSustainabilityIndexes(DJSI)forthethirdconsecutiveyear.InadditiontoitsinclusionintheDJSI,in2009,SAPwasalsorecognizedforitssustainablebusinesspracticesbytheCorporateKnightsGlobal100MostSustain-

ableCorporationslistwhereithasbeenincludedeveryyearsinceitsinceptionin2005aswellastheFTSE4Goodindex.SAPhasalsobeennamedtotheGlobalChallengesIndex,whichrecognizessustainabilityperformance,andtheNASDAQOMXCRDGlobalSustainability50Index.

SAP Sustainability Repo

Thereportcanbefoundonlineatwww.sapsustainabilityreport.com.

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Corporate Social Responsibility nites Employees with a Clear PurposeIn2009,werealignedourcorporatesocialresponsibility(CSR)initiativesunderClearPurpose,aglobalprogramthattakesamoreholisticapproachtostakeholdermanagement,corporategiving,in-kindgiving,and employeeengagement.SAPseesClearPurposeashavingmultiplebenets,andtherebypositionsSAPasanemployerofchoiceandonethathelpseachnonprotandnongovernmentalorganizationwithwhichwepartnerbecomebest-runcompanies.

Programssupportnonprotorganizationsandnongovernmentalorganizations(NGOs)basedontheframeworkofthefollowingfourpillarsoffocustomaximizeimpact:Educationmathematics,science,informationtechnology,literacyandyouthentrepre-

neurshipGoodgovernanceandtransparency openness,communication,andaccountabilityBridgingthedigitaldividelesseningthegapbetweenpeoplewitheectiveaccesstodig-

italandinformationtechnologyandthosewithverylimitedornoaccessatall,usuallyduetoimpoverishment

Environmentalstewardshipcooperativeplanningandmanagementofenvironmentalresourceswithorganizations,communities,andotherstoactivelyengageinthepreventionoflossofhabitatandfacilitateitsrecoveryintheinterestoflong-termsustainability

Employee EngagementSAPunlockstheclearpurposeofeachemployeethroughavarietyofinnovativeinitiativesfrommassmobilizationtoskills-basedvolunteerism.In2009,16%ofouremployeesvolun-teeredduringcorporate-ledvolunteerdaysandsignatureinitiatives:Morethan62,000hours,totalingapproximately7,700workdaysor21yearsofvolun-

teerismbySAPemployeesacross30countriesDuringthefthannualSAPMonthofService,undertheClearPurposebanner,morethan

40%ofemployeesbasedinNorthAmericaandLatinAmericavolunteeredinOctober2009withengagementratesupwardsof70%incountriessuchasPuertoRicoandChile.

Inmanycases,volunteeractivitiesservedasteam-buildingopportunitiesinwhichlineofbusinessesworkedtogethertoservetheircommunities.

290employeesservedasFIRSTLEGOLeaguementors,coaching198teamsin29coun-tries.Asaresult,approximately1,400childrenaged9to16experiencedthisinnova-tive,interactiveroboticsprogramwithafocusoneducation,technology,andinnovation.

Corporate Social

Responsibility

Furtherinformationonourprogramscanbefoundonlineat

www.sap.com/about/CSR.



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Corporate GivingIn2009,SAPdonatedmorethan7 milliontononprotorganizations.Componentstocorporategivingincluded,butwerenotlimitedto:Partnershipswithmorethan200organizationsgloballywithinourpillarsoffocusEmployermatchingofemployeegivingtomorethan1,100organizationsinNorthAmerica

andtheAsia-PacicJapanregionApproximately200volunteergrantsawardedtononprotorganizationsinsupportof

individualemployeevolunteerismbyU.S.-basedemployeesthroughtheSAPDollarsforDoersprogram.

Software DonationsSAPdonatessoftwarefromourSAPBusinessObjectsportfoliotoeligiblenonprotorgani-zations.ThroughapartnershipwithTechSoupGlobal,in2009,morethan900nonprotor-ganizationsinBrazil,Canada,Germany,andtheUnitedStateshavedeployedSAPsoftwaretobuildcapacity,promoteperformance,agility,andorganizationalalignment,anddrivetrans-parencyandgoodgovernancewithintheirorganizations.

Supporting MicronancingIn2009,SAPmadeacommitmenttoprovidenancial,software,andexpertassistancetoPlaNetFinance,aleadinginternationalnonprotorganizationthatoerssupportservicestomicronanceinstitutions(MFIs).SAPandPlaNetFinanceaimtoimprovethemicronancesectorthroughacombinationofmicronancing,theuseofnewtechnologyandthecreationofvalue-chainextensionsthathelpentrepreneursatthebaseoftheeconomicpyramidcre-atesustainablebusinesses.Threemainareasweretargetedwiththepartnership:TechnologydevelopmentforeldinitiativesDevelopmentofsoftwaresolutionsforMFIsDeploymentofSAPtechnologyforPlaNetFinancescorporateinitiatives

Tostarttheirrstjointeldinitiative,SAPandPlaNetFinancehavecarefullystudiedthesheanutvaluechaininNorthernGhana,inAfrica,toidentifyhowmicronance,education,andtechnologycanhelpimprovetheincomesandlivingconditionsofwomenwhopickandpro-cessthenutsintosheabutter.

PlaNet Finance

FurtherinformationonPlaNetFinancecanbefoundonlineatwww.planet-nance.org/EN/.

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SAP niversity AlliancesTheSAPUniversityAlliancesprogramprovidesSAPsoftwarelicenses,curriculummaterials,trainingworkshops,andacademic-orientedeventsaroundtheworld.SAPcurrentlydonateslicenseaccesstoitsfullrangeofsoftwareproductsforreal-life,hands-onclassroomexperiencesformorethan200,000studentsinundergraduateandgraduatedegreeprogramsatover1,000collegesanduniversitiesworldwide.

Keydevelopmentsin2009included:ExpansionoftheprogramtocountriessuchasGreece,Hungary,Israel,Macau,Pakistan,

andPortugalIntroductionofnewcoursesforSAPBusinessObjectsportfoliothatfullycomplements

thegrowingacademicoeringsforSAPBusinessSuitesoftwareLaunchofSAPUniversityAlliancescommunityinSAPCommunityNetwork,amultifaceted

onlineenvironmentthatdeliversthelatestacademicresourcesforbringingreal-lifeSAPknowledgeandskillstothedesktopsofprofessorsandstudentsglobally.Byyear-end,

thisnewcommunityreachedwellover100,000registeredparticipants.

SAPUniversityAlliancesdirectlysupportshighereducationindevelopinggraduateswiththecriticalbusinessprocessknowledgeandadvancedITexpertisethatSAPcustomersandpartnersrequiretoremaincompetitive.

niversity Alliances

Furtherinformationonouruniversityalliancesprogramcanbefoundonlineatwww.sap.com/about/CSR/education/university-alliances.



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corporate goVernance reportresponsible ManageMent

SAPs global business operations and international shareholder

structure mean that effective, transparent corporate governance

is key for the Company.

Intheirwork,theSupervisoryBoardandExecutiveBoardthereforeattachgreatimportancetogoodcorporategovernance.Corporategovernanceistheapplicationofinternationalandnationalvaluesandprinciplesofgood,responsiblemanagementtotheactivitiesofacompanysexecutiveandsupervisorybodiesanditsemployees.Itisnotasystemof

rigidrulesandregulations.Rather,itisaprocessinwhichvaluesandprinciplesconstantlyevolveinlinewithchangingrequirements.

CORPORATE GOVERNANCE AT SAP

BecauseSAPislistedontheGermanstockexchange,itscorporategovernanceisbasedontheprovisionsoftheGermanStockCorporationActandoftheGermanCorporateGovernanceCode(theCodeinthisreport)asfromtimetotimeamended.SAPalsocomplieswiththeprovisionsthatarerelevanttoitasaGermancompanylistedontheNewYorkStockExchange(NYSE).TheseincludetheCorporateGovernanceStandardsoftheNYSEandtheU.S.Sarbanes-OxleyAct.SAPprovidesitsshareholderswithdetailedinfor-mationaboutitsimplementationoftheCodesrecommendationsbypublishinganannualdeclarationofimplementationbytheExecutiveandSupervisoryBoards,asrequiredbythe

GermanStockCorporationAct,section161.Inaddition,withtheannualnancialstatementstheExecutiveBoardpublishesacorporategovernancestatementpursuanttotheGermanCommercialCode,section289a,describingcertainaspectsoftheCompanyscorporategovernanceingreaterdetail.ThepresentreportisasummarizedaccountofcorporategovernanceatSAPin2009.

EXECTIVE BOARD

Atthetimethisannualreportwenttopress,theSAPExecutiveBoardhadvemembers.ItissolelyresponsibleformanagingtheCompany.IthasadutytoexerciseitsmanagementpowersintheinterestoftheCompanyandinpursuitofthesustainedgrowthofcorporate

value.ItdiscussesandagreesonitsstrategyfortheCompanywiththeSupervisoryBoard,ensurescompliancewiththerequirementsofthelawthroughouttheGroup,andmaintainsappropriateriskmanagementstructuresandriskcontrols.

SPERVISOR BOARD

TheSAPSupervisoryBoardhas16memberswho,inequalnumbers,representtheshare-holdersandtheemployees.Itappoints,monitors,andadvisestheExecutiveBoard.TheExecutiveBoardinvolvestheSupervisoryBoardindecisionsonmattersoffundamentalimportancefortheCompany.TheSupervisoryBoardhasreservedtoitselftheapprovalof

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certaindenedtransactionsoffundamentalimportance.WhenselectingcandidatestobeproposedtotheAnnualGeneralMeetingofShareholdersforelectiontotheSAPSuper-visoryBoard,theSupervisoryBoardlooksforpeoplewiththenecessaryknowledge,abili-ties,andexpertexperience.

CORPORATE GOVERNANCE STATEMENT

TheSAPAGExecutiveBoardpublishedourrstcorporategovernancestatementpursuanttotheGermanCommercialCode,section289awiththeCompanysnancialstatementsfor2009.Thedutytopublishacorporategovernancestatementisnew;itarisesundertheGermanAccountingLawModernizationAct,whichcameintoforcein2009.CompaniesmustpublishthecorporategovernancestatementeitheraspartoftheirannualreportorontheirWebsite.ItmustincludethedeclarationofimplementationpursuanttotheGermanStockCorporationAct,section161,certaininformationoncorporategovernancepractices,andanaccountofhowtheExecutiveBoardandtheSupervisoryBoardwork,whositsonwhichSupervisoryBoardcommittees,andhowthosecommitteeswork.Thecorporategov-

ernancestatementpublishedbySAPAGfor2009isonSAPsWebsiteatwww.sap.com/about/governance/statement.

CODE RECOMMENDATIONS

Everyyear,theSupervisoryBoardandExecutiveBoardissueadeclarationstatingwhetherSAPhasimplementedandisfollowingtheCodesrecommendationsandidentifyinganyrecommendationsthattheCompanyhasnotfollowedwithanexplanationofwhyithasnotdoneso.ThedeclarationofimplementationisonSAPsWebsiteatwww.sap.com/about/governance/statutes.Implementationdeclarationspublishedinpreviousyearsarealsoavail-ableonthisWebsite,andalinkisprovidedtothecurrentandpreviousversionsoftheCode.TheExecutiveBoardandSupervisoryBoardissuedthecurrentdeclarationofimple-mentationonOctober30,2009.Itisalsoincludedinthecorporategovernancestatement

publishedonSAPsWebsiteatwww.sap.com/about/governance/statement.

Thedeclarationofimplementationreportsthatwedonotfollowveofthe82recommenda-tionsintheversionoftheCodepublishedonJune18,2009,anddidnotfollowveofthe84recommendationsintheversionoftheCodepublishedonJune6,2008.Thereasonsfornotfollowingtheserecommendationsaredescribedindetailinthedeclarationofimple-mentationrequiredbytheGermanStockCorporationAct,section161(1).

CODE SGGESTIONS

Withoneexception,wefollowall16suggestionsinthecurrentCode,whichisdatedJune18,2009.Asinthepreviousyear,wehavenotagreedtopaySupervisoryBoardmembersperformance-orientedcompensationbasedonSAPslong-termsuccessassuggestedintheCode,section5.4.6,paragraph2.Wedoubtwhetherthelong-termsuccessofSAPistherightbasisforSupervisoryBoardcompensationorimprovestheSupervisoryBoardmembersmotivation.VariablecompensationatSAPisthereforelinkedtothedividendandcanthusbereadilydeterminedbyapplyingtheSupervisoryBoardcompensationprovi-sionsintheArticlesofIncorporation.Webelievethatthisensurestransparent,appropriatecompensationforSupervisoryBoardmembersthatreectstheirlegalresponsibilities.

German Corporate

Governance Code

ThemostrecentversionoftheCodeisavailableonlineat

www.corporate-gover-

nance-code.de.



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CODE OF BSINESS CONDCT

SAPscorporategovernancepracticesincludeourCodeofBusinessConductforemploy-eesandmembersoftheExecutiveBoard.TheCodeofBusinessConductexpressesthehighstandardsthatwerequirefromouremployeesandExecutiveBoardmembersandsetsoutthemainprinciplesthatguideourbusinessconducttowardcustomers,businesspartners,andshareholders.WeseeourCodeofBusinessConductasthestandardforourdealingsinvolvingcustomers,businesspartners,vendors,shareholders,andcompetitors.ByfollowingourCodeofBusinessConduct,wedemonstrateacommitmentagainstallformsofunfaircompetitivepractice,corruption,andmisrepresentation.AcomplianceteamreportingtoourgeneralcounselmonitorsworldwidecompliancewiththeGroupsinternalpolicies,suchasourCodeofBusinessConduct.Itregularlyreviewstheseinternalpolicies,revisesthemifnecessary,anddeliversrelatedtraining.

THE WOR OF THE EXECTIVE AND SPERVISOR BOARDS

TheExecutiveBoardandSupervisoryBoardcooperatecloselyforthebenetoftheCom-pany.TheExecutiveBoardregularlyprovidestheSupervisoryBoardwithfullandtimelyreportsonallmaterialmattersofbusinessplanningandperformance,includinganydeviationsofactualbusinessperformancefromplan,therisksituation,andriskmanagement.SAPprovidesitsshareholderswithin-depthinformationabouthowtheExecutiveandSuperviso-ryBoardswork,howtheSupervisoryBoardcommitteesarecomposed,andhowthesecommitteeswork,initscorporategovernancestatement.Formoreinformationaboutthe

jointworkoftheExecutiveandSupervisoryBoardsandabouttheworkoftheSuper-visoryBoardanditscommitteesin2009,seetheReportbytheSupervisoryBoardinthisannualreport.

APPING INTERNATIONA CORPORATE GOVERNANCE STANDARDS

AsaNYSE-listedcompany,SAPissubjecttoU.S.nanciallegislationandtotherulesoftheSECandNYSE.BesidesimplementingtherequirementsoftheSarbanes-OxleyAct,section404,andotherSarbanes-OxleyActrequirements,includingconductinganannualauditofourinternalcontrolovernancialreporting,wecomplywiththerulesapplicabletonon-U.S.companiessetoutintheNYSEListedCompanyManual.TheserulesgoverntheestablishmentandmembershipofanauditcommitteeandSAPsrelateddutiestoreporttoNYSE.InaccordancewiththeSECandNYSEcorporategovernancerules,wehavepublished,atItem16GinourAnnualReportonForm20-F,areportonthesignicantdier-encesbetweentheNYSEcorporategovernancerulesandtheGermancorporategover-nancerules,whichweapply.TheAnnualReportonForm20-FispublishedonSAPsWebsiteatwww.sap.com/about/investor/reports/2009.epx.

TRANSPARENC, COMMNICATION, AND SERVICE FOR SHAREHODERS

OurshareholderscanobtainfullandtimelyinformationaboutSAPonourWebsiteandcanaccesscurrentandhistoricalCompanydata.Amongotherinformation,SAPpostsallofitsnancialreports,allrelevantnewsabouttheCompanysgoverningbodies,corporategovernancedocumentation,newsinfrequently-asked-questionformatoncurrentbusinessmeasures,informationrequiringad-hoc(current)disclosure,pressreleases,andnewsofdirectorsdealingsnotiablepursuanttotheGermanSecuritiesTradingAct,section15a.ShareholdersarealsoabletowatchalivebroadcastoftheentireAnnualGeneralMeetingof

Code of Business

Conduct

SAPsCodeofBusinessConductsisavailableonlineat

www.sap.com/corpgovernancePoliciesandStatutes

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ShareholdersontheInternet.Theycanvoteaccordingtotheirsharesatthemeetingbyin-structingaproxyoftheirchoiceoroneoftheproxiesprovidedforthatpurposebySAP.AllofthedocumentationrelatedtotheAnnualGeneralMeetingofShareholdersispostedingoodtimeonSAPsWebsiteatwww.sap.com/AGM.

FINANCIA ACCONTING, RIS MANAGEMENT, AND INTERNACONTRO STRCTRE

TheMay2009AnnualGeneralMeetingofShareholdersappointedKPMGtoaudittheCom-panysnancialstatements.WepreparetheSAPAGnancialstatementsinaccordancewiththeGermanCommercialCodeandourstatutoryconsolidatednancialstatementsinaccordancewithIFRS.WealsopreparetheAnnualReportonForm20-FinaccordancewithSECrequirements.TheExecutiveBoardisresponsiblefornancialaccounting.TheSuper-visoryBoardapprovestheSAPAGnancialstatementsandthestatutoryconsolidatednancialstatements.

InGermanstock-corporationandcommerciallaw,therearespecialrequirementsforinternalriskmanagementthatapplytoSAP.Tomeetthem,ourglobalriskmanagementsystemsupportsriskplanning,identication,analysis,handling,andresolution.Wealsomaintainstan-darddocumentationofallourinternalcontrolstructuresandcontinuallyevaluatetheiref-fectiveness.AsacompanylistedontheNYSE,weconductanannualauditofourinternalcontrolovernancialreportinginaccordancewiththecomplexrequirementsoftheU.S.Sarbanes-OxleyAct,section404,withourauditor,KPMG.KPMGsauditofournancialre-portingcontrolhadnotfoundanyindicationbyMarch11,2010,thatitwasnoteectiveonDecember31,2009.Incompliancewiththereportingobligationsintroducedin2009un-dertheGermanCommercialCode,sections289(5)and315(2)(5)in2009,boththeSAPAGreviewofoperations(whichispublishedinGerman)andtheReviewofSAPGroupOperationsincludecomprehensiveinformationabouttheprincipalfeaturesoftheinternalcontrolandriskmanagementsystemwithrespecttotheSAPAGandconsolidatedaccount-

ingprocesses.

EXECTIVE BOARD AND SPERVISOR BOARD COMPENSATION INFORMATION

TheGermanCorporateGovernanceCoderecommendsthatcertaindetailsofExecutiveandSupervisoryBoardmembercompensationandshareownership,stockoptions,andsimilarincentivesbeincludedinthecorporategovernancereportorinthecompensa-tionreportaspartofthecorporategovernancereport.Thesedetails,aswellasthelegallyrequiredinformationaboutExecutiveandSupervisoryBoardmemberscompensa-tion,areallavailableinthecompensationreport.ThecompensationreportispartoftheauditedReviewofSAPGroupOperationsaswellasformingpartofthiscorporategover-nancereport.TheSupervisoryBoardhasapprovedtheReviewofSAPGroupOperations,includingthecompensationreport,andadoptedthecompensationreportscontentforthepurposeofcorporategovernanceandcompensationreportingasrequiredbytheCode.



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RepoRt by the SupeRviSoRy boaRd

Cooperation and Control

For SAP, 2009 was one o the most difcult years ever. Faced with deep economic crisis,many companies in many regions o the world again postponed investments. For the rst timein the history o SAP, the management had to reduce the global workorce. From the Super-

visory Boards many discussions with the Executive Board, we know how hard the Executive

Board ound this drastic step, and we wish to record our special thanks to Lo Apothekerand Henning Kagermann or their strong leadership. The program was implemented as airlyas possible and with every consideration or the interests o our people: Responsibilitytoward our employees is at the heart o our corporate culture.

In response to the difcult market conditions in 2009, SAP concentrated most on sotwaresolutions that can deliver rapid returns or customers and give them new competitive edge.We shipped innovative products, including SAP BusinessObjects Explorer and SAP Busi-ness Suite 7 sotware. We also embarked on a process o wholesale transormation to makeourselves much more agile in our response both to the changes we anticipate in the sot-

ware industry, and to changing customer expectations.

Wisely, in 2009 the Executive Board took the opportunity to gear up or a new era o prot-

able growth. Their concerted eorts already began to bear ruit beore the year was out.There was a denite turnaround in the second hal o the year, and the nal quarter was veryencouraging. Sales improved in the Asia Pacic Japan region and the Americas region, andin some key markets and sectors, suggesting that SAP is gaining momentum or a year ogrowth in 2010. In 2009, we limited the decline in non-GAAP revenue rom our sotware andsotware-related services to 5% year-over-year at constant currencies. Our non-GAAP oper-ating margin on a constant currency basis was 27.5%, surpassing the outlook guidance theCompany had given.

Overall, SAP held up well in a difcult year. SAP leads its segment o the market, and itsagility puts a larger share and more protable growth within grasp. To position theCompany even more strongly or the uture, the Supervisory Board nonetheless decided tomake changes to the Executive Board at the beginning o 2010.On February 7, the Supervisory Board reached an agreement with Lo Apotheker that histerm on the Executive Board would not be renewed ater expiration, and he resigned his seat

with immediate eect, also in agreement with the Supervisory Board. At the same time,the Supervisory Board appointed chie technology ofcer Vishal Sikka to the Executive Board.That day the Executive Board, with Supervisory Board approval, also named the two newco-CEOs: Bill McDermott, head o global eld operations, and Jim Hagemann Snabe, heado product development.

Dear Shareholders,

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AtitsmeetingafewdayslateronFebruary11,2010,theSupervisoryBoardacceptedtheresignationofJohnSchwarzfromtheExecutiveBoard.ThetermofGerhardOswaldsExecutiveBoardappointmentwasextendedtotheendof2011.Inaddition,heacceptedthechiefoperatingocerportfoliofromErwinGunst,whohadtoleaveforhealthreasonsonJanuary31,2010.ErwinGunsthadalsobeenlaborrelationsdirector,andtheSupervisoryBoardaskedWernerBrandttoreplacehiminthisroleonaninterimbasis.

TheSupervisoryBoardthanksLoApothekerforhishugecontributiontothesuccessofSAPovermorethan20years,rangingfromimpressivesuccessintheeldtohisachieve-mentsasCEO.WealsothankErwinGunstforallhissuccessfulworkoverasimilarlylongperiod,culminatingintheestablishmentofthechiefoperatingocerportfolioontheExecutiveBoard,andJohnSchwarzforhiscrucialcontributiontothesuccessfulandveryrapidas-similationofBusinessObjectsintoourCompany.TheSupervisoryBoardwishesallthreeeverysuccessinthefuture.

TheSupervisoryBoardhaseverycondencethatthenewmanagementwillcontinueto

driveforwardthereorientationoftheCompanysstrategyanditsfocusonprotablegrowth,andthatwithourinnovationsitwillextendSAPsleadingposition.

TheSAPSupervisoryBoardcloselymonitoredtheworkoftheSAPExecutiveBoardin2009.Toecientlyorganizeandperformourduties,particularlyinachallengingeconomicenviron-ment,werelyonin-depthandcooperativedialoguewiththeExecutiveBoard.ThatiswhythisreportstartsbyexplainingtheongoingpartnershipbetweenthetwoBoards.ThereportalsofocusesonthemaintopicsdiscussedbytheSupervisoryBoard,theworkofitscom-mittees,corporategovernanceatSAP,andtheauditoftheSAPAGandconsolidatednan-cialstatements.

COOPERATION BETWEEN THE EXECTIVE AND SPERVISOR BOARDS

In2009,wedischargedthedutiesimposedonusbythelawandbytheCompanysArticlesofIncorporation.WewereregularlyconsultedbytheExecutiveBoardontherunningoftheCompanyandwescrutinizedandmonitoredtheworkofmanagement.WemonitoredtheExecutiveBoardsmanagementoftheSAPGroupwithregardtolegality,correctness,appro-priateness,andcost-eectiveness.Inaddition,theExecutiveandSupervisoryBoardscon-sultedontheCompanysstrategicorientationandregularlydiscussedprogressinimple-mentingstrategy.WewereinvolvedwheneverdecisionsoffundamentalimportancetoSAPweremade.



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TheSupervisoryBoardregularlyreceivedfullandtimelyreportsfromtheExecutiveBoard,bothfrommembersinpersonandinwrittendocuments.Thereportschieyconcernedplan-ning,theCompanysbusinessperformanceincludingtherisksituation,riskmanagement,compliance,andtransactionsofspecialsignicanceforSAP.TheExecutiveBoardalsoindi-catedwhentheCompanysbusinessdeviatedfromtheplansandtargetsandexplainedthesedeviations.

ThecontentandscopeoftheExecutiveBoardsreportsfullymettherequirementsthattheSupervisoryBoardhadplacedonthem.Besidesthesereports,theSupervisoryBoardreceivedsupplementaryinformationfromtheExecutiveBoard.Inparticular,theExecutiveBoard

wasavailableatSupervisoryBoardmeetingsfordiscussionsandtoanswerourquestions.WecheckedtheinformationreceivedfromtheExecutiveBoardforplausibilityaswellascriticallyexamininganddiscussingit.TheSupervisoryBoardmaintainsalistoftransactionsforwhichtheExecutiveBoardrequirestheSupervisoryBoardsconsent.Weupdatethelistregularlyasrequired,mostrecentlyin2009.TheSupervisoryBoardcarefullyconsideredalltransactionsinthelistedcategoriesanddiscussedthemwiththeExecutiveBoard,focusing

onthebenetsandeectsofeachtransaction.TheSupervisoryBoardagreedtoalltrans-actionswhereitsconsentwasrequired.

TheExecutiveBoardalsokeptthechairpersonoftheSupervisoryBoardfullyinformedbetweenmeetingsoftheSupervisoryBoardanditscommittees.Forexample,theCompa-nystwoco-CEOs(and,fromJune2009,itssingleCEO)andthechairpersonoftheSuper-

visoryBoardmetregularlytodiscussSAPsstrategy,currentprogressinbusiness,andriskmanagement,aswellasotherkeytopicsanddecisionsthatarose.Theco-CEOs(and,sinceJune2009,theCEO)informedtheSupervisoryBoardchairperson,withoutdelay,ofimportanteventsthatweresignicantforassessingSAPssituationandprogressorforthemanagementofSAP.

SPERVISOR BOARD MEETINGS

TherewerefourordinarymeetingsandoneextraordinarymeetingoftheSupervisoryBoardin2009.TheresolutionsofthefullSupervisoryBoardweremadeatthesemeetings.Areso-lutionononeitemwasadoptedusingthecircularcorrespondenceprocedure.TheSupervisoryBoarddiscussedthefollowingtopicsand,wherenecessary,maderesolutions:

Extraordinary Meeting in JanuaryThemeetingonJanuary27,2009,tookplaceagainstthebackgroundoftheworldeconomiccrisis.WithreferencetotheCompanyskeynancialindicatorsinthefourthquarterandthroughout2008,wediscussedindepththeneedtocontinuethecostcontainmentprograminstigatedbytheExecutiveBoardinOctober2008andtoinstituteadditionalcost-cuttingmeasuresin2009.WewereinagreementwiththeExecutiveBoardthatthesemeasureswererequiredtosustainand,ifpossible,tostrengthenSAPscompetitiveness.ToenableSAPtoadaptitssizetotodaysmarketconditionsandcombattheeectsoftheglobalrecession,afterin-depthdiscussionstheSupervisoryBoardauthorizedtheExecutiveBoardatthelat-terssuggestiontoreducetheworkforceto48,500full-timeequivalentsworldwidebytheendof2009bytakingadvantageofnaturalattritionwhereverpossibleandtocontinuetomain-taintightcostcontrolsonallvariableexpenses,includingthird-partyservicesandcapitalexpenditure.Atthismeeting,theSupervisoryBoardapprovedtheappointmentofRobertEnslinasCEOofSAPAmerica,Inc.andpresidentofourNorthAmericaregion,replacingGregTomb.

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Meeting in FebruaryAtourmeetingonFebruary12,2009,wediscussedthe2008fourth-quarterandfull-yearresultsandtheprogressofourbusinessduring2008.WereceivedanddiscussedindepthareportfromtheExecutiveBoardonstrategyfor2009whichwasclearlygoingtobeadicultyearandagreedthebudgetfor2009presentedbytheExecutiveBoard,includ-ingthecapitalexpenditurebudgetandliquidityplanfor2009.WereviewedindetailthenancingmodelspresentedbytheExecutiveBoardinconnectionwithSAPsfuturenancingstrategyandauthorizedtheExecutiveBoardtoraiseloancapitalnotexceeding1.1billiontosecureadditionalliquidity.TheSupervisoryBoardapprovedHenningKagermannscandidacyandacceptanceofaseatonthesupervisoryboardofDeutschePostAG.Incon-sequenceofHelgaClassensresignationfromtheSupervisoryBoardonherentryintosemi-retirement,andherreplacementbyanewmember,ChristianeKuntz-Mayr,wediscussedthehandoverofHelgaClassensfunctionsontheGeneralCommitteeandtheMediationCom-mittee.WealsoelectedChristianeKuntz-MayrtotheTechnologyandStrategyCommittee.Atthesametimeweamendedthiscommitteesrulesofprocedurebyrepealingtherulecon-cerningthenumberofmembers.TheSupervisoryBoardextendedWernerBrandtsappoint-

mentasamemberoftheExecutiveBoardofSAPAGfromJanuary 1, 2010,toDecember 31,2013.

TheExecutiveBoardonceagainreportedtousinsummarizedformonourequityinvest-mentsin2009.Thecorporategovernanceocerpresentedhisannualreporttous,inwhichhestatedthathehadnotidentiedanybreachesoftheapplicablerulesin2008.Thecapitalmarketcomplianceocersubmittedhisannualreport.TheCompensationCommittee,FinanceandInvestmentCommittee,TechnologyandStrategyCommittee,andAuditCom-mitteereportedonthemostrecenttopicsdiscussedattheirmeetings.TheFinanceandInvestmentCommitteereportedthatitsupportedthenancingstrategyfor2009presentedtoitsmeetingbytheExecutiveBoard.TheTechnologyandStrategyCommitteereportedonthecurrentsituationwithregardtoSAPBusinessByDesignandfutureplansfortheproduct.TheAuditCommitteereportedontheprogressoftheauditofthe2008annualnancial

statementsandourinternalriskmanagement.FollowingtheCompensationCommitteesreportandatitsrecommendation,theSupervisoryBoarddecidedthattheExecutiveBoardscompensationsystemin2009shouldcomprisethreecomponents:axedelement,adirec-torsprot-sharingbonus,andalong-term,performance-orientedincentiveelementintheformofvirtualoptions.Ofthecashcompensation,25%wouldbethexedsalaryandtheremaining75%wouldbemadeupofthedirectorsprot-sharingbonus.Thefairmarketvalueofthevirtualoptionsatthetimeofissuewouldbeone-and-one-halftimesthexedcompensationelement.OnthebasisofareportsubmittedbytheCompensationCommittee,theSupervisoryBoardapprovedtheconclusionofaconsultingcontractbetweentheformerExecutiveBoardmemberPeterZenckeandSAPAG,eectiveuntilDecember31,2009.



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Audit MeetingAtitsMarch26,2009,meeting,theSupervisoryBoardfocusedprincipallyonthedocumentsconcerningSAPAGs2008nancialstatementsandconsolidatednancialstatements,theauditsconductedbyKPMGAGWirtschaftsprfungsgesellschaft(KPMG),andtheExecutiveBoardsproposedresolutionontheappropriationofretainedearningsfor2008.TheAuditCommitteereported,amongotherthings,ontheformandscopeofitsexaminationofthedocumentsrelatingtothenancialstatementsandrecommendedthattheSupervisoryBoardapprovethem.Theauditorattendedthemeetingandreportedindetailontheauditandtheresultsoftheaudit.TheauditorthendiscussedtheresultswiththeSupervisoryBoardandanswereditsquestions.TheSupervisoryBoardapprovedtheaudit.Therewerenondingsfromitsownexamination,sotheSupervisoryBoardgaveitsconsenttothenancialstatementsfor2008.WecheckedandendorsedtheExecutiveBoardsproposaltoappropriateretainedearnings.

Inaddition,wepassedourproposedresolutionsfortheagendaoftheMay2009AnnualGeneralMeetingofShareholders,whichincludedapprovingtheproposaltotheMeeting

concerningtheelectionofanauditorfor2009inaccordancewiththeAuditCommitteesrecommendation.Afurtheritemontheagendaatthismeetingwasareportonbusinessintherstquarterof2009.TheSupervisoryBoardgaveitsconsentforvariouslegaltransac-tionsbetweenSAPandindividualExecutiveandSupervisoryBoardmembers.Afterafulldiscussion,wealsoapprovedtheExecutiveBoardsproposedmaximumtotalbudgetfor2009forvirtualstockoptionstobegrantedunderthenew2009SOPPerformancePlanandstockappreciationrights(STARs)tobegrantedunderthe2009STARPerformancePlan.TheSupervisoryBoardalsoagreedtoconcludedirectorsandocers(D&O)liabilityinsur-ancepoliciesformembersoftheSupervisoryBoardandtheExecutiveBoard,andforcor-porateocers,fromApril1,2009,toApril1,2010.

TheCompensationCommittee,theTechnologyandStrategyCommittee,andtheSpecialCommittee,whichwassetuptohandletheOraclelawsuit,gavereportsontheirrecent

meetings.TheCompensationCommitteereportedonitsrenewedin-depthdiscussionsontheExecutiveBoardscompensationsystem.HavingreceivedtheCompensationCommit-teesreport,theSupervisoryBoardfollowedtheCompensationCommitteesrecommenda-tionandagreedthevariouscomponentsofandmetricsfortheExecutiveBoards2009com-pensationpackageapartfromtheallocationofvirtualstockoptions.ApplyingthestructuredenedbythefullSupervisoryBoard,theCompensationCommitteeallocatedvirtualstockoptionsatitsextraordinarymeetingonMay6,2009.TheTechnologyandStrategyCommit-teereportedontheproductportfoliomanagementprocessandtheproductportfolio.TheSpecialCommitteereportedontheprogressoftheOraclelitigationintheUnitedStates,es-peciallythecondentialsettlementnegotiationsatthesettlementconferencefollowingthecourthearingonFebruary23,2009,andontheinternalanalysesofthecircumstancesthatgaverisetothedispute.



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Meeting in JulyAtthemeetingonJuly31,2009,wefocusedonbusinessinthesecondquarterof2009,anassessmentofthersthalfoftheyear,theforecastforthesecondhalf,andfurtherplanning.TheExecutiveBoardreportedtousontheresultsfromthevariouslinesofbusinessandonthecompetitivepositionofSAPingeneral.TheExecutiveBoardreportedontheintegrationofBusinessObjectsintoSAP,whichisnearingcompletion;ontheenhancementofSAPcoreproducts(includingtheavailabilityofSAPBusinessSuite7);onthefavorablemarketresponsetotheextendedSAPEnterpriseSupportserviceoerings;andontheprogressoftheSAPBusinessByDesignsolution.TheExecutiveBoardprovideduswithinformationaboutthemidtermstrategyoftheSAPGroupupto2014,expandingonthedetailedstrategypaperthatwehadpreviouslyreceived.

TheExecutiveBoardalsoreportedtousagaininsummarizedformonequityinvestmentsmadebetween2003and2008,explainingingreaterdepththeeconomicimpactofacquiringOutlookSoftandVirsa.TheSupervisoryBoardresolvedtoextendthelistoftransactionsrequiringconsent:Inthefuture,thechairpersonoftheSupervisoryBoardistobeinformed

aboutallplannedacquisitionsirrespectiveoftheirvalueandmaydecideathisorherowndiscretiontoasktheFinanceandInvestmentCommitteeorthefullSupervisoryBoardfortheiradviceorconsentbeforeanacquisitioniscompleted.

TheSupervisoryBoardextendedtheappointmentofJohnSchwarzasanExecutiveBoardmemberfromJuly1,2010,untilJune30,2011,andconrmedthathiscompensationduringthisperiodwouldremainatitscurrentlevel.TheSupervisoryBoardapprovedtheappoint-mentofVishalSikka,SAPChiefTechnologyOcer,tothepostcorporateocerofSAPGroup.TheGeneralCommittee,AuditCommittee,TechnologyandStrategyCommittee,andCompensationCommitteereportedontheirmeetings.TheGeneralCommitteereportedontheallocationofvirtualstockoptionstomanagersandemployeesundertheSOPPerform-ancePlan2009.Italsoreportedthat,inordertoavoidtaxdisadvantagesforU.S.employ-ees,ithadagreedtosupplementarytermsstatingthatanyamountsemployeesareto

receiveafterexercisingtheiroptionswillnotbepaidoutuntiltheprogramendsin2014.TheGeneralCommitteealsoreportedonitsdecisiontoapprovetheissuetobeneciariesofupto20 milliontreasurysharesbyMay31,2010,tosatisfyrightsattachingtoconvertiblebondsandstockoptionsundershare-basedcompensationprograms.TheAuditCommitteereportedthatithadmadenondingsinitsexaminationofthenancialreportingofthesecondquarterandrsthalfof2009.

TheAuditCommitteefurtherreportedthatabudgethadbeenagreedforKPMGtoaudittheSAPGroupforscalyear2009,andthatfocusesforthe2009audithadbeendiscussedanddenedwiththeauditor.TheTechnologyandStrategyCommitteereportedontheCom-panyson-demandstrategyforthelargeenterprisetargetmarketandthecurrentsituationregardingSAPBusinessByDesign.



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Meeting in OctoberThetopicscoveredattheSupervisoryBoardmeetingonOctober30,2009,werebusinessinthethirdquarterof2009,theforecastforthefourthquarter,andthefull-yearforecastfor2010.TheExecutiveBoardprovideduswithinformationaboutSAPscompetitivesitua-tion,theongoingbusinesschallengescausedbythenancialmarketcrisis,changesincustomerdemandpatterns,andourmaincompetitorsactivities.TheExecutiveBoardreport-edonthesuccessfulintroductionoftheSAPBusinessExplorersoftware,thecurrentsitua-tionwithregardtotheSAPEnterpriseSupportserviceoerings,andtheplannedgo-to-marketdatefortheSAPBusinessByDesignsolution.TheExecutiveBoardprovideduswithdetailedinformationabouttheimplementationofSAPsmidtermstrategy.Asaresultoftheprivateplacementtransaction(schuldschein),thenancingapprovalthatwegrantedtheExecutiveBoardatthemeetingonFebruary12,2009,wasreducedtoabout400 million.Totakeadvantageofthefavorablecredittermscurrentlyavailableforcorporatebonds,weauthorizedtheExecutiveBoardatitsrequestandontherecommendationoftheFinanceandInvestmentCommitteetoraiseloancapitalofnotmorethan1 billionin2010.WestipulatedthatissuancedetailsrequirepriorapprovaloftheFinanceandInvestment

Committee.WeauthorizedtheExecutiveBoardtodissolvetheSAPPortalsEuropeangroupcompanystructurebelowSAPAmerica,whichwascreatedin2001/2002,andtotakethestepsnecessaryforthatpurpose.

AheadofthedecisionaboutExecutiveBoardcompensationintherstquarterof2010,theSupervisoryBoardagreedtocommissionanindependentexternalconsultingrmtore-port,basedonreferencevaluesforexecutiveboardcompensationatothercompanies,onwhethertheplannedExecutiveBoardcompensationiscustomaryandappropriate.Wedecidedtointroduceatthenextopportunity,whichisinApril2010,adeductibleintheD&OinsurancepolicyforExecutiveBoardmembersinaccordancewiththeminimumrequire-mentsofthenewGermanAppropriateExecutiveBoardRemunerationAct.However,afterdetaileddiscussiontheSupervisoryBoarddecidednottointroduceaD&OinsurancedeductibleformembersoftheSupervisoryBoard.TheSupervisoryBoardalsodetermined

thatithadasucientnumberofindependentmembers.WiththeagreementoftheExecu-tiveBoard,itissueditsannualdeclarationofimplementationoftheGermanCorporateGovernanceCode(theCode)pursuanttotheGermanStockCorporationAct,section161.SpeciallydesignedquestionnairesweresenttoSupervisoryBoardmembersinAugust 2009inconnectionwiththeregularreviewoftheeciencyoftheSupervisoryBoardsactivi-tiespursuanttosection5.6oftheGermanCorporateGovernanceCode.Themembersre-ceivedawrittencopyoftheSupervisoryBoardchairpersonsanalysisoftheresultsofthesurveypriortothemeeting.TheresultswerediscussedatthemeetingonFebruary11,2010.

TheAuditCommittee,CompensationCommittee,TechnologyandStrategyCommittee,andFinanceandInvestmentCommitteereportedontheirrecentmeetings.TheAuditCommit-teereportedontheprogressofitsauditoftheinternalcontrolstructure,statingthattheEx-ecutiveBoardhadimplementedanewriskmanagementconcepttoidentifyandanalyzerisksthatpotentiallythreatentheGroupsabilitytocontinueasagoingconcern.TheAuditCommitteealsoreportedthatboththeinternalauditserviceandtheglobalcomplianceorganizationhadsubmittedtheirannualreportsandthatitwasoftheopinionthatSAPhasaneectiveGroup-widecompliancesystem.TheAuditCommitteereportedthatithadamendeditsrulesofproceduretocomplywiththeprovisionsofthenewGermanAccount-



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ingLawModernizationAct.TheCompensationCommitteesreportpresentedpossibleapproachestoimplementingthenewGermanAppropriateExecutiveBoardRemunerationAct,whichrequirestheExecutiveBoardcompensationsystemtobemodiedinSpring2010whentheperformancetargetsaresetfor2010.TheTechnologyandStrategyCom-mitteereportedonproductstrategyanditsplannedimplementation.ThefuturedevelopmentofSAPBusinessSuiteandtherestoftheproductportfoliowasakeytopic.TheFinanceandInvestmentCommitteereportedspecicallyonitsreviewofSAPsventurecapitalactivi-ties,thenancingstrategypresentedbytheExecutiveBoardtowhichithadgivenitsap-proval,andtheacquisitionoftheSwiss-basedcompanySAFAG,whichitassessedfavorably.

Circular Correspondence ProcedureBasedonthedeliberationsattheSupervisoryBoardmeetingofOctober30,2009,theSupervisoryBoardapprovedbycircularcorrespondenceatechnicalamendmenttotheterms,eectiveDecember4,2009,forthelastexercisedateforstockoptionsgrantedtoExe cutiveBoardmembersin2005undertheSAPStockOptionPlan(SAPSOP)2002,inthesamewayastheExecutiveBoardwouldapplythemforSAPGroupemployees.Thisamendment,

whichdoesnotaecttheexercisepriceinanyway,preventedrecipientsfrommakingalossasaresultofthelongperiodbetweenthenoticeofexercise(December15,2009)andtheexercisedate(February1,2010)ifthepriceofSAPstockontheexercisedatewasbelowtheexercisepriceof33.55(plusadministrationfee)speciedinthePerformancePlan.Inconsequenceofthistechnicalamendmenttotheterms,theexerciseofoptionswouldonlybeexecutedifontheexercisedatetheSAPstockcouldbesoldatnotlessthantheexer-ciseprice(plusadministrationfee).

THE WOR OF THE SPERVISOR BOARD COMMITTEES

ThecommitteesmadeakeycontributiontotheworkoftheSupervisoryBoard.Thecommit-teesthatmetweretheGeneralCommittee,theCompensationCommittee,theFinanceandInvestmentCommittee,theAuditCommittee,theTechnologyandStrategyCommittee,

theNominationCommittee,andtheSpecialCommittee.WhenChristianeKuntz-MayrtookherseatontheSupervisoryBoardwitheectfromJanuary1,2009,changesweremadetothecommitteesmembership.

ThedutiesoftheGeneral Committee,whichhassixmembers,includecoordinatingtheSupervisoryBoardswork,dealingwithcorporategovernancematters,andapprovingtheyearsvirtualstockoptionallocationstoemployeesundertheSOPPerformancePlan2009.ItschairpersonisHassoPlattner.

Theve-memberCompensation Committee,alsochairedbyHassoPlattner,carriesoutthepreparatoryworknecessaryforthepersonneldecisionsmadebytheSupervisoryBoard,particularlywithregardtotheExecutiveBoardcompensationpackageandcompensationamounts.Itdeliberatesonnear,medium,andlong-termplansforExecutiveBoardmember-shipanditidentiesandshortlistspotentialcandidatesformembership.Itisalsoresponsibleforconcluding,amending,andterminatingthecontractsofExecutiveBoardmembers.

TheFinance and Investment Committee,withfourmembers,isresponsibleformattersre-latedtonance,acquisitions,andminorityinvestments.ItschairpersonisWilhelmHaarmann.



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TheAudit Committee isresponsibleformattersrelatingtonancialreportingandauditingaswellasriskmanagementandcompliance.Ithasfourmembers.ThecommitteeischairedbyErhardSchipporeit,whoformanyyearswasthechiefnancialocerofaDAXcompanythatisalsolistedontheNYSEandthereforequaliesasanindependentnancialexpertinthemeaningoftheGermanStockCorporationAct,section100(5),andtheequivalentU.S.provisions.

TheTechnology and Strategy Committee,whichhasninemembers,regularlyreviewstheSAPsproductstrategywithregardtothedevelopmentanddeploymentoftechnologiesandsoftware.ItadvisestheExecutiveBoardontechnologicalandstrategicdecisionsandonplannedinvestmentsinresearchanddevelopment.Italsomonitorsproductstrategyexecu-tion.TheCommitteemonitorsallkeytrendsonthemarketthatarerelevanttoSAPssoft-

wareandservices,andassesseswhichtechnologieswillbeneededtomaintainandimproveSAPsleadingposition.HassoPlattnerchairsthisCommittee.

Germanlawrequiresa Mediation Committee,butitonlymeetstomakepersonnelproposals

wherethereisnottherequiredtwo-thirdsmajorityontheSupervisoryBoardforanExecutiveBoardmembersappointmentordismissal.TheSAPMediationCommitteehasneveryetneededtomeet.

WehaveaNomination Committee,asrecommendedintheCode.Itiscomposedsolelyofshareholderrepresentatives.ItstaskistodenetherequirementsforSAPSupervisoryBoardmembersandsuggestsuitablecandidatesfornominationforelectionattheAnnualGeneralMeetingofShareholders.TheNominationCommitteehasthreemembersandischairedbyHassoPlattner.

TheSpecial CommitteeoftheSupervisoryBoardistaskedwithcoordinatingandmanagingtheSupervisoryBoardsexternallegaladvisorsconcernedwiththeinvestigationandanalysisofthefactsinconnectionwiththelegalactionbroughtbyOracle.HassoPlattner

alsochairsthiscommittee.

FormoreinformationabouttheSupervisoryBoardcommitteesandtheirmemberships,visitSAPsWebsiteatwww.sap.com/about/governance/supervisory.

During2009,thecommitteesfocusedonthefollowingtopics:

TheGeneral Committeemettwicein2009.ItapprovedtheallocationofvirtualstockoptionstoemployeesundertheSOPPerformancePlan2009andtheSTARPerformancePlan.Italsoapprovedtheuseoftreasurysharestosatisfyconversionandsubscriptionrightsattachingtoconvertiblebondsandstockoptions,respectively,thatweregrantedtoemployeesonshare-basedcompensationplans.



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TheCompensation Committeeheldfourregularmeetingsandoneextraordinarymeeting.Amongothermatters,itdeliberatedontheExecutiveBoardcompensationsystemandchangestoExecutiveBoardcompensation.ThenumberofvirtualstockoptionsissuedtoeachmemberoftheExecutiveBoardin2009bywayofshare-basedcompensationundertheSOPPerformancePlan2009wasdecidedbytheCompensationCommitteeatanextra-ordinarymeetingonMay6,2009,andreectedthefairvalueoftheoptions.TheCom-pensationCommitteeapprovedtheamendmentstoJohnSchwarzsemploymentcontractmadenecessarybytheintegrationofBusinessObjectsAmericasintoSAPAmerica,Inc.inacircularcorrespondencedecisiondatedJune30,2009.AtameetingonJuly30,2009,theCompensationCommitteechangedthevirtualstockoptiontermsforExecutiveBoardmembersJohnSchwarzandBillMcDermotttoavoidtaxdisadvantagesduetoanewregulationintheUnitedStates:Theamountspayableaftertheoptionshavebeenexercised

willnotbepaidoutuntiltheprogramendsin2014.InanticipationoftheGermanAppropriateExecutiveBoardRemunerationActofJuly31,2009,whichcameintoeectonAugust5,2009,theCommitteeamendeditsrulesofproceduretotheeectthatinthefuture,thefullSupervisoryBoardwillhavetodetermineindividualExecutiveBoardmembersactual

compensationaswellasthecompensationsystem.TheCommitteeamendeditsrulesofproceduretoreectthenewrecommendationintheGermanCorporateGovernanceCode,section4.2.2(3),thatwhenanexternalexpertiscommissionedtoassesstheappropri-atenessofexecutiveboardremuneration,careshouldbetakentoensurethattheexpertisindependentoftheexecutiveboardandthecompany.

TheFinance and Investment Committeeheldthreemeetings.Betweenthesemeetings,theExecutiveBoardinformedtheCommitteemembersinwritingabouttheequityinvest-mentsundertakenin2008and,onatimelybasis,aboutthoseequityinvestmentsin2009whichtheExecutiveBoardhasadutytoinformtheCommitteeabout.Asinprevious

years,theFinanceandInvestmentCommitteefocusedontransactionsinvolvingequityinterestsandthenancingstrategyofSAPAG.Inparticular,theExecutiveBoardprovidedtheCommitteewithin-depthinformationabouttheacquisitionofsharesinSAFAG,a

companybasedinSwitzerland,followingpublicationofthepublicoer.TheCommitteediscussedtheventurecapitalactivitiesofSAPAGduringtheperiodcoveredbythisreportonaregularbasis,anditadoptedandamendeditsrulesofprocedure.

TheAudit Committee heldfourmeetingsduringtheyearatwhichmemberswerephysicallyinattendance,andsixtelephoneconferencemeetings.ItdeliberatedontheSAPAGandconsolidatednancialstatements,thereviewsofSAPAGandSAPGroupoperations,the

AnnualReportonForm20-Fforscalyear2008,thedevelopmentofriskmanagementintheSAPGroup,theexaminationoftheinternalcontrolandrisk-managementstructure,theexaminationoftheinternalauditsystem,andcomplianceintheSAPGroup.ItdidworkpreparatorytotheSupervisoryBoardsproposaltotheAnnualGeneralMeetingofShare-holderswithrespecttotheelectionofanauditorforscalyear2009andveriedtheauditorsindependence.Followingtheelectionoftheauditor,theAuditCommitteedecided

withtheauditoronthefocusareasoftheauditandagreedtheauditorsfee.TheAuditCommitteedeliberatedregularlyonSAPsbusinessperformanceanditsimpactontheCompanysnancialaccounting.ItdiscussedwiththeExecutiveBoardthenancialnumbersforscalyear2008,thequarterlynumbersandquarterlyreportsin2009,theresultsofthe2008audit,andtheauditorsquarterlyreviewsofselectedsoftwareagreements.TheauditorattendedallphysicalAuditCommitteemeetingsandreportedindepthonitsaudit

workandquarterlyreviewsofselectedsoftwareagreements.Inadditiontothesediscus-



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sionsinthephysicalmeetings,theExecutiveBoardheldtelephoneconferenceswiththeAuditCommitteebeforetheannouncementofthepreliminaryquarterlyresultstoin-formCommitteemembersaboutthepreparationandreviewofthequarterlynancialreportsandaboutthepreliminaryquarterlyresults.Beforepublishingquarterlyreports,theExecutiveBoardsendsthemtotheCommitteeanddiscussesthemwiththeCom-mitteebytelephoneconference.

TheTechnology and Strategy Committeemetfourtimesduringtheyear.ItdiscussedthekeydevelopmentsinthesoftwareindustryinthecomingyearsandSAPsproductstra-tegy.Itfocusedparticularlyontheproduct-relatedfactorsrequiredtosuccessfullylaunchSAPBusinessByDesign.Itexaminedtherelationshipbetweenproductstrategyandcorporatestrategy.ItalsodiscussedthefuturedevelopmentofSAPBusinessSuiteandSAPsentireproductportfolio.

TheNomination Committee didnotmeetin2009becausetherewerenochangesintheshareholderrepresentativesontheSupervisoryBoard.

TheSpecial Committee mettwicein2009,discussingindetailthecurrentstateoftheOraclelitigationagainstSAPAGanditssubsidiaries,SAPAmericaandTomorrowNow.

Theregularreportsfromthecommitteesensuredthatwereceivedcomprehensiveinforma-tionaboutallmatterscoveredbythecommitteesandwerethereforeabletodiscussanddeliberateonthesetopicsthoroughly.

CORPORATE GOVERNANCE

SAPscorporategovernanceocermonitoredourcompliancewiththoserecommendationsintheCodewithwhichinourdeclarationweclaimtocomply,andreportedinfulltotheSupervisoryBoard.SupervisoryBoardmembershadnoconictsofinterestinthemeaning

ofsectionof5.5.2theCode.

TheSupervisoryBoardgranteditsconsenttotheconclusionofcontractswithSupervisoryBoardmemberswhereitsconsentwasrequired.Detailedinformationaboutcompliance

withtheCodeisavailableintheExecutiveandSupervisoryBoardscorporategovernancereport.TheSupervisoryBoardhascloselyexaminedtheExecutiveBoardscorporategovernancestatementpursuanttotheGermanCommercialCode,section289a.Ithasap-provedthestatementinconjunctionwiththereviewofoperationsandfullyendorsedit.

Corporate Governance

SAPscorporategover-nancestatementcanbefoundonlineat

www.sap.com/about/governance/statement.



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SAP AG AND CONSOIDATED ACCONTS FOR 2009

Asinrecentyears,KPMGauditedtheSAPAGandconsolidatedaccountsfor2009.TheAnnualGeneralMeetingofShareholderselectedKPMGastheSAPAGandSAPGroupauditoronMay19,2009.TheSupervisoryBoardproposedtheappointmentofKPMGontherecommendationoftheAuditCommittee.BeforeproposingKPMGtotheAnnualGener-alMeetingofShareholdersasauditorfortheyear,thechairpersonoftheSupervisoryBoardandtheAuditCommitteehadobtainedconrmationfromthermthatcircumstancesdidnotexistthatmightprejudiceitsindependenceastheauditor.TheSupervisoryBoardhasagreedwithKPMGthattheauditorshouldreporttotheSupervisoryBoardandrecordintheauditorsreportanyfactfoundduringtheauditthatisinconsistentwiththedeclarationgivenbytheExecutiveBoardandtheSupervisoryBoardconcerningimplementationoftheCode.

KPMGexaminedtheSAPAGnancialstatementspreparedinaccordancewiththeGermanCommercialCode,theSAPAGreviewofoperations,theconsolidatednancialstatements

preparedinaccordancewithInternationalFinancialReportingStandards(IFRS)asrequiredbytheGermanCommercialCode,section315a,andthereviewofSAPGroupoperations,asrequiredbytheGermanCommercialCode,section315,andcertiedthemwithoutquali-cation.Theauditorthusconrmedthat,initsopinionbasedonthendingsoftheaudit,theSAPAGandconsolidatednancialstatements,inaccordancewiththeapplicableaccount-ingregulations,accuratelypresentSAPAGsandtheSAPGroupsassets,nancialposi-tion,andincome.KPMGalsocertiedwithoutqualicationthatSAPsinternalcontrolsovernancialreportingcomplywithU.S.GAAP.Theauditorstatesinthisauditopinion,whichisprintedintheAnnualReportonForm20-F,thatitconsidersSAPsinternalcontrolsovernancialreportingtobeeectiveinallmaterialrespects.

AllAuditCommitteeandSupervisoryBoardmembersreceivedthedocumentsconcerningthenancialstatementsmentionedabove,theauditreportspreparedbyKPMG,andthe

ExecutiveBoardsproposalfortheappropriationofretainedearningsingoodtime.AftertheExecutiveBoardhadexplainedthem,theAuditCommitteeandtheSupervisoryBoardreviewedthenancialstatementdocumentsinthelightofKPMGsauditreports.Theauditorattend-edthemeetingoftheAuditCommitteeonMarch24,2010,andtheauditmeetingofthefullSupervisoryBoardonMarch25,2010,andreportedontheauditandtheresultsoftheauditindetail.Theauditoralsoreportedthatithadnotidentiedanymaterialweaknessesinourinternalcontrolandrisk-managementstructurefornancialreporting.Duringthediscus-sionwiththeauditor,boththeAuditCommitteeandtheSupervisoryBoardaskeddetailedquestionsabouttheform,scope,andresultsoftheaudit.TheAuditCommitteereportedtotheSupervisoryBoardonitsreviewofthenancialstatements,itsdiscussionswiththeauditor,anditsexaminationofthenancialreportingprocess.ItconrmedthatthestructureoftheSAPGroupinternalcontrol,riskmanagement,andinternalauditingsystemsiseec-tive.TheCommitteereportedthatKPMGhadinformedtheCommitteethatnocircumstanceshadarisenduringtheauditthatmightgivecauseforconcernaboutKPMGspartialityandhadlistedtheservicesithadprovidedthatwerenotpartoftheaudit.TheCommitteereportedthatithadexaminedtheauditorsindependence,takingthenon-auditservicesithadren-deredintoconsideration,andstatedthatintheCommitteesopiniontheauditorpossessedtherequireddegreeofindependence.



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TheAuditCommitteeandSupervisoryBoardwereabletosatisfythemselvesthatKPMGhadconductedtheauditproperly.Inparticular,theyconcludedthatboththeauditreportsandtheaudititselffullledthelegalrequirements.OnthebasisofthereportandtheAuditCommitteesrecommendation,theSupervisoryBoardapprovedtheauditand,becausetherewerenondingsfromitsownexamination,gaveitsconsenttotheSAPAGnancialstatements,theconsolidatednancialstatements,thereviewofSAPAGoperations(includingtheExecutiveBoardscorporategovernancestatementpursuanttotheGermanCommercialCode,section289a),andthereviewofSAPGroupoperations.Thenancialstatementsandreviewsofoperationswerethusformallyadopted.TheSupervisoryBoardsassess-mentofthesituationofSAPAGandtheGroupcoincidedwiththatoftheExecutiveBoardassetoutinthereviewsofSAPAGandSAPGroupoperations.TheSupervisoryBoardconsideredtheproposalpresentedbytheExecutiveBoardfortheappropriationofretainedearnings.Ithadregardtotherequirementsofstringentdividendspolicy,theeectsonliquidity,creditworthiness,andthefuturenancesofSAPAG,andtookintoaccounttheinterestsoftheshareholderswhichincludeddiscussionwiththeauditor.ItendorsedtheExecutiveBoardsproposal.

MEMBERSHIP CHANGES ON THE SPERVISOR BOARDAND EXECTIVE BOARD IN 2009

Attheendofthe2008,HelgaClassen,amemberelectedbytheemployees,tooksemire-tirementandlefttheSupervisoryBoard.ChristianeKuntz-MayrjoinedtheSupervisoryBoardinHelgaClassensplaceonJanuary1,2009.Asindicatedinthe2008report,CEOHenningKagermannretiredafteralongperiodofserviceonMay31,2009.ExecutiveBoardMemberClausHeinrichleftSAPonthesamedate.TheirtaskswereassignedtotheotherExecutiveBoardmembers.Wewouldliketothankbothofthemonceagainfortheiroutstandingwork.ThechangesontheExecutiveBoardin2010arediscussedabove.

TheSupervisoryBoardthankstheExecutiveBoard,themanagersoftheGroupcompanies,

andallofouremployeesfortheircommitmentandhardworkin2009.Wewouldalsoliketothankourcustomersandpartners,whocontributedsignicantlytoSAPssuccessaswell.

HassoPlattnerFortheSupervisoryBoard



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compensation report 1)

CoMpensation for exeCUtive anD sUpervisory boarD MeMbers

This compensation report outlines the criteria that we apply to determine com-

pensation for Executive Board and Supervisory Board members, discloses the

amount of compensation paid, and describes the compensation systems. It also

contains information about Executive Board members share-based compensa-

tion plans, shares held by Executive Board and Supervisory Board members, and

the directors dealings required to be disclosed in accordance with the German

Securities Trading Act.

COMPENSATION FOR EXECTIVE BOARD MEMBERS

Compensation SystemInadeparturefrompreviouspractice,in2009theExecutiveBoardmemberscompensationsystemwasnotsetbytheCompensationCommitteeoftheSupervisoryBoard.Instead,theCompensationCommitteepreparedproposals,which(asisthecaseforindividualExec-utiveBoardmemberstotalremuneration)wereapprovedbythefullSupervisoryBoard.

ExecutiveBoardmemberscompensationisintendedtoreecttheGroupssizeandglobalpresenceaswellasoureconomicandnancialstanding.Thelevelisinternationallycompeti-tivetorewardcommitted,successfulworkinadynamicenvironment.

ThecompensationoftheExecutiveBoardasabodyisperformance-based.Ithasthree

elements:axedelement(salary),aperformance-relatedelement(directorsprot-sharing),andalong-termincentiveelement(share-basedcompensation).

Acompensationtargetissetforthetotalofxedandperformance-relatedelements.Thistargetisreviewedand,ifnecessary,updatedeveryyearinlightofourbusinessperformanceanddirectorscompensationatcomparablecompaniesontheinternationalstage.Everyyear,theSupervisoryBoardsetsthetargetperformance-relatedcompensation,reectingtherelevantvaluesinSAPsbudgetforthatyear.ThenumberofvirtualstockoptionsissuedtoeachmemberoftheExecutiveBoardin2009bywayofshare-basedcompensationwasdecidedbytheCompensationCommitteeonMay6,2009,andreectedthefairvalueoftheoptions.

ThefollowingcriteriaapplytotheelementsofExecutiveBoardcompensationfor2009:Thexedelementispaidasamonthlysalary.Theamountofperformance-relatedcompensationtobepaidoutinrespectof2009de-

pendedontheSAPGroupsachievementofitstargetsfor(non-GAAP)operatingmargin,(non-GAAP)operatingincome,andthecash-owconversionratio(U.S.GAAP).

1ThiscompensationreportispartoftheauditedReviewofSAPGroupOperationsandofourcorporategovernancereport.



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OnFebruary11,2010,theSupervisoryBoardassessedSAPsperformanceagainsttheagreedtargetsanddeterminedhowmuchperformance-relatedcompensationwaspayable.ThepaymentwillbemadeaftertheAnnualGeneralMeetingofShareholdersinJune2010.

Theregularformofshare-basedcompensationwastheissueofvirtualstockoptionsun-derthetermsofthe2009stockoptionplan(SOPPerformancePlan2009).ThetermsanddetailsoftheSOPPerformancePlan2009aredescribedinNote28intheNotestoCon-solidatedFinancialStatementssection.

ClausesareincludedinthecontractsofExecutiveBoardmembersBillMcDermottand,witheectfrom2009,JohnSchwarztoxeuro-denominatedcompensationintheirlocalcurrencies.

Amount of CompensationExecutiveBoardmemberscompensationwasasfollowsin2009:

Thevaluesforregularshare-basedcompensationinthetableaboveresultfromthefollowingallocationsofvirtualstockoptionsgrantedin2009undertheSOPPerformancePlan2009.

(000) Fixed Elements Performance-Related Element

Regular ong-TermIncentive Elements

To

Salary Other1) DirectorsProt-Sharing

Share-BasedCompensation

(SAPSOP2009)2)

Prof.Dr.HenningKagermann

(Co-CEOandMemberuntilMay31,2009)

312.5 7.4 2,026.2 2,34

LoApotheker(Co-CEO) 750.0 137.3 4,862.8 950.0 6,70

Dr.WernerBrandt 455.0 19.1 2,950.1 577.0 4,00

ErwinGunst 455.0 36.0 2,950.1 577.0 4,01

Prof.Dr.ClausE.Heinrich(untilMay31,2009) 189.6 9.3 658.8 85

BillMcDermott3)

900.4 74.9 2,776.7 577.0 4,32GerhardOswald 455.0 437.5 2,950.1 577.0 4,41

JohnSchwarz4) 581.5 28.2 2,910.7 577.0 4,09

JimHagemannSnabe 455.0 131.1 2,950.1 577.0 4,11

Total 4,554.0 880.8 25,035.6 4,412.0 34,88

1)Insurancecontributions,benefitsinkind,expensesformaintenanceoftwohouseholdsduetoworkabroad,reimbursementlegalandtaxadvicefees,leavecompensation

2)Fairvalueatthetimeofallocation3)Includesdiscretepaymentsarisingthroughapplicationofthefixedexchange-rateclausetothefollowingitems:

salaryfor2008:29,600;profit-sharingbonusfor2008:53,200;salaryfor2009:47,500;profit-sharingbonusfor2009:91,900

4)Includesdiscretepaymentsarisingthroughapplicationofthefixedexchange-rateclausetothefollowingitems:salaryfor2009:5,000;profit-sharingbonusfor2009:29,000

CompensationReport


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ThefollowingtableshowstotalExecutiveBoardcompensationin2008,includingSAPSOP2007stockoptionsgranted.

2009 Allocations

Quantity Fair Value per Right

at Time of Grant

Total Fair Value

of ong-Term

Incentive Elementsat Time of Grant

Fair Value per Right

on Dec. 31, 2009

Total Value on

Dec. 31, 2009

(000) (000)


(CEOandMemberuntilMay31,2009)1)

LoApotheker(Co-CEO) 169,040 5.62 950.0 4.89 275.5

Dr.WernerBrandt 102,670 5.62 577.0 4.89 167.4

ErwinGunst 102,670 5.62 577.0 4.89 167.4

Prof.Dr.ClausE.Heinrich1)

BillMcDermott 102,670 5.62 577.0 4.89 167.4

GerhardOswald 102,670 5.62 577.0 4.89 167.4

JohnSchwarz 102,670 5.62 577.0 4.89 167.4

JimHagemannSnabe 102,670 5.62 577.0 4.89 167.4

Total 785,060 4,412.0 1,279

1)RetiredMay31,2009.Noallocationsin2009.

(000) Fixed Elements Performance-

Related Element

Regular ong-Term

Incentive Elements

Total

Salary Other1) DirectorsProtSharing

Share-BasedCompensation

(SAPSOP2007)2)


(Co-CEOandmemberuntilMay31,2009)750.0 15.7 2,606.1 948.4 4,320.2

LoApotheker(Co-CEO) 687.5 334.5 2,388.9 632.3 4,043.2

Dr.WernerBrandt 455.0 23.5 1,581.0 577.3 2,636.8

ErwinGunst3) 227.5 18.1 790.5 1,036.1

Prof.Dr.ClausE.Heinrich 455.0 19.8 1,581.0 577.3 2,633.1

BillMcDermott3) 395.2 142.4 631.3 1,168.9

GerhardOswald 455.0 627.9 1,581.0 577.3 3,241.2

JohnSchwarz4) 424.9 14.3 1,295.2 577.3 2,311.7

JimHagemannSnabe3) 227.5 22.3 790.5 1,040.3

Dr.PeterZencke(memberuntilDec.31,2008) 455.0 27.8 1,581.0 577.3 2,641.1

Total 4,532.6 1,246.3 14,826.5 4,467.2 25,072.6

1)Insurancecontributions,benetsinkind,expensesformaintenanceoftwohouseholdsduetoworkabroad,compensationfromseatsonothergoverningbodiesintheSAPGroup,reimbursementoflegalfees.2)Fairvalueatthetimeofallocation.3)MemberoftheExecutiveBoardfromJuly1,2008.(Thetableshowscompensationsincethatdate.)4)MemberoftheExecutiveBoardfromMarch1,2008.(Thetableshowscompensationsincethatdate.)



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Share-BasedCompensationUnderSAPSOP2007

END-OF-SERVICE BENEFITS

Normal End-of-Service ndertakings

Retirement Pension PlanMembersoftheExecutiveBoardreceivearetirementpensionwhentheyreachtheretire-mentageof60andvacatetheirExecutiveBoardseatoradisabilitypensionif,beforereach-ingtheregularretirementage,theybecomesubjecttooccupationaldisabilityorpermanentincapacity.AsurvivingdependantspensionispaidonthedeathofaformermemberoftheExecutiveBoard.Thedisabilitypensionis100%ofthevestedretirementpensionentitle-mentandispayableuntilthebeneciarys60thbirthday,afterwhichitisreplacedbyaretire-mentpension.Thesurvivingdependantspensionis60%oftheretirementpensionorvesteddisabilitypensionentitlementatdeath.EntitlementsareenforceableagainstSAPAG.

ThebenetpayablehasbeenagreedwiththeactiveExecutiveBoardmembers.Ifserviceisendedprematurely,pensionentitlementisreducedinproportionastheactuallengthofservicestandsinrelationtothemaximumpossiblelengthofservice.

2008 Allocations

Quantity Fair Value per Right

at Time of Grant

Total Fair Value

of ong-Term

Incentive Elements

at Time of Grant

Fair Value per Right

on Dec. 31, 2008

Total Value

Dec. 31, 20

(000) (0


(Co-CEOandMemberuntilMay31,2009)3)133,396 7.11 948.4 4.67 62

LoApotheker(Co-CEO) 88,933 7.11 632.3 4.67 41

Dr.WernerBrandt 81,200 7.11 577.3 4.67 37

ErwinGunst1)

Prof.Dr.ClausE.Heinrich4) 81,200 7.11 577.3 4.67 37

Documents

SAP 2009 Annual Report