CD Projekt — Audit Report / Information 2018

Apr 25, 2019

Current report No. 9/2019

Subject: Update concerning compliance with corporate governance policies

Legal basis: Art. 56 section 1 item 2 of the Act on Public Offering -current and periodic information

In relation to information conveyed in the separate and consolidatedfinancial statement for 2018, the Management Board of CD PROJEKT S.A.(hereinafter referred to as "the Company") wishes to further clarify andupdate the information contained in its statement of compliance withcorporate governance policies issued on 27 March 2019 as follows:

1. Company Audit Committee

Under the Act of 11 May 2017 on licensed auditors, audit companies andpublic supervision (hereinafter referred to as "the Act") throughout2018 an Audit Committee had existed within the framework of theSupervisory Board, with the following membership:

a) Katarzyna Szwarc - Chairwoman of the Audit Committee meetingindependence criteria specified in Art. 129 section 3 of the Act. Has 8years of industry experience, acquired in the course of her tenure asChairwoman of the Supervisory Board of the Company.

b) Maciej Nielubowicz - Member of the Audit Committee possessingknowledge and skills in the area of accounting or attestation offinancial statements. Acquired the relevant knowledge in the course ofhis studies at the Faculty of Management, Warsaw University, majoring inAccounting and Finance. Also possesses extensive professionalexperience, including employment (2009-2015) at Deloitte in theFinancial Audit Department as a member of the Financial ServicesIndustry team charged with auditing and reviewing financial statementsin terms of their compliance with PAS, IAS, SOX and due diligenceprinciples. Currently employed at Grupa Generali Polska, in its InternalAudit Department.

c) Michał Bień - Member of the Audit Committee meeting independencecriteria specified in Art. 129 section 3 of the Act.

Four sessions of the Audit Committee were held in 2018.

2. Auditing company

In 2018 in a single instance the Company solicited a permissible servicenot related to auditing or attestation of financial statements from theentity contracted to audit its financial statement for 2017. In relationto this instance the Audit Committee conducted a review of independencecriteria and approved the procurement of the aforementioned service.

3. Auditor selection policy

In line with the "Policy of selection and rotation of the entitycontracted to audit financial statements and procurement from the entitycontracted to audit financial statements of other permissible servicesnot related to audits and attestation of financial statements" adoptedby CD PROJEKT S.A., selection of the entity contracted to audit theCompany's financial statement is the responsibility of the CompanySupervisory Board. The corresponding decision must be issued in the formof a Supervisory Board resolution.

Under Art. 130 of the Act of 11 May 2017 on certified auditors, auditfirms and public supervision (JL 2017, item 1089), the duties of theAudit Committee include submission to the Supervisory Board ofrecommendations concerning appointment, reappointment and dismissal oflicensed auditors, and the terms and conditions regulating cooperationwith licensed auditors.

Whenever the need arises to select an entity to perform audits offinancial statements published by CD PROJEKT Capital Group companies,the Audit Committee initiates a formal selection procedure which assumesthe form of a tender, consistent with the following guidelines:

a) The Audit Committee indicates which audit firms meet its selectioncriteria and invites these firms to participate in the tender. No fewerthan 4 audit firms must be approached in each case. The Company preparessuitable documentation, which allows prospective applicants tofamiliarize themselves with the profile of CD PROJEKT S.A. and itsCapital Group, indicates which financial statements are to be submittedto an audit and specifies clear and nondiscriminatory selection criteriato be followed by the Company when evaluating applications.

b) The Audit Committee performs a preliminary assessment of applicationsand prepares a list of audit firms regarded as potential candidates forselection.

c) The Audit Committee organizes interviews and/or meetings withpotential candidates.

d) The Audit Committee may delegate certain responsibilities or availitself of assistance provided by the Management Board of CD PROJEKT S.A.when implementing the above activities.

e) The selection procedure takes into account the impartiality andindependence of the audit firm, and also whether the audit firm performsother services for the Company which might trigger a potential conflictof interest. The Audit Committee assesses the independence of each firmon its list of candidates for performing audits of financial statementssubmitted by CD PROJEKT Capital Group member companies.

f) The Company and the Audit Committee acknowledge all findings andconclusions disclosed in the annual report of the Audit SupervisionCommittee (see Art. 90 section 5 of the Act) insofar as these findingsand conclusions may affect the selection process.

g) The Company assesses offers submitted by audit firms in accordancewith criteria set forth in the tender documentation and presents itsfindings in a report which is subsequently submitted to the AuditCommittee for approval.

h) The Audit Committee prepares a recommendation for the SupervisoryBoard. The Audit Committee's recommendation must include at least twoaudit firms, along with a justification of their inclusion on the listand an indication which firm is deemed preferable by the Audit Committee.

i) Based on the Audit Committee's recommendation, the Supervisory Boardadopts a resolution which formally selects a single entity to audit thefinancial statements of CD PROJEKT S.A.

j) Should the Supervisory Board's decision conflict with the AuditCommittee's recommendation, the Supervisory Board must prepare a formalnote explaining this discrepancy and submit it to the body charged withapproving the financial statements of CD PROJEKT S.A.

The rotation policy in force at the Company stipulates that a singleaudit firm may perform financial audit activities for the Company over aperiod not exceeding five years.

4. Recommendations concerning selection of audit firms are issued in theframework of the selection procedure initiated by the Company in linewith the applicable criteria.

Disclaimer: This English language translation has been prepared solelyfor the convenience of English speaking readers. Despite all the effortsdevoted to this translation, certain discrepancies, omissions orapproximations may exist. In case of any differences between the Polishand the English versions, the Polish version shall prevail. CD PROJEKT,its representatives and employees decline all responsibility in thisregard.