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

(all amounts in PLN thousand, unless stated otherwise)

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

Disclaimer

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

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

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

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

this regard.

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

(all amounts in PLN thousand, unless stated otherwise)

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

CD PROJEKT Group - Selected financial data translated into EUR

PLN EUR

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

Net sales of products, services, goods for resale

and materials

1 230 199 952 576 271 663 203 182

Cost of sales of products, services, goods for resale

and materials

380 567 243 974 84 040 52 039

Operating profit/(loss) 469 040 376 687 103 577 80 346

Profit/(loss) before tax 538 492 392 525 118 914 83 725

Net profit/(loss) attributable to owners

of CD PROJEKT S.A.

481 105 346 491 106 242 73 906

Net cash from operating activities 610 881 406 031 134 900 86 606

Net cash from investing activities (607 345) (335 607) (134 119) (71 584)

Net cash from financing activities (103 309) (204 183) (22 814) (43 552)

Net increase/(decrease) in cash and cash equivalents (99 773) (133 759) (22 033) (28 530)

Number of shares (in thousands) 100 269 100 741 100 269 100 741

Net earnings/(loss) per share (in PLN) 4.80 3.44 1.06 0.73

Diluted earnings/(loss) per share (in PLN/EUR) 4.80 3.44 1.06 0.73

Book value per share (in PLN/EUR) 23.97 20,17 5.51 4.30

Diluted book value per share

(in PLN/EUR)

23.97 20,17 5.51 4.30

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

1.00 1.00 0.22 0.21

restated data

PLN EUR

31.12.2023 31.12.2022* 31.12.2023 31.12.2022*

Total assets 2 613 438 2 276 331 601 067 485 369

Liabilities and provisions for liabilities (excluding accruals) 194 463 218 771 44 725 46 647

Non-current liabilities 38 774 36 186 8 918 7 716

Current liabilities 171 174 208 679 39 368 44 495

Equity 2 403 490 2 031 466 552 781 433 158

Share capital 99 911 100 771 22 979 21 487

* restated data

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

 Items of the consolidated income statement and the consolidated statement of cash flows 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

31 December 2023: 4.5284 PLN/EUR and from 1 January to 31 December 2022: 4.6883 PLN/EUR.

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

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

respectively, as follows: 4.348 PLN/EUR as at 31 December 2023 and 4.6899 PLN/EUR as at 31 December 2022.

Reference to published estimates

The Group did not publish estimated data relating to the period presented.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Table of contents

Reference to published estimates ................................................................................................................................................................................. 3

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

Consolidated income statement .................................................................................................................................................................................... 7

Consolidated statement of comprehensive income ................................................................................................................................................ 7

Consolidated statement of financial position ............................................................................................................................................................. 8

Statement of changes in consolidated equity .......................................................................................................................................................... 10

Consolidated statement of cash flows ....................................................................................................................................................................... 12

Notes to the consolidated financial statements ............................................................................................................................................................. 14

General Information ......................................................................................................................................................................................................... 15

Consolidation policies ..................................................................................................................................................................................................... 15

CD PROJEKT Group Companies ............................................................................................................................................................................ 15

Subsidiaries ................................................................................................................................................................................................................. 22

Changes in accounting policies .................................................................................................................................................................................. 22

Going concern assumption ........................................................................................................................................................................................... 22

Compliance with the International Financial Reporting Standards................................................................................................................... 22

Amendments to standards or interpretations effective from 1 January 2023 applicable and adopted by the Group ................23

Description of adopted accounting policies .............................................................................................................................................................24

Revenue and operating expenses ........................................................................................................................................................................24

Finance income and costs ...................................................................................................................................................................................... 25

State subsidies ........................................................................................................................................................................................................... 25

Current and deferred income tax ......................................................................................................................................................................... 25

Value-added tax (VAT) ............................................................................................................................................................................................. 25

Property, plant and equipment .............................................................................................................................................................................. 25

Intangible assets - Expenditure on development projects ........................................................................................................................... 26

Intangible assets - Other ......................................................................................................................................................................................... 29

Goodwill ........................................................................................................................................................................................................................ 29

Mergers of business entities under common control ..................................................................................................................................... 29

Impairment of non-financial assets ....................................................................................................................................................................... 29

Investment properties .............................................................................................................................................................................................. 30

Rights of perpetual usufruct of land ..................................................................................................................................................................... 30

Leases ........................................................................................................................................................................................................................... 30

Shares in non-consolidated subordinated entities .......................................................................................................................................... 30

Financial assets ............................................................................................................................................................................................................ 31

Financial liabilities ........................................................................................................................................................................................................ 31

Inventories ..................................................................................................................................................................................................................... 31

Trade and other receivables ...................................................................................................................................................................................32

Prepayments and accruals .......................................................................................................................................................................................32

Cash and cash equivalents ......................................................................................................................................................................................32

Assets held for sale and discontinued operations ...........................................................................................................................................32

Equity ..............................................................................................................................................................................................................................32

Provisions for liabilities .............................................................................................................................................................................................. 33

Employee benefits ...................................................................................................................................................................................................... 33

Loans granted .............................................................................................................................................................................................................. 33

Trade and other payables ........................................................................................................................................................................................ 33

Licences ......................................................................................................................................................................................................................... 33

Payment of dividend .................................................................................................................................................................................................. 33

Functional currency and presentation currency ...................................................................................................................................................... 34

Functional currency and presentation currency ............................................................................................................................................... 34

Transactions and balances ...................................................................................................................................................................................... 34

Critical accounting estimates and judgements ........................................................................................................................................................ 34

Professional judgement ............................................................................................................................................................................................ 34

Uncertainty of estimates ........................................................................................................................................................................................... 34

Assumption of comparability of the financial statements, changes in accounting policies and estimates.......................................... 36

Presentation changes ............................................................................................................................................................................................... 36

Notes – operating segments of the CD PROJEKT Group .......................................................................................................................................... 37

Operating segments ........................................................................................................................................................................................................38

Information on individual operating segments ................................................................................................................................................. 39

Notes – other explanatory notes to the consolidated financial statements ........................................................................................................ 46

Note 1. Sales revenue ................................................................................................................................................................................................ 47

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 2. Operating expenses ...................................................................................................................................................................................48

Note 3. Other operating income and expenses ............................................................................................................................................... 49

Note 4. Finance income and costs ....................................................................................................................................................................... 50

Note 5. Corporate income tax and deferred income tax................................................................................................................................ 51

Note 6. Discontinued operations .......................................................................................................................................................................... 54

Note 7. Earnings per share ..................................................................................................................................................................................... 54

Note 8. Dividend paid (or declared) and received .......................................................................................................................................... 55

Note 9. Disclosure of other comprehensive income items and their tax effect ..................................................................................... 55

Note 10. Property, plant and equipment ............................................................................................................................................................. 55

Note 11. Intangible assets and expenditure on development projects ...................................................................................................... 60

Note 12. Goodwill ....................................................................................................................................................................................................... 64

Note 13. Investment properties .............................................................................................................................................................................. 64

Note 14. Shares in non-consolidated subordinated entities ......................................................................................................................... 65

Note 15. Other financial assets ............................................................................................................................................................................... 67

Note 16. Inventories ................................................................................................................................................................................................... 67

Note 17. Trade receivables ..................................................................................................................................................................................... 68

Note 18. Other receivables ....................................................................................................................................................................................... 71

Note 19. Prepayments and deferred costs .......................................................................................................................................................... 73

Note 20. Cash and cash equivalents .................................................................................................................................................................... 73

Note 21. Share capital ................................................................................................................................................................................................ 74

Note 22. Treasury shares ......................................................................................................................................................................................... 74

Note 23. Other reserves ........................................................................................................................................................................................... 74

Note 24. Retained earnings / (Accumulated losses) ........................................................................................................................................ 77

Note 25. Equity attributable to non-controlling shareholders ....................................................................................................................... 77

Note 26. Loans and borrowings ............................................................................................................................................................................. 77

Note 27. Other financial liabilities .......................................................................................................................................................................... 77

Note 28. Other non-current liabilities ................................................................................................................................................................... 78

Note 29. Trade payables .......................................................................................................................................................................................... 79

Note 30. Other current liabilities ........................................................................................................................................................................... 80

Note 31. Social assets and the Company’s Social Fund liabilities ................................................................................................................81

Note 32. Contingent liabilities..................................................................................................................................................................................81

Note 33. Lease and sublease contracts ..............................................................................................................................................................83

Note 34. Deferred income ...................................................................................................................................................................................... 86

Note 35. Provision for retirement and similar benefits .................................................................................................................................... 87

Note 36. Other provisions ....................................................................................................................................................................................... 88

Note 37. Information on financial instruments .................................................................................................................................................. 89

Note 38. Capital management ............................................................................................................................................................................... 98

Note 39. Employee benefit programmes ........................................................................................................................................................... 98

Note 40. Transactions with related entities ....................................................................................................................................................... 101

Note 41. Mergers and changes in the structure of the CD PROJEKT Group .......................................................................................... 103

Note 42. Remuneration of the senior management and the Supervisory Board.................................................................................. 104

Note 43. Number of employees ........................................................................................................................................................................... 105

Note 44. Capitalization of borrowing costs ....................................................................................................................................................... 105

Note 45. Revenues generated on a seasonal, cyclical or occasional basis ........................................................................................... 105

Note 46. Tax settlements ....................................................................................................................................................................................... 106

Note 47. Post-balance sheet date events ......................................................................................................................................................... 106

Note 48. Transactions with entities performing the audits of the financial statements ...................................................................... 106

Note 49. Explanations to the statement of cash flows .................................................................................................................................. 107

Note 50. Cash flows and non-monetary changes resulting from changes in liabilities in financing activities ............................ 109

Statement of the Management Board of the Parent Company ......................................................................................................................... 110

Approval of the financial statements .......................................................................................................................................................................... 111

Key financial data of

the CD PROJEKT Group

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

(all amounts in PLN thousand, unless stated otherwise)

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

Consolidated income statement

Note

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

Sales revenue 1 230 199 952 576

Sales of products 1 1 041 784 767 499

Sales of services 1 1 662 1 960

Sales of goods for resale and materials 1 186 753 183 117

Cost of sales of products, services, goods for resale and materials 380 567 243 974

Costs of products and services sold 2 239 760 111 562

Cost of goods for resale and materials sold 2 140 807 132 412

Gross profit/(loss) on sales 849 632 708 602

Selling expenses 2 243 796 189 551

Administrative expenses 2 166 507 108 995

Other operating income 1,3 54 040 19 443

Other operating expenses 3 24 336 52 805

(Impairment)/reversal of impairment

of financial instruments

7 (7)

Operating profit/(loss) 469 040 376 687

Finance income 1,4 118 645 71 501

Finance costs 4 49 193 55 663

Profit/(loss) before tax 538 492 392 525

Income tax 5 57 387 46 034

Net profit/(loss) 481 105 346 491

Net profit/(loss) attributable to owners of CD PROJEKT S.A. 481 105 346 491

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

Basic for the reporting period 7 4.80 3.44

Diluted for the reporting period 7 4.80 3.44

* restated data

Consolidated statement of comprehensive income

Note

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

Net profit/(loss) 481 105 346 491

Other comprehensive income subject to reclassification to gains or losses

after specific conditions have been met

9 1 032 (12 411)

Exchange differences on measurement of foreign operations (3 106) 313

Measurement of derivative financial instruments - fair value through other

comprehensive income, taking into account the tax effect

4 138 (12 724)

Other comprehensive income not subject to reclassification to gains or

losses

9 - -

Total comprehensive income 482 137 334 080

Total comprehensive income attributable to non-controlling interests - -

Total comprehensive income attributable to owners of

CD PROJEKT S.A.

482 137 334 080

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Consolidated statement of financial position

Note 31.12.2023 31.12.2022*

NON-CURRENT ASSETS 1 450 623 1 122 185

Property, plant and equipment 10 183 038 145 252

Intangible assets 11 70 058 69 157

Expenditure on development projects 11 527 182 475 169

Investment properties 13 34 245 42 560

Goodwill 11,12 56 438 56 438

Shares in non-consolidated subordinated entities 14,37 38 095 41 607

Prepayments and deferred costs 19 41 906 31 074

Other financial assets 15,37 455 907 207 437

Deferred tax assets 5 43 371 53 102

Other receivables 18,37 383 389

CURRENT ASSETS 1 162 815 1 154 146

Inventories 16 3 576 12 701

Trade receivables 17,37 193 520 165 290

Current income tax receivable 1 128 1 458

Other receivables 18 57 741 57 139

Prepayments and deferred costs 19 27 872 22 886

Other financial assets 15,37 362 719 279 515

Bank deposits over 3 months 37 338 205 337 330

Cash and cash equivalents 20,37 178 054 277 827

TOTAL ASSETS 2 613 438 2 276 331

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 31.12.2023 31.12.2022*

EQUITY 2 403 490 2 031 466

Equity of the shareholders of CD PROJEKT S.A. 2 403 490 2 031 466

Share capital 21 99 911 100 771

Supplementary capital 23 1 714 604 1 567 325

Share premium 23 116 700 116 700

Treasury shares 23 - (99 993)

Other reserves 23 23 169 2 255

Foreign exchange differences on translation (1 202) 1 904

Retained earnings / (Accumulated losses) 24 (30 797) (3 987)

Net profit (loss) for the period 481 105 346 491

Non-controlling interests 25 - -

NON-CURRENT LIABILITIES 38 774 36 186

Other financial liabilities 27,33,37 20 038 18 883

Other liabilities 28 2 494 2 620

Deferred tax provision 5 - 50

Deferred income 34 2 315 3 669

Provision for retirement and similar benefits 35 518 366

Other provisions 36 13 409 10 598

CURRENT LIABILITIES 171 174 208 679

Other financial liabilities 27,33,37 6 884 9 578

Trade payables 29,37 58 835 72 119

Current income tax liabilities 462 2 116

Other liabilities 30 15 201 10 244

Deferred income 34 13 170 22 425

Provision for retirement and similar benefits 35 6 414 4 155

Other provisions 36 70 208 88 042

TOTAL EQUITY AND LIABILITIES 2 613 438 2 276 331

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Statement of changes in consolidated equity

capital

Supple-

mentary

capital

premium

Treasury

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 – 31.12.2023

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

- - - - 16 776 - - - 16 776 - 16 776

Redemption of

treasury shares

(860) (99 133) - 99 993 - - - - - - -

Retained earnings/

(Accumulated losses)

of the acquired

entity

- - - - - - (26 978) - (26 978) - (26 978)

Payment of dividend - - - - - - (99 911) - (99 911) - (99 911)

Appropriation of the

net profit/offset of

loss

- 246 412 - - - - (246 412) - - - -

Total comprehensive

income

- - - - 4 138 (3 106) - 481 105 482 137 - 482 137

Equity

as at 31.12.2023

99 911 1 714 604 116 700 - 23 169 (1 202) (30 797) 481 105 2 403 490 - 2 403 490

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

(all amounts in PLN thousand, unless stated otherwise)

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

capital

Supple-

mentary

capital

premium

Treasury

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 – 31.12.2022*

Equity

as at 01/01/2022

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

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

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

Share-based

payments

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

Purchase of treasury

shares for

redemption

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

Release of reserve

capital from previous

years created for the

purpose of

purchasing treasury

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

Payment of dividend - - - - - - (100 739) - (100 739) - (100 739)

Appropriation of the

net profit/offset of

loss

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

Total comprehensive

income

- - - - (12 724) 313 - 346 491 334 080 - 334 080

Equity

as at 31.12.2022

100 771 1 567 325 116 700 (99 993) 2 255 1 904 (3 987) 346 491 2 031 466 - 2 031 466

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Consolidated statement of cash flows

Note

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

OPERATING ACTIVITIES

Net profit/(loss) 481 105 346 491

Total adjustments: 49 89 787 56 538

Depreciation and amortization of property, plant and equipment, intangible

assets, expenditure on development projects and investment properties

13 970 13 828

Amortization of development projects recognized as cost of goods sold 231 112 103 604

Foreign exchange (gains)/losses 28 089 4 561

Interest and shares in profits (47 182) (42 487)

(Gains)/Losses on investing activities (84 938) 42 077

Increase/(Decrease) in provisions 7 392 (5 040)

(Increase)/Decrease in inventories 9 125 3 185

(Increase)/Decrease in receivables (60 033) (44 052)

Increase/(Decrease) in liabilities, excluding loans and borrowings (4 974) 13 034

Change in other assets and liabilities (26 668) (40 881)

Other adjustments 23 894 8 709

Cash from operating activities 570 892 403 029

Income tax expense 25 988 13 759

Withholding tax paid abroad 31 399 32 275

Income tax (paid)/refunded (17 398) (43 032)

Net cash from operating activities 610 881 406 031

restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

INVESTING ACTIVITIES

Inflows 696 457 1 292 199

Sale of intangible assets and property, plant and equipment 645 568

Repayment of loans granted 1 662 12 240

Sale of shares in a subsidiary - 76

Expiry of bank deposits over 3 months 530 600 975 860

Redemption of bonds 95 135 268 426

Interest on bonds 13 116 7 879

Interest received on deposits 28 090 26 885

Inflows from execution of forward contracts 27 081 -

Other inflows from investing activities 128 265

Outflows 1 303 802 1 627 806

Acquisition of intangible assets and property, plant and equipment 57 187 48 274

Expenditure on development projects 272 655 207 831

Expenditure on intangible assets 973 -

Acquisition of investment properties and capitalization of expenditure 122 214

Loans granted 4 215 4 187

Purchase of shares in subsidiaries 8 013 6 769

Contribution to the capital of a subsidiary - 28 318

Placement of bank deposits over 3 months 531 475 1 048 190

Purchase of private equity interests in the gaming sector 1 467 2 556

Purchase of bonds and cost of their purchase 427 695 253 580

Outflows from execution of forward contracts - 27 887

Net cash from investing activities (607 345) (335 607)

FINANCING ACTIVITIES

Inflows 32 861

Net proceeds from the sale of shares and issue of shares

in the execution of the incentive plan

- 822

Payment of finance lease liabilities 31 39

Interest paid 1 -

Outflows 103 341 205 044

Purchase of treasury shares for redemption - 99 993

Dividends and other distributions to shareholders 99 911 100 739

Payment of lease liabilities 2 622 3 731

Interest paid 808 581

Net cash used in financing activities (103 309) (204 183)

Net increase/(decrease) in cash and cash equivalents (99 773) (133 759)

Change in cash and cash equivalents in the balance sheet (99 773) (133 759)

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

Cash and cash equivalents as at the end of the period 178 054 277 827

* restated data

Notes to the consolidated financial

statements

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

(all amounts in PLN thousand, unless stated otherwise)

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

General Information

Name of reporting entity:

CD PROJEKT S.A.

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

the prior reporting period)

Legal form: a joint stock company (spółka akcyjna)

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

Country of registration: Poland

Core activities:

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

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

Principal place of business: Warsaw

Registration body:

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

of the National Court Register

Statistical number REGON: 492707333

Tax identification number NIP: 7342867148

Number in the BDO register (national

waste management database):

000141053

Duration of the Group: unspecified

Name of parent entity: CD PROJEKT S.A.

Name of the ultimate parent of

the group:

CD PROJEKT S.A.

Consolidation policies

CD PROJEKT Group Companies

As at 31.12.2023 % 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.

(formerly CD PROJEKT Inc.)

100% 100% acquisition accounting

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

The Molasses Flood LLC 81.82% 81.82% not consolidated

CD PROJEKT SILVER Inc. 100% 100% not consolidated

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

(all amounts in PLN thousand, unless stated otherwise)

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

Three companies were not consolidated due to the immateriality of data. 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, other operating income and finance income 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 cannot exceed:

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

▪ 2% of the share in the parent entity’s revenue from sales, other operating income and finance income;

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.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Total non-consolidated companies

As at 31.12.2023

Total non-

consolidated

companies

Eliminations of non-

consolidated

companies

Parent Company

Consolidation

eliminations

CD PROJEKT S.A.

Total

Percentage

Total assets 22 887 (3 163) 2 517 921 (42 683) 2 494 962 0.80%

for the period 01.01.2023 – 31.12.2023

Total revenue 65 153 (62 308) 1 206 192 (32) 1 209 005 0.24%

Net cash from operating activities 4 595 - 598 627 - 603 222 n/a

Net cash from investing activities (5 244) - (603 468) 2 486 (606 226) n/a

Net cash from financing activities 647 (2 486) (102 749) - (104 588) n/a

As at 31.12.2022

Total non-

consolidated

companies

Eliminations of non-

consolidated

companies

Parent Company

Consolidation

eliminations

CD PROJEKT S.A.

Total

Percentage

Total assets 29 637 (5 325) 2 183 974 (44 133) 2 164 153 1.14%

For the period 01.01.2022 – 31.12.2022

Total revenue 51 369 (47 975) 854 404 (1 395) 856 403 0.40%

Net cash from operating activities (7 598) - 435 369 - 427 771 n/a

Net cash from investing activities (3 767) - (340 989) 15 573 (329 183) n/a

Net cash from financing activities 17 124 (15 640) (203 102) - (201 618) n/a

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

(all amounts in PLN thousand, unless stated otherwise)

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

CD PROJEKT RED Vancouver Studio Ltd.

As at 31.12.2023

Value for the non-

consolidated

company

Eliminations for the

non-consolidated

company

Parent Company

Consolidation

eliminations

CD PROJEKT S.A.

Total

Percentage

Total assets 8 981 (1 549) 2 517 921 (11 504) 2 513 849 0.30%

for the period 01.01.2023 – 31.12.2023

Total revenue 20 260 (17 716) 1 206 192 (30) 1 208 706 0.21%

Net cash from operating activities 1 083 - 598 627 - 599 710 n/a

Net cash from investing activities (533) - (603 468) - (604 001) n/a

Net cash from financing activities (468) - (102 749) - (103 217) n/a

As at 31.12.2022

Value for the non-

consolidated

company

Eliminations for the

non-consolidated

company

Parent Company

Consolidation

eliminations

CD PROJEKT S.A.

Total

Percentage

Total assets 9 761 (2 746) 2 183 974 (11 681) 2 179 308 0.32%

For the period 01.01.2022 – 31.12.2022

Total revenue 18 366 (16 762) 854 404 (68) 855 940 0.19%

Net cash from operating activities 272 - 435 369 - 435 641 n/a

Net cash from investing activities 2 577 - (340 989) 2 190 (336 222) n/a

Net cash from financing activities 2 190 (2 190) (203 102) - (203 102) n/a

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

(all amounts in PLN thousand, unless stated otherwise)

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

The Molasses Flood LLC

As at 31.12.2023

Value for the non-

consolidated

company

Eliminations for the

non-consolidated

company

Parent Company

Consolidation

eliminations

CD PROJEKT S.A.

Total

Percentage

Total assets 13 893 (1 614) 2 517 921 (31 179) 2 499 021 0.49%

for the period 01.01.2023 – 31.12.2023

Total revenue 44 893 (44 592) 1 206 192 (2) 1 206 491 0.02%

Net cash from operating activities 3 515 - 598 627 - 602 142 n/a

Net cash from investing activities (4 711) - (603 468) 2 486 (605 693) n/a

Net cash from financing activities 1 115 (2 486) (102 749) - (104 120) n/a

As at 31.12.2022

Value for the non-

consolidated

company

Eliminations for the

non-consolidated

company

Parent Company

Consolidation

eliminations

CD PROJEKT S.A.

Total

Percentage

Total assets 12 956 (2 579) 2 183 974 (27 153) 2 167 198 0.48%

For the period 01.01.2022 – 31.12.2022

Total revenue 31 328 (31 213) 854 404 (6) 854 513 0.01%

Net cash from operating activities 3 075 - 435 369 - 438 444 n/a

Net cash from investing activities (2 592) - (340 989) (787) (344 368) n/a

Net cash from financing activities (515) 787 (203 102) - (202 830) n/a

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

(all amounts in PLN thousand, unless stated otherwise)

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

Spokko sp. z o.o.

As at 31.12.2022

Value for the non-

consolidated

company

Eliminations for the

non-consolidated

company

Parent Company

Consolidation

eliminations

CD PROJEKT S.A.

Total

Percentage

Total assets 6 854 - 2 183 974 (5 299) 2 185 529 0.31%

For the period 01.01.2022 – 31.12.2022

Total revenue 1 675 - 854 404 (1 321) 854 758 0.20%

Net cash from operating activities (11 012) - 435 369 - 424 357 n/a

Net cash from investing activities (3 752) - (340 989) 14 170 (330 571) n/a

Net cash from financing activities 15 382 (14 170) (203 102) - (201 890) n/a

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

(all amounts in PLN thousand, unless stated otherwise)

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

CD Projekt Silver Inc.

As at 31.12.2023

Value for the non-

consolidated

company

Eliminations for the

non-consolidated

company

Parent Company

Consolidation

eliminations

CD PROJEKT S.A.

Total

Percentage

Total assets 13 - 2 517 921 - 2 517 934 0.00%

for the period 01.01.2023 – 31.12.2023

Total revenue - - 1 206 192 - 1 206 192 0.00%

Net cash from operating activities (3) - 598 627 - 598 624 n/a

Net cash from investing activities - - (603 468) - (603 468) n/a

Net cash from financing activities - - (102 749) - (102 749) n/a

As at 31.12.2022

Value for the non-

consolidated

company

Eliminations for the

non-consolidated

company

Parent Company

Consolidation

eliminations

CD PROJEKT S.A.

Total

Percentage

Total assets 66 - 2 183 974 - 2 184 040 0.00%

For the period 01.01.2022 – 31.12.2022

Total revenue - - 854 404 - 854 404 0.00%

Net cash from operating activities 67 - 435 369 - 435 436 n/a

Net cash from investing activities - - (340 989) - (340 989) n/a

Net cash from financing activities 67 (67) (203 102) - (203 102) n/a

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

(all amounts in PLN thousand, unless stated otherwise)

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

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 direct the relevant activities, i.e.

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

 being exposed or having rights to variable returns, consisting 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 which meet the above-mentioned materiality criterion are fully consolidated from the date on which the Group assumed

control over them. They cease to be consolidated from the date that control ceases.

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

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

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

with the accounting policies adopted by the Group.

Changes in accounting policies

The accounting policies applied in these consolidated financial statements, material judgements made by the Parent Company’s

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

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

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

section “Assumption of comparability of the financial statements, changes in accounting policies and estimates”.

Going concern assumption

These consolidated financial statements have been prepared based on the assumption that the Group and the Parent Company

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

sheet date.

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

any facts or circumstances which would indicate any threats to the Group continuing in operation as a going concern for a period

of 12 months after the end of the reporting period as a result of intended or forced discontinuation or significant curtailment of its

operations to date.

By the date of preparing the consolidated financial statements for the period from 1 January to 31 December 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, no significant prior year events have been disclosed in these

consolidated financial statements.

Compliance with the International Financial Reporting

Standards

The Group’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards

(hereinafter “IFRS”), as adopted by the European Union, effective for annual periods beginning on 1 January 2023.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Amendments to standards or interpretations effective from 1 January 2023

applicable and adopted by the Group

In preparing the consolidated financial statements for 2023, the Group applies the same accounting policies as in preparing the

annual financial statements for 2022, with the exception of amendments to standards and new standards and interpretations

endorsed by the European Union, which are effective for reporting periods beginning on 1 January 2023:

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

2023;

A new standard governing the recognition, measurement, presentation and disclosure of insurance and reinsurance contracts.

It replaced the formerly applicable IFRS 4 Insurance contracts.

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

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

IASB clarified which information on the Group’s accounting policies is material and requires disclosure in the financial

statements. The amendments focus on tailoring disclosures to the Group’s specific circumstances. The Board cautions against

the use of standardised provisions copied from IFRS and expects the basis of measurement of financial instruments to be

considered as material information.

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

applicable to periods beginning on or after 1 January 2023;

The Board introduced the definition of an accounting estimate in the standard: Accounting estimates are monetary amounts in

financial statements that are subject to measurement uncertainty.

 Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction - applicable to periods

beginning on or after 1 January 2023;

The Board introduced the principle that if a transaction gives rise to equal taxable and deductible temporary differences,

a deferred tax asset and a deferred tax provision should be recognized even if the transaction does not result from a business

combination and has no impact on the accounting or tax profit or loss. This means that a deferred tax asset and provision must

be recognized, for example, when equal temporary differences arise on leases (separate temporary differences on the liability

and on the right-of-use asset) or on restoration liabilities. The principle which says that deferred income tax assets and liabilities

are offset if current income tax assets and liabilities are offset was not changed.

 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.

The Board set out transitional provisions relating to comparative data for entities which adopt IFRS 17 and IFRS 9 at the same

time, to reduce the potential accounting mismatch resulting from differences between these two standards.

 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.

The amendment has introduced a temporary exception from recognizing the deferred tax resulting from implementation of the

International Tax Reform (Pillar Two) and a requirement for additional disclosures related to that exception.

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.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Standards published and endorsed by the EU which are not yet effective and their impact on the

Group’s financial statements

The Management Board has analysed the impact of the application of the new standards on future financial statements. When

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

and endorsed by the EU, but not yet effective:

 Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback - applicable to reporting periods beginning on or after

1 January 2024.

 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.

The Group does not expect the introduction of these amendments to have a material impact on the accounting policies adopted

by the Group with regard to the Group’s operations or its financial results.

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

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

which have not yet been endorsed by the EU:

 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.

Description of adopted accounting policies

Revenue and operating expenses

Revenue constitutes inflows of economic benefits, gross, for a given period, arising as a result of ordinary business activities of the

Group, resulting in an increase in equity other than the increases due to contributions made by shareholders.

The Group recognizes revenue using the so-called Five-Step Model provided for in IFRS 15. Revenue includes only amounts

received or receivable equal to the transaction prices that accrue to the Group upon fulfilment (or in the process of fulfilment) of the

performance obligation to transfer the promised good or service (i.e. an asset) to the customer. The payment from a customer

becomes due after that performance obligation has been fulfilled. The transaction price is the amount of consideration that the

Group expects to receive in exchange for the transfer of the promised goods or services, less any applicable value-added tax.

In the case of revenue in the form of royalties from the sale of licences for the distribution of games, which is the Group’s main

source of revenue, revenue depends on the volume of sales realized by the distributor at any given time during the reporting period.

Thus, revenue from the sale of a particular product is recognized in the sales period no sooner than after the delivery of the materials

to start the actual distribution of the completed game, based on sales reports successively provided by the distributor. The payment

from a customer becomes due after sales reports have been submitted by a distributor.

The Group recognizes the costs of materials used, goods for resale and products and service costs in the same period as sales of

these items or sales of the services for which the items are used, in accordance with the principle of matching revenues and costs.

As part of its operations, the GOG.COM segment concludes contracts with users in its own name and on its own account, based on

the right to distribute digital content to end users. By owning the files that make up the products it sells, the Group has control over

them and makes them available to users independently as part of the sales process. The Group is obliged to perform the service

of providing certain services and provides technical support and is liable for the service provided. The Group is liable under

consumer protection legislation and bears the credit risk in respect of the amount owed by the customer. In this line of business,

the Group is a principal and not an intermediary.

The Group receives short-term advances from its customers presenting advance payments as deferred income instead of

recognizing a financing component, if the Group expects, at contract inception, that the period between when the entity transfers

a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Finance income and costs

Finance income consists mainly of interest on deposits of surplus cash in bank accounts, commission and interest on loans granted,

interest on late payment of receivables, release of provisions relating to financing activities, proceeds from sale of securities, foreign

exchange gains, restoration of the impaired value of financial investments, forgiven loans and advances and gains on settlement of

derivative instruments.

Finance costs mainly comprise interest on loans and advances, interest on late payment of liabilities, provisions recorded against

certain or probable losses on financial operations, the cost of shares and securities sold, commission and handling charges, write-

downs of interest receivables and the value of short-term investments, discounts and net foreign exchange losses on financing

activities and, in the case of leases, other charges except for capital instalments.

State subsidies

State subsidies are not recorded until obtaining reasonable assurance that the Group will comply with the required terms and

conditions and obtain a subsidy. State subsidies, the principal condition of which is the purchase or manufacture of fixed assets by

the company, are recognized in the balance sheet as deferred income and taken to the income statement on a pro rata basis over

the expected economic useful life of the assets.

Current and deferred income tax

The mandatory profit reductions consist of current tax, withholding tax paid abroad and deferred tax. Current income tax is

calculated on the basis of taxable income (tax base) for a given financial year. Taxable profit/(loss) differs from accounting profit/(loss)

before tax due to the different timing of the recognition of income and expenses for tax and accounting purposes, as well as due

to the permanent differences between the tax and accounting treatment of certain income and expense items. Tax expense is

calculated based on the tax rates in effect for the financial year. Current income tax relating to items recognized directly in equity

is recognized in equity rather than in the income statement.

Deferred tax is calculated using the liability method as tax payable or reimbursable in the future in respect of differences between

carrying amounts of assets and liabilities and the corresponding tax amounts used for the calculation of the tax base.

Deferred tax provision is recorded on all taxable temporary differences, and a deferred tax asset is recorded to the extent that the

future tax profits are likely to be reduced by the amount of recognized deductible temporary differences. An asset or liability does

not arise if the temporary difference arises from goodwill.

Deferred tax provision is recognized on temporary differences arising from investments in subsidiaries, associates and joint

ventures, unless the Group is able to control the timing of the reversal of the temporary difference and it is probable that the

temporary difference will not reverse in the foreseeable future.

The amount of deferred tax asset is analysed at each balance sheet date, and it is written down if the expected future taxable

income is not sufficient to utilize the asset or its portion.

Deferred tax is calculated using the tax rates which will be binding at the moment when a given asset is realized or a liability

becomes due. Deferred tax is recognized in the income statement, apart from the situations when it relates to items recorded

directly in equity. In the latter case, deferred tax is also recognized directly in Equity.

Value-added tax (VAT)

Revenues, expenses and assets are recognized net of value-added tax, except for:

 where the value-added tax paid on the purchase of assets or services is not recoverable from the tax authorities, in which case

it is recognized as part of the cost of acquiring the asset or as an expense, as appropriate,

 receivables and payables which are recorded including the amount of value-added tax.

The net amount of value-added tax recoverable from or payable to the tax authorities is recognized in the balance sheet as part of

receivables or payables.

Property, plant and equipment

Property, plant and equipment items are initially recognized at cost (the cost of purchase or manufacture) and reduced in

subsequent periods by depreciation and impairment. Borrowing costs directly related to the purchase or manufacture of assets that

require an extended period of time to adapt them for use or resale are added to the cost of such assets until such assets are

commissioned. Investment income generated from the short-term investment of funds raised and related to the purchase or

manufacture of fixed assets reduces the value of capitalized borrowing costs. Other borrowing costs are recognized in the income

statement in the period in which they were incurred.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Depreciation is calculated for property, plant and equipment items, excluding land and assets under construction, over their

estimated useful lives, using the straight-line method.

The expected useful life for each category of property, plant and equipment is:

Category Useful life

Buildings and structures 5 – 25 years

Plant and machinery 2 – 10 years

Vehicles 5 years

Other fixed assets 2 – 10 years

Fixed assets with a low initial unit cost of no more than PLN 5 thousand are depreciated in a simplified way by making a one-off

write-off.

Gains or losses on disposal / scrapping or decommissioning of fixed assets are determined as the difference between proceeds on

disposal and the net carrying amounts of these assets, taking into account the provisions of IFRS 15, and are included in the Income

statement.

Intangible assets - Expenditure on development projects

The Group classifies expenditure on the development of games under Expenditure on development projects. Game development

costs incurred prior to the commencement of sales or the application of new solutions are recognized as Expenditure on

development projects in progress. This expenditure includes expenses that are directly related to the project in question.

The Group verifies whether an intangible asset arising from a development project meets the following conditions:

a) it is technically feasible to complete the intangible asset so that it is suitable for use or sale;

b) there is a demonstrable intention to complete the asset and use or sell it;

c) the intangible asset can be used or sold;

d) the manner in which the asset will generate probable future economic benefits is known;

e) adequate technical, financial and other resources will be ensured to complete the development project and to use or sell

the intangible asset;

f) there is a possibility to reliably determine the expenditure incurred during a development project, which is attributable to

the intangible asset.

When these conditions are met, the Group reclassifies the expenditure from Expenditure on development projects in progress to

Expenditure on development projects completed. In the case of projects for which it is possible to determine reliable estimates of

the volume and value of the sales budget, the Group amortizes the value of these projects based on the consumption of economic

benefits related to the number of copies sold.

The Group determines the amortization period and rates after the release of each title in the course of working on the interim

financial statements while being in possession of the preliminary results of release sales and game ratings. The Group then

establishes:

(i) the useful life based on the historical useful lives of previous comparable titles, normally no less than 3 years and no more than

6 years, given the difficulty in making reliable estimates over a longer horizon in an industry which is subject to dynamic change;

(ii) the basis for determining amortization rates, namely sales forecasts for the period of the useful life.

Then, based on professional judgement, the Group estimates what proportion of the benefits will be realized in the quarter of

release and, in subsequent periods, smooths out the input distribution, eliminating the effect of periodic and one-off promotions

and anticipated but uncertain one-off events (such as the release of the series Cyberpunk: Edgerunners on Netflix), in order to

achieve the effect of constant reducing balance or straight-line amortization from quarter to quarter.

In justified cases, the settlement of expenditure incurred may be of a one-off nature (e.g. Cyberpunk: Edgerunners anime).

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

(all amounts in PLN thousand, unless stated otherwise)

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

In the tables below, the Group presents projects amortized in 2023 for which reliable estimates of sales volumes and budgets can

be determined, together with the useful lives or amortization rates applied:

Until the release of Cyberpunk 2077: Phantom Liberty:

Amortization for the period

Title

Release

period

Q1 Q2 - Q21

Cyberpunk

2077

Q4 2020 40% 60% straight line over 5 years (1% per month)

After the release of Cyberpunk 2077: Phantom Liberty, based on the total amount of non-amortized expenditure on the production

of Cyberpunk 2077, including the version for new generation consoles and expenditure on the production of the Phantom Liberty

expansion:

Amortization for the period

Title

Release

period

Q3-Q4 2023

20%

Cyberpunk 2077 (including the

version for new generation

consoles) + Cyberpunk 2077

Phantom Liberty

Q3 2023

Q1-Q4 2024

Q1-Q4 2025

3.5%

Q1-Q4 2026

2.5%

Q1-Q4 2027

Q1-Q4 2028

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

(all amounts in PLN thousand, unless stated otherwise)

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

GOG.COM’s projects: WN GLX2 and WN Cross-Platform SDK (GAMEINN):

Amortization for the period

Title

Release

period

Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 Q19 Q20 Q21

WN GLX2* Q4 2020 15% 0.7% 1.7% 1.8% 2% 0.6% 0.7% 0.4% 0.5% 0.5% 0.7% 0.4% 0.4% 0.5% 0.5% 0.5% 0.5% 0.3% 0.2% 0.2% 0.2%

WN Cross-

Platform SDK

(GAMEINN)

Q2 2019 84.7% 2.2% 2.5% 1.7% 2.1% 1% 1% 1% 1% 0.6% 0.6% 0.6% 0.6% 0.3% 0.1% - - - - - -

* In 2021, GOG.COM updated the assumptions for the WN GLX2 development expenditure and wrote down 71.7% of the total value of this expenditure.

In other cases, the Group amortizes the value of projects using the straight-line method. Amortization related to Expenditure on development projects is presented under the Cost of products and services

sold (CD PROJEKT RED segment) and in Selling expenses (the GOG.COM segment) in the Income statement.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Intangible assets - Other

Intangible assets are presented at historical cost less amortization and impairment losses. Amortization is recognized on a straight-

line basis. Costs of research projects are not capitalized and are presented in the Income statement as expenses in the period in

which they are incurred.

The expected useful life for each category of intangible assets is as follows:

Category Useful life

Patents and licenses 2 – 15 years

Computer software 2 – 10 years

Intangible assets with a low initial unit cost not exceeding PLN 5 thousand are amortized in a simplified manner by making a one-

time write-off.

The Group’s consolidated financial statements show the commodity brand The Witcher and the corporate brand CD PROJEKT.

Brands have been valued using the Relief from Royalty capitalization method representing the income approach, which is one of

the primary methods for valuing brands and other intangible assets for the purpose of accounting for business combinations in

accordance with IFRS 3 Business Combinations. Neither brand has a definite useful life. Goodwill of the brands is subject to an

annual impairment test.

Goodwill

Goodwill (gain) is calculated as the balance of two amounts:

 the sum of the consideration transferred for control, the non-controlling interests (measured as a proportion of the net assets

acquired) and the fair value of the blocks of interests (shares) held by the acquiree prior to the acquisition date; and

 the fair value of the identifiable net assets acquired of the entity.

The excess of the sum calculated as indicated above over the fair value of the identifiable net assets acquired of the entity is

recognized as goodwill on the assets side of the consolidated statement of financial position. Goodwill represents the payment

made by the acquirer in anticipation of future economic benefits from assets that cannot be individually identified or separately

recognized. After initial recognition goodwill is stated at cost, less accumulated impairment losses.

If the aforementioned sum is less than the fair value of the identifiable net assets acquired of the entity, the difference is recognized

directly in the profit or loss. The Group recognizes a gain on the acquisition under other operating income.

Mergers of business entities under common control

The legal merger of the Parent Company with its subsidiary is recognized using the amounts relating to the subsidiary shown in the

Parent Company’s consolidated financial statements; these amounts include amounts recognized in the Parent Company’s

consolidated financial statements arising from the acquisition of the subsidiary. The subsidiary’s results and statement of financial

position are recognized prospectively from the date of the legal merger.

Impairment of non-financial assets

At each balance sheet date, the Group companies review the net book amounts of non-current assets to determine whether there

are indications of their impairment.

If such indications are found, the recoverable amount of an asset is estimated to determine the amount of the potential write-down.

If an asset does not generate cash flows that are considerably independent of the cash flows generated by other assets, the analysis

is performed for the group of assets generating cash flows (a cash-generating unit) to which the asset belongs.

In the case of intangible assets with an indefinite useful life, impairment tests are carried out annually and additionally when there

are indications of possible impairment.

The recoverable amount is determined as the higher of fair value less costs to sell and value in use. The latter amount corresponds

to the present value of estimated future cash flows discounted using a discount rate that takes into account the current market time

value of money and the risks specific to a given asset.

If the recoverable amount is lower than the net book amount of an asset (or a group of assets), the book value is reduced to the

recoverable amount. An impairment loss is recognized as an expense in the period in which it occurs, except when the asset was

recognized at a revalued amount (impairment is then treated as the reversal of previous revaluation).

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

(all amounts in PLN thousand, unless stated otherwise)

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

If impairment is subsequently reversed, the net book value of an asset (or a group of assets) is increased to the lower of the new

estimated recoverable amount and the net book value of the asset that would have been established had impairment not been

recognized in previous years. Reversals of impairment are recognized in income.

Investment properties

Investment properties include properties held for rental income, appreciation in value or both. Consequently, the cash flows

generated by investment properties are largely independent of other assets held by a Group Company.

Investment properties are valued using the purchase price model.

Rights of perpetual usufruct of land

Land owned by the State Treasury, local government units or their associations may be subject to perpetual usufruct. Perpetual

usufruct is a special type of property right entitling natural or legal persons to use land to the exclusion of others. The perpetual

lessee may also dispose of its right. The right of perpetual usufruct is granted for a period of 99 years or, in exceptional cases –

where the economic purpose of perpetual usufruct does not require the land to be let for such a period – for a shorter period,

however, no shorter than 40 years.

The Group has recognized the right of perpetual usufruct of land as a lease in accordance with IFRS 16. The right to use the leased

asset has been presented in accordance with its purpose in the balance sheet either as Investment properties or Property, plant

and equipment.

Leases

The Group as a lessee classifies a contract as a lease or as containing a lease if it transfers the right to control the use of an identified

asset for a given period in return for a consideration.

Where the Group acts as a lessor, a contract is treated as a finance lease if substantially all the risks and rewards of ownership of

the underlying asset are transferred. If substantially all the risks and rewards of ownership of the underlying asset are not transferred,

a contract is treated as an operating lease.

The right to control the use of an asset used under a lease contract primarily means the right to obtain substantially all economic

benefits from the use of the asset and the right to direct the use of the identified asset.

Risks consist of the possibility of losses due to underutilization of capacity, loss of technical usefulness or changes in the level of

return achieved due to changes in economic conditions. Benefits may include the expectation of profitable operation of the asset

over its useful life and the expectation of a profit arising from an increase in its value or the realization of the residual value.

At the inception, the Group recognizes the right-of-use asset and the corresponding lease liability. The right of use is initially

measured at cost, consisting of the initial lease liability, initial direct costs, an estimate of the costs expected to be incurred in

dismantling the underlying asset and lease payments made at or before the inception, less lease incentives.

The Group depreciates the right-of-use assets on a straight-line basis from the inception to the end of the useful life of the right-of-

use asset or the end of the lease term, whichever is earlier. If there are indications to do so, the right-of-use assets are tested for

impairment in accordance with IAS 36.

At the inception, the Group measures the lease liability at the present value of the lease payments outstanding, using the interest

rate on the lease if this can be readily determined. Otherwise, the incremental borrowing rate of the lessee is applied.

Lease payments included in the value of the lease liability consist of fixed lease payments, variable lease payments dependent on

an index or rate, amounts expected to be paid as the guaranteed residual value and call option payments if it is reasonably certain

that the option will be exercised. In subsequent periods, the lease liability is reduced by repayments made and increased by accrued

interest. The valuation of the lease liability is updated to reflect changes in the contract and the reassessment of the lease term, the

exercise of the call option, the guaranteed residual value or index- or rate-dependent lease payments. In principle the

remeasurement of the liability is recognized as an adjustment of the right-of-use asset.

The Group applies the practical expedients permitted by the standard to short-term leases and leases where the underlying asset

is of low value. For such contracts, instead of recognizing right-of-use assets and lease liabilities, lease payments are recognized in

the profit or loss on a straight-line basis over the lease term.

Shares in non-consolidated subordinated entities

Shares in non-consolidated subordinated entities are initially measured at cost. As at the balance sheet date, investments in

subordinated entities are stated at cost less impairment losses.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Financial assets

The Group classifies each financial asset upon initial recognition into of one of four categories of financial assets, which are

distinguished based on the Group’s business model for managing the assets and the characteristics of the contractual cash flows:

 assets measured at amortized cost after initial recognition;

 assets measured at fair value through other comprehensive income after initial recognition;

 assets measured at fair value through profit or loss;

 hedging financial instruments.

The classification of financial assets is made upon initial recognition and can only be changed if the business model for managing

financial assets changes. The principal models for managing financial assets include the model of holding for receiving contractual

cash flows, the model of holding for receiving contractual cash flows and selling, and the model of holding for purposes other than

those indicated in the two preceding models (in principle, it is a model of holding assets for disposal). The Group adopts the principle

that the sale of a financial asset just before its maturity does not constitute a change in the business model from holding for receiving

contractual cash flows to holding for receiving contractual cash flows and selling or holding for other purposes.

The Group does not apply hedge accounting and, therefore, the regulations of IFRS 9 in this respect do not apply to it.

The Group assesses the credit risk associated with assets constituting financial instruments based on the expected loss model. The

primary method of determining impairment losses under the expected loss model is the method under which the Group monitors

changes in the level of credit risk associated with a given financial asset in relation to its initial recognition and classifies financial

assets into one of the three stages of impairment loss determination: stage 1 - financial assets serviced on an ongoing basis (applied

to assets if their credit risk has not materially increased since initial recognition); stage 2 - financial assets with deteriorated servicing

(applied if credit risk has increased materially since initial recognition, while there is no objective evidence of impairment); stage 3

- financial assets not serviced (applied when there is objective evidence of impairment).

The Group applies the simplification permitted by IFRS 9 (using an allowance matrix, based on historical data adjusted for the impact

of future factors). The matrix is created on the basis of historical data. The Group does not apply the matrix separately to receivables

portfolios as its business is fairly homogeneous. The Group’s customers are mainly large multinational companies that settle their

liabilities on time. The Group uses quarterly ageing for years X-1 and X-2 in relation to the year for which allowances are estimated.

In addition to the allowances calculated according to the matrix, the Group also calculates allowances for receivables on a case-by-

case basis on the basis of an expert analysis of information on receivables considered to be lost or at risk, carried out by the finance

department. These are usually unique events that are not indicative of the Group’s operations and business environment, but only

of a delay in settlement of a particular customer’s receivables.

Financial liabilities

A financial liability is each liability being:

 a contractual obligation to issue cash or another financial asset to another entity or exchange financial assets or liabilities with

another entity on potentially unfavourable terms;

 a contract which will be or may be settled in own equity instruments of the entity and is a non-derivative instrument from which

an obligation arises or may arise for the entity to deliver a variable number of its own equity instruments, or a derivative

instrument which will be or may be settled other than through exchanging a fixed amount of cash or another financial asset for

a fixed number of own equity instruments of the entity. For this purpose, pre-emptive rights, options and warrants to purchase

a fixed number of an entity’s own equity instruments in exchange for a fixed amount of cash in any currency are equity

instruments if the entity offers pro rata pre-emptive rights, options and warrants to all current owners of the same class of the

entity’s non-derivative equity instruments.

The Group companies classify each component of financial liabilities upon initial recognition as:

 financial liabilities measured at fair value through profit or loss;

 other financial liabilities measured at amortized cost.

Financial liabilities are initially stated at fair value plus transaction costs, which can be directly attributed to the financial liability, for

financial liabilities not carried at fair value through profit or loss.

Inventories

The initial cost of inventories includes all costs (the cost of purchase, production and other) incurred in bringing inventories to their

present location and condition. The purchase price of inventories comprises the purchase price plus import duties and other taxes

(not subsequently recoverable from the tax authorities), transport, loading, unloading and other costs directly related to the

acquisition of the inventories, less discounts, rebates and other similar reductions. Inventories are stated at the lower of the initial

cost (the cost of purchase or production) and the net realizable value. The net realizable value corresponds to the estimated selling

price less any costs necessary to complete production and the costs of bringing the inventories to market or finding a buyer (i.e.

selling, marketing, etc.). For inventories, cost is determined using the “weighted average” method.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Trade and other receivables

Trade receivables are measured in the books of account at the value corresponding to the transaction prices adjusted for

appropriate impairment allowances under the expected losses model.

The value of receivables corresponding to the revenue from the sale of products, which arose and were recognized during the

reporting period and were reported after the end of the period (in accordance with the contracts concluded), is presented in trade

receivables.

Prepayments and accruals

The Group recognizes deferred income for the purpose of allocating such income to future reporting periods, when the income is

realized.

In the CD PROJEKT RED segment, deferred income includes proceeds received or due from royalties on pre-orders for digital

distribution of games, or advances on royalties and advances on goods received from distributors, as well as deferred settlements

of subsidies.

In the GOG.COM segment, deferred income includes revenue from pre-ordered sales of products with release dates in future

periods and deferred settlements with customers of the online shop within the so-called GOG Portfolio.

Accruals are liabilities falling due for goods or services that have been received or provided, invoiced or formally agreed with the

supplier.

The Group companies recognize costs that have been incurred in advance but relate in whole or in part to subsequent periods in

prepayments and deferred costs.

In the GOG.COM segment, the GOG Company acquires distribution rights which are initially treated as Deferred Costs. This initial

recognition relates to fees for the so-called minimum guarantees - these are contractual amounts paid to the owner of vested rights

after the conclusion of the contract. Minimum guarantees are charged to the cost of goods sold upon commencing the sales. Thus,

the costs associated with minimum guarantees are correlated with sales revenue.

Cash and cash equivalents

Cash consists of cash in hand, demand deposits and bank deposits with a maturity of up to three months. Cash equivalents are

short-term investments with high liquidity, easily exchangeable for specific amounts of cash and exposed to insignificant risk of

value fluctuations.

Outstanding overdrafts are presented in cash flows from financing activities under Loans and advances.

Assets held for sale and discontinued operations

Non-current assets (and groups of net assets) classified as held for sale are measured at the lower of their carrying amount and fair

value less costs to sell.

Non-current assets (and groups of net assets) are classified as designated for disposal if it is probable that their carrying value will

be recovered through disposal rather than through their continued use. This condition is considered met only if the sale transaction

is highly probable and the asset (or a group of net assets designated for disposal, a disposal group) is available in its current

condition for immediate sale. An asset is classified as designated for disposal under the assumption that a Group Company’s

management intends to complete the transaction within one year from the moment of changing the classification.

Equity

Equity is recorded in the accounting books by type of equity component and in accordance with the binding regulations of the law

and the provisions of the Articles of Association of the Group Companies.

Share capital is shown at the nominal value in the amount consistent with the Parent Company’s Articles of Association and the

entry in the court register.

Supplementary capital is created from profits generated.

Share premium is created from the surplus of the issue price of shares above the nominal value, less issue costs. Issue costs

incurred on formation of a joint stock company or increasing share capital reduce supplementary capital.

Other reserves include Costs of the incentive programme, Reserve capital created for share buybacks and Revaluation reserve.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Provisions for liabilities

Provisions for liabilities are recognized, when a Group Company has a current obligation (legal or constructive) as a result of past

events and it is probable that the discharge of the obligation will result in an outflow of the resources embodying the Group’s

economic benefits and a reliable estimate of the amount of the obligation can be made. No provisions are recorded against future

operating losses.

A provision for restructuring costs is only recognized when a Group Company has announced a detailed and formal restructuring

plan to all stakeholders.

Employee benefits

Short-term employee benefits other than employment termination benefits and share-based payments are recognized as liabilities,

net of any amounts already paid, and simultaneously as an expense for the period, unless the benefit should be included in the

production cost of an asset. The Group does not offer participation in any post-employment benefit plans to its employees.

Based on the resolutions of the Parent Company’s General Meeting of 28 July 2020 and 22 September 2020, an incentive plan for

the years 2020-2025 for selected persons in the Parent Company and in Group companies was introduced. As part of the

implementation of the plan, a maximum of 4 000 000 entitlements, understood as a conditional right to take up subscription

warrants, entitling to take up shares in the Parent Company issued separately as part of a conditional share capital increase, or

alternatively to purchase, on preferential terms, the Parent Company’s treasury shares could be granted. However, due to the fact

that, among other things, the Incentive Plan for the years 2020-2025 lost its motivational and retention functions, as described in

detail in Note 39 “Employee Benefit Plans” below, the General Meeting adopted a resolution to discontinue implementing the plan.

As a result, the plan expired in full on 18 April 2023. Upon expiry of the plan, entitlements awarded as part of that plan to eligible

persons also expired.

Based on the resolutions of the Parent Company’s General Meeting of 18 April 2023, two new incentive plans for the financial years

2023-2027 were introduced on that date, replacing the Incentive Plan for 2020-2025: the Incentive Plan A and Incentive Plan B.

Entitlements awarded under these plans if the conditions set out in the plans are met shall be realized alternatively though either:

(i) offering participants to subscribe for warrants entitling them to subscribe for an identical number of shares in the Parent Company

issued as part of the conditional share capital increase, or (ii) offering participants to purchase from the Parent Company treasury

shares acquired by the Parent Company as part of a buy-back carried out for this purpose. Plans A and B are described in detail in

Note 39 “Employee Benefit Plans” below.

The incentive plans are accounted for in accordance with the principles of IFRS 2 Share-based Payment.

Loans granted

Loans granted are measured at amortized cost, using the effective interest rate.

Trade and other payables

Trade payables are shown in the balance sheet at amortized cost. Financial liabilities and equity instruments are classified according

to their contractual economic content. An equity instrument is a contract giving the right to a share of the Group’s assets less all

liabilities.

Licences

The value of acquired distribution rights is recognized on the basis of invoices received as the balance of Deferred costs. This value

is increased by the amount of the uninvoiced parts of the minimum guarantees under the contracts concluded. The value of acquired

distribution rights is charged to expenses on a pro rata basis in relation to sales and, once the balance of Deferred costs is exceeded,

it is credited to Trade payables.

Payment of dividend

Dividends are recorded at the moment of establishing the rights of the Parent Company’s shareholders to their receipt.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Functional currency and presentation currency

The items contained in the financial statements are valued in the currency of the basic economic environment in which the Group

conducts operations (the “functional currency”). The financial statements are presented in Polish zloty (PLN) which is the functional

and presentation currency of the Group and the Company.

Transactions and balances

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

of transaction. Exchange gains and losses on the settlement of these transactions and on the valuation of monetary assets and

liabilities denominated in foreign currencies as at the balance sheet date are recognized in the Income statement.

Critical accounting estimates and judgements

Professional judgement

As at the end of each reporting period, the Group reviews the expected useful lives of internally generated intangible assets. In the

case of intangible assets for which it is possible to determine reliable estimates of the volume and value of the sales budget, the

Group amortizes the value of these projects based on the consumption of economic benefits related to the number of copies sold.

The premiere-linked nature of the game’s life cycle justifies the use of a reducing balance depreciation method, as the highest sales

volumes are achieved during the premiere period, which decline in subsequent periods. In the remaining cases, the Group

amortizes the value of the projects on a straight-line basis over three years. As the video game market is characterized by

technology rotation cycles, a three-year period is the maximum horizon over which the Group can assess whether and what impact

future technological changes will have on the value of an asset.

Uncertainty of estimates

The following are the key assumptions about the future and other key sources of uncertainties at the balance sheet date that carry

a significant risk of material adjustments to the carrying amounts of assets and liabilities in the next financial year.

Impairment of assets

Impairment tests for assets such as goodwill and brand value require estimating the value in use of a cash-generating unit.

Estimating the value in use means forecasting the future cash flows expected to be generated by a cash-generating unit, and

requires determining a discount rate to be used in order to calculate the present value of these cash flows. The last test of the

CD PROJEKT corporate brand, The Witcher product brand and goodwill was carried out as at 31 December 2023. No impairment

of the brands or goodwill were identified. Impairment tests of shares in subsidiaries were also carried out as at 31 December 2023.

No impairment of the shares was identified.

Assumptions adopted in the valuation of the CD PROJEKT brand, The Witcher trademark and goodwill:

Trademarks Goodwill

Cash flow forecast period 2024-2027 (4 years) 2024-2027 (4 years)

Discount rate (WACC) 12.5% 12.5%

Growth rate (g) for residual value 3% 3%

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

(all amounts in PLN thousand, unless stated otherwise)

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

Valuation of provisions

Provisions for retirement benefits and the share-based incentive plan were estimated using actuarial methods.

The Group creates provisions for performance-related remuneration and other bonuses. Provisions for performance-related

remuneration are created on an aggregate basis for individual employee groups. As a general rule, provisions are calculated

(depending on the employee group) on the basis of the net profit of the Group or of the operating segment. Provisions for

performance-related remuneration are calculated under the principle of recursion - the value of the provisions reduces the

underlying results accordingly.

The Group records provisions for refunds, expected adjustments to licence reports and costs not invoiced by suppliers by the

balance sheet date.

Deferred income tax asset

The Group companies recognize a deferred tax asset based on the assumption that a tax profit will be generated in the future,

enabling its utilization. Deterioration of tax results in the future might result in the assumption becoming unjustified.

Deferred tax provision

The Group recognizes a deferred tax provision based on the assumption that a future tax obligation will arise from taxable temporary

differences, leading to its utilization. In estimating deferred tax, the Group uses an income ratio calculated on the basis of the

following year’s budget to allocate positive and negative temporary differences.

Fair value of financial instruments

The fair value of financial instruments for which there is no active market is determined using appropriate valuation techniques. The

Group companies use professional judgement in selecting appropriate methods and assumptions.

Depreciation and amortization rates

The depreciation and amortization rates are established based on the expected useful lives of property, plant and equipment and

intangible assets. The Group companies verify the adopted useful lives on an annual basis, taking into account the current estimates.

For projects for which reliable estimates of sales volumes and budgets can be determined, the Group determines the amortization

method for the published titles based on historical sales data of previous own titles (no useful predictive sales data of other

publishers’ titles is available) and, to a lesser but significant extent, professional judgement.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Assumption of comparability of the financial statements,

changes in accounting policies and estimates

Changes in accounting policies

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

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

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

2022, with the exception of changes in accounting policies, changes related to the consolidated companies and presentation

changes described below.

Presentation changes

In these consolidated financial statements for the period from 1 January to 31 December 2023, selected financial data were adjusted.

In order to ensure comparability of the financial data in the reporting period, the data for the period from 1 January to 31 December

2022 and as at 31 December 2022 were adjusted. The data is presented after the following adjustments:

 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 asset – an increase of PLN 240 thousand;

- Retained earnings (Accumulated losses) – 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 cash flows for the period from 1 January to 31 December 2022, provisions for holiday pay were included.

Consequently, the following items changed:

- Net profit/(loss) – a decrease of PLN 602 thousand;

- Increase/(Decrease) in provisions – an increase of PLN 660 thousand;

- Income tax expense – a decrease of PLN 58 thousand.

 In the income statement for the period from 1 January to 31 December 2022, provisions for holiday pay were included.

Consequently, the following items changed:

- Administrative expenses – an increase of PLN 660 thousand;

- Income tax – a decrease of PLN 58 thousand.

The change affected the Net profit or loss and Equity.

In these consolidated financial statements for the period from 1 January to 31 December 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 January to 31 December 2022 was changed. The data is presented after the following change:

 In the income statement for the period from 1 January to 31 December 2022, 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 32 799 thousand;

- Administrative expenses – an increase of PLN 32 799 thousand.

The change did not affect the Net profit or loss or Equity.

Notes – operating segments of the

CD PROJEKT Group

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

(all amounts in PLN thousand, unless stated otherwise)

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

Operating segments

Presentation of the financial statements taking into account operating segments

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

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

Description of differences in the basis for 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 determining 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.

Operating segments

In 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 studio 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 executed by the CD PROJEKT RED studio 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 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.

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 the 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 the game, pay for the game and download it to one’s own computer; in

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

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

payments made in the PC version of the game.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Information on individual operating segments

Continuing operations

Consolidation

eliminations

Total continuing

operations

CD PROJEKT RED GOG.COM

01.01.2023 – 31.12.2023

Sales revenue 1 037 873 234 969 (42 643) 1 230 199

from external customers 995 319 234 880 - 1 230 199

between segments 42 554 89 (42 643) -

Amortization and

depreciation

12 944 1 614 (588) 13 970

Interest income 47 198 809 - 48 007

Interest expense 863 167 (167) 863

Net profit/(loss) of

the segment

470 748 10 255 102 481 105

Continuing operations

Consolidation

eliminations

Total continuing

operations

CD PROJEKT RED GOG.COM

01.01.2022 – 31.12.2022*

Sales revenue 780 309 188 579 (16 312) 952 576

from external customers 765 489 187 087 - 952 576

between segments 14 820 1 492 (16 312) -

Amortization and

depreciation

11 890 2 324 (386) 13 828

Interest income 41 950 1 387 - 43 337

Interest expense 874 552 (79) 1 347

Net profit/(loss) of

the segment

341 493 5 248 (250) 346 491

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Consolidated income statement by segment for the period from 01.01.2023 to 31.12.2023

CD PROJEKT RED GOG.COM Consolidation eliminations Total

Sales revenue 1 037 873 234 969 (42 643) 1 230 199

Sales of products 1 023 545 - 18 239 1 041 784

Sales of services 1 014 880 (232) 1 662

Sales of goods for resale and materials 13 314 234 089 (60 650) 186 753

Cost of sales of products, services, goods for resale and materials 254 972 168 136 (42 541) 380 567

Costs of products and services sold 239 914 4 (158) 239 760

Cost of goods for resale and materials sold 15 058 168 132 (42 383) 140 807

Gross profit/(loss) on sales 782 901 66 833 (102) 849 632

Selling expenses 198 832 45 063 (99) 243 796

Administrative expenses 158 381 8 364 (238) 166 507

Other operating income 50 922 5 409 (2 291) 54 040

Other operating expenses 19 162 7 227 (2 053) 24 336

(Impairment)/reversal of impairment

of financial instruments

7 - - 7

Operating profit/(loss) 457 455 11 588 (3) 469 040

Finance income 114 729 3 916 - 118 645

Finance costs 45 429 3 929 (165) 49 193

Profit/(loss) before tax 526 755 11 575 162 538 492

Income tax 56 007 1 320 60 57 387

Net profit/(loss) 470 748 10 255 102 481 105

Net profit/(loss) attributable to owners of CD PROJEKT S.A. 470 748 10 255 102 481 105

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

(all amounts in PLN thousand, unless stated otherwise)

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

Consolidated income statement by segment for the period from 01.01.2022 to 31.12.2022*

CD PROJEKT RED GOG.COM Consolidation eliminations Total

Sales revenue 780 309 188 579 (16 312) 952 576

Sales of products 761 518 - 5 981 767 499

Sales of services 3 044 272 (1 356) 1 960

Sales of goods for resale and materials 15 747 188 307 (20 937) 183 117

Cost of sales of products, services, goods for resale and materials 124 808 134 387 (15 221) 243 974

Costs of products and services sold 112 997 50 (1 485) 111 562

Cost of goods for resale and materials sold 11 811 134 337 (13 736) 132 412

Gross profit/(loss) on sales 655 501 54 192 (1 091) 708 602

Selling expenses 148 042 42 168 (659) 189 551

Administrative expenses 102 715 6 489 (209) 108 995

Other operating income 16 772 7 077 (4 406) 19 443

Other operating expenses 52 604 4 457 (4 256) 52 805

(Impairment)/reversal of impairment

of financial instruments

(7) - - (7)

Operating profit/(loss) 368 905 8 155 (373) 376 687

Finance income 64 717 6 784 - 71 501

Finance costs 47 932 7 810 (79) 55 663

Profit/(loss) before tax 385 690 7 129 (294) 392 525

Income tax 44 197 1 881 (44) 46 034

Net profit/(loss) 341 493 5 248 (250) 346 491

Net profit/(loss) attributable to owners of CD PROJEKT S.A. 341 493 5 248 (250) 346 491

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Consolidated statement of financial position by segment as at 31.12.2023

CD PROJEKT RED GOG.COM Consolidation eliminations Total

NON-CURRENT ASSETS 1 421 258 46 105 (16 740) 1 450 623

Property, plant and equipment 181 955 2 404 (1 321) 183 038

Intangible assets 67 795 2 671 (408) 70 058

Expenditure on development projects 524 475 2 472 235 527 182

Investment properties 34 245 - - 34 245

Goodwill 56 438 - - 56 438

Investments in subordinated entities 15 226 - (15 226) -

Shares in non-consolidated subordinated entities 38 095 - - 38 095

Prepayments and deferred costs 4 913 36 993 - 41 906

Other financial assets 455 907 - - 455 907

Deferred tax assets 41 826 1 565 (20) 43 371

Other receivables 383 - - 383

CURRENT ASSETS 1 102 799 76 195 (16 179) 1 162 815

Inventories 3 576 - - 3 576

Trade receivables 203 783 5 916 (16 179) 193 520

Current income tax receivable 1 128 - - 1 128

Other receivables 52 228 5 513 - 57 741

Prepayments and deferred costs 10 601 17 271 - 27 872

Other financial assets 362 719 - - 362 719

Bank deposits over 3 months 338 205 - - 338 205

Cash and cash equivalents 130 559 47 495 - 178 054

TOTAL ASSETS 2 524 057 122 300 (32 919) 2 613 438

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

(all amounts in PLN thousand, unless stated otherwise)

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

CD PROJEKT RED GOG.COM Consolidation eliminations Total

EQUITY 2 369 714 49 104 (15 328) 2 403 490

Equity of the shareholders of CD PROJEKT S.A. 2 369 714 49 104 (15 328) 2 403 490

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 24 184 525 (1 540) 23 169

Foreign exchange differences on translation (2 153) (65) 1 016 (1 202)

Retained earnings / (Accumulated losses) (21 544) 2 (9 255) (30 797)

Net profit (loss) for the period 470 748 10 255 102 481 105

Non-controlling interests - - - -

NON-CURRENT LIABILITIES 38 753 890 (869) 38 774

Other financial liabilities 20 038 869 (869) 20 038

Other liabilities 2 494 - - 2 494

Deferred income 2 315 - - 2 315

Provision for retirement and similar benefits 497 21 - 518

Other provisions 13 409 - - 13 409

CURRENT LIABILITIES 115 590 72 306 (16 722) 171 174

Other financial liabilities 6 389 1 038 (543) 6 884

Trade payables 24 202 50 716 (16 083) 58 835

Current income tax liabilities - 462 - 462

Other liabilities 7 099 8 102 - 15 201

Deferred income 6 887 6 283 - 13 170

Provision for retirement and similar benefits 6 414 - - 6 414

Other provisions 64 599 5 705 (96) 70 208

TOTAL EQUITY AND LIABILITIES 2 524 057 122 300 (32 919) 2 613 438

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

(all amounts in PLN thousand, unless stated otherwise)

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

Consolidated statement of financial position by 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

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

CD PROJEKT RED GOG.COM Consolidation eliminations Total

EQUITY 2 008 048 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 / (Accumulated losses) 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

Notes – other explanatory notes to

the consolidated financial statements

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 1. Sales revenue

Under IFRS 15 revenue from sales of products, goods, materials and services, net of value-added tax, rebates and discounts, is

recognized, when the performance obligation to deliver the promised good or service (i.e. an asset) to the customer has been

fulfilled (or is in the process of being fulfilled).

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Sales revenue 1 230 199 952 576

of which revenue from research and development projects 521 071 299 720

Sales of products 1 041 784 767 499

Sales of services 1 662 1 960

Sales of goods for resale and materials 186 753 183 117

Other income 172 685 90 944

Other operating income 54 040 19 443

Finance income 118 645 71 501

Total 1 402 884 1 043 520

Sales revenue – geographical structure*

01.01.2023 – 31.12.2023 01.01.2022 – 31.12.2022

in PLN in % in PLN in %

Domestic sales 30 840 2.51% 28 931 3.04%

Export sales, including: 1 199 359 97.49% 923 645 96.96%

Europe 231 012 18.78% 167 881 17.62%

North America 872 353 70.90% 677 683 71.14%

South America 4 682 0.38% 3 579 0.38%

Asia 81 537 6.63% 65 681 6.90%

Australia 9 098 0.74% 8 395 0.88%

Africa 677 0.06% 426 0.04%

Total 1 230 199 100% 952 576 100%

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

distributors, and for retail sales conducted by GOG sp. z o.o. and CD PROJEKT RED Inc. (formerly: CD PROJEKT Inc.) – end

customers.

Sales revenue – by type of production

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Own production 1 041 784 767 499

Third party production 186 753 183 117

Other revenue 1 662 1 960

Total 1 230 199 952 576

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

(all amounts in PLN thousand, unless stated otherwise)

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

Sales revenue – by distribution channel

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Games - box issues 67 989 31 375

Games - digital issues 1 136 680 850 367

Other revenue 25 530 70 834

Total 1 230 199 952 576

Note 2. Operating expenses

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

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

expenditure on development projects and investment properties, including:

13 970 13 828

depreciation of leased buildings 801 1 659

depreciation of leased vehicles 398 412

Materials and energy used 4 802 3 406

External services, including: 180 857 122 751

costs of short-term leases and low value leases 469 463

Taxes and fees 2 354 1 530

Salaries and wages, social insurance and other benefits 202 548 150 649

Business travel 3 831 3 173

Cost of using company cars 268 238

Cost of goods for resale and materials sold 140 807 132 412

Costs of products and services sold 239 760 111 562

Other costs 1 673 2 971

Total 790 870 542 520

Selling expenses 243 796 189 551

Total administrative expenses, including: 166 507 108 995

costs of research projects 20 002 4 593

Cost of sales 380 567 243 974

Total 790 870 542 520

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 3. Other operating income and expenses

Other operating income

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

Tax relief for innovative employees 16 344 -

Reversal of a write-down of expenditure on development projects in progress 21 531 -

Other sales 5 451 3 451

Release of unused provisions for costs 2 816 232

Subsidies 2 763 3 220

Rental income 2 571 6 644

Write-off of past liabilities of GOG.COM 1 246 3 668

Income from re-invoicing 790 757

Fixed assets and goods for resale received free of charge 168 432

Refund of overpaid tax on civil law transactions 94 -

Gains on disposal of non-current assets 75 270

Payments from enforcement officers 27 13

Settlement of the financial liabilities in respect of leases - 602

Damages received - 2

Other 164 152

Total other operating income 54 040 19 443

* restated data

Other operating expenses

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Provision recorded for potential tax liability 3 746 -

Cost of rental 3 621 3 869

Cost of sales of other sales 3 307 4 147

Scrapping of property, plant and equipment items and intangible assets 3 163 1 045

Inventory write-downs 2 028 -

Write-down and write-off of minimum guarantee assets 1 912 1 126

Depreciation of investment properties 1 726 1 854

Donations and charity 880 1 349

Costs relating to re-invoicing 790 757

Scrapping of investment properties 737 -

Costs of projects written off 518 -

VAT written off 338 -

Cost of current assets written off 243 -

Cost of destruction of materials and goods for resale 227 3 172

Irrecoverable receivables 76 -

Impairment write-downs of property, plant and equipment, intangible assets

and expenditure on development projects

- 34 286

Costs incurred on redevelopment of the car park - 551

Provision for the uninsured portion of the US court settlement costs - 126

Costs related to provisions for liabilities to game developers - 391

Other 1 024 132

Total other operating expenses 24 336 52 805

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 4. Finance income and costs

Finance income

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Interest income 48 007 43 337

on current bank deposits 28 090 26 885

on bonds 19 653 16 230

on loans 264 222

Other finance income 70 638 28 164

release of write-downs of non-current financial assets 27 271 -

gains on disposal of bonds 2 259 22 752

forward contracts - Management Board - 2

settlement and measurement of derivative financial instruments 40 768 5 397

other finance income 340 13

Total finance income 118 645 71 501

Finance costs

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Interest expense 863 1 347

on lease contracts 807 581

on bonds 18 269

on liabilities to the State Treasury 35 30

on potential liabilities to the State Treasury - 467

on trade payables 3 -

Other finance costs 48 330 54 316

net foreign exchange losses 47 961 24 547

write-downs of non-current financial assets - 27 271

settlement and measurement of derivative financial instruments - 2 172

commission and fees on purchase of bonds 284 326

measurement of private equity interests in the gaming sector 85 -

Total finance costs 49 193 55 663

Net finance income/expense 69 452 15 838

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 5. Corporate income tax and deferred income tax

The main items of income tax expense for the years ended 31 December 2023 and 31 December 2022 are as follows:

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

Current income tax 47 472 51 591

For the financial year 27 512 19 165

Adjustments relating to prior years (11 439) 151

Withholding tax paid abroad 31 399 32 275

Deferred income tax 9 915 (5 557)

Related to temporary differences arising and reversed 9 915 (5 557)

Income tax expense shown in the income statement 57 387 46 034

Effective tax rate 10.66% 11.73%

* restated data

Deferred tax shown in the income statement is the difference between the balance of deferred tax provisions and assets as at the

end and the beginning of the reporting periods.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Current income tax

01.01.2023 – 31.12.2023 01.01.2022 – 31.12.2022

Income from other

sources of

revenue

Income from

capital gains

Income from other

sources of

revenue*

Income from

capital gains

Profit/(loss) before tax 489 801 48 691 411 412 (18 887)

Income increasing the tax base 7 834 12 138 7 868 6 646

Income relating to subsequent

periods

(75 277) - (34 296) -

Non-taxable income (88 644) (18 619) (11 111) (10 359)

Income from advance payments

disclosed for tax purposes

7 567 - 7 596 -

Costs reducing the tax base (43 162) - (110 389) -

Non-deductible costs 331 314 12 156 370 28 822

Profit/loss made by entities

operating abroad

183 - 173 -

Taxable income 629 616 42 222 427 623 6 222

Deductions from income – loss (8 553) (42 222) (8 553) (6 180)

Deductions from income –

donation and charity

(445) - (1 169) -

Deductions from income –

research and development relief

(83 478) - (39 504) -

Deductions from income – tax-

free income

(466) - (453) -

Tax base, including: 536 674 - 377 944 42

tax base at 5% (profit) 531 847 - 378 244 -

tax base at 19% (profit) 4 827 - 1 243 42

tax base at 19% (loss) - - (1 543) -

Income tax calculated in Poland

at 5%

26 593 - 18 912 -

Income tax calculated in Poland

at 19%

917 - 237 8

Income tax calculated abroad 2 - 8 -

Income tax 27 512 - 19 157 8

* restated data

The current portion of the income tax for Polish companies was determined at the corporate income tax rate of 19% for the tax base

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

intellectual property rights (the so-called IP BOX), and in the case of the activities conducted in the USA by CD PROJEKT RED Inc.,

based on the applicable rates of the federal and state taxes.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Deductible temporary differences underlying the deferred tax asset

31.12.2022*

Differences affecting

the deferred tax

recognized in the

profit or loss

31.12.2023

Provision for other employee benefits 2 382 2 620 5 002

Provision for costs of performance-related

and other remuneration

49 565 248 49 813

Tax loss 5 467 (3 991) 1 476

Foreign exchange losses 7 573 30 823 38 396

Difference between the carrying amount

and tax base of expenditure on development

projects

34 836 (12 795) 22 041

Salaries and wages and social security payable

in future periods

47 (24) 23

Deferred income in respect of virtual wallet top-

ups and fringe benefit scheme

3 955 173 4 128

Other provisions 34 167 8 768 42 935

Tax base of leased non-current assets 20 697 316 21 013

Research and development relief 318 126 (96 402) 221 724

Prepayments recognized as revenue for tax

purposes

7 523 (2 544) 4 979

Difference between the net carrying amounts

and tax bases of property, plant and equipment

and intangible assets

12 - 12

Measurement of forward contracts 892 (396) 496

Other - 3 608 3 608

Total deductible differences, including: 485 242 (69 596) 415 646

taxed at 5% 72 663 57 832 130 495

taxed at 19% 411 344 (127 846) 283 498

deferred tax charged abroad 1 235 418 1 653

Deferred income tax asset 82 140 (21 295) 60 845

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Taxable temporary differences underlying the deferred tax provision

31.12.2022*

Differences affecting

the deferred tax

recognized in the

profit or loss

31.12.2023

Difference between the net carrying amounts

and tax bases of property, plant and equipment

and intangible assets

17 780 4 301 22 081

Current period revenue invoiced in the

subsequent period/accrued income

132 427 59 437 191 864

Foreign exchange gains 8 722 (7 297) 1 425

Difference between the carrying amount

and tax base of expenditure on development

projects

254 638 (205 836) 48 802

Carrying amount of leased non-current assets 20 844 219 21 063

Other 151 (7) 144

Total taxable differences, including: 434 562 (149 183) 285 379

taxed at 5% 382 911 (119 584) 263 327

taxed at 19% 50 214 (29 447) 20 767

deferred tax charged abroad 1 437 (152) 1 285

Deferred tax provision 29 088 (11 614) 17 474

* restated data

The deferred portion of the income tax for the Polish companies 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 rights (the so-called IP BOX), and in the case of the activities conducted in the USA by

CD PROJEKT RED Inc., based on the applicable rates of the federal and state taxes. 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 asset/provision

31.12.2023 31.12.2022*

Deferred tax asset 60 845 82 140

Deferred tax provision 17 474 29 088

* restated data

Note 6. Discontinued operations

The Group did not discontinue any operations in the current year or in the previous year.

Note 7. Earnings per share

Basic earnings per share are calculated by dividing the net profit for the period attributable to ordinary shareholders of the Parent

Company by the weighted average number of ordinary shares in issue, outstanding during the period. Diluted earnings per share

are calculated by dividing the net profit for the period attributable to ordinary shareholders of the Parent Company (net of interest

on redeemable preference shares convertible to ordinary shares) by the weighted average number of ordinary shares in issue

during the year (adjusted for the inflow of diluting options or warrants and diluting redeemable preference shares convertible into

ordinary shares).

During the 12 months ended 31 December 2023, the diluting instruments comprised entitlements granted under the incentive plans,

entitling the holder to take up shares in the Parent Company in the future. For information on the number of entitlements granted,

see Note 39.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Net profit and the number of shares underlying the calculation of earnings per share

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

Weighted average number of shares for the calculation of basic earnings per share

(no. of units)

100 268 964 100 741 467

Weighted average number of shares for the calculation of diluted earnings per share

(no. of units)

100 288 896 100 764 969

Net profit/(loss) shown for the purpose of calculating diluted earnings per share 481 105 346 491

Basic net earnings/(loss) per share 4.80 3.44

Diluted net earnings/(loss) per share 4.80 3.44

* restated data

Note 8. Dividend paid (or declared) and received

On 6 June 2023, the Ordinary Shareholders Meeting of the Parent Company decided to set aside a portion of the Parent Company’s

net profit for 2022 for distribution to shareholders as dividend. In accordance with the adopted resolution, on 20 June 2023 the

Parent Company paid out the total amount of PLN 99 910 510, i.e. PLN 1 per each share participating in the dividend. The number

of the Parent Company’s shares giving right to the dividend was 99 910 510, which represented the total number of the Parent

Company’s shares as at the payment date less the Parent Company’s treasury shares (860 290 shares).

Note 9. Disclosure of other comprehensive income items and their tax effect

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

Net profit/(loss) 481 105 346 491

Exchange differences on measurement of foreign operations (3 106) 313

Measurement of bonds issued by foreign governments 4 138 (12 724)

Total comprehensive income 482 137 334 080

Total comprehensive income attributable to non-controlling interests - -

Total comprehensive income attributable to the parent company 482 137 334 080

* restated data

Note 10. Property, plant and equipment

Ownership structure of property, plant and equipment

31.12.2023 31.12.2022

Own assets 160 229 124 145

Used under lease contracts 22 809 21 107

Total 183 038 145 252

Property, plant and equipment with restricted legal title

31.12.2023 31.12.2022

Used under lease contracts 22 809 21 107

Total 22 809 21 107

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

31.12.2023 31.12.2022

Construction of an office building on the CD PROJEKT campus 83 292 -

Leasing of passenger cars 562 599

Total 83 854 599

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

(all amounts in PLN thousand, unless stated otherwise)

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

Changes in property, plant and equipment (by category) for the period 01.01.2023 - 31.12.2023

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: 1 424 29 881 2 867 34 511 934 2 411 21 256 93 284

purchase - 205 2 26 933 292 444 20 659 48 535

business

combinations

- 52 - 737 - 64 - 853

lease contracts

concluded

1 424 2 850 - - 642 - 597 5 513

transfer from assets

under construction

- 20 148 2 865 6 521 - 1 359 - 30 893

transfer from

investment

properties

- 6 577 - 316 - - - 6 893

reclassification - 49 - - - 544 - 593

other - - - 4 - - - 4

Decrease due to: - 4 721 865 2 631 508 35 30 953 39 713

sale - - - 498 136 - - 634

scrapping - 1 165 372 1 718 5 35 - 3 295

transfer from assets

under construction

- - - - - - 30 893 30 893

reclassification - - 493 99 - - 60 652

lease contracts

terminated

- 3 419 - - 317 - - 3 736

free of charge

transfer

- - - 301 - - - 301

other - 137 - 15 50 - - 202

Gross carrying amount

as at 31.12.2023

41 859 107 457 3 927 90 736 3 677 8 152 18 392 274 200

Accumulated

depreciation

as at 01.01.2023

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

Increase due to: 585 7 937 205 12 886 620 1 107 - 23 340

depreciation charge 585 6 947 205 12 259 620 1 050 - 21 666

transfer from

investment

properties

- 890 - 48 - - - 938

business

combinations

- 21 - 579 - 51 - 651

reclassification - 79 - - - 6 - 85

Decrease due to: - 4 347 211 2 583 379 35 - 7 555

sale - - - 497 57 - - 554

scrapping - 928 205 1 705 5 35 - 2 878

reclassification - - 6 79 - - - 85

lease contracts

terminated

- 3 419 - - 317 - - 3 736

free of charge

transfer

- - - 301 - - - 301

other - - - 1 - - - 1

Accumulated

depreciation

as at 31.12.2023

2 402 28 941 711 52 785 1 778 4 545 - 91 162

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

(all amounts in PLN thousand, unless stated otherwise)

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

Impairment write-downs

as at 01.01.2023

- - - - - - - -

Impairment write-downs

as at 31.12.2023

- - - - - - - -

Net carrying amount as

at 01.01.2023

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

Net carrying amount as

at 31.12.2023

39 457 78 516 3 216 37 951 1 899 3 607 18 392 183 038

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

(all amounts in PLN thousand, unless stated otherwise)

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

Changes in property, plant and equipment (by category) for the period 01.01.2022 – 31.12.2022

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 01.01.2022

40 435 75 861 1 876 52 127 3 243 4 930 2 327 180 799

Increase due to: - 7 777 277 9 645 1 356 1 026 27 030 47 111

purchase - 499 - 9 081 - 987 26 910 37 477

lease contracts

concluded

- 6 831 4 - 1 347 - - 8 182

transfer from assets

under construction

- 239 - 37 - 39 - 315

transfer from

investment

properties

- 112 273 - - - 120 505

reclassification - - - 81 - - - 81

free of charge

receipt

- - - 431 - - - 431

other - 96 - 15 9 - - 120

Decrease due to: - 1 341 228 2 916 1 348 180 1 268 7 281

sale - - - 374 739 1 - 1 114

scrapping - 816 228 2 308 609 98 24 4 083

transfer from assets

under construction

- - - - - - 315 315

reclassification - - - - - 81 929 1 010

lease contracts

terminated

- 525 - - - - - 525

other - - - 234 - - - 234

Gross carrying amount

as at 31.12.2022

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

Accumulated

depreciation

as at 01.01.2022

1 250 19 797 558 35 145 1 792 2 669 - 61 211

Increase due to: 567 6 895 239 10 223 555 933 - 19 412

depreciation charge 567 6 888 210 10 172 555 933 - 19 325

transfer from

investment

properties

- 7 29 - - - - 36

reclassification - - - 51 - - - 51

Decrease due to: - 1 341 80 2 886 810 129 - 5 246

sale - - - 363 739 1 - 1 103

scrapping - 816 80 2 289 71 77 - 3 333

reclassification - - - - - 51 - 51

lease contracts

terminated

- 525 - - - - - 525

other - - - 234 - - - 234

Accumulated

depreciation

as at 31.12.2022

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

Impairment write-downs

as at 01.01.2022

- - - - - - - -

Impairment write-downs

as at 31.12.2022

- - - - - - - -

Net carrying amount as

at 01.01.2022

39 185 56 064 1 318 16 982 1 451 2 261 2 327 119 588

Net carrying amount as

at 31.12.2022

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

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

(all amounts in PLN thousand, unless stated otherwise)

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

Assets under construction

01.01.2023

Expenditure

incurred in

the financial

year

Reclassification of

costs

Settlement of

capital

expenditure

31.12.2023

Redevelopment of the

Jagiellońska 74 property

1 004 705 - 1 243 466

New office building

Jagiellońska 74

1 613 15 683 - 25 17 271

Redevelopment of car park 25 220 3 879 43 29 056 -

Other 252 989 17 569 655

Total 28 089 21 256 60 30 893 18 392

01.01.2022*

Expenditure

incurred in

the financial

year

Reclassification of

costs

Settlement of

capital

expenditure

31.12.2022*

Redevelopment of the

Jagiellońska 74 property

325 968 61 228 1 004

New office building

Jagiellońska 74

765 848 - - 1 613

Redevelopment of car park 924 25 157 861 - 25 220

Other 313 57 7 111 252

Total 2 327 27 030 929 339 28 089

* restated data

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

31.12.2023 31.12.2022

Gross

amount

Accumulated

depreciation

Net

amount

Gross

amount

Accumulated

depreciation

Net

amount

Land 15 964 891 15 073 14 540 669 13 871

Real properties 12 910 6 852 6 058 14 332 8 735 5 597

Civil and hydraulic engineering

facilities

- - - 99 99 -

Plant and machinery 48 28 20 - - -

Vehicles 2 227 550 1 677 2 264 625 1 639

Total 31 149 8 321 22 828 31 235 10 128 21 107

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 11. Intangible assets and expenditure on development projects

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

01.01.2023 – 31.12.2023

Expenditure on

dev.

projects in

progress

Expenditure on

completed dev

projects

Trademarks

Patents and

licenses

Copyrights

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: 264 784

272 683

1 447

239

1 125

4 429

544 730

purchase -

1 447

209

670

3 416

5 742

internally generated

assets

264 784

1 013

265 797

transfer from

intangible assets

under construction

343

reclassification from

expenditure on

development

projects in progress

272 683

business

combinations

119

reclassification -

Decrease due to: 287 272

4 552

360

292 230

scrapping 2 745

4 552

7 297

utilization of

impairment write-

downs

11 844

transfer from

intangible assets

under construction

343

transfer from

expenditure on

development

projects

in progress

272 683

reclassification -

other -

Gross carrying amount

as at 31.12.2023

226 756

1 202 770

33 222

5 561

18 708

46 651

56 438

4 241

1 594 347

Accumulated

amortization

as at 01.01.2023

657 011

2 767

301

33 853

693 932

Increase due to: -

231 557

1 658

549

3 748

237 512

amortization charge -

231 557

1 658

524

3 681

237 420

business

combinations

Decrease due to: -

4 551

scrapping -

4 551

Accumulated

amortization

as at 31.12.2023

888 568

4 425

850

33 050

926 893

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

(all amounts in PLN thousand, unless stated otherwise)

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

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

release of write-

downs (write-off)

11 844

Impairment write-downs

as at 31.12.2023

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 31.12.2023

226 756

300 426

33 222

1 136

17 858

13 601

56 438

4 241

653 678

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

(all amounts in PLN thousand, unless stated otherwise)

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

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

01.01.2022 – 31.12.2022*

Expenditure on

dev.

projects in

progress

Expenditure on

completed dev

projects

Trademarks

Patents and

licenses

Copyrights

Computer

software

Goodwill

Intangible assets

under

construction

Total

Gross carrying amount

as at 01/01/2022

95 169

841 986

33 199

2 154

18 331

36 018

56 438

1 083 314

Increase due to: 263 292

88 101

2 480

138

14 073

583

368 667

purchase -

2 480

13 599

583

16 692

internally generated

assets

263 292

transfer from

intangible assets

under construction

108

reclassification from

expenditure on

development

projects in progress

88 101

reclassification -

474

Decrease due to: 109 217

474

430

110 134

scrapping 283

296

utilization of

impairment write-

downs

20 806

transfer from

intangible assets

under construction

108

transfer from

expenditure on

development

projects

in progress

88 101

reclassification 27

474

322

823

Gross carrying amount

as at 31.12.2022

249 244

930 087

33 199

4 160

18 469

50 078

56 438

172

1 341 847

Accumulated

amortization

as at 01.01.2022

552 378

1 928

173

29 227

583 706

Increase due to: -

104 633

839

128

4 626

110 226

amortization charge -

104 633

839

128

4 626

110 226

Decrease -

Accumulated

amortization as at

31.12.2022

657 011

2 767

301

33 853

693 932

Impairment write-downs

as at 01.01.2022

20 806

13 776

34 582

Increase due to: 33 375

33 375

impairment 33 375

33 375

Decrease due to: 20 806

20 806

release of write-

downs (write-off)

20 806

Impairment write-downs

as at 31.12.2022

33 375

13 776

47 151

Net carrying amount as

at 01.01.2022

74 363

275 832

33 199

226

18 158

6 791

56 438

478 802

Net carrying amount as

at 31.12.2022

215 869

259 300

33 199

1 393

18 168

16 225

56 438

172

600 764

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Intangible assets – ownership structure

31.12.2023 31.12.2022

Own assets 70 058 68 737

Used under lease contracts - 420

Total 70 058 69 157

Intangible assets under construction

01.01.2023

Expenditure

incurred in

the financial

year

Reclassification of

costs

Settlement of

capital

expenditure

31.12.2023

Financial analysis system 172 2 544 - 343 2 373

System for financial

consolidation

- 681 16 - 665

ERP system - 197 - - 197

e-Nova system - 1 006 - - 1 006

Total 172 4 428 16 343 4 241

01.01.2022

Expenditure

incurred in

the financial

year

Reclassification of

costs

Settlement of

capital

expenditure

31.12.2022

Financial analysis system 11 161 - - 172

Document flow system 8 - 8 - -

System for virtualization

and cloud computing

- 314 314 - -

cdprojektred.com website - 108 - 108 -

Total 19 583 322 108 172

Amounts of contractual commitments to purchase intangible assets in the future

None.

Intangible assets – restriction on disposal

None.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 12. Goodwill

Goodwill recognized in business combinations and acquisitions

CD Projekt Red

sp. z o.o.

Strange New

Things business

Total

Gross carrying amount as at 01.01.2023 46 417 10 021 56 438

Gross carrying amount as at 31.12.2023 46 417 10 021 56 438

Impairment write-downs as at 01.01.2023 - - -

Impairment write-downs as at 31.12.2023 - - -

Net carrying amount as at 01.01.2023 46 417 10 021 56 438

Net carrying amount as at 31.12.2023 46 417 10 021 56 438

Impairment tests of goodwill require estimating the value in use of the cash-generating unit. In estimating the value in use, the

Parent Company prepared forecasts of the future cash flows to be generated by the cash-generating unit and determined the

discount rate to be applied to calculate the present value of these cash flows. The Parent Company performed the most recent

impairment test of goodwill as at 31 December 2023. The Parent Company identified no impairment of goodwill.

Note 13. Investment properties

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

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

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

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

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

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

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

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

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

(all amounts in PLN thousand, unless stated otherwise)

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

Changes in investment properties

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Gross carrying amount as at the beginning of the period 47 946 48 169

Increase due to: 124 282

capitalized expenditure 124 282

Decrease due to: 7 757 505

scrapping 864 -

reclassification to other asset categories 6 893 505

Gross carrying amount as at the end of the period 40 313 47 946

Accumulated depreciation as at the beginning of the period 5 386 3 535

Increase due to: 1 747 1 887

depreciation charge 1 747 1 887

Decrease due to: 1 065 36

scrapping 127 -

reclassification to other asset categories 938 36

Accumulated depreciation as at the end of the period 6 068 5 386

Impairment write-downs as at the beginning of the period - -

Increase - -

Decrease - -

Impairment write-downs as at the end of the period - -

Net carrying amount as at the end of the period 34 245 42 560

Amounts of contractual liabilities in respect of purchase of investment properties

None.

Note 14. Shares in non-consolidated subordinated entities

Investments in subordinated entities measured at cost

31.12.2023 31.12.2022

Shares in subordinated entities – subsidiaries 38 095 41 607

Total 38 095 41 607

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

(all amounts in PLN thousand, unless stated otherwise)

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

Changes in investments in subsidiaries

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

As at the beginning of the period 41 607 38 520

Increase due to: 32 442 30 434

acquisition/formation of an entity 5 057 67

release of write-downs 27 271 -

equity element of the incentive plan 114 -

payments towards increasing the share capital of a subsidiary - 28 318

foreign exchange differences - 2 049

Decrease due to: 35 954 27 347

accounting for a business combination 32 854 -

disposal of a subsidiary/shares in a subsidiary - 76

impairment write-downs recorded - 27 271

equity element of the incentive plan 20 -

foreign exchange differences 3 080 -

As at the end of the period 38 095 41 607

Investments in subsidiaries as at 31.12.2023

CD PROJEKT RED

Vancouver Studio Ltd.

The Molasses Flood LLC CD PROJEKT SILVER Inc.

Registered office Vancouver Boston, Waltham Los Angeles, Venice

Percent of shares held

as at 31.12.2023

100% 81.82% 100%

Percent of votes held

as at 31.12.2023

100% 81.82% 100%

Equity investment 10 082 27 953 60

Investments in subsidiaries as at 31.12.2022

Spokko sp. z o.o.

CD PROJEKT RED

Vancouver Studio

Ltd.

The Molasses Flood

LLC

CD Projekt Silver

Inc.

Registered office Warsaw Vancouver Boston, Waltham Los Angeles, Venice

Percent of shares held

as at 31.12.2022

87.6% 100% 60% 100%

Percent of votes held

as at 31.12.2022

87.6% 100% 60% 100%

Equity investment 5 143 9 987 26 411 66

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 15. Other financial assets

31.12.2023 31.12.2022

Loans granted 3 225 739

Bonds 793 200 475 848

Derivative financial instruments 18 683 7 809

Private equity interests in the gaming sector 3 518 2 556

Other financial assets, including: 818 626 486 952

current 362 719 279 515

non-current 455 907 207 437

In 2023, CD PROJEKT S.A. did not conclude any new loan agreements.

Under the loan agreement dated 16 September 2022, a loan of USD 1 150 thousand was granted to The Molasses Flood LLC. The

agreement provides for the loan to be disbursed and repaid in tranches. On 2 November 2022, the first tranche of

USD 166 thousand was paid out. The remaining tranches totalling USD 984 thousand were paid in 2023, as follows:

USD 430 thousand in Q1 and USD 554 thousand in Q2. In 2023, The Molasses Flood LLC started repaying the loan. To date, the

company has repaid USD 350 thousand, as follows: USD 200 thousand in Q3 and USD 150 thousand in Q4. The interest rate on

the loan granted is determined based on a variable rate, namely the 90-day Average SOFR, updated quarterly, plus a margin

updated annually (in 2023, the margin was 2.4 pp). According to the agreement, the loan should be repaid by 31 March 2025.

In accordance with the internally adopted rules on diversification of investment of current cash surpluses, the Parent Company has

the possibility of holding in debt securities up to 80% of the present value of financial resources defined as the sum of the total

amount of: cash and cash equivalents, bank deposits of more than 3 months, bonds of the State Treasury of the Republic of Poland,

bonds secured by a guarantee of the State Treasury of the Republic of Poland, bonds of foreign governments and bonds secured

by a guarantee of foreign governments together with concluded forward hedging transactions. Of the debt securities referred to

above, the Company may acquire domestic Treasury bonds of the Republic of Poland, domestic bonds secured with a guarantee

of the State Treasury of the Republic of Poland, foreign Treasury bonds issued by countries with a rating no lower than Aa3

according to Moody’s rating agency and foreign bonds secured with a guarantee of countries with a rating no lower than Aa3

according to Moody’s rating agency. For more information on the bond portfolio held, see Financial risk management objectives

and policies - Liquidity and credit risk.

Note 16. Inventories

31.12.2023 31.12.2022

Goods for resale 5 600 12 697

Other materials 4 4

Gross inventories 5 604 12 701

Inventory write-downs 2 028 -

Net inventories 3 576 12 701

Changes in inventory write-downs

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Write-downs of finished products as at the beginning of the period - -

Increases, including: 2 028 -

recognition of write-downs against other operating expenses 2 028 -

Decrease - -

Write-downs of finished products as at the end of the period 2 028 -

Inventories put up as collateral

Not applicable.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 17. Trade receivables

31.12.2023 31.12.2022

Trade receivables, gross 193 599 165 376

Write-downs 79 86

Trade receivables 193 520 165 290

from related entities 1 586 860

from other entities 191 934 164 430

Changes in write-downs of trade receivables

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

OTHER ENTITIES

Write-downs as at the beginning of the period 86 79

Increases, including: 7 18

write-downs recognized for past-due and disputed receivables 7 18

Decreases, including: 14 11

release of write-downs 14 11

Write-downs as at the end of the period 79 86

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

(all amounts in PLN thousand, unless stated otherwise)

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

Current and overdue trade receivables as at 31.12.2023

Total Not overdue

Overdue, in days

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

RELATED ENTITIES

gross receivables 1 586 1 586 - - - - -

default ratio - 0% 0% 0% 0% 0% 0%

write-down resulting

from the ratio

- - - - - - -

write-down

determined

individually

- - - - - - -

total expected credit

losses

- - - - - - -

Net receivables 1 586 1 586 - - - - -

Total Not overdue

Overdue, in days

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

OTHER ENTITIES

gross receivables 192 013 188 417 3 504 1 12 - 79

default ratio - 0% 0% 0% 0% 0% 0%

write-down resulting

from the ratio

- - - - - - -

write-down

determined

individually

79 - - - - - 79

total expected credit

losses

79 - - - - - 79

Net receivables 191 934 188 417 3 504 1 12 - -

Total

- - - - - - -

gross receivables 193 599 190 003 3 504 1 12 - 79

impairment write-

downs

79 - - - - - 79

Net receivables 193 520 190 003 3 504 1 12 - -

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

(all amounts in PLN thousand, unless stated otherwise)

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

Current and overdue trade receivables as at 31.12.2022

Total Not overdue

Overdue, in days

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

RELATED ENTITIES

gross receivables 860 860 - - - - -

default ratio - 0% 0% 0% 0% 0% 0%

write-down resulting

from the ratio

- - - - - - -

write-down

determined

individually

- - - - - - -

total expected credit

losses

- - - - - - -

Net receivables 860 860 - - - - -

Total Not overdue

Overdue, in days

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

OTHER ENTITIES

gross receivables 164 516 164 032 398 - - - 86

default ratio - 0% 0% 0% 0% 0% 0%

write-down resulting

from the ratio

- - - - - - -

write-down

determined

individually

86 - - - - - 86

total expected credit

losses

86 - - - - - 86

Net receivables 164 430 164 032 398 - - - -

Total

gross receivables 165 376 164 892 398 - - - 86

impairment write-

downs

86 - - - - - 86

Net receivables 165 290 164 892 398 - - - -

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

(all amounts in PLN thousand, unless stated otherwise)

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

Trade receivables – by currency

31.12.2023 31.12.2022

Value in

foreign

currency

Value in

PLN

Value in

foreign

currency

Value in

PLN

PLN* 179 905 179 905 131 175 131 175

USD 2 653 10 488 7 075 31 144

EUR 470 2 043 314 1 474

GBP 58 289 36 190

BRL 302 245 262 218

CAD 71 212 251 816

AUD 54 146 34 103

CHF 14 64 9 43

SEK 160 63 116 49

DKK 68 40 43 27

NOK 65 25 46 21

CNY - - 47 30

JPY - - 7 -

Total 0 193 520

165 290

* Under receivables in PLN, the Group also recognizes amounts receivable in respect of licence reports received for the current

period expressed in foreign currencies and invoiced in subsequent periods and charged to the current period directly in PLN.

Note 18. Other receivables

31.12.2023 31.12.2022*

Other gross receivables, including: 58 124 58 260

tax receivables, other than corporate income tax 51 151 43 558

prepayments for inventories 3 768 6 940

prepayments for development projects 2 173 1 433

security deposits 658 1 071

provisions for sales revenue - prepayments 249 137

prepayments for property, plant and equipment and intangible assets 77 135

settlements with employees 29 -

settlements with members of the Management Board 3 2

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

settlements with payment operators - 7

other 16 817

Write-downs - 732

Other receivables, including: 58 124 57 528

current 57 741 57 139

non-current 383 389

* restated data

Other tax receivables, other than corporate income tax, also include withholding tax in the amount of PLN 30 406 thousand to be

deducted by the Group companies in their annual CIT returns after obtaining certificates from foreign counterparties confirming

their payment of tax abroad.

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

(all amounts in PLN thousand, unless stated otherwise)

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

31.12.2023 31.12.2022

Other gross receivables 58 124 58 260

Write-downs - 732

Other receivables 58 124 57 528

from related entities 3 995

from other entities 58 121 56 533

Changes in write-downs of other receivables

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

OTHER ENTITIES

Write-downs as at the beginning of the period 732 732

Increase - -

Decreases, including: 732 -

release of write-downs (write-off) 732 -

Write-downs as at the end of the period - 732

Other receivables claimed in court

31.12.2023 31.12.2022

Other receivables in court - 732

Write-downs of disputed receivables - 732

Net other receivables claimed in court - -

Other receivables – by currency

31.12.2023 31.12.2022

Value in

foreign

currency

Value in

PLN

Value in

foreign

currency

Value in

PLN

PLN* 53 765 53 765 49 805 49 805

USD 891 3 540 1 474 5 598

EUR 121 526 126 591

CNY 335 197 18 11

CHF 8 38 8 39

JPY 1 092 30 1 109 37

BRL 26 21 17 14

RUB 163 5 - -

AUD - 1 - -

SEK 3 1 2 1

CAD - - 303 1 004

GBP - - 82 428

NOK 1 - 1 -

Total 0 58 124

57 528

* Receivables in PLN comprise, among others, receivables in respect of withholding tax deducted by foreign counterparties in

foreign currencies and remaining to be settled with the local Tax Office in the annual corporate income tax return.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Trade and other receivables from related entities

31.12.2023 31.12.2022

Receivables from related entities, gross 1 589 1 855

trade 1 586 860

other 3 995

Write-downs - -

Receivables from related entities, net 1 589 1 855

Note 19. Prepayments and deferred costs

31.12.2023 31.12.2022*

Minimum guarantees, advance payments and prepayments GOG.COM 53 539 41 457

Software, licenses 9 487 6 186

Costs of future marketing services 1 456 1 597

Fees for pre-emptive rights 1 164 1 271

Property and personal insurance 1 067 785

Costs of repairs and maintenance 809 1 142

Costs of IT security resources 401 380

Staff relocation costs 343 39

Business travel (tickets, hotels, insurance) 281 85

Costs in connection with redevelopment of the car park 260 260

Domains, servers 72 235

Other prepayments and deferred costs 899 523

Prepayments and deferred costs, including: 69 778 53 960

current 27 872 22 886

non-current 41 906 31 074

* restated data

Note 20. Cash and cash equivalents

31.12.2023 31.12.2022

Cash in hand and at bank: 8 464 12 559

cash in the local currency 1 1

current bank accounts 8 463 12 558

Cash equivalents: 169 590 265 268

cash in transit - 105

overnight deposits 12 501 7 512

short-term deposits maturing within 3 months 156 320 257 320

cash in investment accounts 769 331

Total 178 054 277 827

Restricted cash and cash equivalents

Not applicable.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 21. Share capital

Share capital – structure as at 31.12.2023

Series Number of shares in pcs. 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 -

On 18 April 2023, an Extraordinary General Meeting of the Parent Company took place at which the shareholders approved,

amongst others, resolutions concerning a decrease in the share capital and redemption of 860 290 treasury shares previously

acquired by the Parent Company with a view to their redemption as part of the buyout between 5 and 24 October 2022 for the

total amount of PLN 99 943 thousand. The contents of the resolutions passed by the Extraordinary General Meeting are available

on the Parent Company’s website

On 26 June 2023, in connection with the resolutions passed, the District Court for the Capital City of Warsaw in Warsaw entered

a decrease in the Parent Company’s share capital of PLN 860 290 and redemption of 860 290 treasury shares of the Parent

Company in the Register of Businesses.

As a result, the Parent Company’s share capital amounts to PLN 99 910 510 and consists of 99 910 510 ordinary bearer shares with

a par value of PLN 1 each, designated as series A - M shares. The total number of votes resulting from all shares of the Parent

Company is 99 910 510.

There were no changes in the amount of the Parent Company’s share capital after the balance sheet date.

Changes in share capital

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Share capital as at the beginning of the period 100 771 100 739

Increase due to: - 32

issuance of shares paid up in cash – incentive plan - 32

Decrease due to: 860 -

redemption of treasury shares 860 -

As at the end of the period 99 911 100 771

Note 22. Treasury shares

Purchase of treasury shares

During the reporting period and by the date of publication of these financial statements, no treasury shares were purchased.

Redemption of treasury shares

During 2023, the redemption of treasury shares discussed in Note 21 took place.

Note 23. Other reserves

31.12.2023 31.12.2022

Supplementary capital 1 714 604 1 567 325

Share premium 116 700 116 700

Revaluation reserve (3 803) (7 941)

Treasury shares - (99 993)

Other reserves – incentive plan 26 972 10 196

Total 1 854 473 1 586 287

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

(all amounts in PLN thousand, unless stated otherwise)

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

Change in other reserves

Supplementary

capital

Share premium Treasury shares

Revaluation

reserve

Other reserve

capital

Other reserves –

incentive plan

Total

As at 01.01.2023 1 567 325 116 700 (99 993) (7 941) - 10 196 1 586 287

Increase due to: 246 412 - 99 993 4 138 - 18 548 369 091

redemption of treasury shares - - 99 993 - - - 99 993

appropriation of the net profit/offset

of loss

246 412 - - - - - 246 412

the equity element of the incentive

plan

- - - - - 18 548 18 548

total comprehensive income - - - 4 138 - - 4 138

Decrease due to: 99 133 - - - - 1 772 100 905

redemption of treasury shares 99 133 - - - - - 99 133

the equity element of the incentive

plan

- - - - - 1 772 1 772

As at 31.12.2023 1 714 604 116 700 - (3 803) - 26 972 1 854 473

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

(all amounts in PLN thousand, unless stated otherwise)

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

Supplementary

capital

Share premium Treasury shares

Revaluation

reserve

Other reserve

capital

Other reserves –

incentive plan

Total

As at 01.01.2022 1 425 647 115 909 - 4 783 35 741 7 470 1 589 550

Increase due to: 172 485 791 - - - 4 938 178 214

share-based payments 1 549 791 - - - - 2 340

appropriation of the net profit/

offset of loss

135 195 - - - - - 135 195

release of reserve capital from

previous years created for share

buybacks

35 741 - - - - - 35 741

the equity element of the incentive

plan

- - - - - 4 938 4 938

Decrease due to: 30 807 - 99 993 12 724 35 741 2 212 181 477

purchase of treasury shares for

redemption

- - 99 993 - - - 99 993

appropriation of the net profit/offset

of loss

30 807 - - - - - 30 807

release of reserve capital from

previous years created for share

buybacks

- - - - 35 741 - 35 741

share-based payments - - - - - 1 548 1 548

the equity element of the incentive

plan

- - - - - 664 664

total comprehensive income - - - 12 724 - - 12 724

As at 31.12.2022 1 567 325 116 700 (99 993) (7 941) - 10 196 1 586 287

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 24. Retained earnings / (Accumulated losses)

31.12.2023 31.12.2022*

Retained earnings / (Accumulated losses) (3 818) (3 987)

Retained earnings / (Accumulated losses) of the acquired entity (26 979) -

Total (30 797) (3 987)

* restated data

Change in retained earnings / (accumulated losses)

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

As at the beginning of the period (3 987) (6 432)

Corrections of errors (1 938) (1 336)

Retained earnings / (accumulated losses), as adjusted (5 925) (7 768)

Increase due to: 348 429 208 908

appropriation of profit / (loss) from previous years 348 429 208 908

Decrease due to: 373 301 205 127

payment of dividend 99 911 100 739

transfer to supplementary capital 246 412 104 388

retained earnings of the acquired entity 26 978 -

As at the end of the period (30 797) (3 987)

* restated data

Note 25. Equity attributable to non-controlling shareholders

None.

Note 26. Loans and borrowings

None.

Note 27. Other financial liabilities

31.12.2023 31.12.2022

Lease liabilities 23 306 20 967

Liabilities measured at fair value through profit or loss 495 891

Deferred payment liabilities related to purchase of shares in a subsidiary 3 121 6 603

Total financial liabilities 26 922 28 461

Current, including: 6 884 9 578

up to one month 907 188

from one to three months 3 613 977

from three months to one year 2 364 8 413

Non-current, including: 20 038 18 883

from 1 to 5 years 5 084 5 171

more than 5 years 14 954 13 712

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

(all amounts in PLN thousand, unless stated otherwise)

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

As a lessee, the Group is potentially exposed to future cash outflows that are not included in the measurement of lease liabilities,

comprising:

 with regard to the contracts indicated in Note 33, the subject matter of which are plots of land located at ul. Jagiellońska 74 and

76, constituting, in fact, rights of perpetual usufruct of land – variable lease payments resulting from updating the annual fee for

perpetual usufruct of land, meaning a change to the existing fee amount in order to adjust it to the current value of the property

or in order to determine the appropriate rate at which the fee is calculated;

 with regard to the contract indicated in Note 33, the subject matter of which is office space in a building in Kraków, which is, in

fact, a rental contract – variable lease payments resulting from the building owner’s right to index the amount of fees for the

use of the premises based on the consumer price index;

 with regard to the contract indicated in Note 33, the subject matter of which is office space in a building in Wrocław, which is,

in fact, a rental contract – variable lease payments resulting from the building owner’s right to index the amount of fees for the

use of the premises based on the consumer price index.

Note 28. Other non-current liabilities

31.12.2023 31.12.2022

Other non-current liabilities, including: 2 494 2 620

liabilities in respect of marketing costs 1 322 1 456

liabilities in respect of pre-emptive rights 1 058 1 164

security deposits received 114 -

Other non-current liabilities – by maturity

31.12.2023 31.12.2022

Other non-current liabilities, including: 2 494 2 620

payable after one to three years 779 720

payable after three to five years 480 480

payable after five years 1 235 1 420

Other non-current liabilities – by currency

31.12.2023 31.12.2022

Value in

foreign

currency

Value in

PLN

Value in

foreign

currency

Value in

PLN

PLN 2 494 2 494 2 620 2 620

Total 0 2 494 0 2 620

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 29. Trade payables

31.12.2023 31.12.2022

Trade payables, including: 58 835 72 119

to related entities 3 300 2 575

to other entities 55 535 69 544

Trade payables – ageing analysis

Total Not overdue

Overdue, in days

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

As at 31.12.2023 58 835 58 468 319 - 2 20 26

to related entities 3 300 3 300 - - - - -

to other entities 55 535 55 168 319 - 2 20 26

Total Not overdue

Overdue, in days

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

As at 31.12.2022 72 119 68 092 1 220 95 128 270 2 314

to related entities 2 575 2 575 - - - - -

to other entities 69 544 65 517 1 220 95 128 270 2 314

Trade payables – by currency

31.12.2023 31.12.2022

Value in

foreign

currency

Value in

PLN

Value in

foreign

currency

Value in

PLN

USD 11 256 44 290 10 698 47 089

PLN 7 869 7 869 20 295 20 295

EUR 981 4 267 752 3 528

CAD 522 1 549 - -

GBP 74 369 25 133

JPY 11 854 329 9 921 330

CNY 261 145 1 088 691

KRW 5 500 17 - -

RUB 6 - 854 53

KZT - - 7 -

Total 0 58 835

72 119

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 30. Other current liabilities

31.12.2023 31.12.2022

Taxes (other than corporate income tax), customs duties, social security and other

payables

14 613 9 547

VAT 7 364 5 302

Withholding tax 470 32

Personal income tax 3 614 1 944

Social security contributions 2 798 2 043

PFRON (State Fund for Rehabilitation of Disabled People) 84 75

PIT-8AR (personal income tax) settlements 283 134

Other - 17

Other liabilities 588 697

Wages and salaries payable 9 -

Other settlements with employees 103 241

Other settlements with members of the Management Board 1 32

Prepayments received from foreign customers 84 8

Other liabilities 391 416

Total other current liabilities 15 201 10 244

Other current liabilities – ageing analysis

Total Not overdue

Overdue, in days

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

As at 31.12.2023 15 201 14 887 110 - - 1 203

to related entities 4 3 1 - - - -

to other entities 15 197 14 884 109 - - 1 203

Total Not overdue

Overdue, in days

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

As at 31.12.2022 10 244 9 782 258 1 - 203 -

to related entities 120 88 32 - - - -

to other entities 10 124 9 694 226 1 - 203 -

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

(all amounts in PLN thousand, unless stated otherwise)

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

Other current liabilities – by currency

31.12.2023 31.12.2022

Value in

foreign

currency

Value in

PLN

Value in

foreign

currency

Value in

PLN

PLN 7 720 7 720 4 870 4 870

EUR 1 064 4 715 709 3 350

USD 286 1 161 142 637

GBP 92 462 76 411

CAD 99 300 68 231

AUD 80 214 64 194

RUB 3 103 163 3 104 163

SEK 475 183 361 156

DKK 220 130 160 102

NOK 225 86 180 82

JPY 195 5 156 5

CHF 13 62 9 43

Total - 15 201 - 10 244

Note 31. Social assets and the Company’s Social Fund liabilities

Not applicable.

Note 32. Contingent liabilities

Bills of exchange payable in respect of loans received

Not applicable.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Contingent liabilities in respect of granted guarantees, sureties and collateral

Specification Currency 31.12.2023 31.12.2022

mBank S.A.

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

Bill of exchange agreement Bank guarantee securing a rental contract PLN 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

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

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

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

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

Pekao Leasing Sp. z o.o.

Bill of exchange agreement Lease contract 37/1991/21 PLN 165 314

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

Bank Polska Kasa Opieki Spółka Akcyjna

Bill of exchange agreement Framework agreement on financial market transactions PLN 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

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 33. Lease and sublease contracts

Information on the depreciation of leased assets is presented in Note 2. Interest expense on lease contracts is presented in Note 4.

Information on additions to right-of-use assets and the carrying value of right-of-use assets as at the end of the reporting period by

category of an underlying asset is presented in Note 10. Note 50 provides information on the total cash outflows from leases.

Lease liabilities

Present value of payments 31.12.2023 31.12.2022

Within one month 407 187

From one to three months 484 623

From three months to one year 2 431 1 274

From 1 to 5 years 5 029 5 171

More than 5 years 14 955 13 712

Present value of lease payments, including: 23 306 20 967

current 3 322 2 084

non-current 19 984 18 883

Gross lease commitments (before deduction of finance costs)

31.12.2023 31.12.2022

Within one month 485 276

From one to three months 627 893

From three months to one year 2 962 1 688

From 1 to 5 years 6 860 6 977

More than 5 years 26 151 24 006

Total 37 085 33 840

current 4 074 2 857

non-current 33 011 30 983

Income received through subleasing right-of-use assets

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Revenue 31 39

Costs 31 39

Income - -

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

(all amounts in PLN thousand, unless stated otherwise)

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

Lease and sublease contracts as at 31.12.2023

Leased assets Lessor Contract no. Cost

Opening

balance

(currency)

Currency

Agreement

expiry date

Liabilities as

at the balance

sheet date

Terms of extension or possibility of

purchase

Lease contracts

Passenger car Pekao Leasing Sp. z o.o. 37/1991/21 614 614 PLN 2023-12-14 150

The lessee has the right to purchase the

subject matter of the lease - according

to the contract, the net residual value is

PLN 135 thousand.

Passenger car Pekao Leasing Sp. z o.o. 44/0285/23 535 535 PLN 2026-01-12 328

The lessee has the right to purchase the

subject matter of the lease - according

to the contract, the net residual value is

PLN 91 thousand.

Passenger car Pekao Leasing Sp. z o.o.

44/0010/23 with

subsequent annexes

576 576 PLN 2025-05-12 288

The lessee has the right to purchase the

subject matter of the lease - according

to the contract, the net residual value is

PLN 102 thousand.

Passenger car

Sobiesław Zasada

Automotive Sp. z o.o.

Spółka jawna

L4 10439 622 622 PLN 2024-11-15 261

The lessee has the right to purchase the

subject matter of the lease - according

to the contract, the net residual value is

PLN 134 thousand.

Passenger car Tesla Financial

RN119460449-

1689353431

465 118 USD 2026-08-16 175

The lessee has the right to purchase the

subject matter of the lease - according

to the contract, the buyback value is

USD 66 thousand.

Jagiellońska 74 -

plots 12 and 13

State Treasury

Notarial Deed of

31.10.2019

8 623 8 623 PLN 2089-12-05 8 379

The lessee does not have the right to

buy back the subject matter of the

lease.

Jagiellońska 74 –

plot 14

Capital City of Warsaw

Notarial Deed of

31.10.2019

3 039 3 039 PLN 2100-04-12 2 830

The lessee does not have the right to

buy back the subject matter of the

lease.

Jagiellońska 76 State Treasury

Notarial Deed of

31.12.2018

4 449 4 449 PLN 2089-12-05 4 314

The lessee does not have the right to

buy back the subject matter of the

lease.

Kraków Office

Prestige Property Group

Sp. z o.o.

Rental contract

dated 20.07.2016

with subsequent

annexes

3 715 864 EUR 2025-05-31 1 716

The lessee does not have the right to

buy back the subject matter of the

lease.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Wrocław Office

Cavatina SPV 12

Sp. z o.o.

Rental contract

dated 04.11.2022

with subsequent

annexes

2 800 624 EUR 2027-10-31 2 690

The lessee does not have the right to

buy back the subject matter of the

lease.

Boston office

The Molasses Flood/

Albany Road

Rental contract

dated 01.10.2023

2 374 603 USD 2027-03-31 2 174

The lessee does not have the right to

buy back the subject matter of the

lease.

Lease of computers

De Lage Landen Leasing

Polska S.A.

CZ0227/22 48 48 PLN 2025-02-20 22

The lessee has the right to purchase the

subject matter of the lease - according

to the contract, the net residual value is

PLN 0.5 thousand.

Sub-lease contracts

Car park - Kraków

Office

CD PROJEKT S.A.

Rental contract

dated 02.05.2023

9 2 EUR 2025-05-31 6

The lessee does not have the right to

buy back the subject matter of the

lease.

Car park - Wrocław

Office

CD PROJEKT S.A.

Rental contract

dated 01.10.2023

16 4 EUR 2027-10-31 15

The lessee does not have the right to

buy back the subject matter of the

lease.

Total 0 0 27 835 0 0 0 23 306 0

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

(all amounts in PLN thousand, unless stated otherwise)

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

Leases of low-value assets and short-term leases

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

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

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

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

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

contract (information on the cost of these leases incurred in the period from 1 January to 31 December 2023 is included in Note 2).

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

of low-value assets were as follows:

31.12.2023 31.12.2022

Up to 1 year 827 467

From 1 to 5 years 156 334

More than 5 years - -

Total 983 801

Note 34. Deferred income

31.12.2023 31.12.2022

Subsidies 3 214 5 511

Cross Platform SDK (GameINN) 3 21

Animation Excellence (GameINN) 692 1 385

City Creation (GameINN) 1 388 2 776

Cinematic Feel (GameINN) 665 1 329

Polaris 466 -

Deferred income 12 271 20 583

Sales relating to future periods 7 218 16 088

Virtual wallet (e-wallet, store credit) 4 993 4 460

Rental of company phones 60 35

Total deferred income, including: 15 485 26 094

current 13 170 22 425

non-current 2 315 3 669

In the CD PROJEKT RED segment, sales related to future periods include royalty income received or receivable from pre-orders

completed by players as part of the digital distribution of PC games with a release date in future periods, royalty advances received

or receivable from publishers and distribution partners, and advances on goods received from customers.

In the GOG.COM segment, sales related to future periods include the value of pre-orders placed by customers for games with

release dates in future periods.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 35. Provision for retirement and similar benefits

31.12.2023 31.12.2022*

Provision for retirement and disability bonuses 529 376

Holiday pay provision 6 403 4 145

Total, including: 6 932 4 521

current 6 414 4 155

non-current 518 366

* restated data

The main assumptions adopted by the actuary as at the reporting date for the calculation of the provision are as follows:

31.12.2023 31.12.2022

Discount rate (%) 4.98 6.87

Expected inflation rate (%) 4.98 6.87

Employee turnover rate (%) - Age average

(CD PROJEKT S.A.)

10.7% - 34 years 12% - 34 years

Employee turnover rate (%) - Age average

(GOG sp. z o.o.)

18.5% - 33 years 19.3% - 33 years

Expected rate of salary increase (%) (CD PROJEKT S.A.)

4% - years 2024 and

2025; 6.8% - 2026; 4% -

subsequent years

45% - year 2023; 6% -

subsequent years

Expected rate of salary increase (%) (GOG Sp. z o.o.)

4.5% - year 2024 and

subsequent years

10% - year 2023 and

subsequent years

CSO mortality tables from the year 2022 2021

Probability of disability during the year 0.1% 0.1%

Using statistical methods, the actuary built and calibrated a Multiple Decrement model of employee mobility for the Group

companies. Historical data provided by the Group companies was used to calibrate the model. Based on publicly available statistical

data and actuarial studies, the mobility rate was assumed to decrease with age. The valuation model shows significant sensitivity

to changes in mobility parameters and should, therefore, be continuously reviewed and updated for subsequent estimates.

Change in provisions for retirement and disability bonuses

Provisions for

retirement and

disability

bonuses

Holiday pay

provision

Total

As at 01.01.2023 376 4 145 4 521

Provision recognized 159 6 403 6 562

Provisions utilized/released 6 4 145 4 151

As at 31.12.2023, including: 529 6 403 6 932

current 11 6 403 6 414

non-current 518 - 518

Provisions for

retirement and

disability

bonuses

Holiday pay

provision*

Total

As at 01.01.2022 387 2 889 3 276

Provision recognized 15 1 256 1 271

Provisions utilized/released 26 - 26

As at 31.12.2022, including: 376 4 145 4 521

current 10 4 145 4 155

non-current 366 - 366

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 36. Other provisions

31.12.2023 31.12.2022

Provision for liabilities, including: 83 617 98 640

provision for costs of performance-related and other remuneration 49 813 67 966

provision for costs of the audit and review of the financial statements 198 167

provision for costs of external services 458 850

provision for other costs 33 148 29 657

Total, including: 83 617 98 640

current 70 208 88 042

non-current 13 409 10 598

Change in other provisions

Provision for costs of

performance-related

and other remuneration

Other provisions Total

As at 01.01.2023 67 966 30 674 98 640

Provisions recorded during the year 49 813 91 046 140 859

Provisions utilized/released 67 966 87 916 155 882

As at 31.12.2023, including: 49 813 33 804 83 617

current 49 813 20 395 70 208

non-current - 13 409 13 409

Provision for costs of

performance-related

and other remuneration

Other provisions Total

As at 01.01.2022 44 856 43 554 88 410

Provisions recorded during the year 67 971 60 358 128 329

Provisions utilized/released 44 861 73 238 118 099

As at 31.12.2022, including: 67 966 30 674 98 640

current 67 966 20 076 88 042

non-current - 10 598 10 598

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 37. Information on financial instruments

Fair values of specific classes of financial instruments

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

concluded that the carrying amounts of the instruments does not materially differ from their fair values both as at 31 December

2023 and 31 December 2022.

31.12.2023 31.12.2022

LEVEL 1

Assets measured at fair value

Assets measured at fair value through

other comprehensive income

224 485 243 091

bonds issued by foreign governments - EUR 21 831 25 111

bonds issued by foreign governments - USD 202 654 217 980

LEVEL 2

Assets measured at fair value through profit or loss

Derivatives 18 683 7 809

currency forwards - EUR 1 161 1 249

currency forwards - USD 17 522 6 560

Private equity interests in the gaming sector 3 518 2 556

private equity interests in the gaming sector - SEK 980 1 085

Private equity interests in the gaming sector - USD 2 538 1 471

Liabilities measured at fair value through profit or loss

Derivatives (495) (891)

currency forwards - EUR (102) (72)

currency forwards - USD (393) (819)

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.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Financial assets – classification and measurement

31.12.2023 31.12.2022

Financial assets measured at amortized cost 1 282 102 1 014 332

Other non-current receivables 383 389

Trade receivables 193 520 165 290

Cash and cash equivalents 178 054 277 827

Bank deposits over 3 months 338 205 337 330

Treasury bonds and bonds guaranteed by the State Treasury 568 715 232 757

Loans granted 3 225 739

Financial assets measured at cost 38 095 41 607

Shares in non-consolidated subordinated entities 38 095 41 607

Assets measured at fair value through

other comprehensive income

224 485 243 091

Bonds issued by foreign governments 224 485 243 091

Financial assets measured at fair value through profit or loss: 22 201 10 365

Derivative financial instruments 18 683 7 809

Private equity interests in the gaming sector 3 518 2 556

Total financial assets 1 566 883 1 309 395

Financial liabilities – classification and measurement

31.12.2023 31.12.2022

Financial liabilities measured at amortized cost 85 262 99 689

Trade payables 58 835 72 119

Other financial liabilities 26 427 27 570

Financial liabilities measured at fair value

through profit or loss

495 891

Derivative financial instruments 495 891

Total financial liabilities 85 757 100 580

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

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

and concluded that:

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

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

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

the adopted strategy;

 all bonds purchased meet the SPPI test.

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

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

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

guaranteed by foreign states are measured at fair value through other comprehensive income because of the investment mandate

which allows the possibility of the portfolio being managed by an Asset Manager.

In accordance with the requirements of IFRS 13 Fair Value Measurement, the Group 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.

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

(all amounts in PLN thousand, unless stated otherwise)

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

31.12.2023 31.12.2022

LEVEL 1

Fair value of assets measured at amortized cost 565 473 219 713

Polish Treasury bonds and bonds guaranteed by the Polish State Treasury 565 473 219 713

Other items of financial assets and financial liabilities were classified to Level 3.

With reference to equity shares in other entities, the Group estimates the fair value of the shares held using the method of

forecasting the future cash flows to be generated by a cash-generating unit and requires determining a discount rate to be used in

order to calculate the present value of these cash flows. In justified cases, the Group assumes historical cost as an acceptable

approximation of the fair value.

The Group did not measure the fair value of trade receivables and payables, cash and cash equivalents, bank deposits over

3 months and loans granted at variable interest rates as their carrying amount is considered by the Group to be a reasonable

approximation of fair value.

There were no movements between the Levels in the fair value hierarchy in the Group during the reporting period or in the

comparative period.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Gains and losses on financial assets and liabilities

01.01.2023 – 31.12.2023

Financial assets measured at amortized cost

Financial assets

measured

at cost

Financial assets and liabilities

measured at fair value through

profit or loss

Financial assets

measured at fair

value through

other

comprehensive

income

Financial liabilities

measured

at amortized cost

Total

Trade receivables

Treasury bonds of the

Republic of Poland and

bonds secured with

guarantee by the

State Treasury of the

Republic of Poland

Loans granted

Cash and cash

equivalents and bank

deposits over 3

months

Shares in non

consolidated

subordinated entities

Derivative financial

instruments

Private equity interests

in the gaming sector

Foreign bonds

Trade payables

Other financial liabilities

Interest income/

(expense)

- 13 583 264 28 090 - - - 6 052 (3) (807) 47 179

Write-downs

recognized

(7) - - - - - - - - - (7)

Write-downs

released

14 - - - 27 271 - - - - - 27 285

Gains /(losses) on

disposal of debt

instruments

- - - - - - - 2 259 - - 2 259

Commission and

fees on purchase of

debt instruments

- - - - - - - (284) - - (284)

Measurement of

forward contract

- - - - - 40 768 - - - - 40 768

Measurement of

private equity

interests in the

gaming sector

- - - - - - 85 - - - 85

Measurement of

foreign bonds

- - - - - - - 4 138 - - 4 138

Total gains/(losses) 7 13 583 264 28 090 27 271 40 768 85 12 165 (3) (807) 121 423

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

(all amounts in PLN thousand, unless stated otherwise)

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

01.01.2022 – 31.12.2022*

Financial assets measured at amortized cost

Financial assets

measured

at cost

Financial assets and liabilities

measured at fair value through

profit or loss

Financial assets

measured at fair

value through

other

comprehensive

income

Financial liabilities

measured

at amortized cost

Total

Trade receivables

Treasury bonds of the

Republic of Poland and

bonds secured with

guarantee by the

State Treasury of the

Republic of Poland

Loans granted

Cash and cash

equivalents and bank

deposits over 3

months

Shares in non

consolidated

subordinated entities

Derivative financial

instruments

Private equity interests

in the gaming sector

Foreign bonds

Trade payables

Other financial liabilities

Interest income/

(expense)

- 7 778 222 26 885 - - - 8 184 - (581) 42 488

Write-downs

recognized

(18) - - - (27 271) - - - - - (27 289)

Write-downs

released

11 - - - - - - - - - 11

Gains /(losses) on

disposal of debt

instruments

- - - - - - - 22 752 - - 22 752

Commission and

fees on purchase of

debt instruments

- - - - - - - (326) - - (326)

Measurement of

forward contract

- - - - - 3 225 - - - - 3 225

Measurement of

foreign bonds

- - - - - - - (12 724) - - (12 724)

Total gains/(losses) (7) 7 778 222 26 885 (27 271) 3 225 - (12 724) - (581) 28 137

* restated data

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

(all amounts in PLN thousand, unless stated otherwise)

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

Financial risk management objectives and policies

Credit risk

Risk description: The Group is exposed to credit risk in connection with sales with deferred payment, royalty income customarily

reported and settled after the end of the period for which the royalties are due, in connection with advance payments and also in

connection with cooperation with banks, electronic payment operators or government bond issuers. There are instances where the

concentration of sales to the largest customers exceeds 10% of the Group’s total sales revenue.

Actions taken: I

n order to reduce the credit risk related to buyers, the Group is constantly monitoring the settlement of receivables,

and debt collection in difficult cases is outsourced to external specialized entities. As part of its efforts to mitigate the credit risk of

financial institutions, the Group works with several banks, diversifying the allocations of its cash and bank deposits, both by entity

and geographical area. In addition, the Parent Company, which holds the majority of the Group’s funds, may invest part of its

reserves in the following types of bonds in accordance with the policy adopted in March 2022:

 domestic Treasury bonds of the Republic of Poland;

 domestic bonds secured with a guarantee of the State Treasury of the Republic of Poland;

 foreign Treasury bonds issued by countries with a rating no lower than Aa3 according to Moody’s rating agency;

 foreign bonds secured with a guarantee of countries with a rating no lower than Aa3 according to Moody’s rating agency.

As a result of adopting the credit rating criterion for the country of bond issuers, investments in these financial instruments are

exposed to a very low risk and the expected credit losses are immaterial.

Liquidity risk

Risk description: Inadequate capital and liquidity risk management may generate liquidity risk resulting in delays or inability to settle

liabilities.

Actions taken - managing liquidity risk: Capital and liquidity risk management in the CD PROJECT Group is aimed at ensuring the

financing of its activities, including the long-term investment projects implemented by the group.

Day-to-day liquidity management is carried out at the level of the individual companies, while the coordination and supervision of

long-term plans is carried out at the level of the Parent Company.

The pillars of liquidity risk management are as follows:

 constantly maintained and updated short-term and long-term cash flow forecasts;

 periodic verification, based on cash flow forecasts, of the achievement of liquidity risk management targets in the medium

term;

 maintaining its own financial reserves – the Group has no external interest-bearing debt from loans and borrowings

incurred or bonds issued;

 the Parent Company may provide financing to subsidiaries through capital increases or loans;

 the management of financial reserves (held in the form of cash, bank deposits, domestic and foreign Treasury bonds and

domestic and foreign bonds secured with guarantees of foreign governments) in the Parent Company is carried out taking

into account the maturity dates of the individual instruments, the ratings of the banks or issuers of the Treasury bonds

purchased, the interest rates or yields of the investments concerned and always respecting the principle of diversification

in the allocation of the accumulated financial reserves (both by entity and geographical area).

As at 31 December 2023, the Group held bank deposits with a carrying amount of PLN 507 026 thousand.

Maturity of the deposit

Carrying amount

Quarter 1 of 2024 303 974

Quarter 2 of 2024 104 132

Quarter 3 of 2024 78 420

Quarter 4 of 2024 20 500

Total carrying amount 507 026

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

(all amounts in PLN thousand, unless stated otherwise)

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

As at 31 December 2023, the Parent Company held Treasury bonds with a carrying amount of PLN 793 200 thousand.

Bonds by country of issuer as at

31.12.2023

S&P Fitch Moody’s Carrying amount

Poland A- A- A2 568 715

USA AA+ AA+ Aaa 170 540

Germany AAA AAA Aaa 32 682

Canada AAA AA+ Aaa 11 600

Finland AA+ AA+ Aa1 9 662

Total carrying amount 793 200

Bond portfolio as at 31.12.2023 by instrument maturity

Redemption date of purchased bonds as at 31.12.2023

Carrying amount

2024 178 887

2025 306 955

2026 253 021

2027 51 885

2028 2 452

Total carrying amount 793 200

Currency risk

Risk description: Due to the global nature of the CD PROJEKT Group’s business, where the majority of revenue is generated in

foreign currencies, it is exposed to the risk of sudden changes in exchange rates, including in particular the risk of strengthening of

the Polish zloty.

The majority of publishing and distribution contracts to which the Parent Company is a party as the game developer are based on

settlement in foreign currencies – mainly in USD and EUR. Therefore, a weakening of the USD or EUR exchange rate in relation to

PLN is an undesirable scenario for the Group, resulting in a reduction of sales revenue. The revenues of GOG sp. z o.o. are

generated in 13 currencies, the highest in USD and smaller in EUR, PLN, GBP, CAD, AUD and others, while costs are mainly incurred

in USD and PLN. Therefore, as a rule, a weakening of the exchange rate of the currencies in which GOG.COM earns its sales

revenue in relation to the USD or PLN is an undesirable scenario for the CD PROJECT Group, causing a drop in revenues and results

of operations realized by GOG sp. z o.o.

The Group companies also purchase goods and services in transactions settled in foreign currencies - in such cases, a weakening

of the PLN exchange rate against the relevant currency of the transaction may result in exchange rate group differences

unfavourable to the Group companies’ results.

The Parent Company invests some of its financial resources in foreign bonds denominated in foreign currencies, and it may also

hold cash and cash equivalents or deposits in foreign currencies (for more information, see sections on credit risk and liquidity risk).

Actions taken: The Group companies seek to minimize currency exposure in its operations, but nevertheless it is not possible to

completely eliminate the currency risk that is incumbent on the Group. In the case of the risk associated with the Parent Company’s

investment in foreign bonds denominated in foreign currencies, exposure to exchange rate fluctuations is mitigated by entering

into forward sales of the relevant currency symmetrical to each currency feed to the investment account. Similarly, the Parent

Company hedges the value of cash invested in USD deposits by entering into forward sales of the currency symmetrical to each

term deposit.

The value of forward contracts concluded as at 31.12.2023 is presented in the table below.

Forward contract

currency

Value of forward contracts in

foreign currency

Value of forward contracts in

PLN at forward exchange

rates

Fair value measurement of

forward contracts as at

31.12.2023 in PLN

EUR 6 183 28 423 1 059

USD 73 601 308 059 17 129

Total 336 482 18 188

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

(all amounts in PLN thousand, unless stated otherwise)

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

In accordance with the adopted policy of diversifying investments of current cash surpluses, the Parent Company may hold up to

15% of total funds in unhedged positions in USD and EUR. As at 31 December 2023, the Parent Company had an unhedged position

in foreign currencies amounting to USD 1 872 thousand and EUR 297 thousand.

GOG Sp. z o.o. hedges the cash flows associated with concluded or future foreign currency trade transactions by entering into

forward currency transactions. Hedging transactions are, in principle, concluded at the gross value of GOG’s currency exposure,

i.e. at the full amount of the respective future cash flows.

Interest rate and inflation risk

Risk description: The condition of the global economy, including the effects of global political, economic or military crises or the

development of pandemics, may affect the CD PROJEKT Group’s business, financial position and results. A negative situation

related to the impact of a pandemic, either macroeconomic or political, may result in difficulties in access to finance, changes in the

prices of goods, services and products, conservative consumer attitudes or the emergence of restrictions on sales opportunities as

a consequence of economic sanctions or local regulations introduced.

The monetary policy pursued by the National Bank of Poland in shaping the level of interest rates and consequently influencing the

level of inflation in Poland may affect the financial income achieved by the Group. As surplus cash is invested in, among other things,

bank deposits and bonds, a drop in interest rates may have a negative impact on the Group’s finance income. Moreover, financial

income generated from bank deposits or investments in bonds in relation to the Group’s cash reserves may not compensate for

losses caused by inflation.

A change in the level of interest rates affects the carrying value of the bonds of foreign governments and bonds secured with their

guarantee, which are measured at fair value through other comprehensive income. An increase in interest rates may also reduce

the valuation of the Group’s assets (e.g. shares in related entities, brands) carried out as part of impairment tests, potentially leading

to the need to restate their value in the books of account.

Actions taken: The Group companies strive to monitor the impact of the global situation on the markets in which they operate and,

as far as possible, to adapt their operations as much as possible to the changes observed. The Parent Company mitigates some of

the risk associated with interest rate volatility and market inflation expectations by investing a portion of its cash surpluses in

deposits, Polish Treasury bonds, bonds secured by the State Treasury guarantee and foreign Treasury bonds or foreign bonds

guaranteed by governments of the countries with credit ratings no lower than Aa3 according to Moody’s, while diversifying the

maturities of the aforementioned instruments. In addition, some of the bonds may be floating rate securities.

While maintaining the safety of accumulated funds, in practice it may not be possible to fully protect the value of financial reserves

held against the negative effects of inflation.

Sensitivity analysis

In accordance with the requirements of IFRS 7 Financial Instruments: Disclosures, the Parent Company performed an analysis for

the identified market risks showing what impact changes in the relevant risk factors would have on the results of operations and

equity.

Due to the linear nature of the impact of a change in a factor on the value of the Group’s profit or loss and equity, 5 pps were

adopted for the analysis of the impact of changes in exchange rates and 1 pp for the analysis of the impact of changes in interest

rates and fair value.

The tables below show the sensitivity of profit before tax and equity to the risks identified by the Group over the horizon to the date

of the next financial statements, assuming that other risk factors remain constant.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Currency risk concerning the net value of foreign currency assets and liabilities

Impact on net profit or loss

Impact on equity

EUR USD Other currencies Total EUR USD Total

Exchange rate fluctuations 5% 5% 5% 5% 5%

As at 31.12.2023

Exchange rate growth (14) (3 821) (141) (3 976) 1 092 10 637 11 729

Exchange rate decline 14 3 821 141 3 976 (1 092) (10 637) (11 729)

As at 31.12.2022

Exchange rate growth (734) (1 974) (170) (2 878) 1 256 11 137 12 393

Exchange rate decline 734 1 974 170 2 878 (1 256) (11 137) (12 393)

Exposure to currency risk changes during the year depending on the volume of transactions concluded in the currency. Nevertheless, the above sensitivity analysis can be considered representative of

the Group’s exposure to currency risk as at the balance sheet date.

Interest rate risk relating to interest income on cash held in bank accounts and Polish floating-rate bonds

31.12.2023 31.12.2022

Interest rate fluctuations Impact on net profit or loss Interest rate fluctuations Impact on net profit or loss

Interest rate growth 1 p.p. 6 195 1 p.p. 7 159

Interest rate decline 1 p.p. (6 195) 1 p.p. (7 159)

Fair value change risk relating to the valuation of foreign bonds carried at fair value, which depends on the volatility of market prices

31.12.2023 31.12.2022

Fluctuation

amount

Impact on equity

Impact on net

profit or loss

Fluctuation

amount

Impact on equity

Impact on net

profit or loss

Fair value growth 1 p.p. 2 245 217 1 p.p. 2 431 332

Fair value decline 1 p.p. (2 245) (217) 1 p.p. (2 431) (332)

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

(all amounts in PLN thousand, unless stated otherwise)

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

Note 38. Capital management

The principal objective of the capital management within the Group is to maintain sound credit rating and safe capital ratios to

support the Group’s operating activities, increasing its shareholder value.

The Group manages the capital structure and introduces changes to it based on changes in economic circumstances. In order to

maintain or adjust the capital structure, the Parent Company may pay a dividend to the shareholders, return capital to the

shareholders or issue new shares. The Group monitors its capital balances using the leverage ratio, which is calculated as the ratio

of net debt to total equity plus net debt. As at 31 December 2023, the Group’s balance of cash and cash equivalents was greater

than its trade and other payables, thus the Group had a positive net cash balance.

Note 39. Employee benefit programmes

Incentive plan for the years 2020–2025

Based on the resolutions of the Parent Company’s General Meeting of 28 July 2020 and 22 September 2020, another edition of

the incentive plan was introduced for 2020-2025. In accordance with the adopted assumptions, a maximum of 4 000 000

entitlements, understood as a conditional right to take up subscription warrants, entitling to take up shares in the Parent Company

issued separately as part of a conditional share capital increase, or alternatively to purchase, on preferential terms, the Parent

Company’s treasury shares were to be granted as part of the implementation of the plan. Taking up and exercising of rights from

the subscription warrants or, as the case may be, purchasing the Parent Company’s shares by the eligible persons was to be

conditional upon the Parent Company’s determination that the objectives and criteria of the plan have been met. For more

information on the principles of the incentive plan for the years 2020-2025, see e.g.

Management Board Report on CD PROJEKT

Group activities in 2021.

Based on the results achieved during the functioning of the plan and the assumptions for the subsequent years of the plan, the

Management Board of the Parent Company assessed the possibility of achieving the performance targets set in the plan over the

entire period of the plan duration and revised the estimates, considering it most likely that the performance targets would not be

achieved over that period. In connection with the above, taking into consideration the fact that the plan had lost its motivational and

retention functions, the General Meeting of the Parent Company adopted Resolution no. 5 concerning discontinuation of the

incentive plan for the financial years 2020-2025. Due to the fact that entry into force of that resolution was conditional upon the

General Meeting adopting specific resolutions on the introduction of a new incentive plan, the resolution concerning discontinuation

of the Plan for 2020-2025 became effective on 18 April 2023 and resulted in expiry of the Plan in its entirety.

In 2022 and during the reporting period, no new entitlements were granted under the Incentive Plan for the years 2020-2025. As

at 18 April 2023, 2 113 000 entitlements granted remained in the Incentive plan for 2020-2050. As stated in the Incentive Plan

Regulations for the years 2020-2025, in the event of the expiry of the incentive plan, the entitlements granted under the plan to

the eligible persons will also expire. Detailed data on entitlements awarded under the Incentive Plan for the years 2020-2025 in

previous financial years and their valuation is available in previous interim financial statements of the Parent Company and the

Group.

Incentive plans 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 2020-2025: the Incentive Plan A and Incentive Plan B.

Incentive Plan A

The 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 entirety of the 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 treasury shares acquired by the Parent Company as part of a buy-back carried out for this purpose. Taking up and

exercising of rights from the subscription warrants or, as the case may be, purchasing the Parent Company’s shares by the

participant under Incentive Plan A shall 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 Parent Company’s shares as part of executing entitlements under Plan A shall correspond to the nominal value

of the Parent Company’s shares. The vesting period shall be 3 years as a minimum in each case.

By the date of publication of this report, 100 444 entitlements were granted as part of Phase 1 of the Incentive Plan A (in 2023), of

which 94 051 entitlements remain active.

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

(all amounts in PLN thousand, unless stated otherwise)

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

Assumptions adopted for the valuation of the Incentive Plan A for the years 2023–2027 – phase 1

Date of vesting CDR volatility ratio Risk-free 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 the Incentive Plan A for the years 2023–2027 – phase 1

01.01.2023 – 31.12.2023 Number of entitlements in pcs.

Granted during the period 100 444

Forfeited during the period* 6 393

Unrealized as at the end of the period 1 500 000

Granted unrealized as at the end of the period* 94 051

* All forfeitures by the date of publication of these financial statements

Measurement date

During 2023, the Parent Company granted entitlements to participate in the plan in four tranches, in accordance with the relevant

resolutions of the Management Board.

The fair value of the entitlements awarded in 2023 was in each case measured as at the grant date using financial engineering

methods and numerical methods (which are a development of the so-called Black-Scholes-Merton model) by a licensed actuary

entered in the register of actuaries maintained by the Polish Financial Supervision Authority in accordance with the information in

the table above.

Classification of measurement conditions

The conditions related to completing paperwork (including the correct filing of documents within a certain time limit), loyalty

conditions and other conditions unrelated to the share price were treated as non-market conditions. The condition of living to the

date of exercising the entitlement rights and other similar conditions were treated likewise.

Number of shares as at the grant date

As at the date of granting entitlements under the Incentive Plan A in 2023 (phase 1), the Parent Company had 100 770 800 shares

in issue.

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 entirety of the

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 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 Parent 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 shortening to three financial years for performance-related entitlements in the event of

a possible faster achievement of the four-year performance target over a three-year period).

By the date of publication of this report, 662 000 entitlements were granted as part of Phase 1 of the Incentive Plan B (in 2023), of

which 656 000 entitlements remain active.

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

(all amounts in PLN thousand, unless stated otherwise)

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

100

Performance-related condition – 70% of entitlements awarded under a given phase of the Incentive Plan B

The fulfilment of the performance-related condition means achieving, in the relevant vesting period, a specific result, understood

as the sum of the consolidated net profits on continued operations of the CD PROJEKT Group plus the cost of valuation of

entitlements awarded under a relevant phase of the Incentive Plan B recognized by the CD PROJEKT Group entities in the same

period.

The performance-related condition for entitlements awarded in the first phase of the Incentive Plan B for the years 2023-2026 (in

the financial year 2023) is PLN 2 billion.

For each of the successive phases of the Incentive Plan B starting in the financial years 2025, 2026 and 2027, the performance-

related condition for entitlements awarded in these phases for the relevant periods of 4 financial years will be determined by

resolutions of the General Meeting of the Parent Company (based on a motion of the Management Board of the Parent Company).

Market-related condition – 30% of entitlements awarded under a given phase of the Incentive Plan B

The fulfilment of the market-related condition means achieving a change in the Parent Company’s share price on the Warsaw Stock

Exchange (WSE) in such a manner that the change in the level of the Parent Company's share price expressed as a percentage,

determined on the basis of the Parent Company’s share price at closing of the last trading session of the WSE of the most recent

financial year which is subject to verification for purposes of the performance-related condition referred to above in relation to the

Parent Company’s share price at closing of the last trading session of the WSE in the year preceding the year of the relevant phase

of the Incentive Plan B, will be higher than or equal to the change, expressed as a percentage and increased by 10 percentage

points, in the level of the WIG (WSE Index) index in the same period.

Assumptions adopted for the valuation of the Incentive Plan B for the years 2023–2027 – phase 1

Date of vesting

CDR volatility

ratio

WIG volatility

ratio

WIG correlation

ratio

Risk-free rate

Entitlements granted on 26.05.2023 44% 21% 43% 6.1%

Changes in entitlements granted under the Incentive Plan B for the years 2023–2027 – phase 1

01.01.2023 – 31.12.2023 Number of entitlements in pcs.

Granted during the period 662 000

Forfeited during the period* 6 000

Unrealized as at the end of the period 3 500 000

Granted unrealized as at the end of the period* 656 000

* All forfeitures by the date of publication of these financial statements

Measurement date

During 2023, the Parent Company granted entitlements to participate in the plan in one tranche.

The fair value of the entitlements awarded in 2023 was in each case measured as at the grant date using financial engineering

methods and numerical methods (which are a development of the so-called Black-Scholes-Merton model) by a licensed actuary

entered in the register of actuaries maintained by the Polish Financial Supervision Authority in accordance with the information in

the table above.

Classification of measurement conditions

The condition relating to the change in the price of the Parent Company’s shares in relation to the change in the WIG index and the

condition that the market price on the exercise date will be above the exercise price have been treated as market conditions. The

conditions relating to net profit growth were treated as non-market conditions. The conditions related to completing paperwork

(including the correct filing of documents within a certain time limit), loyalty conditions and other conditions unrelated to the share

price were treated as non-market conditions. The condition of living to the date of exercising the entitlement rights and other similar

conditions were treated likewise.

Number of shares as at the grant date

As at the date of granting entitlements under the Incentive Plan B in 2023 (phase 1), the Parent Company had 100 770 800 shares

in issue.

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

(all amounts in PLN thousand, unless stated otherwise)

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

101

Note 40. 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 related entities

which belong to the CD PROJEKT Group are tested for compliance with the arm’s length basis based on recommendations and

methods provided for in the OECD Guidelines and in the national legislation.

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

(all amounts in PLN thousand, unless stated otherwise)

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

102

Transactions with related entities after consolidation eliminations

Sales to

related entities

Purchases from

related entities

Receivables from

related entities

Liabilities to

related entities

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

31.12.2023 31.12.2022 31.12.2023 31.12.2022

SUBSIDIARIES

Spokko sp. z o.o. - 1 321 - - - 156 - -

CD PROJEKT RED Vancouver

Studio Ltd.

258 68 17 716 16 762 1 483 1 694 1 549 2 746

The Molasses Flood LLC 336 6 44 991 31 213 3 328 742 1 751 2 579

MEMBERS OF THE MANAGEMENT BOARDS OF GROUP COMPANIES

AND SUPERVISORY BOARD MEMBERS

Marcin Iwiński 1 1 - - 1 - - 7

Adam Kiciński 1 - - - - - 1 13

Piotr Nielubowicz 1 4 - - 2 2 - 13

Michał Nowakowski 1 5 - - - - - 4

Adam Badowski 2 6 - - - - - 6

Piotr Karwowski 7 7 - - - - - 2

Urszula Jach-Jaki 3 2 - - - - - -

Maciej Gołębiewski 1 1 - - - - - -

Paweł Zawodny 6 7 - - - - - -

Jeremiah Cohn - 1 - - - - - -

Maciej Nielubowicz 1 - - - - - - -

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

(all amounts in PLN thousand, unless stated otherwise)

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

103

Note 41. Mergers and changes in the structure of the CD PROJEKT Group

Merger between subsidiaries

During the reporting period, two business combinations involving business entities in the Group were registered:

 Registration of the merger of the Company with its subsidiary - CD PROJEKT RED STORE sp. z o.o.

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

through acquisition of the Parent Company, as the surviving company, with its subsidiary CD PROJEKT RED STORE sp. z o.o. with

its registered office in Warsaw, as the target company. The merger was carried out in accordance with the merger plan announced

on 17 November 2022, i.e. by transferring all the assets of CD PROJEKT RED STORE sp. z o.o. to the Parent Company, without

increasing the share capital of the Parent Company, without issuing shares 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

procedure under Article 492 § 1 item 1 of the Commercial Companies Code (“CCC”) in connection with Article 516 § 6 of the CCC).

The business activities of the target company consisted of selling products relating to brands and games developed within the

Group through the CD PROJEKT RED GEAR online shop. The merger was intended to simplify the Group’s structure in view of the

plans to continue the activities of the target company in cooperation with a specialized external entity. The Management Board of

the Parent Company informed of the registration of the merger in its Current report no. 7/2023

 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 in the Register of Businesses 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. The merger was carried out in accordance with the merger plan announced on 20 April 2023,

i.e. by transferring all the assets of SPOKKO sp. z o.o. to the Parent Company, without increasing the share capital of the Parent

Company, without issuing shares 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 procedure under Article 492 § 1 item 1 of the

Commercial Companies Code (“CCC”) in connection with Article 516 § 6 of the CCC). SPOKKO sp. z o.o. was a development studio

specializing in executing projects for mobile devices and responsible for the development of The Witcher: Monster Slayer game

(the project closed as at 30 June 2023). According to the strategy adopted in October 2022, the Parent Company will focus on its

core business and implement mobile projects in collaboration with external partners. The Management Board of the Parent

Company informed of the registration of the merger in its

Current report no. 36/2023.

Business combinations of jointly controlled entities are not covered directly in the International Financial Reporting Standards,

therefore, when accounting for such transactions, the Parent Company uses a method which is based on the following assumptions:

 assets and liabilities of the combining entities are measured at 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 consolidated

financial statements) is reflected in the equity of the acquiring company (the amount embedded in equity is not a component

of supplementary capital, and therefore is not subject to distribution);

 the income statement presents the results of the combined entities from the moment 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.

Establishment of a new subsidiary

It did not occur during the reporting period.

Other changes in the structure of the CD PROJEKT Group made during the reporting period

Parent Company

 Acquisition of the remaining shares in the subsidiary Spokko sp. z o.o.

On 31 January 2023, as a result of the Parent Company concluding agreements for the sale of shares with the other shareholders

of the subsidiary Spokko sp. z o.o., the Parent Company acquired from those shareholders a total of 135 shares in Spokko sp. z o.o.

with a nominal value of PLN 50.00 each, as a result of which the Parent Company became the owner of 100% (i.e. 1 089) of the

shares in that subsidiary.

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

(all amounts in PLN thousand, unless stated otherwise)

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

104

 Share capital decrease and redemption of treasury shares

On 18 April 2023, an Extraordinary General Meeting of the Company took place at which the shareholders decided, amongst others,

to decrease the share capital and voluntarily redeem 860 290 treasury shares with a par value of PLN 1 each. At that time, these

shares represented 0.85% of the share capital and comprised all treasury shares previously acquired by the Parent Company with

a view to their redemption as part of the buyback conducted between 5 and 24 October 2022 for the total amount of

PLN 99 943 thousand. The full contents of the resolutions passed by the Extraordinary General Meeting is available on the Parent

Company’s website.

On 26 June 2023, in connection with the resolutions passed, the District Court for the Capital City of Warsaw in Warsaw entered,

among other things, a decrease in the Parent Company’s share capital of PLN 860 290 and redemption of 860 290 of the Parent

Company’s treasury shares in the Register of Businesses.

CD PROJEKT RED Inc. and The Molasses Flood LLC

On 31 May 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. (the sole shareholder), the share capital of the former company was increased by USD 720 thousand, i.e. up

to USD 6 020 thousand. The increased value of the existing shares was paid up in full by a cash contribution made by the Parent

Company. On the same date, CD PROJEKT Inc. concluded an agreement with The Molasses Flood LLC and with one of its

shareholders at that time, whereby it acquired additional shares in The Molasses Flood LLC, as a result of which it became the

owner of 70.91% of its shares (i.e. 390 000 shares).

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. The increased value of the existing shares was paid up in full by a cash contribution 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% of the shares in that company (i.e. 450 000

shares).

On 29 December 2023, the share capital of CD PROJEKT RED Inc. was increased by USD 800 thousand i.e. up to

USD 7 920 thousand. The increased value of the existing shares was paid up in full by a cash contribution made by the Parent

Company. The purpose of the capital increase was to enable finalizing the payment of the price for a total of 120 000 shares of The

Molasses Flood LLC, acquired by CD PROJEKT RED Inc. based on agreements of 31 May 2023 and 27 October 2023.

Note 42. Remuneration of the senior management and the Supervisory Board

Benefits paid to members of the Management Boards of the Group companies

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

Basic remuneration under the employment relationship 1 988 2 252

Remuneration for the functions performed 4 243 4 672

Bonuses and remuneration linked to the previous year’s result 32 714 21 224

Total 38 945 28 148

* restated data

Benefits paid to other members of the Group’s key management personnel

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Basic remuneration under the employment relationship 29 157 24 855

Remuneration for the functions performed 772 698

Bonuses and remuneration linked to the previous year’s result 11 176 7 058

Total 41 105 32 611

Benefits paid to members of the Supervisory Board

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Remuneration for the functions performed 1 020 602

Total 1 020 602

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

(all amounts in PLN thousand, unless stated otherwise)

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

105

Note 43. Number of employees

Average number of employees understood as the annual average number of FTEs**

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

Average number of employees 633 536

Total 633 536

* restated data

** The average number of employees also includes FTEs for which the Company does not pay remuneration (e.g. unpaid leave,

maternity leave).

Number of employees as at the end of the year (in persons)

31.12.2023 31.12.2022

Number of employees (in persons) 615 508

Total 615 508

Employee turnover

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Number of new employees 110 190

Number of dismissed employees* 101 92

Total 9 98

* Includes employees in the notice period as at the reporting date.

Note 44. Capitalization of borrowing costs

Not applicable.

Note 45. Revenues generated on a seasonal, cyclical or occasional basis

Information on revenues generated on a seasonal, cyclical or occasional basis is included in the Directors’ Report on the

operations of the CD PROJEKT Group and CD PROJEKT S.A. for 2023.

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

(all amounts in PLN thousand, unless stated otherwise)

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

106

Note 46. Tax settlements

Tax settlements and other areas of activities regulated by the tax law may be subject to inspections by administrative bodies which

are entitled to impose high penalties or sanctions. The lack of reference to established legal regulations in Poland results in

ambiguities and inconsistencies in the binding regulations. Frequent differences of opinion as to the legal interpretation of tax

regulations, both internally within the state bodies and between the state bodies and enterprises, result in areas of uncertainty and

conflict arising. Due to these factors, the tax risk in Poland is considerably higher than that usually existing in countries with better

developed tax systems.

In accordance with 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 more broadly the research and development

relief provided for in the Act of 15 February 1992 on corporate income tax (consolidated text, Journal of Laws of 2023, item 2805,

as amended, hereinafter: the “CIT Act”).

Starting from the month following the submission of the CIT-8 tax return for the previous tax year, the Parent Company is taking

advantage of 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 is reducing tax advances remitted to the tax office in respect of

personal income tax and flat-rate personal income tax for employees performing 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 being reduced (the

reduction is the quotient of the personal income tax liability due and the corporate income tax rate).

With effect from 1 January 2019, provisions were introduced into the Act on corporate income tax granting preferential taxation at

the 5% tax rate for qualified income earned by a taxpayer from qualified intellectual property rights. Having met the prerequisites

and formal conditions contained in the said legislation, the Parent Company accounts for income (in respect of selected sources of

income) taking this tax relief into account.

Note 47. Post-balance sheet date events

On 20 February 2024, an Extraordinary General Meeting of the Parent Company took place at which a resolution was adopted,

concerning determination of the performance-related condition of PLN 3 billion in the Incentive Plan B for the financial years 2024-

2027. The performance-related condition corresponds to the sum of the consolidated net profits on continued operations of the

Group for the financial years 2024-2027 plus the cost of valuation of entitlements awarded under a relevant phase of the Incentive

Plan B recognized by the Group entities in the same period. All materials relating to the General Meeting, including the contents of

the resolutions adopted, are available on the Parent Company’s website

On 8 and 10 March 2024, as part of Phase 2 of the Incentive Plans A and B for the years 2023-2027, new entitlements were awarded

to the participants. As a result, 183 189 entitlements were awarded in Phase 2 of the Incentive Plan A and 723 500 in the Incentive

Plan B. All entitlements awarded as part of Phase 2 of the Plans are active as at the date of publication of this report.

Note 48. Transactions with entities performing the audits of the financial

statements

Fees paid or payable for the financial year

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

For the audit of the annual financial statements and the consolidated financial

statements

182 167

For other assurance services, including a review of the financial statements

and the consolidated financial statements

89 85

Total 271 252

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

(all amounts in PLN thousand, unless stated otherwise)

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

107

Note 49. Explanations to the statement of cash flows

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022*

Cash and cash equivalents reported in the statement of cash flows 178 054 277 827

Cash and cash equivalents in the balance sheet 178 054 277 827

Depreciation and amortization 13 970 13 828

Amortization of intangible assets 2 196 2 122

Amortization of expenditure on development projects 447 1 029

Depreciation of property, plant and equipment 11 307 10 644

Depreciation of investment properties 20 33

Foreign exchange gains/(losses) result from the following items: 28 089 4 561

Foreign exchange gains and losses on measurement of private equity interests

in the gaming sector

420 -

Foreign exchange gains/(losses) on measurement of loans granted

as at the balance sheet date

203 -

Foreign exchange gains/(losses) on measurement of leases (375) 55

Foreign exchange gains/(losses) on measurement of bonds 27 841 4 506

Interest and shares in profits comprise: (47 182) (42 487)

Interest on bank deposits (28 090) (26 885)

Interest on bonds (19 635) (15 961)

Interest accrued on loans granted (264) (222)

Interest on lease contracts 807 581

(Gains)/losses on investing activities result from the following items: (84 938) 42 077

Sale of property, plant and equipment (155) (275)

Net carrying amount of property, plant and equipment 80 5

Net carrying amount of non-current assets scrapped 417 750

Net carrying amount of scrapped intangible assets and expenditure on research

and development projects

2 746 295

Net carrying amount of investment properties scrapped 737 -

Impairment write-downs of property, plant and equipment, intangible assets

and expenditure on development projects

- 34 286

Release of write-downs of shares in subsidiaries (27 271) -

Write-downs of shares in subsidiaries - 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 (37 955) 2 172

Measurement of private equity interests in the gaming sector 85 -

Disclosure of property, plant and equipment and intangible assets (4) -

Commission and fees on purchase of bonds 284 326

Proceeds from redemption of bonds (69 564) (202 849)

Value of bonds purchased 67 305 180 096

Settlement of lease contracts expired (112) -

Change in provisions results from the following items: 7 392 (5 040)

Increase/(Decrease) in provisions for liabilities (15 023) 10 230

Increase/(Decrease) in provisions for employee benefits 2 411 1 245

Increase/(Decrease) in provision for costs of performance-related and other

remuneration recognized under expenditure on development projects

20 004 (16 515)

Change in inventories results from the following items: 9 125 3 185

(Increase)/Decrease in inventories 9 125 3 185

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

(all amounts in PLN thousand, unless stated otherwise)

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

108

01.01.2023 –

31.12.2023

01.01.2022 –

31.12.2022

Change in receivables results from the following items: (60 033) (44 052)

(Increase)/Decrease in current receivables in the balance sheet (28 502) 15 002

(Increase)/Decrease in non-current receivables in the balance sheet 6 297

(Increase)/Decrease in prepayments for investment properties - (79)

Income tax settled against withholding tax 11 082 36 260

Withholding tax paid abroad (31 399) (32 270)

Adjusted for current income tax (11 412) (34 840)

(Increase)/Decrease in prepayments for development projects 740 (29 002)

(Increase)/Decrease in receivables in respect of the sale of property, plant

and equipment and intangible assets

(490) 480

(Increase)/Decrease in prepayments for property, plant and equipment

and intangible assets

(58) 100

Change in liabilities, excluding financial liabilities, results from the following items: (4 974) 13 034

Increase/(Decrease) in current liabilities in the balance sheet (12 675) (19 613)

Adjusted for current income tax 1 654 22 330

Increase/(Decrease) in other current financial liabilities 2 694 16 224

Increase/(Decrease) in liabilities in respect of security deposits 114 -

Increase/(Decrease) in liabilities resulting from purchase of property, plant

and equipment

2 653 (5 323)

Increase/(Decrease) in liabilities resulting from purchase of intangible assets 586 (594)

Increase/(Decrease) in liabilities resulting from purchase of investment properties - 10

Change in other assets and liabilities results from the following items: (26 668) (40 881)

Change in prepayments and accruals in the balance sheet (15 818) (28 763)

Increase/(Decrease) in deferred income in the balance sheet (10 609) (11 878)

Adjusted for prepayments and deferred costs with the corresponding entry

in liabilities

(241) (240)

“Other adjustments” comprise: 23 895 8 709

Costs of the incentive plans 16 681 4 276

Measurement of derivative financial instruments (396) 750

Amortization and depreciation written off, reported under cost of sales

and other operating expenses

224 1 300

Amortization and depreciation reported under cost of sales

and other operating expenses

2 575 3 222

Accounting for shares in the acquired entity 32 854 -

Retained earnings/(Accumulated losses) of the acquired entity (26 979) -

Deferred tax asset of the acquired entity (233) -

Net property, plant and equipment and intangible assets of the acquired entity (228) -

Foreign exchange differences on translation (496) (546)

Other adjustments (107) (293)

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

(all amounts in PLN thousand, unless stated otherwise)

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

109

Note 50. Cash flows and non-monetary changes resulting from changes in liabilities in financing activities

01.01.2023 Cash flows

Non-monetary changes

31.12.2023

Takeover of

leased fixed

assets

Termination

of a lease

contract

Foreign

exchange

differences

Interest

accrued

Transfer of

treasury

Adopting

a resolution

on purchase

of treasury

Adopting

a resolution

on the

payment of

dividend

Lease liabilities 20 967 (3 398) 5 467 - (537) 807 - - - 23 306

Liabilities to shareholders

in respect of dividend

payment

- (99 911) - - - - - - 99 911 -

Total 20 967 (103 309) 5 467 - (537) 807 - - 99 911 23 306

01.01.2022 Cash flows

Non-monetary changes

31.12.2022

Takeover of

leased fixed

assets

Termination

of a lease

contract

Foreign

exchange

differences

Interest

accrued

Transfer of

treasury

Adopting

a resolution

on purchase

of treasury

Adopting

a resolution

on the

payment of

dividend

Lease liabilities 16 654 (4 273) 8 276 (293) 22 581 - - - 20 967

Liabilities to shareholders

in respect of dividend

payment

- (100 739) - - - - - - 100 739 -

Receivables from eligible

persons in the incentive

plan

- 822 - - - - (822) - - -

Liabilities in respect of

purchase of treasury

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

Total 16 654 (204 183) 8 276 (293) 22 581 (822) 99 993 100 739 20 967

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

(all amounts in PLN thousand, unless stated otherwise)

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

110

Statement of the Management Board of the Parent

Company

On the fairness of preparation of the 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

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 the Group’s financial position and its results of operations in a true, fair and clear

manner.

These 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 31 December 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 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.

On the entity authorized to audit the fairness of preparation of the annual consolidated financial

statements

On 9 March 2022, the Supervisory Board of the Parent Company appointed 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 semi-annual 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 audit firms maintained by the Polish Agency for Audit Oversight with the number 4055.

As stated by the Company’s Supervisory Board:

- The audit firm Grant Thornton Polska Prosta Spółka akcyjna with its registered office in Poznań and the members of the

audit team fulfilled the conditions for the preparation of an impartial and independent report on the audit of the annual

separate financial statements of CD PROJEKT S.A. and the consolidated financial statements of the CD PROJEKT S.A.

Group for the financial year ending on 31 December 2023, in accordance with the applicable regulations, professional

standards and principles of professional ethics;

- The CD PROJECT Group complies with the applicable regulations relating to the rotation of the audit firm and the key

auditor, as well as mandatory grace periods;

- CD PROJEKT S.A. has a policy on the selection of the audit firm and the provision of additional non-audit services, including

prohibited services conditionally exempted, to CD PROJEKT S.A. by the audit firm, an affiliate of the audit firm or a member

of its network.

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

(all amounts in PLN thousand, unless stated otherwise)

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

111

Approval of the financial statements

These consolidated financial statements of the CD PROJEKT Group were signed and approved for publication by the Management

Board of CD PROJEKT S.A. on 28 March 2024 and will be subject to approval by the General Meeting of CD PROJEKT S.A.

Warsaw, 28 March 2024

Adam Kiciński Piotr Nielubowicz Adam Badowski

Member of the Management Board Member of the Management Board Member of the Management Board

Michał Nowakowski Piotr Karwowski Paweł Zawodny

Member of the Management Board Member of the Management Board Member of the Management Board

Jeremiah Cohn Krystyna Cybulska

Member of the Management Board Chief Accountant

112