Risks and Opportunities

Software AG's primary goal is profitable growth. It is important to us to increase enterprise value on a sustainable basis. We therefore combine established, time-tested business activities with a future-oriented involvement in promising market segments and regions. With a view to an optimum balance of risks and opportunities, we only take on risks if the related opportunities have a high probability of enhancing the value of the Company. An ongoing prerequisite in this respect is that the risks appear manageable and controllable on close examination. To ensure that only appropriate risks are taken, we have established a Group-wide risk and opportunity management system and a central risk monitoring system. Another component of our risk and opportunity management is the transfer of operating risks to insurance carriers, a process that is coordinated globally by the General Services department at Company headquarters.

We are subject to acquisition and integration risks based on planned acquisitions and those already undertaken. In the first quarter of 2007, this risk position increased slightly due to the acquisition of SPL Software. Other than this, however, there were no changes to the risk situation of the Software AG Group as portrayed in the Risk Report of the 2006 Annual Report.

The related opportunities are detailed in the Outlook section of this report and in the Forecast section of the 2006 Annual Report.

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