Independent auditor's report

Translation of the German independent auditor’s report statements, complies with German legal requirements
concerning the audit of the consolidated financial and appropriately presents the opportunities and risks of
statements and combined management report prepared future development.
in German.
Pursuant to Section 322 (3) Sentence 1 HGB, we declare
To Wirecard AG that our audit has not led to any reservations relating to the
legal compliance of the consolidated financial statements
Report on the audit of the consolidated financial statements and ofthe group management report.
and of the group management report
Basis for the opinions
Opinions
We conducted our audit of the consolidated financial
We have audited the consolidated financial statements of statements and of the group management report in
Wirecard AG, Aschheim, and its subsidiaries (the Group), accordance with Sec. 317 HGB and the EU Audit Regulation
which comprise the consolidated statement of financial (No 537/2014, referred to subsequently as “EU Audit
position as of 31 December 2018, the consolidated income Regulation”) and in compliance with German Generally
statement, the consolidated statement of comprehensive Accepted Standards for Financial Statement Audits
income, consolidated statement of changes in equity and promulgated by the Institut der Wirtschaftsprufer [Institute of
consolidated statement of cash flows for the fiscal year from Public Auditors in Germany] (IDW). Our responsibilities
1 January 2018 to 31 December 2018, and notes to the under those requirements and principles are further
consolidated financial statements, including a summary of described in the “Auditor's responsibilities for the audit of the
significant accounting policies. In addition, we have audited consolidated financial statements and of the group
the group management report, which has been combined management report” section of our auditor's report. We are
with the management report of Wirecard AG, for the fiscal independent of the group entities in accordance with the
year from January 1 January 2018 to 31 December 2018. requirements of European law and German commercial and
professional law, and we have fulfilled our other German
In our opinion, on the basis of the knowledge obtained in the
professional responsibilities in accordance with these
audit,
requirements. In addition, in accordance with Art. 10 (2) f) of
the EU Audit Regulation, we declare that we have not
■ the accompanying consolidated financial
provided non-audit services prohibited under Art. 5 (1) ofthe
statements comply, in all material respects, with the
EU Audit Regulation. We believe that the audit evidence we
IFRS as adopted by the EU, and the additional
have obtained is sufficient and appropriate to provide a basis
requirements of German commercial law pursuant to
for our opinions on the consolidated financial statements and
Sec. 315e (1) of the HGB [“Handelsgesetzbuch”:
on the group management report.
German Commercial Code] and, in compliance with
these requirements, give a true and fair view of the
Emphasis of matter paragraph - accounting treatment of
assets, liabilities, and financial position ofthe Group as at
allegations of a whistleblower in Singapore
31 December2018, and of its financial performance for
the reporting year from 1 January 2018 to 31 December We refer to the information presented in chapter 2.7
2018, and Corrections in accordance with IAS 8 ofthe notes to the con
■ the accompanying group management report as a
whole provides an appropriate view of the Group's
position. In all material respects, this group management
report is consistent with the consolidated financial
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solidated financial statements and the information contained thereon; we do not provide a separate opinion on these
in the opportunities and risks report in the group matters.
management report in connection with the allegations of a
whistleblower and the implications for the accounting. The Below, we describe what we consider to be the key audit
allegations mainly concerned fictitious transactions relating matters:
to the procurement and sale of software and also associated
circular payments (“roundtripping”). In addition, the Accounting treatment of matters on the basis of the findings

legitimacy of payments or the economic substance of from investigations, which were performed due to the

contracts was questioned. Besides, legal actions have been allegations of a whistleblower in Singapore

initiated in order to claim damages from Wirecard AG for

Reasons why the matter was determined to be a key audit
wrong or delayed information.
matter: Companies of the Wirecard Group (particularly in

On the basis of the matters presented in the consolidated Asia) were the subject of the investigations commissioned by

financial statements and the group management report as Wirecard AG to be performed by external law firms related to

well as the findings to date of the measures taken to clarify the allegations of a whistleblower. The investigations of the

these matters, currently there is no confirmation that authorities in Singapore in this regard are still in progress.

corrections or other disclosures need to be made in the The allegations related to the points specified in the section

notes to the consolidated financial statements and group “Emphasis of matter - accounting treatment of allegations of

management report for fiscal year 2018. The ongoing a whistleblower in Singapore”. Direct and indirect effects of

investigations by the authorities in Singapore may in the findings from investigations, which have been performed due

future yield findings, which may have effects on the assets, to the allegations, relate particularly to the impairment of

liabilities, financial position and financial performance of the intangible assets, the existence of revenue as well as the

Group and would have to be presented in the Group's existence and recoverability of receivables. The various

accounting. allegations resulted in detailed information requirements

across several legal entities with in some cases different
The findings made to date have been taken into account in accounting systems. Due to the significance of potential
the consolidated financial statements as of 31 December effects on the consolidated financial statements and the
2018 and 2017 and in the 2018 group management report. complexity and time required for the clarification of this
Due to the uncertainties regarding the current and/or any matter, this matter was deemed to be a key audit matter.
future legal disputes and the possible new findings of
investigations being conducted due to the allegations, it Auditor's response: For the audit of the recognition of

cannot be ruled out that assessments of the effects of the revenue and purchase transactions, measurement of

presented matters may be different in the future. receivables and liabilities and the presentation of contracts in
the financial accounting and in the consolidated financial
Our opinions on the consolidated financial statements and statements, we examined the processes established by the
the group management report have not been modified in this management of the companies of the Wirecard Group
respect.

Key audit matters in the audit of the consolidated financial

statements

Key audit matters are those matters that, in our professional

judgment, were of most significance in our audit of the
consolidated financial statements for the fiscal year from 1
January 2018 to 31 December 2018. These matters were
addressed in the context of our audit of the consolidated
financial statements as a whole, and in forming our opinion
to prepare the facts relating to the allegations. We compared audit evidence for the fulfillment of the criteria of IFRS 3 for
the insights obtained therefrom with the elaborations the existence of a business. Additionally, we inspected the
provided to us by independent third parties as well as those purchase contracts and addressed the activities of the
of the internal compliance department. On this basis, we acquired businesses and particularly assessed the existence
performed extended audit procedures on similar matters. We of the criteria of an existing process environment of the
also examined transactions and the related assessments of acquired businesses.
matters in discussion with officers of the companies
concerned, suppliers, customers and the lawyers who have Moreover, we examined the underlying processes for the
been involved, also including our own forensic experts. execution of the purchase price allocation and performed
substantive audit procedures.
Our audit procedures did not lead to any reservations
regarding the accounting treatment of matters on the basis of For the measurement of liabilities from contracts as part of
the findings from investigations, which were performed in purchase price allocation, we included internal valuation
response to allegations of a whistleblower in Singapore. specialists in the audit team to verify the calculation of
liabilities and assessed the underlying valuation models in
Reference to related disclosures: We refer to the disclosures terms of clerical accuracy and the methods used. We
of the Company in the consolidated financial statements in assessed the estimation of the management regarding the
chapter 2.7 Corrections in accordance with IAS 8. economic disadvantage of the contractual relationships, also
taking market conditions into account. Furthermore, we
Identification as business combination and purchase price assessed the disclosures in connection with the
allocation of the acquisition of Citigroup's customer portfolios aforementioned business combinations in the notes to the
in Asia consolidated financial statements.

Reasons why the matter was determined to be a key audit Our audit procedures did not lead to any reservations
matter: In fiscal year 2018, Citigroup's customer portfolios regarding the identification as business combination and the
were acquired in Asia, particularly in Malaysia and India. The purchase price allocation of the acquisition of Citigroup's
accounting treatment requires estimates by the management customer portfolios in Asia.
for the assessment of transactions as business combination,
particularly whether the requirements of IFRS 3: Business
Combinations have been fulfilled. Moreover, the
management made assumptions for measurement of
liabilities from contracts with customers, which belong to the
acquired customer portfolios, as part of (partly provisional)
purchase price allocation. We identified the acquisition of
customer portfolios as a key audit matter because the
management had to exercise judgment to assess whether it
is a business combination, for purchase price allocation as
well as for the measurement of liabilities from contracts and
because there is a significant risk of material misstatement
due to the associated volume of transactions.

Auditor's response: We verified the estimate of the

management, whether the respective transactions represent
a business combination in accordance with the requirements
of IFRS 3: Business Combinations. In the process, we
primarily assessed an appraisal commissioned by the
management to determine to what extent it can serve as
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Reference to related disclosures: The Company's Our audit did not lead to any reservations regarding the
disclosures on the accounting policies applied for these valuation of goodwill.
business combinations as well as judgments exercised in
this connection are presented in chapter 1.1 Business Reference to related disclosures: The company's disclosures
activities and legal background - Business combinations in related to the valuation of goodwill are presented in chapters
the fiscal year, in chapter 2.2. Significant accounting and 2.2. Significant accounting and valuation policies - Goodwill
valuation policies - Accounting for business acquisitions and accounting and in 3.1 Intangible assets - Goodwill and
in chapter 3.1 Intangible assets- Goodwill and customer customer relationships of the notes to the consolidated
relationships of the notes to the consolidated financial financial statements.
statements.
Valuation of acquired customer relationships
Valuation of goodwill
Reasons why the matter was determined to be a key audit
Reasons why the matter was determined to be a key audit matter: The analysis whether an indication for an impairment
matter: The determination of the value in use as part of the of the acquired customer relationship exists, and, if
goodwill impairment test for the “Payment Processing & Risk necessary, the determination of the value in use as part of
Management” and “Acquiring & Issuing” (cashgenerating the testing of the acquired customer relationship for possible
units) for possible impairment was in our opinion a key audit impairment was, if any indication of impairment was
matter. The reason for this is that the valuations require to a identified, in our opinion, a key audit matter. The reason for
large extent assumptions and estimates of future net cash this is that the analyses and valuations require to a large
inflows as well the discount rate applied. Due to the extent assumptions and estimates of future net cash inflows
materiality of the account, incorrect assumptions and as well as the discount rate applied. Due to the materiality of
estimates could have a significant impact on the the account, erroneous analyses and valuations could have
consolidated financial statements. a significant impact on the consolidated financial statements.

Auditor's response: To assess the values in use of the cash- Auditor's response: To assess the appropriateness of the
generating units determined by the management, we analysis performed by management for the existence of an
examined the underlying processes for the determination of indication of an impairment of the acquired customer
the values in use and performed substantive audit relationships (triggering event analysis), as well as for the
procedures. In particular, with the involvement of valuation assessment of the values in use determined by manage
specialists in the audit team, we evaluated the underlying
valuation models both in terms of clerical accuracy and the
methods used. We also examined whether the group budget
reflects general and industry-specific market expectations
and whether the valuation parameters used for the estimate
of values in use, in particular the estimated growth rates, the
weighted average cost of capital rates and the tax rates are
appropriate. To determine the reliability of the budget
planning, we compared historical budget data with actual
figures. In addition, we considered the sensitivity analyses of
the values in use prepared by the management for the
values in use against the change in significant assumptions,
in order to understand the influence of changes in certain
parameters and estimate any potential impairment risk.
Furthermore, we assessed the corresponding disclosures in
the notes to the consolidated financial statements.
ment, we examined the underlying processes and also As far as merchants are not able to settle these chargebacks
performed substantive audit procedures. We examined the or fines after insolvency, and these are also not covered by
management's assessment on the indications of an individual reserves, or alternatively by a delayed payment to
impairment by particularly taking into account Company- the merchants, Wire- card is responsible for the claims of the
internal sources of information (e.g., for profitability of the end customers or credit card organizations.
customer base and identification of significant losses of
individual customer relationships) and external sources of The receivables from transaction fees and commissions from
information (e.g., for economic environment). For the the acquiring partner safeguard their financial risks as rolling
assessment of the calculation of values in use, we involved security reserves.
valuation specialists to verify the underlying valuation models
for clerical accuracy and the methods used. In this context, In connection with the first-time application of the

we discussed the significant planning assumptions with requirements of IFRS 15, Wirecard AG had to be classified

management and verified the assumptions underlying the as principal or agent for these transactions. As a result of the

impairment test by comparing them with the general as well assessment that Wirecard is the principal within the meaning

as industry-specific market expectations. We also performed of IFRS 15: Revenue from Contracts with Customers for the

sensitivity analyses of our own in order to assess the impact majority of transactions via acquiring partners, revenue is

of potential changes in the valuation parameters used on the presented on a gross basis (disclosure of merchant's fees as

value in use. Furthermore, we assessed the corresponding revenue and the expenses for the acquiring partners as cost

disclosures in the notes to the consolidated financial of materials).

statements.
The measurement of receivables and recognition and

Our audit procedures did not lead to any reservations presentation of revenues was in our opinion a key audit

regarding the assessment of the valuation of the acquired matter because receivables and revenue have a significant

customer relationships. impact on the consolidated financial statements and the

estimate to be made on the position of Wirecard as the
Reference to related disclosures: The disclosures of the principal or agent within the meaning of IFRS 15.
Company on the valuation of acquired customer
relationships are presented in chapters 2.2. Significant Auditor's response: As part of our audit, we examined the

accounting and valuation policies - Accounting for intangible procedures contractually agreed with the acquiring partners

assets and 3.1 Intangible assets - Goodwill and customer and defined within the Company as well as the existing

relationships of the notes to the consolidated financial monitoring and control of acquiring partners by management

statements. as part of the risk management process, and tested the

control mechanisms regarding receivables measurement.
Measurement of receivables and recognition and Furthermore, for the assessment of finan
presentation of revenues from acquiring partners

Reasons why the matter was determined to be a key audit

matter: The receivables from acquiring partners result from
transaction fees and commissions from the settlement of
payment transactions of end customers at the merchants
and from prefinancing for merchant's fees in connection with
the acquiring business. Under the contract, Wirecard bears
the significant risks from payment processing inherent in the
default risk of the merchant. These mainly result from
chargebacks that are initiated by the end customers and
through fines imposed on the merchants by credit card
organizations due to infringement of their regulations (fines).
 223

cial risks, we obtained confirmations from the acquiring The Supervisory Board is responsible for the Report of the
partners for the existence of receivables and for charge- Supervisory Board in the corresponding section of the
backs/fines and considered this information for the Annual Report 2018. In all other respects, the management
assessment of the measurement of receivables. We verified is responsible for the other information. The other information
payments received by the acquiring partners as further comprises:
evidence of the existence of receivables.
■ the Letter from the CEO in the “To our
When assessing whether Wirecard is the principal or agent shareholders” section of the Annual Report 2018;
with regard to the presentation of revenues it is of particular ■ the corporate governance report and the corporate
importance whether Wirecard controls the performance from governance declaration in the corresponding section of
the payment transaction via the acquiring partners before the Annual Report 2018;
this is transferred to the merchant. We examined this ■ the information “Wirecard stock” in the “To our
assessment of management on the basis of the contractual shareholders” section of the Annual Report 2018;
arrangements and the risk management process. For the ■ he responsibility statement of the management in
assessment of revenue recognition, we examined the the corresponding section of the Annual Report 2018;
invoices of the acquiring partner to Wire- card related to the ■ the "Glossary" section of the Annual Report 2018
transactions processed in connection with the acquiring
business and the transaction fees and commissions resulting Our opinions on the consolidated financial statements and on
therefrom and compared them with the underlying the group management report do not cover the other
transaction evidence. information, and consequently we do not express an opinion
or any other form of assurance conclusion thereon.
Furthermore, we assessed the corresponding disclosures in
the consolidated financial statements regarding the In connection with our audit, our responsibility is to read the
information required by IFRS 15. other information and, in so doing, to consider whether the
other information
Our audit procedures did not lead to any reservations
regarding the measurement of receivables and the ■ is materially inconsistent with the consolidated
recognition and presentation of revenues from acquiring financial statements, with the group management report
partners. or our knowledge obtained in the audit, or
■ otherwise appears to be materially misstated.
Reference to related disclosures: The company's disclosures
related to the measurement of receivables from acquiring If, based on the work we have performed, we conclude that
partners are presented in chapters 2.3. Accounting for there is a material misstatement of this other information, we
financial assets and liabilities - Impairment of financial are required to report that fact. We have nothing to report in
assets, 3.7 Receivables of acquiring business and 7.2 Risk this regard.
reporting - Accounts receivable risks of the notes to the
consolidated financial statements. Responsibilities of the management and the supervisory
board for the consolidated financial statements and the
The Company's information on the recognition and group management report
disclosure of revenue from acquiring partners is presented in
chapter 2.2. Significant accounting and valuation policies -
Revenue recognition of the notes to the consolidated
financial statements.

Other information
The management is responsible for the preparation of provides an appropriate view of the Group's position and, in
consolidated financial statements that comply, in all material all material respects, is consistent with the consolidated
respects, with IFRSs as adopted by the EU and the financial statements and the knowledge obtained in the audit,
additional requirements of German commercial law pursuant complies with the German legal requirements and
to Sec. 315e (1) HGB, and that the consolidated financial appropriately presents the opportunities and risks of future
statements, in compliance with these requirements, give a development, as well as to issue an auditor's report that
true and fair view of the assets, liabilities, financial position includes our opinions on the consolidated financial
and financial performance of the Group. In addition, the statements and on the group management report.
management is responsible for such internal control as they
have determined necessary to enable the preparation of Reasonable assurance is a high level of assurance, but is
consolidated financial statements that are free from material not a guarantee that an audit conducted in accordance with
misstatement, whether due to fraud or error. Sec. 317 HGB and the EU Audit Regulation and in
compliance with German Generally Accepted Standards for
In preparing the consolidated financial statements, the Financial Statement Audits promulgated by the Institut der
management is responsible for assessing the Group's ability Wirtschaftsprufer (IDW) will always detect a material
to continue as a going concern. They also have the misstatement. Misstatements can arise from fraud or error
responsibility for disclosing, as applicable, matters related to and are considered material if, individually or in the
going concern. In addition, they are responsible for financial aggregate, they could reasonably be expected to influence
reporting based on the going concern basis of accounting the economic decisions of users taken on the basis of these
unless there is an intention to liquidate the Group or to cease consolidated financial statements and this group
operations, or there is no realistic alternative but to do so. management report.

Furthermore, the management is responsible for the We exercise professional judgment and maintain
preparation of the group management report that, as a professional skepticism throughout the audit. We also
whole, provides an appropriate view of the Group's position
and is, in all material respects, consistent with the ■ Identify and assess the risks of material misstatement
consolidated financial statements, complies with German of the consolidated financial statements and of the group
legal requirements, and appropriately presents the management report, whether due to fraud or error,
opportunities and risks of future development. In addition, the design and perform audit procedures responsive to those
management is responsible for such arrangements and risks, and obtain audit evidence that is sufficient and
measures (systems) as they have considered necessary to appropriate to provide a basis for our opinions. The risk
enable the preparation of a group management report that is of not detecting a material misstatement resulting from
in accordance with the applicable German legal fraud is higher than for one resulting from error, as fraud
requirements, and to be able to provide sufficient appropriate may involve collusion, forgery, intentional omissions,
evidence for the assertions in the group management report. misrepresentations, or the override of internal control.

The supervisory board is responsible for overseeing the

Group's financial reporting process for the preparation of the
consolidated financial statements and of the group
management report

Auditor's responsibilities for the audit of the consolidated

financial statements and of the group management report
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or
error, and whether the group management report as a whole
 225

■ Obtain an understanding of internal control relevant to the Group's position it provides.

audit of the consolidated financial statements and of ■ Perform audit procedures on the prospective
arrangements and measures (systems) relevant to the information presented by the management in the group
audit of the group management report in order to design management report. On the basis of sufficient
audit procedures that are appropriate in the appropriate audit evidence we evaluate, in particular, the
circumstances, but not for the purpose of expressing an significant assumptions used by the management as a
opinion on the effectiveness of these systems. basis for the prospective information, and evaluate the
■ Evaluate the appropriateness of accounting policies used proper derivation of the prospective information from
by the management and the reasonableness of these assumptions. We do not express a separate
accounting estimates made by the management and opinion on the prospective information and on the
related disclosures. assumptions used as a basis. There is a substantial
■ Conclude on the appropriateness of the management's unavoidable risk that future events will differ materially
use of the going concern basis of accounting and, based from the prospective information.
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may
cast significant doubt on the Group's ability to continue We communicate with those charged with governance
as a going concern. If we conclude that a material regarding, among other matters, the planned scope and
uncertainty exists, we are required to draw attention in timing of the audit and significant audit findings, including
the auditor's report to the related disclosures in the any significant deficiencies in internal control that we identify
consolidated financial statements and in the group during our audit.
management report or, if such disclosures are
inadequate, to modify our respective opinions. Our We also provide those charged with governance with a
conclusions are based on the audit evidence obtained up statement that we have complied with the relevant
to the date of our auditor’s report. However, future events independence requirements, and communicate with them all
or conditions may cause the Group to cease to be able to
continue as a going concern.
■ Evaluate the overall presentation, structure and content of
the consolidated financial statements, including the
disclosures, and whether the consolidated financial
statements present the underlying transactions and
events in a manner that the consolidated financial
statements give a true and fair view of the assets,
liabilities, financial position and financial performance of
the Group in compliance with IFRSs as adopted by the
EU and the additional requirements of German
commercial law pursuant to Sec. 315e (1) HGB
■ Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the Group to express opinions on the consolidated
financial statements and on the group management
report. We are responsible for the direction, supervision
and performance of the group audit. We remain solely
responsible for our audit opinions.
■ Evaluate the consistency of the group management
report with the consolidated financial statements, its
conformity with [German] law, and the view of the
relationships and other matters that may reasonably be
thought to bear on our independence and where applicable, Budde Dahmen
the related safeguards.
Wirtschaftsprufer Wirtschaftsprufer
From the matters communicated with those charged with [Ge
rm
governance, we determine those matters that were of most an
significance in the audit of the consolidated financial Pu
blic
statements of the current period and are therefore the key Au
dito
audit matters. We describe these matters in our auditor's r]
report unless law or regulation precludes public disclosure [Ge
rm
about the matter. an
Pu
blic
Other legal and regulatory requirements Au
dito
r]
Further information pursuant to Art. 10 of the EU Audit
Regulation

We were elected as group auditor by the annual general

meeting on 21 June 2018. We were engaged by the
Supervisory Board on 25 June 2018. We have been group
auditor of Wirecard AG without interruption since financial
year 2009.

We confirm that the audit opinions expressed in this auditor's

report are consistent with the additional report to the
Supervisory Board pursuant to Art. 11 of the EU Audit
Regulation (audit report).
In addition to the audit, we rendered ISAE 3402 assurance
services for group companies, which were stated neither in
the consolidated financial statements nor in the group
management report.

Responsible auditor

The auditor responsible for the audit is Martin Dahmen.

Munich, 24 April 2019

Ernst & Young GmbH

Wirtschaftsprufungsgesellschaft