Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

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 Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

CD PROJEKT Group – selected financial highlights (converted into EUR)

PLN EUR

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020*

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020*

Revenues from sales of products, services, goods and

materials

888 172 2 138 875 194 030 478 046

Cost of products, services, goods and materials sold 250 234 491 364 54 666 109 822

Operating profit (loss) 232 903 1 157 077 50 880 258 611

Profit (loss) before tax 219 108 1 164 949 47 866 260 370

Net profit (loss) attributable to equity holders of parent

entity

208 908 1 150 148 45 638 257 062

Net cash flows from operating activities 967 825 711 708 211 431 159 069

Net cash flows from investment activities (613 795) (106 386) (134 090) (23 778)

Net cash flows from financial activities (505 779) (91 393) (110 492) (20 426)

Total net cash flows (151 749) 513 929 (33 151) 114 865

Stock volume (thousands) 100 718 96 461 100 718 96 461

Net earnings per share (PLN/EUR) 2.07 11.92 0.45 2.66

Diluted net earnings per share (PLN/EUR) 2.07 11.45 0.45 2.56

Book value per share (PLN/EUR) 18.81 22.63 4.09 4.90

Diluted book value per share (PLN/EUR) 18.80 21.73 4.09 4.71

Declared or paid out dividend per share (PLN/EUR) 5.00 - 1.09 -

* adjusted

PLN EUR

31.12.2021 31.12.2020* 31.12.2021 31.12.2020*

Total assets 2 158 735 2 890 299 469 351 626 311

Liabilities and provisions for liabilities (less accrued

charges)

226 407 658 401 49 225 142 672

Long-term liabilities 36 112 166 153 7 851 36 004

Short-term liabilities 228 267 540 969 49 630 117 225

Equity 1 894 356 2 183 177 411 870 473 082

Share capital 100 739 100 655 21 903 21 811

* adjusted

The above financial data has been converted into EUR under the following assumptions:

 Elements of the consolidated profit and loss account and consolidated statement of cash flows were converted into EUR by

applying the arithmetic average of exchange rates for the final day of each month belonging to the reporting period, as

published by the National Bank of Poland. The corresponding exchange rates were: 4.5775 PLN/EUR for the period between

1 January and 31 December 2021, and 4.4742 PLN/EUR for the period between 1 January and 31 December 2020 respectively,

 Assets and liabilities listed in the consolidated statement of financial position were converted into EUR by applying the

exchange rate for the final day of the reporting period, as published by the National Bank of Poland. These exchange rates

were: 4.6329 PLN/EUR on 30 September 2021 and 4.6148 PLN/EUR on 31 December 2020 respectively.

Validation of published projections

The Group had not published any projections referring to the reporting period.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Table of contents

Validation of published projections ............................................................................................................................................................................... 3

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

Consolidated profit and loss account ........................................................................................................................................................................... 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

Clarifications regarding the consolidated financial statement ................................................................................................................................... 14

General information.......................................................................................................................................................................................................... 15

Consolidation principles ................................................................................................................................................................................................. 15

Entities subject to consolidation ............................................................................................................................................................................ 15

Subsidiaries .................................................................................................................................................................................................................. 16

Changes in accounting practices ................................................................................................................................................................................. 16

Assumption of going concern ....................................................................................................................................................................................... 16

Compliance with International Financial Reporting Standards ............................................................................................................................ 17

Changes in standards or interpretations in force, applied by the Group starting in 2021 .................................................................... 17

Description of applicable accounting practices .......................................................................................................................................................18

Operating revenues and expenses ........................................................................................................................................................................18

Financial revenues and expenses ..........................................................................................................................................................................18

State subsidies ............................................................................................................................................................................................................ 19

Current and deferred income tax .......................................................................................................................................................................... 19

Value added tax .......................................................................................................................................................................................................... 19

Property, plant and equipment ............................................................................................................................................................................... 19

Intangibles - expenditures on development projects ..................................................................................................................................... 20

Other intangibles ....................................................................................................................................................................................................... 20

Goodwill ........................................................................................................................................................................................................................ 20

Business combinations under common control ............................................................................................................................................... 20

Impairment of non-financial assets ........................................................................................................................................................................ 21

Investment properties ............................................................................................................................................................................................... 21

Perpetual usufruct of land ........................................................................................................................................................................................ 21

Lease agreements ...................................................................................................................................................................................................... 21

Shares and investments in subsidiaries excluded from consolidation ..................................................................................................... 22

Financial assets .......................................................................................................................................................................................................... 22

Financial liabilities ...................................................................................................................................................................................................... 22

Inventories ....................................................................................................................................................................................................................23

Trade and other receivables ...................................................................................................................................................................................23

Deferrals and accruals...............................................................................................................................................................................................23

Cash and other monetary assets ...........................................................................................................................................................................23

Assets held for sale and discontinued operations ...........................................................................................................................................23

Equity ..............................................................................................................................................................................................................................24

Provisions for liabilities ..............................................................................................................................................................................................24

Employee benefits ......................................................................................................................................................................................................24

Loans granted ..............................................................................................................................................................................................................24

Trade and other liabilities .........................................................................................................................................................................................24

Licenses .........................................................................................................................................................................................................................24

Dividend payments ....................................................................................................................................................................................................24

Functional currency and presentation currency ..................................................................................................................................................... 25

Functional currency and presentation currency .............................................................................................................................................. 25

Transactions and balances ..................................................................................................................................................................................... 25

Important values based on professional judgment and estimates ................................................................................................................... 25

Professional judgment.............................................................................................................................................................................................. 25

Uncertainty of estimates .......................................................................................................................................................................................... 25

Comparability of financial statements, changes in accounting policies and changes in estimates ....................................................... 26

Changes in accounting policies ............................................................................................................................................................................ 26

Presentation changes ............................................................................................................................................................................................... 26

Supplementary information – CD PROJEKT Group activity segments ................................................................................................................... 27

Activity segments ............................................................................................................................................................................................................. 28

Disclosure of activity segments ............................................................................................................................................................................. 29

Supplementary information – additional notes and clarifications regarding the consolidated financial statement ............................... 36

Note 1. Sales revenues .............................................................................................................................................................................................. 37

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 2. Operating expenses ...................................................................................................................................................................................38

Note 3. Other operating revenues and expenses ............................................................................................................................................38

Note 4. Financial revenues and expenses ......................................................................................................................................................... 39

Note 5. Current and deferred income tax .......................................................................................................................................................... 40

Note 6. Discontinued operations ........................................................................................................................................................................... 43

Note 7. Earnings per share ...................................................................................................................................................................................... 43

Note 8. Dividends paid out (or declared) and collected ................................................................................................................................. 44

Note 9. Disclosure of other components of the reported comprehensive income ............................................................................... 44

Note 10. Property, plant and equipment .............................................................................................................................................................. 44

Note 11. Intangibles and expenditures on development projects ................................................................................................................48

Note 12. Goodwill ....................................................................................................................................................................................................... 52

Note 13. Investment properties .............................................................................................................................................................................. 52

Note 14. Investments in subsidiaries excluded from consolidation .............................................................................................................53

Note 15. Other financial assets .............................................................................................................................................................................. 54

Note 16. Inventories .................................................................................................................................................................................................. 54

Note 17. Trade receivables ..................................................................................................................................................................................... 54

Note 18. Other receivables ...................................................................................................................................................................................... 57

Note 19. Prepaid expenses ..................................................................................................................................................................................... 59

Note 20. Cash and cash equivalents ................................................................................................................................................................... 59

Note 21. Share capital ............................................................................................................................................................................................... 60

Note 22. Other capital contributions ................................................................................................................................................................... 60

Note 23. Retained earnings .................................................................................................................................................................................... 63

Note 24. Minority interest capital .......................................................................................................................................................................... 63

Note 25. Credits and loans ..................................................................................................................................................................................... 63

Note 26. Other financial liabilities ......................................................................................................................................................................... 63

Note 27. Other long-term liabilities ...................................................................................................................................................................... 64

Note 28. Trade liabilities .......................................................................................................................................................................................... 64

Note 29. Other short-term liabilities ..................................................................................................................................................................... 66

Note 30. Internal Social Benefits Fund (ZFŚS): assets and liabilities .......................................................................................................... 67

Note 31. Contingent liabilities .................................................................................................................................................................................. 67

Note 32. Lease and sublease agreements ........................................................................................................................................................ 69

Note 33. Deferred revenues..................................................................................................................................................................................... 71

Note 34. Provisions for employee benefits and similar liabilities.................................................................................................................. 71

Note 35. Other provisions ........................................................................................................................................................................................ 73

Note 36. Disclosure of financial instruments ...................................................................................................................................................... 74

Note 37. Equity management .................................................................................................................................................................................. 78

Note 38. Employee share programs ..................................................................................................................................................................... 78

Note 39. Transactions with affiliates .................................................................................................................................................................... 80

Note 40. Mergers and changes in the structure of the CD PROJEKT Group .......................................................................................... 82

Note 41. Compensation of top management and Supervisory Board members .................................................................................... 82

Note 42. Employment ............................................................................................................................................................................................... 82

Note 43. Activated borrowing costs......................................................................................................................................................................83

Note 44. Disclosure of seasonal, cyclical or sporadic revenues ..................................................................................................................83

Note 45. Fiscal settlements .....................................................................................................................................................................................83

Note 46. Events following the balance sheet date ..........................................................................................................................................83

Note 47. Disclosure of transactions with entities contracted to perform audits of financial statements ........................................ 85

Note 48. Clarifications regarding the cash flow statement ........................................................................................................................... 86

Note 49. Cash flows and other changes resulting from financial activities ............................................................................................. 88

Statement of the Management Board of the parent entity ................................................................................................................................. 89

Approval of financial statement ................................................................................................................................................................................... 90

Primary financial data of the

CD PROJEKT Group

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Consolidated profit and loss account

Note

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020*

Sales revenues 888 172 2 138 875

Revenues from sales of products 1 691 564 1 839 932

Revenues from sales of services 1 5 865 2 242

Revenues from sales of goods and materials 1 190 743 296 701

Cost of products, services, goods and materials sold 250 234 491 364

Cost of products and services sold 2 107 391 256 105

Cost of goods and materials sold 2 142 843 235 259

Gross profit (loss) from sales 637 938 1 647 511

Selling costs 2 299 225 408 016

General and administrative costs 2 71 949 66 435

Other operating revenues 1,3 17 376 8 535

Other operating expenses 3 51 231 24 421

(Impairment)/reversal of impairment of financial instruments (6) (97)

Operating profit (loss) 232 903 1 157 077

Financial revenues 1,4 9 523 17 081

Financial expenses 4 23 318 9 209

Profit (loss) before tax 219 108 1 164 949

Income tax 5 10 200 14 801

Net profit (loss) 208 908 1 150 148

Net profit (loss) attributable to equity holders of parent entity 208 908 1 150 148

Net earnings per share (in PLN) - -

Basic for the reporting period 7 2.07 11.92

Diluted for the reporting period 7 2.07 11.45

* adjusted

Consolidated statement of comprehensive income

Note

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020*

Net profit/(loss) 208 908 1 150 148

Other comprehensive income which will be entered as profit (loss) following

fulfillment of specific criteria

9 4 842 635

Exchange rate differences from valuation of foreign entities 500 193

Estimation of financial instruments at fair value through other

comprehensive income, adjusted for tax effects

4 342 442

Other comprehensive income which will not be entered as profit (loss) 9 - -

Total comprehensive income 213 750 1 150 783

Total comprehensive income attributable to minority interests - -

Total comprehensive income attributable to equity holders of

CD PROJEKT S.A.

213 750 1 150 783

* adjusted

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Consolidated statement of financial position

Note 31.12.2021 31.12.2020*

FIXED ASSETS 905 846 759 999

Property, plant and equipment 10 115 234 105 349

Intangibles 11 58 393 59 790

Expenditures on development projects 11 350 195 406 798

Investment properties 13 48 988 48 841

Goodwill 11,12 56 438 56 438

Shares in subsidiaries excluded from consolidation 14 38 520 8 195

Deferrals 19 11 434 11 676

Other financial assets 15,36 178 540 51 588

Deferred income tax assets 5 47 418 11 003

Other receivables 18,36 686 321

WORKING ASSETS 1 252 889 2 130 300

Inventories 16 15 886 6 957

Trade receivables 17,36 125 293 1 205 603

Current income tax receivables 98 -

Other receivables 18 113 498 70 210

Deferrals 19 13 763 13 383

Other financial assets 15,36 307 765 106 444

Bank deposits (maturity beyond 3 months) 36 265 000 164 368

Cash and cash equivalents 20,36 411 586 563 335

TOTAL ASSETS 2 158 735 2 890 299

* adjusted

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 31.12.2021 31.12.2020*

EQUITY 1 894 356 2 183 177

Parent entity shareholders’ equity 1 894 356 2 183 177

Share capital 21 100 739 100 655

Supplementary capital 22 1 425 647 774 851

Supplementary capital from sale of shares above nominal value 22 115 909 113 844

Other reserve capital 22 47 994 45 547

Exchange rate differences 1 591 1 091

Retained earnings 23 (6 432) (2 959)

Net profit (loss) for the reporting period 208 908 1 150 148

Minority interest equity 24 - -

LONG-TERM LIABILITIES 36 112 166 153

Other financial liabilities 26,32,36 21 080 16 006

Other liabilities 27 2 860 3 173

Deferred revenues 33 6 424 963

Provisions for employee benefits and similar liabilities 34 380 398

Other provisions 35 5 368 145 613

SHORT-TERM LIABILITIES 228 267 540 969

Other financial liabilities 26,32,36 25 802 2 933

Trade liabilities 28,36 53 380 115 444

Current income tax liabilities 24 446 1 742

Other liabilities 29 10 042 33 134

Deferred revenues 33 31 548 47 758

Provisions for employee benefits and similar liabilities 34 7 4

Other provisions 35 83 042 339 954

TOTAL EQUITY AND LIABILITIES 2 158 735 2 890 299

* adjusted

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Statement of changes in consolidated equity

Share capital

Supplementary

capital

Supplementary

capital from

sale of shares

above nominal

value

Own shares

Other

reserve

capital

Exchange

rate

differences

Retained

earnings

Net profit

(loss) for the

reporting

period

Parent entity

shareholders’

equity

Total

equity

01.01.2021 – 31.12.2021

Equity as of 01.01.2021 100 655 774 851 113 844 - 45 547 1 091 1 151 368 - 2 187 356 2 187 356

Rectification of errors - - - - - - (4 179) - (4 179) (4 179)

Adjusted equity 100 655 774 851 113 844 - 45 547 1 091 1 147 189 - 2 183 177 2 183 177

Cost of incentive

program

- - - - (1 026) - - - (1 026) (1 026)

Payment in own shares

84 869 2 065 - (869) - - - 2 149 2 149

Dividend payment - - - - - - (503 694) - (503 694) (503 694)

Allocation of net profit/

coverage of losses

- 649 927 - - - - (649 927) - - -

Total comprehensive

income

- - - - 4 342 500 - 208 908 213 750 213 750

Equity as of 31.12.2021 100 739 1 425 647 115 909 - 47 994 1 591 (6 432) 208 908 1 894 356 1 894 356

The Group has rectified its calculation of deferred tax assets for 31 December 2020, reclassifying some of the negative temporary differences from the 19% tax rate category to the 5% tax rate category.

This resulted in a decrease in Equity by 4 179 thousand PLN.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Share capital

Supplementary

capital

Supplementary

capital from

sale of shares

above nominal

value

Own shares

Other

reserve

capital

Exchange

rate

differences

Retained

earnings

Net profit

(loss) for the

reporting

period

Parent entity

shareholders’

equity

Total

equity

01.01.2020 – 31.12.2020*

Equity as of 01.01.2020 96 120 777 090 3 861 - 54 657 898 173 025 - 1 105 651 1 105 651

Cost of incentive

program

- - - - 14 877 - - - 14 877 14 877

Dissolution of reserve

capital from past years

created to finance

purchase of own shares

- 549 - - (549) - - - - -

Creation of reserve

capital to finance

purchase of own shares

- (250 000) - - 250 000 - - - - -

Purchase of own shares

in the implementation of

the incentive program

- 214 259 - (214 259) (214 259) - - - (214 259) (214 259)

Payment in own shares 4 535 (143 031) 109 983 214 259 (59 621) - - - 126 125 126 125

Allocation of net profit/

coverage of losses

- 175 984 - - - - (175 984) - - -

Total comprehensive

income

- - - - 442 193 - 1 150 148 1 150 783 1 150 783

Equity as of 31.12.2020 100 655 774 851 113 844 - 45 547 1 091 (2 959) 1 150 148 2 183 177 2 183 177

* adjusted

The Group adjusted the presentation of the effect of the vesting of its incentive program for 2012-2015. As a result of this change, the “Other reserve capital” line item was adjusted downward by 3 861

thousand PLN, while the “Supplementary capital from sale of shares above nominal value” was adjusted upward by the same amount.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Consolidated statement of cash flows

Note

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020*

OPERATING ACTIVITIES

Net profit (loss) 208 908 1 150 148

Total adjustments: 48 766 750 (460 131)

Depreciation of PP&E, intangibles, expenditures on development projects

and investment properties

17 764 13 559

Depreciation of expenditures on development projects recognized as

cost of products and services sold

86 965 254 105

Profit (loss) from exchange rate differences (15 047) 2 220

Interest and profit sharing (228) (7 188)

Profit (loss) from investment activities 55 282 (5 440)

Change in provisions (311 449) 366 499

Change in inventories (8 929) 5 905

Change in receivables 1 036 886 (1 083 890)

Change in liabilities excluding credits and loans (85 023) 77 319

Change in other assets and liabilities (11 127) (100 033)

Other adjustments 1 656 16 813

Cash flows from operating activities 975 658 690 017

Income tax on pre-tax profit (loss) 4 337 1 039

Withholding tax paid abroad 5 863 13 762

Income tax (paid)/reimbursed (18 033) 6 890

Net cash flows from operating activities 967 825 711 708

INVESTMENT ACTIVITIES

Inflows 257 135 823 545

Sales of PP&E and intangibles 241 22

Sales of shares in subsidiary 19 -

Closing bank deposits (maturity beyond 3 months) 164 368 754 581

Maturation of bonds 82 715 59 426

Interest on bonds received 1 703 115

Inflows from settlement of forward contracts 7 887 1 801

Other inflows from investment activities 202 7 600

Outflows 870 930 929 931

Purchases of intangibles and PP&E 27 969 18 516

Expenditures on development projects 155 401 203 076

Purchase of investment properties and activation of costs 2 085 8 336

Loans granted 4 340 4 500

Acquisition of subsidiary 19 306 -

Purchase of bonds and the associated purchase fees 396 829 209 441

Opening bank deposits (maturity beyond 3 months) 265 000 486 054

Other outflows from investment activities - 8

Net cash flows from investment activities (613 795) (106 386)

* adjusted

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

FINANCIAL ACTIVITIES

Inflows 2 189 126 124

Net inflows from sale and issue of shares in the exercise of rights assigned

under the incentive program

2 149 126 124

Collection of receivables arising from financial lease agreements 40 -

Outflows 507 968 217 517

Purchase of own shares in the exercise of entitlements assigned under the

incentive program

- 214 259

Dividends and other payments to equity holders 503 694 -

Payment of liabilities arising from lease agreements 3 733 2 857

Interest payments 541 401

Net cash flows from financial activities (505 779) (91 393)

Total net cash flows (151 749) 513 929

Balance of changes in cash and cash equivalents (151 749) 513 929

Cash and cash equivalents at beginning of period 563 335 49 406

Cash and cash equivalents at end of period 411 586 563 335

Clarifications regarding the

consolidated financial statement

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

General information

Name of reporting entity:

CD PROJEKT S.A.

(no changes in the name of the reporting entity occurred since the close of the

previous reporting period)

Legal status: Joint-stock company

Headquarters: Jagiellońska 74, 03-301 Warsaw

Country of registration: Poland

Principal scope of activity:

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

conducts its operations in two activity segments: CD PROJEKT RED

and GOG.COM

Keeper of records:

District Court for the City of Warsaw in Warsaw – Poland; 14th Commercial

Department of the National Court Register (Sąd Rejonowy dla m.st. Warszawy

w Warszawie, XIV Wydział Gospodarczy Krajowego Rejestru Sądowego)

Statistical identification number

(REGON):

492707333

Tax identification number (NIP):

7342867148

Waste disposal database (BDO)

number:

000141053

Duration of the Group: Indefinite

Name of parent entity: CD PROJEKT S.A.

Name of ultimate parent entity of the

Group

CD PROJEKT S.A.

Consolidation principles

Entities subject to consolidation

capital share voting share consolidation method

CD PROJEKT S.A. parent entity - -

GOG sp. z o.o. 100% 100% full

CD PROJEKT Inc. 100% 100% full

CD PROJEKT Co., Ltd. (in liquidation) 100% 100%

excluded from

consolidation

Spokko sp. z o.o. 74% 74%

excluded from

consolidation

CD PROJEKT RED STORE sp. z o.o. 100% 100% full

CD PROJEKT RED Vancouver Studio Ltd. 100% 100%

excluded from

consolidation

The Molasses Flood LLC 60% 60%

excluded from

consolidation

Four companies were excluded from consolidation since they failed to meet the materiality criterion. In accordance with the

accounting policies in force within the Group, the parent entity may elect to exclude certain subsidiaries from consolidation as long

as each of these subsidiaries:

 contributes not more than 2% to the parent entity’s profit and loss balance,

 contributes not more than 1% to the parent entity’s aggregate sales and financial revenues.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note that the above values are exclusive of any transactions between the subsidiary and the parent company which would have

otherwise been subject to consolidation eliminations.

In addition to the above, all subsidiaries excluded from consolidation must jointly:

 contribute not more than 5% to the parent entity’s profit and loss balance,

 contribute not more than 2% to the parent entity’s aggregate sales and financial revenues.

The above values are also exclusive of any transactions between each subsidiary and the parent company which would have

otherwise been subject to consolidation eliminations.

Subsidiaries

Subsidiaries are defined as all entities which fall under the Group’s control. An entity is considered to fall under the Group’s control

if all of the following criteria are met:

 executive control, i.e. possession of the required legal title to direct the entity’s significant operations (operations, which

significantly affect the entity’s financial standing),

 exposure to variation in the entity’s financial results, or possession of the required legal title to adjust the Group’s financial

results in relation to the entity’s own financial results,

 possession of the required administrative apparatus to affect the Group’s own financial results by exercising the right to affect

financial results attributable to the Group by leveraging the Group’s involvement in the entity.

Subsidiaries which meet materiality criteria are subject to full consolidation from the date of acquisition of control by the Group and

cease to be reported as such on the day control is lost.

Any revenues, expenses, settlements and unrealized gains on transactions between companies belonging to the Group are

eliminated in full. Unrealized losses are also eliminated unless the nature of the transaction indicates impairment of any of the

transferred assets. Accounting practices in use at subsidiary companies are adjusted whenever necessary to ensure compliance

with accounting practices adopted by the Group.

Changes in accounting practices

The accounting practices applied in preparing this consolidated financial statement, the Management Board’s professional

judgment concerning the Group’s accounting practices as well as the main sources of uncertainty in estimations are in all material

aspects consistent with the practices applied in preparing the Consolidated Financial Statement of the CD PROJEKT Group for

2020, except for changes in accounting policies and presentation-related adjustments described in the section titled “Comparability

of financial statements, changes in accounting policies and changes in estimates”.

Assumption of going concern

This consolidated financial statement is prepared under the assumption that the parent Company and its Group intend to continue

as a going concern in the foreseeable future, i.e. at least throughout the 12-month period following the balance sheet date.

As of the date of signing this statement, the Management Board of the parent Company is not aware of any facts or circumstances

which would jeopardize the assumption of going concern within said 12-month period by way of intended or forced cessation or

significant reduction of continuing operations.

As of the day of preparation of this consolidated financial statement covering the period between 1 January and 31 December 2021

the Management Board of the parent Company is not aware of any events which should have been reflected in the accounts for

that period but have not been reflected therein. Additionally, no important events related to the preceding years were included in

this statement.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Compliance with International Financial Reporting

Standards

The Group’s consolidated financial statement has been prepared in accordance with the International Financial Reporting Standards

(hereinafter referred to as “IFRS”) approved by the EU and applicable to annual reporting periods beginning on 1 January 2021.

Changes in standards or interpretations in force, applied by the Group

starting in 2021

In preparing its consolidated financial statement for 2021 the Group applied the same accounting standards as in its consolidated

financial statement for 2020 with exception of the following new and amended standards and interpretations approved by the

European Union and applicable to reporting periods beginning on or after 1 January 2021:

 Amendments to MSSF 4 Insurance contracts – postpones application of IFRS 9 Financial instruments until 1 January 2021, i.e.

until IFRS 17 Insurance contracts comes into force.

 Amendments to IFRS 16 Leases – in force since 1 April 2021 and applicable to reporting periods beginning or on after 1 January

2021.

The change introduces a practical expedient which permits the entity to forgo assessing whether changes in future flows

resulting from rent concessions granted by lessors and meeting certain criteria expressed in the standard constitute a “lease

modification” under IFRS 16. The following conditions must be met in order for a concession to be eligible for this status:

 the total revised consideration for the lease following the concession must be substantially the same or lower than prior

to granting the concession,

 the concession must apply to payments which were due on or before 30 June 2021 (although subsequent increases may

fall beyond that date),

 there is no substantive change to other terms and conditions of the lease.

 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, IFRS 16 – applicable to reporting periods beginning on or after 1 January 2021

 In the case of estimation at amortized cost, changes in estimated flows resulting directly from the IBOR reform are treated

in the same way as changes in variable interest rates, i.e. without affecting the P&L statement,

 There is no need to discontinue hedge accounting if the only change results from the IBOR reforms and all other hedge

accounting criteria are met; the change concerns the recognition of alternative benchmark rates in hedge accounting;

 The issuer is obligated to disclose any risks arising due to the reform, along with details of its process of transitioning to

alternative benchmark rates.

These amendments have no significant impact on the Group’s accounting practices as relates to the Group’s activities or its financial

result.

Standards published and approved by the UE which have not yet entered into force, and their effect

on the Group’s financial statement

The Management Board has carried out an analysis of the effect of new standards upon future financial statements. In approving

this financial statement the Group did not apply the following standards, amendments and interpretations which have been

published and approved by the UE but have not yet entered into force:

 Amendments to IAS 1 and Practice Statement 2: Disclosure of accounting policies (published on 12 February 2021) – approved

on 3 March 2022 and applicable to reporting periods beginning on or after 1 January 2023,

 Amendments to IAS 8 Accounting policies, changes in accounting estimates and errors – approved on 3 March 2022 and

applicable to reporting periods beginning on or after 1 January 2023,

 MSSF 17 Insurance contracts – approved on 23 November 2021 and applicable to reporting periods beginning on or after

1 January 2023,

 Amendments to IFRS 3 Business combinations, IAS 16 Property, plant and equipment, IAS 37 Provisions, contingent liabilities

and contingent assets, and amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41 introduced in the annual IFRS improvement cycle

(2018-2020) – approved on 31 August 2021 and applicable to reporting periods beginning on or after 1 January 2022.

The Group does not anticipate a significant effect of these changes upon the Group’s accounting practices as relates to the Group’s

activities or its financial result.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Standards and interpretations approved by the IASB but not yet approved by the EU

In approving this financial statement the Group did not apply the following standards, amendments and interpretations which have

not yet been approved for use in the EU:

 Amendments to IAS 1 Presentation of financial statements: classification of liabilities as current or non-current - applicable to

reporting periods beginning on or after 1 January 2023,

 Amendments to IAS 12 Income taxes: deferred tax related to assets and liabilities arising from a single transaction - applicable

to reporting periods beginning on or after 1 January 2023,

 IFRS 14 Regulatory deferral accounts – published on 30 January 2014 and applicable to annual reporting periods beginning

on or after 1 January 2016. The European Commission has decided to withhold approval of this temporary standard for use in

the UE until the final version of the standard is published. The standard had not been approved by the UE by the date of

publication of this financial statement.

 MSSF 17 Insurance contracts – initial application of IFRS 17 and IFRS 9 - applicable to reporting periods beginning on or after 1

January 2023,

 Amendments to IFRS 10 and IAS 28 Sale or contribution of assets between an investor and its associate or joint venture

(published on 11 September 2014) – the EU has suspended work on approving these amendments indefinitely, and their date

of entry into force has been postponed indefinitely by the International Accounting Standards Board,

The Group is performing an assessment of the effect these new standards and amendments to standards upon the Group’s financial

statement.

Description of applicable accounting practices

Operating revenues and expenses

Revenues are defined as the gross receipts on any economic benefits from the reported period resulting from (ordinary) economic

activities of the Group and leading to an increase in its equity other than from capital increases obtained through shareholder

contributions.

The Group recognizes revenues by applying the so-called Five Step Model described in IFRS 15. Revenues only cover amounts

received or receivable by the Group, equivalent to the transaction prices payable to the Group following (or during) discharge of its

liability to transfer the contractually pledged goods or services (i.e. asset) to the client. The transaction price is defined as the

remuneration which the Group expects to receive in return for transfer of the pledged goods or services, less the applicable value

added tax.

With regard to licensing royalties associated with distribution of videogames, which constitute the Group’s main source of revenues,

these depend on the volume of sales carried out by each distributor throughout the reporting period. Consequently, for each

product, the corresponding sales revenues can be recognized only after the Group has supplied all necessary materials enabling

the finished game to be distributed, and the reported figures depend on sales reports periodically submitted by distributors.

In accordance with the principle of matching revenues and expenses, expenses associated with consumption of materials, goods

and finished products, along with costs of services, are reported in the same period as their corresponding sales revenues or

revenues from services which these assets are part of.

Financial revenues and expenses

Financial revenues consist mainly of interest on bank deposits of monetary assets, commissions and interest on loans granted,

penalty interest on overdue receivables, liabilities, dissolved provisions associated with financial activities, revenues from sales of

securities, gains from exchange rate differences, reversal of impairment of financial investments, credit/loan write-offs and gains

from revaluation of derivatives.

Financial expenses consist mainly of interest on outstanding credits and loans, penalty interest on overdue liabilities, provisions set

aside to cover certain or probable losses from financial operations, purchase value of any securities sold, commissions and handling

charges, impairment allowances on interest owed, short-term investment valuations, discounts and exchange rate differences

related to financial activities (balance), and, in the case of lease agreements, any other payments except capital payments.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

State subsidies

Subsidies are not recognized until there is a reasonable certainty that the Group will fulfill the necessary criteria and receive the

subsidy. State subsidies predicated on the condition that the recipient purchases or produces certain PP&E assets are recognized

in the statement of financial position in the deferred revenues line item and charged to the financial result systematically throughout

the anticipate economic life of such assets.

Current and deferred income tax

The reported revenue is subject to compulsory taxation, whether current or deferred. Current tax is calculated on the basis of

taxable income (tax base) for a given financial year. Tax gain (or loss) differs from net accounting gain (or loss) due to temporal

differences in recognition of revenues and expenses for fiscal and accounting purposes, as well as due to permanent differences

in handling certain revenues and expenses with regard to their fiscal and accounting effects, as appropriate. Tax burden is

calculated on the basis of tax rates valid for a given financial year. Current tax on items included directly in the equity capital is

reported in the equity statement, as opposed to the profit and loss account.

Deferred tax is calculated using the balance sheet method as the amount payable or receivable as a result of the difference between

the carrying amount of assets and liabilities and their corresponding tax base amounts.

Deferred income tax liabilities are recognized in correspondence with taxable positive temporary differences. Deferred tax assets

are recognized up to the amount of probable reduction in future tax gains by any recognized negative temporary differences. A tax

asset or liability is not recognized if the underlying temporary difference is due to goodwill or original recognition of another asset

or liability in a transaction which does not affect the Group’s taxable or accounting revenues.

Deferred income tax liabilities are applied to temporary tax differences resulting from investments in associates and joint ventures

unless the Group is capable of controlling the moment of reversal of the temporary difference and the temporary difference is

unlikely to reverse in the foreseeable future.

The value of the asset associated with deferred tax is subject to analysis for each balance sheet date. If the expected future tax

gains are insufficient to cover the asset or part thereof, a write-down is recognized on the asset.

Deferred tax is calculated by applying rates which will be in force on the date the corresponding gain is realized or the liability

becomes due. Deferred tax is reported in the profit and loss account unless it applies to assets included directly in the equity capital

in which case it is also reported in the equity capital.

Value added tax

All revenues, expenses and assets are recorded following deduction of the applicable value added tax, except for:

 cases where the value added tax paid when purchasing assets or services cannot be recovered from tax authorities, in which

case it is reported as part of the purchase cost of a given asset or as an expense,

 receivables and liabilities reported as inclusive of value added tax.

The net amount of value added tax recoverable from or payable to tax authorities is reported in the statement as part of the Group’s

receivables or liabilities.

Property, plant and equipment

PP&E assets are recognized on the basis of their cost (purchase price or production cost) following deduction of depreciation and

impairment for each reporting period. Borrowing costs associated directly with the purchase or construction of assets which require

a long time to become usable or resalable are added to the cost of construction of such assets up until the beginning of their useful

economic life. Revenues from short-term investment of borrowings related to construction of PP&E assets are deducted from the

borrowing costs following capitalization. Other borrowing costs are reported as expenses in the period during which they were

incurred.

Depreciation is calculated for all fixed assets except land holdings and PP&E assets under construction, throughout their expected

useful economic life, using the straight-line method.

The expected useful life for individual categories of PP&E assets is as follows:

Category Useful life

Buildings and structures 5 – 25 years

Machinery and equipment 2 – 10 years

Vehicles 5 years

Other PP&E 2 – 10 years

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Low-value PP&E assets, i.e. assets whose initial unit value does not exceed 5 000 PLN, are depreciated in a simplified manner by

way of a one-time write-down.

Profits or losses on sales/disposal or cessation of use of PP&E assets are defined as the difference between their sales revenues

and net value, and are reported in the profit and loss account.

Intangibles - expenditures on development projects

The Group reports expenses associated with development of videogames as expenditures on development projects. Videogame

development expenses incurred prior to the commencement of sales or application of new solutions are recognized as

development projects in progress. Once development has completed and the relevant costs are recognized, said expenses are

transferred to the Development projects completed line item. In the case of projects for which a reliable estimate of sales volume

and budget can be provided, the Group recognizes depreciation on the basis of economic benefits associated with the expected

sales volume. In all other cases, the straight-line method is applied instead. Depreciation of development expenditures is presented

in the profit and loss account as the cost of products and services sold.

Other intangibles

Intangibles are recognized according to their historical cost of purchase or production, following deduction of depreciation and

impairment costs. Depreciation is calculated using the straight-line method. Costs of research and development activities are not

subject to activation and are reported in the profit and loss account for the period when they were incurred.

The expected useful life for individual classes of intangible assets is as follows:

Category Useful life

Patents and licenses 2 – 15 years

Computer software 2 – 10 years

Intangibles with a low opening value, not exceeding 5 000 PLN, are depreciated in a simplified way through a one-time deduction.

In its consolidated financial statement, the Group regards The Witcher trademark and the CD PROJEKT brand name as its intangible

assets. The value of trademarks is calculated using the Relief from Royalty method, which is one of the basic valuation methods for

trademarks and other intangible assets in the context of business combinations, in line with IFRS 3 Business combinations. The

useful economic life of both assets is regarded as indefinite. Trademark valuation is subject to yearly impairment tests.

Goodwill

Goodwill is computed by calculating the difference between the following two values:

 total payment remitted in exchange for control, noncontrolling interests (estimated in proportion to net assets taken over) and

fair value of shares of the acquired entity held prior to the date of its acquisition,

 fair value of identifiable net assets acquired.

The surplus between the total calculated according to the above formula and the fair value of identifiable net assets acquired is

recognized in the consolidated statement of financial position as a distinct asset, i.e. goodwill. Goodwill represents the payment

made by the acquirer in exchange for future economic benefits yielded by the acquired assets which cannot be individually

identified or estimated. Following initial recognition, goodwill is estimated at purchase price less any impairment write-downs.

Any negative difference between the aforementioned figure and the net value of identifiable assets acquired is directly represented

on the balance sheet. The Group aggregates profit from business combinations with its Other operating revenues.

Business combinations under common control

Legal mergers between the parent Company and a subsidiary thereof are recognized on the basis of the subsidiary’s financial data

disclosed in the parent Company’s consolidated financial statement; these figures include changes which occur at the parent

Company as a result of merging with the subsidiary. The reported financial result and financial position of the subsidiary are

determined prospectively from the merger date.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Impairment of non-financial assets

For each balance sheet date Group member companies perform an inventory of the net value of all of their PP&E assets in order to

determine whether impairment of assets may have occurred.

If asset impairment is suspected, the recoverable amount of each asset is calculated to determine the potential write-down. If

a given asset does not produce a cash flow that is substantially separate from cash flows produced by other assets, analysis is

performed for the whole group of cash producing assets to which the given asset belongs.

For intangible assets with an indefinite useful economic life this impairment test is performed on a yearly basis and, additionally,

whenever impairment is suspected.

Recoverable amount is defined as the greater of the following two values: fair value of the asset less the cost of sale, and the asset’s

value in use. The latter value is defined as the balance of expected future cash flows produced by the asset, discounted using

discount rates which acknowledge the market value of the relevant currency and a risk factor specific to the given asset.

If the recoverable amount of a given asset is lower than its net book value, the book value is lowered to match the recoverable

amount. The loss resulting from this operation is accounted as cost in the period during which it was incurred, unless the asset had

previously been carried at a revalued amount in which case the impairment is reflected by adjusting the revalued amount.

At the moment of reversal of asset impairment, the net value of the asset (or group of assets) is increased to match the newly

estimated recoverable amount; it cannot, however, exceed the net value of the asset which would have been reported had the

impairment not been recognized during previous fiscal years. Reversal of asset impairment is recognized as revenues.

Investment properties

Investment properties are defined as all properties held for the expected revenues from rent, increase in value, or both. As such,

cash flows produced by investment properties are largely independent from those produced by other assets belonging to any

member company of the Group.

Investment properties are estimated using the purchase cost method.

Perpetual usufruct of land

Perpetual usufruct may apply to land owned by the State Treasury, local authorities, or combinations thereof. Perpetual usufruct is

a special type of property law which entitles physical or legal entities to use a given plot of land on an exclusive basis. Perpetual

usufruct is fully transferable and usually granted for a period of 99 years, although in exceptional cases shorter grants (of at least

40 years) are permitted when the economic rationale for establishing the usufruct does not justify a longer grant.

Perpetual usufruct of land is reported as a lease, in line with IFRS 16. The Group represents the usufruct of such leases, in accordance

with its nature, as either Investment properties or Property, Plant and Equipment.

Lease agreements

The Group, when acting as the lessee, regards a contract as a lease agreement or an agreement which includes a lease if it

essentially transfers the totality of risks and benefits associated with a given base asset for a given period, in exchange for

remuneration.

When acting as the lessor, the Group regards a contracts as a financial lease agreement if it essentially transfers the totality of risks

and benefits associated with a given asset. When such risks and benefits are not transferred in their totality, the contract is instead

regarded as an operating lease agreement.

The usufruct of an asset held under a lease agreement entails mainly the right to acquire all economic benefits associated with its

use, as well as the right to control the manner in which it is used.

Risks associated with leases comprise losses incurred due to the non-use of production capabilities, loss of technical suitability or

reduction in returns resulting from changes in economic conditions. Benefits may include the expected profitable operation of

a given asset throughout its useful economic life or the expected profit resulting from increases in the asset’s value or recovery of

its final value.

On the date of initial recognition the Group recognizes an asset representing the usufruct of the lease, and a corresponding lease

liability. Usufruct is initially estimated at purchase price, which consists of the initial value of the lease liability, initial direct costs,

estimated costs related to disposal of the base asset, and lease payments remitted on or before the initial date, less lease incentives

(if any).

The Group depreciates usufruct using the straight-line method between the initial date and the end of the usufruct or the end of

the lease period, whichever comes first. When deemed justifiable, usufruct of leased assets is subjected to impairment tests,

pursuant to IAS 36.

On the initial date the Group recognizes a lease liability which is equivalent to the lease payments outstanding, adjusted for the

lease interest rate, if easily determinable. If not, the lessee’s marginal interest rate is applied instead.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Lease payments which affect the corresponding lease liability consist of fixed lease payments, variable lease payments (dependent

on the applicable indexation or interest rate), expected payments corresponding to the asset’s guaranteed residual value, and

expected payments related to buyout of leased assets, when such buyout can reasonably be regarded as certain. In each

successive reporting period the lease liability is lowered by the amount paid, and increased to account for accrued interest.

Estimation of lease liabilities is updated to reflect contractual changes and reassessments related to lease periods, buyout options,

guaranteed residual value or lease payments dependent on the applicable indexation or interest rate. As a rule, revaluation of lease

liabilities is recognized as an update of the line item which represents the usufruct of the leased asset.

The Group applies the practical expedient allowed by the standard to account for short-term leases and leases of low-value assets.

In relation such assets, instead of recognizing usufruct and a corresponding lease liability, lease payments are aggregated with the

financial result using the straight-line method throughout the lease period.

Shares and investments in subsidiaries excluded from consolidation

Shares and investments in subsidiaries excluded from consolidation are accounted on their effective date and at cost. Assessment

of such investments for a given balance sheet date is performed on the basis of initial cost less write-downs associated with

impairment of assets, if any.

Financial assets

On initial recognition the Group assigns each of its financial assets into one of four categories, depending on the Group’s business

model related to management of financial assets and the specific nature of contractual cash flows associated therewith:

 assets classified at amortized cost,

 assets classified at fair value reported in other comprehensive income (FVOCI),

 assets classified at fair value through profit and loss,

 financial hedges.

Each financial asset is assigned to one of the above categories on initial recognition. This assignment may change only if the

associated business model changes. Essential classes of business models are as follows: assets held to collect contractual cash

flows; assets held to collect contractual cash flows and potentially sell the asset; assets held for reasons other than those listed

previously (as a rule, this is construed as holding assets for trading). The Group has adopted a rule stating that the sale of a financial

asset prior to its maturity does not, in itself, cause the underlying business model to shift from holding assets to collect contractual

cash flows to holding assets to collect contractual cash flows and potentially sell the assets or to holding assets for other purposes.

As the Group does not engage in hedge accounting, the corresponding IFRS 9 provisions do not apply to the Group’s activities.

Credit risk associated with assets which constitute financial instruments is estimated by the Group on the basis of the expected

credit loss (ECL) model. The basic method for determining loss allowances in the ECL model is a procedure under which the Group

monitors changes in credit risk associated with each financial asset since its initial recognition, and assigns each financial asset to

one of three stages: stage 1 – performing (used in relation to assets whose credit risk has not increased substantially since initial

recognition); stage 2 – under-performing (used in relation to assets whose credit risk has increased substantially since initial

recognition, but for which there is no objective reason to suspect impairment); stage 3 – impaired (used in relation to assets for

which there is objective reason to suspect impairment).

Financial liabilities

A financial liability is defined as any liability which:

 is associated with a contractual obligation to transfer monetary or other financial assets to another entity, or exchange financial

assets or liabilities with another entity on potentially disadvantageous terms;

 is associated with a contract that will or may be settled in the entity’s own equity instruments and is a non-derivative for which

the entity is or may be obliged to deliver a variable number of the entity’s own equity instruments; or a derivative that will or

may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s

own equity instruments. For this purpose, rights, options or warrants to acquire a fixed number of the entity’s own equity

instruments for a fixed amount of any currency are considered equity instruments if the entity offers the rights, options or pro

rata warrants to all existing owners of the same class of its own non-derivative equity instruments.

On initial recognition Group member companies classify each of their financial liabilities as:

 financial liabilities designated at fair value through financial result,

 other financial liabilities designated at amortized cost.

On initial recognition a financial liability is estimated at fair value, which is increased – if the given liability is not qualified for

estimation at fair value through financial result – by the cost of transactions directly related to said liability.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Inventories

The initial value (cost) of an inventory is the sum of all costs (related to purchase, production etc.) incurred in bringing the inventory

to its current level and location. The cost of inventories is defined as the original purchase price increased by import duties and

other taxes (which cannot be recovered from tax authorities), transport, loading and unloading costs, and any other costs associated

with construction of inventories, and reduced by any discounts, rebates and similar deductions. Inventories are valued at initial cost

(purchase price or production cost) or at their achievable net sale price, whichever is lower. The achievable net sale price is defined

as the estimated sale price reduced by any costs involved in finalizing production, facilitating the sale and finding a buyer (this

includes sales and marketing expenses, etc.) In relation to inventories, cost is always determined by applying the “weighted

average” method.

Trade and other receivables

Receivables associated with delivery of products and services are entered in the accounts at their transaction prices, adjusted for

impairment allowances under the expected credit loss model.

Claims related to sale of products which have been produced and accounted for in the reporting period but reported following the

end of this period (in accordance with contractual obligations) are reported as trade receivables.

Deferrals and accruals

The Group recognizes as deferred revenues those revenues which corresponds to future reporting periods, at the moment these

revenues are realized.

In the CD PROJEKT RED segment future period sales represent mainly royalties obtained or obtainable in association with customer

preorders of digital editions of PC games scheduled for release in future reporting periods, prepayments related to royalties,

advance payments for goods received from suppliers, and settlements carried out over time in relation to subsidies.

In the GOG.COM segment future period sales represent the value of customer preorders of games scheduled for release in future

reporting periods as well as deferrals involving customers of the online store in the framework of the so-called GOG Wallet.

Accrued expenses represent liabilities related to goods and services which have been received or rendered, invoiced or formally

agreed upon with suppliers.

Group member companies recognize as prepaid expenses costs borne upfront, associated – in whole or in part – with future

reporting periods.

In the GOG.COM segment GOG sp. z o.o. purchases distribution licenses, which are initially regarded as prepaid expenses. This

initial recognition applies to the so-called minimum guarantees: payments contractually remitted to copyright holders upon

conclusion of a contract. Minimum guarantees are aggregated with cost of goods sold following commencement of sales; thus,

costs related to minimum guarantees correlate with sales revenues.

Cash and other monetary assets

Cash assets are defined as cash on hand, deposits payable on demand and bank deposits with maturity periods of up to 3 months.

Other monetary assets represent highly liquid short-term investments easily exchangeable for a known quantity of cash and subject

to low depreciation risk.

Overdraft on any current bank account is aggregated with credits and loans and reported as cash flows from financial activities.

Assets held for sale and discontinued operations

Fixed assets held for sale (as well as net disposal groups) are estimated at either their carrying amount or their fair value less the

cost of sale, whichever is lower.

Fixed assets and disposal groups are classified as held for sale if their carrying amount is expected to be retrieved by way of sale

rather than continued use. This condition is only considered fulfilled if the sale transaction is highly likely to occur and the given

asset (or disposal group) is available for immediate sale in its present form. Designating a given asset as held for sale conveys the

Group member company management’s intent to conclude the sale transaction within one year of such a designation being made.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Equity

Equity is treated in accounting practice with distinction to its type and in accordance with the applicable legal constraints, as well

as any statutory requirements and conditions expressed in the contracts to which the given Group member company is a party.

Share capital is reported at nominal value, in the amount consistent with the parent Company’s articles and its record in the court

Supplementary capital is derived from profit earned.

Supplementary capital from sale of shares above nominal value is derived from the positive difference between the issue price of

shares and their corresponding nominal value less the cost of issuance. Said costs, incurred while establishing a joint-stock

company or increasing its share capital, limit the capital to the excess of issue price over the nominal value of shares.

The reported Other capital contributions aggregate costs related to its incentive program, supplementary capital created to finance

the buy-back of own shares, and revaluation capital.

Provisions for liabilities

Provisions are created whenever the Group member company faces a liability (whether legal or customary) resulting from past

events, it is likely that discharging said liability will reduce the Group’s economic advantage and the liability can be reliably

estimated. No provisions are made for future operating losses.

Restructuring cost allowances are made only when the given Group member company has revealed a detailed and formalized

restructuring plan to all interested parties.

Employee benefits

The costs of short-term employee benefits other than those stemming from termination of employment and equity compensation

are recognized as liabilities following adjustment for any payments already made and, at the same time, as expenses during the

period, unless a given benefit is includable in the cost of construction of an asset. The Group does not provide any employee benefit

programs following termination of employment.

On 28 July 2020 the General Meeting of Shareholders of CD PROJEKT S.A. voted to institute an incentive program for 2020-2025

for the benefit of selected individuals at CD PROJEKT S.A. and other member companies of the Group. A set of targets was

established and the Management Board and Supervisory Board of the parent Company selected a number of persons who,

assuming these profit and marketing goals are met, are rewarded with subscription warrants entitling them to acquire parent

Company shares by way of a conditional increase in the parent Company’s share capital. The incentive program complies with

IFRS 2 Share-based payment rules.

Loans granted

Loans granted are estimated at their amortized cost adjusted by applying the effective interest rate.

Trade and other liabilities

Liabilities pertaining to supplies and services are reported in their amortized cost. Financial liabilities and equity instruments are

classified according to their commercial substance which depends on contractual obligations. Equity instruments are defined as

contracts granting a share in the Group’s equity less any applicable liabilities.

Licenses

The value of licenses purchased by the Group is recognized as prepaid expenses on the basis of invoices, and increased by the

uninvoiced portion of minimum guarantees arising under the relevant contracts. These expenses are then recognized as costs in

proportion to realized sales, with any amount exceeding the previously reported prepaid expenses reclassified as trade liabilities.

Dividend payments

Dividends are recognized at the moment the parent Company’s shareholders become entitled to receive them.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Functional currency and presentation currency

Figures reported in this financial statement are denominated in the currency of the primary economic environment in which the

Group carries outs its activities (functional currency). The functional currency and the presentation currency of the Group and its

parent Company is the Polish Zloty (PLN).

Transactions and balances

Transactions denominated in foreign currencies are converted to the functional currency according to the exchange rate on the

date of the transaction. Exchange rate losses and gains on settlement of transactions and on valuation of assets and liabilities

denominated in foreign currencies are reported in the profit and loss statement.

Important values based on professional judgment and

estimates

Professional judgment

The Management Board of the parent Company has performed an analysis of the feasibility of attaining the result goal as defined

for the entire duration of the 2020-2025 incentive program, and has consequently revised its projections, declaring that the most

likely outcome is that the result goal for the duration of the program cannot be attained.

Uncertainty of estimates

This section lists key assumptions regarding future conditions and other fundamental sources of uncertainty, as of the balance

sheet date, which may pose a serious risk of significant adjustments in asset and liability valuation during the coming financial year.

Asset impairment

Impairment tests which concern goodwill, trademarks and similar assets require an assessment of the value in use of each cash

generating unit. This assessment is based on a projection of future cash flows generated by individual cash generating units and

requires an estimate of the discount rate applied when conducting pending assessment of the value of said flows. The latest test

of the CD PROJEKT brand name, The Witcher trademark and of goodwill was conducted on 31 December 2021. No impairment of

any of the aforementioned assets or goodwill was identified. Asset impairment tests at individual subsidiaries were last conducted

on 31 December 2021. No circumstances were identified which would suggest impairment of these assets.

Assumptions made in the assessment of the CD PROJEKT brand name, The Witcher trademark and goodwill:

Trademarks Goodwill

Cash flow projection period 2022-2025 (4 years) 2022-2025 (4 years)

Weighted Average Cost of Capital (WACC) 11.92% 8.52%

Residual value growth rate (g) 4% 3%

Estimation of provisions

Provisions for employee pensions and incentive program benefits settled in own shares were estimated on the basis of actuarial

gains and losses.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

The Group recognizes provisions for compensation dependent on its financial result, and other bonuses. Provisions for

compensation dependent on financial result are recognized jointly for each group of employees. As a rule, provisions are computed

(depending on the specific group of employees) on the basis of net earnings reported by the Group, by a specific activity segment

or by a smaller set of operations disaggregated for the purpose of calculating such provisions. Provisions for compensation

dependent on the Group’s financial result are computed using the recursion principle – the value of provisions decreases the result

upon which such provisions are computed.

The Group also recognizes provisions for returns, expected adjustments of licensing reports or expenses which have not been

invoiced by suppliers as of the balance sheet date.

Deferred income tax assets

Group member companies recognize deferred income tax assets by anticipating future taxable revenues which may require

recognition of such assets. A decrease in future economic performance might render such assumptions invalid.

Deferred income tax liabilities

Group member companies recognize deferred income tax liabilities by anticipating future tax liabilities arising from positive

temporary differences, enabling the given provision to be consumed.

Fair value of financial instruments

Financial instruments for which there is no active market are estimated using the appropriate valuation methods. In selecting

the suitable methods and assumptions Group member companies apply their professional judgment.

Depreciation rates

Depreciation rates are determined on the basis of the expected useful economic life of tangible equity assets and intangible assets.

Group member companies perform annual validation of the assumed useful economic life of its assets, based on current estimates.

Comparability of financial statements, changes in

accounting policies and changes in estimates

Changes in accounting policies

The accounting practices applied in preparing this separate financial statement, the Management Board’s professional judgment

concerning the Group’s accounting practices as well as the main sources of uncertainty in estimations are in all material aspects

consistent with the practices applied in preparing the Consolidated Financial Statement of the CD PROJEKT Group for 2020, except

for changes in accounting policies and presentation-related adjustments described below.

Presentation changes

This consolidated financial statement for the period between 1 January and 31 December 2021 includes changes in the presentation

of certain financial data and rectification of errors. In order to ensure comparability of financial data, adjustments were also

introduced with respect to reference data for 31 December 2020. The following adjustments were made:

 The Group rectified its calculation of deferred income tax assets as of 31 December 2020 by reassigning some of the negative

temporary differences from the 19% tax rate category to the 5% tax rate category. This resulted in the following changes:

- Deferred income tax assets – adjusted by (4 179) thousand PLN

- Financial result for the current period – adjusted by (4 179) thousand PLN.

This change resulted in a reduction in equity by 4 179 thousand PLN.

Supplementary information –

CD PROJEKT Group activity

segments

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Activity segments

Presentation of results by activity segment

The scope of financial disclosures in relation to each of the Group’s activity segments is regulated by IFRS 8. For each segment

the result is based on net profit.

Description of changes in the differentiation of activity segments, or of the assessment of per-

segment profit or loss compared to the most recent annual consolidated financial statement

No changes in the differentiation of activity segments or in the assessment of per-segment profit or loss occurred in comparison

with the Group’s financial statement for the year ending on 31 December 2020.

There are no differences in the assessment of assets, liabilities, profits and losses for each segment separately and for the Group

as a whole.

Activity segments

In 2021 the Group carried out its activities in two activity segments:

 CD PROJEKT RED,

 GOG.COM.

CD PROJEKT RED

Target and scope of business activity

The CD PROJEKT RED Studio carries out its activities in the framework of CD PROJEKT S.A. (domestic holding company of the

CD PROJEKT Group), CD PROJEKT Inc. (USA), CD PROJEKT RED Vancouver Studio Ltd. (Canada) and CD PROJEKT RED STORE

sp. z o.o. (online merch store).

This activity bases upon brands held by the Company: The Witcher and Cyberpunk. It entails development and publishing

videogames, licensing the associated distribution rights, coordinating promotional activities and manufacturing, distributing or

licensing tie-in products which exploit the appeal of the Company’s brands.

In the scope of its publishing activities the Company also assumes responsibility for promotional and advertising campaigns related

to its products, and maintains direct relations with the player base via electronic and social media channels as well as through

regular participation in trade fairs.

Since 2019 the Group also operates an online merch store for fans of CD PROJEKT RED videogames, available at

gear.cdprojektred.com

GOG.COM

Target and scope of business activity

The GOG.COM platform was launched in August 2008. Its initial mission was to revitalize major PC cult classics and offer them for

sale to international customers with particular focus on English-speaking countries, i.e. United States, Canada, United Kingdom and

Australia. In 2021 the platform was offered in English, French, German, Russian, Chinese and Polish – this includes full game

localizations as well as dedicated customer support and integration with locally popular payment channels, accepting payments in

thirteen currencies. GOG.COM also carries releases for the macOS and Linux operating systems.

GOG.COM activities focus on digital distribution of videogames via the Company’s proprietary GOG.COM distribution platform and

the GOG GALAXY application. The platform enables customers to purchase games, remit payment and download game files to

their personal devices, while the GOG GALAXY application provides – among others – automatic updates, cloud saves, online and

cross-play features. It is also responsible for the online features of GWENT, as well as for processing in-game sales and payments

within the PC edition of the game.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Disclosure of activity segments

Continuing operations

Consolidation

eliminations

Total (continuing

operations)

CD PROJEKT RED GOG.COM

01.01.2021 – 31.12.2021

Sales revenues 701 739 199 983 (13 550) 888 172

sales to external clients 688 485 199 687 - 888 172

sales between segments 13 254 296 (13 550) -

Segment net profit (loss) 238 678 (29 791) 21 208 908

Continuing operations

Consolidation

eliminations

Total (continuing

operations)

CD PROJEKT RED GOG.COM

01.01.2020 – 31.12.2020*

Sales revenues 1 895 913 343 748 (100 786) 2 138 875

sales to external clients 1 795 313 343 562 - 2 138 875

sales between segments 100 600 186 (100 786) -

Segment net profit (loss) 1 129 450 20 655 43 1 150 148

* adjusted

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Segmented consolidated profit and loss account for the period between 01.01.2021 and 31.12.2021

CD PROJEKT RED GOG.COM Consolidation eliminations Total

Sales revenues 701 739 199 983 (13 550) 888 172

Revenues from sales of products 678 507 8 264 4 793 691 564

Revenues from sales of services 8 103 286 (2 524) 5 865

Revenues from sales of goods and materials 15 129 191 433 (15 819) 190 743

Cost of products, services, goods and materials sold 118 547 144 458 (12 771) 250 234

Cost of products and services sold 104 933 4 236 (1 778) 107 391

Cost of goods and materials sold 13 614 140 222 (10 993) 142 843

Gross profit (loss) from sales 583 192 55 525 (779) 637 938

Selling costs 239 160 60 382 (317) 299 225

General and administrative costs 65 413 6 735 (199) 71 949

Other operating revenues 18 999 1 640 (3 263) 17 376

Other operating expenses 34 065 20 609 (3 443) 51 231

(Impairment)/reversal of impairment of financial instruments (6) - - (6)

Operating profit (loss) 263 547 (30 561) (83) 232 903

Financial revenues 3 831 5 692 - 9 523

Financial expenses 15 036 8 380 (98) 23 318

Profit (loss) before taxation 252 342 (33 249) 15 219 108

Income tax 13 664 (3 458) (6) 10 200

Net profit (loss) 238 678 (29 791) 21 208 908

Net profit (loss) attributable to equity holders of parent entity 238 678 (29 791) 21 208 908

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Segmented consolidated profit and loss account for the period between 01.01.2020 and 31.12.2020*

CD PROJEKT RED GOG.COM Consolidation eliminations Total

Sales revenues 1 895 913 343 748 (100 786) 2 138 875

Revenues from sales of products 1 786 145 12 937 40 850 1 839 932

Revenues from sales of services 5 251 132 (3 141) 2 242

Revenues from sales of goods and materials 104 517 330 679 (138 495) 296 701

Cost of products, services, goods and materials sold 347 436 243 653 (99 725) 491 364

Cost of products and services sold 252 340 5 963 (2 198) 256 105

Cost of goods and materials sold 95 096 237 690 (97 527) 235 259

Gross profit (loss) from sales 1 548 477 100 095 (1 061) 1 647 511

Selling costs 341 633 67 344 (961) 408 016

General and administrative costs 59 426 7 195 (186) 66 435

Other operating revenues 8 835 1 469 (1 769) 8 535

Other operating expenses 25 243 813 (1 635) 24 421

(Impairment)/reversal of impairment of financial instruments (97) - - (97)

Operating profit (loss) 1 130 913 26 212 (48) 1 157 077

Financial revenues 15 912 1 169 - 17 081

Financial expenses 6 278 3 032 (101) 9 209

Profit (loss) before taxation 1 140 547 24 349 53 1 164 949

Income tax 11 097 3 694 10 14 801

Net profit (loss) 1 129 450 20 655 43 1 150 148

Net profit (loss) attributable to equity holders of parent entity 1 129 450 20 655 43 1 150 148

* adjusted

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Segmented consolidated statement of financial position as of 31.12.2021

CD PROJEKT RED GOG.COM Consolidation eliminations Total

FIXED ASSETS 906 304 17 860 (18 318) 905 846

Property, plant and equipment 100 882 5 316 9 036 115 234

Intangibles 58 382 11 - 58 393

Expenditures on development projects 347 802 2 318 75 350 195

Investment properties 61 436 - (12 448) 48 988

Goodwill 56 438 - - 56 438

Investments in subsidiaries 14 978 - (14 978) -

Shares in subsidiaries excluded from consolidation 38 520 - - 38 520

Deferrals 4 741 6 693 - 11 434

Other financial assets 178 540 - - 178 540

Deferred income tax assets 43 899 3 522 (3) 47 418

Other receivables 686 - - 686

WORKING ASSETS 1 177 941 78 794 (3 846) 1 252 889

Inventories 15 886 - - 15 886

Trade receivables 123 605 3 875 (2 187) 125 293

Current income tax receivables 98 - - 98

Other receivables 113 724 1 433 (1 659) 113 498

Deferrals 4 154 9 609 - 13 763

Other financial assets 307 765 - - 307 765

Bank deposits (maturity beyond 3 months) 265 000 - - 265 000

Cash and cash equivalents 347 709 63 877 - 411 586

TOTAL ASSETS 2 084 245 96 654 (22 164) 2 158 735

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

CD PROJEKT RED GOG.COM Consolidation eliminations Total

EQUITY 1 875 936 33 352 (14 932) 1 894 356

Equity attributable to shareholders of the parent entity 1 875 936 33 352 (14 932) 1 894 356

Share capital 100 739 136 (136) 100 739

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

Supplementary capital from sale of shares above nominal value 115 909 - - 115 909

Other reserve capital 49 007 276 (1 289) 47 994

Exchange rate differences 642 (65) 1 014 1 591

Retained earnings 2 595 - (9 027) (6 432)

Net profit (loss) for the reporting period 238 678 (29 791) 21 208 908

Noncontrolling interest equity - - - -

LONG-TERM LIABILITIES 36 079 2 691 (2 658) 36 112

Other financial liabilities 21 080 2 658 (2 658) 21 080

Other liabilities 2 860 - - 2 860

Deferred revenues 6 403 21 - 6 424

Provisions for employee benefits and similar liabilities 368 12 - 380

Other provisions 5 368 - - 5 368

SHORT-TERM LIABILITIES 172 230 60 611 (4 574) 228 267

Other financial liabilities 25 661 869 (728) 25 802

Trade liabilities 15 703 39 787 (2 110) 53 380

Current income tax liabilities 24 445 1 - 24 446

Other liabilities 4 134 7 567 (1 659) 10 042

Deferred revenues 26 072 5 476 - 31 548

Provisions for retirement benefits and similar liabilities 6 1 - 7

Other provisions 76 209 6 910 (77) 83 042

TOTAL EQUITY AND LIABILITIES 2 084 245 96 654 (22 164) 2 158 735

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Segmented consolidated statement of financial position as of 31.12.2020*

CD PROJEKT RED GOG.COM Consolidation eliminations Total

FIXED ASSETS 744 444 32 750 (17 195) 759 999

Property, plant and equipment 102 971 4 185 (1 807) 105 349

Intangibles 59 576 214 - 59 790

Expenditures on development projects 384 601 22 210 (13) 406 798

Investment properties 48 841 - - 48 841

Goodwill 56 438 - - 56 438

Investments in subsidiaries 15 079 - (15 079) -

Shares in subsidiaries excluded from consolidation 8 195 - - 8 195

Deferred income tax assets 11 299 - (296) 11 003

Deferrals 5 535 6 141 - 11 676

Other financial assets 51 588 - - 51 588

Other receivables 321 - - 321

WORKING ASSETS 2 012 477 179 990 (62 167) 2 130 300

Inventories 6 957 - - 6 957

Trade receivables 1 255 595 10 102 (60 094) 1 205 603

Other receivables 50 135 22 148 (2 073) 70 210

Deferrals 3 478 9 905 - 13 383

Other financial assets 106 365 79 - 106 444

Bank deposits (maturity beyond 3 months) 164 368 - - 164 368

Cash and cash equivalents 425 579 137 756 - 563 335

TOTAL ASSETS 2 756 921 212 740 (79 362) 2 890 299

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

CD PROJEKT RED GOG.COM Consolidation eliminations Total

EQUITY 2 134 987 63 245 (15 055) 2 183 177

Equity attributable to shareholders of the parent entity 2 134 987 63 245 (15 055) 2 183 177

Share capital 100 655 136 (136) 100 655

Supplementary capital 738 225 42 141 (5 515) 774 851

Supplementary capital from sale of shares above nominal value 113 844 - - 113 844

Other reserve capital 46 560 378 (1 391) 45 547

Exchange rate differences 142 (65) 1 014 1 091

Retained earnings 6 111 - (9 070) (2 959)

Net profit (loss) for the reporting period 1 129 450 20 655 43 1 150 148

Noncontrolling interest equity - - - -

LONG-TERM LIABILITIES 166 079 1 764 (1 690) 166 153

Other financial liabilities 16 006 1 403 (1 403) 16 006

Other liabilities 3 173 - - 3 173

Deferred income tax liabilities - 287 (287) -

Deferred revenues 910 53 - 963

Provisions for employee benefits and similar liabilities 377 21 - 398

Other provisions 145 613 - - 145 613

SHORT-TERM LIABILITIES 455 855 147 731 (62 617) 540 969

Other financial liabilities 2 875 508 (450) 2 933

Trade liabilities 73 633 101 888 (60 077) 115 444

Current income tax liabilities 1 384 358 - 1 742

Other liabilities 4 980 30 227 (2 073) 33 134

Deferred revenues 43 611 4 147 - 47 758

Provisions for retirement benefits and similar liabilities 3 1 - 4

Other provisions 329 369 10 602 (17) 339 954

TOTAL EQUITY AND LIABILITIES 2 756 921 212 740 (79 362) 2 890 299

* adjusted

Supplementary information –

additional notes and clarifications

regarding the consolidated financial

statement

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 1. Sales revenues

Pursuant to IFRS 15 revenues from sales of products, goods and services, less the applicable value added tax and any discounts

or rebates, are recognized following (or during) discharge of the Group’s contractual duty to transfer the pledged goods or services

(assets) to the client.

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Sales revenues 888 172 2 138 875

Revenues from sales of products 691 564 1 839 932

Revenues from sales of services 5 865 2 242

Revenues from sales of goods and materials 190 743 296 701

Other revenues 26 899 25 616

Other operating revenues 17 376 8 535

Financial revenues 9 523 17 081

Total 915 071 2 164 491

Sales revenues by territory **

01.01.2021 – 31.12.2021 01.01.2020 – 31.12.2020*

PLN % PLN %

Domestic sales 21 469 2.42% 79 528 3.72%

Exports, including: 866 703 97.58% 2 059 347 96.28%

Europe 140 264 15.79% 374 300 17.50%

North America 650 090 73.19% 1 500 985 70.18%

South America 2 894 0.33% 7 028 0.33%

Asia 66 090 7.44% 137 826 6.44%

Australia 6 837 0.77% 35 965 1.68%

Africa 528 0.06% 3 243 0.15%

Total 888 172 100% 2 138 875 100%

* adjusted

Revenues from exports reported for Europe include the Russian market which, in previous financial statements, had been

aggregated with the figure reported for Asia.

** The presented data reflects the territories of residence of the immediate clients of Group member companies. For

CD PROJEKT S.A. this means distributors, while in the scope of retail distribution carried out by GOG.COM sp. z o.o., CD PROJEKT

RED STORE sp. z o.o. and CD PROJEKT Inc. – final customers.

Sales revenues by product type

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Own products 691 564 1 839 932

External products 190 743 296 701

Other revenues 5 865 2 242

Total 888 172 2 138 875

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Sales revenues by distribution channel

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Videogames – box editions 87 222 163 645

Videogames – digital editions 768 202 1 943 240

Other revenues 32 748 31 990

Total 888 172 2 138 875

Note 2. Operating expenses

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Depreciation of PP&E, intangibles, expenditures on development projects and

investment properties, including:

17 764 13 559

depreciation of leased buildings 2 094 1 297

depreciation of leased vehicles 246 268

Consumption of materials and energy 3 260 3 443

Bought-in services, including: 184 887 213 558

short-term leases and leases of low-value assets 719 667

Taxes and fees 1 268 1 391

Employee compensation, social security and other benefits 160 865 240 666

Business travel 570 424

Use of company cars 213 176

Cost of goods and materials sold 142 843 235 259

Cost of products and services sold 107 391 256 105

Other expenses 2 347 1 234

Total 621 408 965 815

Selling costs 299 225 408 016

General and administrative costs 71 949 66 435

Cost of products, services, goods and materials sold 250 234 491 364

Total 621 408 965 815

Note 3. Other operating revenues and expenses

Other operating revenues

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Subsidies 7 995 816

Revenues from lease contracts 6 186 5 688

Reinvoicing revenues 1 309 992

Other sales 515 270

Compensation for damages received 480 169

Dissolution of unused provisions for expenses 408 18

PP&E and goods received free of charge 284 505

Profit from sale of PP&E 61 19

Other miscellaneous operating revenues 138 58

Total other operating revenues 17 376 8 535

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Other operating expenses

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Impairment allowances PP&E, intangibles and expenditures on development projects 35 820 -

Provisions for potential tax liabilities 4 309 -

Own cost of leases 4 002 3 429

Depreciation of investment properties 1 788 1 462

Provisions for uninsured portion of costs related to the legal settlement in the USA 1 502 -

Reinvoicing expenses 1 311 991

Disposal of materials and goods 965 6 068

Disposal of PP&E and intangibles 774 52

Donations 445 2 300

Liquidation of investment properties 51 1 630

Other selling costs 34 -

Help Me Refund campaign – refunds 33 8 238

Settlement of stocktaking shortages 9 24

Other miscellaneous operating expenses 188 227

Total other operating expenses 51 231 24 421

Following the decision to change the underlying technology and conclusion of a licensing and partnership agreement with Epic

Games International S.à r.l. CD PROJEKT S.A. gained access to multiplayer solutions available in Unreal Engine 4 and 5.

Consequently, the Company abandoned further development work on adding multiplayer elements to REDEngine and reassigned

the corresponding to-date expenditures (20 806 thousand PLN) from Fixed assets to Other operating expenses.

GOG.COM revised its earlier projections due to a change in expectations which do not constitute rectification of an error, concerning

depreciation of existing client-centric technologies and features, which have been deemed to not support sales, recognizing 13 775

thousand PLN in Other operating expenses.

Note 4. Financial revenues and expenses

Financial revenues

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Revenues from interest 1 550 7 812

on bonds 1 321 193

on loans 161 37

on short-term bank deposits 68 7 582

Other financial revenues 7 973 9 269

settlement and assessment of derivative financial instruments 7 962 9 265

management Board forward contracts 6 -

other miscellaneous financial revenues 5 4

Total financial revenues 9 523 17 081

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Financial expenses

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Interest payments 2 797 659

on potential budget commitments 1 437 -

on bonds 787 224

on lease agreements 535 400

on budget commitments 38 35

Other financial expenses 20 521 8 550

surplus negative exchange rate differences 17 053 7 339

impairment allowances on long-term financial assets 1 668 -

losses from maturation of bonds 1 436 1 081

bond purchase fees 364 128

other miscellaneous financial expenses - 2

Total financial expenses 23 318 9 209

Net balance of financial activities (13 795) 7 872

Note 5. Current and deferred income tax

The main components of the tax burden for the years ending on 31 December 2021 and 31 December 2020 respectively are as

follows:

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Current income tax 46 500 28 842

For the fiscal year 40 291 15 088

Withholding tax paid abroad 5 864 13 762

Adjustments from preceding years 345 (8)

Deferred income tax (36 300) (14 041)

Due to creation and reversal of temporary differences (36 300) (14 041)

Tax burden reported in profit and loss account 10 200 14 801

Deferred tax reported in the profit and loss account represents the difference between the deferred tax provisions and assets at

the beginning and end of each reporting period.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Current income tax

01.01.2021 – 31.12.2021 01.01.2020 – 31.12.2020*

Income from other

sources

Income from

capital

investments

Income from other

sources

Income from

capital

investments

Pre-tax income 238 510 (19 402) 1 157 658 7 291

Revenues increasing the tax

base

9 588 1 606 13 249 11 722

Revenues applicable to future

reporting periods

908 111 - (972 621) -

Tax-exempt revenues (18 357) 5 530 (2 776) (7 024)

Expenses reducing the tax base (14 486) - (518 259) (214 259)

Non-deductible expenses (76 918) 19 983 467 969 580

Profit (loss) reported by foreign

entities

812 - (785) -

Income taxable in Poland 1 047 260 7 717 144 435 (201 690)

Deductions from income – losses (226 106) (7 717) (1 674) -

Deductions from income –

donations

- - (2 200) -

Deductions from income – R&D

fiscal relief

(31 741) - (91 048) -

Deductions from income – tax-

exempt income

(1 405) - (1 707) -

Tax base, including: 788 008 - 47 806 (201 690)

Subject to 5% tax rate (profit) 805 825 - 265 536 -

Subject to 5% tax rate (loss) - - (226 106) -

Subject to 19% tax rate (profit) - - 8 376 282

Subject to 19% tax rate (loss) (17 817) - - (201 972)

Tax base abroad

Income tax due in Poland

(rate: 5%)

40 291 - 13 277 -

Income tax due in Poland

(rate: 19%)

- - 1 591 54

Income tax due abroad - - 166 -

Income tax 40 291 - 15 034 54

Effective tax rate 4.28% - 1.28% 0.74%

* adjusted

Current income tax is estimated by applying a rate of 19% to the reported tax base from revenues from other sources, and a rate of

5% to the reported tax base from eligible IP-related revenues as specified in the IP BOX tax relief regulation.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Negative temporary differences requiring recognition of deferred tax assets

31.12.2020*

Differences

affecting

deferred tax

aggregated

with financial

result

Differences

affecting

deferred tax

aggregated with

other

comprehensive

income

31.12.2021

Provisions for other employee benefits 402 (17) - 385

Provisions for compensation dependent on

financial result and other compensation

199 817 (160 274) - 39 543

Tax loss 227 028 (211 895) - 15 133

Negative exchange rate differences 24 259 (20 984) - 3 275

Difference between balance sheet value and

tax value of expenditures on development

projects

3 045 21 735 - 24 780

Employee compensation and social security

expenses payable in future reporting periods

25 36 - 61

Deferred revenues associated with adding

funds to virtual wallets and participation in the

additional benefits programs

2 820 581 - 3 401

Other provisions 221 280 (172 439) - 48 841

R&D tax relief 309 826 (5 935) - 303 891

Advances recognized as taxable income 4 036 (2 567) - 1 469

Difference between net balance sheet value

and net tax value of PP&E and intangibles

- 12 - 12

Valuation of forward contracts - 142 - 142

Other sources - 83 - 83

Total negative temporary differences 992 538 (551 522) - 441 016

subject to 5% tax rate 647 194 (586 771) - 60 423

subject to 19% tax rate 345 344 35 249 - 380 593

withholding tax levied abroad - 1 209 - 1 209

Deferred tax assets 97 976 (22 626) - 75 350

* adjusted

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Positive temporary differences requiring recognition of deferred tax liabilities

31.12.2020*

Differences

affecting

deferred tax

aggregated

with financial

result

Differences

affecting

deferred tax

aggregated

with other

comprehensive

income

31.12.2021

Difference between net balance sheet value

and net tax value of PP&E and intangibles

13 314 1 117 - 14 431

Income in the current period invoiced in the

following period / accrued income

1 200 377 (1 071 120) - 129 257

Positive exchange rate differences 22 117 (7 154) - 14 963

Estimation of bonds 610 (65) (545) -

Estimation of forward contracts 6 914 (6 914) - -

Difference between net balance sheet value

and net tax value of expenditures on

development projects

305 339 (32 405) - 272 934

Other sources 136 (50) - 86

Total positive temporary differences 1 548 807 (1 116 591) (545) 431 671

subject to 5% tax rate 1 480 720 (1 094 396) - 386 324

subject to 19% tax rate 68 087 (22 195) (545) 45 347

Deferred tax liabilities 86 973 (58 937) (104) 27 932

* adjusted

Deferred income tax was estimated in part by applying the standard corporate income tax rate of 19% (applicable to revenues from

other sources) and in part by applying the preferential rate of 5% (applicable to eligible IP-related revenues under the IP BOX tax

relief regulation). In determining the correct rate to apply to temporary differences, the Group relied on projections regarding the

tax base to which each temporary difference is likely to apply.

Net balance of deferred tax assets/liabilities

31.12.2021 31.12.2020*

Deferred tax assets 75 350 97 976

Deferred tax liabilities 27 932 86 973

Net deferred tax assets/(liabilities) 47 418 11 003

* adjusted

Note 6. Discontinued operations

No operations were discontinued by the Group in either the current or the preceding financial year.

Note 7. Earnings per share

Base earnings per share are calculated by dividing the net profit for the reporting period attributable to ordinary equity holders of

the parent Company by a weighted average of the number of ordinary shares issued valid during the reporting period. Diluted

earnings per share are calculated by dividing the net profit for the reporting period attributable to ordinary equity holders of the

parent Company (following deduction of interest on redeemable privileged shares converted into ordinary shares) by a weighted

average of the number of ordinary shares issued valid during the reporting period (adjusted for the effect of dilutive options and

dilutive redeemable preference shares convertible into ordinary shares).

During the 12-month period ending on 31 December 2021 dilutive instruments comprised entitlements and subscription warrants

assigned under the incentive programs and permitting certain parties to claim, in the future, shares of the parent Company.

Information regarding the quantity of entitlements assigned is provided in Note 38.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Net profit and number of shares for the purpose of calculating earnings per share

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020*

Average weighted number of shares for the purpose of calculating base earnings per

share (units)

100 717 756 96 461 316

Average weighted number of shares for the purpose of calculating diluted earnings

per share (units)

100 763 966 100 465 283

Net profit/ (loss) for the purpose of calculating diluted earnings per share 208 908 1 150 148

Base net earnings per share (PLN) 2.07 11.92

Diluted net earnings per share (PLN) 2.07 11.45

* adjusted

Note 8. Dividends paid out (or declared) and collected

On 25 May 2021 the Ordinary General Meeting of CD PROJEKT S.A. voted to allocate part of the parent Company’s profit obtained

in 2020 to a dividend payable to shareholders. In line with the corresponding resolution, on 8 June 2021 the parent Company paid

out a dividend in the amount of 503 694 thousand PLN, i.e. 5 PLN per share. The dividend applied to 100 738 800 shares of the

parent Company.

Note 9. Disclosure of other components of the reported comprehensive

income

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020*

Net profit (loss) 208 908 1 150 148

Exchange rate differences on estimation of foreign entities 500 193

Estimation of foreign treasury bonds 4 238 545

Tax effect of bond estimation 104 (103)

Total comprehensive income 213 750 1 150 783

Total comprehensive income attributable to noncontrolling interests - -

Total comprehensive income attributable to parent entity 213 750 1 150 783

* adjusted

Note 10. Property, plant and equipment

Ownership structure of property, plant and equipment

31.12.2021 31.12.2020

Wholly owned 98 525 86 487

Held under a lease contracts 16 709 18 862

Total 115 234 105 349

PP&E whose title is restricted

31.12.2021 31.12.2020

Held under a financial lease contract 16 709 18 862

Total 16 709 18 862

Contractual commitments for future acquisition of PP&E

31.12.2021 31.12.2020

Leasing of passenger cars 429 195

Total 429 195

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Changes in PP&E (by category) between 01.01.2020 and 31.12.2021

Land holdings

Buildings and

structures

Civil engineering

objects

Machinery and

equipment

Vehicles

Other fixed assets

Fixed assets under

construction

Total

Gross carrying amount

as of 01.01.2021

35 986 67 795 1 834 39 741 2 961 3 145 1 671 153 133

Increases from: - 8 662 53 13 917 1 263 1 814 9 797 35 506

purchase - 540 53 13 614 17 1 583 9 797 25 604

lease agreements

concluded

- 77 - - 1 236 - - 1 313

reassignment from

PP&E under

construction

- 7 955 - 286 - 231 - 8 472

other - 90 - 17 10 - - 117

Reductions from: - 596 11 1 531 981 29 9 141 12 289

sale - - - 400 365 17 - 782

disposal - 596 11 1 131 616 12 - 2 366

reassignment from

PP&E under

construction

- - - - - - 9 141 9 141

Gross carrying amount

as of 31.12.2021

35 986 75 861 1 876 52 127 3 243 4 930 2 327 176 350

Depreciation as of

01.01.2021

588 14 311 275 28 876 1 710 2 024 - 47 784

Increases from: 567 5 926 286 7 621 502 674 - 15 576

depreciation 567 5 926 286 7 621 502 674 - 15 576

Reductions from: - 440 3 1 352 420 29 - 2 244

sale - - - 340 256 17 - 613

disposal - 440 3 1 012 164 12 - 1 631

Depreciation as of

31.12.2021

1 155 19 797 558 35 145 1 792 2 669 - 61 116

Impairment allowances

as of 01.01.2021

- - - - - - - -

Impairment allowances

as of 31.12.2021

- - - - - - - -

Net carrying amount

as of 01.01.2021

35 398 53 484 1 559 10 865 1 251 1 121 1 671 105 349

Net carrying amount

as of 31.12.2021

34 831 56 064 1 318 16 982 1 451 2 261 2 327 115 234

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Changes in PP&E (by category) between 01.01.2020 and 31.12.2020

Land holdings

Buildings and

structures

Civil engineering

objects

Machinery and

equipment

Vehicles

Other fixed assets

Fixed assets under

construction

Total

Gross carrying amount

as of 01.01.2020

35 986 65 937 1 587 31 043 2 234 2 623 151 139 561

Increases from: - 2 401 251 8 836 874 532 2 103 14 997

purchase - 323 27 8 726 - 279 2 103 11 458

lease agreements

concluded

- 927 94 - 874 - - 1 895

reassignment from

PP&E under

construction

- - 130 48 - 253 - 431

reassignment from

investment

properties

- 1 151 - - - - - 1 151

receipt free of

charge

- - - 62 - - - 62

Reductions from: - 543 4 138 147 10 583 1 425

sale - - - 129 137 - - 266

disposal - 503 4 6 - 10 41 564

reassignment from

PP&E under

construction

- - - - - - 542 542

other - 40 - 3 10 - - 53

Gross carrying amount

as of 31.12.2020

35 986 67 795 1 834 39 741 2 961 3 145 1 671 153 133

Depreciation as of

01.01.2020

84 9 322 53 21 945 1 327 1 563 - 34 294

Increases from: 504 5 538 223 7 061 523 466 - 14 315

depreciation 504 5 513 223 7 061 523 466 - 14 290

reassignment from

investment

properties

- 25 - - - - - 25

Reductions from: - 549 1 130 140 5 - 825

sale - - - 127 137 - - 264

disposal - 503 1 - - 5 - 509

other - 46 - 3 3 - - 52

Depreciation as of

31.12.2020

588 14 311 275 28 876 1 710 2 024 - 47 784

Impairment allowances

as of 01.01.2020

- - - - - - - -

Impairment allowances

as of 31.12.2020

- - - - - - - -

Net carrying amount

as of 01.01.2020

35 902 56 615 1 534 9 098 907 1 060 151 105 267

Net carrying amount

as of 31.12.2020

35 398 53 484 1 559 10 865 1 251 1 121 1 671 105 349

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

PP&E under construction

01.01.2021

Expenditures

in fiscal year

Expenditure

settlements

31.12.2021

Redevelopment of property at Jagiellońska 74 1 614 9 253 8 855 2 012

Other 57 544 286 315

Total 1 671 9 797 9 141 2 327

01.01.2020

Expenditures

in fiscal year

Expenditure

settlements

31.12.2020

Redevelopment of property at Jagiellońska 74 54 2 054 494 1 614

Other 97 49 89 57

Total 151 2 103 583 1 671

Usufruct of PP&E held under lease agreements

31.12.2021 31.12.2020

Gross

value

Depreciation Net value

Gross

value

Depreciation Net value

Land holdings 14 540 464 14 076 14 540 260 14 280

Immovable properties 8 037 6 698 1 339 7 635 3 962 3 673

Civil engineering objects 94 47 47 94 - 94

Vehicles 1 504 257 1 247 1 029 214 815

Total 24 175 7 466 16 709 23 298 4 436 18 862

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 11. Intangibles and expenditures on development projects

Changes in intangibles and expenditures on development projects between

01.01.2021 and 31.12.2021

Development

projects

progress

Development

projects

completed

Trademarks

Patents and

licenses

Copyrights

Computer

software

Goodwill

Intangible assets

under

construction

Others

Total

Gross carrying

amount as of

01.01.2021

28 887 841 377 33 199

2 154

18 331 32 294

56 438

1 158 -

1 013 838

Increases from: 66 891 609 -

157

- 3 860

209 -

71 726

purchases - - -

157

- 2 531

209 -

2 897

reassignment

from intangible

assets under

construction

- - -

- 1 329

- -

1 329

reassignment

from development

projects in

progress

- 457 -

- -

457

reassignment of

expenditures on

development

projects under

a consortium

agreement

- 152 -

- -

152

own creation 66 891 - -

- -

66 891

Reductions from: 609 - -

157

- 136

1 348 -

2 250

sale - - -

- -

19 -

disposal - - -

- 136

- -

227

reassignment

from intangible

assets under

construction

- - -

- -

1 329 -

1 329

reassignment

from development

projects in

progress

457 - -

- -

457

reassignment of

expenditures on

development

projects under

a consortium

agreement

152 - -

- -

152

Gross carrying

amount as of

31.12.2021

95 169 841 986 33 199

2 154

18 331 36 018

56 438

19 -

1 083 314

Depreciation as of

01.01.2021

- 463 466 -

1 626

48 25 672

- -

490 812

Increases from: - 88 912 -

459

125 3 652

- -

93 148

depreciation - 88 912 -

459

125 3 652

- -

93 148

Reductions from: - - -

157

- 97

- -

254

sale - - -

- -

disposal - - -

- 97

- -

188

Depreciation as of

31.12.2021

- 552 378 -

1 928

173 29 227

- -

583 706

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Impairment

allowances as of

01.01.2021

- - -

- -

Increases from: 20 806 13 776 -

- -

34 582

impairment 20 806 13 776 -

- -

34 582

Impairment

allowances as of

31.12.2021

20 806 13 776 -

- -

34 582

Net carrying amount

as of 01.01.2021

28 887 377 911 33 199

528

18 283 6 622

56 438

1 158 -

523 026

Net carrying amount

as of 31.12.2021

74 363 275 832 33 199

226

18 158 6 791

56 438

19 -

465 026

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Changes in intangibles and expenditures on development projects between

01.01.2020 and 31.12.2020*

Development

projects

progress

Development

projects

completed

Trademarks

Patents and

licenses

Copyrights

Computer

software

Goodwill

Intangible assets

under

construction

Others

Total

Gross carrying

amount as

of 01.01.2020

337 578 252 238 33 199

3 293

17 718 30 299

56 438

1 228 1

731 992

Increases from: 280 448 589 139 -

2 086

613 5 347

1 330 -

878 963

purchases - - -

1 803

613 4 229

1 330 -

7 975

reassignment

from intangible

assets under

construction

- - -

283

- 1 118

- -

1 401

reassignment

from development

projects in

progress

- 589 139 -

- -

589 139

own creation 280 448 - -

- -

280 448

Reductions from: 589 139 - -

3 225

- 3 352

1 400 1

597 117

disposal - - -

3 225

- 3 352

- 1

6 578

reassignment

from intangible

assets under

construction

- - -

- -

1 400 -

1 400

reassignment

from development

projects in

progress

589 139 - -

- -

589 139

Gross carrying

amount as of

31.12.2020

28 887 841 377 33 199

2 154

18 331 32 294

56 438

1 158 -

1 013 838

Depreciation as of

01.01.2020

- 203 968 -

1 610

- 24 364

- 1

229 943

Increases from: - 259 498 -

3 241

48 4 657

- -

267 444

depreciation - 259 498 -

3 241

48 4 657

- -

267 444

Reductions from: - - -

3 225

- 3 349

- 1

6 575

disposal - - -

3 225

- 3 349

- 1

6 575

Depreciation as of

31.12.2020

- 463 466 -

1 626

48 25 672

- -

490 812

Impairment

allowances as of

01.01.2020

- - -

- -

Impairment

allowances as of

31.12.2020

- - -

- -

Net carrying amount

as of 01.01.2020

337 578 48 270 33 199

1 683

17 718 5 935

56 438

1 228 -

502 049

Net carrying amount

as of 31.12.2020

28 887 377 911 33 199

528

18 283 6 622

56 438

1 158 -

523 026

* adjusted

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Ownership structure of intangible assets

31.12.2021 31.12.2020

Wholly owned 57 830 59 072

Held under lease contracts 563 718

Total 58 393 59 790

Intangible assets under construction

01.01.2021

Expenditures

incurred in

financial year

Expenditure

settlements

31.12.2021

Financial analytics system 11 - - 11

HR support system 1 129 201 1 330 -

Document flow system - 8 - 8

Game licenses, GOG 18 - 18 -

Total 1 158 209 1 348 19

01.01.2020

Expenditures

incurred in

financial year

Expenditure

settlements

31.12.2020

Financial analytics system 61 29 79 11

HR support system 655 474 - 1 129

Musical score 77 126 203 -

Document flow system 323 76 399 -

Game licenses, GOG 18 - - 18

E-commerce platform 94 625 719 -

Total 1 228 1 330 1 400 1 158

Contractual commitments for future acquisition of intangible assets

None reported.

Intangible assets whose title is restricted

None reported.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 12. Goodwill

Goodwill acquired in business combinations and acquisition of enterprises

CD Projekt Red

sp. z o.o.

Strange New

Things

(enterprise)

Total

Gross goodwill as of 01.01.2021 46 417 10 021 56 438

Gross goodwill as of 31.12.2021 46 417 10 021 56 438

Impairment allowances as of 01.01.2021 - - -

Impairment allowances as of 31.12.2021 - - -

Net goodwill as of 01.01.2021 46 417 10 021 56 438

Net goodwill as of 31.12.2021 46 417 10 021 56 438

Goodwill impairment tests require an assessment of the value in use of each cash generating unit. In performing this assessment

the parent Company developed projections of future cash flows generated by individual cash generating units and estimated the

discount rate applied when conducting pending assessment of the value of said flows. The latest test of goodwill was conducted

by the parent Company on 31 December 2021. No impairment of goodwill was identified.

Note 13. Investment properties

The parent Company owns the property complex at Jagiellońska 74 and Jagiellońska 76 in Warsaw. Since part of this complex is

being leased to other entities, including other member companies of the CD PROJEKT Group, the Group has decided to report it in

part as an investment property. The remaining part of both properties is used by the Group for its own purposes.

Properties purchased by the Group are estimated at purchase cost less depreciation.

Changes in the value of investment properties between 01.01.2021 and 31.12.2021,

and between 01.01.2020 and 31.12.2020

31.12.2021 31.12.2020

Gross balance sheet value at beginning of period 50 650 45 296

Increases from: 2 024 8 179

activation of costs 2 024 8 179

Reductions from: 56 2 825

disposal 56 1 674

reassignment to other asset categories - 1 151

Gross balance sheet value at end of period 52 618 50 650

Depreciation at beginning of period 1 809 336

Increases from: 1 826 1 541

depreciation 1 826 1 541

Reductions from: 5 68

disposal 5 43

reassignment to other asset categories - 25

Depreciation at end of period 3 630 1 809

Impairment allowances at beginning of period - -

Increases - -

Reductions - -

Impairment allowances at end of period - -

Net balance sheet value at end of period 48 988 48 841

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Contractual commitments for acquisition of investment properties

None reported.

Note 14. Investments in subsidiaries excluded from consolidation

Investments in subsidiaries held at purchase price

31.12.2021 31.12.2020

Shares in subsidiaries 38 520 8 195

Total 38 520 8 195

Changes in investments in subsidiaries

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

At beginning of period 8 195 8 025

Increases from: 32 203 170

acquisition/incorporation of subsidiary 32 039 -

capital contributions mandated by the incentive program 164 170

Reductions from: 1 878 -

sale of subsidiary or shares therein 19 -

creation of impairment allowances 1 668 -

capital contributions mandated by the incentive program 191 -

At end of period 38 520 8 195

Investments in subsidiaries as of 31.12.2021

CD PROJEKT Co.,

Ltd. (in liquidation)

Spokko

sp. z o.o.

CD PROJEKT RED

Vancouver Studio

Ltd.

The Molasses

Flood LLC

Registered office Shanghai Warsaw Vancouver Boston

Percentage of shares held as of

31.12.2021

100% 74% 100% 60%

Percentage of votes controlled

as of 31.12.2021

100% 74% 100% 60%

Capital investment - 6 481 7 679 24 360

Investments in subsidiaries as of 31.12.2020

CD PROJEKT Co.,

Ltd.

Spokko sp. z o.o.

Registered office Shanghai Warsaw

Percentage of shares held as

of 31.12.2020

100% 75%

Percentage of votes controlled

as of 31.12.2020

100% 75%

Capital investment 1 695

6 500

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 15. Other financial assets

31.12.2021 31.12.2020

Loans granted 8 890 4 520

Bonds 477 415 146 985

Derivative financial instruments - 6 527

Other financial assets, including: 486 305 158 032

short-term assets 307 765 106 444

long-term assets 178 540 51 588

In 2021, under the loan agreement concluded on 12 November 2020, two batches of the corresponding loan (out of a total of three)

were transferred to Spokko Sp. z o.o. on 25 February and 30 March 2021 respectively (the first batch having been disbursed on

27 November 2020). The repayment period was extended in accordance with an annex signed on 18 October 2021. Consequently,

the loan is now repayable by 30 June 2022. The repayment period for the loan granted under the agreement of 25 May 2020 was

also extended – an annex was signed on 21 December 2021, providing for an extension until 30 June 2022. In 2021

Spokko sp. z o.o. was also granted another loan by CD PROJEKT S.A. in accordance with an agreement concluded on 5 May 2021,

with five of a total of seven batches being disbursed on 28 May 2021, 29 June 2021, 29 July 2021, 25 February 2022 and 30 March

2022 respectively. This loan is repayable by 30 June 2022. All of the aforementioned loans are subject to variable interest rates

which are updated on a quarterly basis.

Note 16. Inventories

31.12.2021 31.12.2020

Goods 15 843 6 875

Other materials 43 82

Gross inventories 15 886 6 957

Inventory impairment allowances - -

Net inventories 15 886 6 957

The “Other materials” line item represents marketing materials.

Changes in inventory impairment allowances

None reported.

Inventories pledged as collateral for liabilities

Not applicable.

Note 17. Trade receivables

31.12.2021 31.12.2020

Gross trade receivables 125 372 1 205 729

Impairment allowances 79 126

Trade receivables 125 293 1 205 603

from affiliates 1 231 81

from external entities 124 062 1 205 522

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Changes in impairment allowances on trade receivables

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

FROM AFFILIATES

Impairment allowances at beginning of period - -

Increases - -

Reductions - -

Impairment allowances at end of period - -

FROM OTHER ENTITIES

Impairment allowances at beginning of period 126 29

Increases, including: 12 107

recognition of impairment allowances on past-due and contested receivables 12 107

Reductions, including: 59 10

consumption of impairment allowances 53 -

elimination of impairment allowances due to collection of receivables - 2

dissolution of impairment allowances 6 8

Impairment allowances at end of period 79 126

Aggregate impairment allowances at end of period (affiliates and other entities) 79 126

Current and overdue trade receivables as of 31.12.2021

Total Not overdue

Days overdue

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

AFFILIATES

gross receivables 1 231 223 1 008 - - - -

non-fulfillment ratio - 0% 0% 0% 0% 0% 0%

impairment

allowances as

determined by non-

fulfillment ratio

- - - - - - -

impairment

allowances as

individually assessed

- - - - - - -

total expected credit loss - - - - - - -

Net receivables 1 231 223 1 008 - - - -

Total Not overdue

Days overdue

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

OTHER ENTITIES

gross receivables 124 141 123 851 162 - 8 - 120

non-fulfillment ratio - 0% 0% 0% 0% 0% 0%

impairment

allowances as

determined by non-

fulfillment ratio

- - - - - - -

impairment

allowances as

individually assessed

79 - - - - - 79

total expected credit loss 79 - - - - - 79

Net receivables 124 062 123 851 162 - 8 - 41

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Total

- - - - - - -

gross receivables 125 372 124 074 1 170 - 8 - 120

impairment

allowances

79 - - - - - 79

Net receivables 125 293 124 074 1 170 - 8 - 41

Current and overdue trade receivables as of 31.12.2020

Total Not overdue

Days overdue

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

AFFILIATES

gross receivables 81 81 - - - - -

non-fulfillment ratio - 0% 0% 0% 0% 0% 0%

impairment

allowances as

determined by non-

fulfillment ratio

- - - - - - -

impairment

allowances as

individually assessed

- - - - - - -

total expected credit loss - - - - - - -

Net receivables 81 81 - - - - -

Total Not overdue

Days overdue

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

OTHER ENTITIES

gross receivables 1 205 648 1 205 333 144 2 36 1 132

non-fulfillment ratio - 0% 0% 0% 0% 0% 0%

impairment

allowances as

determined by non-

fulfillment ratio

- - - - - - -

impairment

allowances as

individually assessed

126 - - - - - 126

total expected credit loss 126 - - - - - 126

Net receivables 1 205 522 1 205 333 144 2 36 1 6

Total

gross receivables 1 205 729 1 205 414 144 2 36 1 132

impairment

allowances

126 - - - - - 126

Net receivables 1 205 603 1 205 414 144 2 36 1 6

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Trade receivables by currency

31.12.2021 31.12.2020

currency

units

PLN

equivalent

currency

units

PLN

equivalent

PLN* 115 457 115 457 1 144 283 1 144 283

EUR 1 317 6 060 3 621 16 708

USD 449 1 821 11 115 41 775

CAD 348 1 109 129 382

RUB 4 033 219 13 550 679

GBP 30 166 91 465

AUD 55 163 92 266

BRL 158 115 670 485

CNY 81 52 132 76

SEK 104 47 411 189

CHF 9 41 29 125

DKK 47 29 169 105

NOK 30 14 148 65

Total 0 125 293

1 205 603

* This field also aggregates receivables obtained in association with foreign licensing reports during the current period but invoiced

in future reporting periods. For the purposes of this financial statement, such receivables are denominated directly in PLN.

Note 18. Other receivables

31.12.2021 31.12.2020

Other gross receivables, including: 114 916 71 263

tax returns except corporate income tax 77 067 36 342

advance payments associated with expenditures on development projects 30 435 24 353

advance payments for supplies 5 391 4 643

deposits 998 619

provisions for sales revenues - advances 79 70

prepayments associated with purchases of PP&E and intangibles 34 38

provisions for sales revenues - advances 67 119

settlements with board members at the Group’s member companies 7 7

employee compensation settlements 5 26

settlements with operators of payment processing platforms - 4 173

prepayments associated with licensing royalties - 86

others 101 55

Impairment allowances 732 732

Total other gross receivables 114 184 70 531

short-term 113 498 70 210

long-term 686 321

The “tax returns except corporate income tax” line item also aggregates withholding tax levied at source, in the amount of 70 887

thousand PLN, subject to deduction in the Company’s annual CIT declaration following receipt of certificates stating that this tax

has been paid abroad by the Company’s foreign partners

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

31.12.2021 31.12.2020

Other gross receivables 114 916 71 263

Impairment allowances 732 732

Other receivables, including 114 184 70 531

from affiliates 7 7

from external entities 114 177 70 524

Other receivables subject to court proceedings

31.12.2021 31.12.2020

Other receivables subject to court proceedings 732 732

Impairment allowances on contested receivables 732 732

Net other receivables subject to court proceedings - -

Other receivables by currency

31.12.2021 31.12.2020

currency

units

PLN

equivalent

currency

units

PLN

equivalent

PLN* 77 977 77 977 37 363 37 363

USD 4 660 17 680 4 093 15 344

JPY 496 092 17 214 496 092 17 215

EUR 189 871 104 464

CNY 336 201 3 2

GBP 40 200 22 110

CHF 8 36 7 32

BRL 3 3 - -

SEK 4 2 - -

DKK - - 2 1

Total 0 114 184

70 531

* This field also aggregates withholding tax deducted at source by the Group’s foreign partners and reportable in the Company’s

annual CIT forms filed with domestic tax authorities.

Trade and other receivables from affiliates

31.12.2021 31.12.2020

Gross receivables from affiliates 1 238 88

trade receivables 1 231 81

other receivables 7 7

Impairment allowances - -

Net receivables from affiliates 1 238 88

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 19. Prepaid expenses

31.12.2021 31.12.2020

Minimum guarantees and advance payments at GOG 15 230 14 630

Software, licenses 3 905 4 183

Expenses associated with future marketing activities 1 734 1 861

Repairs and renovations 1 470 1 651

Fees associated with right of first refusal 1 378 1 484

Non-life insurance 525 289

IT security 421 653

Business travel (airfare, accommodation, insurance) 64 7

Participation in trade fairs 7 -

Marketing campaigns 19 54

Other prepaid expenses 444 247

Total prepaid expenses 25 197 25 059

short-term 13 763 13 383

long-term 11 434 11 676

Note 20. Cash and cash equivalents

31.12.2021 31.12.2020

Cash on hand and bank deposits: 74 372 543 249

current bank accounts 74 372 543 249

Other monetary assets: 337 214 20 086

cash in transit 70 12 051

overnight deposits 36 142 2 071

short-term bank deposits (maturity up to 3 months) 262 980 940

monetary assets in investment accounts 38 022 5 024

Total 411 586 563 335

Restricted cash

Not applicable.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 21. Share capital

Share capital structure as of 31.12.2021

Series Shares outstanding Nominal value of series/issue Capital paid up in

A 500 000 500 000 Cash

B 2 000 000 2 000 000 Cash

C 6 884 108 6 884 108 Cash

C1 18 768 216 18 768 216 Cash

D 35 000 000 35 000 000 Non-cash assets

E 6 847 676 6 847 676 Cash

F 3 500 000 3 500 000 Cash

G 887 200 887 200 Cash

H 3 450 000 3 450 000 Cash

I 7 112 800 7 112 800 Cash

J 5 000 000 5 000 000 Cash

K 5 000 000 5 000 000 Cash

L 1 170 000 1 170 000 Cash

M 4 618 800

4 618 800

Cash

Total 100 738 800 100 738 800 -

In March 2021, in the exercise of 84 176 Series B subscription warrants issued under the 2016-2019 incentive program, the entitled

parties claimed Series M shares, issued in the framework of a conditional increase in the parent Company share capital. These

shares were admitted to organized trading on 31 March 2021, as a result of which the parent Company share capital was increased

by 84 176 thousand PLN. Following this increase, the parent Company share capital amounts to 100 738 000 PLN and is divided

into 100 738 000 shares with a nominal value of 1 PLN per share.

As of 31 December 2021 the total number of votes afforded by all parent Company shares is 100 738 000. No changes in the parent

Company share capital occurred after the balance sheet date.

As of 31 December 2021 there remain 32 000 unexercised Series B subscription warrants, entitling their holders to claim an

equivalent number of Series M shares. These warrants will expire on 31 October 2022. No changes in the status of these warrants

occurred after the balance sheet date.

Changes in share capital

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Share capital at beginning of period 100 655 96 120

Increases from: 84 4 535

issue of shares paid up in cash – incentive program 84 4 535

Reductions - -

Share capital at end of period 100 739 100 655

Note 22. Other capital contributions

31.12.2021 31.12.2020

Supplementary capital 1 425 647 774 851

Supplementary capital from sale of shares above nominal value 115 909 113 844

Revaluation capital 4 783 442

Other reserve capital 35 741 35 741

Other reserve capital – incentive program 7 470 9 364

Total 1 589 550 934 242

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Change in other capital contributions

Supplementary

capital

Supplementary

capital from sale

of shares above

nominal value

Revaluation

capital

Reserve capital Own shares

Other reserve

capital – incentive

program

Total

As of 01.01.2021* 774 851 113 844 442 35 741 - 9 364 934 242

Increases from: 650 796 2 065 4 341 - - 41 249 698 451

payment in own shares 869 2 065 - - - - 2 934

allocation of net profit / coverage of

losses

649 927 - - - - - 649 927

capital contributions mandated by

the incentive program

- - - - - 41 249 41 249

total comprehensive income - - 4 341 - - - 4 341

Reductions from: - - - - - 43 143 43 143

payment in own shares - - - - - 869 869

capital contributions mandated by

the incentive program

- - - - - 42 274 42 274

As of 31.12.2021 1 425 647 115 909 4 783 35 741 - 7 470 1 589 550

* adjusted

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Supplementary

capital

Supplementary

capital from sale

of shares above

nominal value

Revaluation

capital

Reserve capital Own shares

Other reserve

capital – incentive

program

Total

As of 01.01.2020* 777 090 3 861 - 549 - 54 108 835 608

Increases from: 392 314 109 983 442 250 000 214 259 14 936 981 934

creation of reserve capital to

finance purchase of own shares

- - - 250 000 - - 250 000

allocation of net profit / coverage of

losses

175 984 - - - - - 175 984

dissolution of reserve capital

created to finance purchase of own

shares in past years

549 - - - - - 549

payment in own shares 1 522 109 983 - - 214 259 - 325 764

capital contributions mandated by

the incentive program

- - - - - 14 936 14 936

purchase of own shares in the

course of implementing the

incentive program

214 259 - - - - - 214 259

total comprehensive income - - 442 - - - 442

Reductions from: 394 553 - - 214 808 214 259 59 680 883 300

creation of reserve capital to

finance purchase of own shares

250 000 - - - - - 250 000

dissolution of reserve capital

created to finance purchase of own

shares in past years

- - - 549 - - 549

payment in own shares 144 553 - - - - 59 621 204 174

capital contributions mandated by

the incentive program

- - - - - 59 59

purchase of own shares in the

course of implementing the

incentive program

- - - 214 259 214 259 - 428 518

As of 31.12.2020 774 851 113 844 442 35 741 - 9 364 934 242

* adjusted

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 23. Retained earnings

31.12.2021 31.12.2020

Retained earnings from preceding years (6 432) (2 959)

Total (6 432) (2 959)

Changes in retained earnings

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

At beginning of period (2 959) (2 290)

Rectification of errors (4 179) -

Adjusted retained earnings (7 138) (2 290)

Increases from: 1 153 508 175 315

allocation of profit from preceding years 1 153 508 175 315

Reductions from: 1 152 802 175 984

dividend payments 503 694 -

reclassification as reserve capital 649 196 175 984

allocation of financial result from preceding years (88) -

At end of period (6 432) (2 959)

Note 24. Minority interest capital

None reported.

Note 25. Credits and loans

None reported.

Note 26. Other financial liabilities

31.12.2021 31.12.2020

Lease liabilities 16 654 18 939

Liabilities estimated at fair value through financial result 142 -

Cash flow hedges 17 906 -

Liabilities related to deferred portion of payment for acquisition of shares in subsidiary 12 180 -

Total financial liabilities 46 882 18 939

Short-term liabilities 25 802 2 933

Long-term liabilities, including: 21 080 16 006

between 1 and 5 years 7 261 2 081

beyond 5 years 13 819 13 925

As a lessee the Group may potentially incur cash outflows which are not currently included in its valuation of lease liabilities,

including:

 With regard to lease agreements reported in Note 32, concerning perpetual usufruct of land comprising the properties at

Jagiellońska 74 and 76 – changes in lease fees may result from revaluation of annual payments related to perpetual usufruct

of land by adjusting them to reflect the current value of the property or by modifying the base rate upon which fees are

calculated.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

 With regard to the agreement reported in Note 32, concerning office space in Kraków, which effectively constitutes a lease

agreement – changes in lease fees may result from indexation accounting for increases in the retail price index, to which the

lessor is contractually entitled.

 With regard to the lease agreement reported in Note 32, concerning office space in Wrocław, which effectively constitutes

a lease agreement – changes in lease fees may result from indexation accounting for increases in the retail price index, to

which the lessor is contractually entitled.

Note 27. Other long-term liabilities

31.12.2021 31.12.2020

Other long-term liabilities, including: 2 860 3 173

liabilities related to marketing expenses 1 589 1 722

liabilities related to right of first refusal 1 271 1 378

deposits received - 73

Other long-term liabilities by due date

31.12.2021 31.12.2020

Other long-term liabilities, including: 2 860 3 173

due between 1 and 3 years 720 553

due between 3 and 5 years 480 480

due later than in 5 years 1 660 2 140

Other long-term liabilities by currency

31.12.2021 31.12.2020

currency

units

PLN

equivalent

currency

units

PLN

equivalent

PLN 2 860 2 860 3 173 3 173

Total 0 2 860 0 3 173

Note 28. Trade liabilities

31.12.2021 31.12.2020

Trade liabilities: 53 380 115 444

payable to affiliates 1 183 557

payable to external entities 52 197 114 887

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Current and overdue trade liabilities

Total Not overdue

Days overdue

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

As of 31.12.2021 53 380 48 958 1 572 556 59 2 172 63

payable to affiliates 1 183 1 135 48 - - - -

payable to external

entities

52 197 47 823 1 524 556 59 2 172 63

Total Not overdue

Days overdue

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

As of 31.12.2020 115 444 111 982 3 075 114 153 27 93

payable to affiliates 557 557 - - - - -

payable to external

entities

114 887 111 425 3 075 114 153 27 93

Trade liabilities by currency

31.12.2021 31.12.2020

currency

units

PLN

equivalent

currency

units

PLN

equivalent

USD 10 523 42 748 15 699 59 005

PLN 7 967 7 967 16 843 16 843

EUR 380 1 746 7 583 34 993

CNY 1 015 648 3 847 2 209

CAD 51 164 59 172

JPY 1 804 65 4 043 148

GBP 7 39 22 111

RUB 52 3 32 902 1 648

SEK - - 546 251

AUD - - 12 35

BRL - - 40 29

Total 0 53 380

115 444

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 29. Other short-term liabilities

31.12.2021 31.12.2020*

Liabilities from other taxes, duties, social security payments and others, except

corporation tax

9 536 32 789

VAT 5 515 27 790

Flat-rate withholding tax 905 982

Personal income tax 1 835 2 370

Social security (ZUS) payments 1 164 1 557

National Disabled Persons Rehabilitation Fund (PFRON) payments 56 45

PIT-8A settlements 61 45

Other liabilities 506 345

Deposits - 149

Other employee-related liabilities 125 15

Other liabilities payable to board members of the Group’s member companies 36 1

Prepayments received from foreign clients 13 -

Other miscellaneous liabilities 332 180

Total other short-term liabilities 10 042 33 134

* adjusted

Current and overdue other short-term liabilities

Total Not overdue

Days overdue

1 – 60 61 – 90 91 – 180 1 – 60 >360

As of 31.12.2021 10 042 9 918 123 - 1 - -

payable to affiliates 533 409 123 - 1 - -

payable to external

entities

9 509 9 509 - - - - -

Total Not overdue

Days overdue

1 – 60 61 – 90 91 – 180 1 – 60 >360

As of 31.12.2020 33 134 33 122 12 - - - -

payable to affiliates 1 - 1 - - - -

payable to external

entities

33 133 33 122 11 - - - -

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Other short-term liabilities by currency

31.12.2021 31.12.2020

currency

units

PLN

equivalent

currency

units

PLN

equivalent

PLN 4 804 4 804 19 779 19 779

EUR 663 3 068 1 890 8 480

USD 165 663 367 1 377

GBP 104 567 303 1 506

RUB 5 915 330 1 932 97

AUD 65 190 201 551

SEK 347 158 1 141 499

DKK 161 100 524 316

NOK 165 76 598 251

CAD 15 47 47 135

CHF 9 39 34 141

BRL - - 1 2

Total - 10 042 - 33 134

Note 30. Internal Social Benefits Fund (ZFŚS): assets and liabilities

31.12.2021

31.12.2020

Cash assets 23 23

Liabilities associated with the Internal Social Benefits Fund (ZFŚS) 23 23

Balance - -

Internal Social Benefits Fund (ZFŚS) deductions in the financial year - -

Note 31. Contingent liabilities

Promissory note liabilities from loans received

Not applicable.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Contingent liabilities from guarantees, sureties and collateral pledged

Type of agreement Currency 31.12.2021 31.12.2020

mBank S.A.

Declaration of submission to enforcement Collateral for debit card agreement PLN 920 920

Promissory note agreement Collateral for framework concerning financial market transactions PLN 50 000 50 000

Promissory note agreement Collateral for lease agreement PLN 667 667

Ingenico Group S.A. (formerly Global Collect Services BV)

Contract of guarantee Guarantee of discharge of liabilities by GOG sp. z o.o. EUR 155 155

Mazovian Unit for Implementation of EU Programs (Mazowiecka Jednostka Wdrażania Programów Unijnych)

Contractual pledge

Pledge to cover maintenance and renovation expenses related to

leased space

PLN 58 115

National Center for Research and Development (Narodowe Centrum Badań i Rozwoju)

Promissory note agreement Co-financing agreement no. POIR.01.02.00-00-0105/16 PLN 7 711 7 934

Promissory note agreement Co-financing agreement no. POIR.01.02.00-00-0110/16 PLN 3 846 5 114

Promissory note agreement Co-financing agreement no. POIR.01.02.00-00-0112/16 PLN 3 692 3 857

Promissory note agreement Co-financing agreement no. POIR.01.02.00-00-0118/16 PLN 5 324 5 324

Promissory note agreement Co-financing agreement no. POIR.01.02.00-00-0120/16 PLN 1 204 1 204

Pekao Leasing Sp. z o.o.

Promissory note agreement Lease agreement no. 37/1991/21 PLN 442 -

Santander Bank Polska S.A. (formerly BZ WBK S.A.)

Promissory note agreement Framework agreement concerning financial market transactions PLN 23 500 13 000

Bank Polska Kasa Opieki S.A.

Promissory note agreement Framework agreement concerning financial market transactions PLN 35 000 20 000

BNP Paribas Bank Polska S.A.

Promissory note agreement Framework agreement concerning financial market transactions PLN 26 600 75 000

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 32. Lease and sublease agreements

Information concerning depreciation of leased assets is included in Note 2. Interest on lease agreements is presented in Note 4.

Information concerning disclosure of assets related to usufruct and the balance sheet value of such assets at the close of the

reporting period, divided into base asset categories, is presented in Note 10. Note 49 contains information regarding the total cash

outflows related to lease agreements.

Liabilities from lease agreements

Payments outstanding 31.12.2021 31.12.2020

Due within 1 year 1 664 2 933

Due between 1 and 5 years 1 171 2 081

Due later than in 5 years 13 819 13 925

Total lease payments outstanding, including: 16 654 18 939

short-term liabilities 1 664 2 933

long-term liabilities 14 990 16 006

Gross liabilities from lease agreements (prior to deduction of financial costs)

31.12.2021 31.12.2020

Due within 1 year 1 901 3 375

Due between 1 and 5 years 3 125 3 266

Due later than in 5 years 24 388 24 770

Total, including: 29 414 31 411

short-term liabilities 1 901 3 375

long-term liabilities 27 513 28 036

Income from subleasing of leased assets (usufruct)

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Revenues 40 -

Expenses 40 -

Income - -

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Lease and sublease agreements in force as of 31.12.2021

Subject Financier Contract no. Base value

Base value

in currency

units

Currency

Contract

expiration

date

Payments

outstanding at

end of

reporting

period

Prolongation conditions and buyout

options

Lease agreements

Passenger car

Pekao Leasing

Sp. z o.o

37/1991/21 614 614 PLN 14.12.2023 377

Lessee is entitled to buy out the leased

asset – the contractual net buyout

charge is 135 thousand PLN

Passenger car

BMW Financial

Services Polska

Sp. z.o.o.

LO/40953/0421 377 377 PLN 08.04.2023 201

Lessee is entitled to buy out the leased

asset – the contractual net buyout

charge is 135 thousand PLN

Passenger car Carefleet S.A. UG20002163 118 118 PLN 06.08.2023 123

Lessee is entitled to buy out the leased

asset – the contractual net buyout

charge is 80 thousand PLN

Passenger car Tesla Financial RN111270740-1581877310 490 121 USD 18.02.2023 86

Lessee is entitled to buy out the leased

asset – the contractual net buyout

charge is 71 thousand USD

Jagiellońska 74 –

plots no. 12 and 13

State Treasury

Deed issued on

31.10.2019

8 623 8 623 PLN 05.12.2089 8 499

Lessee is not entitled to buy out the

leased asset

Jagiellońska 74 –

plot no. 14

Municipality of Warsaw

Deed issued on

31.10.2019

1 468 1 468 PLN 12.04.2100 1 452

Lessee is not entitled to buy out the

leased asset

Jagiellońska 76 State Treasury

Deed issued on

31.12.2018

4 449 4 449 PLN 05.12.2089 4 376

Lessee is not entitled to buy out the

leased asset

Kraków office

Prestige Property

Group Sp. z o.o

Lease agreement

concluded on

20.07.2016

3 715 864 EUR 31.03.2022 351

Lessee is not entitled to buy out the

leased asset

Wrocław office

Wisher Enterprise

Sp. z o.o.

Lease agreement

concluded on 24.10.2019

806 180 EUR 31.01.2022 45

Lessee is not entitled to buy out the

leased asset

Los Angeles office 1011 OFW Owner LLC

Lease agreement

concluded on

01.04.2018

3 319 817 USD 31.03.2023 1 097

Lessee is not entitled to buy out the

leased asset

Parking lot at

Jagiellońska 78

Sokołowo Sp. z o.o.

Lease agreement

concluded on 01.01.2020

174 174 PLN 31.12.2022 87

Lessee is not entitled to buy out the

leased asset

Sublease agreements

Parking lot at

Jagiellońska 78

CD Projekt S.A.

Lease agreement WPA

469/17 concluded on

31.07.2017

79 79 PLN 31.12.2022 40

Lessee is not entitled to buy out the

leased asset

Total 0 0 24 074 0 0 0 16 654 0

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Short-term lease agreements and lease of low-value assets

The Group has entered into agreements concerning leasing of office equipment (multipurpose photocopiers, kitchen equipment)

as well as apartments which potentially meet the criteria of lease agreements under IFRS 16. However, the Group regards these

agreements as either short-term or concerning low-value assets and, consequently, does not apply the new standard to these

agreements in line with the practical expedient specified in Art. 5 of the new standard. In such cases lease payments are reported

as costs during the period in which they are incurred, using either the straight-line method or another method which best reflects

the breakdown of payments throughout the duration of the agreement (information regarding costs related to such agreements,

incurred between 1 January and 31 December 2021, can be found in Note 2).

As of 31 December 2021 and 31 December 2020 future payments associated with irrevocable short-term lease agreements and

lease agreements concerning low-value assets are as follows:

31.12.2021 31.12.2020

Due within 1 year 121 179

Due between 1 and 5 years 149 170

Due later than in 5 years - -

Total 270 349

Note 33. Deferred revenues

31.12.2021 31.12.2020

Subsidies 8 277 14 867

Cross Platform SDK (GameINN) 53 118

Animation Excellence (GameINN) 1 846 3 730

City Creation (GameINN) 3 701 6 977

Seamless Multiplayer (GameINN) 905 905

Cinematic Feel (GameINN) 1 772 3 137

Future period revenues 29 695 33 854

Future period sales 25 715 30 985

GOG Wallet 3 947 2 847

Official phone rental 33 22

Total, including: 37 972 48 721

short-term deferrals 31 548 47 758

long-term deferrals 6 424 963

In the CD PROJEKT RED segment future period sales represent mainly royalties obtained or obtainable in association with customer

preorders of digital editions of PC games scheduled for release in future reporting periods, prepayments related to royalties

collected from publishers and distribution partners, as well as advance payments for goods received from suppliers.

In the GOG.COM segment future period sales represent the value of customer preorders of games scheduled for release in future

reporting periods.

Note 34. Provisions for employee benefits and similar liabilities

31.12.2021 31.12.2020

Provisions for retirement benefits and pensions 387 402

Total, including: 387 402

short-term provisions 7 4

long-term provisions 380 398

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

The following assumptions were made by the actuary when calculating provisions as of the balance sheet date:

31.12.2021 31.12.2020

Discount rate (%) 3.41 1.59

Projected inflation rate (%) 3.41 1.59

Employee turnover rate (%) – average age (CD PROJEKT S.A.) 11.6% - 34 years 9.2% - 33 years

Employee turnover rate (%) – average age (GOG sp. z o.o.) 16.8% - 33 years 14.7% - 32 years

Projected annual rate of salary growth (%) (CD PROJEKT S.A.)

10% in 2022 - 2023; 6%

in later years

8% in 2021 - 2022;

5% in later years

Projected annual rate of salary growth (%) (GOG sp. z o.o.)

0% in 2022 – 2023

2.5% in later years

8.1% in 2021 – 2022

5% in later years

Mortality rates published by the Central Statistical Office (year of

estimation)

2020 2019

Likelihood of disability during the fiscal year 0.1% 0.1%

Statistical methods were employed by an actuary to construct and calibrate a mobility model for Group member company

employees, based on the Multiple Decrement paradigm. The model was calibrated using historical data supplied by Group member

companies. Based on publicly available statistical data and the actuary’s own analysis, the mobility coefficient was assumed to

decrease with age. The valuation model is highly sensitive to changes in mobility coefficients and should therefore be subject to

frequent verifications and updates.

Changes in provisions for employee benefits and similar liabilities

Provisions for

retirement

benefits and

pensions

Total

As of 01.01.2021 402 402

Provisions dissolved 15 15

As of 31.12.2021, including: 387 387

short-term provisions 7 7

long-term provisions 380 380

Provisions for

retirement

benefits and

pensions

Total

As of 01.01.2020 257 257

Provisions created 145 145

As of 31.12.2020, including: 402 402

short-term provisions 4 4

long-term provisions 398 398

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 35. Other provisions

31.12.2021 31.12.2020

Provisions for returns - 194 537

Provisions for liabilities, including: 88 410 291 030

provisions for compensation contingent upon the Group’s financial result, and other

compensation

44 856 256 130

provisions for financial statement audit and review expenses 160 73

provisions for bought-in services 1 042 740

provisions for other expenses 42 352 34 087

Total, including: 88 410 485 567

short-term provisions 83 042 339 954

long-term provisions 5 368 145 613

Changes in other provisions

Provisions for

returns

Provisions for

compensation

contingent upon

the Group’s

financial result

and other

compensation

Other provisions Total

As of 01.01.2021 194 537 256 130 34 900 485 567

Provisions created during the financial

year

42 635 47 021 104 586 194 242

Provisions consumed 136 236 256 726 78 020 470 982

Provisions dissolved 100 936 1 569 17 912 120 417

As of 31.12.2021, including: - 44 856 43 554 88 410

short-term provisions - 44 856 38 186 83 042

long-term provisions - - 5 368 5 368

Provisions for

returns

Provisions for

compensation

contingent upon

the Group’s

financial result

and other

compensation

Other provisions Total

As of 01.01.2020 - 36 038 3 148 39 186

Provisions created during the financial

year

194 537 255 923 37 977 488 437

Provisions consumed - 35 526 6 225 41 751

Provisions dissolved - 305 - 305

As of 31.12.2020, including: 194 537 256 130 34 900 485 567

short-term provisions 48 924 256 130 34 900 339 954

long-term provisions 145 613 - - 145 613

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 36. Disclosure of financial instruments

Fair value of financial instruments per class

Following an analysis of each class of financial instruments the Management Board of the parent Company has reached the

conclusion that their carrying amounts in all cases reflect their corresponding fair value, both as of 31 December 2021 and as of

31 December 2020 respectively.

31.12.2021 31.12.2020

LEVEL 1

Assets estimated at fair value

Financial assets estimated at fair value through other comprehensive income 228 661 97 397

foreign government bonds – CHF - 32 023

foreign government bonds – EUR 24 517 20 829

foreign government bonds – USD 204 144 44 545

LEVEL 2

Assets estimated at fair value through financial result

Derivative instruments: - 6 527

forward currency contracts – CHF - 1 231

forward currency contracts – EUR - (202)

forward currency contracts – USD - 5 498

Liabilities estimated at fair value through financial result

Derivative instruments: (18 047) -

forward currency contracts – EUR (486) -

forward currency contracts – USD (17 561) -

Financial instruments estimated at fair value are classified according to a three-tier fair value hierarchy:

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

Level 2 – fair value estimated on the basis of observable market inputs

Level 3 – fair value estimated on the basis of unobservable market inputs

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Financial assets – classification and estimation

31.12.2021 31.12.2020

Financial assets estimated at amortized cost 1 060 209 1 987 735

Other long-term receivables 686 321

Trade receivables 125 293 1 205 603

Cash and cash equivalents 411 586 563 335

Bank deposits (maturity beyond 3 months) 265 000 164 368

State Treasury bonds and bonds guaranteed by the State Treasury 248 754 49 588

Loans granted 8 890 4 520

Financial assets estimated at fair value through other comprehensive income 228 661 97 397

Foreign government bonds 228 661 97 397

Financial assets estimated at fair value through financial result - 6 527

Derivative financial instruments - 6 527

Total financial assets 1 288 870 2 091 659

Financial liabilities – classification and estimation

31.12.2021 31.12.2020

Financial liabilities held at amortized cost 100 120 134 383

Trade liabilities 53 380 115 444

Other financial liabilities 46 740 18 939

Financial liabilities held at fair value through financial result 142 -

Derivative financial instruments 142 -

Total financial liabilities 100 262 134 383

In line with the requirements of IFRS 9 Financial Instruments the parent Company has carried out an analysis of the business model

concerning management of financial assets and of the characteristics of contractual cash flows for each component of the bond

portfolio. This led the parent Company to conclude the following:

 The purpose of the conducted investments in domestic and foreign treasury bonds is to hold to maturity and collect the

associated contractual cash flows;

 The investment mandates granted to Credit Suisse also permits sale of bonds prior to the expiration of their respective

redemption periods in the framework of the adopted portfolio management strategy;

 All purchased bonds pass the SPPI test.

As a result of the presented analysis, the purchased bonds were assigned to two distinct financial asset management models

identified by the entity which manages the bond portfolio. Polish State Treasury bonds and bonds guaranteed by the Polish State

Treasury – given the intent to hold them to maturity and collect the associated contractual cash flows – were estimated at amortized

cost. Foreign treasury bonds – given the investment mandate which permits management of portfolio by the Asset Manager – were

estimated at fair value through other comprehensive income.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Profits and losses from financial assets and liabilities

01.01.2021 – 31.12.2021

Financial assets estimated at amortized cost

Financial assets

estimated at fair

value through

financial result

Financial liabilities

estimated at

amortized cost

Total

Trade receivables

Bonds issued or

guaranteed by the

State Treasury and

bonds issued by

foreign

governments

Loans granted

Cash, cash

equivalents and

bank deposits with

maturity periods

beyond

3 months

Derivative financial

instruments

Other financial

liabilities

Revenues/(expenses) from

interest

- 534 161 68 - (535) 228

Creation of impairment

allowances

(12) - - - - - (12)

Dissolution of impairment

allowances

6 - - - - - 6

Profit (loss) from sale of debt

instruments

- (1 436) - - - - (1 436)

Fees and commission on

purchases of debt instruments

- (364) - - - - (364)

Forward contract estimation - - - - 7 962 - 7 962

Total profit / (loss) (6) (1 266) 161 68 7 962 (535) 6 384

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

01.01.2020 – 31.12.2020

Financial assets estimated at amortized cost

Financial assets

estimated at fair

value through

financial result

Financial liabilities

estimated at

amortized cost

Total

Trade receivables

Bonds issued or

guaranteed by the

State Treasury and

bonds issued by

foreign

governments

Loans granted

Cash, cash

equivalents and

bank deposits with

maturity periods

beyond

3 months

Derivative financial

instruments

Other financial

liabilities

Revenues/(expenses) from

interest

- (31) 37 7 582 - (400) 7 188

Creation of impairment

allowances

(107) - - - - - (107)

Dissolution of impairment

allowances

10 - - - - - 10

Profit (loss) from sale of debt

instruments

- (1 081) - - - - (1 081)

Fees and commission on

purchases of debt instruments

- (128) - - - - (128)

Forward contract estimation - - - - 9 265 - 9 265

Total profit / (loss) (97) (1 240) 37 7 582 9 265 (400) 15 147

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 37. Equity management

The main goal of equity management at the Group is to retain a good credit rating and safe capital indicators, facilitating operations,

enabling implementation of future development and publishing plans, and increasing shareholder value.

The Group actively manages its equity structure, resulting in changes which reflect changing economic conditions. In order to retain

or adjust said structure, the parent entity may pay out dividends to shareholders, return capital to shareholders or issue new shares.

The Group monitors its capital status by applying a leverage ratio which is calculated as the ratio of net borrowing versus total

equity increased by net borrowing. As of 31 December 2021 the value of cash assets held by the Group is in excess of its sum of

trade liabilities and other liabilities. Consequently, the Group reports a positive cash balance.

Note 38. Employee share programs

2016-2019 incentive program

On 24 May 2016 the General Meeting of Shareholders of the parent Company voted to institute an incentive program covering the

years 2016-2021, for the benefit of individuals deemed to have a key influence on the Group’s activities. Following attainment of

the program’s goals for the years 2016-2019, as officially confirmed in 2020, a total of 5 167 500 exercisable entitlements were held

by participants.

In the course of implementing the program, in 2020 the parent Company sold to entitled parties a total of 516 700 shares of its own

stock, previously bought back on the open market. The remaining entitlements vested by way of issuing 4 650 800 subscription

warrants, of which 4 534 624 were exercised by 31 December 2020. In March 2021, another 84 176 warrants were exercised, as a

result of which the entitled parties claimed Series M shares, newly issued in the framework of a conditional increase in the parent

Company share capital. These shares were admitted to organized trading on 31 March 2021, as a result of which the share capital

of the parent Company was increased by 84 176 PLN.

As of the publication date of this financial statement there remain 32 000 unexercised Series B subscription warrants, entitling

holders to claim the equivalent number of shares of the parent Company. These warrants will expire on 31 October 2022.

Incentive program estimation – assumed indicators

Grant date

CDR volatility

index

WIG volatility

index

WIG/CDR

correlation

coefficient

Risk-free rate

Entitlements granted on 29.06.2020 41% 19% 51% 0.2%

Entitlements granted on 17.06.2019 38% 14% 41% 1.8%

Entitlements granted on 08.01.2019 38% 15% 41% 2.1%

Entitlements granted on 11.06.2018 34% 14% 38% 2.3%

Entitlements granted on 04.12.2017 32% 14% 37% 2.6%

Entitlements granted on 06.09.2017 32% 14% 37% 2.5%

Entitlements granted on 29.08.2017 32% 14% 37% 2.6%

Entitlements granted on 18.05.2017 32% 15% 38% 2.8%

Entitlements granted on 05.01.2017 32% 16% 37% 3.0%

Entitlements granted on 17.11.2016 32% 16% 37% 2.4%

Entitlements granted on 05.07.2016 32% 16% 39% 2.5%

Grant date

Throughout the duration of the program the parent Company issued grants of eligibility in 11 batches. The fair value of assigned

entitlements was, in each case, calculated on the corresponding grant date using modern financial engineering methods and

numerical algorithms (an extension of the so-called Black-Scholes-Morton model) by a licensed actuary entered in the register of

actuaries maintained by the Financial Supervision Authority (cf. above table).

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Classification of estimation conditions

The condition associated with changes in the parent Company stock price vs. changes in the value of the WIG index and the

condition specifying that on the day of exercise the market price must be above the acquisition price are considered market

conditions. Conditions related to increases in net profits are considered non-market conditions. Formal terms (i.a. correct and timely

filing of the relevant documentation), loyalty criteria and any other terms not related to share price are also treated as non-market

conditions, as is the requirement of survival until the exercise date and other similar stipulations.

Changes in entitlements assigned under the incentive program in force between 2016 and 2019

01.01.2020 – 31.12.2020

Entitlements granted Exercise price (PLN)

Unexercised at beginning of period 6 000 000 25.7 or 22.35

Granted but unexercised at beginning of period 5 535 000 25.7 or 22.35

Granted 500 25.7 or 22.35

Forfeited 368 000 25.7 or 22.35

Exercised 5 167 500 25.7 or 22.35

Unexercised at end of period - -

Granted but unexercised at end of period - -

2020-2025 incentive program

As mandated by the General Meetings of the parent Company held on 28 July 2020 and 22 September 2020, the Group instituted

another (third) edition of its incentive program, covering the years 2020-2025. In line with the adopted stipulations, a total of

4 000 000 entitlements may be granted under the program, each entitling its holder to conditionally claim subscription warrants

which incorporate the right to acquire parent Company shares issued in the framework of a conditional increase in the Company

share capital, or, alternatively, purchase the parent Company’s own shares on preferential terms. Acquisition and exercise of

subscription warrants or the purchase of the parent Company’s own shares by the entitled parties, as appropriate, is predicated

upon attaining certain goals and criteria defined under the program. These include earnings goals (80% of entitlements), market

goals (20% of entitlements), additional individual goals (in selected cases) as well as – in all circumstances – fulfillment of a loyalty

criterion up until the day the attainment of the program’s goals and criteria is declared.

As of the publication date of this financial statement, 2 275 000 entitlements have been granted under the 2020-2025 incentive

program.

Incentive program estimation – assumed indicators

Grant date

CDR volatility

index

WIG volatility

index

WIG/CDR

correlation

coefficient

Risk-free rate

Entitlements granted on 30.10.2020 38% 17% 44% 0.7%

Entitlements granted on 10.11.2020 38% 17% 44% 0.7%

Entitlements granted on 12.08.2021 42% 17% 42% 1.3%

Grant date

In 2020 the parent Company issued grants of eligibility in two batches. In 2021 additional entitlements were assigned on one

occasion (pursuant to Management Board resolution of 10 August 2021). In each case the fair value of assigned entitlements was

calculated on the corresponding grant date using modern financial engineering methods and numerical algorithms (an extension

of the so-called Black-Scholes-Morton model) by a licensed actuary entered in the register of actuaries maintained by the Financial

Supervision Authority (cf. above table).

Classification of estimation conditions

The condition associated with changes in the parent Company stock price vs. changes in the value of the WIG index and the

condition specifying that on the day of exercise the market price must be above the acquisition price are considered market

conditions. Conditions related to increases in net profits are considered non-market conditions. Formal terms (e.g. correct and timely

filing of the relevant documentation), loyalty criteria and any other terms not related to share price are also treated as non-market

conditions, as is the requirement of survival until the exercise date and other similar stipulations.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Shares outstanding on grant date

On each grant date in 2020 the parent Company had 96 120 000 shares outstanding.

On the additional grant date in 2021 the parent Company had 100 738 800 shares outstanding.

Status of the program

Based on the Group’s 2020 and 2021 earnings, as well as assumptions concerning further years covered by the incentive program,

the Management Board has performed an analysis of the feasibility of attaining the result goal as defined for the entire duration of

the program, and has consequently revised its projections, declaring that the most likely outcome is that the result goal for the

duration of the program cannot be attained.

Changes in entitlements granted under the 2020-2025 incentive program

01.01.2021 – 31.12.2021 01.01.2020 – 31.12.2020

Entitlements

granted

Exercise price

(PLN)

Entitlements

granted

Exercise price

(PLN)

Unexercised at beginning of period 4 000 000 390.59 or 371.06 - -

Granted but unexercised at beginning of

period

2 592 000 390.59 or 371.06 - -

Granted 30 000 390.59 or 371.06 2 617 000 390.59 or 371.06

Forfeited 347 000 390.59 or 371.06 25 000 390.59 or 371.06

Unexercised at end of period 4 000 000 390.59 or 371.06 4 000 000 390.59 or 371.06

Granted but unexercised at end of period 2 275 000 390.59 or 371.06 2 592 000 390.59 or 371.06

Note 39. Transactions with affiliates

Conditions governing transactions with affiliates

Intragroup transactions are conducted at market prices on the basis of the so-called arm’s length principle. The principle stipulates

that transactions between affiliated entities should be carried out under conditions similar to those which would otherwise apply to

transactions carried out by unaffiliated entities.

The prices of goods and services exchanged in controlled transactions are estimated by CD PROJEKT Group member companies

in accordance with OECD guidelines and national legislation, including the so-called safe harbor regulations. Transfer method

selection is preceded by a thorough analysis of each transaction, which includes, among others, the assignment of responsibilities

to each party, the assets involved and the corresponding allocation of risks and costs. In each case, the method regarded as most

appropriate for the given transaction type is applied so that transactions between member companies of the CD PROJEKT Group

are carried out under conditions approximating those which unaffiliated entities could be expected to agree upon.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Transactions with affiliates following consolidation eliminations

Sales to affiliates Purchases from affiliates Receivables from affiliates Liabilities due to affiliates

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

31.12.2021 31.12.2020 31.12.2021 31.12.2020

SUBSIDIARIES

CD PROJEKT Co., Ltd. (in

liquidation)

- - 6 629 3 707 - - - 557

Spokko sp. z o.o. 1 460 495 - - 9 113 4 601 - -

CD PROJEKT RED

Vancouver Studio Ltd.

- - 2 889 - 1 008 - 164 -

The Molasses Flood LLC - - 2 616 - - - 1 019 -

MANAGEMENT BOARD MEMBERS AT GROUP MEMBER COMPANIES

Marcin Iwiński 18 10 - - - 5 19 -

Adam Kiciński 4 4 - - - - 5 -

Piotr Nielubowicz 7 10 - - - 2 - -

Michał Nowakowski 24 11 - - - - 7 1

Adam Badowski 9 4 - - 7 - 5 -

Piotr Karwowski 4 - - - - - - -

Oleg Klapovskiy - 2 - - - - - -

Urszula Jach - Jaki 1 4 - - - - - -

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 40. Mergers and changes in the structure of the CD PROJEKT Group

Mergers between subsidiaries

None reported.

Incorporation of new subsidiaries

On 8 July 2021 the parent Company purchased 100% of shares in the Canadian studio named Digital Scapes (later rebranded as

CD PROJEKT RED Vancouver Studio Ltd.) This is a full-fledged gamedev studio which will support the Company in its future game

development projects.

On 22 October 2021 CD PROJEKT Inc. purchased 60% of shares in The Molasses Flood LLC. The Molasses Flood closely

collaborates with the parent Company while retaining full autonomy. It is working on a separate project based upon one of

CD PROJEKT’s IPs.

On 2 July 2021 the parent Company sold four shares in Spokko sp. z o.o., as a result of which the percentage share of Spokko

sp. z o.o. held by the parent Company decreased by 1%, to 74%.

Note 41. Compensation of top management and Supervisory Board members

Benefits paid out to Management Board members at Group member companies

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Base salaries 79 86

Compensation for duties performed 2 586 2 826

Bonuses and compensation contingent upon the Group’s financial result

for the previous year

112 479 17 374

Total 115 144 20 286

Benefits paid out to other top executives at the Group

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Base salaries 29 406 15 490

Compensation for duties performed 733 353

Bonuses and compensation contingent upon the Group’s financial result

for the previous year

39 752 5299

Total 69 891 21 142

Benefits paid out to Supervisory Board members

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Compensation for duties performed 481 408

Total 481 408

Note 42. Employment

Average employment

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Average employment 493 406

Total 493 406

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Employment turnover

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Employees hired 146 165

Employees dismissed 108 41

Total 38 124

Note 43. Activated borrowing costs

Not applicable.

Note 44. Disclosure of seasonal, cyclical or sporadic revenues

Not applicable.

Note 45. Fiscal settlements

Fiscal settlements and other areas of activity governed by fiscal regulations may be subject to audits by administrative bodies

authorized to impose high penalties and sanctions. The lack of entrenched legal regulations in Poland leads to numerous

ambiguities and inconsistencies in this regard. Interpretation of existing tax law frequently varies from state organ to state organ as

well as between state organs and business entities, giving rise to areas of uncertainty and conflict. These conditions elevate tax

risks in Poland beyond the level encountered in states with more developed fiscal systems.

As a rule, fiscal settlements may be subject to state audits within five years following the end of the calendar year in which tax

payment was due.

R&D tax relief and R&D center status; IP Box preference

Given that the parent Company meets the requirements expressed in Art. 19 of the Act of 30 May 2008 on certain forms of

supporting innovative activity (JL 2021 item 706), on 11 August 2021, the Minister for Entrepreneurship and Technology issued

decision no. DNP-V.4241.11.2021, upholding the previous decision no. 4/CBR/18 of 19 June 2018 which bestowed upon the parent

Company the status of an R&D center. This status entitles the parent Company to apply broader R&D tax relief options specified in

the Corporate Income Tax Act of 15 February 1992 (JL 2021, item 1800).

On 1 January 2019, the Corporate Income Tax Act was amended with regulations which enable taxpayers to apply a preferential tax

rate of 5% to eligible income derived from intellectual property rights. Having fulfilled the conditions and formal stipulations

expressed in the aforementioned legislation, the parent Company is able to apply the preferential rate to certain sources of its

income.

Note 46. Events following the balance sheet date

 Appointment of new Management Board members, as disclosed in Current Report no. 4/2022

On 26 January 2022 the parent Company announced that its Supervisory Board had appointed Mr. Jeremiah Cohn and Mr. Paweł

Zawodny to the Management Board of the Company, effective on 1 February 2022.

 Update on court proceedings in the USA – conclusion of a formal settlement agreement, as disclosed in

Current Report no.

5/2022

In Current Report no. 5/2022 of 28 January 2022 the parent Company provided an update on litigation pending before the US

District Court of the Central District of California, by announcing that on 27 January 2022 it had received from the law firm

representing the parent Company in matters related to this class action lawsuit information concerning conclusion of a formal

Stipulation and Agreement of Settlement, along with the required annexes. The provisions of this settlement agreement elaborate

upon and are materially consistent with the previously concluded Settlement Term Sheet which had been announced by the parent

Company in

Current Report no. 45/2021 of 16 December 2021.

An additional agreement was also concluded, as is standard practice in such cases, listing the circumstances under which the parent

Company retains the right to withdraw from the settlement agreement. This document (as well as in the previously concluded

Settlement Term Sheet) includes a statement whereby the parent Company and other defendants named in the case expressly

deny any wrongdoing.

The formal settlement agreement was filed in the Court on 27 January 2022 along with a motion requesting its approval.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

 Suspension of distribution of the parent Company’s Group’s products and games distributed by the GOG.COM platform on the

territories of Russia and Belarus, as disclosed in Current Report no. 6/2022

On 3 March 2022 the parent Company announced that it had decided to suspend sales of its Group’s products and distribution of

games on the GOG.COM platform on the territories of Russia and Belarus.

The parent Company estimates that over the past 12 months the aggregate share of Russia and Belarus in revenues from sales of

products in the CD PROJEKT RED segment and in GOG.COM sales revenues amounted to 5.4% and 3.7% respectively.

 Disclosure of inside information concerning initiation of negotiations and conclusion of an agreement with Epic Games

International S.à r.l., as disclosed in Current Report no. 7/2022

On 21 March 2022 the parent Company publicly disclosed inside information which arose on 20 December 2021 and was subject

to delayed disclosure under Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market

abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission

Directives 2003/124/EC, 2003/125/EC and 2004/72/EC, to wit:

“On 20 December 2021 the Management Board of CD PROJEKT S.A. undertook the decision to enter into negotiations with Epic

Games.”

The parent Company further announced that following the conclusion of negotiations, on 21 March 2022 it had signed a licensing

and partnership agreement with Epic Games International S.à r.l. The agreement specifies the conditions under which the parent

Company is permitted to use the Unreal Engine, and establishes a framework of cooperation between the parties in the scope of

developing and improving the engine to adapt it to the requirements of open-world games, such as those developed by the parent

Company. The agreement is regarded as strategically important for both parties.

Under the agreement the parent Company gains the right to develop and publish games powered by Unreal Engine 4, 5 and

subsequent versions. The agreement was concluded for a period of 15 years with a prolongation option. It places no restriction on

the number of games created with the use of Unreal Engine. Epic Games will also provide dedicated technical support for games

published by the parent Company.

 Updated decision concerning diversification of surplus cash assets, as disclosed in Current Report no. 8/2022

On 25 March 2022 the parent Company announced that it had changed its existing surplus cash asset diversification policy.

The updated policy specifies that debt instruments held by the parent Company may account for not more than 80% of the

Company’s current financial assets, which are defined as the sum of the following: cash and near-cash, bank deposits with maturity

periods longer than 3 months, Polish State Treasury bonds, other bonds guaranteed by the Polish State Treasury and bonds issued

by foreign governments, estimated at the price specified in the corresponding forward contract hedges. Cash assets may be

invested in the following types of bonds:

a) domestic bonds issued by the Polish State Treasury,

b) domestic bonds guaranteed by the Polish State Treasury,

c) foreign treasury bonds issued by countries with a credit rating of at least Aa3 according to Moody’s,

d) foreign bonds guaranteed by countries with a credit rating of at least Aa3 according to Moody’s.

The updated policy also upholds the parent Company’s decision to hedge the interest rate risks associated with holding bonds

denominated in foreign currencies through offsetting purchases of derivative financial instruments, particularly forward contracts,

with an added stipulation that up to 15% of cash assets may be allocated to unhedged securities denominated in USD or EUR.

 Effect of the political and economic situation in Ukraine on the activities of the CD PROJEKT Group

Effect on sales

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

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

The parent Company estimates that throughout the 12-month period between March 2021 and February 2022 the aggregate share

of Russia and Belarus in revenues from sales of products in the CD PROJEKT RED segment and in GOG.COM sales revenues

amounted to 5.4% and 3.7% respectively. At an early stage of hostilities the Polish currency (in which most expenses borne by the

Group are denominated) weakened substantially against USD and EUR, i.e. the main currencies in which the Group obtains sales

revenues. Given that most of the Group’s sales are exports, this strengthening of foreign currencies against the domestic currency

should be viewed as a favorable circumstance.

Risks associated with the current political and economic situation in Ukraine

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

upon the activities of the CD PROJEKT Group.

The parent Company has terminated, or is in the process of terminating collaboration with Russian suppliers. At the present time

the parent Company does not intend to initiate any further collaboration with Russian or Belorussian entities.

As of the publication date of this financial statement the Group’s operating activities proceed unhindered, and the effect of the

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

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

In the Management Board’s opinion the current political and economic situation in Ukraine does not affect the quantitative data

contained in this financial statement, does not provide a reason to suspect impairment of assets, should not have a significant

negative effect on the Group’s earnings in 2022, and does not jeopardize continuation of the parent Company’s activities within

12 months of the conclusion of the reporting period. Given the unprecedented character of current events and significant uncertainty

associated therewith – particularly the lack of reliable knowledge concerning the duration of the Russian invasion – as of the

publication date of this report it is impossible to accurately predict the long-term effects of the invasion upon the condition and

earnings of the parent Company and its Group. Any assessments and forecasts in this regard are fraught with uncertainty, and will

be subject to further monitoring and analysis by the Group.

Insofar as possible, the above assessment reflects the parent Company’s knowledge as of the publication date of this financial

statement.

Further information on events which occurred after the balance sheet date can be found in the Management Board report on

CD PROJEKT Group and CD PROJEKT S.A. activities in 2021.

Note 47. Disclosure of transactions with entities contracted to perform audits

of financial statements

Compensation paid out or payable during the fiscal year

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

for auditing the annual financial statement and the consolidated financial statement 165 148

for other attestation services, including reviewing financial statements and the

consolidated financial statement

60 60

Total 225 208

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 48. Clarifications regarding the cash flow statement

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Cash and cash equivalents reported in cash flow statement 411 586 563 335

Cash on balance sheet 411 586 563 335

Depreciation: 17 764 13 559

Depreciation of intangibles 3 063 1 963

Depreciation of expenditures on development projects 2 084 5 418

Depreciation of PP&E 12 578 6 099

Depreciation of investment properties 39 79

Profit (loss) from exchange rate differences (15 047) 2 220

Exchange rate differences on valuation of bonds (15 047) 2 220

Interest and share in profits consist of: (228) (7 188)

Interest on bank deposits (68) (7 582)

Interest on bonds (534) 31

Interest charged on loans granted (161) (37)

Interest on lease agreements collected 535 400

Profit (loss) from investment activities results from: 55 282 (5 440)

Revenues from sales of PP&E (249) (21)

Net value of PP&E sold 169 2

Net value of intangibles sold 19 -

Net value of PP&E liquidated 735 49

Net value of intangibles liquidated 39 3

Net value of investment properties liquidated 51 1 630

Impairment allowances on PP&E, intangibles and expenditures on development

projects

34 582 -

Impairment allowances on shares in subsidiaries 1 668 -

Fixed assets received free of charge - (62)

Settlement and estimation of derivative instruments 16 468 (8 250)

Bond purchase fees 364 128

Revenues from maturation of bonds (82 718) (59 429)

Value of bonds held to maturity 84 154 60 510

Changes in provisions result from: (311 449) 366 499

Balance of changes in provisions for liabilities (397 157) 446 381

Balance of changes in provisions for employee benefits (15) 145

Provisions for compensation contingent upon the Group’s financial result aggregated

with expenses on development projects

85 723 (80 027)

Changes in inventory status result from: (8 929) 5 905

Balance of changes in inventory status (8 929) 5 905

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

01.01.2021 –

31.12.2021

01.01.2020 –

31.12.2020

Changes in receivables result from: 1 036 886 (1 083 890)

Balance of changes in short-term receivables 1 036 924 (1 065 813)

Balance of changes in long-term receivables (365) 37

Balance of changes in advance payments for investment properties 9 70

Income tax set against withholding tax 8 196 3 878

Withholding tax paid abroad (5 858) (13 762)

Current income tax adjustments (8 098) (24 227)

Changes in advance payments related to expenditures on development projects 6 082 16 266

Changes in advance payments related to purchase of PP&E and intangibles (4) (339)

Changes in short-term liabilities except financial liabilities result from: (85 023) 77 319

Balance of changes in short-term liabilities (39 583) 80 074

Current income tax adjustments (22 704) (1 624)

Changes in financial liabilities (22 869) (779)

Adjustments for changes in liabilities due to purchase of PP&E 77 (1 137)

Adjustments for changes in liabilities due to purchase of intangibles 139 678

Adjustments for changes in liabilities related to purchase of investment properties (10) 87

Adjustment for liabilities booked on the other side as deferrals (73) 20

Changes in other assets and liabilities result from: (11 127) (100 033)

Balance of changes in prepaid expenses (138) 13 227

Balance of changes in deferred revenues (10 749) (113 007)

Adjustment for prepaid expenses booked on the other side as liabilities (240) (260)

Adjustment for depreciation aggregated with deferrals - 7

Other adjustments include: 1 656 16 813

Cost of incentive program (999) 14 707

Estimation of financial derivative instruments 220 (79)

Depreciation aggregated with cost of products, services, goods and materials sold,

consortium settlements and other operating expenses

2 529 1 991

Exchange rate differences (76) 194

Miscellaneous adjustments (18) -

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Note 49. Cash flows and other changes resulting from financial activities

01.01.2021 Cash flows

Non-cash changes

31.12.2021

Acquisition of

PP&E under

lease

agreements

Dissolution

of lease

agreements

Exchange

rate

differences

Accrued

interest

Assignment

of own

Resolution

concerning

purchase of

own shares

Resolution

concerning

dividend

payment

Lease liabilities 18 939 (4 234) 1 236 (18) 196 535 - - - 16 654

Liabilities due to

shareholders in

association with dividend

payment

- (503 694) - - - - - - 503 694 -

Receivables from entitled

parties under the

incentive program

- 2 149 - - - - (2 149) - - -

Total 18 939 (505 779) 1 236 (18) 196 535 (2 149) - 503 694 16 654

01.01.2020 Cash flows

Non-cash changes

31.12.2020

Acquisition of

PP&E under

lease

agreements

Dissolution

of lease

agreements

Exchange

rate

differences

Accrued

interest

Assignment

of own

Resolution

concerning

purchase of

own shares

Resolution

concerning

dividend

payment

Lease liabilities 19 905 (3 258) 1 775 - 116 401 - - - 18 939

Liabilities associated with

purchase of own shares

- (214 259) - - - - - 214 259 - -

Receivables from entitled

parties under the

incentive program

- 126 124 - - - - (126 124) - - -

Total 19 905 (91 393) 1 775 - 116 401 (126 124) 214 259 - 18 939

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Statement of the Management Board of the parent

entity

With regard to the correctness of the consolidated financial statement

Pursuant to the directive of the Finance Minister of 29 March 2018 regarding the publication of periodic and current reports by

issuers of securities and the conditions for regarding as equivalent the information required under the laws of a non-member state,

the Management Board of the parent entity hereby states that, to the best of its knowledge, this consolidated financial statement

and comparative data contained herein have been prepared in accordance with all accounting regulations applicable to the

CD PROJEKT Group and that they constitute a true, unbiased and clear description of the finances and assets of the Group as well

as its current profit and loss balance.

This consolidated financial statement conforms to International Financial Reporting Standards (IFRS) approved by the European

Union and in force as of 31 December 2021. Where the above mentioned standards are not applicable the statement conforms to

the Accounting Act of 29 September 1994 and to any secondary legislation based on said Act, as well as to the directive of the

Finance Minister of 29 March 2018 regarding the publication of periodic and current reports by issuers of securities and the

conditions for regarding as equivalent the information required under the laws of a non-member state.

With regard to the entity contracted to audit the consolidated financial statement

On 14 May 2020 the Supervisory Board of the parent Company concurred with the Audit Committee recommendation and selected

Grant Thornton Polska sp. z o.o. sp. k. with a registered office in Poznań as the entity contracted to review the semiannual financial

statements and to perform an audit of the annual financial statements of the Company and its Group for 2020 and 2021. Grant

Thornton Polska sp. z o.o. sp. k. is authorized to conduct audits of financial statements by the National Chamber of Licensed Auditors

(license no. 4055).

As declared by the Supervisory Board of the Company:

- Grant Thornton Polska sp. z o.o. sp. k. with a registered office in Poznań, along with members of the audit team, fulfill the

necessary criteria to ensure preparation of an unbiased and independent audit of the annual separate financial statement

of CD PROJEKT S.A. and the consolidated statement of the CD PROJEKT Group for the fiscal year ending on 31 December

2021, as defined under the relevant legislation, standards of professional conduct and professional ethics guidelines,

- The CD PROJEKT Group observes existing regulations governing rotation of auditing companies and head auditors, as

well as mandatory grace periods,

- CD PROJEKT S.A. has instituted a policy regulating selection of auditing companies and procurement by CD PROJEKT S.A.

from auditing companies, their affiliates or members of their business networks, of additional services not directly related

to financial audits, including services which auditing companies are conditionally authorized to perform.

Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December 2021

(all figures quoted in PLN thousands unless indicated otherwise)

The appended information constitutes an integral part of this financial statement.

Approval of financial statement

This consolidated financial statement of the CD PROJEKT Group was signed and approved for publication by the Management

Board of CD PROJEKT S.A. on 14 April 2022 and is duly submitted to the General Meeting of CD PROJEKT S.A. for approval.

Warsaw, 14 April 2022

Adam Kiciński Marcin Iwiński Piotr Nielubowicz

President of the Board Vice President of the Board Vice President of the Board

Adam Badowski Michał Nowakowski Piotr Karwowski

Board Member Board Member Board Member

Paweł Zawodny Jeremiah Cohn Krystyna Cybulska

Board Member Board Member Chief Accountant