CD Projekt

CD PROJEKT Group - Selected financial data translated into EUR Table of contents Interim condensed consolidated income statement Interim condensed consolidated statement of comprehensive income Interim condensed consolidated statement of financial position Interim condensed statement of changes in consolidated equity Interim condensed consolidated statement of cash flows General Information Presentation of the Group Subsidiaries Consolidation policies Consolidated companies – as at 30 September 2023 Subsidiaries 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 Standards published and endorsed by the EU but not yet effective and their impact on the Group’s financial statements Standards and interpretations adopted by the IASB but not yet endorsed by the EU Functional currency and presentation currency Functional currency and presentation currency Transactions and balances Assumption of comparability of the financial statements and changes in accounting policies Presentation changes and correction of errors Audit by the registered auditor Operating segments Presentation of the financial statements, taking into account operating segments Description of differences in the basis for determination of segments and the profit or loss of a segment compared with the last annual consolidated financial statements Information on individual operating segments Consolidated income statement by segment for the period from 01.07.2023 to 30.09.2023 Consolidated income statement by segment for the period from 01.07.2022 to 30.09.2022 Consolidated income statement by segment for the period from 01.01.2023 to 30.09.2023 Consolidated income statement by segment for the period from 01.01.2022 to 30.09.2022 Consolidated statement of financial position by segment as at 30.09.2023 Consolidated statement of financial position by segment as at 30.06.2023 Consolidated statement of financial position by segment as at 31.12.2022 Operating segments CD PROJEKT RED GOG.COM Description of the Issuer’s major achievements or failures in the third quarter of 2023 by operating segment CD PROJEKT RED GOG.COM Other corporate events Factors affecting the Group’s future performance Impact of the political and economic situation in Ukraine on sales during the reporting period Impact on sales Risks associated with the current political and economic situation in Ukraine Seasonality or cyclicality of the Group’s operations CD PROJEKT RED GOG.COM Key customers Note 1. Description of those items affecting assets, liabilities, equity, net profit or loss and cash flows which are unusual in terms of their type, size and impact Material events Note 2. Property, plant and equipment Changes in property, plant and equipment (by category) for the period 01.01.2023 – 30.09.2023 Amounts of contractual commitments to purchase property, plant and equipment in the future Right-of-use assets relating to property, plant and equipment Note 3. Intangible assets and expenditure on development projects Changes in intangible assets and expenditure on development projects for the period 01.01.2023 – 30.09.2023 Amounts of contractual commitments to purchase intangible assets in the future Note 4. Goodwill Note 5. Investment properties Changes in investment properties for the period 01.01.2023 – 30.09.2023 Amounts of contractual liabilities in respect of purchase of investment properties Note 6. Inventories Changes in inventory write-downs Note 7. Trade and other receivables Changes in write-downs of receivables Current and overdue trade receivables as at 30.09.2023 Other receivables Note 8. Other financial assets Note 9. Prepayments and deferred costs Note 10. Deferred income tax Deductible temporary differences underlying the deferred tax asset Taxable temporary differences underlying the deferred tax provision Net deferred tax assets/provisions Income tax expense recognized in the income statement Note 11. Share capital Share capital – structure as at 30.09.2023 Changes in the share capital for the period 01.01.2023 – 30.09.2023 Note 12. Provision for retirement and similar benefits Note 13. Other provisions Changes in other provisions Note 14. Other liabilities Current and overdue other liabilities as at 30.09.2023 Note 15. Deferred income Note 16. Information on financial instruments Fair values and hierarchy of specific classes of financial instruments Financial assets – classification and measurement Financial liabilities – classification and measurement Note 17. Sales revenue Sales revenue – geographical structure 2023 Sales revenue – geographical structure 2022 Sales revenue – by type of production Sales revenue – by distribution channel Note 18. Operating expenses Note 19. Other operating income and expenses Other operating income Other operating expenses Note 20. Finance income and costs Finance income Finance costs Note 21. Leases of low-value assets and short-term leases Note 22. Issuance, redemption and repayment of debt and equity securities Issuance of debt securities Issuance of equity securities Note 23. Dividend paid (or declared) and received Note 24. Transactions with related entities Terms and conditions of transactions with related entities Transactions with related entities after consolidation eliminations Note 25. Unpaid loans or defaults on loan agreements in the cases where no corrective measures were adopted by the balance sheet date Note 26. Changes in contingent liabilities or contingent assets which occurred after the end of the last financial year Contingent liabilities in respect of guarantees, sureties and collateral Note 27. Changes in the structure of the Group and Group companies during the reporting period Note 28. Agreements that may result in future changes in the proportions of shares held by shareholders and bondholders Assumptions made for the valuation of Incentive Plan A for the years 2023-2027 Changes in entitlements granted under Incentive Plan A for the years 2023-2027 Assumptions made for the valuation of Incentive Plan B for the years 2023-2027 Changes in entitlements granted under Incentive Plan B for the years 2023-2027 Note 29. Tax settlements Note 30. Explanations to the condensed consolidated statement of cash flows Note 31. Cash flows and non-monetary changes resulting from changes in liabilities in financing activities Note 32. Post balance sheet events Litigation pending 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 99 910 510 and consists of 99 910 510 shares with a nominal value of PLN 1 each. The shareholding structure, including the percentage share in the share capital and at the General Shareholders’ Meeting... Changes in the shareholding structure of the Parent Company Parent Company’s shares held by the members of the Management Board and the Supervisory Board Changes in the number of shares held by the Members of the Management Board and the Supervisory Board Reference to published estimates Interim condensed separate income statement Interim condensed separate statement of comprehensive income Interim condensed separate statement of financial position Interim condensed separate statement of changes in equity Interim condensed separate statement of cash flows Explanations to the condensed separate statement of cash flows Assumption of comparability of the financial statements and changes in accounting policies Changes in accounting policies Presentation changes and correction of errors Notes to the separate financial statements of CD PROJEKT S.A. A. Deferred tax Deductible temporary differences underlying the deferred tax asset Taxable temporary differences underlying the deferred tax provision Net deferred tax assets/provisions * restated data Income tax expense recognized in the income statement * restated data B. Other provisions Changes in other provisions C. Goodwill D. Business combinations E. Dividend paid (or declared) and received F. Trade and other receivables Changes in write-downs of receivables Current and overdue trade receivables as at 30.09.2023 Other receivables G. Information on financial instruments Fair values and hierarchy of specific classes of financial instruments Financial assets – classification and measurement Financial liabilities – classification and measurement H. Transactions with related entities Statement by the Management Board of the Parent Company On the fairness of preparation of the interim condensed consolidated financial statements On the entity authorized to review the fairness of preparation of the interim condensed consolidated financial statements Approval of the financial statements 1 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 2 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 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 3 CD PROJEKT Group - Selected financial data translated into EUR PLN EUR 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Net sales of products, services, goods for resale and materials 767 692 623 507 167 717 133 001 Cost of sales of products, services, goods for resale and materials 251 356 180 561 54 914 38 516 Operating profit/(loss) 281 152 233 882 61 423 49 890 Profit/(loss) before tax 350 364 264 958 76 544 56 518 Net profit/(loss) attributable to owners of CD PROJEKT S.A. 289 981 211 861 63 352 45 192 Net cash from operating activities 244 768 212 084 53 474 45 240 Net cash from investing activities (183 968) (321 193) (40 191) (68 514) Net cash from financing activities (102 395) (103 788) (22 370) (22 139) Net increase/(decrease) in cash and cash equivalents (41 595) (212 897) (9 087) (45 413) Number of shares (in thousands) 100 388 100 739 100 388 100 739 Net earnings/(loss) per share (in PLN) 2.89 2.11 0.63 0.45 Diluted earnings/(loss) per share (in PLN/EUR) 2.89 2.11 0.63 0.45 Book value per share (in PLN/EUR) 22.00 19.82 4.75 4.07 Diluted book value per share (in PLN/EUR) 21.99 19.81 4.74 4.07 Dividend declared or paid per share (in PLN/EUR) 1.00 1.00 0.22 0.21 * restated data PLN EUR 30.09.2023 31.12.2022 30.09.2023 31.12.2022 Total assets 2 412 731 2 276 331 520 479 485 369 Liabilities and provisions for liabilities (excluding accruals) 189 411 218 771 40 860 46 647 Non-current liabilities 40 252 36 186 8 683 7 716 Current liabilities 164 335 208 679 35 451 44 495 Equity 2 208 144 2 031 466 476 345 433 158 Share capital 99 911 100 771 21 553 21 487 * restated data The financial data presented above were translated to 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 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 30 September 2023: 4.5773 PLN/EUR and from 1 January to 30 September 2022: 4.688 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: 4.6356 PLN/EUR as at 30 September 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 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 4 Table of contents Key financial data of the .......................................................................................................................................................................................................... 6 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 ..................................................................................................................... 13 Interim condensed consolidated statement of cash flows ................................................................................................................................... 15 Notes to the interim condensed consolidated financial statements ........................................................................................................................ 18 General Information ......................................................................................................................................................................................................... 19 Presentation of the Group .............................................................................................................................................................................................. 19 Consolidation policies .................................................................................................................................................................................................... 20 Consolidated companies – as at 30 September 2023 .................................................................................................................................. 20 Subsidiaries ................................................................................................................................................................................................................. 20 Basis of preparation of the interim condensed consolidated financial statements ..................................................................................... 21 Going concern assumption ............................................................................................................................................................................................ 21 Compliance with the International Financial Reporting Standards.................................................................................................................... 21 Amendments to standards or interpretations effective from 1 January 2023, applicable and adopted by the Group ............... 21 Functional currency and presentation currency ..................................................................................................................................................... 22 Functional currency and presentation currency .............................................................................................................................................. 22 Transactions and balances ..................................................................................................................................................................................... 22 Assumption of comparability of the financial statements and changes in accounting policies .............................................................. 23 Presentation changes and correction of errors ................................................................................................................................................ 23 Audit by the registered auditor .................................................................................................................................................................................... 24 Notes – operating segments of the CD PROJEKT Group ......................................................................................................................................... 25 Operating segments ....................................................................................................................................................................................................... 26 Information on individual operating segments ................................................................................................................................................. 27 Consolidated income statement by segment for the period from 01.07.2023 to 30.09.2023 ......................................................... 28 Consolidated income statement by segment for the period from 01.07.2022 to 30.09.2022 ........................................................ 29 Consolidated income statement by segment for the period from 01.01.2023 to 30.09.2023 .......................................................... 30 Consolidated income statement by segment for the period from 01.01.2022 to 30.09.2022.......................................................... 31 Consolidated statement of financial position by segment as at 30.09.2023 ......................................................................................... 32 Consolidated statement of financial position by segment as at 30.06.2023 ........................................................................................ 34 Consolidated statement of financial position by segment as at 31.12.2022 .......................................................................................... 36 Operating segments ................................................................................................................................................................................................. 38 Description of the Issuer’s major achievements or failures in the third quarter of 2023 by operating segment ........................ 39 Factors affecting the Group’s future performance ........................................................................................................................................... 41 Impact of the political and economic situation in Ukraine on sales during the reporting period ..................................................... 42 Impact on sales ........................................................................................................................................................................................................... 42 Risks associated with the current political and economic situation in Ukraine ...................................................................................... 42 Seasonality or cyclicality of the Group’s operations ....................................................................................................................................... 43 Key customers ............................................................................................................................................................................................................ 44 Notes – other explanatory notes to the interim condensed consolidated financial statements .................................................................... 45 Note 1. Description of those items affecting assets, liabilities, equity, net profit or loss and cash flows which are unusual in terms of their type, size and impact ......................................................................................................................................... 46 Note 2. Property, plant and equipment................................................................................................................................................................ 47 Note 3. Intangible assets and expenditure on development projects ...................................................................................................... 49 Note 4. Goodwill ......................................................................................................................................................................................................... 50 Note 5. Investment properties ............................................................................................................................................................................... 50 Note 6. Inventories .................................................................................................................................................................................................... 52 Note 7. Trade and other receivables ................................................................................................................................................................... 52 Note 8. Other financial assets ................................................................................................................................................................................ 54 Note 9. Prepayments and deferred costs .......................................................................................................................................................... 55 Note 10. Deferred income tax ................................................................................................................................................................................ 56 Note 11. Share capital ................................................................................................................................................................................................ 58 Note 12. Provision for retirement and similar benefits .................................................................................................................................... 58 Note 13. Other provisions ........................................................................................................................................................................................ 59 Note 14. Other liabilities ........................................................................................................................................................................................... 59 Note 15. Deferred income ....................................................................................................................................................................................... 60 Note 16. Information on financial instruments ................................................................................................................................................... 60 Note 17. Sales revenue ............................................................................................................................................................................................. 62 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 5 Note 18. Operating expenses................................................................................................................................................................................. 64 Note 19. Other operating income and expenses ............................................................................................................................................. 65 Note 20. Finance income and costs .................................................................................................................................................................... 66 Note 21. Leases of low-value assets and short-term leases ......................................................................................................................... 66 Note 22. Issuance, redemption and repayment of debt and equity securities ...................................................................................... 67 Note 23. Dividend paid (or declared) and received ........................................................................................................................................ 67 Note 24. Transactions with related entities ....................................................................................................................................................... 67 Note 25. Unpaid loans or defaults on loan agreements in the cases where no corrective measures were adopted by the balance sheet date .................................................................................................................................................................................................... 70 Note 26. Changes in contingent liabilities or contingent assets which occurred after the end of the last financial year .......... 71 Note 27. Changes in the structure of the Group and Group companies during the reporting period ............................................. 73 Note 28. Agreements that may result in future changes in the proportions of shares held by shareholders and bondholders ......................................................................................................................................................................................................... 73 Note 29. Tax settlements ........................................................................................................................................................................................ 75 Note 30. Explanations to the condensed consolidated statement of cash flows .................................................................................. 76 Note 31. Cash flows and non-monetary changes resulting from changes in liabilities in financing activities ............................... 79 Note 32. Post balance sheet events ..................................................................................................................................................................... 81 Additional information ...........................................................................................................................................................................................................82 Litigation pending ...................................................................................................................................................................................................... 83 Shareholding structure ................................................................................................................................................................................................... 84 Parent Company’s shares held by the members of the Management Board and the Supervisory Board .................................... 85 Reference to published estimates .............................................................................................................................................................................. 85 Interim condensed separate financial statements of CD PROJEKT S.A. ...............................................................................................................86 Interim condensed separate income statement ......................................................................................................................................................87 Interim condensed separate statement of comprehensive income ................................................................................................................ 88 Interim condensed separate statement of financial position ............................................................................................................................. 88 Interim condensed separate statement of changes in equity ............................................................................................................................ 90 Interim condensed separate statement of cash flows.......................................................................................................................................... 92 Assumption of comparability of the financial statements and changes in accounting policies .............................................................. 94 Changes in accounting policies ............................................................................................................................................................................ 94 Presentation changes and correction of errors ................................................................................................................................................ 94 Notes to the separate financial statements of CD PROJEKT S.A. .................................................................................................................... 96 A. Deferred tax....................................................................................................................................................................................................... 96 B. Other provisions ............................................................................................................................................................................................... 97 C. Goodwill .............................................................................................................................................................................................................. 97 D. Business combinations .................................................................................................................................................................................. 98 E. Dividend paid (or declared) and received ...............................................................................................................................................102 F. Trade and other receivables........................................................................................................................................................................102 G. Information on financial instruments ........................................................................................................................................................ 104 H. Transactions with related entities.............................................................................................................................................................. 107 Statement by the Management Board of the Parent Company .......................................................................................................................109 Approval of the financial statements ......................................................................................................................................................................... 110 Key financial data of the CD PROJEKT Group 1 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 7 Interim condensed consolidated income statement Note 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Sales revenue 442 682 245 514 767 692 623 507 Sales of products 17 390 534 203 189 628 634 489 057 Sales of services 17 455 308 1 041 1 622 Sales of goods for resale and materials 17 51 693 42 017 138 017 132 828 Cost of sales of products, services, goods for resale and materials 143 167 79 200 251 356 180 561 Costs of products and services sold 18 104 410 48 602 148 101 85 640 Cost of goods for resale and materials sold 18 38 757 30 598 103 255 94 921 Gross profit/(loss) on sales 299 515 166 314 516 336 442 946 Selling expenses 18 66 140 45 064 152 470 135 697 Administrative expenses 18 51 300 26 973 111 904 73 862 Other operating income 19 7 412 9 819 40 747 15 204 Other operating expenses 19 3 243 6 783 11 556 14 692 (Impairment)/reversal of impairment of financial instruments (5) (9) (1) (17) Operating profit/(loss) 186 239 97 304 281 152 233 882 Finance income 20 60 424 33 219 80 005 68 589 Finance costs 20 12 994 18 276 10 793 37 513 Profit/(loss) before tax 233 669 112 247 350 364 264 958 Income tax 10 30 805 13 358 60 383 53 097 Net profit/(loss) 202 864 98 889 289 981 211 861 Net profit/(loss) attributable to owners of CD PROJEKT S.A. 202 864 98 889 289 981 211 861 Net earnings/(loss) per share (in PLN) - - - - Basic for the reporting period 2.03 0.98 2.89 2.11 Diluted for the reporting period 2.03 0.98 2.89 2.11 * restated data A significant increase, in terms of value, compared with the prior period in Sales revenue in the third quarter of 2023 is the result of a successful launch of Phantom Liberty, the feature expansion of Cyberpunk 2077. The launch, supported by a marketing and communication campaign, took place on 26 September and in the period discussed, the Group recognized in revenues the total value of sales under pre-orders received until the date of the launch and sales in the first days after the launch. This translated into an increase in Sales of products in the CD PROJEKT RED segment, where sales of the expansion represented more than a half of the total sales of products, and almost 90% including sales of the main game. In addition, in the item discussed, the CD PROJEKT RED segment recognized: a) licence revenue from the sale of the game Witcher 3: Wild Hunt, including expansions: Hearts of Stone and Blood and Wine; b) revenue relating to the games GWENT: The Witcher Card Game, Witcher 2: Assassins of Kings, Thronebreaker: The Witcher Tales and The Witcher; c) licence revenue relating to the CD PROJEKT RED studio’s franchises. In the period discussed, the Group recorded an increase in sales also in Sales of goods for resale and materials, which comprised mainly revenue from digital distribution of games from external suppliers to end customers executed via the GOG.COM platform. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 8 The Cost of products and services sold, where the cost of amortization of expenditure on development projects (primarily the cost of own games developed in the CD PROJEKT RED segment) is presented, is the first component of the Group’s Cost of sales of products, services, goods for resale and materials. The value of the said item in the third quarter of 2023 comprised mainly the amortization of expenditure on the Cyberpunk 2077, including its expansion Phantom Liberty. In connection with the launch of the expansion, the Company assessed the useful economic life and estimated expected benefits from assets associated with the Cyberpunk 2077 game and, based on the analysis performed, it was decided that:  starting from the third quarter of 2023, expenditure on the Cyberpunk 2077 asset, including expenditure on the production of the version of the game dedicated to new generation consoles and expenditure on development projects relating to the Phantom Liberty expansion will be amortized according to the same pattern;  assets will be amortized until the end of 2028;  the reducing balance method of amortization will be used, with the following pattern of amortization: - 20% in the third quarter of 2023; - 20% in the fourth quarter of 2023; - 5% in each quarter of 2024; - 3.5% in each quarter of 2025; - 2.5% in each quarter of 2026; - 2% in each quarter of 2027 and 2028, with the amortization rates specified above being applied to the balance of assets relating to the Cyberpunk 2077 game and its editions for new generation consoles Xbox Series X|S and PlayStation 5 as at the end of June 2023 and to the initial value of the asset relating to Phantom Liberty. An additional increase in the said item in the third quarter of 2023 was attributable to an increase in the provision for liabilities relating to settlements with distributors of the sales and costs of the physical copies of the Cyberpunk 2077 game totalling PLN 13 041 thousand resulting from updating estimates. Cost of goods for resale and materials sold represents mainly the cost of goods for resale and materials sold via the GOG.COM platform and the cost of physical products sold by the CD PROJEKT RED segment. In the third quarter of 2023, the largest component of the Selling expenses comprised costs relating to the publishing activities, current advertising and promotion of own titles, including salaries and wages of the internal publishing department teams and external sales promotion services. The increase in these costs compared with the prior period resulted mainly from the Phantom Liberty promotional campaign conducted by the segment. The second largest category of the Selling expenses comprised costs recognized in the GOG.COM segment in respect of marketing activities relating to the GOG.COM platform and the work on the development and processing of sales executed through that platform. The third major category of the selling expenses in the period discussed included the cost of maintenance of the titles published in the CD PROJEKT RED segment. Compared with the third quarter of 2022, the value of maintenance costs was reduced, mainly due to a significant decrease in the costs relating to the work on Cyberpunk 2077 updates. Administrative expenses of the CD PROJEKT Group comprise mainly: a) the fixed and performance-related parts of the remuneration of the Management Boards and top management of the companies where there was an increase in relation to the comparative period resulting mainly from an increase in the provision for performance-related remuneration; b) remuneration of the administrative teams and costs of external services classified in this category, which are consistently on the rise in line with the Group’s development; c) costs of work on the future games incurred at an initial stage (research phase) preceding the execution of the projects (development phase) and the start of their capitalization as part of Expenditure on development projects forming part of Non- current assets, where there was an increase due to expansion of the teams working on the projects at the research stage; d) the cost of valuation of the entitlements awarded under the incentive scheme for the years 2020–2025. Items with the most significant impact on the balance of the Group’s Other operating income and expenses included recognition of the tax relief for innovative employees, subsidies received, other sales, including costs, and income and costs relating to the lease of office space in the property complex at Jagiellońska 74 and 76 in Warsaw. In the period discussed, the Group reported an excess of Finance income over Finance costs. The excess was mainly due to the reversal of a write-down of shares in the acquired company recognized in 2022 in connection with the merger of Spokko sp. z o.o. with CD PROJEKT S.A., the excess of foreign exchange gains over foreign exchange losses and the settlement and valuation of derivative financial instruments hedging foreign exchange risk, and interest on bank deposits and bonds. The release of the previously recognized write-down of shares in Spokko sp. z o.o. due to its takeover (merger with the Parent Company) discussed above was accompanied, at the same time, by the recognition of income and costs for the current year of the acquired company in the income statement of the Parent Company for the third quarter of 2023 and the recognition of the past results of the acquired company in Equity of the Parent Company under Retained earnings. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 9 The effective income tax rate recognized in the income statement for the third quarter of the current year was 13.2% compared to 11.9% in the third quarter of 2022, and the increase is mainly due to a change in the approach to recognition of non-deductible income tax collected in other jurisdictions on royalties paid to the Group (withholding tax), which involves its ongoing recognition on the basis of reliable estimates. This is a change from the previous approach under which the recognition of non-deductible withholding tax only occurred upon receiving documents confirming the settlement of the tax abroad, i.e. in the year following the year of the actual withholding by the Company’s royalty payer. In addition, the increase in Income tax was affected by an increased deferred tax provision resulting mainly from the recognition of expenditure on the Phantom Liberty expansion and the increased balance of current period revenue invoiced in the following period compared to the third quarter of 2022, which is also due in large part to the release of the Cyberpunk 2077 Phantom Liberty expansion. The consolidated Net profit of the Group for the third quarter of 2023 amounted to PLN 202 864 thousand and was significantly higher than in the corresponding period of the prior year, mainly as a result of the successful launch of the Phantom Liberty expansion. Interim condensed consolidated statement of comprehensive income 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Net profit/(loss) 202 864 98 889 289 981 211 861 Other comprehensive income subject to reclassification to gains or losses after specific conditions have been met: 1 128 (4 402) (231) (10 841) Exchange differences on measurement of foreign operations 1 607 1 896 (89) 3 448 Measurement of derivative financial instruments - fair value through other comprehensive income, taking into account the tax effect (479) (6 298) (142) (14 289) Other comprehensive income not subject to reclassification to gains or losses - - - - Total comprehensive income 203 992 94 487 289 750 201 020 Total comprehensive income attributable to non-controlling interests - - - - Total comprehensive income attributable to owners of CD PROJEKT S.A. 203 992 94 487 289 750 201 020 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 10 Interim condensed consolidated statement of financial position Note 30.09.2023 30.06.2023 31.12.2022 NON-CURRENT ASSETS 1 274 924 1 300 586 1 122 185 Property, plant and equipment 2 171 619 161 009 145 252 Intangible assets 3 69 507 69 785 69 157 Expenditure on development projects 3 575 418 600 099 475 169 Investment properties 5 34 612 37 429 42 560 Goodwill 3.4 56 438 56 438 56 438 Shares in non-consolidated subordinated entities 40 863 43 477 41 607 Prepayments and deferred costs 9 48 503 42 727 31 074 Other financial assets 8.16 254 687 242 203 207 437 Deferred tax assets 10 22 897 47 044 53 102 Other receivables 7.16 380 375 389 CURRENT ASSETS 1 137 807 883 921 1 154 146 Inventories 6 7 463 8 118 12 701 Trade receivables 7.16 287 833 83 557 165 290 Current income tax receivable 14 853 12 356 1 458 Other receivables 7 33 747 42 359 57 139 Prepayments and deferred costs 9 26 386 21 494 22 886 Other financial assets 8.16 268 043 249 576 279 515 Bank deposits over 3 months 16 263 250 317 125 337 330 Cash and cash equivalents 16 236 232 149 336 277 827 TOTAL ASSETS 2 412 731 2 184 507 2 276 331 * restated data The item Expenditure on development projects, in which the Group recognizes expenditure on the development of new games, new technologies and other products of a similar nature, incurred and deferred, had the largest share in the value of the Group’s Non-current assets as at the end of the third quarter of 2023, as well as the greatest impact on the decrease in the balance thereof. The decrease in the said item in the period discussed is due to the commencement of the amortization of the Phantom Liberty expansion after its launch and increased amortization rates on other assets relating to the main game Cyberpunk 2077. Moreover, in non-current assets, the Group recorded an increase in the balance of Property, plant and equipment in the period discussed. The increase was mainly due to expenditure on construction work at the CD PROJEKT campus in Warsaw (assets under construction). A decrease in Shares in non-consolidated subordinated entities is mainly due to the final settlement of the merger of Spokko sp. z o.o. with CD PROJEKT S.A. Other financial assets, current and non-current, include mainly domestic and foreign Treasury bonds purchased as part of credit risk diversification. The consolidated value of the current and non-current Prepayments and deferred costs recognized as at the end of the analysed period was mainly affected by the amount of the so-called minimum guarantees, i.e. advances and prepayments made by GOG.COM to its suppliers towards fees for the distribution of games offered on the GOG.COM platform, recognized in the GOG.COM segment. The Group also recognizes the settlement of subscriptions for utility software under this item. As at the end of September 2023, the Group’s Other receivables included, in particular, tax receivables and advance payments made by CD PROJEKT RED in respect of development projects, goods for resale and services. The consolidated balance of Trade receivables increased compared with 30 June 2023 mainly as a result of a strong increase in sales associated with the launch of the Phantom Liberty game during the current period, especially in September 2023 when the premiere took place. This naturally resulted in an increase in the balance of receivables relating to licences in the CD PROJEKT RED segment as at the balance sheet date. The total amount 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 (recognized in total in current and non-current Other financial assets) held by the Group as at 30 September 2023 amounted to PLN 1 014 652 thousand. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 11 Note 30.09.2023 30.06.2023 31.12.2022 EQUITY 2 208 144 2 030 808 2 031 466 Equity of the shareholders of CD PROJEKT S.A. 2 208 144 2 030 808 2 031 466 Share capital 11.22 99 911 99 911 100 771 Supplementary capital 1 714 604 1 714 604 1 567 325 Share premium 116 700 116 700 116 700 Treasury shares - - (99 993) Other reserves 15 930 12 984 2 255 Foreign exchange differences on translation 1 815 208 1 904 Retained earnings (30 797) (3 818) (3 987) Net profit (loss) for the period 289 981 90 219 346 491 Non-controlling interests - - - NON-CURRENT LIABILITIES 40 252 30 041 36 186 Other financial liabilities 16 19 640 18 206 18 883 Other liabilities 14 2 501 2 500 2 620 Deferred tax provision 10 49 46 50 Deferred income 15 2 069 2 753 3 669 Provision for retirement and similar benefits 12 366 366 366 Other provisions 13 15 627 6 170 10 598 CURRENT LIABILITIES 164 335 123 658 208 679 Other financial liabilities 16 14 239 8 478 9 578 Trade payables 16 67 302 49 870 72 119 Current income tax liabilities 147 - 2 116 Other liabilities 14 13 722 10 760 10 244 Deferred income 15 13 107 25 611 22 425 Provision for retirement and similar benefits 12 7 156 6 909 4 155 Other provisions 13 48 662 22 030 88 042 TOTAL EQUITY AND LIABILITIES 2 412 731 2 184 507 2 276 331 * restated data As at the end of the third quarter of 2023, the value of Equity of the CD PROJEKT Group amounted to PLN 2 208 144 and was PLN 177 336 thousand higher compared with 30 June 2023, mainly due to the Net profit for the period generated in the current period. The largest negative impact on the value of Equity was the recognition of the past profits of the acquired Spokko sp. z o.o., which were recognized under Retained earnings. An increase in current and non-current Other financial liabilities in the period discussed is mainly due to the remeasurement of instruments hedging the foreign exchange risk related to holding foreign Treasury bonds denominated in foreign currencies. In this item, the Group also recognizes liabilities in respect of the perpetual usufruct of land at the Jagiellońska 74 and Jagiellońska 76 complexes in Warsaw and liabilities in respect of payment of a part of the purchase price of the shares in The Molasses Flood with a deferred payment term. An increase in the balance of the Group’s Trade payables is due to the current operations of the GOG.COM segment and an increase in payables relating to royalties in respect of sales made in the current period. The total of the Group’s Other liabilities in the period discussed comprised mainly current tax liabilities (VAT, PIT, withholding tax) and social security liabilities. The balance of the CD PROJEKT Group’s Deferred income as at the end of September 2023 comprises mainly the following:  GOG.COM – deferred income settlements with the Company’s customers (including the Store credit and Wallet granted);  CD PROJEKT RED and GOG.COM – deferred income concerning subsidies;  CD PROJEKT RED – sales relating to future periods – the so-called minimum guarantees, i.e. advances towards royalties related to sales in future periods, received or receivable from publishers and distribution partners;  GOG.COM – sales relating to future periods – the value of pre-orders for games with a release date in future periods, placed by customers. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 12 Compared with the end of June 2023, the balance of the item discussed decreased mainly due to the execution of pre-orders for the Phantom Liberty expansion, both in the CD PROJEKT RED and GOG.COM segments. The balance of the current and non-current Provision for retirement and similar benefits includes primarily a holiday pay provision in the CD PROJEKT RED segment. The increase in the balance of Other provisions of the CD PROJEKT Group in the third quarter of 2023 concerned mainly the CD PROJEKT RED segment and was primarily due to the recognition of provisions for performance-related remuneration for the current period and an increase in the value of the provision for liabilities relating to settlements with sales distributors and the costs of physical copies of the Cyberpunk 2077 game, resulting from updated estimates. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 13 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 Net profit (loss) for the period Equity of the shareholders of CD PROJEKT S.A. Non- controlling interests Total equity 01.01.2023 – 30.09.2023 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 Corrections of errors - - - - - - (1 938) - (1 938) - (1 938) Equity, as adjusted 100 771 1 567 325 116 700 (99 993) 2 255 1 904 342 504 - 2 031 466 - 2 031 466 Costs of the incentive plan - - - - 13 816 - - - 13 816 - 13 816 Appropriation of the net profit/offset of loss - 246 412 - - - - (246 412) - - - - Payment of dividend - - - - - - (99 911) - (99 911) - (99 911) Redemption of Treasury shares (860) (99 133) - 99 993 - - - - - - - Retained earnings of the acquired entity - - - - - - (26 978) - (26 978) - (26 978) Total comprehensive income - - - - (141) (89) - 289 981 289 751 - 289 751 Equity as at 30.09.2023 99 911 1 714 604 116 700 - 15 930 1 815 (30 797) 289 981 2 208 144 - 2 208 144 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 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 Net profit (loss) for the period Equity of the shareholders of CD PROJEKT S.A. Non- controlling interests Total equity 01.01.2022 – 30.09.2022 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 Corrections of errors - - - - - - (1 336) - (1 336) - (1 336) Equity, as adjusted 100 739 1 425 647 115 909 - 47 994 1 591 201 140 - 1 893 020 - 1 893 020 Costs of the incentive plan - - - - 3 285 - - - 3 285 - 3 285 Appropriation of the net profit/offset of loss - 104 388 - - - - (104 388) - - - - Payment of dividend - - - - - - (100 739) - (100 739) - (100 739) Total comprehensive income - - - - (14 289) 3 448 - 211 861 201 020 - 201 020 Equity as at 30.09.2022 100 739 1 530 035 115 909 - 36 990 5 039 (3 987) 211 861 1 996 586 - 1 996 586 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 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 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 OPERATING ACTIVITIES Net profit/(loss) 202 864 98 889 289 981 211 861 Total adjustments: 30 (111 979) (42 358) (85 935) (17 467) Depreciation and amortization of property, plant and equipment, intangible assets, expenditure on development projects and investment properties 3 271 3 425 9 942 10 771 Amortization of development projects recognized as cost of goods sold 93 935 48 325 137 148 84 541 Foreign exchange (gains)/losses (14 819) (19 888) 4 024 (24 769) Interest and shares in profits (10 466) (9 168) (35 831) (26 719) (Gains)/losses on investing activities (14 501) 13 796 (57 543) 15 282 Increase/(Decrease) in provisions 36 413 13 066 (11 526) (36 231) (Increase)/Decrease in inventories 655 644 5 238 1 394 (Increase)/Decrease in receivables (205 052) (87 658) (126 129) (15 016) Increase/(Decrease) in liabilities, excluding loans and borrowings 17 197 4 762 1 768 12 285 Change in other assets and liabilities (23 916) (11 201) (32 028) (45 874) Other adjustments 5 304 1 539 19 002 6 869 Cash from operating activities 90 885 56 531 204 046 194 394 Income tax expense 21 150 6 636 34 769 21 741 Withholding tax paid abroad 9 655 6 722 25 614 31 356 Income tax (paid)/refunded 1 649 (454) (19 661) (35 407) Net cash from operating activities 123 339 69 435 244 768 212 084 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 16 Note 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 INVESTING ACTIVITIES Inflows 144 830 92 054 565 856 553 821 Sale of intangible assets and property, plant and equipment 129 260 642 274 Repayment of loans granted 1 002 - 1 002 12 202 Sale of shares in a subsidiary - - - 76 Expiry of bank deposits over 3 months 124 680 - 454 650 265 000 Redemption of bonds - 84 853 56 411 257 943 Interest on bonds 1 637 1 147 8 116 3 250 Interest received on deposits 5 912 5 794 23 249 14 811 Inflows from execution of forward contracts 11 470 - 21 743 - Other inflows from investing activities - - 43 265 Outflows 180 594 546 181 749 824 875 014 Acquisition of intangible assets and property, plant and equipment 10 310 10 333 40 004 35 953 Expenditure on development projects 64 831 55 831 227 448 145 542 Expenditure on intangible assets 345 - 724 - Acquisition of investment properties and capitalization of expenditure 57 - 155 145 Loans granted - - 4 215 3 400 Purchase of shares in a subsidiary - - 3 488 - Contribution to the capital of a subsidiary - 2 308 - 28 318 Purchase of bonds and cost of their purchase 34 246 57 380 93 220 225 500 Placement of bank deposits over 3 months 70 805 410 544 380 570 410 544 Outflows from execution of forward contracts - 9 785 - 25 548 Other outflows on investing activities - - - 64 Net cash from investing activities (35 764) (454 127) (183 968) (321 193) FINANCING ACTIVITIES Inflows 1 10 31 30 Payment of finance lease liabilities 1 10 31 30 Outflows 680 101 658 102 426 103 818 Dividends and other payments to shareholders - 100 739 99 911 100 739 Payment of lease liabilities 480 782 1 920 2 675 Interest paid 200 137 595 404 Net cash used in financing activities 31 (679) (101 648) (102 395) (103 788) Net increase/(decrease) in cash and cash equivalents 86 896 (486 340) (41 595) (212 897) Change in cash and cash equivalents in the balance sheet 86 896 (486 340) (41 595) (212 897) Cash and cash equivalents as at the beginning of the period 149 336 685 029 277 827 411 586 Cash and cash equivalents as at the end of the period 236 232 198 689 236 232 198 689 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 17 In the third quarter of 2023, the CD PROJEKT Group reported positive Net cash from operating activities of PLN 123 339 thousand. The consolidated net profit was adjusted for: a) Non-cash items (an increase in total):  Depreciation and amortization;  Amortization of development projects recognized as cost of goods sold which comprises the amortization of expenditure on the development projects Cyberpunk 2077 together with the Phantom Liberty expansion and The Witcher 3: Wild Hunt Complete Edition for new generation consoles Xbox Series X|S and PlayStation5;  Foreign exchange gains/(losses), a decrease resulting mainly from the elimination of foreign exchange gains/(losses) on the remeasurement of foreign Treasury bonds held by the CD PROJEKT RED segment;  Increase/(Decrease) in provisions, an increase relating to an increase in provisions for liabilities;  Other adjustments, an increase resulting mainly from the elimination of the accounting settlement of the costs of the incentive plan and accounting for the merger of Spokko sp. z o.o. with CD PROJEKT S.A. b) Items related to changes in current assets and current liabilities (a decrease in total):  (Increase)/Decrease in inventories, an increase in the balance of cash flows as a result of a drop in inventories;  (Increase)/Decrease in receivables, a decrease in the balance of cash flows mainly due to an increase in the balance of trade receivables of the CD PROJEKT RED segment as at the end of the third quarter of 2023 in connection with an increase in sales in connection with the launch of the Phantom Liberty expansion on 26 September;  Increase/(decrease) in liabilities, excluding loans and borrowings, an increase in the balance of cash flows in consequence of an increase in the balance of the Group’s liabilities;  Change in other assets and liabilities, a decrease in the balance of cash flows resulting mainly from the settlement of pre-orders for Phantom Liberty by the CD PROJEKT RED and GOG.COM segments and an increase in the balance of prepayments and deferred costs in the GOG.COM segment. c) Items reported in other sections of the statement of cash flows – Interest and shares in profits and (Gains)/losses on investing activities which resulted in a decrease in the balance of cash flows from operating activities; d) Difference between the corporate income tax recognized in the income statement and the tax actually paid during the third quarter of 2023, taking into account settlements related to withholding tax. The outflows relating to expenditure incurred on development projects had the largest effect on the negative balance of Net cash flows from investing activities during the third quarter of the current year. In the third quarter of 2023, the CD PROJEKT Group did not generate any material Net cash flows from financing activities. In total, in the third quarter of 2023, the CD PROJEKT Group generated Net cash inflows of PLN 86 896 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 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 19 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: 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 entity: CD PROJEKT S.A. Name of the ultimate parent of the Group: CD PROJEKT S.A. Presentation of the Group Subsidiaries CD PROJEKT S.A. GOG sp. z o.o. CD PROJEKT RED Inc. The Molasses Flood LLC CD PROJEKT SILVER Inc. CD PROJEKT RED Vancouver Studio Ltd. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 20 Consolidation policies Consolidated companies – as at 30 September 2023 % share in capital % share of voting rights consolidation method CD PROJEKT S.A. parent entity - - GOG sp. z o.o. 100% 100% acquisition accounting CD PROJEKT RED Inc. 100% 100% acquisition accounting CD PROJEKT RED Vancouver Studio Ltd. 100% 100% not consolidated The Molasses Flood LLC 71% 71% 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 subsidiary’s share in the parent entity’s total assets does not exceed 2%;  the share in the parent entity’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 eliminated from consolidation may not exceed:  5% of the share in the parent entity’s total assets;  2% of the share in the parent entity’s revenue from sales and financial transactions, where those transactions between the subsidiary and its parent entity which would be eliminated during consolidation are not taken into account when determining whether the said thresholds have been exceeded. Subsidiaries Subsidiaries are all and any entities over which the Group has control which manifests itself by, simultaneously:  having power, consisting of having substantive rights that give the Group the current ability to manage the relevant activities, i.e. those activities which affect the entity’s financial results significantly;  being exposed or having rights to variable returns, consisting of 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. The accounting policies of the 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 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 21 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 going concerns in the foreseeable future, i.e. in the period of at least 12 months after the balance sheet date. As at the date of these financial statements being signed, the Management Board of the Parent Company did not identify 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 discontinuation or significant curtailment of its operations to date. By the date of preparation of the consolidated financial statements for the period from 1 July to 30 September 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 not disclosed 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, endorsed by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), applicable as at 30 September 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 was 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 Presentation of Financial Statements and IFRS 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; Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 22  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;  Amendments to IAS 12 The International Tax Reform - Pillar Two Model Rules - endorsed on 8 November 2023, applicable to reporting periods beginning on or after 1 January 2023. These amendments have no material impact on the accounting policies adopted by the Group with regard to the Group’s operations or its financial results. Standards published and endorsed by the EU but not yet effective and their impact on the Group’s financial statements  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 does not expect a material impact of the amendments introduced on the accounting policies applied by the Group with regard to the Group’s operations or its net profit or loss. 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 and Non-current Liabilities with Covenants - applicable to reporting periods beginning on or after 1 January 2024;  Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures – Supplier Finance Arrangements - applicable to reporting periods beginning on or after 1 January 2024;  Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates - Lack of Exchangeability - applicable to reporting periods beginning on or after 1 January 2025. 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 Functional currency and presentation currency The functional currency of the Group and the Parent Company and the reporting currency of these financial statements is the Polish zloty (PLN). Unless stated otherwise, all data is presented in thousands of Polish zlotys (PLN ‘000). Transactions and balances Transactions expressed in foreign currencies are translated into the functional currency based on the exchange rate 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. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 23 Assumption of comparability of the financial statements and changes in 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 the 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. Presentation changes and correction of errors In these interim condensed consolidated financial statements for the period from 1 July to 30 September 2023, adjustments to certain financial data were made. In order to ensure comparability of the financial data in the reporting period, the data for the period from 1 July to 30 September 2022, from 1 January to 30 September 2022 and as at 31 December 2022 and 30 June 2023 were adjusted. The data are presented after the following corrections:  In the statement of financial position as at 31 December 2022, provisions for holiday pay were entered. Consequently, the following items changed: - Expenditure on development projects – an increase of PLN 1 967 thousand; - Deferred income tax assets – an increase of PLN 240 thousand; - Retained earnings – a decrease of PLN 1 336 thousand; - Net profit (loss) for the period – a decrease of PLN 602 thousand ; - Provision for retirement and similar benefits – an increase of PLN 4 145 thousand. The change affected the Net profit or loss and Equity.  In the statement of financial position as at 30 June 2023, provisions for holiday pay were entered. Consequently, the following items changed: - Expenditure on development projects – an increase of PLN 3 524 thousand; - Deferred income tax assets – an increase of PLN 386 thousand; - Retained earnings – a decrease of PLN 1 937 thousand; - Net profit (loss) for the period – a decrease of PLN 1 052 thousand ; - Provision for retirement and similar benefits – an increase of PLN 6 899 thousand. The change affected the Net profit or loss and Equity.  In the statement of cash flows for the period from 1 July to 30 September 2022, provisions for holiday pay were recognized. Consequently, the following items changed: - Net profit/(loss) – an increase of PLN 185 thousand; - Increase/(Decrease) in provisions – a decrease of PLN 209 thousand; - Income tax expense – an increase of PLN 24 thousand.  In the statement of cash flows for the period from 1 January to 30 September 2022, provisions for holiday pay were recognized. Consequently, the following items changed: - Net profit/(loss) – a decrease of PLN 601 thousand; - Increase/(Decrease) in provisions – an increase of PLN 683 thousand; - Income tax expense – a decrease of PLN 82 thousand. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 24  In the income statement for the period from 1 July to 30 September 2022, provisions for holiday pay were recognized. Consequently, the following items changed: - Administrative expenses – a decrease of PLN 209 thousand; - Income tax – an increase of PLN 24 thousand. The change affected the Net profit or loss and Equity.  In the income statement for the period from 1 January to 30 September 2022, provisions for holiday pay were recognized. Consequently, the following items changed: - Administrative expenses – an increase of PLN 683 thousand; - Income tax – a decrease of PLN 82 thousand. The change affected the Net profit or loss and Equity. In these interim condensed consolidated financial statements for the period from 1 July to 30 September 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 of the data for the period from 1 July to 30 September 2022 and from 1 January to 30 September 2022 was changed. The data are presented after the following adjustment:  In the income statement for the period from 1 July 2022 to 30 September 2022, the presentation of the provisions for the variable component of the performance-related remuneration of the Management Board Members was changed. Consequently, the following items changed: - Selling expenses – a decrease of PLN 9 315 thousand; - Administrative expenses – an increase of PLN 9 315 thousand. The change did not affect the Net profit or loss or Equity.  In the income statement for the period from 1 January to 30 September 2022, the presentation of the provisions for the variable component of the performance-related remuneration of the Management Board Members was changed. Consequently, the following items changed: - Selling expenses – a decrease of PLN 20 023 thousand; - Administrative expenses – an increase of PLN 20 023 thousand. The change did not affect the Net profit or loss or Equity. 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 3 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 26 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 determination of segments and the profit or loss of a segment compared with the last annual consolidated financial statements The Group did not make any changes in the determination of segments or in the measurement of the profits or losses of the individual segments in relation to the financial statements for the year ended 31 December 2022. There are no differences between the measurement of the assets, liabilities, profits and losses of the Group’s reporting segments. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 27 Information on individual operating segments Continuing operations Consolidation eliminations Total continuing operations CD PROJEKT RED GOG.COM 01.07.2023 – 30.09.2023 Sales revenue 382 042 83 700 (23 060) 442 682 from external customers 358 982 83 700 - 442 682 between segments 23 060 - (23 060) - Net profit/(loss) of the segment 195 256 7 590 18 202 864 Continuing operations Consolidation eliminations Total continuing operations CD PROJEKT RED GOG.COM 01.07.2022 – 30.09.2022 Sales revenue 205 157 44 022 (3 665) 245 514 from external customers 201 560 43 954 - 245 514 between segments 3 597 68 (3 665) - Net profit/(loss) of the segment 97 562 1 306 21 98 889 * restated data Continuing operations Consolidation eliminations Total continuing operations CD PROJEKT RED GOG.COM 01.01.2023 – 30.09.2023 Sales revenue 626 109 168 222 (26 639) 767 692 from external customers 599 538 168 154 - 767 692 between segments 26 571 68 (26 639) - Net profit/(loss) of the segment 282 521 7 449 11 289 981 Continuing operations Consolidation eliminations Total continuing operations CD PROJEKT RED GOG.COM 01.01.2022 – 30.09.2022 Sales revenue 500 722 132 773 (9 988) 623 507 from external customers 490 938 132 569 - 623 507 between segments 9 784 204 (9 988) - Net profit/(loss) of the segment 210 264 1 659 (62) 211 861 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 28 Consolidated income statement by segment for the period from 01.07.2023 to 30.09.2023 CD PROJEKT RED GOG.COM Consolidation eliminations Total Sales revenue 382 042 83 700 (23 060) 442 682 Sales of products 380 646 - 9 888 390 534 Sales of services 191 307 (43) 455 Sales of goods for resale and materials 1 205 83 393 (32 905) 51 693 Cost of sales of products, services, goods for resale and materials 105 689 60 579 (23 101) 143 167 Costs of products and services sold 104 494 - (84) 104 410 Cost of goods for resale and materials sold 1 195 60 579 (23 017) 38 757 Gross profit/(loss) on sales 276 353 23 121 41 299 515 Selling expenses 53 275 12 883 (18) 66 140 Administrative expenses 49 031 2 119 150 51 300 Other operating income 7 578 449 (615) 7 412 Other operating expenses 3 555 372 (684) 3 243 (Impairment)/reversal of impairment of financial instruments (5) - - (5) Operating profit/(loss) 178 065 8 196 (22) 186 239 Finance income 57 186 3 238 - 60 424 Finance costs 10 015 3 019 (40) 12 994 Profit/(loss) before tax 225 236 8 415 18 233 669 Income tax 29 980 825 - 30 805 Net profit/(loss) 195 256 7 590 18 202 864 Net profit/(loss) attributable to owners of CD PROJEKT S.A. 195 256 7 590 18 202 864 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 29 Consolidated income statement by segment for the period from 01.07.2022 to 30.09.2022 CD PROJEKT RED GOG.COM Consolidation eliminations Total Sales revenue 205 157 44 022 (3 665) 245 514 Sales of products 201 745 - 1 444 203 189 Sales of services 576 68 (336) 308 Sales of goods for resale and materials 2 836 43 954 (4 773) 42 017 Cost of sales of products, services, goods for resale and materials 50 916 31 672 (3 388) 79 200 Costs of products and services sold 48 657 4 (59) 48 602 Cost of goods for resale and materials sold 2 259 31 668 (3 329) 30 598 Gross profit/(loss) on sales 154 241 12 350 (277) 166 314 Selling expenses 34 989 10 387 (312) 45 064 Administrative expenses 25 391 1 611 (29) 26 973 Other operating income 7 817 2 891 (889) 9 819 Other operating expenses 6 810 808 (835) 6 783 (Impairment)/reversal of impairment of financial instruments (9) - - (9) Operating profit/(loss) 94 859 2 435 10 97 304 Finance income 33 984 3 563 (4 328) 33 219 Finance costs 18 245 4 374 (4 343) 18 276 Profit/(loss) before tax 110 598 1 624 25 112 247 Income tax 13 036 318 4 13 358 Net profit/(loss) 97 562 1 306 21 98 889 Net profit/(loss) attributable to owners of CD PROJEKT S.A. 97 562 1 306 21 98 889 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 30 Consolidated income statement by segment for the period from 01.01.2023 to 30.09.2023 CD PROJEKT RED GOG.COM Consolidation eliminations Total Sales revenue 626 109 168 222 (26 639) 767 692 Sales of products 617 257 - 11 377 628 634 Sales of services 484 746 (189) 1 041 Sales of goods for resale and materials 8 368 167 476 (37 827) 138 017 Cost of sales of products, services, goods for resale and materials 157 588 120 331 (26 563) 251 356 Costs of products and services sold 148 210 4 (113) 148 101 Cost of goods for resale and materials sold 9 378 120 327 (26 450) 103 255 Gross profit/(loss) on sales 468 521 47 891 (76) 516 336 Selling expenses 119 431 33 067 (28) 152 470 Administrative expenses 105 926 6 045 (67) 111 904 Other operating income 41 294 1 140 (1 687) 40 747 Other operating expenses 12 160 1 001 (1 605) 11 556 (Impairment)/reversal of impairment of financial instruments (1) - - (1) Operating profit/(loss) 272 297 8 918 (63) 281 152 Finance income 75 986 4 019 - 80 005 Finance costs 6 325 4 596 (128) 10 793 Profit/(loss) before tax 341 958 8 341 65 350 364 Income tax 59 437 892 54 60 383 Net profit/(loss) 282 521 7 449 11 289 981 Net profit/(loss) attributable to owners of CD PROJEKT S.A. 282 521 7 449 11 289 981 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 31 Consolidated income statement by segment for the period from 01.01.2022 to 30.09.2022 CD PROJEKT RED GOG.COM Consolidation eliminations Total Sales revenue 500 722 132 773 (9 988) 623 507 Sales of products 485 216 - 3 841 489 057 Sales of services 2 582 204 (1 164) 1 622 Sales of goods for resale and materials 12 924 132 569 (12 665) 132 828 Cost of sales of products, services, goods for resale and materials 94 733 94 880 (9 052) 180 561 Costs of products and services sold 85 821 47 (228) 85 640 Cost of goods for resale and materials sold 8 912 94 833 (8 824) 94 921 Gross profit/(loss) on sales 405 989 37 893 (936) 442 946 Selling expenses 104 867 31 261 (431) 135 697 Administrative expenses 69 343 4 775 (256) 73 862 Other operating income 13 178 5 074 (3 048) 15 204 Other operating expenses 15 189 2 680 (3 177) 14 692 (Impairment)/reversal of impairment of financial instruments (17) - - (17) Operating profit/(loss) 229 751 4 251 (120) 233 882 Finance income 70 316 8 007 (9 734) 68 589 Finance costs 37 244 10 068 (9 799) 37 513 Profit/(loss) before tax 262 823 2 190 (55) 264 958 Income tax 52 559 531 7 53 097 Net profit/(loss) 210 264 1 659 (62) 211 861 Net profit/(loss) attributable to owners of CD PROJEKT S.A. 210 264 1 659 (62) 211 861 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 32 Consolidated statement of financial position by segment as at 30.09.2023 CD PROJEKT RED GOG.COM Consolidation eliminations Total NON-CURRENT ASSETS 1 241 119 51 089 (17 284) 1 274 924 Property, plant and equipment 170 522 2 559 (1 462) 171 619 Intangible assets 67 982 2 015 (490) 69 507 Expenditure on development projects 572 913 2 271 234 575 418 Investment properties 34 612 - - 34 612 Goodwill 56 438 - - 56 438 Investments in subordinated entities 15 552 - (15 552) - Shares in non-consolidated subordinated entities 40 863 - - 40 863 Prepayments and deferred costs 5 390 43 113 - 48 503 Other financial assets 254 687 - - 254 687 Deferred tax assets 21 780 1 131 (14) 22 897 Other receivables 380 - - 380 CURRENT ASSETS 1 075 461 82 995 (20 649) 1 137 807 Inventories 7 463 - - 7 463 Trade receivables 297 037 11 445 (20 649) 287 833 Current income tax receivable 14 853 - - 14 853 Other receivables 31 943 1 804 - 33 747 Prepayments and deferred costs 9 682 16 704 - 26 386 Other financial assets 267 106 937 - 268 043 Bank deposits over 3 months 263 250 - - 263 250 Cash and cash equivalents 184 127 52 105 - 236 232 TOTAL ASSETS 2 316 580 134 084 (37 933) 2 412 731 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 33 CD PROJEKT RED GOG.COM Consolidation eliminations Total EQUITY 2 177 266 46 623 (15 745) 2 208 144 Equity of the shareholders of CD PROJEKT S.A. 2 177 266 46 623 (15 745) 2 208 144 Share capital 99 911 136 (136) 99 911 Supplementary capital 1 681 868 38 251 (5 515) 1 714 604 Share premium 116 700 - - 116 700 Other reserves 16 943 850 (1 863) 15 930 Foreign exchange differences on translation 866 (65) 1 014 1 815 Retained earnings (21 543) 2 (9 256) (30 797) Net profit (loss) for the period 282 521 7 449 11 289 981 Non-controlling interests - - - - NON-CURRENT LIABILITIES 40 225 1 037 (1 010) 40 252 Other financial liabilities 19 640 1 010 (1 010) 19 640 Other liabilities 2 501 - - 2 501 Deferred tax provision 49 - - 49 Deferred income 2 069 - - 2 069 Provision for retirement and similar benefits 339 27 - 366 Other provisions 15 627 - - 15 627 CURRENT LIABILITIES 99 089 86 424 (21 178) 164 335 Other financial liabilities 14 239 529 (529) 14 239 Trade payables 22 194 65 394 (20 286) 67 302 Current income tax liabilities - 147 - 147 Other liabilities 4 774 8 948 - 13 722 Deferred income 7 051 6 056 - 13 107 Provision for retirement and similar benefits 7 155 1 - 7 156 Other provisions 43 676 5 349 (363) 48 662 TOTAL EQUITY AND LIABILITIES 2 316 580 134 084 (37 933) 2 412 731 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 34 Consolidated statement of financial position by segment as at 30.06.2023 CD PROJEKT RED GOG.COM Consolidation eliminations Total NON-CURRENT ASSETS 1 273 234 44 633 (17 281) 1 300 586 Property, plant and equipment 159 837 2 778 (1 606) 161 009 Intangible assets 69 146 1 129 (490) 69 785 Expenditure on development projects 597 653 2 212 234 600 099 Investment properties 37 429 - - 37 429 Goodwill 56 438 - - 56 438 Investments in subordinated entities 15 405 - (15 405) - Shares in non-consolidated subordinated entities 43 477 - - 43 477 Prepayments and deferred costs 6 100 36 627 - 42 727 Other financial assets 242 203 - - 242 203 Deferred tax assets 45 171 1 887 (14) 47 044 Other receivables 375 - - 375 CURRENT ASSETS 840 247 51 078 (7 404) 883 921 Inventories 8 118 - - 8 118 Trade receivables 83 176 5 035 (4 654) 83 557 Current income tax receivable 10 784 1 572 - 12 356 Other receivables 40 432 1 927 - 42 359 Prepayments and deferred costs 9 484 14 760 (2 750) 21 494 Other financial assets 249 576 - - 249 576 Bank deposits over 3 months 317 125 - - 317 125 Cash and cash equivalents 121 552 27 784 - 149 336 TOTAL ASSETS 2 113 481 95 711 (24 685) 2 184 507 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 35 CD PROJEKT RED GOG.COM Consolidation eliminations Total EQUITY 2 007 539 38 887 (15 618) 2 030 808 Equity of the shareholders of CD PROJEKT S.A. 2 007 539 38 887 (15 618) 2 030 808 Share capital 99 911 136 (136) 99 911 Supplementary capital 1 681 868 38 251 (5 515) 1 714 604 Share premium 116 700 - - 116 700 Other reserves 13 997 704 (1 717) 12 984 Foreign exchange differences on translation (741) (65) 1 014 208 Retained earnings 5 436 2 (9 256) (3 818) Net profit (loss) for the period 90 368 (141) (8) 90 219 Non-controlling interests - - - - NON-CURRENT LIABILITIES 30 014 1 174 (1 147) 30 041 Other financial liabilities 18 206 1 147 (1 147) 18 206 Other liabilities 2 500 - - 2 500 Deferred tax provision 46 - - 46 Deferred income 2 753 - - 2 753 Provision for retirement and similar benefits 339 27 - 366 Other provisions 6 170 - - 6 170 CURRENT LIABILITIES 75 928 55 650 (7 920) 123 658 Other financial liabilities 8 251 743 (516) 8 478 Trade payables 19 501 34 972 (4 603) 49 870 Other liabilities 5 415 5 345 - 10 760 Deferred income 18 479 9 882 (2 750) 25 611 Provision for retirement and similar benefits 6 908 1 - 6 909 Other provisions 17 374 4 707 (51) 22 030 TOTAL EQUITY AND LIABILITIES 2 113 481 95 711 (24 685) 2 184 507 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 36 Consolidated statement of financial position by segment as at 31.12.2022 CD PROJEKT RED GOG.COM Consolidation eliminations Total NON-CURRENT ASSETS 1 106 752 32 593 (17 160) 1 122 185 Property, plant and equipment 143 837 3 269 (1 854) 145 252 Intangible assets 69 476 171 (490) 69 157 Expenditure on development projects 473 495 1 439 235 475 169 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 51 107 1 954 41 53 102 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 2 201 976 96 925 (22 570) 2 276 331 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 37 CD PROJEKT RED GOG.COM Consolidation eliminations Total EQUITY 2 008 048 38 715 (15 297) 2 031 466 Equity of the shareholders of CD PROJEKT S.A. 2 008 048 38 715 (15 297) 2 031 466 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 5 015 4 (9 006) (3 987) Net profit (loss) for the period 341 493 5 248 (250) 346 491 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 retirement and similar benefits 339 27 - 366 Other provisions 10 598 - - 10 598 CURRENT LIABILITIES 157 772 56 843 (5 936) 208 679 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 retirement and similar benefits 4 154 1 - 4 155 Other provisions 83 267 5 281 (506) 88 042 TOTAL EQUITY AND LIABILITIES 2 201 976 96 925 (22 570) 2 276 331 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 38 Operating segments In the third 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). These operations consist of creating and publishing video games, selling licences for their distribution, coordinating sales promotions, and the production, sales licensing and releasing 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 Parent Company - the Witcher and Cyberpunk. The studio is 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 has started internal concept work on the third franchise for a planned future video game with the code name Hadar. 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 with an expansion The Liberty Phantom released on 26 September 2023. A network game Gwent: The Witcher Card Game has been available since 2018 (PC, macOS, iOS, Android). In addition, the Parent Company’s offer includes a game based on Gwent’s mechanics: Thronebreaker: The Witcher Tales (PC, iOS, Nintendo Switch, Xbox One, PlayStation 4, Android) and Gwent: Rogue Mage (PC, iOS, Android) - a single player expansion to Gwent: The Witcher Card Game. GOG.COM The scope and model of operations GOG.COM is one of the world’s most popular independent digital distribution platforms for computer games, which is distinguished by offering digital products without security features that make it difficult for users to use the games they have purchased (DRM). The platform is available in English, French, German, Russian, Chinese and Polish, offering customers not only a fully localized website or games, but also (with the exception of the Russian version) dedicated customer service, technical support, direct marketing activity in a given language and popular local payment methods (in twelve currencies). 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 of digital distribution of the games via own GOG.COM shop and GOG GALAXY application. The platform makes it possible to purchase a 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 the handling of payments made in the PC version of the game. Key products As at the date of publication of this report, more than 9 000 products from over 1 200 partners are available on the GOG.COM digital distribution platform. These include both timeless classics and 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 application 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. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 39 Description of the Issuer’s major achievements or failures in the third quarter of 2023 by operating segment CD PROJEKT RED Events relating to Cyberpunk 2077 On 6 July 2023, CD PROJEKT RED announced the dates and locations for its community event series, the Phantom Liberty Tour. As part of the series, eight events were held around the world during which fans had the chance to play a preview of Cyberpunk 2077 expansion and meet the creators from CD PROJEKT RED. On 14 July, Cyberpunk 2077 crossed the rating threshold on Steam to “Very Positive” - meaning that at least 80 per cent of the reviews posted were classified as positive. The global launch of the novel Cyberpunk 2077: No Coincidence, by a popular Polish science fiction writer Rafał Kosik, took place on 8-10 August 2023. On 22 August, during the opening event at gamescom in Cologne, Opening Night Live, CD PROJEKT RED presented New Ways to Play - a video announcing new features introduced to Cyberpunk 2077 and the Phantom Liberty expansion as part of the biggest 2.0 update to date. On the same day, NVIDIA, a close partner of the CD PROJEKT RED studio, presented a trailer announcing and demonstrating the innovative DLSS 3.5 technology. Among the titles that are the first to support this technology is Cyberpunk 2077: Phantom Liberty. Between 23 and 27 August 2023, the participants in the gamescom fair in Cologne had the opportunity to play a preview of Phantom Liberty as part of cooperation with Xbox. On 14 September 2023, the studio launched a special episode of Night City Wire to promote Phantom Liberty, which was focused on Idris Elba and the character he plays, as well as on the music. The first reviews of the Phantom Liberty expansion appeared on 20 September. On 21 September, Cyberpunk 2077 received update 2.0, introducing a number of changes to the base gameplay. Five days later, on 26 September, the Phantom Liberty expansion had its global premiere. On 29 September 2023, a track by Dawid Podsiadło composed especially for Phantom Liberty was released. The newly-launched music video appeared in the game’s credits (the so-called credit song). After the reporting period, on 5 October 2023, the CD PROJEKT Investor Day took place. During the event, the Management Board of CD PROJEKT S.A. summarized the release of Phantom Liberty and announced that by 3 October 2023 sales of the expansion had exceeded 3 million copies. On the other hand, the basic version of the game, Cyberpunk 2077, has sold more than 25 million copies. On that day, it was also announced that CD PROJEKT had entered into collaboration with the production studio Anonymous Content to jointly create a live-action project in the world of Cyberpunk. On 10 November 2023, Cyberpunk 2077: Phantom Liberty won awards for the best game expansion and the best game trailer at the Golden Joystick 2023 gala. On 13 November, Cyberpunk 2077 won 5 nominations in The Game Awards 2023. The Cyberpunk 2077: Phantom Liberty expansion was nominated in the categories of the best narrative, the best acting performance for Idris Elba (who plays the role of the secret agent Solomon Reed in the game) and in the Player’s Voice category where the winner is selected solely by the players. Moreover, the basic version of the game, Cyberpunk 2077, won the nominations for the best community support and the best ongoing game. On 21 November, CD PROJEKT announced the release of Cyberpunk 2077: Ultimate Edition. It is an omnibus edition of Cyberpunk 2077 comprising the basic version of the game, the feature expansion Phantom Liberty, Update 2.0, as well as a set of bonus content and access to the My Rewards item pack. The title will be released for Xbox Series X|S and PlayStation 5 consoles and for PC in digital box issue distribution and will be, at the same time, the first edition of the game for new generation consoles. The launch is scheduled for 5 December 2023. On 28 November, CD PROJEKT also announced that, according to the latest estimates, by the date of publication of this report, total sales of the Cyberpunk 2077 - Phantom Liberty expansion had exceeded 4.3 million copies. Events relating to the Witcher series games After the reporting period, on 19 October 2023, a crowdfunding campaign was launched for a board game The Witcher: Path of Destiny, developed in collaboration with Go On Board. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 40 Other On 3 July 2023, a summer internship programme began at CD PROJEKT RED. For three months, the selected participants had the opportunity to get to know the work of the studio from the inside and participate in the final phase of preparation for the release of the Phantom Liberty expansion. 18 July 2023 saw the re-opening of the CD PROJEKT RED GEAR Store - a mail-order shop with gadgets from the Witcher and Cyberpunk universes addressed to fans of the studio’s games. The shop is now run by an external partner, DPI Merchandising. The Promised Land Art Festival, organized by CD PROJEKT RED and EC1 in Łódź, took place between 2 and 6 September 2023. For four days, representatives of the video games, film and art sectors had the opportunity to participate in interesting lectures, panel discussions, workshops and networking to share experiences and gain new contacts. The representatives of CD PROJEKT RED were also among the speakers and lecturers at the event. GOG.COM Digital distribution of games As at the date of publication of this report, the product range on GOG.COM comprises more than 9 000 items. In the third quarter of 2023, the GOG.COM catalogue expanded to include, among other things, Cyberpunk 2077: Phantom Liberty, Fallout 4: Game of the Year Edition, Jagged Alliance 3, Warhammer 40,000: Dawn of War II - Grand Master Collection and Yakuza: Like a Dragon Hero Edition. 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. During the reporting period, special promotions took place on GOG.COM in addition to weekly promotions - in July and August these included the ‘Make the classics last forever’ classic games sale, the French Games Week, the Made in Ukraine games sale and the Autumn Sale, among other things. In turn, in September, a special promotional event was organized to celebrate GOG.COM’s 15th anniversary. The key event on GOG.COM during the reporting period was the release of Cyberpunk 2077: Phantom Liberty. The expansion was released on the platform on 26 September, becoming an absolute bestseller - by 3 October 2023, approximately 10% of over 3 million copies of the Cyberpunk 2077 expansion sold had been purchased via the GOG.COM platform. Other corporate events On 10 July 2023, as a result of decisions adopted by the Board of Directors of CD PROJEKT Inc. (currently: CD PROJEKT RED Inc.) and CD PROJEKT S.A. (its sole shareholder), the company’s name was changed from “CD PROJEKT Inc.” to “CD PROJEKT RED Inc.” and its principal place of business was relocated to Boston (Waltham), Massachusetts. On 26 July 2023, the Management Board of the Parent Company announced a decision to adjust the scale and structure of the Parent Company’s team to its operating needs and project-and-publishing plans executed under the strategy of the CD PROJEKT Group. As a result, a reduction in workforce is being carried out, covering 9% of the personnel in the CD PROJEKT RED studio, including, among other things, the production and publishing teams as well as the back office. The decision adopted is related to the ongoing transformation which involved, among other things, the CD PROJEKT RED studio implementing the Agile methodology, making production methods more efficient and optimizing work organization. The process is planned to end in the first quarter of 2024. On 31 August 2023, the District Court for the Capital City of Warsaw in Warsaw entered the merger of CD PROJEKT S.A. with its subsidiary Spokko sp. z o.o. as the target company in the Register of Businesses. The merger was carried out in accordance with the merger plan announced on 20 April 2023 . On 21 September 2023, in order to harmonize the corporate names of the positions held by the Management Board members, the Supervisory Board of CD PROJEKT S.A. decided that, starting from the date of registration of the Company’s amended Articles of Association, which took place on 9 October 2023:  Adam Kiciński, who held the position of the President of the Parent Company’s Management Board until that date, would hold the position of a Member of the Management Board of the Parent Company for the current term of office;  Piotr Nielubowicz, who held the position of the Vice-President of the Management Board responsible for Finance until that date, would hold the position of a Member of the Management Board of the Parent Company for the current term of office. In addition, on the same date, the Management Board of CD PROJEKT S.A., acting on the basis of the Rules of Procedure of the Management Board, decided to adopt five additional designations of the functions performed by the Members of the Management Board, corresponding to the current internal segregation of duties with regard to the individual areas of the Parent Company’s operations and the roles performed by the Members of the Management Board. As a result, the Members of the Management Board will also use the following terms to specify their respective positions: Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 41  Adam Kiciński - Chief Executive Officer (CEO);  Piotr Nielubowicz - Chief Financial Officer (CFO);  Adam Badowski - Chief Creative Officer (CCO);  Michał Nowakowski - Chief Commercial Officer (CCO);  Piotr Karwowski - Joint Chief Operating Officer (Joint COO);  Paweł Zawodny - Joint Chief Operating Officer (Joint COO);  Jeremiah Cohn - Chief Marketing Officer (CMO). On 5 October 2023, Mr. Adam Kiciński, CEO of CD PROJEKT S.A., informed the Company of his intention to stand as a future candidate for the position of Member of the Supervisory Board of the Company from 2025 and, as a consequence, of his intention to resign, in the future, from the position of Member of the Management Board as of the end of 2024. The full contents of Mr. Adam Kiciński’s letter to the Parent Company is attached as an appendix to the current report no. 39/2023 . Moreover, in connection with the said decision, the Management Board of CD PROJEKT S.A. has decided that as of 1 January 2024 the internal segregation of duties with regard to the individual areas of the Company’s business activities among the Members of the Management Board will be updated and, as a consequence, the roles and designations of the functions of the Members of the Management Board will be changed as follows:  Adam Kiciński will perform the role of the Chief Strategy Officer (CSO);  the role of the Chief Executive Officer (CEO) will be performed jointly by: Mr. Adam Badowski, currently performing the role of the Chief Creative Officer, who has been with the Parent Company for 20 years, and Mr. Michał Nowakowski, currently performing the role of the Chief Commercial Officer, who has been with the Parent Company for 18 years. Mr. Adam Badowski and Mr. Michał Nowakowski will use the same functional designation: Joint Chief Executive Officer (Joint CEO). Factors affecting the Group’s future performance For the future growth of the Parent Company and the Group, the ability to retain and offer growth opportunities to a team of world- class creative professionals and experts, and to attract a growing number of specialists, to work on the Group’s future releases 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, the effective execution of the CD PROJEKT RED production plan presented in October 2022 as part of the Strategy Update and a further increase in franchise recognizability and popularity (including through collaboration with external parties) and enhancing selected titles developed as part of the IP owned to include a multiplayer feature will be the key aspects to support the Group’s growth. The material Group-specific external and internal factors which may have a negative effect on the Group’s operations and development, identified by the Management Board and the risk management system functioning within the Parent Company, are described in the risks section of the Management Board Report on CD PROJEKT Group activities for 2022 . CD PROJEKT RED In the CD PROJEKT RED segment, the expansion of the operations is linked directly 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 Witcher universe already issued by the Parent Company. In the following periods, the progress of the production work and the market acceptance of the Parent Company’s next productions in progress, as well as the creation and release of high-quality support products within the Parent Company’s franchises, which will contribute to the growth of the Parent Company’s brand recognition, will be of key importance to the Parent Company’s development and results. In the coming quarters, the activities of particular importance for the CD PROJEKT RED studio will include the release of an omnibus edition of Cyberpunk 2077 consisting of the basic version of the game, the feature expansion Phantom Liberty and a set of premium content. Another important process in the context of the development of the CD PROJEKT RED studio, which is under way and whose implementation will continue in the coming quarters, is the integration of development projects with the new Unreal Engine 5, following the signing of the licence and partnership agreement with Epic Games in March 2022. The use of the new engine should improve the game development process. The strategic partnership assumes improving the UE5 engine in terms of handling open world type games and the adaptation and optimization of its elements, paying attention 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. Starting work on the EU5 engine opened prospects for recruitment to the studio’s development teams due to a good knowledge of the Unreal Engine among game creators. The key factor for maintaining the current high growth rate of the CD PROJEKT RED segment in the future is to further develop 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 a more flexible one, based on agile methodologies and supporting the quality of future products. The development of the newly created CD PROJEKT RED North America studio, including the opening of an office in Boston, is an important element of CD PROJEKT RED’s strategy. The transformation of the business to a publishing model based on two Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 42 concurrent brands and several simultaneous projects will potentially allow production and financial optimization, an increased frequency of launches and higher total revenue and further diversification of risks, while creating more opportunities for professional self-realization for the creators employed by the Parent Company. GOG.COM In the GOG.COM segment, growth was supported by the increasing propensity of consumers to purchase games directly online in recent years. For the further development of the GOG.COM platform, it will be important to make it more popular among gamers and to attract more newly released 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. The successive first releases of new games on GOG.COM each time contribute to increasing user activity and translate into sales growth. In addition to continuously expanding the catalogue of the products offered, the growth of GOG sp. z o.o.’s operations also requires broadening the user base by reaching out 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 own PR activities, collaboration with business partners and looking for new opportunities for partnership actively, and the synergies resulting from the cooperation with CD PROJEKT S.A. The results and development of the activities carried out as part of the GOG.COM segment, including the acquisition of unique knowledge and experience and the full use of the technological solutions possessed, will be affected by the development of functionalities which support the sale of games on the platform, including better integration of the monetization mechanisms of the GOG GALAXY application with the GOG.COM shop, as well as increased activity to expand the range of classic games offered on the platform. Other The development of the CD PROJEKT Group will also be influenced by the development projects 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 the CD PROJEKT Group’s products as well as games distributed on the GOG.COM platform in the territory of Russia and Belarus. The Company estimated that in the period of 12 months from March 2021 to February 2022 the total share of Russia and Belarus in the 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 has terminated its cooperation with the Russian and Belarussian suppliers and is not currently considering engaging in new collaboration. As of the date of publication of these financial statements, the Group’s operating activities are carried out without any disruptions, and the effects of the Russian armed invasion of Ukraine do not have a significant direct negative impact on the Group’s operations. In the opinion of the Management Board of the Parent Company, 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 the next quarter of 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 future scale and 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 Ukraine by the Russian armed forces on the 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 Parent Company’s knowledge at the date of publication of these financial statements. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 43 Seasonality or cyclicality of the Group’s operations CD PROJEKT RED The segment’s revenues and results are strongly affected by the videogame release schedule. CD PROJEKT RED usually takes between 2 and 5 years to produce a game. Typically, initial development projects on a new game starts before the production of the previous game has been completed and the game has been released on the market. CD PROJEKT RED also engages in smaller-scale projects, e.g. expansions for its own games or adapting the existing products to work on new gaming platforms. Such projects may be carried out directly by the Parent Company or by its external partners. 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 quarters, while the first and the third quarters (the latter of which overlaps with the summer vacation season) see weaker sales. In addition to pure development activities, the Parent Company also develops its franchises in other fields actively, with a view to continually expanding its audience and exploring other types of media and products. Chart 1 Effect of new releases on the quarterly sales of products, goods for resale and materials of the CD PROJEKT RED segment in 2011-2023 (in PLN thousand) 0 200000 400000 600000 800000 1000000 1200000 1400000 1600000 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 44 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 reported in the second and fourth quarters, with lower revenues in the first and third quarters. Sales in the second and fourth quarters are temporarily boosted by promotional campaigns normally 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) Key customers The CD PROJEKT Group collaborates with external customers whose share in revenue exceeds 10% of the Group’s consolidated revenue. Within the CD PROJEKT RED segment, the commercial activities carried out by CD PROJEKT S.A. in cooperation with two customers generated cumulatively, by the end of the third quarter of 2023, sales revenue exceeding 10% of the Group's total consolidated sales revenue, amounting to PLN 303 887 thousand and PLN 131 422 thousand, i.e. 39.58% and 17.12%, respectively, of the Group’s total revenue. These customers are not related to either CD PROJEKT S.A. or its subsidiaries. None of the Group’s other external customers exceeded the threshold of 10% of the Group’s consolidated revenue. 0 40000 80000 120000 160000 200000 Q1 Q2 Q3 Q4 2018 2019 2020 2021 2022 2023 45 Notes – other explanatory notes to the interim condensed consolidated financial statements 4 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements 46 Note 1. Description of those items affecting assets, liabilities, equity, net profit or loss and cash flows which are unusual in terms of their type, size and impact Material events The release of the Phantom Liberty expansion of Cyberpunk 2077 was a material event which was not observed in the comparative period but which affected the net profit or loss, assets, liabilities and cash flows of the CD PROJEKT Group in the third quarter of 2023, resulting in:  an increase in Net sales of products, services, goods for resale and materials in both segments of the Group;  a decrease in the balance of Expenditure on development projects and an increase in Costs of products and services sold in the CD PROJEKT RED segment due to the settlement and commencement of amortization of the expenditure on the production of the expansion;  an increase in Costs of products and services sold in the CD PROJEKT RED segment due to a change in the amortization pattern of the basic Cyberpunk 2077 game;  an increase in expenditure on promotion (Selling expenses) in the CD PROJEKT RED segment;  an increase in Trade Receivables as a consequence of the high sales associated with the release of the Phantom Liberty expansion on 26 September this year, i.e. towards the end of the reporting period;  a decrease in the balance of Deferred income in the CD PROJEKT RED and GOG.COM segments due to the settlement of pre-orders for the expansion. In connection with the entry of the merger of CD PROJEKT S.A. with its subsidiary Spokko sp. z o.o., as the acquired company, by the District Court for the Capital City of Warsaw in the Register of Businesses on 31 August 2023, CD PROJEKT accounted for the merger, which resulted, among other things, in: an increase in Finance income as a consequence of the reversal of the write-down of the value of shares in the acquired company recognized in 2022, the recognition of the past results of Spokko sp. z o.o. in the Parent Company’s Equity under Retained earnings and the recognition of the current revenue and costs of Spokko sp. z o.o. in the current profit and loss account of the Parent Company. At the end of the period discussed, the CD PROJEKT RED segment revised its estimates of contractual obligations towards the distributors of physical copies of the Cyberpunk 2077 game, increasing the level of Other provisions, which also translated into an increase in the Costs of products and services sold. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 47 Note 2. Property, plant and equipment Changes in property, plant and equipment (by category) for the period 01.01.2023 – 30.09.2023 Land Buildings and structures Civil and hydraulic engineering facilities Plant and machinery Vehicles Other fixed 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: - 30 181 2 867 25 842 956 2 360 14 104 76 310 purchase - 163 2 18 249 295 393 14 104 33 206 business combinations - 52 - 737 - 64 - 853 lease contracts concluded - 2 813 - - 642 - - 3 455 transfer from investment properties - 6 577 - 316 - - - 6 893 transfer from assets under construction - 20 148 2 865 6 512 - 1 359 - 30 884 reclassification - 49 - - - 544 - 593 other - 379 - 28 19 - - 426 Decrease due to: - 4 497 859 1 396 462 35 30 939 38 188 sale - - - 367 136 - - 503 scrapping - 1 036 366 660 5 35 1 2 103 transfer from assets under construction - - - - - - 30 884 30 884 reclassification - - 493 100 - - 54 647 lease contracts expired - 3 461 - - 321 - - 3 782 free-of-charge transfer - - - 269 - - - 269 Gross carrying amount as at 30.09.2023 40 435 107 981 3 933 83 302 3 745 8 101 11 254 258 751 Accumulated depreciation as at 01.01.2023 1 817 25 351 717 42 482 1 537 3 473 - 75 377 Increase due to: 425 6 351 155 9 880 488 822 - 18 121 depreciation charge 425 5 062 155 9 227 475 765 - 16 109 transfer from investment properties - 890 - 48 - - - 938 business combinations - 21 - 579 - 51 - 651 reclassification - 80 - - - 6 - 86 other - 298 - 26 13 - - 337 Decrease due to: - 4 377 209 1 363 382 35 - 6 366 sale - - - 366 57 - - 423 scrapping - 916 203 648 5 35 - 1 807 reclassification - - 6 80 - - - 86 lease contracts expired - 3 461 - - 320 - - 3 781 free-of-charge transfer - - - 269 - - 269 Accumulated depreciation as at 30.09.2023 2 242 27 325 663 50 999 1 643 4 260 - 87 132 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 48 Impairment write-downs as at 01.01.2023 - - - - - - - - Impairment write-downs as at 30.09.2023 - - - - - - - - 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 30.09.2023 38 193 80 656 3 270 32 303 2 102 3 841 11 254 171 619 Amounts of contractual commitments to purchase property, plant and equipment in the future 30.09.2023 30.06.2023 31.12.2022 Construction of an office building on the CD PROJEKT campus 97 657 97 072 - Leasing of passenger cars 450 554 599 Total 98 107 97 626 599 Right-of-use assets relating to property, plant and equipment 30.09.2023 Gross amount Accumulated depreciation Net amount Land 14 540 822 13 718 Real properties 11 996 5 111 6 885 Plant and machinery 48 24 24 Vehicles 2 250 433 1 817 Total 28 834 6 390 22 444 30.06.2023 Gross amount Accumulated depreciation Net amount Land 14 540 771 13 769 Real properties 9 385 4 606 4 779 Vehicles 2 464 674 1 790 Total 26 389 6 051 20 338 31.12.2022 Gross amount Accumulated depreciation Net amount Land 14 540 669 13 871 Real properties 14 332 8 735 5 597 Civil and hydraulic engineering facilities 99 99 - Vehicles 2 264 625 1 639 Total 31 235 10 128 21 107 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 49 Note 3. Intangible assets and expenditure on development projects Changes in intangible assets and expenditure on development projects for the period 01.01.2023 – 30.09.2023 Expenditure on development projects in progress Exp enditure on completed development projects Trademarks Patents and licenses Author’ s economic rights Computer software Goodwill Intangible assets under construction Total Gross carrying amount as at 01.01.2023 249 244 930 087 33 199 4 160 18 469 50 078 56 438 172 1 341 847 Increase due to: 218 961 272 682 23 1 287 159 1 026 - 3 249 497 387 purchase - - - 1 287 129 571 - 2 493 4 480 assets generated internally 218 961 - - - - - - 756 219 717 transfer from intangible assets under construction - - - - - 343 - - 343 reclassification from expenditure on development projects in progress - 272 682 - - - - - - 272 682 business combinations - - 23 - 25 71 - - 119 reclassification - - - - 5 41 - - 46 Decrease due to: 287 272 - - 46 - 4 552 - 360 292 230 scrapping 2 745 - - - - 4 552 - - 7 297 utilization of impairment write- downs 11 844 - - - - - - - 11 844 transfer from intangible assets under construction - - - - - - - 344 344 transfer from expenditure on development projects in progress 272 683 - - - - - - - 272 683 reclassification - - - 46 - - - 16 62 Gross carrying amount as at 30.09.2023 180 933 1 202 769 33 222 5 401 18 628 46 552 56 438 3 061 1 547 004 Accumulated amortization as at 01.01.2023 - 657 011 - 2 767 301 33 853 - - 693 932 Increase due to: - 137 497 - 1 515 396 3 076 - - 142 484 amortization charge - 137 497 - 1 515 371 3 009 - - 142 392 business combinations - - - - 25 67 - - 92 Decrease due to: - - - - - 4 551 - - 4 551 scrapping - - - - - 4 551 - - 4 551 Accumulated amortization as at 30.09.2023 - 794 508 - 4 282 697 32 378 - - 831 865 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 50 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 release of write- downs (write-off) 11 844 - - - - - - - 11 844 Impairment write-downs as at 30.09.2023 - 13 776 - - - - - - 13 776 Net carrying amount as at 01.01.2023 215 869 259 300 33 199 1 393 18 168 16 225 56 438 172 600 764 Net carrying amount as at 30.09.2023 180 933 394 485 33 222 1 119 17 931 14 174 56 438 3 061 701 363 * restated data Amounts of contractual commitments to purchase intangible assets in the future None. Note 4. Goodwill During the period from 1 July to 30 September 2023, there were no changes in goodwill. Note 5. Investment properties The Parent Company owns a real estate complex located at Jagiellońska 76 in Warsaw. Given that a part of the properties purchased is leased out to third parties, including CD PROJEKT Group companies, the Group has decided to classify these properties partly 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 Jagiellońska 74 and PLN 13 212 thousand for the buildings at Jagiellońska 76. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 51 Changes in investment properties for the period 01.01.2023 – 30.09.2023 Gross carrying amount as at 01.01.2023 47 946 Increase due to: 102 purchase of a property 102 Decrease due to: 7 757 scrapping 864 reclassification to other asset categories 6 893 Gross carrying amount as at 30.09.2023 40 291 Accumulated depreciation as at 01.01.2023 5 386 Increase due to: 1 358 depreciation charge 1 358 Decrease due to: 1 065 scrapping 127 reclassification to other asset categories 938 Accumulated depreciation as at 30.09.2023 5 679 Impairment write-downs as at 01.01.2023 - Increase - Decrease - Impairment write-downs as at 30.09.2023 - Net carrying amount as at 30.09.2023 34 612 Amounts of contractual liabilities in respect of purchase of investment properties None. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 52 Note 6. Inventories 30.09.2023 30.06.2023 31.12.2022 Goods for resale 7 460 8 115 12 697 Other materials 3 3 4 Gross inventories 7 463 8 118 12 701 Inventory write-downs - - - Net inventories 7 463 8 118 12 701 Changes in inventory write-downs None. Note 7. Trade and other receivables 30.09.2023 30.06.2023 31.12.2022 Trade and other receivables, gross 322 047 127 105 223 636 Write-downs 87 814 818 Trade and other receivables 321 960 126 291 222 818 from related entities 2 384 423 1 855 from other entities 319 576 125 868 220 963 Changes in write-downs of receivables Trade receivables Other receivables Total OTHER ENTITIES Write-downs as at 01.01.2023 86 732 818 Increases, including: 7 - 7 recognition of write-downs of overdue and disputed receivables 7 - 7 Decreases, including: 6 732 738 reversal of write-downs (write-off) - 732 732 reversal of write-downs 6 - 6 Write-downs as at 30.09.2023 87 - 87 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 53 Current and overdue trade receivables as at 30.09.2023 Total Not overdue Overdue, in days 1 – 60 61 – 90 91 – 180 181 – 360 >360 RELATED ENTITIES gross receivables 2 382 2 381 1 - - - - default ratio - 0% 0% 0% 0% 0% 0% write-down resulting from the ratio - - - - - - - write-down determined individually - - - - - - - total expected credit losses - - - - - - - Net receivables 2 382 2 381 1 - - - - Total Not overdue Overdue, in days 1 – 60 61 – 90 91 – 180 181 – 360 >360 OTHER ENTITIES gross receivables 285 538 284 764 675 12 - 1 86 default ratio - 0% 0% 0% 0% 0% 0% write-down resulting from the ratio - - - - - - - write-down determined individually 87 - - - - 1 86 total expected credit losses 87 - - - - 1 86 Net receivables 285 451 284 764 675 12 - - - Total gross receivables 287 920 287 145 676 12 - 1 86 impairment write- downs 87 - - - - 1 86 Net receivables 287 833 287 145 676 12 - - - Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 54 Other receivables 30.09.2023 30.06.2023 31.12.2022 Other gross receivables, including: 34 127 43 466 58 260 tax receivables, other than corporate income tax 24 102 26 074 43 414 prepayments for inventories 8 428 14 142 6 940 prepayments for development projects 633 1 718 1 433 security deposits 468 475 1 071 provisions for sales revenue - prepayments 123 53 137 prepayments for investment properties 54 - - settlements with employees 51 59 - prepayments for property, plant and equipment and intangible assets 30 30 135 settlements with members of the Management Boards 2 - 2 settlements with suppliers of property, plant and equipment items - - 4 160 settlements with payment operators - - 7 other 236 915 961 Write-downs - 732 732 Other receivables, including: 34 127 42 734 57 528 current 33 747 42 359 57 139 non-current 380 375 389 Note 8. Other financial assets 30.09.2023 30.06.2023 31.12.2022 Loans granted 4 236 4 789 739 Bonds 515 170 464 196 475 848 Derivative financial instruments 937 20 534 7 809 Private equity interests in the gaming sector 2 387 2 260 2 556 Other financial assets, including: 522 730 491 779 486 952 current 268 043 249 576 279 515 non-current 254 687 242 203 207 437 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 55 Note 9. Prepayments and deferred costs 30.09.2023 30.06.2023 31.12.2022 Minimum guarantees, advance payments and prepayments GOG.COM 59 251 47 706 41 457 Software, licenses 9 804 10 042 6 186 Costs of future marketing services 1 489 1 522 1 597 Fees for pre-emptive rights 1 191 1 218 1 271 Costs of repairs and maintenance 891 974 1 142 Staff relocation costs 555 365 39 Costs of IT security resources 352 451 380 Costs in connection with redevelopment of the car park 260 260 260 Business travel (tickets, hotels, insurance) 177 235 85 Property and personal insurance 132 263 785 Domains, servers 72 125 235 Perpetual usufruct 71 141 - Transaction costs - 143 - Other prepayments and deferred costs 644 776 523 Prepayments and deferred costs, including: 74 889 64 221 53 960 current 26 386 21 494 22 886 non-current 48 503 42 727 31 074 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 56 Note 10. Deferred income tax Deductible temporary differences underlying the deferred tax asset 31.12.2022 Differences affecting the deferred tax recognized in the profit or loss 30.09.2023 Provision for other employee benefits 2 382 1 343 3 725 Provision for costs of performance-related and other remuneration 49 565 (17 995) 31 570 Tax loss 5 467 (4 440) 1 027 Foreign exchange losses 7 573 1 486 9 059 Difference between the carrying amounts and tax bases of expenditure on development projects 34 836 (14 184) 20 652 Wages & salaries and social security payable in future periods 47 3 50 Deferred income in respect of virtual wallet top- ups and a fringe benefit scheme 3 955 317 4 272 Other provisions 34 167 9 092 43 259 Tax base of non-current assets leased 20 697 (563) 20 134 Research and development relief 318 126 (65 015) 253 111 Prepayments recognized as revenue for tax purposes 7 523 (3 424) 4 099 Difference between the net carrying amounts and tax bases of property, plant and equipment and intangible assets 12 (9) 3 Measurement of forward contracts 892 (892) - Total deductible differences, including: 485 242 (94 281) 390 961 taxed at 5% 72 663 13 580 86 243 taxed at 19% 411 344 (107 852) 303 492 deferred tax charged abroad 1 235 (9) 1 226 Deferred income tax assets 82 140 (19 814) 62 326 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 57 Taxable temporary differences underlying the deferred tax provision 31.12.2022 Differences affecting the deferred tax recognized in the profit or loss 30.09.2023 Difference between the net carrying amounts and tax bases of property, plant and equipment and intangible assets 17 780 2 726 20 506 Current period revenue invoiced in the subsequent period/accrued income 132 427 156 980 289 407 Foreign exchange gains 8 722 (3 731) 4 991 Measurement of forward contracts - 937 937 Difference between the carrying amounts and tax bases of expenditure on development projects 254 638 134 546 389 184 Carrying amount of non-current assets leased 20 844 (1 060) 19 784 Other 151 (8) 143 Total taxable differences, including: 434 562 290 390 724 952 taxed at 5% 382 911 319 882 702 793 taxed at 19% 50 214 (29 482) 20 732 deferred tax charged abroad 1 437 (10) 1 427 Deferred tax provisions 29 088 10 390 39 478 * restated data The deferred part of the income tax was determined either at the corporate income tax rate of 19% for the tax base corresponding to income from other sources, or at the rate of 5% for the tax base corresponding to income from qualifying intellectual property (the so-called IP BOX). When determining the appropriate tax rate for temporary differences, the Group relied on forecasts of which tax base will give rise to the realization of the temporary differences recognized. Net deferred tax assets/provisions 30.09.2023 30.06.2023 31.12.2022 Deferred tax assets 62 326 65 483 82 140 Deferred tax provisions 39 478 18 485 29 088 * restated data Income tax expense recognized in the income statement 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Current income tax, including: 6 425 14 776 29 944 47 638 withholding tax paid abroad 9 653 6 722 25 614 31 356 Change in deferred tax 24 380 (1 418) 30 439 5 459 Income tax expense recognized in the income statement 30 805 13 358 60 383 53 097 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 58 Note 11. Share capital Share capital – structure as at 30.09.2023 Series Number of shares Value of the series/issue at par Manner of covering share capital A - M 99 910 510 99 910 510 Fully paid up Total 99 910 510 99 910 510 - As at the date of publication of this report, the Parent Company’s share capital amounted to PLN 99 910 510 and consisted of 99 910 510 ordinary bearer shares with a par value of PLN 1 each, designated as A – M series shares. The total number of votes resulting from all shares of the Parent Company was 99 910 510. During the reporting period and after the balance sheet date, there were no changes in the amount of the Parent Company’s share capital. Changes in the share capital for the period 01.01.2023 – 30.09.2023 Share capital as at 01.01.2023 100 771 Increase - Decrease due to: 860 redemption of own shares 860 Share capital as at 30.09.2023 99 911 Note 12. Provision for retirement and similar benefits 30.09.2023 30.06.2023 31.12.2022 Provision for retirement and disability bonuses 376 376 376 Provisions for holiday pay 7 146 6 899 4 145 Total, including: 7 522 7 275 4 521 current 7 156 6 909 4 155 non-current 366 366 366 * restated data Provisions for one- time retirement and disability bonuses Provisions for holiday pay Total As at 01.01.2023 376 4 145 4 521 Provisions recognized - 7 146 7 146 Provisions released - 4 145 4 145 As at 30.09.2023, including: 376 7 146 7 522 current 10 7 146 7 156 non-current 366 - 366 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 59 Note 13. Other provisions 30.09.2023 30.06.2023 31.12.2022 Provision for liabilities, including: 64 289 28 200 98 640 provision for costs of the audit and review of the financial statements 71 73 167 provision for costs of external services 1 104 910 850 provision for costs of performance-related and other remuneration 31 569 9 254 67 966 provision for other costs 31 545 17 963 29 657 Total, including: 64 289 28 200 98 640 current 48 662 22 030 88 042 non-current 15 627 6 170 10 598 Changes 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 31 569 74 271 105 840 Provisions utilized/released 67 966 72 225 140 191 As at 30.09.2023, including: 31 569 32 720 64 289 current 31 569 17 093 48 662 non-current - 15 627 15 627 Note 14. Other liabilities 30.09.2023 30.06.2023 31.12.2022 Taxes (other than corporate income tax), customs duties, social security and other payables 13 334 9 775 9 547 VAT 8 290 4 309 5 302 Withholding tax 433 504 32 Personal income tax 1 162 1 071 1 944 Social security contributions 3 197 3 764 2 043 PFRON (State Fund for Rehabilitation of Disabled People) 85 91 75 PIT-8AR (personal income tax) settlements 16 36 134 Other 151 - 17 Other liabilities 2 889 3 485 3 317 Liabilities in respect of pre-emptive rights and costs of future marketing services 2 440 2 500 2 620 Other settlements with employees 133 148 241 Other settlements with members of the Management Board 3 1 32 Prepayments received from foreign customers - - 8 Other liabilities 313 836 416 Total other liabilities 16 223 13 260 12 864 current 13 722 10 760 10 244 non-current 2 501 2 500 2 620 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 60 Current and overdue other liabilities as at 30.09.2023 Total Not overdue Overdue, in days 1 – 60 61 – 90 91 – 180 181 – 360 >360 To related entities 3 1 2 - - - - To other entities 16 220 15 887 125 3 1 1 203 Total 16 223 15 888 127 3 1 1 203 Note 15. Deferred income 30.09.2023 30.06.2023 31.12.2022 Subsidies 3 667 4 586 5 511 Sales relating to future periods 6 633 18 991 16 088 GOG wallet 4 832 4 746 4 460 Rental of company phones 44 41 35 Deferred income, including: 15 176 28 364 26 094 current 13 107 25 611 22 425 non-current 2 069 2 753 3 669 Note 16. Information on financial instruments Fair values and hierarchy of specific classes of financial instruments The Management Board of the Group has analysed specific classes of financial instruments. Based on the analysis, it was concluded that the carrying amounts of the instruments did not differ materially from their fair values as at both 30 September 2023, 30 June 2023 and 31 December 2022. 30.09.2023 30.06.2023 31.12.2022 LEVEL 1 Assets measured at fair value Assets measured at fair value through other comprehensive income 234 677 220 483 243 091 bonds issued by foreign governments - EUR 16 327 15 609 25 111 bonds issued by foreign governments - USD 218 350 204 874 217 980 LEVEL 2 Assets measured at fair value through profit or loss Derivatives 937 20 534 7 809 currency forwards - EUR 116 973 1 249 currency forwards - USD 821 19 561 6 560 Private equity interests in the gaming sector 2 414 2 260 2 556 private equity interests in the gaming sector - SEK 985 919 1 085 Private equity interests in the gaming sector - USD 1 429 1 341 1 471 Liabilities measured at fair value through profit or loss Derivatives 3 632 227 891 currency forwards - EUR 192 56 72 currency forwards - USD 3 440 171 819 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 61 Financial instruments measured at fair value are classified according to a three-level 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 30.09.2023 30.06.2023 31.12.2022 Financial assets measured at amortized cost 1 072 424 798 895 1 014 332 Other non-current receivables 380 375 389 Trade receivables 287 833 83 557 165 290 Cash and cash equivalents 236 232 149 336 277 827 Bank deposits over 3 months 263 250 317 125 337 330 Treasury bonds and bonds guaranteed by the State Treasury 280 493 243 713 232 757 Loans granted 4 236 4 789 739 Financial assets measured at cost 40 863 43 477 41 607 Shares in non-consolidated subordinated entities 40 863 43 477 41 607 Assets measured at fair value through other comprehensive income 234 677 220 483 243 091 Bonds issued by foreign governments 234 677 220 483 243 091 Financial assets measured at fair value through profit or loss 3 324 22 794 10 365 Derivative financial instruments 937 20 534 7 809 Private equity interests in the gaming sector 2 387 2 260 2 556 Total financial assets 1 351 288 1 085 649 1 309 395 Financial liabilities – classification and measurement 30.09.2023 30.06.2023 31.12.2022 Financial liabilities measured at amortized cost 97 549 76 327 99 689 Trade payables 67 302 49 870 72 119 Other financial liabilities 30 247 26 457 27 570 Financial liabilities measured at fair value through profit or loss 3 632 227 891 Derivative financial instruments 3 632 227 891 Total financial liabilities 101 181 76 554 100 580 In accordance with the requirements of IFRS 9 Financial Instruments, the Parent Company has 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 bonds to be sold 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 offers the possibility of the portfolio being managed by an Asset Manager. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 62 In accordance with the requirements of IFRS 13 Fair Value Measurement, the Group has analysed the valuation of the financial instruments measured at amortized cost in the consolidated statement of financial position in order to determine their fair values and their classification in the fair value hierarchy. Listed debt securities were classified to Level 1. They include State Treasury bonds and bonds guaranteed by the State Treasury whose fair value was determined on the basis of a market valuation provided by the brokerage office as part of the applicable agreement for the provision of brokerage services. 30.09.2023 30.06.2023 31.12.2022 LEVEL 1 Fair value of assets measured at amortized cost 278 985 236 096 219 713 Treasury bonds and bonds guaranteed by the State Treasury 278 985 236 096 219 713 Other items of financial assets and financial liabilities measured at amortized cost were classified to Level 3. With regard to equity interests in other entities, the Group estimates the fair values of the shares held using the method which consists of forecasting future cash flows generated by the relevant cash generating unit and requires determining a discount rate to be used to calculate the present value of these cash flows. In justified cases, the Group assumes a historical cost as an acceptable approximation of the fair value. The Group did not determine the fair values of receivables, trade payables, cash and cash equivalents, bank deposits over 3 months and loans granted with variable interest rates, because their carrying amounts are considered by the Group to be a reasonable approximation of their fair values. There were no movements between the levels in the fair value hierarchy in the reporting period or in the comparative period. Note 17. Sales revenue Sales revenue – geographical structure 2023 01.07.2023 – 30.09.2023 01.01.2023 – 30.09.2023 in PLN in % in PLN in % Domestic sales 9 372 2.12% 23 238 3.03% Export sales, including: 433 310 97.88% 744 454 96.97% Europe 76 338 17.24% 147 317 19.19% North America 329 828 74.51% 540 442 70.40% South America 1 577 0.36% 3 323 0.43% Asia 22 270 5.03% 46 435 6.05% Australia 3 042 0.69% 6 449 0.84% Africa 255 0.05% 488 0.06% Total 442 682 100% 767 692 100% Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 63 Sales revenue – geographical structure 2022 01.07.2022 – 30.09.2022 01.01.2022 – 30.09.2022 in PLN in % in PLN in % Domestic sales 7 474 3.04% 22 337 3.58% Export sales, including: 238 040 96.96% 601 170 96.42% Europe 35 513 14.46% 111 951 17.96% North America 185 753 75.67% 433 794 69.57% South America 881 0.36% 2 411 0.39% Asia 14 055 5.72% 47 029 7.54% Australia 1 788 0.73% 5 735 0.92% Africa 50 0.02% 250 0.04% Total 245 514 100% 623 507 100% * The data presented relate 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., and CD PROJEKT Inc. – end customers. Sales revenue – by type of production 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Own production 390 534 203 189 628 634 489 057 Third party production 51 693 42 017 138 017 132 828 Other revenue 455 308 1 041 1 622 Total 442 682 245 514 767 692 623 507 Sales revenue – by distribution channel 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Games - box issues 10 364 1 640 32 306 19 076 Games - digital issues 428 659 194 033 716 880 540 872 Other revenue 3 659 49 841 18 506 63 559 Total 442 682 245 514 767 692 623 507 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 64 Note 18. Operating expenses 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Depreciation and amortization of property, plant and equipment, intangible assets, expenditure on development projects and investment properties, including: 3 271 3 425 9 942 10 771 depreciation of leased buildings 244 394 803 1 291 depreciation of leased vehicles 110 115 347 288 Materials and energy used 1 737 964 3 520 2 181 External services, including: 53 072 28 345 106 595 84 019 costs of short-term leases and low-value leases 121 123 363 362 Taxes and fees 704 533 1 645 1 086 Wages & salaries, social insurance and other benefits 56 854 36 723 138 274 107 279 Business travel 1 125 1 078 2 942 1 640 Cost of using company cars 63 55 180 172 Cost of goods for resale and materials sold 38 757 30 598 103 255 94 921 Costs of products and services sold 104 410 48 602 148 101 85 640 Other costs 614 914 1 276 2 411 Total 260 607 151 237 515 730 390 120 Selling expenses 66 140 45 064 152 470 135 697 Total administrative expenses, including: 51 300 26 973 111 904 73 862 cost of research projects 4 602 404 7 875 4 308 Cost of sales 143 167 79 200 251 356 180 561 Total 260 607 151 237 515 730 390 120 * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 65 Note 19. Other operating income and expenses Other operating income 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Tax relief for innovative employees 4 635 - 12 353 - Other sales 1 082 3 296 1 428 3 337 Subsidies 919 1 823 1 843 2 754 Rental income 138 1 696 2 294 5 046 Income from re-invoicing 131 197 553 595 Gains on disposal of non-current assets 48 256 73 265 Release of unused provisions for costs 38 - 178 232 Write-off of past liabilities of GOG.COM - 2 230 - 2 230 Fixed assets and goods for resale received free of charge - 306 168 306 Reversal of a write-down of expenditure on development projects in progress - - 21 531 - Refund of overpaid tax on civil law transactions - - 94 - Payments from enforcement officers - - 27 - Release of provisions for minimum guarantees - - - 376 Damages received - - - 2 Other 421 15 205 61 Total other operating income 7 412 9 819 40 747 15 204 Other operating expenses 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Cost of sales of other sales 1 719 3 925 2 214 3 957 Cost of rental 552 994 2 265 2 825 Depreciation of investment properties 413 462 1 341 1 391 Disposal of fixed assets and intangible assets 163 - 3 042 483 Costs relating to re-invoicing 131 197 553 595 VAT written off 73 - 328 - Donations and charity 41 89 445 1 312 Irrecoverable receivables 16 - 70 - Impairment write-downs of property, plant and equipment, intangible assets and expenditure on development projects - 911 - 911 Cost of disposal of materials and goods for resale (destruction) - 12 171 2 771 Liquidation of investment properties - - 737 - Other 135 193 390 447 Total other operating expenses 3 243 6 783 11 556 14 692 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 66 Note 20. Finance income and costs Finance income 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Interest income 10 666 9 344 36 443 27 363 on current bank deposits 5 913 5 794 23 249 14 811 on bonds 4 668 3 550 13 007 12 337 on loans 85 - 187 215 Other finance income 49 758 23 875 43 562 41 226 release of write-downs of non-current financial assets 27 271 - 27 271 - net foreign exchange gains 19 474 15 890 - 11 907 gain on redemption of bonds - 4 929 2 294 22 437 settlement and measurement of derivative financial instruments 3 013 3 056 13 951 6 880 forward contracts - Management Board - - - 2 other finance income - - 46 - Total finance income 60 424 33 219 80 005 68 589 Finance costs 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Interest expense 200 206 847 923 on bonds - 39 18 240 on lease contracts 200 137 594 404 on liabilities to the State Treasury - 30 232 278 on trade payables - - 3 1 Other finance costs 12 794 18 070 9 946 36 590 net foreign exchange losses - - 9 654 - settlement and measurement of derivative financial instruments 12 696 17 990 - 36 343 commission and fees on purchase of bonds 71 80 214 247 measurement of private equity interests in the gaming sector 27 - 78 - Total finance costs 12 994 18 276 10 793 37 513 Net finance income/expense 47 430 14 943 69 212 31 076 Note 21. Leases of low-value assets and short-term leases The Group has concluded lease contracts for office equipment (multifunctional photocopiers, kitchen appliances) and residential premises which potentially meet the 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 standard. 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 costs of these leases, incurred in the period from 1 July to 30 September 2023, is included in Note 18). Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 67 As at 30 September 2023, 30 June 2023 and 31 December 2022, future minimum payments in respect of irrevocable short-term leases and leases of low-value assets were as follows: 30.09.2023 30.06.2023 31.12.2022 Up to 1 year 253 319 467 From 1 year to 5 years 210 199 334 Total 463 518 801 Note 22. Issuance, redemption and repayment of debt and equity securities Issuance of debt securities Not applicable. Issuance of equity securities Specification 30.09.2023 30.06.2023 31.12.2022 Number of shares in thousands 99 911 99 911 100 771 Par value of shares in PLN 1 1 1 Share capital 99 911 99 911 100 771 Note 23. Dividend paid (or declared) and received During the period from 1 July to 30 September 2023, the Group companies did not pay or receive any dividends. Note 24. Transactions with related entities Terms and conditions of transactions with related entities The terms and conditions of intra-group transactions were determined on the 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 concluded by the related entities which belong to the CD PROJEKT Group are tested for compliance with the arm’s length basis based on the recommendations and methods provided for in OECD Guidelines and in the national legislation. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 68 Transactions with related entities after consolidation eliminations Sales to related entities Purchases from related entities 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 SUBSIDIARIES Spokko sp. z o.o. - 324 - 1 061 - - - - CD PROJEKT RED Vancouver Studio Ltd. 50 4 74 33 3 251 4 342 13 355 12 124 The Molasses Flood LLC 82 2 84 2 9 573 9 737 35 265 20 048 MEMBERS OF THE MANAGEMENT BOARDS OF THE GROUP COMPANIES AND THE SUPERVISORY BOARD Marcin Iwiński - - - 1 - - - - Adam Kiciński 1 - 1 - - - - - Piotr Nielubowicz - - - 2 - - - - Michał Nowakowski - 2 - 5 - - - - Adam Badowski 1 1 1 6 - - - - Piotr Karwowski 2 2 5 6 - - - - Urszula Jach - Jaki 1 - 2 1 - - - - Maciej Gołębiewski 1 - 1 1 - - - - Paweł Zawodny - - 6 7 - - - - Jeremiah Cohn - - - 1 - - - - Maciej Nielubowicz 1 - 1 - - - - - Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 69 Receivables from related entities Liabilities to related entities 30.09.2023 30.06.2023 31.12.2022 30.09.2023 30.06.2023 31.12.2022 SUBSIDIARIES Spokko sp. z o.o. - 2 156 - 246 - CD PROJEKT RED Vancouver Studio Ltd. 2 296 563 1 694 1 725 1 730 2 746 The Molasses Flood LLC 4 322 4 789 742 2 565 2 855 2 579 MEMBERS OF THE MANAGEMENT BOARDS OF THE GROUP COMPANIES AND THE SUPERVISORY BOARD Marcin Iwiński - - - - - 7 Adam Kiciński - - - - - 13 Piotr Nielubowicz - - 2 - - 13 Michał Nowakowski 2 - - - - 4 Adam Badowski - - - 3 1 6 Piotr Karwowski - - - - - 2 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 70 Note 25. Unpaid loans or defaults on loan agreements in the cases where no corrective measures were adopted by the balance sheet date Not applicable. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 71 Note 26. Changes in contingent liabilities or contingent assets which occurred after the end of the last financial year Contingent liabilities in respect of guarantees, sureties and collateral Specification Currency 30.09.2023 30.06.2023 31.12.2022 mBank S.A. 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 Mazovian Unit for Implementation of EU Programmes Contractual commitment Commitment to incur operating and renovation expenditures on leased space PLN - - 20 National Centre for Research and Development 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 1 358 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 202 240 314 Santander Bank Polska S.A. (formerly: BZ WBK S.A.) Bill of exchange agreement Framework agreement on financial market transactions PLN 23 500 23 500 23 500 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 72 Bank Polska Kasa Opieki Spółka Akcyjna Bill of exchange agreement Framework agreement on financial market transactions PLN 50 000 50 000 50 000 BNP Paribas Bank Polska S.A. Bill of exchange agreement Framework agreement on financial market transactions PLN 26 600 26 600 26 600 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 73 Note 27. Changes in the structure of the Group and Group companies during the reporting period  Registration of the merger of the Parent Company with its subsidiary - Spokko sp. z o.o. On 31 August 2023, the District Court for the Capital City of Warsaw in Warsaw entered the merger-through-acquisition of the Parent Company, as the surviving company, with its subsidiary Spokko sp. z o.o. with its registered office in Warsaw, as the target company, in the Register of Businesses. The merger was carried out in accordance with the merger plan announced on 20 April 2023, i.e. by transferring all of the assets of Spokko 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 28. Agreements that may result in future changes in the proportions of shares held by shareholders and bondholders Incentive Plan for the years 2023-2027 Based on the resolutions of the Parent Company’s General Meeting of 28 July 2020, two new incentive plans for the financial years 2023-2027 were introduced on that date, replacing the Incentive Plan for 202-2025: the Incentive Plan A and Incentive Plan B. Incentive Plan A Incentive Plan A is addressed to persons who are not members of the Management Board of the Parent Company. The assumptions are that the entitlements in this plan 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 entire Incentive Plan 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 the 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 participant under Incentive Plan A will be conditional upon meeting the loyalty criterion (understood as participants of Incentive Plan A remaining in a legal relationship with the Parent Company or its related entity during the vesting period). The price of taking up or acquiring the Company’s shares as part of executing entitlements under Plan A will correspond to the nominal value of the Parent Company’s shares. The vesting period will be 3 years. By the date of publication of this report, 100 444 entitlements were awarded under Incentive Plan A, of which 96 322 remain active. Assumptions made for the valuation of Incentive Plan A for the years 2023-2027 Date of vesting CDR volatility ratio Risk-free interest rate Entitlements granted on 26.05.2023 44% 6.2% Entitlements granted on 27.05.2023 44% 6.2% Entitlements granted on 29.05.2023 44% 5.9% Entitlements granted on 07.06.2023 44% 5.8% Changes in entitlements granted under Incentive Plan A for the years 2023-2027 Specification 01.01.2023 – 30.09.2023 Number of shares Granted during the period 100 444 Forfeited during the period 4 122 Unrealized as at the end of the period 1 500 000 Granted, unrealized as at the end of the period 96 322 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 74 Incentive Plan B Incentive Plan 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 plan 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 entire Incentive Plan 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 the 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 under Incentive Plan B will be conditional upon the Parent Company determining that the performance condition (for 70% of the entitlements), the market condition (for 30% of the entitlements), and in selected cases the individual conditions and, in each case, the loyalty condition (understood as participants of Incentive Plan A remaining in a legal relationship with the Parent Company or its related entity during the vesting period) have been met. The base price of subscription for or purchase of the Company’s shares as part of exercising the entitlements under Plan B will correspond to the price of the Parent 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 plan. The plan 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 being shortened to three financial years for performance-related entitlements in the event of the four-year performance target being achieved faster over a three-year period). By the date of publication of this report, 662 000 entitlements were awarded under Incentive Plan B, of which 662 000 remain active. Assumptions made for the valuation of Incentive Plan B for the years 2023-2027 Date of vesting CDR volatility ratio WIG volatility ratio WIG correlation ratio Risk-free interest rate Entitlements granted on 26.05.2023 44% 21% 43% 6.1% Changes in entitlements granted under Incentive Plan B for the years 2023-2027 Specification 01.01.2023 – 30.09.2023 Number of shares Granted during the period 662 000 Unrealized as at the end of the period 3 500 000 Granted, unrealized as at the end of the period 662 000 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 75 Note 29. 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 more developed tax systems. In accordance with a general rule, tax settlements may be subject to inspections within 5 years from the end of the 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- 4241.27.2023.2 of 23 August 2023, 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 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, hereinafter called the “CIT Act”). Starting from the month following the submission of the CIT-8 tax return, the Parent Company enjoys a relief in respect of an innovative employee. As part of the relief, it is possible to deduct the research and development relief which the Parent Company did not deduct from the tax base in the tax return for the previous tax year. As a result of using tax relief in respect of an innovative employee, the Parent Company reduces tax advances remitted to the tax office in respect of personal income tax and flat-rate personal income tax for employees carrying out research and development projects for the Parent Company. At the same time, the amount of the research and development relief reported and not deducted is reduced (the reduction is the product of the personal income tax liability due and the personal income tax rate). With effect from 1 January 2019, provisions were introduced into the Act on corporate income tax, granting preferential taxation at a 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. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 76 Note 30. Explanations to the condensed consolidated statement of cash flows 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Cash and cash equivalents reported in the statement of cash flows 236 232 198 689 236 232 198 689 Cash and cash equivalents in the balance sheet 236 232 198 689 236 232 198 689 Depreciation and amortization 3 271 3 425 9 942 10 771 Amortization of intangible assets 437 535 1 580 1 615 Amortization of expenditure on development projects 101 211 359 833 Depreciation of property, plant and equipment 2 730 2 672 7 985 8 297 Depreciation of investment properties 3 7 18 26 Foreign exchange gains/(losses) arise on the following items: (14 819) (19 888) 4 024 (24 769) Foreign exchange gains and losses on measurement of private equity interests in the gaming sector (128) - 118 - Foreign exchange gains/(losses) on measurement of loans granted as at the balance sheet date (364) - (140) - Foreign exchange gains/(losses) on measurement of leases (81) - (252) - Foreign exchange gains/(losses) on measurement of bonds (14 246) (19 888) 4 298 (24 769) Interest and shares in profits comprise: (10 466) (9 168) (35 831) (26 719) Interest on bank deposits (5 913) (5 794) (23 249) (14 811) Interest on bonds (4 668) (3 511) (12 989) (12 097) Interest accrued on loans granted (85) - (187) (215) Interest on lease contracts 200 137 594 404 (Gains)/losses on investing activities arise on the following items: (14 501) 13 796 (57 543) 15 282 Proceeds from sale of property, plant and equipment (127) (260) (152) (274) Net carrying amount of property, plant and equipment 79 4 79 9 Net carrying amount of non-current assets scrapped 163 - 296 200 Net carrying amount of intangible assets liquidated and expenditure on research and development projects - - 2 746 283 Net carrying amount of investment properties liquidated - - 737 - Impairment write-downs of property, plant and equipment, intangible assets and expenditure on development projects - 911 - 911 Release of write-downs of shares in subsidiaries (27 271) - (27 271) - 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 12 696 17 990 (10 301) 36 343 Measurement of private equity interests in the gaming sector - - 51 - Disclosure of property, plant and equipment and intangible assets - - (4) - Commission and fees on purchase of bonds 71 80 214 247 Proceeds from redemption of bonds - (34 672) (36 711) (192 373) Value of bonds purchased - 29 743 34 417 169 936 Settlement of lease contracts expired (112) - (113) - Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 77 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Changes in provisions result from the following items: 36 413 13 066 (11 526) (36 231) Increase/(Decrease) in provisions for liabilities 36 089 19 458 (34 351) (29 545) Increase/(Decrease) in provisions for employee benefits 247 (397) 3 001 1 301 Increase/(Decrease) in provision for the costs of performance-related and other remuneration recognized under expenditure on development projects 77 (5 995) 19 824 (7 987) Changes in inventories result from the following items: 655 644 5 238 1 394 (Increase)/Decrease in inventories 655 644 5 238 1 394 Changes in receivables result from the following items: (205 052) (87 658) (126 129) (15 016) (Increase)/Decrease in current receivables in the balance sheet (198 161) (80 029) (112 546) 41 775 (Increase)/Decrease in non-current receivables in the balance sheet (5) (53) 9 (101) (Increase)/Decrease in prepayments for investment properties 54 - 54 (79) Income tax settled against withholding tax 5 - 14 914 27 961 Withholding tax paid abroad (9 653) (6 720) (25 612) (31 353) Adjustment for current income tax 2 488 (1 133) (1 554) (26 751) (Increase)/Decrease in prepayments for development projects (1 085) 211 (800) (26 575) (Increase)/Decrease in prepayments for property, plant and equipment and intangible assets - 66 (105) 107 (Increase)/Decrease in receivables in respect of the sale of property, plant and equipment and intangible assets 1 305 - (489) - Changes in current liabilities, excluding loans and borrowings, result from the following items: 17 197 4 762 1 768 12 285 Increase/(Decrease) in current liabilities in the balance sheet 26 302 (82 424) 1 353 7 994 Adjustment for current income tax (147) (6 468) 1 970 17 978 Increase/(Decrease) in other current financial liabilities (5 757) (8 867) (4 657) (12 789) Increase/(Decrease) in liabilities in respect of security deposits 61 - 61 - Increase/(Decrease) in liabilities resulting from purchase of property, plant and equipment (3 308) 1 788 2 455 (933) Increase/(Decrease) in liabilities resulting from purchase of intangible assets 46 (6) 586 25 Increase/(Decrease) in liabilities resulting from dividends from retained earnings - 100 739 - - Increase/(Decrease) in liabilities resulting from the purchase of investment properties - - - 10 Changes in other assets and liabilities result from the following items: (23 916) (11 201) (32 028) (45 874) (Increase)/Decrease in prepayments and accruals in the balance sheet (10 668) (12 722) (20 929) (32 489) Increase/(Decrease) in deferred income in the balance sheet (13 188) 1 581 (10 918) (13 205) Adjustment for prepayments and deferred costs with the corresponding entry in liabilities (60) (60) (181) (180) * restated data Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 78 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 The value of “Other adjustments” comprises: 5 304 1 539 19 002 6 869 Costs of the incentive plan 3 311 967 13 451 3 285 Measurement of derivative financial instruments (1 164) (714) (1 829) (651) Amortization and depreciation written off, reported under cost of sales, consortium settlements and other operating expenses 83 - 82 1 046 Amortization and depreciation reported under cost of sales and other operating expenses 492 806 2 036 2 470 Accounting for shares in the acquired entity 32 854 - 32 854 - Retained earnings of the acquired entity (26 979) - (26 979) - Net profit or loss of the acquired entity (3 653) - - - Deferred tax asset of the acquired entity (233) - (233) - Net amount of property, plant and equipment and intangible assets of the acquired entity 378 - (228) - Foreign exchange differences on translation 215 480 (52) 781 Other adjustments - - (100) (62) Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 79 Note 31. Cash flows and non-monetary changes resulting from changes in liabilities in financing activities 01.07.2023 Cash flows Non-monetary changes 30.09.2023 Takeover of fixed assets leased Foreign exchange differences Interest accrued Adoption of resolution on the payment of dividend Lease liabilities 20 307 (679) 2 519 57 200 - 22 404 Total 20 307 (679) 2 519 57 200 - 22 404 01.07.2022 Cash flows Non-monetary changes 30.09.2022 Takeover of fixed assets leased Foreign exchange differences Interest accrued Adoption of resolution on the payment of dividend Lease liabilities 19 362 (909) 194 167 137 - 18 951 Liabilities to shareholders in respect of dividend payment 100 739 (100 739) - - - - - Total 120 101 (101 648) 194 167 137 - 18 951 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 80 01.01.2023 Cash flows Non-monetary changes 30.09.2023 Takeover of fixed assets leased Foreign exchange differences Interest accrued Adoption of resolution on the payment of dividend Lease liabilities 20 761 (2 484) 3 711 (177) 593 - 22 404 Liabilities to shareholders in respect of dividend payment - (99 911) - - - 99 911 - Total 20 761 (102 395) 3 711 (177) 593 99 911 22 404 01.01.2022 Cash flows Non-monetary changes 30.09.2022 Takeover of fixed assets leased Foreign exchange differences Interest accrued Adoption of resolution on the payment of dividend Lease liabilities 16 655 (3 049) 4 775 168 404 - 18 953 Liabilities to shareholders in respect of dividend payment - (100 739) - - - 100 739 - Total 16 655 (103 788) 4 775 168 404 100 739 18 953 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 81 Note 32. Post balance sheet events On 5 October 2023, in the current report no. 38/2023, the Management Board of the Parent Company informed that, based on reports from digital distribution platforms, by the end of the first week after the launch, that is up to and including 3 October 2023, gamers had purchased over 3 million copies of the Cyberpunk 2077: Phantom Liberty expansion across all hardware platforms available. At the same time, the Management Board informed that according to initial data the total value of direct expenses incurred on the production of the Cyberpunk 2077: Phantom Liberty expansion amounted to approximately PLN 275 million and the costs of the global marketing campaign related to the launch of the expansion directly organized by the Parent Company amounted to approximately PLN 95 million. On 5 October 2023, in the current report no. 39/2023, the Management Board of the Parent Company informed that the Company had received a notification from Mr. Adam Kiciński of his intention to stand as a future candidate for the position of Member of the Supervisory Board of the Parent Company from 2025 and, as a consequence, of his intention to resign, in the future, from the position of Member of the Management Board as of the end of 2024. The full contents of Mr. Adam Kiciński’s letter are attached as an appendix to the said report. In connection with the said decision, the Management Board has decided that as of 1 January 2024 the internal segregation of duties with regard to the individual areas of the Company’s business activities among the Members of the Management Board will be updated and, as a consequence, the roles and designations of the functions of the Members of the Management Board will be changed as follows: (i) Mr. Adam Kiciński will perform the role of the Chief Strategy Officer (CSO); (ii) the role of the Chief Executive Officer (CEO) will be performed jointly by: Mr. Adam Badowski, currently performing the role of the Chief Creative Officer, who has been with the Company for 20 years, and Mr. Michał Nowakowski, currently performing the role of the Chief Commercial Officer, who has been with the Company for 18 years. Mr. Adam Badowski and Mr. Michał Nowakowski will use the same designation of Joint Chief Executive Officer (Joint CEO). The Company informed further on the adoption of the new functional designations in the current report no. 37/2023. On 23 October 2023, the share capital of CD PROJEKT RED Inc. was increased by USD 1 100 thousand i.e. up to USD 7 120 thousand, by increasing the value of the existing 10 thousand shares by USD 110 each. The increased value of the existing shares was paid up in full by a cash contribution of USD 1 100 thousand, made by the Parent Company. The capital increase was intended to enable finalizing the last stage of the process of acquisition of shares in The Molasses Flood LLC (payment of the third tranche). On 27 October 2023, CD PROJEKT RED Inc. concluded an agreement based on which it acquired additional shares in The Molasses Flood LLC from one of its shareholders at that time, thus becoming the owner of 81.82% (i.e. 450 000) of the shares in that company. On 28 November 2023, in the current report no. 42/2023, the Management Board of the Parent Company informed that it has received a notification to the effect that the U.S. District Court for the Central District of California had issued an order regarding final approval of the settlement, i.e. Order re: motion for final approval of class action settlement. The final approval of class action settlement confirms the final terms of the settlement reached in the U.S. class action lawsuit (as the Parent Company informed in detail in the current report no. 45/2021 and the current report no. 5/2022 ) and ends the legal proceedings related to the U.S. class action lawsuit filed against the Company and other defendants. 82 Additional information 5 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements 83 Litigation pending During the reporting period, the following material proceedings were pending (as at the date of publication of the financial statements). Criminal cases in which CD PROJEKT S.A. has the status of the aggrieved party Case against private individuals (including former members of the Management Board of Optimus S.A.) for acts to the detriment of the Company On 27 October 2016, the Regional Court in Warsaw, in Case ref. no. XVIII K 126/09 as a result of the indictment by the Public Prosecutor’s Office of the Regional Prosecutor’s Office in Warsaw to the Regional Court, passed a sentence convicting Michał L., Piotr L. and Michał D., ascribing to them the commission of acts under Article 296 § 1 of the Penal Code and Article 296 § 3 of the Penal Code and others. The Parent Company acted as an auxiliary prosecutor at first instance (a status it retains until the end of the proceedings). The scope of damages awarded under Article 46 of the Penal Code amounted to a total of PLN 210 thousand, with the damage ascertained by the court amounting to at least PLN 16 million according to the operative part of the verdict (this method of determining damage results from the principles of adjudication in criminal proceedings). The Company appealed against the judgment, requesting that it be amended, including, inter alia, the part relating to the amount of damages awarded to the Company. Appeals were also filed by the defendants’ counsels – against the entire decision and by the prosecutor – against a part of the judgment. On 26 October 2017, the Court of Appeals overturned the judgment of the Court of First Instance in the case in its entirety and referred the case to the Court of First Instance for retrial in its entirety. The Regional Court in Warsaw is currently examining the case under Case number XVIII K 316/17. The Parent Company is acting as an auxiliary prosecutor in the case. Cases in which CD PROJEKT S.A. has the status of the defendant Class action lawsuit against CD PROJEKT S.A. concerning US securities On 25 December 2020 and 15 January 2021, the Management Board of the Parent Company received confirmation of the filing of civil class actions before the United States District Court for the District of Central California. The lawsuits were filed by law firms acting on behalf of groups of holders of US financial instruments listed under the symbols “OTGLY” and “OTGLF” and based on the Company’s shares. The plaintiffs sought a judicial determination whether the actions of the Company and its Management Board Members in connection with the launch of the Cyberpunk 2077 game constituted a violation of federal regulations by, among other things, misleading investors, thereby leading to losses on their part. In the following months, the Company became aware of two other lawsuits also filed in the local court, identical in subject matter and directed against CD PROJEKT S.A. The contents of all of the said lawsuits did not specify the value of the claim. On 18 May 2021, the Company was informed that the court consolidated the lawsuits filed and selected a lead plaintiff. Following consolidation, all four lawsuits filed were being dealt with in a single proceeding. On 29 June 2021, the Company received a copy of the lawsuit filed against the Company, as well as the members of its Management Board, by the law firm representing the lead plaintiff and the other qualifying holders of US securities listed under the symbols “OTGLY” and “OTGLF”. The contents of the lawsuit filed did not differ in subject matter from the previously filed unconsolidated lawsuits in this regard, nor did it specify the value of the claims. On 12 August 2021, the Company filed a response to the claim seeking dismissal of the action. Subsequently, on 5 October 2021, the Company received a pleading from the plaintiffs challenging the motion to dismiss, to which the Company responded on 17 November 2021, again seeking dismissal of the action. On 7 December 2021, the Company entered into settlement negotiations with the plaintiffs, resulting in the signing of a Settlement Term Sheet on 16 December 2021, whereby the Company agreed to pay the plaintiffs USD 1 850 thousand in exchange for the waiver of all claims against the Company. A settlement agreement with the Company’s insurer, Colonnade Insurance S.A., Polish Branch, was also obtained. On 27 January 2022, the Company entered into a formal settlement document, the Stipulation Agreement, confirming the findings of the Settlement Term Sheet. The Stipulation Agreement, just like the Settlement Term Sheet previously entered into, contains a statement that there is no admission of any fault on the part of the Company or the other defendants. On 4 January 2023, the Company received information that the United States District Court for the District of Central California had issued an Order for preliminary approval of the settlement document. The order approves the terms of the settlement relating specifically to the plaintiffs’ complete withdrawal of any claims against the Company and members of its Management Board, and the payment of USD 1 850 000 to the plaintiffs’ class by the Company and its insurer, i.e. Colonnade Insurance S.A. Branch in Poland. On 28 November 2023, the Company received a notification to the effect that the U.S. District Court for the Central District of California had issued an order regarding final approval of the settlement (Order re: motion for final approval of class action settlement). The final approval of class action settlement confirms the final terms of the settlement and ends the legal proceedings related to the U.S. class action lawsuit filed against the Company and other defendants. Litigation involving subsidiaries Proceedings of GOG sp. z o.o. before the Voivodship Administrative Court in Kraków On 19 August 2022, the Head of the Małopolski Customs and Tax Office in Kraków issued a decision against the subsidiary GOG sp. z o.o., determining the corporate income tax liability for 2016. The Management Board of GOG sp. z o.o. paid the liability resulting from the decision received which amounted to PLN 2 638 thousand, including interest due as at the payment date. Irrespective of the above, GOG sp. z o.o. disagreed with the assessment by the tax authorities and appealed against the decision on 5 September 2022. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements 84 On 22 May 2023, the Head of the Małopolski Customs and Tax Office in Kraków, which also acted as the appeal authority in this case, issued a decision upholding the contested decision. The decision of the appeal authority was served on GOG sp. z o.o. on 5 June 2023. On 4 July 2023, the Management Board of GOG sp. z o.o., disagreeing with the position of the tax authority, filed a complaint against the decision issued with the Voivodeship Administrative Court in Kraków. On 3 October 2023, a hearing before the Voivodeship Administrative Court in Kraków was held, as a result of which the said Court issued a judgment overruling the decisions of the Head of the Małopolski Customs and Tax Office of 19 August 2022 and 22 May 2023. As at the date of publication of this report, the judgment has the status of a non-final decision. 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 99 910 510 and consists of 99 910 510 shares with a nominal value of PLN 1 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 the 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 12.89% Michal Kicinski 1 9 989 363 9.99% Piotr Nielubowicz 6 858 717 6.86% 1 According to the latest statement submitted to the Company - current report no. 41/2023 of 13 November 2023. Changes in the shareholding structure of the Parent Company In the reporting period presented, the Parent Company did not receive any notifications concerning changes in the number of voting rights or the Parent Company’s shares held. After the balance sheet date, on 13 November 2023, the Parent Company received a notification from a shareholder, Mr. Michał Kiciński, according to which the number of shares in the Parent Company held by Mr. Michał Kiciński had decreased from 9 995 024 (i.e. 10.00% of the total number of votes) to 9 989 363 (i.e. 9.99% of the total number of votes). The status resulting from the said notification is presented in the table above. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements 85 Parent Company’s shares held by the members of the Management Board and the Supervisory Board Changes in the number of shares held by the Members of the Management Board and the Supervisory Board Name and surname Position As at 01.01.2023 As at 30.09.2023 As at 28.11.2023 Adam Kiciński Member of the Board 4 046 001 4 046 001 4 046 001 Piotr Nielubowicz Member of the Board 6 858 717 6 858 717 6 858 717 Adam Badowski Member of the Board 692 640 692 640 692 640 Michał Nowakowski Member of the Board 530 290 530 290 530 290 Piotr Karwowski Member of the Board 108 728 108 728 108 728 Paweł Zawodny Member of the Board 18 508 18 508 18 508 Marcin Iwiński Chair of the Supervisory Board 12 873 520 12 873 520 12 873 520 Katarzyna Szwarc Deputy Chair of the Supervisory Board 10 10 10 Maciej Nielubowicz Secretary 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 any 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 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements 87 Interim condensed separate income statement Note 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Sales revenue 381 921 203 081 625 242 494 049 Sales of products 380 646 201 452 617 254 485 205 Sales of services 70 359 356 1 495 Sales of goods for resale and materials 1 205 1 270 7 632 7 349 Cost of sales of products, services, goods for resale and materials 107 298 49 835 157 441 90 842 Costs of products and services sold 106 104 48 617 149 521 85 397 Cost of goods for resale and materials sold 1 194 1 218 7 920 5 445 Gross profit/(loss) on sales 274 623 153 246 467 801 403 207 Selling expenses 52 873 35 335 121 164 105 969 Administrative expenses 47 963 24 012 102 596 64 929 Other operating income 7 578 7 881 41 307 13 499 Other operating expenses 3 591 6 874 12 094 15 467 (Impairment)/reversal of impairment of financial instruments (5) (9) (1) (17) Operating profit/(loss) 177 769 94 897 273 253 230 324 Finance income 60 161 33 955 78 880 70 305 Finance costs 12 984 18 740 6 316 40 114 Profit/(loss) before tax 224 946 110 112 345 817 260 515 Income tax A 29 933 13 054 59 437 52 383 Net profit/(loss) 195 013 97 058 286 380 208 132 Net earnings/(loss) per share (in PLN) - - - - Basic for the reporting period 1.95 0.96 2.85 2.07 Diluted for the reporting period 1.95 0.96 2.85 2.07 * restated data Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements 88 Interim condensed separate statement of comprehensive income 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 Net profit/(loss) 195 013 97 058 286 380 208 132 Other comprehensive income subject to reclassification to gains or losses after specific conditions have been met (479) (6 298) (142) (14 289) Measurement of derivative financial instruments - fair value through other comprehensive income, taking into account the tax effect (479) (6 298) (142) (14 289) Other comprehensive income not subject to reclassification to gains or losses - - - - Total comprehensive income 194 534 90 760 286 238 193 843 * restated data Interim condensed separate statement of financial position Note 30.09.2023 30.06.2023 31.12.2022 NON-CURRENT ASSETS 1 228 171 1 265 852 1 096 803 Property, plant and equipment 167 301 159 479 143 439 Intangible assets 69 250 70 414 70 324 Expenditure on development projects 572 915 597 658 473 504 Investment properties 34 612 37 429 42 560 Goodwill C 49 167 49 168 49 168 Investments in subordinated entities 52 698 57 910 53 566 Prepayments and deferred costs 5 390 6 100 5 314 Other financial assets G 254 687 242 203 207 437 Deferred tax assets A 21 778 45 123 51 108 Other receivables F,G 373 368 383 CURRENT ASSETS 1 072 936 838 024 1 089 378 Inventories 7 463 8 118 9 886 Trade receivables F,G 296 920 83 188 164 708 Current income tax receivable 14 780 10 716 - Other receivables F 31 725 40 376 54 677 Prepayments and deferred costs 9 522 9 362 6 189 Other financial assets G 267 106 249 576 279 515 Bank deposits over 3 months G 263 250 317 125 337 330 Cash and cash equivalents G 182 170 119 563 237 073 TOTAL ASSETS 2 301 107 2 103 876 2 186 181 * restated data Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements 89 Note 30.09.2023 30.06.2023 31.12.2022 EQUITY 2 171 290 2 003 419 1 999 827 Share capital 11,22 99 911 99 911 100 771 Supplementary capital 1 681 466 1 681 466 1 539 437 Share premium 116 700 116 700 116 700 Treasury shares - - (99 993) Other reserves 17 451 14 504 3 777 Retained earnings (30 618) (3 638) (1 336) Net profit (loss) for the period 286 380 94 476 340 471 NON-CURRENT LIABILITIES 38 137 29 968 36 106 Other financial liabilities G 17 601 18 206 18 883 Other liabilities 2 501 2 500 2 620 Deferred income 2 069 2 753 3 666 Provision for retirement and similar benefits 339 339 339 Other provisions B 15 627 6 170 10 598 CURRENT LIABILITIES 91 680 70 489 150 248 Other financial liabilities G 5 848 2 085 1 788 Trade payables G 23 179 18 945 39 587 Current income tax liabilities - - 2 116 Other liabilities 4 774 5 452 4 350 Deferred income 7 052 18 479 15 032 Provision for retirement and similar benefits 7 155 6 908 4 154 Other provisions B 43 672 18 620 83 221 TOTAL EQUITY AND LIABILITIES 2 301 107 2 103 876 2 186 181 * restated data ** 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 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements 90 Interim condensed separate statement of changes in equity Share capital Supplementary capital Share premium Treasury shares Other reserves Retained earnings Net profit (loss) for the period Total equity 01.01.2023 – 30.09.2023 Equity as at 01.01.2023 100 771 1 539 437 116 700 (99 993) 3 777 341 073 - 2 001 765 Correction of errors - - - - - (1 938) - (1 938) Equity, as adjusted 100 771 1 539 437 116 700 (99 993) 3 777 339 135 - 1 999 827 Costs of the incentive plan - - - - 13 816 - - 13 816 Appropriation of the net profit/offset of loss - 241 162 - - - (241 162) - - Payment of dividend - - - - - (99 911) - (99 911) Redemption of Treasury shares (860) (99 133) - 99 993 - - - - Retained earnings of the acquired entity - - - - - (28 680) - (28 680) Total comprehensive income - - - - (142) - 286 380 286 238 Equity as at 30.09.2023 99 911 1 681 466 116 700 - 17 451 (30 618) 286 380 2 171 290 Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements 91 Share capital Supplementary capital Share premium Treasury shares Other reserves Retained earnings Net profit (loss) for the period Total equity 01.01.2022 – 30.09.2022 Equity as at 01.01.2022 100 739 1 366 952 115 909 - 49 515 235 934 - 1 869 049 Correction of errors - - - - - (1 336) - (1 336) Equity, as adjusted 100 739 1 366 952 115 909 - 49 515 234 598 - 1 867 713 Costs of the incentive plan - - - - 3 285 - - 3 285 Appropriation of the net profit/offset of loss - 135 195 - - - (135 195) - - Payment of dividend - - - - - (100 739) - (100 739) Total comprehensive income - - - - (14 289) - 208 132 193 843 Equity as at 30.09.2022 100 739 1 502 147 115 909 - 38 511 (1 336) 208 132 1 964 102 Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 92 Interim condensed separate statement of cash flows 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 OPERATING ACTIVITIES Net profit/(loss) 195 013 97 058 286 380 208 132 Total adjustments: (126 936) (20 335) (96 315) 17 499 Depreciation and amortization of property, plant and equipment, intangible assets, expenditure on development projects and investment properties 2 903 2 650 8 738 8 150 Amortization of development projects recognized as cost of goods sold 93 938 48 327 137 155 84 464 Foreign exchange (gains)/losses (14 819) (19 888) 4 024 (24 747) Interest and shares in profits (10 247) (8 663) (35 465) (25 629) (Gains)/losses on investing activities (14 498) 14 299 (60 459) 18 182 Increase/(Decrease) in provisions 34 833 15 393 (11 696) (33 443) (Increase)/Decrease in inventories 655 (60) 2 423 2 732 (Increase)/Decrease in receivables (215 772) (87 792) (135 714) (14 747) Increase/(Decrease) in liabilities, excluding loans and borrowings 1 652 11 849 (12 937) 10 526 Change in other assets and liabilities (11 621) 1 718 (13 166) (14 863) Other adjustments 6 040 1 832 20 782 6 874 Cash from operating activities 68 077 76 723 190 065 225 631 Income tax expense 20 280 6 334 33 825 21 030 Withholding tax paid abroad 9 653 6 720 25 612 31 353 Income tax (paid)/refunded - - (21 158) (34 188) Net cash from operating activities 98 010 89 777 228 344 243 826 * restated data Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 93 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 INVESTING ACTIVITIES Inflows 144 600 91 538 564 987 553 707 Sale of intangible assets and property, plant and equipment 127 256 149 262 Repayment of loans granted 1 002 - 1 002 13 220 Sale of shares in a subsidiary - - - 76 Expiry of bank deposits over 3 months 124 680 - 454 650 265 000 Redemption of bonds - 84 853 56 411 257 943 Interest on bonds 1 637 1 147 8 116 3 250 Interest received on deposits 5 684 5 282 22 873 13 679 Inflows from execution of forward contracts 11 470 - 21 743 - Other inflows from investing activities - - 43 277 Outflows 179 409 546 554 746 203 879 370 Acquisition of intangible assets and property, plant and equipment 9 275 10 206 37 559 35 371 Expenditure on development projects 64 681 55 831 226 267 145 542 Expenditure on intangible assets 345 - 724 - Acquisition of investment properties and capitalization of expenditure 57 - 155 145 Loans granted - - 4 215 4 000 Purchase of shares in a subsidiary - - 440 - Contribution to the capital of a subsidiary - 2 808 3 053 32 720 Purchase of bonds and cost of their purchase 34 246 57 380 93 220 225 500 Placement of bank deposits over 3 months 70 805 410 544 380 570 410 544 Outflows from execution of forward contracts - 9 785 - 25 548 Net cash from investing activities (34 809) (455 016) (181 216) (325 663) FINANCING ACTIVITIES Inflows 1 10 31 30 Payment of finance lease liabilities 1 10 30 30 Interest paid - - 1 - Outflows 595 101 367 102 062 103 014 Dividends and other payments to shareholders - 100 739 99 911 100 739 Payment of lease liabilities 405 499 1 566 1 901 Interest paid 190 129 585 374 Net cash from financing activities (594) (101 357) (102 031) (102 984) Net increase/(decrease) in cash and cash equivalents 62 607 (466 596) (54 903) (184 821) Change in cash and cash equivalents in the balance sheet 62 607 (466 596) (54 903) (184 821) Cash and cash equivalents as at the beginning of the period 119 563 627 570 237 073 345 795 Cash and cash equivalents as at the end of the period 182 170 160 974 182 170 160 974 Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 94 Explanations to the condensed separate statement of cash flows 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 The item “Other adjustments” comprises: 6 040 1 832 20 782 6 874 Costs of the incentive plan 3 055 963 12 594 3 112 Amortization and depreciation written off, reported under cost of sales, consortium settlements and other operating expenses 125 - 125 1 046 Amortization and depreciation reported under cost of sales and other operating expenses 494 869 1 994 2 716 Accounting for shares in the acquired entity 32 854 - 35 754 - Retained earnings of the acquired entity (26 979) - (28 680) - Net profit or loss of the acquired entity (3 109) - - - Deferred tax asset of the acquired entity (233) - (233) - Net amount of property, plant and equipment and intangible assets of the acquired entity (167) - (772) - 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 The changes in accounting policies relating to the Company are the same as those described in the section Assumption of comparability of the financial statements and changes in the accounting policies of the consolidated financial statements for the period from 1 July to 30 September 2023. Presentation changes and correction of errors In these interim condensed separate financial statements for the period from 1 July to 30 September 2023, certain adjustments in selected financial data were made. In order to ensure comparability of the financial data in the reporting period, the data for the period from 1 July to 30 September 2022, from 1 January to 30 September 2022 and as at 31 December 2022 and 30 June 2023 were adjusted. The data are presented after the following corrections:  In the statement of financial position as at 31 December 2022, provisions for holiday pay were entered. Consequently, the following items changed: - Expenditure on development projects – an increase of PLN 1 967 thousand; - Deferred income tax assets – an increase of PLN 240 thousand; - Retained earnings – a decrease of PLN 1 336 thousand; - Net profit (loss) for the period – a decrease of PLN 602 thousand ; - Provision for retirement and similar benefits – an increase of PLN 4 145 thousand. The change affected the Net profit or loss and Equity. Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 95  In the statement of financial position as at 30 June 2023, provisions for holiday pay were entered. Consequently, the following items changed: - Expenditure on development projects – an increase of PLN 3 524 thousand; - Deferred income tax assets – an increase of PLN 386 thousand; - Retained earnings – a decrease of PLN 1 937 thousand; - Net profit (loss) for the period – a decrease of PLN 1 052 thousand ; - Provision for retirement and similar benefits – an increase of PLN 6 899 thousand. The change affected the Net profit or loss and Equity.  In the statement of cash flows for the period from 1 July to 30 September 2022, provisions for holiday pay were recognized. Consequently, the following items changed: - Net profit/(loss) – an increase of PLN 185 thousand; - Increase/(Decrease) in provisions – a decrease of PLN 209 thousand; - Income tax expense – an increase of PLN 24 thousand.  In the statement of cash flows for the period from 1 January to 30 September 2022, provisions for holiday pay were recognized. Consequently, the following items changed: - Net profit/(loss) – a decrease of PLN 601 thousand; - Increase/(Decrease) in provisions – an increase of PLN 683 thousand; - Income tax expense – a decrease of PLN 82 thousand.  In the income statement for the period from 1 July to 30 September 2022, provisions for holiday pay were recognized. Consequently, the following items changed: - Administrative expenses – a decrease of PLN 209 thousand; - Income tax – an increase of PLN 24 thousand. The change affected the Net profit or loss and Equity.  In the income statement for the period from 1 January to 30 September 2022, provisions for holiday pay were recognized. Consequently, the following items changed: - Administrative expenses – an increase of PLN 683 thousand; - Income tax – a decrease of PLN 82 thousand. The change affected the Net profit or loss and Equity. In these interim condensed separate financial statements for the period from 1 July to 30 September 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 of the data for the period from 1 July to 30 September 2022 and from 1 January to 30 September 2022 was changed. The data are presented after the following adjustment:  In the income statement for the period from 1 July 2022 to 30 September 2022, the presentation of the provisions for the variable component of the performance-related remuneration of the Management Board Members was changed. Consequently, the following items changed: - Selling expenses – a decrease of PLN 9 315 thousand; - Administrative expenses – an increase of PLN 9 315 thousand. The change did not affect the Net profit or loss or Equity.  In the income statement for the period from 1 January to 30 September 2022, the presentation of the provisions for the variable component of the performance-related remuneration of the Management Board Members was changed. Consequently, the following items changed: - Selling expenses – a decrease of PLN 20 023 thousand; - Administrative expenses – an increase of PLN 20 023 thousand. The change did not affect the Net profit or loss or Equity. Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 96 Notes to the separate financial statements of CD PROJEKT S.A. A. Deferred tax Deductible temporary differences underlying the deferred tax asset 31.12.2022 Differences affecting the deferred tax recognized in the profit or loss 30.09.2023 Provision for other employee benefits 2 353 1 343 3 696 Provision for costs of performance-related and other remuneration 48 719 (17 597) 31 122 Foreign exchange losses 7 118 (351) 6 767 Difference between the carrying amount and tax base of expenditure on development projects 34 848 (14 184) 20 664 Wages & salaries and social security payable in future periods 47 - 47 Other provisions 33 282 8 871 42 153 Tax value of non-current assets leased 20 671 (575) 20 096 Research and development relief 317 927 (65 015) 252 912 Prepayments recognized as revenue for tax purposes 7 523 (3 424) 4 099 Total deductible differences, including: 472 488 (90 932) 381 556 taxed at 5% 72 656 13 580 86 236 taxed at 19% 399 832 (104 512) 295 320 Deferred income tax assets 79 601 (19 178) 60 423 * restated data Taxable temporary differences underlying the deferred tax provision 31.12.2022 Differences affecting the deferred tax recognized in the profit or loss 30.09.2023 Difference between the net carrying amounts and tax bases of property, plant and equipment and intangible assets 16 358 2 720 19 078 Current period revenue invoiced in the subsequent period/accrued income 132 887 156 519 289 406 Foreign exchange gains 8 417 (3 938) 4 479 Difference between the carrying amount and tax base of expenditure on development projects 253 594 134 895 388 489 Book value of non-current assets leased 20 849 (1 060) 19 789 Other 7 (7) - Total taxable differences, including: 432 112 289 129 721 241 taxed at 5% 382 910 319 882 702 792 taxed at 19% 49 202 (30 753) 18 449 Deferred tax provisions 28 493 10 152 38 645 * restated data Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 97 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 tax base will give rise to the realization of the temporary differences recognized. Net deferred tax assets/provisions 30.09.2023 30.06.2023 31.12.2022 Deferred tax assets 60 423 62 890 79 601 Deferred tax provisions 38 645 17 767 28 493 * restated data Income tax expense recognized in the income statement 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022* Current income tax, including: 6 355 14 775 29 874 47 563 withholding tax paid abroad 9 653 6 720 25 612 31 353 Change in deferred tax 23 578 (1 721) 29 563 4 820 Income tax expense recognized in the income statement 29 933 13 054 59 437 52 383 * restated data B. Other provisions 30.09.2023 30.06.2023 31.12.2022 Provision for liabilities, including: 47 662 24 790 93 819 provision for costs of the audit and review of the financial statements 71 73 137 provision for costs of performance-related and other remuneration 31 123 9 254 67 121 provision for other costs 16 468 15 463 26 561 Total, including: 47 662 24 790 93 819 current 43 672 18 620 83 221 non-current 3 990 6 170 10 598 Changes in other provisions Provision for costs of performance-related and other remuneration Other provisions Total As at 01.01.2023 67 121 26 698 93 819 Provisions recorded during the year 31 123 70 634 101 757 Provisions utilized/released 67 121 69 156 136 277 As at 30.09.2023, including: 31 123 28 176 59 299 current 31 123 12 549 43 672 non-current - 15 627 15 627 C. Goodwill During the period from 1 July to 30 September 2023, there were no changes in goodwill. Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 98 D. Business combinations Business combinations of jointly controlled entities are not covered directly in the International Financial Reporting Standards, therefore, when accounting for such transactions, the Company uses a method consistent with the pooling of interests method, which assumes that:  assets and liabilities of combining entities are measured at the carrying amounts derived from the Company’s consolidated financial statements. This means that goodwill previously recognized in the consolidated financial statements and all other intangible assets recognized as part of accounting for the combination are moved to separate financial statements;  transaction costs relating to the business combination are recognized in the income statement (finance costs);  mutual balances of receivables/payables are eliminated;  any difference between the amount paid or transferred and net assets acquired (at amounts derived from the consolidated financial statements) is reflected in the equity of the acquiring company (the amount embedded in equity is not a component of the supplementary capital and, therefore, is not subject to distribution);  the income statement presents the results of the combined entities from the moment when the combination occurred, while the data for prior periods of the year in which the combination took place are recognized in equity as retained earnings, and the data for the year preceding the business combination are not restated. During the reporting period, a business combination involving the Group’s business entities was registered – on 31 August 2023, the District Court for the Capital City of Warsaw in Warsaw entered the merger-through-acquisition of the Parent Company, as the surviving company, with its subsidiary Spokko sp. z o.o. with its registered office in Warsaw, as the target company, in the Register of Businesses. The merger was carried out in accordance with the merger plan announced on 20 April 2023, i.e. by transferring all of the assets of Spokko 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 Parent Company informed of the registration of the merger in its current report no. 36/2023. Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 99 Income statement for the period from 01.01.2023 to 31.08.2023 CD PROJEKT S.A. Spokko sp. z o.o. Merger adjustments CD PROJEKT S.A. after merger Sales revenue 292 992 1 528 (1 698) 292 822 Sales of products 285 463 15 - 285 478 Sales of services 470 1 513 (1 698) 285 Sales of goods for resale and materials 7 059 - - 7 059 Cost of sales of products, services, goods for resale and materials 62 897 1 376 (38) 64 235 Costs of products and services sold 55 505 1 376 (38) 56 843 Cost of goods for resale and materials sold 7 392 - - 7 392 Gross profit/(loss) on sales 230 095 152 (1 660) 228 587 Selling expenses 86 439 1 449 (250) 87 638 Administrative expenses 69 332 1 493 (1 146) 69 679 Other operating income 38 237 5 (56) 38 186 Other operating expenses 10 117 5 (15) 10 107 (Impairment)/reversal of impairment of financial instruments 4 - - 4 Operating profit/(loss) 102 448 (2 790) (305) 99 353 Finance income 121 377 167 - 121 544 Finance costs 38 216 2 - 38 218 Profit/(loss) before tax 185 609 (2 625) (305) 182 679 Income tax 35 348 245 - 35 593 Net profit/(loss) 150 261 (2 870) (305) 147 086 Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 100 Statement of financial position as at 31 August 2023 CD PROJEKT S.A. Spokko sp. z o.o. Merger adjustments CD PROJEKT S.A. after merger NON-CURRENT ASSETS 1 330 857 228 (33 153) 1 297 932 Property, plant and equipment 162 282 201 - 162 483 Intangible assets 70 306 26 - 70 332 Expenditure on development projects 624 898 - (299) 624 599 Investment properties 37 151 - - 37 151 Goodwill 49 167 - - 49 167 Investments in subordinated entities 85 434 - (32 854) 52 580 Prepayments and deferred costs 2 506 - - 2 506 Other financial assets 241 863 - - 241 863 Deferred tax assets 56 869 1 - 56 870 Other receivables 381 - - 381 CURRENT ASSETS 1 082 679 2 859 (229) 1 085 309 Inventories 7 917 - - 7 917 Trade receivables 41 041 229 (229) 41 041 Current income tax receivable 8 366 - - 8 366 Other receivables 45 618 - - 45 618 Prepayments and deferred costs 13 886 37 - 13 923 Other financial assets 503 902 - - 503 902 Bank deposits over 3 months 300 940 - - 300 940 Cash and cash equivalents 161 009 2 593 - 163 602 TOTAL ASSETS 2 413 536 3 087 (33 382) 2 383 241 Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 101 CD PROJEKT S.A. Spokko sp. z o.o. Merger adjustments CD PROJEKT S.A. after merger EQUITY 2 063 869 3 001 (33 153) 2 033 717 Equity of the shareholders of CD PROJEKT S.A. 2 063 869 3 001 (33 153) 2 033 717 Share capital 99 911 54 (54) 99 911 Supplementary capital 1 681 466 32 684 (32 684) 1 681 466 Share premium 116 700 - - 116 700 Other reserves 17 234 - - 17 234 Retained earnings (1 703) (26 867) (110) (28 680) Net profit (loss) for the period 150 261 (2 870) (305) 147 086 Non-controlling interests - - - - NON-CURRENT LIABILITIES 42 411 19 - 42 430 Other financial liabilities 18 070 11 - 18 081 Other liabilities 2 524 - - 2 524 Deferred tax provision 14 220 8 - 14 228 Deferred income 1 088 - - 1 088 Provision for retirement and similar benefits 339 - - 339 Other provisions 6 170 - - 6 170 CURRENT LIABILITIES 307 256 67 (229) 307 094 Other financial liabilities 233 538 16 - 233 554 Trade payables 11 527 4 - 11 531 Other liabilities 4 745 32 (45) 4 732 Deferred income 26 827 - - 26 827 Provision for retirement and similar benefits 9 - - 9 Other provisions 30 610 15 (184) 30 441 TOTAL EQUITY AND LIABILITIES 2 413 536 3 087 (33 382) 2 383 241 No other business combinations of the Group entities took place in the reporting period. Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 102 E. Dividend paid (or declared) and received During the period from 1 July to 30 September 2023, the Group companies did not pay or receive any dividends. F. Trade and other receivables 30.09.2023 30.06.2023 31.12.2022 Trade and other receivables, gross 329 105 124 746 220 586 Write-downs 87 814 818 Trade and other receivables 329 018 123 932 219 768 from related entities 22 593 4 978 5 535 from other entities 306 425 118 954 214 233 Changes in write-downs of receivables Trade receivables Other receivables Total OTHER ENTITIES Write-downs as at 01.01.2023 86 732 818 Increases, including: 7 - 7 recognition of write-downs of overdue and disputed receivables 7 - 7 Decreases, including: 6 732 738 reversal of write-downs (write-off) - 732 732 reversal of write-downs 6 - 6 Write-downs as at 30.09.2023 87 - 87 Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 103 Current and overdue trade receivables as at 30.09.2023 Total Not overdue Overdue, in days 1 – 60 61 – 90 91 – 180 181 – 360 >360 RELATED ENTITIES gross receivables 22 591 22 590 1 - - - - default ratio - 0% 0% 0% 0% 0% 0% write-down resulting from the ratio - - - - - - - write-down determined individually - - - - - - - total expected credit losses - - - - - - - Net receivables 22 591 22 590 1 - - - - Total Not overdue Overdue, in days 1 – 60 61 – 90 91 – 180 181 – 360 >360 OTHER ENTITIES gross receivables 274 415 273 801 517 11 - 1 85 default ratio - 0% 0% 0% 0% 0% 0% write-down resulting from the ratio - - - - - - - write-down determined individually 86 - - - - 1 85 total expected credit losses 86 - - - - 1 85 Net receivables 274 329 273 801 517 11 - - - Total gross receivables 297 006 296 391 518 11 - 1 85 impairment write- downs 86 - - - - 1 85 Net receivables 296 920 296 391 518 11 - - - Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 104 Other receivables 30.09.2023 30.06.2023 31.12.2022 Other gross receivables, including: 32 098 41 476 55 792 tax receivables, other than corporate income tax 22 773 24 451 41 766 prepayments for inventories 8 138 14 041 6 826 prepayments for development projects 633 1 718 1 433 security deposits 422 432 687 prepayments for investment properties 54 - - prepayments for property, plant and equipment and intangible assets 30 30 135 settlements with employees 28 40 - settlements with members of the Management Boards 2 - 2 settlements with suppliers of property, plant and equipment items - - 4 160 settlements with payment operators - - 7 other 18 764 776 Write-downs - 732 732 Other receivables, including: 32 098 40 744 55 060 current 31 725 40 376 54 677 non-current 373 368 383 G. Information on financial instruments Fair values and hierarchy of specific classes of financial instruments The Management Board of the Company has analysed specific classes of financial instruments. Based on the analysis, it was concluded that the carrying amounts of the instruments do not differ materially from their fair values as at both 30 September 2023, 30 June 2023 and 31 December 2022. 30.09.2023 30.06.2023 31.12.2022 LEVEL 1 Assets measured at fair value Assets measured at fair value through other comprehensive income 234 677 220 483 243 091 bonds issued by foreign governments - EUR 16 327 15 609 25 111 bonds issued by foreign governments - USD 218 350 204 874 217 980 LEVEL 2 Assets measured at fair value through profit or loss Derivatives - 20 534 7 809 currency forwards - EUR - 973 1 249 currency forwards - USD - 19 561 6 560 Private equity interests in the gaming sector 2 414 2 260 2 556 private equity interests in the gaming sector - SEK 985 919 1 085 Private equity interests in the gaming sector - USD 1 429 1 341 1 471 Liabilities measured at fair value through profit or loss Derivatives 3 632 - - currency forwards - EUR 192 - - currency forwards - USD 3 440 - - Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 105 Financial instruments measured at fair value are classified according to a three-level 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 30.09.2023 30.06.2023 31.12.2022 Financial assets measured at amortized cost 1 027 442 768 746 972 990 Other non-current receivables 373 368 383 Trade receivables 296 920 83 188 164 708 Cash and cash equivalents 182 170 119 563 237 073 Bank deposits over 3 months 263 250 317 125 337 330 Treasury bonds and bonds guaranteed by the State Treasury 280 493 243 713 232 757 Loans granted 4 236 4 789 739 Financial assets measured at cost 52 698 57 910 53 566 Investments in subordinated entities 52 698 57 910 53 566 Assets measured at fair value through other comprehensive income 234 677 220 483 243 091 Bonds issued by foreign governments 234 677 220 483 243 091 Financial assets measured at fair value through profit or loss 2 387 22 794 10 365 Derivative financial instruments - 20 534 7 809 Private equity interests in the gaming sector 2 387 2 260 2 556 Total financial assets 1 317 204 1 069 933 1 280 012 Financial liabilities – classification and measurement 30.09.2023 30.06.2023 31.12.2022 Financial liabilities measured at amortized cost 42 996 39 236 60 258 Trade payables 23 179 18 945 39 587 Other financial liabilities 19 817 20 291 20 671 Financial liabilities measured at fair value through profit or loss 3 632 - - Derivative financial instruments 3 632 - - Total financial liabilities 46 628 39 236 60 258 In accordance with the requirements of IFRS 9 Financial Instruments, the Company has 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 bonds to be sold 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 offers the possibility of the portfolio being managed by an Asset Manager. Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 106 In accordance with the requirements of IFRS 13 Fair Value Measurement, the Company has analysed the valuation of the financial instruments measured at amortized cost in the separate statement of financial position in order to determine their fair values and their classification in the fair value hierarchy. Listed debt securities were classified to Level 1. They include State Treasury bonds and bonds guaranteed by the State Treasury whose fair value was determined on the basis of a market valuation provided by the brokerage office as part of the applicable agreement for the provision of brokerage services. 30.09.2023 30.06.2023 31.12.2022 LEVEL 1 Fair value of assets measured at amortized cost 278 985 236 096 219 713 Treasury bonds and bonds guaranteed by the State Treasury 278 985 236 096 219 713 Other items of financial assets and financial liabilities measured at amortized cost were classified to Level 3. With regard to equity interests in other entities, the Company estimates the fair values of the shares held using the method which consists of forecasting future cash flows generated by the relevant cash generating unit and requires determining a discount rate to be used to calculate the present value of these cash flows. In justified cases, the Company assumes a historical cost as an acceptable approximation of the fair value. The Company did not determine the fair values of receivables, trade payables, cash and cash equivalents, bank deposits over 3 months and loans granted with variable interest rates, because their carrying amounts are considered by the Company to be a reasonable approximation of their fair values. There were no movements between the levels in the fair value hierarchy in the reporting period or in the comparative period. Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 107 H. Transactions with related entities Sales to related entities Purchases from related entities 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 01.07.2023 – 30.09.2023 01.07.2022 – 30.09.2022 01.01.2023 – 30.09.2023 01.01.2022 – 30.09.2022 SUBSIDIARIES GOG sp. z o.o. 23 313 3 692 27 330 10 148 386 731 764 2 234 CD PROJEKT RED Inc. 14 100 201 271 6 560 3 538 14 449 11 762 Spokko sp. z o.o. - 324 - 1 061 - - - - CD PROJEKT RED STORE sp. z o.o. - 268 - 1 003 - 43 - 113 CD PROJEKT RED Vancouver Studio Ltd. 6 4 29 33 3 251 4 342 13 355 12 124 The Molasses Flood LLC 1 2 2 2 9 488 9 737 35 178 20 048 MANAGEMENT BOARD OF THE COMPANY AND SUPERVISORY BOARD MEMBERS Marcin Iwiński - - - 1 - - - - Adam Kiciński 1 - 1 - - - - - Piotr Nielubowicz - - - 1 - - - - Michał Nowakowski - 2 - 3 - - - - Adam Badowski 1 1 1 6 - - - - Paweł Zawodny - - 6 7 - - - - Jeremiah Cohn - - - 1 - - - - Maciej Nielubowicz 1 - 1 - - - - - Interim condensed separate financial statements of CD PROJEKT S.A. for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 108 Receivables from related entities Liabilities to related entities 30.09.2023 30.06.2023 31.12.2022 30.09.2023 30.06.2023 31.12.2022 SUBSIDIARIES GOG sp. z o.o. 20 326 4 394 2 798 88 4 2 610 CD PROJEKT RED Inc. 14 2 909 43 1 230 1 249 1 185 Spokko sp. z o.o. - 2 156 - 246 - CD PROJEKT RED STORE sp. z o.o. - - 839 - - 19 CD PROJEKT RED Vancouver Studio Ltd. 2 250 563 1 694 1 725 1 730 2 746 The Molasses Flood LLC 4 237 4 789 742 2 496 2 855 2 579 MANAGEMENT BOARD OF THE COMPANY AND SUPERVISORY BOARD MEMBERS Marcin Iwiński - - - - - 7 Adam Kiciński - - - - - 13 Piotr Nielubowicz - - 2 - - 13 Michał Nowakowski 2 - - - - 4 Adam Badowski - - - 3 1 6 Piotr Karwowski - - - - - 2 Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 109 109 Statement by the Management Board of the Parent Company On the fairness of preparation of the interim condensed consolidated financial statements In accordance with the requirements of the Regulation of the Minister of Finance of 29 March 2018 on current and periodical information submitted by issuers of securities and conditions for considering as equivalent the information required under the legislation of a non-Member State, the Management Board of the Parent Company declares that, to the best of its knowledge, these interim condensed consolidated financial statements and comparative data have been prepared in accordance with the accounting policies applicable in the CD PROJEKT Group and that they reflect in a true, fair and clear manner the Group’s financial position and its results of operations. These interim condensed consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) endorsed by the European Union, published and effective as at 1 January 2023, and to the extent not governed by the said standards, in accordance with the Accounting Act of 29 September 1994 and the implementing legislation issued on the basis thereof and to the extent required by the Regulation of the Minister of Finance of 19 February 2009 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. On the entity authorized to review the fairness of preparation of the interim condensed consolidated financial statements On 9 March 2022, the Supervisory Board of the Parent Company selected Grant Thornton Polska Prosta spółka akcyjna with its registered office in Poznań, as recommended by the Audit Committee, as auditor to carry out the review of the semi-annual financial statements and the audit of the annual financial statements of the Company and its Group for 2022 and 2023. Grant Thornton Polska Prosta spółka akcyjna has been entered on the list of entities authorized to audit financial statements by the National Chamber of Statutory Auditors, with the reference number 4055. Interim condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 July to 30 September 2023 (all amounts in PLN thousand, unless stated otherwise) The attached notes are an integral part of these financial statements. 110 110 Approval of the financial statements This report for the period from 1 July to 30 September 2023 was signed and approved for publication by the Management Board of CD PROJEKT S.A. on 28 November 2023. Warsaw, 28 November 2023 Adam Kiciński Piotr Nielubowicz Adam Badowski Member of the Board Member of the Board Member of the Board Michał Nowakowski Piotr Karwowski Paweł Zawodny Member of the Board Member of the Board Member of the Board Jeremiah Cohn Krystyna Cybulska Member of the Board Chief Accountant 111 111 112 112

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