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

	01.01.2023 – 31.03.2023	01.01.2022 – 31.03.2022	01.01.2023 – 31.03.2023	01.01.2022 – 31.03.2022
	PLN	PLN	EUR	EUR
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	0.15
Diluted earnings/(loss) per share (in PLN/EUR)	0.69	0.68	0.15	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	1.00	0.21	0.22

	31.03.2023	31.12.2022	31.03.2023	31.12.2022
	PLN	PLN	EUR	EUR
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

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

Operating segments ...# CD PROJEKT Group

Interim Condensed Consolidated Financial Statements for the Period from 1 January to 31 March 2023

34 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 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.

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements.# Interim Condensed Consolidated Financial Statements of the CD PROJEKT Group

The attached notes are an integral part of these financial statements.

7 Interim Condensed Consolidated Income Statement

	01.01.2023 – 31.03.2023	01.01.2022 – 31.03.2022*
Sales revenue	174 757	216 146
Sales of products	16 130	595 173
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	18 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 19 286	16 791
Finance costs	19 10 461	10 219
Profit/(loss) before tax	80 364	91 893
Income tax	10 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

8

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.

83 Assumption of comparability of the financial statements and changes in accounting policies

84 Changes in accounting policies

85 Presentation changes

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

A. Deferred tax

B. Other provisions

C. Goodwill

D. Business combinations

E. Dividend paid (or declared) and received

F. Trade and other receivables

G. Information on financial instruments

H. Transactions with related entities

94 Statement of the Management Board of the Parent Company

95 Approval of the financial statements# Interim Condensed Consolidated 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
Other comprehensive income subject to reclassification to gains or losses after specific conditions have been met:	1 737
Exchange differences on measurement of foreign operations	(583)
Measurement of derivative financial instruments – fair value through other comprehensive income, taking into account the tax effect	2 320
Other comprehensive income not subject to reclassification to gains or losses	-
Total comprehensive income	71 407
Total comprehensive income attributable to non-controlling interests	-
Total comprehensive income attributable to owners of CD PROJEKT S.A.	71 407

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
Intangible assets	3	68 792	69 157
Expenditure on development projects	3	544 483	473 202
Investment properties	5	42 188	42 560
Goodwill	3.4	56 438	56 438
Shares in non-consolidated subordinated entities	15	41 394	41 607
Prepayments and deferred costs	9	28 898	31 074
Other financial assets	8.15	216 098	207 437
Deferred tax assets	10	54 850	52 862
Other receivables	7.15	390 389	378
CURRENT ASSETS	1 099 522	1 154 146	1 311 733
Inventories	6	10 365	12 701
Trade receivables	7.15	73 738	165 290
Current income tax receivable	12	106	1 458
Other receivables	7	54 390	57 139
Prepayments and deferred costs	9	28 099	22 886
Other financial assets	8.15	277 203	279 515
Bank deposits over 3 months	15	48 883	337 330
Cash and cash equivalents	15	154 738	277 827
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 statement of financial position

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	2	100 771	100 771
Supplementary capital	1 567 325	1 567 325	1 425 647
Share premium	116 700	116 700	115 909
Treasury shares	(99 993)	(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
Other liabilities	13	2 560	2 620
Deferred tax provision	10	49	50
Deferred income	14	3 212	3 669
Provision for retirement and similar benefits	11	366	366
Other provisions	12	7 538	10 598
CURRENT LIABILITIES	169 768	204 534	254 795
Other financial liabilities	15	8 771	9 578
Trade payables	15	46 001	72 119
Current income tax liabilities	-	2 116	31 589
Other liabilities	13	9 410	10 244
Deferred income	14	15 042	22 425
Provision for retirement and similar benefits	11	10	10
Other provisions	12	90 534	88 042
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

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

12 Interim condensed statement of changes in consolidated equity

	Share capital	Supplementary capital	Share premium	Treasury shares	Other reserves	Foreign exchange differences on 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	-	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

13

	Share capital	Supplementary capital	Share premium	Treasury shares	Other reserves	Foreign exchange differences on 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	-	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 shares	-	35 741	-	-	(35 741)	-	-	-	-	-	-
Payment of dividend	-	-	-	-	-	-	(100 739)	-	(100 739)	-	(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	-	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

14

	Share capital	Supplementary capital	Share premium	Treasury shares	Other reserves	Foreign exchange differences on 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	-	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

15 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	4 24	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		98 89	-
Loans granted		1 881	1 500
Purchase of shares in a subsidiary		440	-
Purchase of bonds and cost of their purchase		7 966	91
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

16

	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

2 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

18 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

19 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;

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

20 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

21

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).# 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.

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.

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

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.

Information on individual operating segments

Continuing operations

	CD PROJEKT RED	GOG.COM	Consolidation eliminations	Total continuing operations
01.01.2023 – 31.03.2023
Sales revenue 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

01.01.2022 – 31.03.2022
Sales revenue 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

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	68	(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	25	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

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	68	(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	9	(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

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	-	-	56 438
Investments in subordinated entities	15 136	-	(15 136)	-
Shares in non-consolidated subordinated entities	41 394	-	-	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	-	-	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	-	-	488 883
Cash and cash equivalents	120 083	34 655	-	154 738
TOTAL ASSETS	2 235 722	91 583	(19 317)	2 307 988

	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.

	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	-	-	56 438
Investments in subordinated entities	15 092	-	(15 092)	-
Shares in non-consolidated subordinated entities	41 607	-	-	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	41	52 862
Other receivables	389	-	-	389
CURRENT ASSETS	1 095 224	64 332	(5 410)	1 154 146
Inventories	12 701	-	-	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	-	-	337 330
Cash and cash equivalents	239 713	38 114	-	277 827
TOTAL ASSETS	2 199 769	96 925	(22 570)	2 274 124

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	10	-	68 222
Expenditure on development projects	364 998	2 020	(13)	367 005
Investment properties	56 630	-	(12 312)	44 318
Goodwill	56 438	-	-	56 438
Investments in subordinated entities	15 036	-	(15 036)	-
Shares in non-consolidated subordinated entities	39 240	-	-	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	-	-	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	-	-	85 390
Cash and cash equivalents	693 338	55 247	-	748 585
TOTAL ASSETS	2 180 758	93 988	(22 197)	2 252 549

Consolidated statement of financial position by segments as at 31.12.2022

	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	-	-	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	50	-	-	50
Deferred income	3 666	3	-	3 669
Provision for pension and similar benefits	339	27	-	366
Other provisions	10 598	-	-	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

Consolidated statement of financial position by segments as at 31.03.2022

	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	-	-	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	12	-	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	6	1	-	7
Other provisions	80 501	6 715	(801)	86 415
TOTAL LIABILITIES AND EQUITY	2 180 758	93 988	(22 197)	2 252 549

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 1 ). 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.

1 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.

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
36
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.# CD PROJEKT GROUP

Interim Condensed Consolidated Financial Statements for the period from 1 January to 31 March 2023

The Management Board of CD PROJEKT S.A. (the “Company”) 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

37 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

38

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.

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)

(Chart data would be represented here if it were in a tabular format. Since it's graphical, it cannot be directly translated to Markdown tables.)

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 4

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.

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	-	51	-	-	-	-	51	-
other	-	-	-	4	-	-	4	-
Decrease due to:	-	4 094	-	293	1	639	5 027	-
sale	-	-	-	105	-	-	105	-
scrapping	-	956	-	124	-	-	1 081	-
transfer from assets under construction	-	-	-	-	-	-	601	601
reclassification	-	-	-	51	-	37	88	-
lease contracts terminated	-	3 138	-	-	-	-	3 138	-
other	-	-	-	13	1	-	14	-
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	40	2 782	149	239	-	5 152
depreciation charge	142	1 717	40	2 782	149	239	-	5 069
reclassification	-	83	-	-	-	-	-	83
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

	31.03.2023	31.12.2022	31.03.2022
Amounts of contractual commitments to purchase property, plant and equipment in future
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	Gross amount	Accumulated depreciation	Net amount
31.03.2023
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

(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	Copyright	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	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	-	-	41	-	-	-	-	14 630
scrapping	2 745	-	-	-	-	-	-	-	2 745
utilization of impairment write-downs	11 844	-	-	-	-	-	-	-	11 844
reclassification	-	-	-	41	-	-	-	-	41
Gross carrying amount as at 31.03.2023	306 907	930 087	33 199	4 490	18 469	50 515	56 438	1 400 695
Accumulated amortization as at 01.01.2023	-	657 011	-	2 767	33 853	-	693 932	-
Increase due to:	-	21 724	-	230	75 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	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	-	-	-	-	-	-
Net carrying amount as at 01.01.2023	213 902	259 300	33 199	1 393	18 168	16 225	56 438	172 598
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.

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	Increase due to:	Decrease	Gross carrying amount as at 31.03.2023
	47 946	98	-	48 044
capitalized expenditure		98
Accumulated amortization as at 01.01.2023	5 386	Increase due to:	Decrease	Accumulated amortization as at 31.03.2023
		470	-	5 856
amortization charge		470
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.

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
Write-downs as at 01.01.2023	86	732	818
Increase	-	-	-
Decreases, including:	2	-	2
release of write-downs (write-off)	2	-	2
Write-downs as at 31.03.2023	84	732	816

Current and overdue trade receivables as at 31.03.2023

RELATED ENTITIES

	Total	Not overdue	Overdue, in days
			1 – 60	61 – 90	91 – 180	181 – 360	>360
gross receivables	187	187	-	-	-	-	-
default ratio	-	0%	0%	0%	0%	0%	0%
write-down resulting from the ratio	-	-	-	-	-	-	-
write-down determined individually	-	-	-	-	-	-	-
total expected credit losses	-	-	-	-	-	-	-
Net receivables	187	187	-	-	-	-	-

OTHER ENTITIES

	Total	Not overdue	Overdue, in days
			1 – 60	61 – 90	91 – 180	181 – 360	>360
gross receivables	73 635	73,512	37	1	1	-	84
default ratio	-	0%	0%	0%	0%	0%	0%
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

	Total	Not overdue	Overdue, in days
			1 – 60	61 – 90	91 – 180	181 – 360	>360
gross receivables	73 822	73 699	37	1	1	-	84
impairment write- downs	84	-	-	-	-	-	84
Net receivables	73 738	73 699	37	1	1	-	-

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	13
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	-	7	-
other	1 018	961	890
Write-downs	732	732	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

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	85	48
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

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.

	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	10	10	7
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)	(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	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	32	134	53
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	-	8	-
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	45	35	46
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	19 606	7 809	236
Derivatives
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	388	891	24 303
Derivatives
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 maturityConsolidated 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
57

Note 16. Sales revenue

Sales revenue – geographical structure*

	01.01.2023 – 31.03.2023	01.01.2022 – 31.03.2022
	in PLN	in %
Domestic sales	5 848	3.35%
Export sales, including:	168 909	96.65%
Europe	36 155	20.69%
North America	115 720	66.22%
South America	796	0.46%
Asia	14 359	8.22%
Australia	1 772	1.00%
Africa	107	0.06%
Total	174 757	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
58

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	60	59
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

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	11
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	94	-
Gains on disposal of non-current assets	2	3
Release of unused provisions for costs	-	206
Other	106	19
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	59	-
Other	212	12
Total other operating expenses	5 897	5 163

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	36	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	3	-
Other finance costs	10 237	9 976
net foreign exchange losses	10 137	3 488
commission and fees on purchase of bonds	75	91
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

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	1	1	1
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.

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
SUBSIDIARIES
Spokko sp. z o.o.	205	343
CD PROJEKT RED Vancouver Studio Ltd.	22	22
The Molasses Flood LLC	1	-
MEMBERS OF THE MANAGEMENT BOARDS OF GROUP COMPANIES AND SUPERVISORY BOARD MEMBERS
Marcin Iwiński	-	1
Piotr Nielubowicz	-	1
Michał Nowakowski	-	3
Adam Badowski	-	6
Piotr Karwowski	2	2
Paweł Zawodny	6	1
Jeremiah Cohn	-	1
Urszula Jach - Jaki	1	-

Receivables from related entities	Liabilities to related entities
31.03.2023	31.12.2022
SUBSIDIARIES
Spokko sp. z o.o.	175
CD PROJEKT RED Vancouver Studio Ltd.	540

(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.

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

Specification	Currency	31.03.2023	31.12.2022	31.03.2022
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

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.

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.

69

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	7	10
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	42	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	75	91
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)

70

	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)	(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

71

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

	Cash flows	Non-monetary changes	Takeover of leased fixed assets	Foreign exchange differences	Interest accrued	Lease liabilities
01.01.2023 – 31.03.2023
Lease liabilities	20 967	(1 014)	-	317	200	20 470
Total	20 967	(1 014)	-	317	200	20 470
01.01.2022 – 31.03.2022
Lease liabilities	16 655	(984)	3 962	2 135	19 770
Total	16 655	(984)	3 962	2 135	19 770

72

Note 31. Post-balance sheet date events

The Extraordinary General Meeting of the Parent Company was held on 18 April 2023.# Regulatory Filing

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

73 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

74 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

75 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.

6 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

77 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		4 216	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

78 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	C	49 168	49 168	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	G	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	F	52 085	54 677	110 021
Prepayments and deferred costs		8 269	6 189	5 256
Other financial assets	G	277 203	279 515	262 507
Bank deposits over 3 months	G	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

79

	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	100 771	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)	(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	G	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	B	7 538	10 598	5 368
CURRENT LIABILITIES		115 594	146 103	189 831
Other financial liabilities	G	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	B	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

80 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

81

	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	32	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

82

	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

83 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

(all amounts in PLN thousand, unless stated otherwise)

The attached notes are an integral part of these financial statements

84

01.01.2023 – 31.03.2023

01.01.2022 – 31.03.2022

FINANCING ACTIVITIES

	01.01.2023 – 31.03.2023	01.01.2022 – 31.03.2022
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

	01.01.2023 – 31.03.2023	01.01.2022 – 31.03.2022
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

85

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

86

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

A. Deferred tax

	31.12.2022*	Differences affecting the deferred tax recognized in the profit or loss	31.03.2023
Deductible temporary differences underlying the deferred tax asset
Provision for other employee benefits	348	-	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
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	7	29	36
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

87

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.

	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

	01.01.2023 – 31.03.2023	01.01.2022 – 31.03.2022
Income tax expense recognized in the income statement
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
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

	As at 01.01.2023	Provisions recorded during the year	Provisions utilized/released	As at 31.03.2023
Provision for costs of performance-related and other remuneration	67 121	8 616	-	75 737
Other provisions	26 698	17 609	(26 961)	17 346
Total	93 819	26 225	(26 961)	93 083
including:
short-term	75 737	9 808	-	85 545
long-term	-	7 538	-	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

88 C. Goodwill

	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	10 021	10 021
Total	49 168	49 168	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	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
Write-downs as at 01.01.2023	86 732	818	87 550
Increase	-	-	-
Decreases, including:	2	-	2
release of write-downs (write-off)	2	-	2
Write-downs as at 31.03.2023	84 732	816	85 548

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	-	-	-	-
OTHER ENTITIES
gross receivables	71 152	71 054	13	-	1	84	-
default ratio	-	0%	0%	0%	0%	0%	0%
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	18	-	1	84	-
impairment write- downs	84	-	-	-	-	-	84
Net receivables	73 324	73 305	18	-	1	-	-

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	-	7	-
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	19 605	7 809	-
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	-	-	24 303
Derivatives	-	-	24 303
currency forwards - EUR	-	-	598
currency forwards - USD	-	-	23 705

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.

H. Transactions with related entities

Sales to 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	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	-	9
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	-	6	-	-
Paweł Zawodny	6	1	-	-
Jeremiah Cohn	-	1	-	-

Purchases from 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	-	-	-	12	7	-
Adam Kiciński	-	-	-	1	13	-
Piotr Nielubowicz	-	2	-	13	-	-
Michał Nowakowski	-	-	2	1	4	-
Adam Badowski	2	-	6	-	6	-
Piotr Karwowski	-	-	-	-	2	-
Paweł Zawodny	6	-	-	4	-	7

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

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

95 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
President of the Management Board

Piotr Nielubowicz
Vice-President of the Management Board

Adam Badowski
Member of the Management Board

Michał Nowakowski
Member of the Management Board

Piotr Karwowski
Member of the Management Board

Paweł Zawodny
Member of the Management Board

Jeremiah Cohn
Member of the Management Board

Krystyna Cybulska
Chief Accountant

AI assistant

CD Projekt — Interim / Quarterly Report 2023

5556_rns_2023-05-29_1152af57-2c96-4e25-ae4c-eabcd59b059e.xhtml

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

Disclaimer

CD PROJEKT Group – Selected financial data translated into EUR

Table of contents

Interim Condensed Consolidated Financial Statements for the Period from 1 January to 31 March 2023

Contents

7 Interim Condensed Consolidated Income Statement

8

83 Assumption of comparability of the financial statements and changes in accounting policies

84 Changes in accounting policies

85 Presentation changes

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

A. Deferred tax

B. Other provisions

C. Goodwill

D. Business combinations

E. Dividend paid (or declared) and received

F. Trade and other receivables

G. Information on financial instruments

H. Transactions with related entities

94 Statement of the Management Board of the Parent Company

95 Approval of the financial statements# Interim Condensed Consolidated Statements

Interim condensed consolidated statement of comprehensive income

Interim condensed consolidated statement of financial position

Interim condensed consolidated statement of financial position

12 Interim condensed statement of changes in consolidated equity

13

14

15 Interim condensed consolidated statement of cash flows

16

2 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)

18 General information

Presentation of the Group Subsidiaries

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)

19 Consolidation policies

Subsidiaries

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)

20 Basis of preparation of the interim condensed consolidated financial statements

Going concern assumption

Compliance with the International Financial Reporting Standards

Amendments to standards or interpretations effective from 1 January 2023 applicable and 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)

21

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

Functional currency and presentation currency

For the period from 1 January to 31 March 2023 (all amounts in PLN thousand, unless stated otherwise)

Transactions and balances

Comparability of the financial statements and consistency of accounting policies

Changes in accounting policies

Presentation changes

Audit by the registered auditor

Notes – operating segments of the CD PROJEKT Group

Operating segments

Presentation of the financial statements taking into account operating segments

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

Information on individual operating segments

Continuing operations

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

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

Consolidated statement of financial position by segments as at 31.03.2023

Consolidated statement of financial position by segments as at 31.03.2022

Consolidated statement of financial position by segments as at 31.12.2022

Consolidated statement of financial position by segments as at 31.03.2022

Operating segments

CD PROJEKT RED

The scope and model of operations

Key products

The scope and model of operations

Key products

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

Events relating to the Witcher series games

GOG.COM

Digital distribution of games

Sales promotion

Other corporate events

CD Projekt Interim / Quarterly Report 2023