Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Disclaimer

This English language translation has been prepared solely for the convenience of English speaking

readers. Despite all the efforts devoted to this translation, certain discrepancies, omissions or

approximations may exist. In case of any differences between the Polish and the English versions, the

Polish version shall prevail. CD PROJEKT, its representatives and employees decline all responsibility in

this regard.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

CD PROJEKT Group – Selected financial data translated into EUR

PLN EUR

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Net sales of products, services, goods for resale

and materials

174 757 216 146 37 178 46 511

Cost of sales of products, services, goods for resale

and materials

54 252 47 627 11 542 10 249

Operating profit/(loss) 71 539 85 321 15 219 18 360

Profit/(loss) before tax 80 364 91 893 17 097 19 774

Net profit/(loss) attributable to owners of

CD PROJEKT S.A.

69 670 68 918 14 822 14 830

Net cash from operating activities

113 089

142 122

24 059

30 582

Net cash from investing activities (235 164) 195 861 (50 030) 42 146

Net cash used in financing activities (1 014) (984) (215) (211)

Net increase/(decrease) in cash and cash equivalents

(123 089)

336 999

(26 186)

72 517

Number of shares (in thousands) 100 771 100 739 100 771 100 739

Net earnings/(loss) per share (in PLN/EUR)

0.69

0.68

0.15

Diluted earnings/(loss) per share (in PLN/EUR)

0.69

0.68

0.15

Book value per share (in PLN/EUR) 20.90 19.46 4.47 4.18

Diluted book value per share

(in PLN/EUR)

20.90 19.45 4.47 4.18

Dividend declared or paid per share (in PLN/EUR)

1.00

0.21

0.22

PLN

EUR

31.03.2023 31.12.2022 31.03.2023 31.12.2022

Total assets

2 307 988

2 274 124

493 634

484 898

Liabilities and provisions for liabilities

(excluding accruals)

183 764 214 626 39 304 45 763

Non-current liabilities 32 250 36 186 6 898 7 716

Current liabilities

169 768

204 534

36 310

43 612

Equity 2 105 970 2 033 404 450 427 433 571

Share capital 100 771 100 771 21 553 21 487

The financial data presented above was translated into EUR as follows:

 Items of the consolidated income statement and the consolidated cash flow statement were translated at exchange rates

calculated as an arithmetic mean of the mid exchange rates announced by the National Bank of Poland for the euro applicable

as at the last day of each month in a given reporting period. These rates were, respectively, as follows: from 1 January to

31 March 2023: 4.7005 PLN/EUR and from 1 January to 31 March 2022: 4.6472 PLN/EUR.

 Items of assets, liabilities and equity in the consolidated statement of financial position were translated at exchange rates

announced by the National Bank of Poland for the euro applicable on the last day of the reporting period. These rates were,

respectively, as follows: 4.6755 PLN/EUR as at 31 March 2023 and 4.6899 PLN/EUR as at 31 December 2022.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Table of contents

Key financial data of the CD PROJEKT Group ................................................................................................................................................................. 6

Interim condensed consolidated income statement ................................................................................................................................................ 7

Interim condensed consolidated statement of comprehensive income ........................................................................................................... 9

Interim condensed consolidated statement of financial position ...................................................................................................................... 10

Interim condensed statement of changes in consolidated equity ..................................................................................................................... 12

Interim condensed consolidated statement of cash flows ................................................................................................................................... 15

Notes to the interim condensed consolidated financial statements ........................................................................................................................ 17

General information.......................................................................................................................................................................................................... 18

Presentation of the Group .............................................................................................................................................................................................. 18

Consolidation policies ..................................................................................................................................................................................................... 19

Consolidated companies .......................................................................................................................................................................................... 19

Subsidiaries .................................................................................................................................................................................................................. 19

Basis of preparation of the interim condensed consolidated financial statements .................................................................................... 20

Going concern assumption ........................................................................................................................................................................................... 20

Compliance with the International Financial Reporting Standards................................................................................................................... 20

Amendments to standards or interpretations effective from 1 January 2023 applicable and adopted by the Group ............... 20

Functional currency and presentation currency ...................................................................................................................................................... 21

Functional currency and presentation currency ............................................................................................................................................... 21

Transactions and balances ...................................................................................................................................................................................... 21

Comparability of the financial statements and consistency of accounting policies ..................................................................................... 21

Changes in accounting policies ............................................................................................................................................................................. 21

Presentation changes ............................................................................................................................................................................................... 22

Audit by the registered auditor .................................................................................................................................................................................... 22

Notes – operating segments of the CD PROJEKT Group .......................................................................................................................................... 23

Operating segments ....................................................................................................................................................................................................... 24

Information on individual operating segments ................................................................................................................................................. 25

Consolidated income statement by segments for the period from 01.01.2023 to 31.03.2023 .......................................................... 26

Consolidated income statement by segments for the period from 01.01.2022 to 31.03.2022* ......................................................... 27

Consolidated statement of financial position by segments as at 31.03.2023 ......................................................................................... 28

Consolidated statement of financial position by segments as at 31.12.2022.......................................................................................... 30

Consolidated statement of financial position by segments as at 31.03.2022 .........................................................................................32

Description of the Issuer’s major achievements or failures in the first quarter of 2023 by operating segments .........................35

Factors affecting the Group’s future performance ........................................................................................................................................... 37

Impact of the political and economic situation in Ukraine on sales during the reporting period ......................................................38

Seasonality or cyclicality of the Group’s operations ........................................................................................................................................38

Key customers ............................................................................................................................................................................................................ 40

Notes – other explanatory notes to the interim condensed consolidated financial statements ..................................................................... 41

Note 1. Description of those items affecting assets, liabilities, equity, net profit or loss and cash flows which

are not typical in terms of their type, size and impact .....................................................................................................................................42

Note 2. Property, plant and equipment................................................................................................................................................................ 43

Note 3. Intangible assets and expenditure on development projects ...................................................................................................... 45

Note 4. Goodwill ......................................................................................................................................................................................................... 45

Note 5. Investment properties ............................................................................................................................................................................... 46

Note 6. Inventories ..................................................................................................................................................................................................... 47

Note 7. Trade and other receivables .................................................................................................................................................................... 47

Note 8. Other financial assets ................................................................................................................................................................................ 49

Note 9. Prepayments and deferred costs .......................................................................................................................................................... 50

Note 10. Deferred income tax ................................................................................................................................................................................. 51

Note 11. Provision for retirement and similar benefits ......................................................................................................................................53

Note 12. Other provisions .........................................................................................................................................................................................53

Note 13. Other liabilities ........................................................................................................................................................................................... 54

Note 14. Deferred income ....................................................................................................................................................................................... 54

Note 15. Information on financial instruments ................................................................................................................................................... 55

Note 16. Sales revenue ............................................................................................................................................................................................. 57

Note 17. Operating expenses ................................................................................................................................................................................. 58

Note 18. Other operating income and expenses ............................................................................................................................................. 59

Note 19. Finance income and costs ..................................................................................................................................................................... 60

Note 20. Leases of low-value assets and short-term leases........................................................................................................................ 60

Note 21. Issuance, redemption and repayment of debt and equity securities ........................................................................................ 61

Note 22. Dividend paid (or declared) and received ......................................................................................................................................... 61

Note 23. Transactions with related entities ........................................................................................................................................................ 61

Note 24. Unpaid loans or defaults on loan agreements in the cases where no corrective measures were adopted by

the balance sheet date ............................................................................................................................................................................................ 64

Note 25. Changes in contingent liabilities or contingent assets which occurred after the end of the last financial year ........ 65

Note 26. Changes in the structure of the Group and Group companies during the reporting period............................................. 67

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 27. Agreements that may result in future changes in the proportions of shares held by shareholders

and bondholders ......................................................................................................................................................................................................... 67

Note 28. Tax settlements ........................................................................................................................................................................................ 68

Note 29. Explanations to the condensed consolidated statement of cash flows .................................................................................. 69

Note 30. Cash flows and non-monetary changes resulting from changes in liabilities in financing activities ................................ 71

Note 31. Post-balance sheet date events ............................................................................................................................................................ 72

Additional information ........................................................................................................................................................................................................... 73

Litigation ........................................................................................................................................................................................................................ 74

Shareholding structure ....................................................................................................................................................................................................74

Parent Company’s shares held by members of the Management and Supervisory Boards ............................................................... 75

Reference to published estimates .............................................................................................................................................................................. 75

Interim condensed separate financial statements of CD PROJEKT S.A. ............................................................................................................... 76

Interim condensed separate income statement ...................................................................................................................................................... 77

Interim condensed separate statement of comprehensive income ................................................................................................................ 78

Interim condensed separate statement of financial position ............................................................................................................................. 78

Interim condensed separate statement of changes in equity ............................................................................................................................ 80

Interim condensed separate statement of cash flows.......................................................................................................................................... 83

Assumption of comparability of the financial statements and changes in accounting policies .............................................................. 84

Notes to separate financial statements of CD PROJEKT S.A. ............................................................................................................................ 86

A. Deferred tax....................................................................................................................................................................................................... 86

B. Other provisions ................................................................................................................................................................................................ 87

C. Goodwill .............................................................................................................................................................................................................. 88

D. Business combinations .................................................................................................................................................................................. 88

E. Dividend paid (or declared) and received ................................................................................................................................................ 88

F. Trade and other receivables......................................................................................................................................................................... 88

G. Information on financial instruments ......................................................................................................................................................... 90

H. Transactions with related entities............................................................................................................................................................... 92

Statement of the Management Board of the Parent Company ......................................................................................................................... 94

Approval of the financial statements ......................................................................................................................................................................... 95

Key financial data of the CD PROJEKT

Group

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Interim condensed consolidated income statement

Note

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022*

Sales revenue

174 757

216 146

Sales of products

130 595

173 787

Sales of services 16 428 635

Sales of goods for resale and materials 16 43 734 41 724

Cost of sales of products, services, goods for resale and materials

54 252

47 627

Costs of products and services sold 17 21 858 18 372

Cost of goods for resale and materials sold 17 32 394 29 255

Gross profit/(loss) on sales

120 505

168 519

Selling expenses 17 39 048 54 110

Administrative expenses 17 28 486 26 513

Other operating income

24 463

2 590

Other operating expenses 18 5 897 5 163

(Impairment)/reversal of impairment

of financial instruments

2 (2)

Operating profit/(loss) 71 539 85 321

Finance income

19 286

16 791

Finance costs 19 10 461 10 219

Profit/(loss) before tax

80 364

91 893

Income tax

10 694

22 975

Net profit/(loss) 69 670 68 918

Net profit/(loss) attributable to owners of CD PROJEKT S.A.

69 670

68 918

Net earnings/(loss) per share (in PLN) - -

Basic for the reporting period 0.69 0.68

Diluted for the reporting period

0.69

0.68

* restated data

The Group’s total Sales revenue in the first quarter of 2023 was lower compared to the first quarter of last year, which, partly due

to the release of the next-generation console game Cyberpunk 2077, was the best first quarter sales-wise in the Group’s history.

A decline in revenue with the CD PROJEKT RED segment’s steady portfolio of games and the lack of major sales-boosting events

is a natural trend.

Sales of products had the largest share in the CD PROJEKT Group’s sales revenue for the period under review and primarily related

to:

a) royalties resulting from the sale of Cyberpunk 2077;

b) royalties resulting from the sale of The Witcher 3: Wild Hunt with Hearts of Stone and Blood and Wine expansions;

c) licence revenue from CD PROJEKT RED studio franchises;

d) revenue related to other products of the CD PROJEKT RED segment: the GWENT games: The Witcher Card Game, The Witcher

2: The Assassins of Kings, The Witcher and Thronebreaker: The Witcher Tales.

Sales of goods for resale and materials were another significant item of sales revenue, which mainly comprised revenue from

digital distribution of games from third-party suppliers to end customers via the GOG.COM platform, where, compared to the

corresponding period of the prior year, the GOG.COM segment recorded a slight increase, as well as revenue from sales of physical

products of the CD PROJEKT RED segment.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Costs of products and services sold were the first component of the Group’s Cost of sales of products, services, goods for resale

and materials, which comprise mainly amortization of development expenditure on games developed in house. The value of the

item in question in the first quarter of 2023 consisted primarily of the amortization of expenditure on Cyberpunk 2077, which, after

being expensed at 40% of the expenditure in the quarter of release (fourth quarter of 2020), is recognized in subsequent quarterly

periods at 3% of the initial value of the asset, and the amortization of production costs of The Witcher 3: Wild Hunt for the new-

generation consoles Xbox Series X|S and PlayStation 5, which is accounted for on a straight-line basis over 3 years from the date

of its release in December 2022. This item also includes the cost of sales related to sales of services.

The cost of goods for resale and materials sold comprises mainly the cost of sales generated as part of the GOG.COM platform

and the cost of sales of physical products of the CD PROJEKT RED segment.

In the first quarter of 2023, the largest part of the Cost of sales were the costs reported in the CD PROJEKT RED segment related

to publishing, advertising and promotion of own titles, including salaries (both fixed and result-driven) of internal publishing

departments and other external services related to boosting of sales. Due to the lack of significant promotional events in the period

under review, costs of promotion campaigns decreased relative to the comparative period.

The second major group of costs of sales were costs of maintenance of released titles, the significant part of which in the reporting

period were the maintenance and development costs of GWENT: The Witcher Card Game and the maintenance costs of Cyberpunk

2077 and The Witcher 3 for next-generation consoles. Compared to the first quarter of 2022, the amount of the maintenance costs

dropped, mainly due to a decrease in costs related to work on Cyberpunk 2077 updates and a reduction in expenses related to

GWENT: The Witcher Card Game project.

In addition, this category includes costs included in the GOG.COM segment related to marketing activities for the GOG.COM service,

as well as work related to the development and handling of sales made through the service.

Administrative expenses of the CD PROJEKT Group mainly include:

a) salaries of the administration teams and external services costs classified in this category showing a steady upward trend

accompanying the Group’s growth;

b) the costs of working on future games during the initial period of their development (research phase) before moving on to the

implementation of projects (development phase) and starting to capitalize them within expenditure on development projects

which is a part of non-current assets;

c) the fixed and performance-related remuneration of the companies’ management boards;

d) performance-related remuneration of the companies’ senior management;

e) costs of valuation of the entitlements granted under the 2020-2025 incentive scheme.

The balance of administrative expenses in the first quarter of 2023 was at a similar level to the amount in the comparative period,

accompanied by a change in their structure. Initial product development costs decreased as projects moved on to the development

phase while other administrative expenses increased due to the increase in the scale of the Group’s operations and general price

increases.

The Group’s other operating income and expenses comprise mainly income generated by CD PROJEKT from the rental of office

space (and accompanying maintenance costs) in the real estate complex at ul. Jagiellońska 74 and 76 in Warsaw, as well as

proceeds from subsidies received. However, in the period under review, the value of these items was significantly affected by the

partial reversal of the write-down of development expenditure incurred up to the end of 2022 (in the amount of PLN 21 531 thousand)

associated with defining the new framework of the Sirius project being developed by The Molasses Flood studio, together with the

write-down of part of the expenditure on the Project in the first quarter of 2023 (PLN 2 745 thousand).

In the period from 1 January to 31 March 2023, the Group reported an excess of Finance income over Finance costs, primarily in

connection with interest income on bank deposits and bonds.

Income tax recognized in the income statement for the first quarter of the current year and the effective tax rate decreased

significantly compared to the first quarter of 2022, in which the reported tax was more significantly affected by including in the

income tax figure a portion of tax levied in other jurisdictions on royalties paid to the Group (withholding tax).

After collecting documentary evidence of the amounts and the fact that withholding tax had been paid abroad, the Group deducted

the amount of income tax calculated using the preferential IP Box taxation and charged the excess to the income statement.

The Group’s consolidated Net profit for the first quarter of 2023 amounted to PLN 69 670 thousand, and was slightly higher than

in the first quarter of 2022.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Interim condensed consolidated statement of

comprehensive income

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Net profit/(loss) 69 670 68 918

Other comprehensive income subject to reclassification to gains or losses after

specific conditions have been met:

1 737 (4 493)

Exchange differences on measurement of foreign operations

(583)

437

Measurement of derivative financial instruments – fair value through other

comprehensive income, taking into account the tax effect

2 320 (4 930)

Other comprehensive income not subject to reclassification to gains or losses - -

Total comprehensive income

71 407

64 425

Total comprehensive income attributable to non-controlling interests - -

Total comprehensive income attributable to owners of CD PROJEKT S.A. 71 407 64 425

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Interim condensed consolidated statement of financial

position

Note 31.03.2023 31.12.2022 31.03.2022

NON-CURRENT ASSETS

1 208 466

1 119 978

940 816

Property, plant and equipment 2 154 935 145 252 124 261

Intangible assets

68 792

69 157

68 222

Expenditure on development projects 3 544 483 473 202 367 005

Investment properties 5 42 188 42 560 44 318

Goodwill

3.4

56 438

Shares in non-consolidated subordinated entities 15 41 394 41 607 39 240

Prepayments and deferred costs 9 28 898 31 074 14 319

Other financial assets

8.15

216 098

207 437

176 456

Deferred tax assets 10 54 850 52 862 50 179

Other receivables 7.15 390 389 378

CURRENT ASSETS

1 099 522

1 154 146

1 311 733

Inventories 6 10 365 12 701 14 970

Trade receivables 7.15 73 738 165 290 68 422

Current income tax receivable

12 106

1 458

401

Other receivables 7 54 390 57 139 113 206

Prepayments and deferred costs

28 099

22 886

18 931

Other financial assets

8.15

277 203

279 515

261 828

Bank deposits over 3 months 15 488 883 337 330 85 390

Cash and cash equivalents

154 738

277 827

748 585

TOTAL ASSETS 2 307 988 2 274 124 2 252 549

Expenditure on development projects, in which the Group recognizes incurred and deferred expenditure on the production of

games and new technologies, represented the largest share of the Group’s non-current assets at the end of the first quarter of

2023, and had the largest impact on the increase in their balance. The increase in the value of the item in question in the period

under analysis is a result the CD PROJEKT RED segment incurring higher expenditure on the production of future games than the

depreciation of completed productions.

The increase in the balance of CD PROJEKT Group’s Property, plant and equipment is mainly due to expenditure on network

infrastructure and developers’ workstations (machinery and equipment), as well as expenditure on construction work on the

CD PROJEKT campus in Warsaw (assets under construction).

The balance of Other non-current and current financial assets consists primarily of domestic and foreign government bonds

acquired as part of credit risk diversification, together with the valuation of derivative financial instruments hedging the currency

risk of foreign bonds.

The consolidated current and non-current Prepayments and deferred costs recognized at the end of the period under analysis

comprised mainly the value of the so-called minimum guarantees disclosed in the GOG.COM segment, i.e. advance payments and

prepayments made by GOG.COM to suppliers for fees related to the distribution of games offered on the GOG.COM platform. The

Group also recognizes the settlement of utility software subscriptions under this heading.

The consolidated balance of Trade receivables decreased relative to 31 December 2022 mainly as a result of the inflow in the

CD PROJEKT RED segment of receivables related to the usual high level of game sales in December 2022.

The Group’s Other receivables as at the end of March 2023 include, in particular, tax receivables, settlements with the insurer of

the costs of the US class action settlement and advances paid by CD PROJEKT RED for development works, goods for resale and

services.

The total value of financial reserves in the form of Cash and cash equivalents, bank deposits over 3 months and liquid financial

assets in the form of purchased treasury bonds (collectively included in current and non-current Other financial assets) held by the

Group as at 31.03.2023 amounted to PLN 1 112 251 thousand (compared with PLN 1 091 005 thousand as at 31.12.2022).

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note

31.03.2023

31.12.2022

31.03.2022

EQUITY 2 105 970 2 033 404 1 959 929

Equity attributable to owners of CD PROJEKT S.A. 2 105 970 2 033 404 1 959 929

Share capital 21 100 771 100 771 100 739

Supplementary capital

1 567 325

1 425 647

Share premium 116 700 116 700 115 909

Treasury shares

(99 993)

Other reserves 5 734 2 255 44 212

Foreign exchange differences on translation 1 321 1 904 2 028

Retained earnings / (Accumulated losses)

344 442

(2 651)

202 476

Net profit (loss) for the period 69 670 347 093 68 918

Non-controlling interests - - -

NON-CURRENT LIABILITIES

32 250

36 186

37 825

Other financial liabilities 15 18 525 18 883 23 309

Other liabilities 13 2 560 2 620 2 800

Deferred tax provision

Deferred income 14 3 212 3 669 5 968

Provision for retirement and similar benefits 11 366 366 380

Other provisions

7 538

10 598

5 368

CURRENT LIABILITIES 169 768 204 534 254 795

Other financial liabilities 15 8 771 9 578 33 327

Trade payables

46 001

72 119

71 272

Current income tax liabilities - 2 116 31 589

Other liabilities

9 410

10 244

9 132

Deferred income

15 042

22 425

23 053

Provision for retirement and similar benefits 11 10 10 7

Other provisions

90 534

88 042

86 415

TOTAL LIABILITIES AND EQUITY 2 307 988 2 274 124 2 252 549

As at the end of the first quarter of 2023, the Equity of the CD PROJECT Group amounted to PLN 2 105 970 thousand and was PLN

72 566 thousand higher than at the end of 2022, which was mainly influenced by the Net profit (loss) for the period.

Other non-current and current financial liabilities in the period under analysis are mainly related to the revaluation of instruments

hedging the exchange rate risk associated with holding foreign Treasury bonds denominated in foreign currencies. In this item, the

Group also recognizes liabilities for perpetual usufruct of land in the Jagiellońska 74 and Jagiellońska 76 complexes in Warsaw, as

well as liabilities for payment of a portion of the purchase price of shares in The Molasses Flood with a deferred payment date.

The decrease in the Group’s Trade payables results from the ongoing operations of the CD PROJEKT RED segment. In addition, in

this item the Group presents liabilities of the GOG.COM segment resulting mainly from royalties relating to sales made in the first

quarter of 2023.

The Group’s total Other liabilities in the period under analysis consisted mainly of current taxation liabilities (VAT, PIT, withholding

tax) and social security.

The balance of the CD PROJEKT Group’s Deferred income as at the end of March 2023 mainly consists of:

 CD PROJEKT RED – sales relating to future periods – so-called minimum guarantees, i.e. advances received or due from

publishers and distribution partners for royalties related to sales in future periods;

 CD PROJEKT RED and GOG.COM – deferred income relating to grants;

 GOG.COM – deferred income relating to the company’s customers (GOG Portfolio);

 GOG.COM – sales related to future periods – the value of pre-orders placed by customers for games with release dates in

future periods.

Changes in the balance of the CD PROJEKT Group’s Other provisions related mainly to the CD PROJEKT RED segment in the first

quarter of 2023 under analysis, where:

 provisions recorded for salaries contingent on the current period’s result increased the balance of other provisions;

 the excess of utilized provisions for other costs over newly created provisions reduced the balance of other provisions.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Interim condensed statement of changes in consolidated equity

capital

Supplementary

capital

premium

Treasury

Other

reserves

Foreign

exchange

differences

translation

Retained

earnings /

(Accumulated

losses)

Net profit

(loss) for

the period

Equity

attributable

to owners of

CD PROJEKT

S.A.

Non-controlling

interests

Total equity

01.01.2023 – 31.03.2023

Equity

as at 01.01.2023

100 771 1 567 325 116 700 (99 993) 2 255 1 904 344 442 - 2 033 404 - 2 033 404

Costs of the

incentive scheme

- - - - 1 159 - - - 1 159 - 1 159

Total

comprehensive

income

- - - - 2 320 (583) - 69 670 71 407 - 71 407

Equity

as at 31.03.2023

100 771 1 567 325 116 700 (99 993) 5 734 1 321 344 442 69 670 2 105 970 - 2 105 970

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

capital

Supplementary

capital

premium

Treasury

Other

reserves

Foreign

exchange

differences

translation

Retained

earnings /

(Accumulated

losses)

Net profit

(loss) for

the period

Equity

attributable

to owners of

CD PROJEKT

S.A.

Non-controlling

interests

Total equity

01.01.2022 – 31.12.2022

Equity

as at 01.01.2022

100 739 1 425 647 115 909 - 47 994 1 591 202 476 - 1 894 356 - 1 894 356

Costs of the

incentive scheme

- - - - 4 274 - - - 4 274 - 4 274

Share-based

payments

32 1 549 791 - (1 548) - - - 824 - 824

Purchase of treasury

shares for

redemption

- - - (99 993) - - - - (99 993) - (99 993)

Release of reserve

capital from

previous years

created for the

purpose of

purchasing treasury

- 35 741 - - (35 741) - - - - - -

Payment of dividend

(100 739)

Appropriation of the

net profit/offset of

loss

- 104 388 - - - - (104 388) - - - -

Total

comprehensive

income

- - - - (12 724) 313 - 347 093 334 682 - 334 682

Equity

as at 31.12.2022

100 771 1 567 325 116 700 (99 993) 2 255 1 904 (2 651) 347 093 2 033 404 - 2 033 404

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

capital

Supplementary

capital

premium

Treasury

Other

reserves

Foreign

exchange

differences

translation

Retained

earnings /

(Accumulated

losses)

Net profit

(loss) for

the period

Equity

attributable

to owners of

CD PROJEKT

S.A.

Non-controlling

interests

Total equity

01.01.2022 – 31.03.2022

Equity

as at 01.01.2022

100 739 1 425 647 115 909 - 47 994 1 591 202 476 - 1 894 356 - 1 894 356

Costs of the

incentive scheme

- - - - 1 148 - - - 1 148 - 1 148

Total

comprehensive

income

- - - - (4 930) 437 - 68 918 64 425 - 64 425

Equity

as at 31.03.2022

100 739 1 425 647 115 909 - 44 212 2 028 202 476 68 918 1 959 929 - 1 959 929

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Interim condensed consolidated statement of cash

flows

Note

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

OPERATING ACTIVITIES

Net profit /(loss)

69 670

68 918

Total adjustments: 29 52 072 53 442

Depreciation and amortization of property, plant and equipment,

intangible assets, expenditure on development projects and investment

properties

3 424 3 894

Amortization of development projects recognized as cost of goods sold 21 607 18 020

Foreign exchange (gains)/losses 5 965 (1 359)

Interest and participation in profits

(9 607)

(7 427)

(Gains)/Losses on investing activities (27 768) (434)

Increase/(Decrease) in provisions (980) (4 176)

(Increase)/Decrease in inventories

2 336

916

(Increase)/Decrease in receivables 87 854 43 740

Increase/(Decrease) in liabilities, excluding loans and borrowings (21 154) 15 515

Change in other assets and liabilities

(10 937)

(17 064)

Other adjustments 1 332 1 817

Cash from operating activities

121 742

122 360

Income tax expense 4 623 7 302

Withholding tax paid abroad 6 071 15 673

Income tax (paid)/refunded

(19 347)

(3 213)

Net cash from operating activities

113 089

142 122

INVESTING ACTIVITIES

Inflows

122 963

325 840

Sale of intangible assets and property, plant and equipment 492 7

Expiry of bank deposits over 3 months 100 900 265 000

Redemption of bonds

14 474

58 132

Interest on bonds 1 259 291

Interest received on deposits

5 831

2 364

Other cash inflows from investing activities 7 46

Outflows 358 127 129 979

Acquisition of intangible assets and property, plant and equipment

21 760

15 212

Expenditure on development projects

70 590

27 697

Expenditure on intangible assets 48 -

Acquisition of investment properties and capitalization of expenditure

Loans granted 1 881 1 500

Purchase of shares in a subsidiary 440 -

Purchase of bonds and cost of their purchase

7 966

Placement of bank deposits over 3 months 252 453 85 390

Outflows from execution of forward contracts 2 891 -

Net cash from investing activities

(235 164)

195 861

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

FINANCING ACTIVITIES

Inflows 21 10

Payment of finance lease liabilities 21 10

Outflows

1 035

994

Payment of lease liabilities 835 863

Interest paid 200 131

Net cash used in financing activities

(1 014)

(984)

Net increase/(decrease) in cash and cash equivalents

(123 089)

336 999

Change in cash and cash equivalents in the balance sheet (123 089) 336 999

Cash and cash equivalents as at the beginning of the period 277 827 411 586

Cash and cash equivalents at the end of the period 154 738 748 585

In the first quarter of 2023 under analysis, the CD PROJEKT Group reported positive net cash flows from operating activities of PLN

113 089 thousand.

The consolidated net profit (loss) for the period was adjusted for:

a) Non-cash items (total increase):

 Amortization and depreciation,

 Amortization of development work recognized as cost of sales, consisting of amortization of development

expenditure on Cyberpunk 2077 and The Witcher 3: Wild Hunt Complete Edition for the next-generation Xbox Series

X|S and PlayStation 5 consoles,

 Foreign exchange (gains)/losses, an increase resulting from the elimination of foreign exchange differences

recognized in the income statement from the valuation of foreign Treasury bonds held by the CD PROJEKT RED

segment,

 Increase/(decrease) in provisions, decrease,

 Other adjustments, an increase resulting mainly from the elimination of the accounting treatment of incentive

scheme costs and depreciation recognized in cost of sales and other operating income.

b) Items related to changes in current assets and current liabilities (total increase):

 (Increase)/decrease in inventories, an increase in the balance of flows resulting from a decrease in stocks,

 (Increase)/decrease in receivables, an increase in the balance of cash flows resulting primarily from a decrease in

the balance of receivables at the end of the first quarter of 2023 related to the receipt of royalties reported for the

fourth quarter of 2022, as well as the settlement of withholding tax paid abroad by the customers of CD PROJEKT

RED,

 Increase/(decrease) in liabilities except for loans and borrowings, a decrease in the balance of cash flows as

a consequence of a decrease in the Group’s liabilities,

 Changes in other assets and liabilities, a decrease in the balance of cash flows resulting mainly from the settlement

of minimum sales royalty guarantees previously received by CD PROJEKT RED and an increase in the balance of

prepayments.

c) Items included in other parts of the statement of cash flows - Interest and shares in profits, resulting in a decrease in the

cash flows reported under operating activities and (Profit)/loss from investing activities, a decrease resulting from the

partial reversal of the write-down of expenditure on development projects incurred until the end of 2022 related to the

Sirius Project and operations on bonds and derivative financial instruments.

d) The difference between the income tax recognized in the income statement and that actually paid during the first quarter

of 2023 including withholding tax settlements.

The balance of Net cash outflows from investing activities during the first quarter of the current year was mainly due the negative

cash flows associated with the increase in the balance of deposits over 3 months, expenditure on development projects incurred

and purchase of intangible assets and property, plant and equipment.

In the first quarter of 2023 under analysis, the CD PROJEKT Group did not generate any significant Net cash flows from financing

activities.

Total Net cash outflows for the first quarter of the current year amounted to PLN 123 089 thousand with an increase in the balance

of bank deposits over 3 months and Treasury bonds by a total of PLN 144 335 thousand.

Notes to the interim condensed

consolidated financial statements

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

General information

Name of reporting entity:

CD PROJEKT S.A.

(there have been no changes in the name of the reporting entity since the end of

the prior reporting period)

Legal form: a joint stock company (spółka akcyjna)

Registered office: ul. Jagiellońska 74, 03-301 Warsaw

Country of registration: Poland

Core activities:

CD PROJEKT S.A. is the holding company of the CD PROJEKT Group which

operates in the CD PROJEKT RED and GOG.COM segments.

Principal place of business: Warsaw

Registration body:

District Court for the Capital City of Warsaw in Warsaw, 14th Business Department

of the National Court Register

Statistical number REGON: 492707333

Tax identification number NIP:

7342867148

Number in the BDO register (national

waste management database):

000141053

Duration of the Group: Unspecified

Name of parent company: CD PROJEKT S.A.

Name of the top parent of the group: CD PROJEKT S.A.

Presentation of the Group

Subsidiaries

CD PROJEKT S.A.

GOG sp. z o.o. CD PROJEKT Inc.

The Molasses Flood LLC

CD PROJEKT SILVER Inc.

Spokko sp. z o.o.

CD PROJEKT RED

Vancouver Studio Ltd.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Consolidation policies

Consolidated companies

% share in capital % share of voting rights consolidation method

CD PROJEKT S.A. parent company - -

GOG sp. z o.o. 100% 100% acquisition accounting

CD PROJEKT Inc. 100% 100% acquisition accounting

Spokko sp. z o.o. 100% 100% not consolidated

CD PROJEKT RED Vancouver Studio Ltd. 100% 100% not consolidated

The Molasses Flood LLC 60% 60% not consolidated

CD PROJEKT SILVER Inc. 100% 100% not consolidated

In accordance with the accounting policy adopted by the Group, the parent entity does not have to consolidate a subsidiary using

the acquisition accounting method, if:

 the share in the parent company’s balance sheet total does not exceed 2%;

 the share in the parent company’s revenue from sales and financial transactions does not exceed 1%;

where those transactions between the subsidiary and its parent entity which would be eliminated during consolidation are not taken

into account when determining whether the said thresholds have been exceeded.

In total, the financial data of the subsidiaries excluded from consolidation cannot exceed:

 5% of the share in the parent entity’s total assets;

 2% of the share in the parent entity’s revenue from sales and financial transactions;

where those transactions between the subsidiary and its parent entity which would be eliminated during consolidation are not taken

into account when determining whether the said thresholds have been exceeded.

Subsidiaries

Subsidiaries are all and any entities over which the Group has control which manifests itself by, simultaneously:

 having power, consisting in having substantive rights that give the Group the current ability to direct the relevant activities, i.e.

those activities which significantly affect the entity’s financial results,

 being exposed or having rights to variable returns, consisting in having the potential to change the financial results of the

Group depending on the results of the subsidiary,

 having the ability to use the power exercised to affect its returns from the subsidiary by using its power in order to affect the

financial results attributable to the Group resulting from the involvement in the subsidiary.

Subsidiaries are fully consolidated from the date on which the Group assumed control over them. They cease to be consolidated

from the date that control ceases.

Revenue and costs, receivables and payables and unrealized gains on transactions between Group companies are eliminated for

the purposes of the consolidated financial statements. Unrealized losses are also eliminated, unless the transaction is an impairment

indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency

with the accounting policies adopted by the Group.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Basis of preparation of the interim condensed

consolidated financial statements

These interim condensed consolidated financial statements have been prepared in accordance with the International Accounting

Standard No. 34 Interim Financial Reporting endorsed by the EU (“IAS 34”).

The interim condensed consolidated financial statements do not comprise all the information and disclosures which are required in

annual financial statements and should be read jointly with the consolidated financial statements of the Group for the year ended

31 December 2022 approved for publication on 30 March 2023.

Going concern assumption

These interim condensed consolidated financial statements have been prepared based on the assumption that the Group and the

Parent Company will continue in operation as a going concern in the foreseeable future, i.e. in the period of at least 12 months after

the balance sheet date.

As at the date of signing these financial statements, the Management Board of the Parent Company has not identified any facts or

circumstances which would indicate any threats to the Group continuing in operation as a going concern for a period of 12 months

after the end of the reporting period as a result of intended or forced discontinuing or significantly curtailing its existing operations.

By the date of preparing the consolidated financial statements for the period from 1 January to 31 March 2023, the Management

Board of the Parent Company did not become aware of any events which should have been but were not recognized in the

accounting records for the reporting period. At the same time, there were no significant prior year events undisclosed in these

financial statements.

Compliance with the International Financial Reporting

Standards

These interim condensed consolidated financial statements have been prepared in accordance with the International Accounting

Standard No. 34 Interim Financial Reporting and in accordance with the relevant International Financial Reporting Standards (IFRS)

applicable to interim financial reporting, approved by the International Accounting Standards Board (IASB) and the International

Financial Reporting Interpretations Committee (IFRIC) as applicable as at 31 March 2023.

The Group intends to apply changes to IFRS published but not yet binding by the date of publication of these interim condensed

consolidated financial statements in accordance with their effective dates. Information on standards and interpretations adopted

for the first time, early adoption of the standards, standards effective on or after 1 January 2023 and the assessment of the impact

of IFRS changes on the future consolidated financial statements of the Group has been presented in the second part of the

Consolidated Financial Statements for 2022.

Amendments to standards or interpretations effective from 1 January 2023

applicable and adopted by the Group

 IFRS 17, Insurance Contracts – endorsed on 19 November 2021, applicable to reporting periods beginning on or after 1 January

2023,

 Amendments to IAS 1 and Practice Statement 2: Disclosure of Accounting Policies (published on 12 February 2021) – endorsed

on 2 March 2022 and applicable to annual periods beginning on or after 1 January 2023,

 Amendments to IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors – endorsed on 2 March 2022 and

applicable to periods beginning on or after 1 January 2023,

 Amendments to IAS 12, Deferred Tax related to Assets and Liabilities arising from a Single Transaction – endorsed on

11 August 2022 and applicable to periods beginning on or after 1 January 2023,

 Amendments to IFRS 17, Insurance Contracts concerning Initial Application of IFRS 17 and IFRS 9 – Comparative Information –

endorsed on 8 September 2022 and applicable to periods beginning on or after 1 January 2023.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

The amendments do not have a material impact on the accounting policies adopted by the Group with regard to the Group’s

operations or its financial results.

Standards and interpretations adopted by the IASB but not yet endorsed by the EU

When approving these financial statements, the Group did not apply the following standards, amendments and interpretations

which have not yet been endorsed by the EU:

 Amendment to IAS 1 Presentation of financial statements: Classification of liabilities as current or non-current – applicable to

reporting periods beginning on or after 1 January 2024,

 Amendments to IFRS 16, Leases. Lease Liability in a Sale and Leaseback – applicable to reporting periods beginning on or

after 1 January 2024.

The Group is analysing the estimated impact of the standards and amendments listed above on the Group’s financial statements.

Functional currency and presentation currency

The functional currency of the Group and the Parent Company and the reporting currency of these financial statements is the Polish

zloty (PLN). Unless stated otherwise, all data is presented in thousands of Polish zlotys (PLN ‘000).

Transactions and balances

Transactions expressed in foreign currencies are translated into functional currency based on the exchange rate valid as at the

transaction date. Foreign exchange gains and losses on the settlement of these transactions and the translation of monetary assets

and liabilities as at the balance sheet date are recognized in the income statement, unless they are deferred in equity, when they

qualify for recognition as cash flow hedges and hedges of a net investment.

Comparability of the financial statements and

consistency of accounting policies

The accounting policies applied in these interim condensed consolidated financial statements, material judgments made by the

Management Board with regard to the accounting policies applied by the Group and the main sources of estimating uncertainties

are consistent, in all material respects, with the policy adopted for preparing the annual consolidated financial statements of the

CD PROJEKT Group for 2022, with the exception of changes in accounting policies and presentation changes described below.

These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial

statements for the year ended 31 December 2022.

Changes in accounting policies

The accounting policies applied in these consolidated financial statements, material judgments made by the Management Board

with regard to the accounting policies applied by the Group and the main sources of estimating uncertainties are consistent, in all

material respects, with the policy adopted for preparing the annual consolidated financial statements of the CD PROJEKT Group

for 2022, with the exception of changes in accounting policies, changes related to companies covered by consolidation and

presentation changes described below.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Presentation changes

In these interim condensed consolidated financial statements for the period from 1 January to 31 March 2023, changes were

introduced in the presentation of selected financial data. In order to ensure comparability of the financial data in the reporting period

presentation changes were made to the data as at 31 March 2022 r. The data is presented after the following adjustment:

 In the income statement for the period from 1 January 2022 to 31 March 2022, the Group changed the presentation of the

provisions for variable portion of the Management Board’s performance-related remuneration. As a result of this adjustment,

the following balances have changed:

- Selling expenses – a decrease of PLN 6 496 thousand

- Administrative expenses – an increase of PLN 6 496 thousand.

Audit by the registered auditor

These interim condensed consolidated financial statements, including the selected elements of the interim condensed separate

financial statements were not audited or reviewed by an independent registered auditor.

Notes – operating segments of the

CD PROJEKT Group

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Operating segments

Presentation of the financial statements taking into account operating segments

The scope of the financial information provided on the Group’s operating segments is consistent with the requirements of IFRS 8.

The segments’ results are determined based on their net profits.

Description of differences in the basis for the determination of segments and the profit or loss of a

segment compared with the last annual consolidated financial statements

The Group did not make any changes in the determination of segments or in the measurement of the profits or losses of the

individual segments in relation to the financial statements for the year ended 31 December 2022.

There are no differences between the measurement of the assets, liabilities, profits and losses of the Group’s reporting segments.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Information on individual operating segments

Continuing operations

Consolidation eliminations Total continuing operations

CD PROJEKT RED

GOG.COM

01.01.2023 – 31.03.2023

Sales revenue 135 193 41 513 (1 949) 174 757

from external customers

133 312

41 445

174 757

between segments 1 881 68 (1 949) -

Net profit/(loss) of the segment 69 452 248 (30) 69 670

Continuing operations

Consolidation eliminations Total continuing operations

CD PROJEKT RED

GOG.COM

01.01.2022 – 31.03.2022

Sales revenue 179 349 40 387 (3 590) 216 146

from external customers

175 827

40 319

216 146

between segments 3 522 68 (3 590) -

Net profit/(loss) of the segment 68 849 152 (83) 68 918

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Consolidated income statement by segments for the period from 01.01.2023 to 31.03.2023

CD PROJEKT RED GOG.COM Consolidation eliminations Total

Sales revenue 135 193 41 513 (1 949) 174 757

Sales of products 129 786 - 809 130 595

Sales of services

463

(103)

428

Sales of goods for resale and materials 4 944 41 445 (2 655) 43 734

Cost of sales of products, services, goods for resale and materials 27 082 29 043 (1 873) 54 252

Costs of products and services sold 21 882 4 (28) 21 858

Cost of goods for resale and materials sold

5 200

29 039

(1 845)

32 394

Gross profit/(loss) on sales 108 111 12 470 (76) 120 505

Selling expenses 29 271 9 814 (37) 39 048

Administrative expenses

26 799

1 801

(114)

28 486

Other operating income 24 689 317 (543) 24 463

Other operating expenses

6 041

303

(447)

5 897

(Impairment)/reversal of impairment

of financial instruments

2 - - 2

Operating profit/(loss)

70 691

869

(21)

71 539

Finance income 18 876 410 - 19 286

Finance costs

9 573

934

(46)

10 461

Profit/(loss) before tax

79 994

345

80 364

Income tax 10 542 97 55 10 694

Net profit/(loss)

69 452

248

(30)

69 670

Net profit/(loss) attributable to owners of CD PROJEKT S.A. 69 452 248 (30) 69 670

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Consolidated income statement by segments for the period from 01.01.2022 to 31.03.2022*

CD PROJEKT RED GOG.COM Consolidation eliminations Total

Sales revenue 179 349 40 387 (3 590) 216 146

Sales of products 172 416 - 1 371 173 787

Sales of services

1 017

(450)

635

Sales of goods for resale and materials 5 916 40 319 (4 511) 41 724

Cost of sales of products, services, goods for resale and materials 22 063 28 768 (3 204) 47 627

Costs of products and services sold 18 416 21 (65) 18 372

Cost of goods for resale and materials sold

3 647

28 747

(3 139)

29 255

Gross profit/(loss) on sales

157 286

11 619

(386)

168 519

Selling expenses 43 933 10 308 (131) 54 110

Administrative expenses

25 023

1 538

(48)

26 513

Other operating income

2 694

1 030

(1 134)

2 590

Other operating expenses 5 603 794 (1 234) 5 163

(Impairment)/reversal of impairment

of financial instruments

(2) - - (2)

Operating profit/(loss)

85 419

(107)

85 321

Finance income 14 597 2 194 - 16 791

Finance costs 8 203 2 042 (26) 10 219

Profit/(loss) before tax

91 813

161

(81)

91 893

Income tax 22 964 9 2 22 975

Net profit/(loss) 68 849 152 (83) 68 918

Net profit/(loss) attributable to owners of CD PROJEKT S.A. 68 849 152 (83) 68 918

* restated data

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Consolidated statement of financial position by segments as at 31.03.2023

CD PROJEKT RED GOG.COM Consolidation eliminations Total

NON-CURRENT ASSETS 1 194 629 30 992 (17 155) 1 208 466

Property, plant and equipment 153 632 3 050 (1 747) 154 935

Intangible assets

68 902

380

(490)

68 792

Expenditure on development projects 542 286 1 965 232 544 483

Investment properties 42 188 - - 42 188

Goodwill

56 438

Investments in subordinated entities 15 136 - (15 136) -

Shares in non-consolidated subordinated entities

41 394

Prepayments and deferred costs 5 158 23 740 - 28 898

Other financial assets 216 098 - - 216 098

Deferred tax assets

53 007

1 857

(14)

54 850

Other receivables 390 - - 390

CURRENT ASSETS 1 041 093 60 591 (2 162) 1 099 522

Inventories

10 365

Trade receivables 73 179 2 721 (2 162) 73 738

Current income tax receivable 10 534 1 572 - 12 106

Other receivables

52 416

1 974

54 390

Prepayments and deferred costs 8 430 19 669 - 28 099

Other financial assets 277 203 - - 277 203

Bank deposits over 3 months

488 883

Cash and cash equivalents 120 083 34 655 - 154 738

TOTAL ASSETS 2 235 722 91 583 (19 317) 2 307 988

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

CD PROJEKT RED

GOG.COM

Consolidation eliminations

Total

EQUITY 2 082 335 39 006 (15 371) 2 105 970

Equity attributable to owners of CD PROJEKT S.A.

2 082 335

39 006

(15 371)

2 105 970

Share capital 100 771 136 (136) 100 771

Supplementary capital 1 539 839 33 001 (5 515) 1 567 325

Share premium

116 700

Treasury shares (99 993) - - (99 993)

Other reserves 6 747 435 (1 448) 5 734

Foreign exchange differences on translation

372

(65)

1 014

1 321

Retained earnings / (Accumulated losses) 348 447 5 251 (9 256) 344 442

Net profit (loss) for the period 69 452 248 (30) 69 670

Non-controlling interests

NON-CURRENT LIABILITIES 32 222 1 309 (1 281) 32 250

Other financial liabilities 18 525 1 281 (1 281) 18 525

Other liabilities

2 560

Deferred tax provision 49 - - 49

Deferred income

3 211

3 212

Provision for retirement and similar benefits 339 27 - 366

Other provisions 7 538 - - 7 538

CURRENT LIABILITIES

121 165

51 268

(2 665)

169 768

Other financial liabilities 8 383 891 (503) 8 771

Trade payables 13 418 34 505 (1 922) 46 001

Other liabilities

5 032

4 378

9 410

Deferred income 8 806 6 236 - 15 042

Provision for retirement and similar benefits 9 1 - 10

Other provisions

85 517

5 257

(240)

90 534

TOTAL LIABILITIES AND EQUITY 2 235 722 91 583 (19 317) 2 307 988

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Consolidated statement of financial position by segments as at 31.12.2022

CD PROJEKT RED GOG.COM Consolidation eliminations Total

NON-CURRENT ASSETS 1 104 545 32 593 (17 160) 1 119 978

Property, plant and equipment 143 837 3 269 (1 854) 145 252

Intangible assets

69 476

171

(490)

69 157

Expenditure on development projects 471 528 1 439 235 473 202

Investment properties 42 560 - - 42 560

Goodwill

56 438

Investments in subordinated entities 15 092 - (15 092) -

Shares in non-consolidated subordinated entities

41 607

Prepayments and deferred costs

5 314

25 760

31 074

Other financial assets 207 437 - - 207 437

Deferred tax assets

50 867

1 954

52 862

Other receivables 389 - - 389

CURRENT ASSETS 1 095 224 64 332 (5 410) 1 154 146

Inventories

12 701

Trade receivables 164 079 6 621 (5 410) 165 290

Current income tax receivable 38 1 420 - 1 458

Other receivables

55 340

1 799

57 139

Prepayments and deferred costs 6 508 16 378 - 22 886

Other financial assets 279 515 - - 279 515

Bank deposits over 3 months

337 330

Cash and cash equivalents 239 713 38 114 - 277 827

TOTAL ASSETS

2 199 769

96 925

(22 570)

2 274 124

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

CD PROJEKT RED

GOG.COM

Consolidation eliminations

Total

EQUITY 2 009 986 38 715 (15 297) 2 033 404

Equity attributable to owners of CD PROJEKT S.A.

2 009 986

38 715

(15 297)

2 033 404

Share capital 100 771 136 (136) 100 771

Supplementary capital 1 539 839 33 001 (5 515) 1 567 325

Share premium

116 700

Treasury shares (99 993) - - (99 993)

Other reserves 3 268 391 (1 404) 2 255

Foreign exchange differences on translation

955

(65)

1 014

1 904

Retained earnings / (Accumulated losses) 6 351 4 (9 006) (2 651)

Net profit (loss) for the period 342 095 5 248 (250) 347 093

Non-controlling interests

NON-CURRENT LIABILITIES 36 156 1 367 (1 337) 36 186

Other financial liabilities 18 883 1 337 (1 337) 18 883

Other liabilities 2 620 - - 2 620

Deferred tax provision

Deferred income 3 666 3 - 3 669

Provision for pension and similar benefits 339 27 - 366

Other provisions

10 598

CURRENT LIABILITIES 153 627 56 843 (5 936) 204 534

Other financial liabilities 8 687 1 417 (526) 9 578

Trade payables

38 787

38 236

(4 904)

72 119

Current income tax liabilities 2 116 - - 2 116

Other liabilities

4 382

5 862

10 244

Deferred income

16 379

6 046

22 425

Provision for pension and similar benefits 9 1 - 10

Other provisions

83 267

5 281

(506)

88 042

TOTAL LIABILITIES AND EQUITY 2 199 769 96 925 (22 570) 2 274 124

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Consolidated statement of financial position by segments as at 31.03.2022

CD PROJEKT RED GOG.COM Consolidation eliminations Total

NON-CURRENT ASSETS 939 507 19 752 (18 443) 940 816

Property, plant and equipment 110 102 5 235 8 924 124 261

Intangible assets

68 212

68 222

Expenditure on development projects 364 998 2 020 (13) 367 005

Investment properties 56 630 - (12 312) 44 318

Goodwill

56 438

Investments in subordinated entities 15 036 - (15 036) -

Shares in non-consolidated subordinated entities

39 240

Prepayments and deferred costs

5 346

8 973

14 319

Other financial assets 176 456 - - 176 456

Deferred tax assets

46 671

3 514

(6)

50 179

Other receivables 378 - - 378

CURRENT ASSETS 1 241 251 74 236 (3 754) 1 311 733

Inventories

14 970

Trade receivables 68 869 3 307 (3 754) 68 422

Current income tax receivable 101 300 - 401

Other receivables

111 556

1 650

113 206

Prepayments and deferred costs 5 436 13 495 - 18 931

Other financial assets 261 591 237 - 261 828

Bank deposits over 3 months

85 390

Cash and cash equivalents 693 338 55 247 - 748 585

TOTAL ASSETS

2 180 758

93 988

(22 197)

2 252 549

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

CD PROJEKT RED

GOG.COM

Consolidation eliminations

Total

EQUITY 1 941 440 33 563 (15 074) 1 959 929

Equity attributable to owners of CD PROJEKT S.A.

1 941 440

33 563

(15 074)

1 959 929

Share capital 100 739 136 (136) 100 739

Supplementary capital 1 368 366 62 796 (5 515) 1 425 647

Share premium

115 909

Other reserves 45 225 335 (1 348) 44 212

Foreign exchange differences on translation 1 079 (65) 1 014 2 028

Retained earnings / (Accumulated losses)

241 273

(29 791)

(9 006)

202 476

Net profit (loss) for the period 68 849 152 (83) 68 918

Non-controlling interests - - - -

NON-CURRENT LIABILITIES

37 797

2 626

(2 598)

37 825

Other financial liabilities

23 309

2 598

(2 598)

23 309

Other liabilities 2 800 - - 2 800

Deferred income 5 952 16 - 5 968

Provision for pension and similar benefits

368

380

Other provisions 5 368 - - 5 368

CURRENT LIABILITIES 201 521 57 799 (4 525) 254 795

Other financial liabilities

33 327

771

(771)

33 327

Trade payables 33 650 40 575 (2 953) 71 272

Current income tax liabilities 31 589 - - 31 589

Other liabilities

4 912

4 220

9 132

Deferred income 17 536 5 517 - 23 053

Provision for pension and similar benefits

Other provisions

80 501

6 715

(801)

86 415

TOTAL LIABILITIES AND EQUITY 2 180 758 93 988 (22 197) 2 252 549

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Operating segments

In the first quarter of 2023, the Group’s operations were carried out in two business segments:

 CD PROJEKT RED,

 GOG.COM.

CD PROJEKT RED

The scope and model of operations

The operations of the CD PROJEKT RED segment are executed within the structures of CD PROJEKT S.A. (the domestic holding

company of the CD PROJEKT Group), CD PROJEKT Inc. (USA) and CD PROJEKT RED Vancouver Studio Ltd. (Canada). The segment

also includes the operations of the gear.cdprojektred.com

mail-order shop offering products for fans of CD PROJEKT RED games

(CD PROJEKT RED STORE sp. z o.o. was acquired by CD PROJEKT S.A. on 28 February 2023).

The segment’s operations consist in creating and publishing video games, selling licences for their distribution, coordinating sales

promotions, and the production, sales or licensing of the accompanying products which use the brands owned.

The production and publishing of the computer games is executed by the CD PROJEKT RED studio and is based on the brands

owned by the Company – the Witcher and Cyberpunk. The studio is globally known for its Cyberpunk 2077 game and the Witcher

game series, the flagship brands of CD PROJEKT RED. In addition to the said franchises, the studio started internal concept work

on the third franchise under which the creation of a video game with the code name Hadar is planned.

As part of the publishing operations, the Parent Company is responsible for the design of the campaigns which promote its own

products and independently maintains direct communication with players via electronic media channels and social media and by

participating in industry events.

Key products

Currently, the portfolio of the studio’s main products includes video games which comprise the Witcher trilogy: The Witcher, The

Witcher 2: Assassins of Kings, The Witcher 3: Wild Hunt with two expansions: Hearts of Stone and Blood and Wine, and Cyberpunk

2077 - the studio’s first game in the Cyberpunk universe launched on 10 December 2020.

As of 2018, the online game GWENT: The Witcher Card Game is available (PC, macOS, iOS, Android). In addition, the Parent

Company offers Blood Wars: The Witcher Tales (PC, iOS, Nintendo Switch, Xbox One, PlayStation 4, Android), which is based on its

mechanics and GWENT: Rouge Mage – an expansion to GWENT: The Witcher Card Game for single player (PC, iOS, Android).

GOG.COM

The scope and model of operations

GOG.COM is currently one of the world’s most popular independent digital distribution platforms for computer games, which is

distinguished by offering digital products without security features that make it difficult for users to use the games they have

purchased (DRM

The platform is available in English, French, German, Chinese and Polish, offering customers not only a fully localized website or

games, but also dedicated customer service, technical support, direct marketing activity in the language and popular local payment

methods. On GOG.COM, games are available for Windows PCs, as well as for macOS and Linux operating systems.

The operations of the GOG.COM segment consists in digital distribution of the games via own GOG.COM shop and GOG GALAXY

application. The platform makes it possible to purchase the game, pay for the game and download it to one’s own computer; in

addition, the GOG GALAXY application enables, among other things, automatic updates, saving the game in the cloud, network

play, including between platforms, and is also responsible for GWENT’s network functionalities, sales support and handling of

payments made in the PC version of the game.

Key products

As at the date of these financial statements, more than 7 300 products from more than 1 000 partners are available on the

GOG.COM digital distribution platform. These include timeless classics as well as the latest titles from such recognizable companies

as Bethesda, Disney, Electronic Arts, Ubisoft, Konami and Warner Bros. Games are also distributed via the proprietary GOG GALAXY

app designed to provide the most convenient and functional experience for purchasing, playing and updating games offered in the

GOG.COM catalogue and enabling, among other things, online play between platforms.

Through GOG.COM, the Group also sells its own products directly to retail customers, i.e. games from the Witcher universe and

Cyberpunk 2077.

DRM (Digital Rights Management) – a broad term which refers to technologies which limit access to digital content (games, music, movies, books) to specific persons or

timeslots.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Description of the Issuer’s major achievements or failures in the first quarter

of 2023 by operating segments

CD PROJEKT RED

Events relating to Cyberpunk 2077

On 4 January 2023, the Steam platform awarded its Best Games Awards, honouring the game Cyberpunk 2077 with a win in the

“Labor of love” category. As voted by players, Cyberpunk 2077 was recognized by the community for its continued support and

development of the game.

On 11 April 2023, update 1.62 for Cyberpunk 2077 was unveiled, introducing a “technology familiarization” version of the new Ray

Tracing: Overdrive mode. The update has been produced in collaboration with NVIDIA, and can be used by owners of advanced

NVIDIA RTX 40 series graphics cards. This mode uses an innovative rendering technology, Path Tracing, which allows the images

generated in the game to achieve even greater realism, making Cyberpunk 2077 one of the most technologically advanced games

in the world.

On 27 April 2023, the studio announced that during the Summer Game Fest Play Days event in Los Angeles on 9-10 June 2023,

invited journalists and developers will have the opportunity to play Phantom Liberty, the expansion for Cyberpunk 2077, for the first

time.

On 15 May 2023, at the Digital Dragons Awards, the game Cyberpunk 2077 was honoured with an award in the Best Ongoing Polish

Game category.

Events relating to the Witcher series games

The beginning of 2023 was marked by CD PROJEKT RED announcing its partnership with Amazon Games on 18 January. Lost Ark

players from Europe and the Americas gained the opportunity to play Geralt of Rivia, as well as experience unique quests in Arkania

inspired by the Witcher games.

On 26 January 2023, the boxed edition of The Witcher 3: Wild Hunt – Complete Edition for next-generation consoles was published.

On 7 February 2023, Geralt of Rivia, through CD PROJEKT RED’s partnership with Epic Games, made his debut in the game Fortnite.

Fortnite players can unlock this character in the game, and with him unique quests, events and items inspired by the Witcher games.

GOG.COM

Digital distribution of games

As at the date of publication of this report, the product range on GOG.COM comprises more than 7 300 items. In the first quarter of

2023, the platform’s list of titles has expanded to include, among other things, titles such as: Wild West Dynasty, SpellForce:

Conquest of Eo, Pharaoh: A New Era, SpongeBob SquarePants: The Cosmic Shake, Enderal: Forgotten Stories, Nehrim: At Fate’s

Edge, X-Blades HD, Dreams in the Witch House, Loretta.

Sales promotion

Sales promotion in the digital distribution of games mainly consists of adding new items of interest to users to the catalogue and

running seasonal promotional campaigns.

The first quarter of 2023 on GOG.COM is traditionally a period of cyclical promotional activities. The new calendar year kicked off

with the Winter Sale, followed by the New Year’s Sale at the end of January, during which gamers were able to purchase more than

3 200 games at bargain prices. In February this year, a promotional campaign was organized on the occasion of Saint Valentine’s

Day entitled “We love games”, and in March – the GOG Spring Sale, the biggest event of the quarter, during which players had the

opportunity to purchase more than 4 000 games at promotional prices.

Other corporate events

On 5 January 2023, the Company announced that it has been advised by the law firm representing the Company in the US class

action that the US District Court for the District of Central California has issued an order granting preliminary approval of the

settlement. The order approves the terms of the settlement relating specifically to the plaintiffs’ complete withdrawal of any claims

against the Company and its Management Board members and the payment to the plaintiffs of USD 1 850 000 by the Company

and its insurer, Colonnade Insurance S.A.

On 23 January 2023, the RED Playtesting Program was announced – a new initiative by the studio to encourage player and

community participation in the production process of the studio’s games. During the playtests organized on the Warsaw campus of

CD PROJEKT RED, invited participants can see and test elements of games in production and share their comments and impressions

with the team, which will allow the studio to create games even better adapted to the expectations of players.

On 28 February 2023, the District Court for the Capital City of Warsaw in Warsaw entered in the Register of Businesses the merger

through acquisition of the Company with its subsidiary CD PROJEKT RED STORE sp. z o.o. with its registered office in Warsaw, as

the target company. The purpose of the merger was to simplify the structure of the Group in connection with the plans to continue

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

the existing operations of the Target Company in cooperation with a specialized third party – in line with the Long-Term Strategic

Growth Outlook of the CD PROJEKT Group.

From 20 to 24 March 2023, one of the world’s most important conferences for developers – the Game Developer Conference –

was held in San Francisco, where CD PROJEKT RED studio was represented by a group of more than thirty specialists who, during

presentations and panels, shared their knowledge and experience gained during the production of the game Cyberpunk 2077.

On 20 March 2023, the Company’s Management Board announced that it has decided to recognize an impairment charge in its

books of account in relation to the expenditure incurred to date on Project Sirius developed by The Molasses Flood studio. The

decision was based on the results of the evaluation of the scope and commercial potential of the Project in its original formula. At

the same time, it was reported that work is underway to define a new framework for the Project. The expenditure incurred on the

development of the Sirius Project until the end of 2022 amounted to PLN 33.4 million and was charged to the Company’s financial

result for 2022.

The Extraordinary General Meeting of the Company was held on 18 April 2023. Shareholders voted on resolutions to adopt new

incentive schemes A and B for 2023-2027 and to issue subscription warrants with disenfranchisement of existing shareholders.

The EGM of the Company also decided to reduce the share capital and cancel 860 290 treasury shares acquired by the Company

between 5 and 24 October 2022. The text of the adopted draft resolutions of the EGM is available on the Company’s website

On 20 April 2023, the Company’s Management Board announced that a merger plan between the Company, as the acquiring

company, and its subsidiary SPOKKO sp. z o.o. has been agreed and signed. The Merger Plan (including the annexes to the plan)

has been made available as an appendix to current report no. 14/2023 and is also available on the Company’s website and

on the

website of the acquired company. The merger will take place on the date of entry in the register. According to the strategy adopted

in October 2022, the Company will focus on its core business and implement mobile projects in collaboration with external partners.

On 28 April 2023, Forbes Poland declared CD PROJEKT RED the best employer in the IT industry in Poland and the second best

employer in Poland.

On 8 May 2023, the Management Board of CD PROJEKT S.A. adopted a resolution on adopting and recommending to the General

Meeting the method of distribution of the Company’s net profit for 2022. The Management Board has proposed to allocate

PLN 99 910 510.00 for the payment of dividend which means the dividend of PLN 1.00 per each participating share of the Company.

The Management Board has proposed transferring the remaining part of the net profit of PLN 241 162 310.59 to supplementary

capital. The dividend date is set for 13 June 2023 and the dividend payment date for 20 June 2023. After the Supervisory Board of

the Company has given its opinion on the proposal, the final decision on profit distribution and dividend payment will be made by

the Annual General Meeting, convened for 6 June 2023.

On 11 May 2023, the Management Board of CD PROJEKT, in reference to current report no. 8/2023

of 20 March 2023, announced

the completion of work on defining the new framework of Project Sirius being developed by The Molasses Flood studio. As a result

of defining the new Project framework in the Company’s books:

- the write-down of the development expenditure incurred in 2022 related to the Project, which originally amounted to PLN

33.4 million and was charged to the financial result of the Company and the CD PROJEKT Group for 2022, was partially

reversed, in an amount of PLN 21.5 million;

- a part of the expenditure, in an amount of PLN 2.7 million, incurred on development related to the Project in Q1 2023 was

written off.

The reversal of a part of the impairment charge for 2022 and writing off a part of the development expenditure incurred in Q1 2023

is the result of the decision to continue the Project within the newly defined framework and thus use a significant part of the work

completed to date in the further development of the game being developed by The Molasses Flood studio.

On 15-16 May 2023, a representation of CD PROJEKT RED took part in the most important conference for the Polish game industry

– Digital Dragons. Studio representatives shared their knowledge and experience gained from working on The Witcher and

Cyberpunk 2077.

On 18 May 2023, the studio announced the date for this year’s Promised Land Art Festival, a unique gathering for creative

professionals from the creative industries (including film, video games and digital art). This year’s festival will take place between

2 and 6 September at the EC1 complex in Łódź.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Factors affecting the Group’s future performance

For the future growth of the Company and the Group, the ability to retain and offer growth opportunities to a team of the best

creative professionals and experts, and to attract new specialists to work on the Group’s projects is of critical importance. Strategic

directions related to talent acquisition, team development and support are presented in the

CD PROJEKT Group Strategy Update

of 2021 (including its discussion in the form of a video commentary) and in the CD PROJEKT Group Sustainable Development Report

for 2022.

At the same time, important aspects supporting the development of the Group will include effective implementation of the

production plan of CD PROJEKT RED presented in October 2022, within the framework of Strategy Update

, as well as further

development of recognisability and popularity of franchises (including through cooperation with external entities) and the

enrichment with multiplayer gameplay elements of selected titles developed within the framework of owned IPs.

Material Group-specific external and internal factors which may negatively affect the Group’s operations and development identified

by the Management Board and the risk management system functioning within the Company are described in the risks section of

the Management Report on the operations of CD PROJEKT Group for 2022

Looking ahead to the next quarters of 2023, the CD PROJEKT Group intends to continue the organic growth of its business.

CD PROJEKT RED

In the CD PROJEKT RED segment, expansion of the operations is directly linked to new projects implemented, the scale of their

production and popularity among players. In this context, the current results of the CD PROJEKT Group are driven by the popularity

of the games in the Cyberpunk and The Witcher universe already issued by the Company, and in the coming periods they will be

driven by the progress of the production work and the market reception of the successive productions realized by the Company.

Looking ahead to the next quarters, particularly important activities for the CD PROJEKT RED studio will include the release of

a major expansion to Cyberpunk 2077 and continued organic growth of the business, also within the newly established

CD PROJEKT RED North America studio.

Another important process in the context of the development of the CD PROJEKT RED studio is the continuation of work on

implementing the new Unreal Engine 5 (the licence and partnership agreement with Epic Games was concluded in March 2022).

The new engine used should contribute to making the process of games creation more efficient. The strategic partnership assumes

improving the UE5 engine in terms of handling ‘open world’ games and adaptation and optimization of its elements to creative

concepts of the next projects. It also involves dedicated technical support on the part of Epic Games for titles released by

CD PROJEKT RED. Performing work on the EU5 engine should also facilitate recruitment to the studio’s development teams due to

the good knowledge of the Unreal Engine among game creators.

A key factor in maintaining the high growth dynamics of the CD PROJEKT RED segment in the future is the further development of

the in-house ability to produce games of the highest world class and quality, combined with the ability to communicate effectively

with players around the world. Both are part of the RED 2.0 studio’s ongoing transformation, which aims, among other things, to

change the way games are developed to be more flexible, based on agile methodologies, and to support the quality of future

products. The growing team, as well as the number and scale of productions, requires the ability to effectively manage teams and

production within CD PROJEKT RED’s studios in Europe (consisting of offices in Warsaw, Kraków and Wrocław) and North America

(Vancouver and the newly established office in Boston), The Molasses Flood studio (Boston), as well as publishing activities realized

mainly by teams from Warsaw, Los Angeles, Seoul, Tokyo and local representatives in other countries. The success of each of the

studio’s productions is important from the perspective of its being perceived as a creator of highly anticipated, top-quality

entertainment products and building the long-term value and recognisability of The Witcher, Cyberpunk brands, the internally

produced third franchise and the studio’s own brand – which are the cornerstones of the Company’s and Group’s operations and

continued growth. On the management side of ongoing projects, having two product lines – The Witcher and Cyberpunk – as well

as two independent development teams enabled parallel production of individual projects starting in 2022. Changing the

operations to a publishing model based on two brands running in parallel, and in the future three or more projects running

concurrently, will potentially enable optimization in terms of production and finance, increase the frequency of new launches and

increase the aggregate revenue, and will help further diversify risks, while opening up more opportunities for professional self-

realization for the creators employed by the Company.

GOG.COM

In the GOG.COM segment, the increasing propensity of consumers to purchase games directly online in recent years has been an

element supporting growth.

It will be important for the further development of the GOG.COM platform to further popularize it among gamers and to acquire

more premiere products. GOG sp. z o.o. is proactively talking with leading international game developers and publishers, constantly

expanding the range of suppliers and products on offer. Successive first releases of new games on GOG-COM each time contribute

to increasing user activity and translate to sales growth. In addition to continuously expanding the list of the products offered,

expansion of GOG sp. z o.o.’s operations also requires growing the user base by reaching to new players around the world who

have not yet had an account on the GOG.COM platform. In this respect, in recent years, a constant growth of the number of users

has been achieved, due to both intensive own PR activities, cooperation with business partners and synergies resulting from

cooperation with CD PROJEKT S.A.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

The results and development of the activities carried out as part of the GOG.COM segment, including acquisition of unique

knowledge and experience and the full use of technological solutions possessed will be affected by the development of

functionalities which support the sale of games on the platform, including better integration of monetization mechanisms of the

GOG GALAXY application with the GOG.COM shop, as well as increased activity to expand the offer of classic games on the

platform.

Other

The development of the CD PROJEKT Group will also be influenced by the development work carried out by its subsidiary The

Molasses Flood.

Impact of the political and economic situation in Ukraine on sales during the

reporting period

Impact on sales

In response to the Russian armed invasion of Ukraine, on 3 March 2022 the Management Board of CD PROJEKT decided to

suspend sales of CD PROJEKT Group products as well as games distributed on the GOG.COM platform in the territory of Russia

and Belarus. The Company estimates that in the 12 months since March 2021 to February 2022, the total share of Russia and Belarus

in sales of products in the CD PROJEKT RED segment and in the sales of the GOG.COM segment amounted to, respectively,

approximately 5.4% and approximately 3.7%.

Risks associated with the current political and economic situation in Ukraine

The Company continually monitors the impact of the current political and economic situation in Ukraine, Russia and Belarus on the

activities of the CD PROJEKT Group.

The Company terminated cooperation with the Russian and Belarussian suppliers and is currently not considering engaging in new

collaboration.

As of the publication date of these financial statements, the Group’s operating activities are undisturbed and the effects of the

Russian armed invasion of Ukraine do not have a significant negative impact on the Group’s operations.

In the opinion of the Management Board, the current political and economic situation in Ukraine does not materially affect the

quantitative data presented in the financial statements, has not resulted in any indications of impairment of assets, should not have

a significant negative effect on the Group’s results in 2023, and does not pose any risks to the Company’s continuing as a going

concern within 12 months of the end of the reporting period. Given the unprecedented nature of the current situation and the related

significant uncertainty, particularly the inability to predict the duration of the Russian invasion, as at the date of publication of these

financial statements, it is impossible to reliably estimate the long-term impact of the invasion of the Russian armed forces on Ukraine

on long-term performance and condition of the Company and its Group. Any assessments and forecasts in this regard are uncertain

and will be subject to further monitoring and analysis by the Group.

The above assessment has been prepared to the best of the Company’s knowledge at the date of preparing these financial

statements.

Seasonality or cyclicality of the Group’s operations

CD PROJEKT RED

Segment revenues and results are strongly affected by the new titles’ release schedule. CD PROJEKT RED usually takes between

2 and 5 years to produce a game. Typically, initial development work on a new game starts before the production of the previous

game has been completed and the game release to the market.

CD PROJEKT RED also engages in smaller-scale projects – such as add-ons for its own games or adapting the existing products to

work on new gaming platforms. Such projects may be carried out directly by the Company or by its external partners, and their

implementation takes from less than ten to below twenty months.

With regard to games which have already been released, their yearly sales breakdown is dependent on the schedule of periodic

sale campaigns. In most cases, strong sales are reported in the second and fourth quarter, while the first and the third quarter (the

latter of which overlaps with the summer vacation season) see weaker sales.

In addition to pure development activities, the Company also actively develops its franchises in other fields, with a view to continually

expanding its audience and exploring other types of media and products.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Chart 1 Release quarters of the CD PROJEKT RED segment – sales of products, goods for resale and materials in 2011-2023 (in PLN

thousands)

GOG.COM

The digital videogame distribution market on which GOG.COM operates is characterized by seasonal fluctuations in revenues. On

an annual basis, the highest revenues are typically obtained in the second and fourth quarter while the lowest revenues in the first

and third quarter. Sales in the second and fourth quarters are temporarily boosted by promotional campaigns typically organized

in these quarters.

The sales volume may also be strongly affected by the list of new products introduced in a given reporting period.

Chart 2

Quarterly distribution of sales of goods for resale and materials of the GOG.COM segment in 2018-2023 (in PLN thousand)

200000

400000

600000

800000

1000000

1200000

1400000

1600000

40000

80000

120000

160000

200000

Q1 Q2 Q3 Q4

2018 2019 2020 2021 2022 2023

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Key customers

The CD PROJEKT Group cooperates with external customers whose share in the consolidated revenues of the Group exceeds 10%.

Within the CD PROJEKT RED segment, the commercial activities carried out by CD PROJEKT S.A. in cooperation with two customers

generated cumulative sales exceeding 10% of the CD PROJEKT Group’s total consolidated sales revenue by the end of the first

quarter of 2023:

 recipient I: PLN 54 334 thousand, which accounted for 31.1% of the Group’s total consolidated sales revenue,

 recipient II: PLN 29 559 thousand, which accounted for 16.9% of the Group’s total consolidated sales revenue.

The customers referred to above are not related to CD PROJEKT S.A. or its subsidiaries. In the remaining business segments, no

external single customer exceeded the threshold of 10% of the Group’s consolidated revenue.

Notes – other explanatory notes to

the interim condensed consolidated

financial statements

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 1. Description of those items affecting assets, liabilities, equity, net profit

or loss and cash flows which are not typical in terms of their type, size and

impact

In connection with defining the new framework of the Sirius project being developed by The Molasses Flood studio, the write-down

of the development expenditure incurred until the end of 2022, development expenditure was partly reversed (an increase in the

balance of Other operating income of PLN 21 531 thousand) and writing off a part of the expenditure incurred on the project in the

first quarter of 2023 (an increase in the balance of Other operating expenses of PLN 2 745 thousand), which significantly affected

the Group’s results and the corresponding items of the Statement of financial position and the Statement of cash flows presented

in these financial statements.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 2. Property, plant and equipment

Changes in property, plant and equipment (by category) for the period 01.01.2023 31.03.2023

Land

Buildings and

structures

Civil and

water

engineering

facilities

Plant and

machinery

Vehicles

Other assets

Assets under

construction

Total

Gross carrying amount

as at 01.01.2023

40 435 82 297 1 925 58 856 3 251 5 776 28 089 220 629

Increase due to: - 983 2 11 046 31 212 3 213 15 487

purchase - 72 2 11 009 31 212 3 213 14 539

lease contracts

concluded

- 291 - - - - - 291

transfer from assets

under construction

- 569 - 33 - - - 602

reclassification

other - - - 4 - - - 4

Decrease due to: - 4 094 - 293 1 - 639 5 027

sale

105

scrapping - 956 - 124 - - 1 1 081

transfer from assets

under construction

- - - - - - 601 601

reclassification - - - 51 - - 37 88

lease contracts

terminated

- 3 138 - - - - - 3 138

other

Gross carrying amount

as at 31.03.2023

40 435 79 186 1 927 69 609 3 281 5 988 30 663 231 089

Accumulated

depreciation as at

01.01.2023

1 817 25 351 717 42 482 1 537 3 473 - 75 377

Increase due to:

142

1 800

2 782

149

239

5 152

depreciation charge 142 1 717 40 2 782 149 239 - 5 069

reclassification

Decrease due to: - 4 075 - 300 - - - 4 375

sale - - - 105 - - - 105

scrapping

928

111

1 039

reclassification - - - 83 - - - 83

termination of lease

contracts

- 3 138 - - - - - 3 138

other - 9 - 1 - - - 10

Accumulated

depreciation as at

31.03.2023

1 959 23 076 757 44 964 1 686 3 712 - 76 154

Impairment write-downs

as at 01.01.2023

- - - - - - - -

Impairment write-downs

as at 31.03.2023

- - - - - - - -

Net carrying amount as

at 01.01.2023

38 618 56 946 1 208 16 374 1 714 2 303 28 089 145 252

Net carrying amount as

at 31.03.2023

38 476 56 110 1 170 24 645 1 595 2 276 30 663 154 935

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Amounts of contractual commitments to purchase property, plant and equipment in future

31.03.2023 31.12.2022 31.03.2022

Construction of an office building on the CD PROJEKT campus 97 072 - -

Leasing of passenger cars

429

599

429

Total 97 501 599 429

Right-of-use assets relating to property, plant and equipment

31.03.2023

Gross amount

Accumulated

depreciation

Net amount

Land

14 540

720

13 820

Real properties 12 903 7 670 5 233

Civil and water engineering facilities 99 99 -

Vehicles

2 256

737

1 519

Total 29 798 9 226 20 572

31.12.2022

Gross amount

Accumulated

depreciation

Net amount

Land

14 540

669

13 871

Real properties 14 332 8 735 5 597

Civil and water engineering facilities 99 99 -

Vehicles

2 264

625

1 639

Total 31 235 10 128 21 107

31.03.2022

Gross amount

Accumulated

depreciation

Net amount

Land 14 540 515 14 025

Real properties

11 276

6 577

4 699

Civil and water engineering facilities 94 59 35

Vehicles

1 512

347

1 165

Total 27 422 7 498 19 924

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 3. Intangible assets and expenditure on development projects

Changes in intangible assets and expenditure on development projects for the period 01.01.2023 –

31.03.2023

Expenditure on

development

projects in progress

Expenditure on

completed

development

projects

Trademarks

Patents and licenses

Computer software

Goodwill

Intangible assets

under construction

Total

Gross carrying amount

as at 01.01.2023*

247 277 930 087 33 199

4 160

18 469 50 078 56 438

172 1 339 880

Increase due to:

74 219

371

437

418

75 445

purchase - - -

371

- 396 -

367 1 134

assets internally

generated

74 219 - -

- - -

51 74 270

reclassification - - -

- 41 -

- 41

Decrease due to:

14 589

14 630

scrapping 2 745 - -

- - -

- 2 745

utilization of

impairment write-

downs

11 844 - -

- - -

- 11 844

reclassification

Gross carrying amount

as at 31.03.2023

306 907 930 087 33 199

4 490

18 469 50 515 56 438

590 1 400 695

Accumulated

amortization as at

01.01.2023

- 657 011 -

2 767

301 33 853 -

- 693 932

Increase due to:

21 724

230

1 245

23 274

amortization charge - 21 724 -

230

75 1 245 -

- 23 274

Decrease - - -

- - -

- -

Accumulated

amortization as at

31.03.2023

- 678 735 -

2 997

376 35 098 -

- 717 206

Impairment write-downs

as at 01.01.2023

33 375 13 776 -

- - -

- 47 151

Increase - - -

- - -

- -

Decrease due to: 33 375 - -

- - -

- 33 375

reversal of write-

downs

21 531 - -

- - -

- 21 531

reversal of write-

downs (write-off)

11 844 - -

- - -

- 11 844

Impairment write-downs

as at 31.03.2023

- 13 776 -

- - -

- 13 776

Net carrying amount as

at 01.01.2023

213 902 259 300 33 199

1 393

18 168 16 225 56 438

172 598 797

Net carrying amount as

at 31.03.2023

306 907 237 576 33 199

1 493

18 093 15 417 56 438

590 669 713

* restated data

Amounts of contractual commitments to purchase intangible assets in future

Not applicable.

Note 4. Goodwill

During the period from 1 January to 31 March 2023 there were no changes in goodwill.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 5. Investment properties

The Parent Company owns a real estate complex located at ul. Jagiellońska 74 and 76 in Warsaw. Given that a part of the properties

purchased is leased out to third parties, including CD PROJEKT Group companies, the Group decided to partly classify these

properties as investment properties. The remaining part of the property is used for own needs of the activities conducted.

The Group measures the properties purchased at cost less accumulated depreciation.

The last appraisal report by the expert surveyor, for the buildings recognized as investment properties, was prepared on the basis

of unit prices for the construction of buildings with the most similar parameters included in the Bistyp Catalogue of Unit Prices for

Works and Investment Facilities 2021. The valuation of the individual assets amounted to PLN 60 692 thousand for the buildings at

ul. Jagiellońska 74, and PLN 13 212 thousand for the buildings at ul. Jagiellońska 76.

Changes in investment properties for the period 01.01.2023 – 31.03.2023

Gross carrying amount as at 01.01.2023 47 946

Increase due to:

capitalized expenditure

Decrease -

Gross carrying amount as at 31.03.2023

48 044

Accumulated amortization as at 01.01.2023 5 386

Increase due to:

470

amortization charge 470

Decrease -

Accumulated amortization as at 31.03.2023

5 856

Impairment write-downs as at 01.01.2023

Increase -

Decrease -

Impairment write-downs as at 31.03.2023

Net carrying amount as at 31.03.2023

42 188

Contractual liabilities on purchase of investment properties

Not applicable.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 6. Inventories

31.03.2023 31.12.2022 31.03.2022

Goods for resale 10 362 12 697 14 909

Other materials 3 4 61

Gross inventories

10 365

12 701

14 970

Inventory write-downs - - -

Net inventories

10 365

12 701

14 970

Changes in inventory write-downs

Not applicable.

Note 7. Trade and other receivables

31.03.2023 31.12.2022 31.03.2022

Trade and other receivables, gross 129 334 223 636 182 819

Write-downs

816

818

813

Trade and other receivables 128 518 222 818 182 006

from related entities

189

1 855

1 356

from other entities 128 329 220 963 180 650

Change in write-downs of receivables

Trade

receivables

Other

receivables

Total

OTHER ENTITIES

Write-downs as at 01.01.2023

732

818

Increase

Decreases, including: 2 - 2

release of write-downs (write-off)

Write-downs as at 31.03.2023 84 732 816

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Current and overdue trade receivables as at 31.03.2023

Total Not overdue

Overdue, in days

1 – 60

61 – 90

91 – 180

181 – 360

>360

RELATED ENTITIES

gross receivables 187 187 - - - - -

default ratio

write-down resulting

from the ratio

- - - - - - -

write-down

determined

individually

- - - - - - -

total expected credit

losses

- - - - - - -

Net receivables 187 187 - - - - -

Total Not overdue

Overdue, in days

1 – 60 61 – 90 91 – 180 181 – 360 >360

OTHER ENTITIES

gross receivables 73 635 73,512 37 1 1 - 84

default ratio

write-down resulting

from the ratio

- - - - - - -

write-down

determined

individually

84 - - - - - 84

total expected credit

losses

84 - - - - - 84

Net receivables 73 551 73,512 37 1 1 - -

Total

gross receivables

73 822

73 699

impairment write-

downs

84 - - - - - 84

Net receivables 73 738 73 699 37 1 1 - -

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Other receivables

31.03.2023 31.12.2022 31.03.2022*

Other gross receivables, including: 55 512 58 260 114 316

tax receivables, other than corporate

income tax

38 180 43 414 69 462

reimbursement from the insurer for part of the costs

of the US court settlement

6 354 - -

prepayments for inventories

5 821

6 940

10 346

settlements with suppliers of property, plant and equipment items 2 059 4 160 -

prepayments for development projects 1 081 1 433 32 480

security deposits

825

1 071

1 014

prepayments for property, plant and equipment

and intangible assets

138 135 10

provisions for sales revenue – prepayments 22 137 75

settlements with employees 12 - 31

settlements with members of the management boards

of the Group companies

2 2 8

settlements with payment operators

other 1 018 961 890

Write-downs

732

Other receivables, including:

54 780

57 528

113 584

short-term 54 390 57 139 113 206

long-term

390

389

378

* restated data

Note 8. Other financial assets

31.03.2023 31.12.2022 31.03.2022

Loans granted

2 596

739

10 441

Bonds 468 630 475 848 427 607

Derivative financial instruments

19 606

7 809

236

Private equity interests in the gaming sector 2 469 2 556 -

Other financial assets, including: 493 301 486 952 438 284

short-term

277 203

279 515

261 828

long-term 216 098 207 437 176 456

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 9. Prepayments and deferred costs

31.03.2023 31.12.2022* 31.03.2022*

Minimum guarantees, advance payments and prepayments

GOG.COM

42 557 41 457 21 496

Software, licenses 7 903 6 186 5 815

Costs of future marketing services

1 556

1 597

1 715

Fees for pre-emptive rights

1 244

1 271

1 351

Costs of repairs and maintenance 1 057 1 142 1 387

Property and personal insurance 511 785 332

Costs of IT security resources

392

380

432

Costs in connection with redevelopment of the car park 260 260 -

Fees for perpetual usufruct of land

211

213

Staff relocation costs 179 39 -

Domains, servers 174 235 49

Business travel (tickets, hotels, insurance)

165

Marketing campaigns - - 3

Other prepayments and deferred costs 788 523 409

Prepayments and deferred costs, including:

56 997

53 960

33 250

short-term 28 099 22 886 18 931

long-term 28 898 31 074 14 319

* restated data

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 10. Deferred income tax

Deductible temporary differences underlying the deferred tax asset

31.12.2022*

Differences affecting

the deferred tax

recognized in the

profit or loss

31.03.2023

Provision for other employee benefits 376 - 376

Provision for costs of performance-related

and other remuneration

49 565 8 270 57 835

Tax loss

5 467

(454)

5 013

Foreign exchange losses 7 573 2 638 10 211

Difference between the carrying and tax

amount of expenditure on development

projects

34 836 (17 857) 16 979

Salaries and wages and social security payable

in future periods

47 1 48

Deferred income in respect of virtual wallet top-

ups and fringe benefit scheme

3 955 262 4 217

Other provisions

34 167

(7 199)

26 968

Tax value of leased non-current assets 20 697 (157) 20 540

Research and development relief 318 126 - 318 126

Prepayments recognized as revenue for tax

purposes

7 523 (1 809) 5 714

Difference between the net carrying amount

and tax amount of property, plant and

equipment and intangible assets

12 12 24

Measurement of forward contracts 892 (504) 388

Other - (31) (31)

Total deductible differences, including:

483 236

(16 828)

466 408

taxed at 5%

71 657

23 074

94 731

taxed at 19% 410 344 (39 871) 370 473

deferred tax charged abroad 1 235 (31) 1 204

Deferred income tax asset

81 900

(6 428)

75 472

* restated data

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Taxable temporary differences underlying the deferred tax provision

31.12.2022*

Differences affecting

the deferred tax

recognized in the

profit or loss

31.03.2023

Difference between the net carrying amount

and tax amount of property, plant and

equipment and intangible assets

17 780 1 036 18 816

Current period revenue invoiced in the

subsequent period/accrued income

132 427 (68 619) 63 808

Foreign exchange gains 8 722 (5 918) 2 804

Difference between the carrying and tax

amount of expenditure on development

projects

254 638 (14 093) 240 545

Book value of leased non-current assets

20 844

(258)

20 586

Other 151 (6) 145

Total taxable differences, including:

434 562

(87 858)

346 704

taxed at 5%

382 911

(59 141)

323 770

taxed at 19% 50 214 (28 682) 21 532

deferred tax charged abroad

1 437

(35)

1 402

Deferred tax provision 29 088 (8 417) 20 671

* restated data

The deferred part of the income tax was determined either at the corporate income tax rate of 19% for the tax base corresponding

to income from other sources, or at the rate of 5% for the tax base corresponding to income from qualifying intellectual property

(the so-called IP BOX). When determining the appropriate tax rate for temporary differences, the Group relied on forecasts of which

tax base will give rise to the realization of the temporary differences recognized.

Net deferred tax asset/provision

31.03.2023 31.12.2022* 31.03.2022

Deferred tax asset 75 472 81 900 75 150

Deferred tax provision 20 671 29 088 24 971

* restated data

Income tax expense recognized in the income statement

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Current income tax, including: 12 681 25 729

withholding tax paid abroad

6 071

15 673

Change in deferred tax (1 987) (2 754)

Income tax expense recognized in the income statement

10 694

22 975

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 11. Provision for retirement and similar benefits

31.03.2023 31.12.2022 31.03.2022

Provision for retirement and disability bonuses 376 376 387

Total, including: 376 376 387

short-term

long-term 366 366 380

During the period from 1 January to 31 March 2023 there were no changes in provisions for retirement and similar benefits.

Note 12. Other provisions

31.03.2023 31.12.2022 31.03.2022

Provision for liabilities, including:

98 072

98 640

91 783

provision for costs of performance-related and other remuneration 76 582 67 966 58 105

provision for costs of the audit and review of the financial

statements

54 167 184

provision for costs of external services

818

850

1 085

provision for other costs 20 618 29 657 32 409

Total, including: 98 072 98 640 91 783

short-term

90 534

88 042

86 415

long-term 7 538 10 598 5 368

Change in other provisions

Provision for costs of

performance-related

and other

remuneration

Other provisions Total

As at 01.01.2023

67 966

30 674

98 640

Provisions recorded during the year 8 616 18 231 26 847

Provisions utilized/released

27 415

As at 31.03.2023, including:

76 582

21 490

98 072

short-term 76 582 13 952 90 534

long-term

7 538

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 13. Other liabilities

31.03.2023 31.12.2022 31.03.2022

Liabilities in respect of taxes, customs duties, social security and

other, with the exception of corporate income tax

8 943 9 547 8 679

VAT 3 859 5 302 3 841

Withholding tax 43 32 888

Personal income tax

560

1 944

1 112

Social security contributions 4 296 2 043 2 723

State Disabled Persons Fund (PFRON) 83 75 62

PIT-8AR (personal income tax) settlements

134

Other 70 17 -

Other liabilities

3 027

3 317

3 253

Liabilities in respect of pre-emptive rights and costs of future

marketing services

2 560 2 620 2 800

Other settlements with employees

176

241

105

Other settlements with members of the Management Boards 29 32 22

Prepayments received from foreign customers

Other liabilities 262 416 326

Total other liabilities 11 970 12 864 11 932

short-term

9 410

10 244

9 132

long-term 2 560 2 620 2 800

Note 14. Deferred income

31.03.2023

31.12.2022

31.03.2022

Subsidies 5 048 5 511 7 812

Sales relating to future periods

8 589

16 088

17 105

GOG portfolio 4 572 4 460 4 058

Rental of company phones

Deferred income, including: 18 254 26 094 29 021

short-term 15 042 22 425 23 053

long-term

3 212

3 669

5 968

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 15. Information on financial instruments

Fair values of specific classes of financial instruments

The Management Board of the Group analysed specific classes of financial instruments. Based on the analysis, it was concluded

that the carrying amounts of the instruments do not materially differ from their fair values, as at both 31 March 2023, 31 December

2022 and 31 March 2022.

31.03.2023 31.12.2022* 31.03.2022

LEVEL 1

Assets measured at fair value

Assets measured at fair value through

other comprehensive income

232 091 243 091 177 736

bonds issued by foreign governments - EUR

16 440

25 111

24 731

bonds issued by foreign governments - USD 215 651 217 980 153 005

LEVEL 2

Assets measured at fair value through profit or loss

Derivatives

19 606

7 809

236

currency forwards - EUR 1 112 1 249 6

currency forwards - USD

18 494

6 560

230

Private equity interests in the gaming sector 2 469 2 556 -

private equity interests in the gaming sector - SEK 1 038 1 085 -

private equity interests in the gaming sector - USD

1 431

1 471

Liabilities measured at fair value through profit or loss

Derivatives

388

891

24 303

currency forwards - EUR 38 72 598

currency forwards - USD

350

819

23 705

* restated data

Financial Instruments measured at fair value are classified to 3-stage fair value hierarchy:

Level 1 – quoted prices in active markets for identical assets or liabilities.

Level 2 – fair value based on observable market data.

Level 3 – fair value based on market data that is not observable in the market.

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Financial assets – classification and measurement

31.03.2023 31.12.2022 31.03.2022*

Financial assets measured at amortized cost 956 884 1 014 332 1 163 087

Other non-current receivables

390

389

378

Trade receivables 73 738 165 290 68 422

Cash and cash equivalents 154 738 277 827 748 585

Bank deposits over 3 months

488 883

337 330

85 390

Treasury bonds and bonds guaranteed by the State Treasury 236 539 232 757 249 871

Loans granted 2 596 739 10 441

Financial assets measured at cost

41 394

41 607

39 240

Shares in non-consolidated subordinated entities 41 394 41 607 39 240

Assets measured at fair value through

other comprehensive income

232 091 243 091 177 736

Bonds issued by foreign governments 232 091 243 091 177 736

Financial assets measured at fair value through profit or loss

22 075

10 365

236

Derivative financial instruments 19 606 7 809 236

Private equity interests in the gaming sector

2 469

2 556

Total financial assets

1 252 444

1 309 395

1 380 299

* restated data

Financial liabilities – classification and measurement

31.03.2023 31.12.2022 31.03.2022

Financial liabilities measured at amortized cost

72 909

99 689

103 605

Trade payables 46 001 72 119 71 272

Other financial liabilities

26 908

27 570

32 333

Financial liabilities at fair value

through profit or loss

388 891 24 303

Derivative financial instruments 388 891 24 303

Total financial liabilities 73 297 100 580 127 908

In accordance with the requirements of IFRS 9 Financial Instruments, the Company analysed the business model for managing

financial assets and examined the characteristics of contractual cash flows for each component of the bond portfolio, and concluded

that:

 the purpose of investments in domestic and foreign Treasury bonds and domestic bonds guaranteed by the Polish State

Treasury is to hold them to maturity and to collect contractual cash flows;

 investment mandates for managing the foreign bonds portfolio allow selling bonds before maturity as part of the adopted

strategy;

 all bonds purchased meet the SPPI test.

As a result of the analysis conducted, purchased bonds were classified into two financial asset management models which differ in

terms of the entity managing the bond portfolio. Polish Treasury bonds and bonds guaranteed by the Polish State Treasury are

measured at amortized cost, because they are held to collect contractual cash flows. Foreign Treasury bonds are measured at fair

value through other comprehensive income, because of the investment mandate which allows the possibility of the portfolio being

managed by an Asset Manager.

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 16. Sales revenue

Sales revenue – geographical structure*

01.01.2023 – 31.03.2023 01.01.2022 – 31.03.2022

in PLN

in %

in PLN

in %

Domestic sales 5 848 3.35% 7 855 3.63%

Export sales, including:

168 909

96.65%

208 291

96.37%

Europe 36 155 20.69% 44 678 20.67%

North America 115 720 66.22% 141 329 65.40%

South America

796

0.46%

634

0.29%

Asia 14 359 8.22% 19 929 9.22%

Australia

1 772

1.00%

1 673

0.77%

Africa 107 0.06% 48 0.02%

Total 174 757 100% 216 146 100%

* The data presented relates to the place of residence of the customers of the Group companies: for CD PROJEKT S.A. –

distributors, and for retail sales conducted by GOG sp. z o.o., CD PROJEKT RED STORE sp. z o.o., CD PROJEKT Inc. – end customers.

Sales revenue – by type of production

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Own production

130 595

173 787

Third party production 43 734 41 724

Other revenue 428 635

Total

174 757

216 146

Sales revenue – by distribution channel

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Games – box issues 12 287 10 712

Games – digital issues

156 326

197 926

Other revenue 6 144 7 508

Total

174 757

216 146

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 17. Operating expenses

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022*

Depreciation and amortization of property, plant and equipment, intangible assets,

expenditure on development projects and investment properties, including:

3 424 3 894

depreciation on leased buildings

380

421

depreciation of leased vehicles 98 81

Materials and energy used 710 634

External services, including:

21 192

37 829

costs of short-term leases and low value leases 43 41

Taxes and fees 356 265

Salaries and wages, social insurance and other benefits

40 577

37 350

Business travel 808 81

Cost of using company cars

Cost of goods for resale and materials sold

32 394

29 255

Costs of products and services sold 21 858 18 372

Other costs

407

511

Total 121 786 128 250

Selling expenses 39 048 54 110

Total administrative expenses, including:

28 486

26 513

cost of research work 1 430 4 977

Cost of sales 54 252 47 627

Total

121 786

128 250

* restated data

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 18. Other operating income and expenses

Other operating income

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Reversal of a write-down of expenditure on development projects in progress

21 531

Rental income 1 674 1 660

Subsidies 462 465

Other sales

289

Fixed assets and goods for resale received free of charge 168 -

Income from re-invoicing

137

226

Refund of overpaid tax on civil law transactions

Gains on disposal of non-current assets 2 3

Release of unused provisions for costs - 206

Other

106

Total other operating income 24 463 2 590

Other operating expenses

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Scrapping of fixed assets and intangible assets 2 787 170

Cost of rental 1 057 894

Depreciation of investment properties

464

463

Donations and charity 404 1 097

Cost of sales on other sales 372 -

VAT written off

255

Cost of destruction of materials and goods for resale 150 2 301

Costs relating to re-invoicing

137

226

Provision for the uninsured portion of the US court settlement costs

Other 212 12

Total other operating expenses

5 897

5 163

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 19. Finance income and costs

Finance income

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Interest income

9 823

7 663

on current bank deposits 5 831 2 364

on bonds 3 956 5 198

on loans

101

Other finance income 9 463 9 128

settlement and measurement of derivative financial instruments

9 235

2 037

gain on redemption of bonds

188

7 089

forward contracts – Management Board - 2

other finance income 40 -

Total finance income

19 286

16 791

Finance costs

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Interest expense 224 243

on lease contracts

200

135

on bonds 16 101

on liabilities to the State Treasury 5 7

on trade payables

Other finance costs 10 237 9 976

net foreign exchange losses 10 137 3 488

commission and fees on purchase of bonds

settlement and measurement of derivative financial instruments - 6 397

other finance costs 25 -

Total finance costs

10 461

10 219

Net finance income/expense

8 825

6 572

Note 20. Leases of low-value assets and short-term leases

The Group concluded lease contracts for office equipment (multifunctional photocopiers, kitchen appliances) and residential

premises which potentially meet recognition criteria for leases under the new IFRS 16. However, the Group considered these

contracts to be short-term leases and leases of low-value assets and decided not to apply the new requirements for leases to these

assets, as permitted by paragraph 5 of the standards. In such cases, lease payments are charged to costs of the period to which

they relate, either on a straight-line basis or in some other systematic way that reflects the distribution of costs over the life of the

contract (information on the cost of these leases incurred in the period from 1 January to 31 March 2023 is included in Note 17).

As at 31 March 2023, 31 December 2022 and 31 March 2022, future payments in respect of irrevocable short-term leases and leases

of low-value assets were as follows:

31.03.2023 31.12.2022 31.03.2022

Up to 1 year 396 467 338

From 1 to 5 years 217 334 131

Total

613

801

469

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 21. Issuance, redemption and repayment of debt and equity securities

Issuance of debt securities

Not applicable.

Issuance of equity securities

Specification

31.03.2023

31.12.2022

31.03.2022

Number of shares in thousands 100 771 100 771 100 739

Par value of shares in PLN

Share capital 100 771 100 771 100 739

Note 22. Dividend paid (or declared) and received

During the period from 1 January to 31 March 2023, Group companies did not pay or receive dividends.

On 8 May 2023, the Management Board of the Parent Company recommended to the General Meeting that a dividend of PLN

99 910 510 be paid, i.e. an amount of PLN 1 for each participating share of the Parent Company.

Note 23. Transactions with related entities

Terms and conditions of transactions with related entities

The terms and conditions of intra-group transactions were determined on an arm’s length basis. The essence of this principle is

based on the premise that the terms and conditions agreed in transactions between related parties should not differ from those

that would be agreed between independent parties in a comparable situation. Controlled transactions entered into by related

parties belonging to the CD PROJEKT Group are verified to determine whether the agreed terms of the transactions are similar to

the market terms, based on the recommendations and methods provided for in the OECD Guidelines as well as in national

legislation.

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Transactions with related entities after consolidation eliminations

Sales to related entities Purchases from related entities

01.01.2023 – 31.03.2023 01.01.2022 – 31.03.2022 01.01.2023 – 31.03.2023 01.01.2022 – 31.03.2022

SUBSIDIARIES

Spokko sp. z o.o. 205 343 490 -

CD PROJEKT RED Vancouver

Studio Ltd.

22 22 4 535 3 226

The Molasses Flood LLC 1 - 13 134 3 962

MEMBERS OF THE MANAGEMENT BOARDS OF GROUP COMPANIES AND SUPERVISORY BOARD MEMBERS

Marcin Iwiński - 1 - -

Piotr Nielubowicz

Michał Nowakowski - 3 - -

Adam Badowski - 6 - -

Piotr Karwowski

Paweł Zawodny

Jeremiah Cohn - 1 - -

Urszula Jach - Jaki

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Receivables from related entities Liabilities to related entities

31.03.2023 31.12.2022 31.03.2022 31.03.2023 31.12.2022 31.03.2022

SUBSIDIARIES

Spokko sp. z o.o. 175 156 10 713 540 - -

CD PROJEKT RED Vancouver

Studio Ltd.

6 1 694 1 076 1 589 2 746 874

The Molasses Flood LLC 2 596 742 - 4 501 2 579 1 792

MEMBERS OF THE MANAGEMENT BOARDS OF GROUP COMPANIES AND SUPERVISORY BOARD MEMBERS

Marcin Iwiński - - - 12 7 -

Adam Kiciński

Piotr Nielubowicz - 2 - - 13 -

Michał Nowakowski - - 2 1 4 -

Adam Badowski

Piotr Karwowski - - - - 2 -

Urszula Jach - Jaki - - - - - 15

Paweł Zawodny

Maciej Gołębiewski - - - 9 - -

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 24. Unpaid loans or defaults on loan agreements in the cases where no

corrective measures were adopted by the balance sheet date

Not applicable.

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 25. Changes in contingent liabilities or contingent assets which occurred after the end of the last financial year

Contingent liabilities in respect of granted guarantees, sureties and collateral

Specification Currency 31.03.2023 31.12.2022 31.03.2022

mBank S.A.

Voluntary submission to execution Agreement for payment cards PLN - - 920

Bill of exchange agreement Framework agreement on financial market transactions PLN 50 000 50 000 50 000

Bill of exchange agreement Bank guarantee securing a rental contract PLN 427 427 427

Mazowiecka Jednostka Wdrażania Programów Unijnych

Contractual commitment

Commitment to incur operating and renovation expenditures on

leased space

PLN 36 20 40

Narodowe Centrum Badań i Rozwoju

Bill of exchange agreement Subsidy agreement POIR.01.02.00-00-0105/16 PLN 7 711 7 711 7 711

Bill of exchange agreement Subsidy agreement POIR.01.02.00-00-0110/16 PLN 3 846 3 846 3 846

Bill of exchange agreement Subsidy agreement POIR.01.02.00-00-0112/16 PLN 3 692 3 692 3 692

Bill of exchange agreement Subsidy agreement POIR.01.02.00-00-0118/16 PLN 1 358 1 358 5 324

Bill of exchange agreement Subsidy agreement POIR.01.02.00-00-0120/16 PLN 1 204 1 204 1 204

Pekao Leasing Sp. z o.o.

Bill of exchange agreement Lease contract 37/1991/21 PLN 277 314 418

Santander Bank Polska S.A. (previously: BZ WBK S.A.)

Bill of exchange agreement Framework agreement on financial market transactions PLN 23 500 23 500 23 500

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Bank Polska Kasa Opieki Spółka Akcyjna

Bill of exchange agreement Framework agreement on financial market transactions PLN 50 000 50 000 35 000

BNP Paribas Bank Polska S.A.

Bill of exchange agreement Framework agreement on financial market transactions PLN 26 600 26 600 26 600

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 26. Changes in the structure of the Group and Group companies during

the reporting period

 Acquisition of the remaining shares in the subsidiary Spokko sp. z o.o.

On 31 January 2023, as a result of the Parent Company concluding agreements for the sale of shares with the other shareholders

of the subsidiary Spokko sp. z o.o., the Parent Company acquired from those shareholders a total of 135 shares in Spokko sp. z o.o.

with a nominal value of PLN 50.00 each, as a result of which the Parent Company became the owner of 100% (i.e. 1089) of shares

in that subsidiary.

 Registration of the merger between the Parent Company and its subsidiary - CD PROJEKT RED STORE sp. z o.o.

On 28 February 2023, the District Court for the Capital City of Warsaw in Warsaw entered in the Register of Businesses the merger

through acquisition of the Parent Company, as the surviving company, with its subsidiary CD PROJEKT RED STORE sp. z o.o. with

its registered office in Warsaw, as the target company. The merger was carried out in accordance with the merger plan announced

on 17 November 2022, i.e. by transferring all the assets of CD PROJEKT RED STORE sp. z o.o. to the Parent Company, without

increasing the share capital of the Parent Company and without exchanging shares of the target company for shares of the Parent

Company due to the fact that the Parent Company holds 100% of the shares in the target company.

Note 27. Agreements that may result in future changes in the proportions of

shares held by shareholders and bondholders

Incentive scheme for the years 2020-2025

Based on the resolutions of the Parent Company’s General Meeting of 28 July 2020 and 22 September 2020, another edition of

the incentive scheme was introduced for 2020–2025. In accordance with the adopted assumptions, a maximum of 4 000 000

entitlements, understood as a conditional right to take up subscription warrants, entitling to take up shares in the Parent Company

issued separately as part of a conditional share capital increase, or alternatively to purchase, on preferential terms, the Parent

Company’s treasury shares were to be granted as part of the implementation of the scheme. Taking up and exercising of rights

from the subscription warrants or, as the case may be, purchasing the Parent Company’s shares by the eligible persons was to be

conditional upon the Parent Company’s determination that the objectives and criteria of the scheme have been met. The scheme

included performance-related objectives (80% of entitlements), market related objectives (20% of entitlements), individual

objectives in selected cases and, in each case, the loyalty criterion which applies until the date of determining that the scheme

objectives and criteria have been met.

Based on the results achieved in 2020 and 2021 and the assumptions for the subsequent years of the plan, the Management Board

of the Parent Company assessed the possibility of achieving the performance targets set in the programme over the entire period

of the plan duration and revised the estimates, considering it most likely that the performance targets would not be achieved over

that period.

On 20 December 2022, the General Meeting of the Parent Company passed resolution no. 5 concerning the discontinuation of the

incentive scheme for the financial years 2020-2025, but as its entry into force was subject to the General Meeting adopting certain

resolutions on introducing a new incentive scheme, which did not happen, resolution no. 5 did not enter into force as of the date

of that General Meeting. The final entry into force of the resolution on the subject of discontinuing the Incentive Scheme 2020-

2025 took place on 18 April 2023.

As a result, the General Meeting decided to discontinue the operation of the incentive scheme for the financial years 2020-2025

as of the entry into force of the resolution in question, resulting in its expiry in its entirety.

No new entitlements were granted under the 2020-2025 Incentive Scheme during the reporting period. As at 18 April 2023,

2 113 000 entitlements remained in the incentive scheme for 2020-2050. In accordance with the Incentive Scheme Regulations for

the years 2020-2025, in the event of the expiry of the incentive scheme, the entitlements granted under the scheme to the eligible

persons will also expire.

Incentive scheme for the years 2023– 2027

On 20 December 2022, the Extraordinary General Meeting of the Parent Company passed a resolution on introducing an Incentive

Scheme for 2023-2027. However, due to the failure to obtain the required majority for the resolution on the issue of subscription

warrants and the conditional increase in the share capital necessary for the implementation of this scheme, the Parent Company

did not have the actual possibility to implement it.

In view of the above, the Management Board of the Parent Company proposed a new structure of the Incentive Scheme for the

financial years 2023-2027, replacing the Incentive Scheme for the years 2020-2025, which was approved by the General Meeting.

Thus, two new incentive schemes for the financial years 2023-2027 were introduced on that date by resolutions of the Parent

Company’s General Meeting of 18 April 2023: Incentive Scheme A and Incentive Scheme B.

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Incentive Scheme A

Incentive Scheme A is addressed to persons who are not members of the Parent Company’s Management Board. The assumptions

are that the entitlements in this scheme will be granted in each of the financial years 2023-2027 (i.e. in five phases). A maximum of

1 500 000 entitlements may be granted under the entirety of the Incentive Scheme A. The entitlements will be realized alternatively

through: (i) offering participants to subscribe for warrants entitling them to subscribe for an identical number of shares in the Parent

Company issued as part of the conditional share capital increase, or (ii) offering participants to purchase from the Parent Company

treasury shares acquired by the Parent Company as part of a buy-back carried out for this purpose. Taking up and exercising the

rights from the subscription warrants or, as the case may be, purchasing the Parent Company’s shares by the eligible persons will

be conditional upon the Parent Company’s determining that the objectives and criteria of the scheme have been met. The price of

subscription for or purchase of the Company’s shares as part of exercising the entitlements from Scheme A will correspond to the

nominal value of the Company’s shares. The vesting period is 3 years.

Incentive Scheme B

Incentive Scheme B is addressed to both persons who are members of the Parent Company’s Management Board and persons

who are not members of the Management Board. The assumptions are that the entitlements in this scheme will be granted in each

of the financial years 2023-2027 (i.e. in five phases). A maximum of 3 500 000 entitlements may be granted under the entirety of

Incentive Scheme B. The entitlements will be realized alternatively through: (i) offering participants to subscribe for warrants entitling

them to subscribe for an identical number of shares in the Parent Company issued as part of the conditional share capital increase,

or (ii) offering participants to purchase from the Parent Company treasury shares acquired by the Parent Company as part of a buy-

back carried out for this purpose. Taking up and exercising the rights from the subscription warrants or, as the case may be,

purchasing the Parent Company’s shares by the eligible persons will be conditional upon the Parent Company determining that it

has fulfilled the performance condition (for 70% of the entitlements), the market condition (for 30% of the entitlements), in selected

cases the individual conditions and, in each case, the fulfilment of the loyalty condition. The base price of subscription for or

purchase of the Company’s shares as part of exercising the entitlements under Scheme B will correspond to the price of the

Company’s shares at the close of the last trading session preceding the date of the relevant resolution on the participant’s inclusion

in the scheme. The scheme provides for the possibility to reduce the price of subscription for or purchase of the shares with

a simultaneous proportional reduction in the number of rights to be exercised by the participant. The base vesting period

corresponds to four consecutive financial years starting from the year in which the relevant phase commenced (with the possibility

of shortening to three financial years for performance-related entitlements in the event of a possible faster achievement of the four-

year performance target over a three-year period).

Note 28. Tax settlements

Tax settlements and other areas of activities regulated by the tax law may be subject to inspections by administrative bodies which

are entitled to impose high penalties or sanctions. The lack of reference to established legal regulations in Poland results in

ambiguities and inconsistencies in the binding regulations. Frequent differences of opinion as to the legal interpretation of tax

regulations, both internally within the state bodies and between the state bodies and enterprises, result in areas of uncertainty and

conflict arising. Due to these factors, the tax risk in Poland is considerably higher than that usually existing in countries with better

developed tax systems.

In accordance with the general rule, tax settlements may be subject to inspections within five years from the end of the calendar

year in which tax was paid.

Following the fulfilment of the criteria set out in Article 19 of the Act of 30 May 2008 on certain forms of innovation support

(consolidated text, Journal of Laws of 2022, item 2474), the Minister of Development and Technology, by decision No.

DNP-V.4241.16.2022 of 11 August 2022, maintained the status of a research and development centre granted to the Parent

Company by decision 4/CBR/18 of 19 June 2018. The status allows the Parent Company to use more broadly the research and

development relief provided for in the Act of 15 February 1992 on corporate income tax (consolidated text, Journal of Laws of 2022,

item 2587, as amended).

With effect from 1 January 2019, provisions were introduced into the Act on corporate income tax granting preferential taxation at

the 5% tax rate for qualified income earned by a taxpayer from qualified intellectual property rights. Having met the prerequisites

and formal conditions contained in the said legislation, the Parent Company accounts for income (in respect of selected sources of

income) taking this tax relief into account.

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 29. Explanations to the condensed consolidated statement of cash flows

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Cash and cash equivalents reported in the statement of cash flows

154 738

748 585

Cash and cash equivalents in the balance sheet 154 738 748 585

Depreciation and amortization 3 424 3 894

Amortization of intangible assets

665

590

Amortization of expenditure on development projects 118 299

Depreciation of property, plant and equipment 2 634 2 995

Depreciation of investment properties

Foreign exchange (gains)/losses arise on the following items: 5 965 (1 359)

Foreign exchange (gains)/losses on measurement of bonds

5 825

(1 359)

Foreign exchange (gains)/losses on measurement of private equity interests in the

gaming sector

87 -

Foreign exchange (gains)/losses on measurement of loans granted as at the balance

sheet date

53 -

Interest and shares in profits comprise: (9 607) (7 427)

Interest on bank deposits (5 831) (2 364)

Interest on bonds

(3 940)

(5 097)

Interest accrued on loans granted (36) (101)

Interest on lease contracts 200 135

(Gains)/losses on investing activities arise from the following items:

(27 768)

(434)

Proceeds from sale of property, plant and equipment (2) (7)

Net carrying amount of property, plant and equipment - 4

Net carrying amount of non-current assets scrapped

170

Net book amount of scrapped intangible assets and expenditure on development

projects

2 745 -

Reversal of impairment write-downs of property, plant and equipment, intangible

assets and expenditure on development projects

(21 531) -

Settlement and measurement of derivative financial instruments (8 905) 6 397

Disclosures of property, plant and equipment and intangible assets (4) -

Commission and fees on purchase of bonds

Proceeds from redemption of bonds (11 495) (61 449)

Value of bonds purchased

11 307

54 360

Change in provisions results from the following items:

(980)

(4 176)

Increase/(Decrease) in provisions for liabilities (568) 3 373

Change in provision for costs of performance-related and other remuneration

recognized under expenditure on development projects

(412) (7 549)

(Increase)/Decrease in inventories results from the following items:

2 336

916

(Increase)/Decrease in inventories

2 336

916

(Increase)/Decrease in receivables results from the following items: 87 854 43 740

(Increase)/Decrease in current receivables in the balance sheet

83 653

56 860

(Increase)/Decrease in non-current receivables in the balance sheet (1) 308

(Increase)/Decrease in prepayments for investment properties - (79)

Income tax settled against withholding tax

8 039

Withholding tax paid abroad (6 071) (15 673)

Adjusted for current income tax 2 582 303

Change in prepayments for development projects

(352)

2 045

Change in prepayments for property, plant and equipment and intangible assets 4 (24)

Consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Increase/(Decrease) in current liabilities, excluding loans and borrowings, results from

the following items:

(21 154) 15 515

(Increase)/Decrease in current receivables in the balance sheet (29 875) 31 650

Adjusted for current income tax 2 116 (7 143)

Increase/(Decrease) in short-term financial liabilities

807

(7 525)

Increase/(Decrease) in liabilities resulting from purchase of property, plant and

equipment

5 231 10

Increase/(Decrease) in liabilities resulting from purchase of intangible assets 567 (201)

Increase/(Decrease) in liabilities resulting from purchase of investment properties - (1 276)

Change in other assets and liabilities results from the following items:

(10 937)

(17 064)

Change in prepayments and accruals in the balance sheet (3 037) (8 053)

Increase/(Decrease) in deferred income in the balance sheet (7 840) (8 951)

Adjusted for prepayments and deferred costs with the double entry in liabilities

(60)

“Other adjustments” comprise: 1 332 1 817

Costs of the incentive scheme

1 159

1 148

Measurement of derivative financial instruments

(504)

(378)

Amortization and depreciation written off, reported under cost of sales, consortium

settlements and other operating expenses

160 806

Amortization and depreciation reported under cost of sales and other operating

expenses

754 72

Foreign exchange differences on translation (93) -

Other adjustments

(144)

169

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 30. Cash flows and non-monetary changes resulting from changes in liabilities in financing activities

01.01.2023 Cash flows

Non-monetary changes

31.03.2023

Takeover of leased fixed

assets

Foreign exchange

differences

Interest accrued

Lease liabilities

20 967

(1 014)

317

200

20 470

Total

20 967

(1 014)

317

200

20 470

01.01.2022 Cash flows

Non-monetary changes

31.03.2022

Takeover of leased fixed

assets

Foreign exchange

differences

Interest accrued

Lease liabilities 16 655 (984) 3 962 2 135 19 770

Total 16 655 (984) 3 962 2 135 19 770

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note 31. Post-balance sheet date events

The Extraordinary General Meeting of the Parent Company was held on 18 April 2023. The key resolutions passed by the General

Meeting on that date were resolutions on (i) the discontinuation of the Incentive Scheme for the financial years 2020-2025 and (ii)

introducing new incentive schemes at the Parent Company for the years 2023-2027, as further described in Note 27 above, as well

as resolutions on (iii) the cancellation of treasury shares acquired by the Parent Company as part of the buyback carried out in

October 2022 and the related corresponding reduction in the Parent Company’s share capital. By means of these resolutions, the

General Meeting resolved to cancel 860 290 treasury shares (i.e. all treasury shares held by the Parent Company) and to reduce

the share capital of the Parent Company to PLN 99 910 510. The redemption will take place as soon as the reduction of the share

capital of the Parent Company is registered by the registry court. The full content of the resolutions adopted by the Extraordinary

General Meeting was announced by the Management Board in current report No. 12/2023

On 20 April 2023, in current report no. 14/2023, the Management Board of the Parent Company informed that a merger plan

between the Company, as the surviving company, and its wholly-owned subsidiary SPOKKO sp. z o.o. as the target company was

agreed and signed. The planned merger will be effected by transferring all assets of the target company to the Parent Company in

accordance with Article 492 § 1 item 1 of the Commercial Companies Code (merger by acquisition) in connection with Article 516 § 6

of the Commercial Companies Code, without increasing the share capital of the Parent Company and without exchanging the shares

in the target company for shares in the Parent Company. This was done because due to the decision to phase out The Witcher:

Monster Slayer project implemented by the SPOKKO team, according to which on 30 June 2023 the game will cease to be available

to existing players, and the related planned involvement of a part of the SPOKKO team and resources in other projects implemented

by CD PROJEKT RED, the Parent Company and SPOKKO sp. z o.o. decided to simplify the structure of the CD PROJEKT Group.

These decisions are in line with the CD PROJEKT Group’s business strategy update, which envisages the Group focusing on its

core business and implementing mobile projects in cooperation with external partners.

On 8 May 2023, in current report No. 16/2023, the Parent Company’s Management Board announced that it had adopted

a resolution on accepting and referring to the General Meeting a proposition concerning the distribution of the Parent Company’s

net profit for 2022. The Management Board has proposed to allocate PLN 99 910 510 for the payment of dividend which means

the dividend of PLN 1 per each participating share. The Management Board has proposed transferring the remaining part of the

Company’s undistributed net profit of PLN 241 162 310.59 to supplementary capital. The number of 99 910 510 shares described as

shares participating in the dividend, is the number of shares of the Parent Company less the treasury shares (860 290 shares) of

the Parent Company held by the Parent Company as a result of the buyback carried out between 5 and 24 October 2022. At the

same time, the Parent Company’s Management Board requested the appointment of: (i) the dividend date as 13 June 2023, and (ii)

the dividend payment date as 20 June 2023. On 9 May 2023, the Supervisory Board of the Parent Company gave a positive opinion

on the Management Board’s proposal for profit distribution. The final decision on profit distribution and dividend payment will be

taken by the Annual General Meeting.

On 10 May 2023, in current report No. 18/2023, the Parent Company’s Management Board announced that it had decided not to

continue to buy back the Parent Company’s treasury shares on the basis of Resolution No. 4 of the Company’s General Meeting of

29 November 2016 on authorizing the buyback of the Company’s treasury shares for cancellation, repealing and replacing

Resolution No. 22 of the Company’s Annual General Meeting of 24 May 2016 on the same issue. Thus, the possibility of continuing

the buyback programme implemented on the basis of that resolution ceased. The decision was related to the Parent Company’s

Management Board applying to the General Meeting for a new authorization to buy back the Parent Company’s treasury shares for

cancellation.

On 10 May 2023, the Parent Company’s Management Board announced convening the Annual Shareholders’ Meeting of the Parent

Company for 20 December 2022. The agenda of the General Meeting will primarily include the resolutions, which are standard for

annual company meetings, on the approval of the reports of the Parent Company’s bodies, the discharge of the members of its

bodies, and the distribution of its net profit for the financial year 2022. In view of the merger of the Parent Company with

CD PROJEKT RED STORE sp. z o.o., the General Meeting of the Parent Company will also vote on similar resolutions with regard to

the affairs of the acquired company. In addition, the agenda will include resolutions on the merger of the Parent Company with

SPOKKO sp. z o.o., a new authorization for the Parent Company’s Management Board to buy back treasury shares for cancellation,

as well as resolutions on amendments to the Parent Company’s Articles of Association concerning, among other things, the

introduction of the possibility of paying out interim dividends. The full agenda, including additional information in this respect, is

presented in current report no. 19/2023. The full text of the draft resolutions is also available in current report 20/2023

On 11 May 2023, in current report No. 21/2023, the Parent Company’s Management Board announced the completion of work on

defining a new framework for Project Sirius, being developed by The Molasses Flood studio. As a result of defining the new

framework for this project, it was decided that the Parent Company’s books: (a) the write-down of the project-related development

expenditure incurred in 2022, which originally amounted to PLN 33.4 million and charged to the financial result of the Parent

Company and the CD PROJECT Capital Group for 2022, will be reversed partially, in the amount of PLN 21.5 million, and (b) a part

of the project-related development expenditure incurred in Q1 2023 will be written off in the amount of PLN 2.7 million. These

changes have been included in this report and affect the Parent Company’s results for Q1 2023. They are the result of the decision

to continue the Sirius Project within a newly defined framework and thus use a significant part of the work completed to date in the

further development of the game being developed by The Molasses Flood.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Additional information

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Litigation

During the period presented, no new significant court, arbitration or administrative proceedings were initiated to which the Parent

Company or its subsidiaries would be a party.

There have been no significant changes to the existing disputes disclosed in the CD PROJEKT Group Management Report 2022.

Shareholding structure

Shareholders holding directly or indirectly through subsidiaries at least 5% of the total number of

votes at the Parent Company’s General Shareholders Meeting as at the date of publication of the

quarterly report

The Parent Company’s share capital amounts to PLN 100 738 800 and consists of 100 738 800 shares with a nominal value of

PLN 1.00 each. The shareholding structure, including the percentage share in the share capital and at the General Shareholders

Meeting of the Parent Company, is updated on the basis of formal notifications received by the Parent Company from shareholders

holding at least 5% of the total number of votes at the General Shareholders Meeting of the Parent Company.

Number of votes at the

GSM

% of votes at the GSM

Marcin Iwiński 12 873 520 12.78%

Michał Kiciński* 10 433 719 10.35%

Piotr Nielubowicz 6 858 717 6.81%

* According to a recent statement made to the Company – current report no. 33/2021 dated 26 May 2021.

Changes in the shareholding structure of the Parent Company

In the period presented, the Parent Company received official notifications concerning qualifying changes in the number of votes

or the Company’s shares held solely with respect to the percentage share of votes held by The Goldman Sachs Group, Inc.

According to the most recent notification in this respect received by the Parent Company, the percentage share of the voting rights

held by The Goldman Sachs Group Inc. went down below 5%.

After the balance sheet date, on 18 April 2023, the General Meeting of the Parent Company adopted a resolution on the cancellation

of the treasury shares acquired by the Parent Company as part of the buyback carried out in October 2022 and the related

corresponding reduction in the share capital of the Parent Company. By means of these resolutions, the General Meeting resolved

to cancel 860 290 treasury shares (i.e. all treasury shares held by the parent company) and to reduce the share capital of the parent

company accordingly, i.e. to PLN 99 910 510. The redemption will take place as soon as the reduction in the share capital of the

Parent Company is registered by the registry court, which has not yet taken place at the date of publication of this report. The full

content of the resolutions adopted in this regard was announced by the Management Board in current report No. 12/2023

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Parent Company’s shares held by members of the Management and

Supervisory Boards

Changes in the number of shares held by members of the Management and Supervisory Boards*

Name and surname Position As at 01.01.2023 As at 31.03.2023 As at 29.05.2023

Adam Kiciński

President of the

Management Board

4 046 001 4 046 001 4 046 001

Piotr Nielubowicz

Vice-President of the

Management Board

6 858 717 6 858 717 6 858 717

Adam Badowski

Member of the

Management Board

692 640 692 640 692 640

Michał Nowakowski

Member of the

Management Board

530 290 530 290 530 290

Piotr Karwowski

Member of the

Management Board

108 728 108 728 108 728

Paweł Zawodny

Member of the

Management Board

18 508 18 508 18 508

Marcin Iwiński

Chairman of the

Supervisory

Board

12 873 520 12 873 520 12 873 520

Katarzyna Szwarc

Vice-Chair of the

Supervisory Board

10 10 10

Maciej Nielubowicz

Member of the

Supervisory Board

51 51 51

* Based on statements and notifications submitted to the Company

Reference to published estimates

The Group did not publish estimated data relating to the period presented.

Interim condensed separate financial

statements of CD PROJEKT S.A.

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Interim condensed separate income statement

Note

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022*

Sales revenue

134 391

177 820

Sales of products 129 787 172 413

Sales of services 421 669

Sales of goods for resale and materials

4 183

4 738

Cost of sales of products, services, goods for resale and materials 25 323 21 118

Costs of products and services sold

21 626

18 280

Cost of goods for resale and materials sold

3 697

2 838

Gross profit/(loss) on sales 109 068 156 702

Selling expenses 30 305 44 239

Administrative expenses 25 791 23 374

Other operating income 24 689 2 825

Other operating expenses

5 919

5 711

(Impairment)/reversal of impairment

of financial instruments

2 (2)

Operating profit/(loss) 71 744 86 201

Finance income 21 775 14 602

Finance costs

9 576

8 190

Profit/(loss) before tax 83 943 92 613

Income tax A 10 551 23 098

Net profit/(loss)

73 392

69 515

Net earnings/(loss) per share (in PLN)

Basic for the reporting period

0.73

0.69

Diluted for the reporting period 0.73 0.69

* restated data

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Interim condensed separate statement of

comprehensive income

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Net profit/(loss)

73 392

69 515

Other comprehensive income subject to reclassification to gains or losses after

specific conditions have been met:

2 320 (4 930)

Measurement of derivative financial instruments – fair value through other

comprehensive income, taking into account the tax effect

2 320 (4 930)

Other comprehensive income not subject to reclassification to gains or losses

Total comprehensive income 75 712 64 585

Interim condensed separate statement of financial

position

Note 31.03.2023 31.12.2022 31.03.2022

NON-CURRENT ASSETS 1 186 041 1 094 596 920 571

Property, plant and equipment 153 511 143 439 109 055

Intangible assets

70 170

70 324

68 952

Expenditure on development projects 542 291 471 537 365 011

Investment properties

42 188

42 560

56 630

Goodwill

49 168

Investments in subordinated entities G 54 076 53 566 43 531

Prepayments and deferred costs 5 158 5 314 5 346

Other financial assets

216 098

207 437

176 456

Deferred tax assets A 52 997 50 868 46 044

Other receivables

F,G

384

383

378

CURRENT ASSETS 1 038 662 1 089 378 1 235 567

Inventories

10 365

9 886

11 263

Trade receivables F,G 73 324 164 708 69 546

Current income tax receivable 10 470 - -

Other receivables

52 085

54 677

110 021

Prepayments and deferred costs 8 269 6 189 5 256

Other financial assets

277 203

279 515

262 507

Bank deposits over 3 months

488 883

337 330

85 390

Cash and cash equivalents G 118 063 237 073 691 584

TOTAL ASSETS

2 224 703

2 183 974

2 156 138

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Note

31.03.2023

31.12.2022

31.03.2022

EQUITY 2 076 936 2 001 765 1 934 781

Share capital

21*

100 771

100 739

Supplementary capital 1 539 437 1 539 437 1 366 952

Share premium 116 700 116 700 115 909

Treasury shares

(99 993)

Other reserves 7 257 3 777 45 732

Retained earnings / (Accumulated losses) 339 372 - 235 934

Net profit (loss) for the period

73 392

341 073

69 515

NON-CURRENT LIABILITIES 32 173 36 106 31 526

Other financial liabilities

18 525

18 883

17 039

Other liabilities

2 560

2 620

2 800

Deferred income 3 211 3 666 5 951

Provision for retirement and similar benefits 339 339 368

Other provisions

7 538

10 598

5 368

CURRENT LIABILITIES 115 594 146 103 189 831

Other financial liabilities

1 916

1 788

26 073

Trade payables G 14 287 39 587 33 302

Current income tax liabilities - 2 116 31 589

Other liabilities

5 031

4 350

4 837

Deferred income 8 806 15 032 13 572

Provision for retirement and similar benefits 9 9 5

Other provisions

85 545

83 221

80 453

TOTAL LIABILITIES AND EQUITY 2 224 703 2 183 974 2 156 138

* Detailed information on changes in items are presented in the relevant notes to the interim condensed consolidated financial

statements.

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Interim condensed separate statement of changes in equity

Share capital

Supplementary

capital

Share premium Treasury shares Other reserves

Retained

earnings /

(Accumulated

losses)

Net profit (loss)

for the period

Total equity

01.01.2023 – 31.03.2023

Equity

as at 01.01.2023

100 771 1 539 437 116 700 (99 993) 3 777 341 073 - 2 001 765

Costs of the incentive

scheme

- - - - 1 160 - - 1 160

Undistributed profit of

the acquired entity

- - - - - (1 701) - (1 701)

Total comprehensive

income

- - - - 2 320 - 73 392 75 712

Equity

as at 31.03.2023

100 771 1 539 437 116 700 (99 993) 7 257 339 372 73 392 2 076 936

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Share capital

Supplementary

capital

Share premium Treasury shares Other reserves

Retained

earnings /

(Accumulated

losses)

Net profit (loss)

for the period

Total equity

01.01.2022 – 31.12.2022

Equity

as at 01.01.2022

100 739 1 366 952 115 909 - 49 515 235 934 - 1 869 049

Costs of the incentive

scheme

- - - - 4 275 - - 4 275

Share-based payments

1 549

791

(1 548)

824

Purchase of treasury

shares for redemption

- - - (99 993) - - - (99 993)

Release of reserve

capital from previous

years created for the

purpose of purchasing

treasury shares

- 35 741 - - (35 741) - - -

Payment of dividend - - - - - (100 739) - (100 739)

Appropriation of the net

profit/offset of loss

- 135 195 - - - (135 195) - -

Total comprehensive

income

- - - - (12 724) - 341 073 328 349

Equity

as at 31.12.2022

100 771 1 539 437 116 700 (99 993) 3 777 - 341 073 2 001 765

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Share capital

Supplementary

capital

Share premium Treasury shares Other reserves

Retained

earnings /

(Accumulated

losses)

Net profit (loss)

for the period

Total equity

01.01.2022 – 31.03.2022

Equity

as at 01.01.2022

100 739 1 366 952 115 909 - 49 515 235 934 - 1 869 049

Costs of the incentive

scheme

- - - - 1 147 - - 1 147

Total comprehensive

income

- - - - (4 930) - 69 515 64 585

Equity

as at 31.03.2022

100 739 1 366 952 115 909 - 45 732 235 934 69 515 1 934 781

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Interim condensed separate statement of cash flows

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

OPERATING ACTIVITIES

Net profit /(loss)

73 392

69 515

Total adjustments:

51 522

61 277

Depreciation and amortization of property, plant and equipment, intangible assets,

expenditure on development projects and investment properties

2 910 2 987

Amortization of development projects recognized as cost of goods sold 21 608 17 941

Foreign exchange (gains)/losses 5 964 (1 362)

Interest and participation in profits

(9 527)

(7 288)

(Gains)/Losses on investing activities (30 689) (430)

Increase/(Decrease) in provisions (1 148) (3 257)

(Increase)/Decrease in inventories

(479)

2 276

(Increase)/Decrease in receivables 87 555 43 683

Increase/(Decrease) in liabilities, excluding loans and borrowings (18 612) 16 586

Change in other assets and liabilities

(8 664)

(11 829)

Other adjustments 2 604 1 970

Cash from operating activities

124 914

130 792

Income tax expense

4 480

7 426

Withholding tax paid abroad 6 071 15 672

Income tax (paid)/refunded

(19 195)

(2 908)

Net cash from operating activities

116 270

150 982

INVESTING ACTIVITIES

Inflows

122 392

325 775

Repayment of loans granted - 94

Expiry of bank deposits over 3 months 100 900 265 000

Redemption of bonds

14 474

58 132

Interest on bonds 1 259 291

Interest received on deposits

5 751

2 206

Other cash inflows from investing activities

Outflows 356 923 130 226

Acquisition of intangible assets and property, plant and equipment

21 200

14 859

Expenditure on development projects

69 946

27 697

Expenditure on intangible assets 48 -

Acquisition of investment properties and capitalization of expenditure

Loans granted 1 881 2 100

Purchase of shares in a subsidiary 440 -

Purchase of bonds and cost of their purchase

7 966

Placement of bank deposits over 3 months 252 453 85 390

Outflows from execution of forward contracts 2 891 -

Net cash from investing activities

(234 531)

195 549

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

FINANCING ACTIVITIES

Inflows 21 10

Payment of finance lease liabilities 21 10

Outflows

770

752

Payment of lease liabilities 570 629

Interest paid 200 123

Net cash used in financing activities

(749)

(742)

Net increase/(decrease) in cash and cash equivalents

(119 010)

345 789

Change in cash and cash equivalents in the balance sheet (119 010) 345 789

Cash and cash equivalents as at the beginning of the period 237 073 345 795

Cash and cash equivalents at the end of the period 118 063 691 584

Explanations to the condensed separate statement of cash flows

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

“Other adjustments” comprise:

2 604

1 970

Costs of the incentive scheme

1 090

1 064

Amortization and depreciation written off, reported under cost of sales, consortium

settlements and other operating expenses

125 906

Amortization and depreciation reported under cost of sales and other operating

expenses

778 -

Settlement of the acquiree’s shares 2 900 -

Retained earnings of the acquiree

(1 701)

Net property, plant and equipment and intangible assets of the acquired entity (545) -

Other adjustments (43) -

Assumption of comparability of the financial

statements and changes in accounting policies

The accounting policies applied in these interim condensed separate financial statements, material judgments made by the

Management Board with regard to the accounting policies applied by the Company and the main sources of estimating uncertainties

are consistent, in all material respects, with the policy adopted for preparing the annual financial statements of CD PROJEKT S.A.

for 2022, with the exception of changes in the accounting policies and presentation changes described below. These condensed

financial statements should be read in conjunction with the financial statements for the year ended 31 December 2022.

Changes in accounting policies

Changes in accounting policies relating to the Company are the same as those described in the section Comparability of the

financial statements and consistency of accounting policies of the consolidated financial statements for the period from 1 January

to 31 March 2023.

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Presentation changes

In these interim condensed separate financial statements for the period from 1 January to 31 March 2023, changes were introduced

in the presentation of selected financial data. In order to ensure comparability of the financial data in the reporting period

presentation changes were made to the data as at 31 March 2022 r. The data is presented after the following adjustment:

 In the income statement for the period from 1 January 2022 to 31 March 2022, the Company changed the presentation of the

provisions for variable portion of the Management Board’s performance-related remuneration. As a result of this adjustment,

the following balances have changed:

- Selling expenses – a decrease of PLN 6 496 thousand

- Administrative expenses – an increase of PLN 6 496 thousand.

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Notes to separate financial statements of

CD PROJEKT S.A.

A. Deferred tax

Deductible temporary differences underlying the deferred tax asset

31.12.2022*

Differences affecting

the deferred tax

recognized in the

profit or loss

31.03.2023

Provision for other employee benefits

348

Provision for costs of performance-related

and other remuneration

48 719 8 270 56 989

Foreign exchange losses 7 118 2 136 9 254

Difference between the carrying and tax

amount of expenditure on development

projects

34 848 (17 857) 16 991

Salaries and wages and social security payable

in future periods

47 1 48

Other provisions

33 282

(7 186)

26 096

Tax value of leased non-current assets

20 671

(130)

20 541

Research and development relief 317 927 - 317 927

Prepayments recognized as revenue for tax

purposes

7 523 (1 809) 5 714

Total deductible differences, including: 470 483 (16 575) 453 908

taxed at 5%

71 651

23 074

94 725

taxed at 19% 398 832 (39 649) 359 183

Deferred income tax asset 79 361 (6 379) 72 982

* restated data

Taxable temporary differences underlying the deferred tax provision

31.12.2022*

Differences affecting

the deferred tax

recognized in the

profit or loss

31.03.2023

Difference between the net carrying amount

and tax amount of property, plant and

equipment and intangible assets

16 358 1 020 17 378

Current period revenue invoiced in the

subsequent period/accrued income

132 887 (69 080) 63 807

Foreign exchange gains

8 417

(6 096)

2 321

Difference between the carrying and tax

amount of expenditure on development

projects

253 594 (13 976) 239 618

Book value of leased non-current assets 20 849 (258) 20 591

Other

Total taxable differences, including: 432 112 (88 361) 343 751

taxed at 5% 382 910 (59 141) 323 769

taxed at 19% 49 202 (29 220) 19 982

Deferred tax provision

28 493

(8 508)

19 985

* restated data

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

The deferred part of the income tax was determined either at the corporate income tax rate of 19% for the tax base corresponding

to income from other sources, or at the rate of 5% for the tax base corresponding to income from qualifying intellectual property

(the so-called IP BOX). When determining the appropriate tax rate for temporary differences, the Company relied on forecasts of

which the tax base will give rise to the realization of the temporary differences recognized.

Net deferred tax asset/provision

31.03.2023 31.12.2022* 31.03.2022

Deferred tax asset 72 982 79 361 70 678

Deferred tax provision

19 985

28 493

24 634

* restated data

Income tax expense recognized in the income statement

01.01.2023 –

31.03.2023

01.01.2022 –

31.03.2022

Current income tax, including:

12 680

25 724

withholding tax paid abroad 6 071 15 672

Change in deferred tax

(2 129)

(2 626)

Income tax expense recognized in the income statement

10 551

23 098

B. Other provisions

31.03.2023

31.12.2022

31.03.2022

Provision for liabilities, including: 93 083 93 819 85 821

provision for costs of performance-related and other remuneration

75 737

67 121

58 094

provision for costs of the audit and review of the financial

statements

41 137 130

provision for other costs 17 305 26 561 27 597

Total, including: 93 083 93 819 85 821

short-term

85 545

83 221

80 453

long-term 7 538 10 598 5 368

Change in other provisions

Provision for costs of

performance-related

and other

remuneration

Other provisions Total

As at 01.01.2023 67 121 26 698 93 819

Provisions recorded during the year

8 616

17 609

26 225

Provisions utilized/released - 26 961 26 961

As at 31.03.2023, including:

75 737

17 346

93 083

short-term 75 737 9 808 85 545

long-term

7 538

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

C. Goodwill

Goodwill recognized in business combinations and acquisitions

31.03.2023 31.12.2022 31.03.2022

CD Projekt Red sp. z o.o. 39 147 39 147 39 147

Strange New Things business

10 021

Total

49 168

Changes in goodwill

During the period from 1 January to 31 March 2023 there were no changes in goodwill.

D. Business combinations

On 28 February 2023, the District Court for the Capital City of Warsaw in Warsaw entered in the Register of Businesses the merger

through acquisition of the Parent Company, as the surviving company, with its subsidiary CD PROJEKT RED STORE sp. z o.o. with

its registered office in Warsaw, as the target company. The merger was carried out in accordance with the merger plan announced

on 17 November 2022, i.e. by transferring all the assets of CD PROJEKT RED STORE sp. z o.o. to the Parent Company, without

increasing the share capital of the Parent Company and without exchanging shares of the target company for shares of the Parent

Company due to the fact that the Parent Company holds 100% of the shares in the target company. The merger was intended to

simplify the Group’s structure in view of the plans to continue the existing activities of the target company in cooperation with

a specialized external entity. The parent company informed about the entry of the merger in current report No. 7/2023

There were no other business combinations of the Group during the reporting period.

E. Dividend paid (or declared) and received

During the period from 1 January to 31 March 2023, the Company did not pay or receive dividends.

On 8 May 2023, the Company’s Board of Directors recommended to the General Meeting payment of dividend of PLN 99 910 510,

i.e. an amount of PLN 1 for each participating share of the Company.

F. Trade and other receivables

31.03.2023 31.12.2022 31.03.2022

Trade and other receivables, gross 126 610 220 586 180 758

Write-downs

816

818

813

Trade and other receivables

125 794

219 768

179 945

from related entities 2 258 5 535 4 953

from other entities

123 536

214 233

174 992

Change in write-downs of receivables

Trade

receivables

Other

receivables

Total

OTHER ENTITIES

Write-downs as at 01.01.2023 86 732 818

Increase - - -

Decreases, including:

release of write-downs (write-off) 2 - 2

Write-downs as at 31.03.2023 84 732 816

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Current and overdue trade receivables as at 31.03.2023

Total Not overdue

Overdue, in days

1 – 60

61 – 90

91 – 180

181 – 360

>360

RELATED ENTITIES

gross receivables 2 256 2 251 5 - - - -

default ratio - 0% 0% 0% 0% 0% 0%

write-down resulting

from the ratio

- - - - - - -

write-down

determined

individually

- - - - - - -

total expected credit

losses

- - - - - - -

Net receivables 2 256 2 251 5 - - - -

Total Not overdue

Overdue, in days

1 – 60 61 – 90 91 – 180 181 – 360 >360

OTHER ENTITIES

gross receivables 71 152 71 054 13 - 1 - 84

default ratio

write-down resulting

from the ratio

- - - - - - -

write-down

determined

individually

84 - - - - - 84

total expected credit

losses

84 - - - - - 84

Net receivables 71 068 71 054 13 - 1 - -

Total

gross receivables

73 408

73 305

impairment write-

downs

84 - - - - - 84

Net receivables 73 324 73 305 18 - 1 - -

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Other receivables

31.03.2023 31.12.2022 31.03.2022*

Other gross receivables, including: 53 201 55 792 111 131

tax receivables, other than corporate

income tax

36 598 41 766 67 633

reimbursement from the insurer for part of the costs

of the US court settlement

6 354 - -

prepayments for inventories

5 727

6 826

9 545

settlements with suppliers of property, plant and equipment items 1 965 4 160 -

prepayments for development projects 1 081 1 433 32 480

security deposits

450

687

649

prepayments for property, plant and equipment

and intangible assets

138 135 10

settlements with employees 12 - 28

settlements with members of the Management Boards 2 2 8

settlements with payment operators

other 874 776 778

Write-downs 732 732 732

Other receivables, including:

52 469

55 060

110 399

short-term 52 085 54 677 110 021

long-term 384 383 378

* restated data

G. Information on financial instruments

Fair values of specific classes of financial instruments

The Management Board of the Company analysed specific classes of financial instruments. Based on the analysis, it was concluded

that the carrying amounts of the instruments do not materially differ from their fair values, as at both 31 March 2023, 31 December

2022 and 31 March 2022.

31.03.2023 31.12.2022 31.03.2022

LEVEL 1

Assets measured at fair value

Assets measured at fair value through

other comprehensive income

232 092 243 091 177 736

bonds issued by foreign governments - EUR

16 440

25 111

24 731

bonds issued by foreign governments - USD 215 652 217 980 153 005

LEVEL 2

Assets measured at fair value through profit or loss

Derivatives

19 605

7 809

currency forwards - EUR 1 111 1 249 -

currency forwards - USD 18 494 6 560 -

Private equity interests in the gaming sector

2 469

2 556

private equity interests in the gaming sector - SEK

1 038

1 085

private equity interests in the gaming sector - USD 1 431 1 471 -

Liabilities measured at fair value through profit or loss

Derivatives - - 24 303

currency forwards - EUR

598

currency forwards - USD - - 23 705

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Financial Instruments measured at fair value are classified to 3-stage fair value hierarchy:

Level 1 – quoted prices in active markets for identical assets or liabilities.

Level 2 – fair value based on observable market data.

Level 3 – fair value based on market data that is not observable in the market.

Financial assets – classification and measurement

31.03.2023 31.12.2022 31.03.2022*

Financial assets measured at amortized cost 919 789 972 990 1 108 125

Other non-current receivables

384

383

378

Trade receivables 73 324 164 708 69 546

Cash and cash equivalents 118 063 237 073 691 584

Bank deposits over 3 months

488 883

337 330

85 390

Treasury bonds and bonds guaranteed by the State Treasury 236 539 232 757 249 871

Loans granted 2 596 739 11 356

Financial assets measured at cost

54 076

53 566

43 531

Investments in subordinated entities 54 076 53 566 43 531

Assets measured at fair value through

other comprehensive income

232 092 243 091 177 736

Bonds issued by foreign governments 232 092 243 091 177 736

Financial assets measured at fair value through profit or loss

22 074

10 365

Derivative financial instruments 19 605 7 809 -

Private equity interests in the gaming sector 2 469 2 556 -

Total financial assets

1 228 031

1 280 012

1 329 392

* restated data

Financial liabilities – classification and measurement

31.03.2023

31.12.2022

31.03.2022

Financial liabilities measured at amortized cost 34 728 60 258 52 111

Trade payables

14 287

39 587

33 302

Other financial liabilities 20 441 20 671 18 809

Financial liabilities at fair value

through profit or loss

- - 24 303

Derivative financial instruments - - 24 303

Total financial liabilities

34 728

60 258

76 414

In accordance with the requirements of IFRS 9 Financial Instruments, the Company analysed the business model for managing

financial assets and examined the characteristics of contractual cash flows for each component of the bond portfolio, and concluded

that:

 the purpose of investments in domestic and foreign Treasury bonds and domestic bonds guaranteed by the Polish State

Treasury is to hold them to maturity and to collect contractual cash flows;

 investment mandates for managing the foreign bonds portfolio allow selling bonds before maturity as part of the adopted

strategy;

 all bonds purchased meet the SPPI test.

As a result of the analysis conducted, purchased bonds were classified into two financial asset management models which differ in

terms of the entity managing the bond portfolio. Polish Treasury bonds and bonds guaranteed by the Polish State Treasury are

measured at amortized cost, because they are held to collect contractual cash flows. Foreign Treasury bonds are measured at fair

value through other comprehensive income, because of the investment mandate which allows the possibility of the portfolio being

managed by an Asset Manager.

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

H. Transactions with related entities

Sales to related entities Purchases from related entities

01.01.2023 – 31.03.2023 01.01.2022 – 31.03.2022 01.01.2023 – 31.03.2023 01.01.2022 – 31.03.2022

SUBSIDIARIES

GOG sp. z o.o.

2 143

3 647

297

690

CD PROJEKT Inc. 169 63 3 552 3 072

Spokko sp. z o.o.

205

343

490

CD PROJEKT RED STORE sp. z o.o.

339

CD PROJEKT RED Vancouver

Studio Ltd.

22 22 4 535 3 226

The Molasses Flood LLC 1 - 13 134 3 962

THE COMPANY’S MANAGEMENT BOARD AND MEMBERS OF THE SUPERVISORY BOARD

Marcin Iwiński - 1 - -

Michał Nowakowski - 1 - -

Adam Badowski

Paweł Zawodny 6 1 - -

Jeremiah Cohn - 1 - -

Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Receivables from related entities Liabilities to related entities

31.03.2023 31.12.2022 31.03.2022 31.03.2023 31.12.2022 31.03.2022

SUBSIDIARIES

GOG sp. z o.o. 1 900 2 798 2 731 211 2 610 740

CD PROJEKT Inc. 169 43 486 1 196 1 185 984

Spokko sp. z o.o. 175 156 10 713 540 - -

CD PROJEKT RED STORE sp. z o.o. - 839 1 295 - 19 2

CD PROJEKT RED Vancouver

Studio Ltd.

6 1 694 1 076 1 589 2 746 874

The Molasses Flood LLC 2 596 742 - 4 501 2 579 1 792

THE COMPANY’S MANAGEMENT BOARD AND MEMBERS OF THE SUPERVISORY BOARD

Marcin Iwiński

Adam Kiciński - - - 1 13 -

Piotr Nielubowicz

Michał Nowakowski

Adam Badowski 2 - 6 - 6 -

Piotr Karwowski

Paweł Zawodny 6 - - 4 - 7

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Statement of the Management Board of the Parent

Company

On the fairness of the preparation of the interim condensed consolidated financial statements

In accordance with the requirements of the Regulation of the Minister of Finance of 29 March 2018 on current and periodical

information submitted by issuers of securities and conditions for considering as equivalent the information required under the

legislation of a non-Member State, the Management Board of the Parent Company declares that, to the best of its knowledge, these

interim condensed consolidated financial statements and comparative data have been prepared in accordance with the accounting

policies applicable in the CD PROJEKT Group and that they reflect in a true, fair and clear manner the Group’s financial position and

its results of operations.

These interim condensed consolidated financial statements have been prepared in accordance with the International Financial

Reporting Standards (IFRS) endorsed by the European Union published and effective as at 1 January 2023, and to the extent not

governed by the said standards, in accordance with the Accounting Act of 29 September 1994 and the implementing legislation

issued on the basis thereof and to the extent required by Regulation of the Minister of Finance of 29 March 2018 on current and

periodical information submitted by issuers of securities and conditions for considering as equivalent the information required under

the legislation of a non-Member State.

Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 31 March 2023

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

Approval of the financial statements

This report for the period from 1 January to 31 March 2023 has been signed and approved for publication by the Management Board

of CD PROJEKT S.A. on 29 May 2023.

Warsaw, 29 May 2023

Adam Kiciński Piotr Nielubowicz Adam Badowski

President of the Management Board

Vice-President of the Management

Board

Member of the Management Board

Michał Nowakowski Piotr Karwowski Paweł Zawodny

Member of the Management Board Member of the Management Board Member of the Management Board

Jeremiah Cohn Krystyna Cybulska

Member of the Management Board Chief Accountant