All of our activities focus on ensuring the success of the Company

Software AG’s primary goal is to grow profitably without jeopardizing the existence of the Company. It is important to us to increase enterprise value on a sustainable basis. We therefore combine established, stable business activities with a futureoriented involvement in promising market segments and regions. Focusing on a balanced risk-opportunity relationship, we only take on risk 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.

Risk and opportunity management system throughout the Group

Software AG’s professional risk and opportunity management system is designed to identify potential risks, to assess them and to either avoid them entirely or limit them to the greatest extent possible. Continuous risk monitoring is accompanied by systematic and prompt evaluation of the overall status and assists in assessing the effectiveness of appropriate countermeasures. Operational risks as well as financial, economic, and market threats are all included in our risk monitoring. Since opportunities and risks in principle represent the two faces of entrepreneurial activities, opportunities are generally congruent to the operational and functional risk structure in all risk areas.

One of our tools for ongoing monitoring of the risk areas identified is a balanced scorecard system. The Executive Board is kept constantly informed of all current and future risks and opportunities as well as the overall risk and opportunity structure via established communication channels. Software AG updates and monitors the applicable specifications for preventing and reducing threats on an ongoing basis throughout the Group.

Control system with central responsibility

Risks and opportunities throughout the Group are managed and controlled at corporate headquarters for both the main offices and the regions. This is where risk and opportunity reports are prepared, development of the risk management system initiated, and guidelines for the entire Group that serve to mitigate risk elaborated. The Executive Board constantly reviews the functioning and reliability of risk and opportunity management and risk and opportunity reporting.

The internal control system of Software AG has operationalized business risks by way of internal guidelines (Policies) on business policies and practices. Software AG classifies these policies by field (general, Professional Services, financial powers and financial markets). The policies defined regulate internal procedures at the global and local levels. They are designed to provide information for management and to monitor the operating business risks of the Software AG Group. In order to enhance transparency, these policies are administered and published centrally.

Another component of risk and opportunity management is the transfer of operating risks to insurance carriers. The General Services department at corporate headquarters coordinates this function globally.