1
Separate financial statement of CD PROJEKT S.A. 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.
2
Disclaimer
This English language translation has been prepared solely for the convenience of English speaking
readers. Despite all the efforts devoted to this translation, certain discrepancies, omissions or
approximations may exist. In case of any differences between the Polish and the English versions, the
Polish version shall prevail. CD PROJEKT, its representatives and employees decline all responsibility in
this regard.
Separate financial statement of CD PROJEKT S.A. 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.
3
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
692 196 1 883 645 151 217 421 002
Cost of products, services, goods and materials sold 111 002 338 760 24 249 75 714
Operating profit (loss) 265 323 1 128 943 57 962 252 323
Profit (loss) before tax 254 234 1 138 836 55 540 254 534
Net profit (loss) attributable to equity holders of parent
entity
240 113 1 128 056 52 455 252 125
Net cash flows from operating activities 1 039 282 595 080 227 041 133 003
Net cash flows from investment activities (611 597) (95 911) (133 609) (21 437)
Net cash flows from financial activities (504 804) (90 441) (110 279) (20 214)
Total net cash flows (77 119) 408 728 (16 847) 91 352
Stock volume (thousands) 100 718 96 461 100 718 96 461
Net earnings per share (PLN/EUR) 2.38 11.69 0.52 2.61
Diluted net earnings per share (PLN/EUR) 2.38 11.23 0.52 2.51
Book value per share (PLN/EUR) 18.56 22.05 4.03 4.78
Diluted book value per share (PLN/EUR) 18.55 21.17 4.03 4.59
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 2 061 164 2 745 083 448 138 594 843
Liabilities and provisions for liabilities (less accrued
charges)
162 670 574 722 35 368 124 539
Long-term liabilities 29 756 164 990 6 470 35 752
Short-term liabilities 162 359 452 928 35 300 98 147
Equity 1 869 049 2 127 165 406 368 460 944
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 separate profit and loss account and separate 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 separate 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:
4.5994 PLN/EUR on 31 December 2021 and 4.6148 PLN/EUR on 31 December 2020 respectively.
Separate financial statement of CD PROJEKT S.A. 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.
4
Table of contents
Primary financial data of CD PROJEKT S.A. ...................................................................................................................................................................... 6
Profit and loss account ...................................................................................................................................................................................................... 7
Statement of comprehensive income ........................................................................................................................................................................... 7
Statement of financial position ....................................................................................................................................................................................... 8
Statement of changes in equity .................................................................................................................................................................................... 10
Statement of cash flows .................................................................................................................................................................................................. 12
Clarifications regarding the separate financial statement ........................................................................................................................................... 14
General information.......................................................................................................................................................................................................... 15
Changes in accounting policies ................................................................................................................................................................................... 15
Assumption of going concern ....................................................................................................................................................................................... 15
Regulated market listings ............................................................................................................................................................................................... 16
Compliance with International Financial Reporting Standards ........................................................................................................................... 16
Changes in standards or interpretations in force, applied by the Company starting in 2021 ............................................................. 16
Description of applicable accounting practices .......................................................................................................................................................18
Operating revenues and expenses ........................................................................................................................................................................18
Financial revenues and expenses ..........................................................................................................................................................................18
State subsidies .............................................................................................................................................................................................................18
Current and deferred income tax ...........................................................................................................................................................................18
Value added tax .......................................................................................................................................................................................................... 19
Property, plant and equipment ............................................................................................................................................................................... 19
Intangibles - expenditures on development projects ...................................................................................................................................... 19
Other intangibles ........................................................................................................................................................................................................ 19
Goodwill ........................................................................................................................................................................................................................ 20
Business combinations under common control ............................................................................................................................................... 20
Impairment of non-financial assets ....................................................................................................................................................................... 20
Investment properties .............................................................................................................................................................................................. 20
Perpetual usufruct of land ........................................................................................................................................................................................ 21
Lease agreements ...................................................................................................................................................................................................... 21
Investments in subsidiaries ...................................................................................................................................................................................... 21
Financial assets ........................................................................................................................................................................................................... 21
Financial liabilities ...................................................................................................................................................................................................... 22
Inventories ................................................................................................................................................................................................................... 22
Trade and other receivables .................................................................................................................................................................................. 22
Deferrals and accruals.............................................................................................................................................................................................. 22
Cash and other monetary assets ...........................................................................................................................................................................23
Assets held for sale and discontinued operations ...........................................................................................................................................23
Equity ..............................................................................................................................................................................................................................23
Provisions for liabilities ..............................................................................................................................................................................................23
Employee benefits ......................................................................................................................................................................................................23
Loans granted ..............................................................................................................................................................................................................23
Trade and other liabilities .........................................................................................................................................................................................24
Dividend payments ....................................................................................................................................................................................................24
Functional currency and presentation currency ......................................................................................................................................................24
Functional currency and presentation currency ...............................................................................................................................................24
Transactions and balances ......................................................................................................................................................................................24
Important values based on professional judgment and estimates ....................................................................................................................24
Professional judgment...............................................................................................................................................................................................24
Uncertainty of estimates ...........................................................................................................................................................................................24
Comparability of financial statements, changes in accounting policies and changes in estimates ....................................................... 26
Changes in accounting policies ............................................................................................................................................................................ 26
Presentation changes ............................................................................................................................................................................................... 26
Supplementary information – additional notes and explanations concerning the separate financial statement ..................................... 27
Note 1. Sales revenues ............................................................................................................................................................................................. 28
Note 2. Activity segments ....................................................................................................................................................................................... 29
Note 3. Operating expenses .................................................................................................................................................................................. 29
Note 4. Other operating revenues and expenses ........................................................................................................................................... 30
Note 5. Financial revenues and expenses ........................................................................................................................................................... 31
Note 6. Current and deferred income tax ...........................................................................................................................................................32
Note 7. Discontinued operations ...........................................................................................................................................................................35
Note 8. Earnings per share ......................................................................................................................................................................................35
Note 9. Dividends paid out (or declared) and collected .................................................................................................................................35
Note 10. Disclosure of other components of the reported comprehensive income ..............................................................................35
Separate financial statement of CD PROJEKT S.A. 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.
5
Note 11. Property, plant and equipment .............................................................................................................................................................. 36
Note 12. Intangibles and expenditures on development projects .............................................................................................................. 40
Note 13. Goodwill ........................................................................................................................................................................................................ 43
Note 14. Investment properties ............................................................................................................................................................................... 43
Note 15. Investments in subsidiaries .................................................................................................................................................................... 45
Note 16. Other financial assets ............................................................................................................................................................................... 47
Note 17. Joint ventures .............................................................................................................................................................................................. 47
Note 18. Inventories....................................................................................................................................................................................................48
Note 19. Trade receivables ......................................................................................................................................................................................48
Note 20. Other receivables .................................................................................................................................................................................... 52
Note 21. Prepaid expenses ......................................................................................................................................................................................53
Note 22. Cash and cash equivalents ................................................................................................................................................................... 54
Note 23. Share capital .............................................................................................................................................................................................. 54
Note 24. Own shares ................................................................................................................................................................................................ 55
Note 25. Other capital contributions ................................................................................................................................................................... 55
Note 26. Retained earnings.................................................................................................................................................................................... 58
Note 27. Credits and loans ..................................................................................................................................................................................... 58
Note 28. Other financial liabilities ......................................................................................................................................................................... 58
Note 29. Other long-term liabilities ...................................................................................................................................................................... 59
Note 30. Trade liabilities .......................................................................................................................................................................................... 59
Note 31. Other short-term liabilities ...................................................................................................................................................................... 60
Note 32. Internal Social Benefits Fund (ZFŚS): assets and liabilities .......................................................................................................... 61
Note 33. Contingent liabilities ................................................................................................................................................................................. 61
Note 34. Lease and sublease agreements ........................................................................................................................................................ 63
Note 35. Deferred revenues .................................................................................................................................................................................. 65
Note 36. Provisions for employee benefits and similar liabilities ............................................................................................................... 66
Note 37. Other provisions ........................................................................................................................................................................................ 67
Note 38. Disclosure of financial instruments ..................................................................................................................................................... 68
Note 39. Equity management ................................................................................................................................................................................. 72
Nota 40. Employee share programs ..................................................................................................................................................................... 72
Note 41. Transactions with affiliates ...................................................................................................................................................................... 74
Note 42. Compensation of top management and Supervisory Board members.................................................................................... 76
Note 43. Employment ................................................................................................................................................................................................ 76
Note 44. Activated borrowing costs...................................................................................................................................................................... 77
Nota 45. Fiscal settlements ..................................................................................................................................................................................... 77
Note 46. Events following the balance sheet date .......................................................................................................................................... 77
Note 47. Disclosure of transactions with entities contracted to perform audits of financial statements ......................................... 79
Note 48. Clarifications regarding the cash flow statement ............................................................................................................................ 79
Note 49. Cash flows and other changes resulting from financial activities ...............................................................................................81
Note 50. Expenditures on development projects.............................................................................................................................................83
Statement of the Management Board ........................................................................................................................................................................83
Approval of financial statement ....................................................................................................................................................................................84
Primary financial data of
CD PROJEKT S.A.
1
Separate financial statement of CD PROJEKT S.A. 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.
7
Profit and loss account
Note
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020*
Sales revenues 692 196 1 883 645
Revenues from sales of products 1 678 566 1 786 270
Revenues from sales of services 1 5 502 1 840
Revenues from sales of goods and materials 1 8 128 95 535
Cost of products, services, goods and materials sold 111 002 338 760
Cost of products and services sold 3 102 946 249 476
Cost of goods and materials sold 3 8 056 89 284
Gross profit (loss) from sales 581 194 1 544 885
Selling costs 3 241 785 344 565
General and administrative costs 3 59 030 54 875
Other operating revenues 1,4 19 321 8 904
Other operating expenses 4 34 371 25 309
(Impairment)/reversal of impairment of financial instruments (6) (97)
Operating profit (loss) 265 323 1 128 943
Financial revenues 1,5 3 876 16 013
Financial expenses 5 14 965 6 120
Profit (loss) before tax 254 234 1 138 836
Income tax 6 14 121 10 780
Net profit (loss) 240 113 1 128 056
Net earnings per share (in PLN)
Basic for the reporting period 8 2.38 11.69
Diluted for the reporting period 8 2.38 11.23
* adjusted
Statement of comprehensive income
Note
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020*
Net profit/(loss) 240 113 1 128 056
Other comprehensive income which will be entered as profit (loss) following
fulfillment of specific criteria
10 4 342 442
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) 10 - -
Total comprehensive income 244 455 1 128 498
* adjusted
Separate financial statement of CD PROJEKT S.A. 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.
8
Statement of financial position
Note 31.12.2021 31.12.2020*
FIXED ASSETS 887 663 738 694
Property, plant and equipment 11 99 632 101 050
Intangibles 12 59 086 60 125
Expenditures on development projects 12 347 822 384 625
Investment properties 14 61 436 48 841
Goodwill 12,13 49 168 49 168
Investments in subsidiaries 15 43 447 24 567
Deferrals 21 4 741 5 535
Other financial assets 16,38 178 540 53 465
Deferred income tax assets 6 43 418 11 286
Other receivables 20,38 373 32
WORKING ASSETS 1 173 501 2 006 389
Inventories 18 13 539 3 827
Trade receivables 19,38 123 821 1 255 867
Other receivables 20 113 163 48 922
Deferrals 21 4 015 3 366
Other financial assets 16,38 308 168 107 125
Bank deposits (maturity beyond 3 months) 38 265 000 164 368
Cash and cash equivalents 22,38 345 795 422 914
TOTAL ASSETS 2 061 164 2 745 083
* adjusted
Separate financial statement of CD PROJEKT S.A. 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.
9
Note 31.12.2021 31.12.2020*
EQUITY 1 869 049 2 127 165
Share capital 23 100 739 100 655
Supplementary capital 25 1 366 952 737 542
Supplementary capital from sale of shares above nominal value 25 115 909 113 844
Other reserve capital 25 49 515 47 068
Retained earnings 26 (4 179) -
Net profit (loss) for the reporting period 240 113 1 128 056
LONG-TERM LIABILITIES 29 756 164 990
Other financial liabilities 28,34,38 14 757 14 917
Other liabilities 29 2 860 3 173
Deferred revenues 35 6 403 910
Provisions for employee benefits and similar liabilities 36 368 377
Other provisions 37 5 368 145 613
SHORT-TERM LIABILITIES 162 359 452 928
Other financial liabilities 28,34,38 18 620 2 053
Trade liabilities 30,38 16 028 73 024
Current income tax liabilities 24 445 1 296
Other liabilities 31 4 059 4 933
Deferred revenues 35 23 042 42 286
Provisions for employee benefits and similar liabilities 36 5 3
Other provisions 37 76 160 329 333
TOTAL EQUITY AND LIABILITIES 2 061 164 2 745 083
* adjusted
Separate financial statement of CD PROJEKT S.A. 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.
10
Statement of changes in equity
Share capital
Supplementary
capital
Supplementary
capital from sale
of shares above
nominal value
Own shares
Other reserve
capital
Retained
earnings
Net profit/loss
for the current
period
Total equity
01.01.2021 – 31.12.2021
Equity as of 01.01.2021 100 655 737 542 113 844 - 47 068 1 132 235 - 2 131 344
Rectification of errors - - - - - (4 179) - (4 179)
Adjusted equity 100 655 737 542 113 844 - 47 068 1 128 056 - 2 127 165
Cost of incentive
program
- - - - (1 025) - - (1 025)
Payment in own shares 84 869 2 065 - (869) - - 2 149
Dividend payments - - - - - (503 694) - (503 694)
Allocation of net profit/
coverage of losses
- 628 541 - - - (628 541) - -
Total comprehensive
income
- - - - 4 341 - 240 113 244 454
Equity as of 31.12.2021 100 739 1 366 952 115 909 - 49 515 (4 179) 240 113 1 869 049
The Company has rectified its calculation of deferred tax assets as of 31 December 2020 by reassigning some negative temporary differences from the 19% tax rate category to the 5% tax rate category.
As a result, the reported Equity was adjusted downward by 4 179 thousand PLN.
Separate financial statement of CD PROJEKT S.A. 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.
11
Share capital
Supplementary
capital
Supplementary
capital from sale
of shares above
nominal value
Own shares
Other reserve
capital
Retained
earnings
Net profit/loss
for the current
period
Total equity
01.01.2020 – 31.12.2020*
Equity as of 01.01.2020 96 120 744 463 3 861 - 54 655 172 826 - 1 071 925
Cost of incentive
program
- - - - 14 877 - - 14 877
Dissolution of reserve
capital created in past
years and earmarked for
purchase of own shares
- 549 - - (549) - - -
Creation of reserve
capital for purchase of
own shares
- (250 000) - - 250 000 - - -
Purchase of own shares
in the framework of
implementing the
incentive program
- 214 259 - (214 259) (214 259) - - (214 259)
Payment in own shares 4 535 (144 555) 109 983 214 259 (58 098) - - 126 124
Allocation of net profit/
coverage of losses
- 172 826 - - - (172 826) - -
Total comprehensive
income
- - - - 442 - 1 128 056 1 128 498
Equity as of 31.12.2020 100 655 737 542 113 844 - 47 068 - 1 128 056 2 127 165
* adjusted
The Company has adjusted the presentation of the settlement of its incentive program for the years 2012-2015. As a result, Supplementary capital was adjusted downward by 3 861 thousand PLN while
Supplementary capital from sale of shares above nominal value was adjusted upward by the same amount.
Separate financial statement of CD PROJEKT S.A. 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.
12
Statement of cash flows
Note
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020*
OPERATING ACTIVITIES
Net profit (loss) 240 113 1 128 056
Total adjustments: 48 802 191 (551 010)
Depreciation of PP&E, intangibles, expenditures on development projects
and investment properties
12 658 5 647
Depreciation of expenditures on development projects recognized as
cost of products and services sold
82 736 248 164
Profit (loss) from exchange rate differences (15 118) 2 223
Interest and profit sharing (343) (7 246)
Profit (loss) from investment activities 41 323 (5 438)
Change in provisions (307 704) 359 214
Change in inventories (9 712) 4 658
Change in receivables 1 067 693 (1 110 415)
Change in liabilities excluding credits and loans (57 773) 47 553
Change in other assets and liabilities (13 846) (111 936)
Other adjustments 2 277 16 566
Cash flows from operating activities 1 042 304 577 046
Income tax on pre-tax profit (loss) 8 263 (2 982)
Withholding tax paid abroad 5 858 13 762
Income tax (paid)/reimbursed (17 143) 7 254
Net cash flows from operating activities 1 039 282 595 080
INVESTMENT ACTIVITIES
Inflows 263 407 824 849
Sales of intangibles and PP&E 1 015 17
Expenditures on development projects reassigned in the framework of
a consortium agreement
152 312
Sales of subsidiary shares 19 -
Repayment of loans granted 5 301 1 049
Closing bank deposits (maturity beyond 3 months) 164 368 754 581
Maturation of bonds 82 715 59 426
Interest on bonds 1 703 115
Inflows from forward contracts 7 887 1 801
Other inflows from investment activities 247 7 548
Outflows 875 004 920 760
Purchases of intangibles and PP&E 27 789 16 321
Expenditures on development projects 155 265 196 100
Purchase of investment properties and activation of costs 2 085 8 336
Loans granted 7 339 4 500
Acquisition of subsidiary 7 679 -
Purchase of bonds and the associated purchasing costs 396 829 209 441
Opening bank deposits (maturity beyond 3 months) 265 000 486 054
Capital contributions to subsidiary 13 018 -
Other outflows from investment activities - 8
Net cash flows from investment activities (611 597) (95 911)
* adjusted
Separate financial statement of CD PROJEKT S.A. 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.
13
Note
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
FINANCIAL ACTIVITIES
Inflows 2 189 126 124
Net inflows from sale of own shares and issue of stock in the exercise of
options granted under the incentive program
2 149 126 124
Collection of receivables arising from financial lease agreements 40 -
Outflows 506 993 216 565
Purchase of own shares in order to enable exercise of options granted
under the incentive program
- 214 259
Dividends and other payments due to equity holders 503 694 -
Payment of liabilities arising from lease agreements 2 834 2 015
Interest payments 465 291
Net cash flows from financial activities (504 804) (90 441)
Total net cash flows (77 119) 408 728
Balance of changes in cash and cash equivalents (77 119) 408 728
Cash and cash equivalents at beginning of period 422 914 14 186
Cash and cash equivalents at end of period 345 795 422 914
Clarifications regarding the separate
financial statement
2
Separate financial statement of CD PROJEKT S.A. for the period between 1 January and 31 December 2020
(all figures quoted in PLN thousands unless indicated otherwise)
The appended information constitutes an integral part of this financial statement.
15
General information
Name: CD PROJEKT S.A.
Legal status: Joint-stock company
Headquarters: Jagiellońska 74, 03-301 Warsaw
Country of registration: Poland
Principal scope of activity: Development and publishing of videogames and the associated merchandise
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 company Indefinite
Changes in accounting policies
The accounting practices applied in preparing this separate financial statement, the Management Board’s professional judgment
concerning the Company’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 Separate Financial Statement of CD PROJEKT S.A. for 2020, except for
changes in accounting policies and presentation-related adjustments described in the section entitled “Comparability of financial
statements, changes in accounting policies and changes in estimates”.
Assumption of going concern
This separate financial statement is prepared under the assumption that the Company intends 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 separate financial statement, the Management Board of the 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 separate financial statement covering the period between 1 January and 31 December 2021 the
Management Board 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.
Separate financial statement of CD PROJEKT S.A. for the period between 1 January and 31 December 2020
(all figures quoted in PLN thousands unless indicated otherwise)
The appended information constitutes an integral part of this financial statement.
16
Regulated market listings
General information
Stock exchange
Warsaw Stock Exchange (Giełda Papierów Wartościowych
w Warszawie S.A.)
Książęca 4
00-498 Warsaw
WSE ticker symbol CDR
Depository and settlement system
Depository and settlement system
National Deposit for Securities (Krajowy Depozyt Papierów
Wartościowych S.A.; KDPW)
Książęca 4
00-498 Warsaw
Contact for investors
Investor relations gielda@cdprojekt.com
Compliance with International Financial Reporting
Standards
The Company’s 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 Company
starting in 2021
In preparing its separate financial statement for 2021 the Company applied the same accounting standards as in its separate
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.
Separate financial statement of CD PROJEKT S.A. for the period between 1 January and 31 December 2020
(all figures quoted in PLN thousands unless indicated otherwise)
The appended information constitutes an integral part of this financial statement.
17
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 Company’s accounting practices as relates to the Company’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 Company’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 Company 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 Company does not anticipate a significant effect of these changes upon its accounting practices as relates to the Company’s
activities or its financial result.
Standards and interpretations approved by the IASB but not yet approved by the EU
In approving this financial statement the Company 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 Company is performing an assessment of the effect these new standards and amendments to standards upon the Company’s
financial statement.
Separate financial statement of CD PROJEKT S.A. for the period between 1 January and 31 December 2020
(all figures quoted in PLN thousands unless indicated otherwise)
The appended information constitutes an integral part of this financial statement.
18
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 Company and leading to an increase in its equity other than from capital increases obtained through shareholder
contributions.
The Company recognizes revenues by applying the so-called Five Step Model described in IFRS 15. Revenues only cover amounts
received or receivable by the Company, equivalent to the transaction prices payable to the Company 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 Company 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 Company’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 Company 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, as well as 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.
State subsidies
Subsidies are not recognized until there is a reasonable certainty that the Company 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 in 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 Company’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 Company 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.
Separate financial statement of CD PROJEKT S.A. for the period between 1 January and 31 December 2020
(all figures quoted in PLN thousands unless indicated otherwise)
The appended information constitutes an integral part of this financial statement.
19
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
Company’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
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 Company 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 Company 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
Separate financial statement of CD PROJEKT S.A. for the period between 1 January and 31 December 2020
(all figures quoted in PLN thousands unless indicated otherwise)
The appended information constitutes an integral part of this financial statement.
20
Intangibles with a low opening value, not exceeding 5 000 PLN, are depreciated in a simplified way through a one-time deduction.
In its financial statement, the Company 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 separate 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 Company 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.
Impairment of non-financial assets
For each balance sheet date the Company performs an inventory of the net value of all of its 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 the
Company.
Investment properties are estimated using the purchase cost method.
Separate financial statement of CD PROJEKT S.A. 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.
21
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 Company represents the usufruct of such leases, in
accordance with its nature, as either Investment properties or Property, Plant and Equipment.
Lease agreements
The Company, 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 Company 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 Company 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 Company 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 Company 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.
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 Company 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.
Investments in subsidiaries
Investments in subsidiaries 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 Company assigns each of its financial assets into one of four categories, depending on the Company’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.
Separate financial statement of CD PROJEKT S.A. 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.
22
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 Company 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 Company does not engage in hedge accounting, the corresponding IFRS 9 provisions do not apply to the Company’s
activities.
Credit risk associated with assets which constitute financial instruments is estimated by the Company 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
Company 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 the Company classifies each of its 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.
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 Company recognizes as deferred revenues those revenues which corresponds to future reporting periods, at the moment
these revenues are realized.
Future period sales represent mainly royalties obtained or obtainable in association with customer preorders of digital editions of
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.
Separate financial statement of CD PROJEKT S.A. 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.
23
Accrued expenses represent liabilities related to goods and services which have been received or rendered, invoiced or formally
agreed upon with suppliers.
The Company recognizes as prepaid expenses costs borne upfront, associated – in whole or in part – with future reporting periods.
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
Company management’s intent to conclude the sale transaction within one year of such a designation being made.
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 Company is a party.
Share capital is reported at nominal value, in the amount consistent with the Company articles and its record in the court register.
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 Company faces a liability (whether legal or customary) resulting from past events, it is likely
that discharging said liability will reduce the Company’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 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 Company 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 Company selected a number of persons who, assuming
these profit and marketing goals are met, are rewarded with subscription warrants entitling them to acquire Company shares by
way of a conditional increase in the 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.
Separate financial statement of CD PROJEKT S.A. 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.
24
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 Company’s equity less any applicable liabilities.
Dividend payments
Dividends are recognized at the moment the Company’s shareholders become entitled to receive them.
Functional currency and presentation currency
Functional currency and presentation currency
Figures reported in this financial statement are denominated in the currency of the primary economic environment in which the
Company carries outs its activities (functional currency). The functional currency and the presentation currency of the 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 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.
Separate financial statement of CD PROJEKT S.A. 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.
25
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.
The Company 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 Company’s financial result are computed using the recursion principle – the value of provisions decreases the
result upon which such provisions are computed.
The Company 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
The Company recognizes 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
The Company recognizes 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 the Company applies its professional judgment.
Depreciation rates
Depreciation rates are determined on the basis of the expected useful economic life of tangible equity assets and intangible assets.
The Company performs annual validation of the assumed useful economic life of its assets, based on current estimates.
Separate financial statement of CD PROJEKT S.A. 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.
26
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 Company’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 Separate Financial Statement of CD PROJEKT S.A. for 2020, except
for changes in accounting policies and presentation-related adjustments described below.
Presentation changes
This separate financial statement for the period between 1 January and 31 December 2021 incorporates changes in the presentation
of selected 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 Company rectified its calculation of deferred income tax assets for 31 December 2020 by reassigning some negative
temporary differences from the 19% tax rate category to the 5% tax rate category, resulting in the following adjustments:
- Deferred income tax assets – adjusted by (4 179) thousand PLN
- Net profit/loss for the current period – adjusted by (4 179) thousand PLN
As a result of this change, the reported equity decreased by 4 179 thousand PLN.
In the statement of financial position for 31 December 2020, in order to ensure consistency with the consolidated financial
statement, the presentation of goodwill was adjusted as follows:
- Goodwill – adjusted by 49 168 thousand PLN
- Intangibles – adjusted by (49 168) thousand PLN
This adjustment does not affect the Company’s financial result or equity.
Supplementary information –
additional notes and explanations
concerning the separate financial
statement
3
Separate financial statement of CD PROJEKT S.A. 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.
28
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 Company’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 692 196 1 883 645
incl. from R&D activities 281 564 911 222
Revenues from sales of products 678 566 1 786 270
Revenues from sales of services 5 502 1 840
Revenues from sales of goods and materials 8 128 95 535
Other revenues 23 197 24 917
Other operating revenues 19 321 8 904
Financial revenues 3 876 16 013
Total 715 393 1 908 562
Sales revenues by territory**
01.01.2021 – 31.12.2021 01.01.2020 – 31.12.2020*
PLN % PLN %
Domestic sales 23 468 3.39% 157 785 8.38%
Exports, including: 668 728 96.61% 1 725 860 91.62%
Europe 42 566 6.15% 217 283 11.53%
North America 568 645 82.15% 1 369 724 72.72%
South America 144 0.02% 989 0.05%
Asia 58 066 8.39% 112 211 5.96%
Australia (693) (0.10)% 23 423 1.24%
Africa - - 2 230 0.12%
Total 692 196 100% 1 883 645 100%
* 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 Company’s immediate clients (distributors), not final customers.
Sales revenues by product type
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Own products 678 566 1 786 270
External products 8 128 95 535
Other revenues 5 502 1 840
Total 692 196 1 883 645
Separate financial statement of CD PROJEKT S.A. 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.
29
Sales revenues by distribution channel
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Videogames – box editions 87 141 163 303
Videogames – digital editions 581 016 1 699 283
Other revenues 24 039 21 059
Total 692 196 1 883 645
Note 2. Activity segments
Information concerning the Company’s operating segments is provided in Section 3 “Supplementary information – activity
segments” of the Consolidated Financial Statement of the CD PROJEKT Group for the period between 1 January and 31 December
2021.
Note 3. 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:
12 658 5 647
depreciation of leased buildings 1 323 609
depreciation of leased vehicles 147 158
Consumption of materials and energy 2 735 2 820
Bought-in services, including: 155 407 180 113
short-term leases and leases of low-value assets 719 665
Taxes and fees 1 081 1 191
Employee compensation, social security and other benefits 126 840 208 632
Business travel 519 262
Use of company cars 206 147
Cost of goods and materials sold 8 056 89 284
Cost of products and services sold 102 946 249 476
Other expenses 1 369 628
Total 411 817 738 200
Selling costs 241 785 344 565
General and administrative costs 59 030 54 875
Cost of products, services, goods and materials sold 111 002 338 760
Total 411 817 738 200
Separate financial statement of CD PROJEKT S.A. 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.
30
Depreciation and impairment write-downs recognized in the profit and loss account
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Items aggregated with cost of products, services, goods and materials sold 905 791
Depreciation of PP&E 795 603
Depreciation of intangibles 110 188
Items aggregated with selling costs 9 565 3 452
Depreciation of PP&E 7 565 2 488
Depreciation of intangibles 2 000 964
Items aggregated with general and administrative costs 3 093 2 195
Depreciation of PP&E 2 363 1 583
Depreciation of intangibles 730 612
Items aggregated with other operating expenses 22 911 1 462
Depreciation of investment properties 2 105 1 462
Impairment of expenditures on development projects 20 806 -
Total 36 474 7 900
Employee benefits
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Employee remuneration 112 956 201 859
Social security and other similar expenses 9 819 4 600
Other employee benefits 4 065 2 173
Total employee benefits 126 840 208 632
Items aggregated with selling costs 94 810 166 663
Items aggregated with general and administrative costs 32 030 41 969
Note 4. Other operating revenues and expenses
Other operating revenues
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Subsidies 7 929 128
Revenue from lease contracts 7 122 6 416
Reinvoicing revenues 2 886 1 471
Compensation for damages received 468 168
PP&E and goods received free of charge 283 503
Dissolution of unused provisions for expenses 271 -
Other sales 161 156
Profit from sale of PP&E 136 17
Other miscellaneous operating revenues 65 45
Total other operating revenues 19 321 8 904
Separate financial statement of CD PROJEKT S.A. 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
Other operating expenses
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Impairment allowances on PP&E, intangibles and expenditures on development
projects
20 806 -
Own cost of leases 4 908 4 040
Reinvoicing expenses 2 887 1 470
Depreciation of investment properties 2 105 1 462
Provisions for uninsured portion of costs related to the legal settlement in the USA 1 502 -
Disposal of materials and goods 963 6 063
Disposal of PP&E and intangibles 668 52
Donations 415 2 300
Liquidation of investment properties 51 1 630
Help Me Refund campaign – refunds 33 8 238
Settlement of stocktaking shortages - 22
Other miscellaneous operating expenses 33 32
Total other operating expenses 34 371 25 309
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.
Note 5. Financial revenues and expenses
Financial revenues
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Revenues from interest 1 594 7 761
on bonds 1 321 193
on loans 205 142
on short-term bank deposits 68 7 426
Other financial revenues 2 282 8 252
settlement and estimation of derivative financial instruments 2 271 8 250
management Board forward contracts 6 -
other miscellaneous financial revenues 5 2
Total financial revenues 3 876 16 013
Separate financial statement of CD PROJEKT S.A. 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.
32
Financial expenses
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Interest payments 1 288 539
on bonds 787 224
on lease agreements 464 291
on budget commitments 37 24
Other financial expenses 13 677 5 581
surplus negative exchange rate differences 10 207 4 372
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 14 965 6 120
Net balance of financial activities (11 089) 9 893
Note 6. 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 46 149 27 039
For the fiscal year 40 291 13 277
Withholding tax paid abroad 5 858 13 762
Deferred income tax (32 028) (16 259)
Due to creation and reversal of temporary differences (32 028) (16 259)
Tax burden reported in profit and loss account 14 121 10 780
* adjusted
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.
Separate financial statement of CD PROJEKT S.A. 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.
33
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 273 636 (19 402) 1 131 826 7 010
Revenues increasing the tax
base
2 377 1 606 5 744 11 722
Revenues applicable to future
reporting periods
908 111 - (972 621) -
Tax-exempt revenues (9 009) 5 530 (1 061) (7 024)
Expenses reducing the tax base (14 100) - (494 253) (214 259)
Non-deductible expenses (95 940) 19 983 453 385 580
Taxable income 1 065 075 7 717 123 020 (201 971)
Deductions from income – loss (226 106) (7 717) - -
Deductions from income –
donations
- - (2 200) -
Deductions from income – R&D
fiscal relief
(31 741) - (79 686) -
Deductions from income – tax-
exempt income
(1 403) - (1 707) -
Tax base, including: 805 825 - 39 427 (201 971)
Subject to 5% tax rate (profit) 805 825 - 265 533 -
Subject to 5% tax rate (loss) - - (226 106) -
Subject to 19% tax rate (loss) - - - (201 971)
Income tax due in Poland
(rate: 5%)
40 291 - 13 277 -
Income tax 40 291 - 13 277 -
Effective tax rate 5.16% - 0.95% -
* 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.
Separate financial statement of CD PROJEKT S.A. 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.
34
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 380 (8) - 372
Provisions for compensation dependent
on financial result, and other compensation
190 040 (150 640) - 39 400
Tax loss 226 106 (226 106) - -
Negative exchange rate differences 23 810 (21 524) - 2 286
Difference between balance sheet value and
tax value of expenditures on development
projects
3 043 21 749 - 24 792
Compensation and social security payable
in future reporting periods
23 38 - 61
Other provisions 220 327 (172 826) - 47 501
R&D tax relief 309 826 (7 872) - 301 954
Advance payments recognized as taxable
income
4 036 (2 567) - 1 469
Total negative temporary differences 977 591 (559 756) - 417 835
subject to 5% tax rate 647 098 (586 681) - 60 417
subject to 19% tax rate 330 493 26 925 - 357 418
Deferred tax assets 95 149 (24 218) - 70 931
* adjusted
Positive temporary differences requiring creation of deferred tax provisions
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
13 216 913 - 14 129
Income in the current period invoiced in the
following period / accrued income
1 201 112 (1 072 323) - 128 789
Positive exchange rate differences 21 577 (6 791) - 14 786
Estimation of bonds 610 (65) (545) -
Estimation of forward contracts 6 835 (6 835) - -
Difference between balance sheet value and
tax value of expenditures on development
projects
289 019 (17 347) - 271 672
Other sources 71 20 - 91
Total positive temporary differences 1 532 440 (1 102 428) (545) 429 467
subject to 5% tax rate 1 480 719 (1 094 396) - 386 323
subject to 19% tax rate 51 721 (8 032) (545) 43 144
Deferred tax provisions 83 863 (56 246) (104) 27 513
* 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 Company relied on projections regarding
the tax base to which each temporary difference is likely to apply.
Separate financial statement of CD PROJEKT S.A. 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.
35
Net balance of deferred tax assets/provisions
31.12.2021 31.12.2020*
Deferred tax assets 70 931 95 149
Deferred tax provisions 27 513 83 863
Net deferred tax – assets/(provisions) 43 418 11 286
* adjusted
Note 7. Discontinued operations
No operations were discontinued by the Company in either the current or the preceding financial year.
Note 8. 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 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 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 shares of the Company. Information regarding the
quantity of entitlements assigned is provided in Note 40.
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 240 113 1 128 056
Base net earnings per share (PLN) 2.38 11.69
Diluted net earnings per share (PLN) 2.38 11.23
* adjusted
Note 9. 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 Company’s profit obtained in 2020
to a dividend payable to shareholders. In line with the corresponding resolution, on 8 June 2021 the 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 Company.
Note 10. Disclosure of other components of the reported comprehensive
income
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020*
Net profit (loss) 240 113 1 128 056
Estimation of foreign treasury bonds 4 238 545
Tax effect of bond estimation 104 (103)
Total comprehensive income 244 455 1 128 498
* adjusted
Separate financial statement of CD PROJEKT S.A. 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.
36
Note 11. Property, plant and equipment
Ownership structure of property, plant and equipment
31.12.2021 31.12.2020
Wholly owned 83 996 84 115
Held under lease contracts 15 636 16 935
Total 99 632 101 050
PP&E whose title is restricted
31.12.2021 31.12.2020
Held under a financial lease contract 15 636 16 935
Total 15 636 16 935
Contractual commitments for future acquisition of PP&E
31.12.2021 31.12.2020
Leasing of passenger cars 429 165
Total 429 165
Separate financial statement of CD PROJEKT S.A. 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.
37
Changes in PP&E (by category) between 01.01.2021 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 62 145 1 834 31 863 2 538 3 083 1 651 139 100
Increases from: - 9 231 53 13 164 1 253 1 765 9 429 34 895
purchase - 1 199 53 13 164 17 1 534 9 429 25 396
lease agreements
concluded
- 77 - - 1 236 - - 1 313
reassignment from
PP&E under
construction
- 7 955 - - - 231 - 8 186
Reductions from: - 14 343 11 1 299 805 4 8 855 25 317
sale - 815 - 328 189 - - 1 332
disposal - 186 11 971 616 4 - 1 788
reassignment from
PP&E under
construction
- - - - - - 8 855 8 855
reassignment to
investment
properties
- 13 342 - - - - - 13 342
Gross carrying amount
as of 31.12.2021
35 986 57 033 1 876 43 728 2 986 4 844 2 225 148 678
Depreciation as of
01.01.2021
588 11 181 275 22 454 1 588 1 964 - 38 050
Increases from: 567 4 733 286 6 582 386 654 - 13 208
depreciation 567 4 733 286 6 582 386 654 - 13 208
Reductions from: - 714 3 1 148 344 3 - 2 212
reassignment to
investment
properties
- 638 - - - - - 638
sale - - - 274 180 - - 454
disposal - 76 3 874 164 3 - 1 120
Depreciation as of
31.12.2021
1 155 15 200 558 27 888 1 630 2 615 - 49 046
Impairment allowances
as of 01.01.2021
- - - - - - - -
Impairment allowances
as of 31.12.2021
- - - - - - - -
Net carrying amount
as of 01.01.2021
35 398 50 964 1 559 9 409 950 1 119 1 651 101 050
Net carrying amount
as of 31.12.2021
34 831 41 833 1 318 15 840 1 356 2 229 2 225 99 632
Separate financial statement of CD PROJEKT S.A. 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.
38
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 60 305 1 587 24 687 2 059 2 563 131 127 318
Increases from: - 2 343 251 7 301 616 530 2 057 13 098
purchase - 265 27 7 239 - 277 2 057 9 865
lease agreements
concluded
- 927 94 - 616 - - 1 637
reassignment from
PP&E under
construction
- - 130 - - 253 - 383
reassignment from
investment
properties
- 1 151 - - - - - 1 151
receipt free of
charge
- - - 62 - - - 62
Reductions from: - 503 4 125 137 10 537 1 316
sale - - - 119 137 - - 256
disposal - 503 4 6 - 10 41 564
reassignment from
PP&E under
construction
- - - - - - 496 496
Gross carrying amount
as of 31.12.2020
35 986 62 145 1 834 31 863 2 538 3 083 1 651 139 100
Depreciation as of
01.01.2020
84 7 179 53 16 493 1 316 1 509 - 26 634
Increases from: 504 4 505 223 6 080 409 460 - 12 181
depreciation 504 4 480 223 6 080 409 460 - 12 156
reassignment from
investment
properties
- 25 - - - - - 25
Reductions from: - 503 1 119 137 5 - 765
sale - - - 119 137 - - 256
disposal - 503 1 - - 5 - 509
Depreciation as of
31.12.2020
588 11 181 275 22 454 1 588 1 964 - 38 050
Impairment allowances
as of 01.01.2020
- - - - - - - -
Impairment allowances
as of 31.12.2020
- - - - - - - -
Net carrying amount
as of 01.01.2020
35 902 53 126 1 534 8 194 743 1 054 131 100 684
Net carrying amount
as of 31.12.2020
35 398 50 964 1 559 9 409 950 1 119 1 651 101 050
Separate financial statement of CD PROJEKT S.A. 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.
39
PP&E under construction
01.01.2021
Expenditures
in fiscal year
Expenditure
settlements
31.12.2021
Redevelopment of property at Jagiellońska 74 1 612 9 254 8 855 2 011
Other 39 175 - 214
Total 1 651 9 429 8 855 2 225
01.01.2020
Expenditures
in fiscal year
Expenditure
settlements
31.12.2020
Redevelopment of property at Jagiellońska 74 54 2 054 496 1 612
Other 77 3 41 39
Total 131 2 057 537 1 651
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 4 718 4 357 361 4 641 2 595 2 046
Civil engineering objects 94 47 47 94 - 94
Vehicles 1 236 84 1 152 616 103 513
Total 20 588 4 952 15 636 19 891 2 958 16 933
Separate financial statement of CD PROJEKT S.A. 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.
40
Note 12. Intangibles and expenditures on development projects
Changes in intangibles and expenditures on development projects between
01.01.2021 and 31.12.2021
Development
projects
in
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
28 890 798 035 34 467 1 435
18 331 26 277 49 168
1 129 - 957 732
Increases from: 66 891 457 - 153
- 3 855 -
209 - 71 565
purchases - - - 153
- 2 526 -
209 - 2 888
reassignment
from intangible
assets under
construction
- - - -
- 1 329 -
- - 1 329
reassignment
from development
projects
in progress
- 457 - -
- - -
- - 457
own creation 66 891 - - -
- - -
- - 66 891
Reductions from: 609 - - 91
- - -
1 329 - 2 029
disposal - - - 91
- - -
- - 91
reassignment
from intangible
assets under
construction
- - - -
- - -
1 329 - 1 329
reassignment
from development
projects
in progress
457 - - -
- - -
- - 457
expenditures on
development
projects
transferred under
a consortium
agreement
152 - - -
- - -
- - 152
Gross carrying
amount as of
31.12.2021
95 172 798 492 34 467 1 497
18 331 30 132 49 168
9 - 1 027 268
Depreciation as of
01.01.2021
- 442 300 - 1 043
48 20 423 -
- - 463 814
Increases from: - 82 736 - 321
125 3 481 -
- - 86 663
depreciation - 82 736 - 321
125 3 481 -
- - 86 663
Reductions from: - - - 91
- - -
- - 91
disposal - - - 91
- - -
- - 91
Depreciation as of
31.12.2021
- 525 036 - 1 273
173 23 904 -
- - 550 386
Impairment
allowances as of
01.01.2021
- - - -
- - -
- - -
Increases from: 20 806 - - -
- - -
- - 20 806
impairment 20 806 - - -
- - -
- - 20 806
Impairment
allowances as of
31.12.2021
20 806 - - -
- - -
- - 20 806
Net carrying amount
as of 01.01.2021
28 890 355 735 34 467 392
18 283 5 854 49 168
1 129 - 493 918
Net carrying amount
as of 31.12.2021
74 366 273 456 34 467 224
18 158 6 228 49 168
9 - 456 076
Separate financial statement of CD PROJEKT S.A. 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.
41
Changes in intangibles and expenditures on development projects between
01.01.2020 and 31.12.2020
Development
projects
in
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
324 532 229 634 34 467 2 668
17 718 25 001 49 168
1 055 1 684 244
Increases from: 273 071 568 401 - 1 992
613 4 628 -
676 - 849 381
purchases - - - 1 789
613 4 229 -
676 - 7 307
reassignment
from intangible
assets under
construction
- - - 203
- 399 -
- - 602
reassignment
from development
projects in
progress
- 568 401 - -
- - -
- - 568 401
own creation 273 071 - - -
- - -
- - 273 071
Reductions from: 568 713 - - 3 225
- 3 352 -
602 1 575 893
disposal - - - 3 225
- 3 352 -
- 1 6 578
reassignment
from intangible
assets under
construction
- - - -
- - -
602 - 602
reassignment
from development
projects in
progress
568 401 - - -
- - -
- - 568 401
reassignment of
expenditures on
development
projects under
consortium
agreement
312 - - -
- - -
- - 312
Gross carrying
amount as of
31.12.2020
28 890 798 035 34 467 1 435
18 331 26 277 49 168
1 129 - 957 732
Depreciation as of
01.01.2020
- 194 136 - 1 225
- 19 279 -
- 1 214 641
Increases from: - 248 164 - 3 043
48 4 493 -
- - 255 748
depreciation - 248 164 - 3 043
48 4 493 -
- - 255 748
Reductions from: - - - 3 225
- 3 349 -
- 1 6 575
disposal - - - 3 225
- 3 349 -
- 1 6 575
Depreciation as of
31.12.2020
- 442 300 - 1 043
48 20 423 -
- - 463 814
Impairment
allowances as of
01.01.2020
- - - -
- - -
- - -
Impairment
allowances as of
31.12.2020
- - - -
- - -
- - -
Net carrying amount
as of 01.01.2020
324 532 35 498 34 467 1 443
17 718 5 722 49 168
1 055 - 469 603
Net carrying amount
as of 31.12.2020
28 890 355 735 34 467 392
18 283 5 854 49 168
1 129 - 493 918
Separate financial statement of CD PROJEKT S.A. 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.
42
Ownership structure of intangible assets
31.12.2021 31.12.2020*
Wholly owned 59 086 60 125
Total 59 086 60 125
* adjusted
Intangible assets under construction
01.01.2021
Expenditures
in financial
year
Expenditure
settlements
31.12.2021
HR support system 1 129 200 1 329 -
Document flow system - 9 - 9
Total 1 129 209 1 329 9
01.01.2020
Expenditures
in financial
year
Expenditure
settlements
31.12.2020
HR support system 655 474 - 1 129
Musical score 77 126 203 -
Document flow system 323 76 399 -
Total 1 055 676 602 1 129
Contractual commitments for future acquisition of intangible assets
None reported.
Intangible assets whose title is restricted
None reported.
Separate financial statement of CD PROJEKT S.A. 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.
43
Note 13. 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 39 147 10 021 49 168
Gross goodwill as of 31.12.2021 39 147 10 021 49 168
Impairment allowances as of 01.01.2021 - - -
Impairment allowances as of 31.12.2021 - - -
Net goodwill as of 01.01.2021 39 147 10 021 49 168
Net goodwill as of 31.12.2021 39 147 10 021 49 168
Goodwill impairment tests 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 goodwill was conducted on 31 December 2021.
No impairment of goodwill was identified.
Business combinations
None reported.
Note 14. Investment properties
The 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 Company has decided to report it in
part as an investment property. The remaining part of both properties is used by the Company for its own purposes.
Properties purchased by the Company are estimated at purchase price less depreciation.
Separate financial statement of CD PROJEKT S.A. 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.
44
Change in value of investment properties between 1 January 2021 and 31 December 2021,
and between 1 January 2020 and 31 December 2020
31.12.2021 31.12.2020
Gross value at beginning of period 50 650 45 296
Increases from: 15 428 8 179
activation of costs 2 086 8 179
reclassification of expenses from PP&E following handover of investment property 13 342 -
Reductions from: 56 2 825
disposal 56 1 674
reassignment to other asset categories - 1 151
Gross value at end of period 66 022 50 650
Depreciation at beginning of period 1 809 336
Increases from: 2 782 1 541
depreciation 2 144 1 541
reassignment from perpetual usufruct of land and from PP&E 638 -
Reductions from: 5 68
disposal 5 43
reassignment to other asset categories - 25
Depreciation at end of period 4 586 1 809
Impairment allowances at beginning of period - -
Increases - -
Reductions - -
Impairment allowances at end of period - -
Net value at end of period 61 436 48 841
Contractual commitments for acquisition of investment properties
None reported.
Separate financial statement of CD PROJEKT S.A. 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.
45
Note 15. Investments in subsidiaries
Investments in subsidiaries held at purchase price
31.12.2021 31.12.2020
Shares in subsidiaries 43 447 24 567
Total 43 447 24 567
Changes in investments in subsidiaries
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
At beginning of period 24 567 23 830
Increases from: 23 585 737
purchase/incorporation of subsidiary 7 679 -
capital contributions mandated by the incentive program 2 888 737
capital contributions to subsidiary 13 018 -
Reductions from: 4 705 -
sale of subsidiary or shares therein 19 -
creation of impairment allowances 1 668 -
capital contributions mandated by the incentive program 3 018 -
At end of period 43 447 24 567
Separate financial statement of CD PROJEKT S.A. 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.
46
Investments in subsidiaries as of 31.12.2021
GOG sp. z o.o. CD PROJEKT Inc.
CD PROJEKT Co., Ltd.
(in liquidation)
Spokko sp. z o.o.
CD PROJEKT RED
STORE sp. z o.o.
CD PROJEKT RED
Vancouver Studio Ltd.
Registered office Warsaw
Los Angeles,
Venice
Shanghai Warsaw Warsaw Vancouver
Percentage of shares
held as of 31.12.2021
100% 100% 100% 74% 100% 100%
Percentage of votes
controlled
as of 31.12.2021
100% 100% 100% 74% 100% 100%
Capital investment 14 978 13 810 - 6 481 500 7 678
Investments in subsidiaries as of 31.12.2020
GOG sp. z o.o. CD PROJEKT Inc. CD PROJEKT Co., Ltd. Spokko sp. z o.o.
CD PROJEKT RED
STORE sp. z o.o.
Registered office Warsaw
Los Angeles,
Venice
Shanghai Warsaw Warsaw
Percentage of shares
held as of 31.12.2020
100% 100% 100% 75% 100%
Percentage of votes
controlled
as of 31.12.2020
100% 100% 100% 75% 100%
Capital investment 15 078 794 1 695 6 500 500
Separate financial statement of CD PROJEKT S.A. 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.
47
Note 16. Other financial assets
31.12.2021 31.12.2020
Loans granted 9 292 7 156
Bonds 477 416 146 985
Derivative financial instruments - 6 449
Other financial assets, including: 486 708 160 590
short-term assets 308 168 107 125
long-term assets 178 540 53 465
In 2021 CD PROJEKT S.A. granted loans to its affiliates – CD PROJEKT Inc. and Spokko sp. z o.o.
Loans granted to CD PROJEKT Inc. under the agreements concluded on 18 June 2019 and 12 September 2019 were repaid in
February 2021. The loan granted on 23 December 2019 is repayable by the end of December 2022, subject to a variable interest
rate, which is updated on a quarterly basis. On 7 October 2021, in line with an agreement signed on the same date, the Company
granted a short-term loan to CD PROJEKT Inc. This loan was repaid on 23 November 2021.
The loan granted to CD PROJEKT RED STORE sp z o.o. under the agreement concluded on 25 October 2019 was repaid on
27 October 2021, while the loan granted under the agreement concluded on 20 December 2019 was repaid on 8 December 2021.
In parallel, a separate agreement was signed on 10 February 2022 in accordance with which a new loan was granted to
CD PROJEKT RED STORE sp z o.o. The agreement stipulates that the loan would be divided into three batches, the first of which
was disbursed on 14 February 2022. The loan is repayable by 31 January 2023, subject to a variable interest rate which is updated
on a quarterly basis.
In 2021 on 25 February and 30 March 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. (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 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 17. Joint ventures
The Company participated in the following significant joint ventures:
Name of
venture
Principal site
of activity
Contract
concluded in
Scope of activity Entities involved
Main responsibilities in
the framework of the joint
venture
Consortium Warsaw 2016
Collaboration in the
scope of
development,
release, distribution
and maintenance of
the GWENT and
Thronebreaker
videogames
CD PROJEKT S.A.
Conceptual development,
gameplay mechanics,
graphics, front-end
programming, localization,
marketing and
communication
GOG sp. z o.o.
(formerly GOG
Poland sp. z o.o.)
Back-end programming, in-
game sales, maintenance
of server infrastructure
Joint activities carried out by CD PROJEKT S.A. and GOG sp. z o.o. in the context of the GWENT and Thronebreaker development
consortium concluded on 31 December 2021.
By the end of 2021 these activities had been settled in monthly cycles. The basis for each settlement, alongside the predetermined
share ratio, was the aggregate profit or loss generated by the project during the given month, inclusive of all revenues and expenses
directly associated with GWENT and Thronebreaker.
Separate financial statement of CD PROJEKT S.A. 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.
48
Note 18. Inventories
31.12.2021 31.12.2020
Goods 13 535 3 816
Other materials 4 11
Gross inventories 13 539 3 827
Inventory impairment allowances - -
Net inventories 13 539 3 827
The “Other materials” line item represents marketing materials.
Inventories between 01.01.2021 and 31.12.2021
Goods Total
Value of inventories recognized as expenses during the reporting period 8 056 8 056
Total 8 056 8 056
Inventories between 01.01.2020 and 31.12.2020
Goods Total
Value of inventories recognized as expenses during the reporting period 89 284 89 284
Total 89 284 89 284
Changes in inventory impairment allowances
None reported.
Inventories pledged as collateral for liabilities
Not applicable.
Note 19. Trade receivables
31.12.2021 31.12.2020
Gross trade receivables 123 900 1 255 993
Impairment allowances 79 126
Trade receivables 123 821 1 255 867
from affiliates 3 507 60 289
from external entities 120 314 1 195 578
Separate financial statement of CD PROJEKT S.A. 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.
49
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 -
dissolution of impairment allowances 6 8
elimination of impairment allowances due to collection of receivables - 2
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 3 507 2 496 1 010 1 - - -
non-fulfillment ratio 0% 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 3 507 2 496 1 010 1 - - -
Separate financial statement of CD PROJEKT S.A. 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.
50
Total Not overdue
Days overdue
1 – 60 61 – 90 91 – 180 181 – 360 >360
OTHER ENTITIES
gross receivables 120 393 120 103 162 - 8 - 120
non-fulfillment ratio 0% 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 120 314 120 103 162 - 8 - 41
Total
gross receivables 123 900 122 599 1 172 1 8 - 120
impairment
allowances
79 - - - - - 79
Net receivables 123 821 122 599 1 172 1 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 60 289 60 283 6 - - - -
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 60 289 60 283 6 - - - -
Separate financial statement of CD PROJEKT S.A. 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.
51
Total Not overdue
Days overdue
1 – 60 61 – 90 91 – 180 181 – 360 >360
OTHER ENTITIES
gross receivables 1 195 704 1 195 470 64 - 38 - 132
non-fulfillment ratio 0% 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 1 195 578 1 195 470 64 - 38 - 6
Total
gross receivables 1 255 993 1 255 753 70 - 38 - 132
impairment
allowances
126 - - - - - 126
Net receivables 1 255 867 1 255 753 70 - 38 - 6
Trade receivables by currency
31.12.2021 31.12.2020
currency
units
PLN
equivalent
currency
units
PLN
equivalent
PLN* 117 545 117 545 1 202 771 1 202 771
EUR 1 056 4 855 2 973 13 721
CAD 316 1 008 - -
USD 102 413 10 477 39 375
Total 0 123 821 0 1 255 867
* 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.
Separate financial statement of CD PROJEKT S.A. 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.
52
Note 20. Other receivables
31.12.2021 31.12.2020
Other gross receivables, including: 114 268 49 686
tax returns except corporate income tax 75 562 18 139
advance payments associated with expenditures on development projects 30 435 24 353
advance payments for supplies 5 076 3 962
consortium settlements 1 659 2 073
deposits 650 296
prepayments associated with purchases of PP&E and intangibles 34 38
prepayments associated with purchases of investment properties 79 70
employee compensation settlements 3 5
settlements involving members of management boards of Group member companies 7 7
others 31 11
Impairment allowances 732 732
Total other gross receivables 113 536 48 954
short-term 113 163 48 922
long-term 373 32
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
31.12.2021 31.12.2020
Other gross receivables 114 268 49 686
Impairment allowances 732 732
Other receivables, including 113 536 48 954
from affiliates 1 672 2 080
from external entities 111 864 46 874
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 - -
Separate financial statement of CD PROJEKT S.A. 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.
53
Other receivables by currency
31.12.2021 31.12.2020
currency
units
PLN
equivalent
currency
units
PLN
equivalent
PLN* 77 909 77 909 20 666 20 666
JPY 496 092 17 214 496 092 17 215
USD 4 545 17 214 2 778 10 491
EUR 182 837 106 472
CNY 336 201 - -
GBP 33 161 22 110
Total - 113 536 - 48 954
* 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 5 179 62 369
trade receivables 3 507 60 289
other receivables 1 672 2 080
Impairment allowances - -
Net receivables from affiliates 5 179 62 369
Note 21. Prepaid expenses
31.12.2021 31.12.2020
Software, licenses 3 545 3 554
Expenses associated with future marketing activities 1 722 1 856
Repairs and renovations 1 470 1 651
Fees associated with right of first refusal 1 378 1 484
Non-life insurance 344 148
Business travel (airfare, accommodation, insurance) 34 6
Marketing campaigns 7 54
Other prepaid expenses 256 148
Total prepaid expenses 8 756 8 901
short-term 4 015 3 366
long-term 4 741 5 535
Separate financial statement of CD PROJEKT S.A. 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.
54
Note 22. Cash and cash equivalents
31.12.2021 31.12.2020
Cash on hand and bank deposits: 68 187 406 951
current bank accounts 68 187 406 951
Other monetary assets: 277 608 15 963
cash in transit - 10 000
short-term bank deposits (maturity up to 3 months) 239 586 940
cash in investment accounts 38 022 5 023
Total 345 795 422 914
Restricted cash
Not applicable.
Note 23. 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 Company share capital. These shares
were admitted to organized trading on 31 March 2021, as a result of which the Company share capital was increased by 84 176
thousand PLN. Following this increase, the 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 Company shares is 100 738 000. No changes in the 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.
Separate financial statement of CD PROJEKT S.A. 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.
55
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 24. Own shares
The Company did not purchase any own shares during the reporting period.
Note 25. Other capital contributions
31.12.2021 31.12.2020
Supplementary capital 1 366 952 737 542
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 8 991 10 885
Total 1 532 376 898 454
Separate financial statement of CD PROJEKT S.A. 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.
56
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* 737 542 113 844 442 35 741 - 10 885 898 454
Increases from: 629 410 2 065 4 341 - - 41 249 677 065
payment in own shares 869 2 065 - - - - 2 934
allocation of net profit / coverage of
losses
628 541 - - - - - 628 541
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 1 366 952 115 909 4 783 35 741 - 8 991 1 532 376
* adjusted
Separate financial statement of CD PROJEKT S.A. 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.
57
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* 744 463 3 861 - 549 - 54 106 802 979
Increases from: 387 634 109 983 442 250 000 214 259 14 944 977 262
creation of reserve capital to
finance purchase of own shares
- - - 250 000 - - 250 000
allocation of net profit / coverage of
losses
172 826 - - - - - 172 826
dissolution of reserve capital
created to finance purchase of own
shares in past years
549 - - - - - 549
payment in own shares - 109 983 - - 214 259 - 324 242
capital contributions mandated by
the incentive program
- - - - - 14 944 14 944
purchase of own shares in the
course of implementing the
incentive program
214 259 - - - - - 214 259
total comprehensive income - - 442 - - - 442
Reductions from: 394 555 - - 214 808 214 259 58 165 881 787
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 144 555 - - - - 58 098 202 653
capital contributions mandated by
the incentive program
- - - - - 67 67
purchase of own shares in the
course of implementing the
incentive program
- - - 214 259 214 259 - 428 518
As of 31.12.2020 737 542 113 844 442 35 741 - 10 885 898 454
* adjusted
Separate financial statement of CD PROJEKT S.A. 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.
58
Note 26. Retained earnings
Changes in retained earnings
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
At beginning of period - -
Rectification of errors (4 179) -
Adjusted retained earnings (4 179) -
Increases from: 1 132 235 172 826
allocation of profit from preceding years 1 132 235 172 826
Reductions from: 1 132 235 172 826
dividend payments 503 694 -
reclassification as reserve capital 628 541 172 826
At end of period (4 179) -
Note 27. Credits and loans
None reported.
Note 28. Other financial liabilities
31.12.2021 31.12.2020
Lease liabilities 15 471 16 970
Cash flow hedges 17 906 -
Total financial liabilities 33 377 16 970
Short-term liabilities 18 620 2 053
Long-term liabilities, including: 14 757 14 917
between 1 and 5 years 938 992
beyond 5 years 13 819 13 925
As a lessee the Company 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 34, 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.
With regard to the agreement reported in Note 34, 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 34, 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.
Separate financial statement of CD PROJEKT S.A. 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.
59
Note 29. 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 collected - 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 30. Trade liabilities
31.12.2021 31.12.2020
Trade liabilities: 16 028 73 024
payable to affiliates 2 407 1 498
payable to external entities 13 621 71 526
Current and overdue trade liabilities
Total Not overdue
Days overdue
1 – 60 61 – 90 91 – 180 181 – 360 >360
As of 31.12.2021 16 028 12 257 1 578 10 43 2 083 57
payable to affiliates 2 407 2 252 155 - - - -
payable to external
entities
13 621 10 005 1 423 10 43 2 083 57
Total Not overdue
Days overdue
1 – 60 61 – 90 91 – 180 181 – 360 >360
As of 31.12.2020 73 024 69 974 2 928 43 40 23 16
payable to affiliates 1 498 1 498 - - - - -
payable to external
entities
71 526 68 476 2 928 43 40 23 16
Separate financial statement of CD PROJEKT S.A. 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.
60
Trade liabilities by currency
31.12.2021 31.12.2020
currency
units
PLN
equivalent
currency
units
PLN
equivalent
PLN 7 024 7 024 10 337 10 337
USD 1 638 6 652 6 309 23 712
EUR 322 1 483 7 455 34 404
CNY 1 015 648 3 847 2 209
CAD 51 164 59 172
GBP 5 29 21 108
JPY 707 25 4 043 148
RUB 52 3 32 902 1 648
SEK - - 546 251
AUD - - 12 35
Total 0 16 028 0 73 024
Note 31. Other short-term liabilities
31.12.2021 31.12.2020*
Liabilities from other taxes, duties, social security payments and others, except
corporation tax
3 584 4 603
Flat-rate withholding tax 905 976
Personal income tax 1 704 2 220
Social security (ZUS) payments 876 1 329
National Disabled Persons Rehabilitation Fund (PFRON) payments 45 35
PIT-8AR settlements 54 43
Other liabilities 475 330
Other employee-related liabilities 125 14
Other liabilities payable to Management Board members 37 1
Advance payments received from foreign clients - 166
Other liabilities 313 149
Total other short-term liabilities 4 059 4 933
* adjusted
Separate financial statement of CD PROJEKT S.A. 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.
61
Current and overdue other short-term liabilities
Total Not overdue
Days overdue
1 – 60 61 – 90 91 – 180 181 – 360 >360
As of 31.12.2021 4 059 3 935 123 - 1 - -
payable to affiliates 162 38 123 - 1 - -
payable to external
entities
3 897 3 897 - - - - -
Total Not overdue
Days overdue
1 – 60 61 – 90 91 – 180 181 – 360 >360
As of 31.12.2020 4 933 4 921 12 - - - -
payable to affiliates 1 - 1 - - - -
payable to external
entities
4 932 4 921 11 - - - -
Other short-term liabilities by currency
31.12.2021 31.12.2020
currency
units
PLN
equivalent
currency
units
PLN
equivalent
PLN 3 978 3 978 4 930 4 930
USD 17 70 - -
EUR 2 11 1 3
Total 0 4 059 0 4 933
Note 32. Internal Social Benefits Fund (ZFŚS): assets and liabilities
Not applicable.
Note 33. Contingent liabilities
Promissory note liabilities from loans received
Not applicable.
Separate financial statement of CD PROJEKT S.A. 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.
62
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
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
Separate financial statement of CD PROJEKT S.A. 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.
63
Note 34. Lease and sublease agreements
Information concerning depreciation of leased assets is included in Note 3. Interest on lease agreements is presented in Note 5.
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 11. 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 714 2 053
Due between 1 and 5 years 938 992
Due later than in 5 years 13 819 13 925
Total lease payments outstanding, including: 15 471 16 970
short-term liabilities 714 2 053
long-term liabilities 14 757 14 917
Gross liabilities from lease agreements (prior to deduction of financial costs)
31.12.2021 31.12.2020
Due within 1 year 1 058 2 425
Due between 1 and 5 years 2 071 2 126
Due later than in 5 years 24 387 24 769
Total, including: 27 516 29 320
short-term liabilities 1 058 2 425
long-term liabilities 26 458 26 895
Income from subleasing of leased assets (usufruct)
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Revenues 40 -
Expenses 40 -
Income - -
Separate financial statement of CD PROJEKT S.A. 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.
64
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
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
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 no.
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 - - 20 265 16 788 - - 15 471 -
Separate financial statement of CD PROJEKT S.A. 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.
65
Short-term lease agreements and lease of low-value assets
The Company 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 Company 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 3).
As of 31 December 2021 and 31 December 2020 future minimum 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 118 176
Due between 1 and 5 years 149 170
Due later than in 5 years - -
Total 267 346
Note 35. Deferred revenues
31.12.2021 31.12.2020
Subsidies 8 224 14 749
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 21 221 28 447
Future period sales 21 186 28 427
Official phone rental 35 20
Total, including: 29 445 43 196
short-term deferrals 23 042 42 286
long-term deferrals 6 403 910
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.
Separate financial statement of CD PROJEKT S.A. 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.
66
Note 36. Provisions for employee benefits and similar liabilities
31.12.2021 31.12.2020
Provisions for retirement benefits and pensions 373 380
Total, including: 373 380
short-term provisions 5 3
long-term provisions 368 377
The following assumptions were made by the actuary when calculating provisions:
31.12.2021 31.12.2020
Discount rate (%) 3.41 1.59
Projected inflation rate (%) 3.41 1.59
Employee turnover rate (%) – average age 11.6% - 34 years 9.2% - 33 years
Projected annual rate of salary growth (%)
10% in 2022-2023;
6% in later years
8% 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 Company employees, based on
the Multiple Decrement paradigm. The model was calibrated using historical data supplied by the Company. 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 380 380
Provisions dissolved 7 7
As of 31.12.2021, including: 373 373
short-term provisions 5 5
long-term provisions 368 368
Provisions for
retirement
benefits and
pensions
Total
As of 01.01.2020 248 248
Provisions created 132 132
As of 31.12.2020, including: 380 380
short-term provisions 3 3
long-term provisions 377 377
Separate financial statement of CD PROJEKT S.A. 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.
67
Note 37. Other provisions
31.12.2021 31.12.2020
Provisions for returns - 194 537
Provisions for liabilities, including: 81 528 280 409
provisions for compensation contingent upon the Company’s financial result, and
other compensation
44 714 246 278
provisions for financial statement audit and review expenses 102 45
provisions for other expenses 36 712 34 086
Total, including: 81 528 474 946
short-term provisions 76 160 329 333
long-term provisions 5 368 145 613
Changes in other provisions
Provisions for
returns
Provisions for
compensation
contingent upon
the Company’s
financial result
and other
compensation
Other provisions Total
As of 01.01.2021 194 537 246 278 34 131 474 946
Provisions created during the financial
year
42 635 46 880 94 956 184 471
Provisions consumed 136 236 246 937 74 435 457 608
Provisions dissolved 100 936 1 507 17 838 120 281
As of 31.12.2021, including: - 44 714 36 814 81 528
short-term provisions - 44 714 31 446 76 160
long-term provisions - - 5 368 5 368
Provisions for
returns
Provisions for
compensation
contingent upon
the Company’s
financial result
and other
compensation
Other provisions Total
As of 01.01.2020 - 33 310 2 527 35 837
Provisions created during the financial
year
194 537 246 278 36 191 477 006
Provisions consumed - 33 310 4 587 37 897
As of 31.12.2020, including: 194 537 246 278 34 131 474 946
short-term provisions 48 924 246 278 34 131 329 333
long-term provisions 145 613 - - 145 613
Separate financial statement of CD PROJEKT S.A. 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.
68
Note 38. Disclosure of financial instruments
Fair value of financial instruments per class
Following an analysis of each class of financial instruments held by the Company the Management Board 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: - 6 449
forward currency contracts – CHF - 1 232
forward currency contracts – EUR - (387)
forward currency contracts – USD - 5 604
Liabilities estimated at fair value through financial result
Derivative instruments: (17 906) -
forward currency contracts – EUR (455) -
forward currency contracts – USD (17 451) -
Financial assets 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
Separate financial statement of CD PROJEKT S.A. 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.
69
Financial assets – classification and estimation
31.12.2021 31.12.2020
Financial assets estimated at amortized cost 993 036 1 899 925
Other long-term receivables 373 32
Trade receivables 123 821 1 255 867
Cash and cash equivalents 345 795 422 914
Bank deposits (maturity beyond 3 months) 265 000 164 368
State Treasury bonds and bonds guaranteed by the State Treasury 248 755 49 588
Loans granted 9 292 7 156
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 - 6 449
Derivative financial instruments - 6 449
Total financial assets 1 221 697 2 003 771
Financial liabilities – classification and estimation
31.12.2021 31.12.2020
Financial liabilities held at amortized cost 49 405 89 994
Trade liabilities 16 028 73 024
Other financial liabilities 33 377 16 970
In line with the requirements of IFRS 9 Financial Instruments the 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 Company to conclude the following:
The purpose of the conducted investments in domestic and foreign treasury bonds, as well as domestic bonds
guaranteed by the State Treasury, is to hold to maturity and collect the associated contractual cash flows;
The investment mandates covering management the Company’s foreign bond portfolio also permit sale of bonds prior
to the expiration of their respective redemption periods in the framework of the adopted 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.
Separate financial statement of CD PROJEKT S.A. 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.
70
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
- 534 205 68 - (464) 343
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 - - - - 2 271 - 2 271
Total profit / (loss) (6) (1 266) 205 68 2 271 (464) 808
Separate financial statement of CD PROJEKT S.A. 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.
71
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) 142 7 426 - (291) 7 246
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 - - - - 8 250 - 8 250
Total profit / (loss) (97) (1 240) 142 7 426 8 250 (291) 14 190
Separate financial statement of CD PROJEKT S.A. 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.
72
Note 39. Equity management
The main goal of equity management at the Company is to retain a good credit rating and safe capital indicators, facilitating
Company operations, enabling implementation of future development and publishing plans, and increasing shareholder value.
The Company actively manages its equity structure, resulting in changes which reflect changing economic conditions. In order to
retain or adjust said structure, the Company may pay out dividends to shareholders, return capital to shareholders or issue new
shares. The Company 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 Company is in excess of its
sum of trade liabilities and other liabilities. Consequently, the Company reports a positive cash balance.
Nota 40. Employee share programs
2016-2019 incentive program
On 24 May 2016 the General Meeting of Shareholders of the 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 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 Company share
capital. These shares were admitted to organized trading on 31 March 2021, as a result of which the share capital of the 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 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 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).
Separate financial statement of CD PROJEKT S.A. 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.
73
Classification of estimation conditions
The condition associated with changes in the 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.
Changes in entitlements granted under the 2016-2019 incentive program
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 Company held on 28 July 2020 and 22 September 2020, the Company 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 Company shares issued in the framework of a conditional increase in the Company share
capital, or, alternatively, purchase the Company’s own shares on preferential terms. Acquisition and exercise of subscription
warrants or the purchase of the 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 balance sheet date, 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 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 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.
Separate financial statement of CD PROJEKT S.A. 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.
74
Shares outstanding on grant date
On each grant date in 2020 the Company had 96 120 000 shares outstanding.
On the additional grant date in 2021 the 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 41. 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 the Company 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.
Separate financial statement of CD PROJEKT S.A. 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.
75
Transactions with affiliates
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
GOG sp. z o.o. 14 048 100 054 1 978 571 3 411 61 660 232 181
CD PROJEKT Inc. 515 764 12 203 14 921 511 1 834 948 558
CD PROJEKT Co., Ltd.
(in liquidation)
- - 6 629 3 701 - - - 557
Spokko sp. z o.o. 1 417 495 - - 9 113 4 601 - -
CD PROJEKT RED STORE sp.
z o.o.
1 222 1 909 243 818 421 1 423 158 202
CD PROJEKT RED
Vancouver Studio Ltd.
- - 2 889 - 1 008 - 164 -
The Molasses Flood LLC - - 2 616 - - - 1 018 -
MANAGEMENT BOARD MEMBERS
Marcin Iwiński 18 10 - - - 5 20 -
Adam Kiciński 4 4 - - - - 5 -
Piotr Nielubowicz 5 7 - - - 2 - -
Michał Nowakowski 22 10 - - - - 7 1
Adam Badowski 9 4 - - 7 - 5 -
Piotr Karwowski 1 - - - - - - -
Separate financial statement of CD PROJEKT S.A. 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.
76
Note 42. Compensation of top management and Supervisory Board members
Benefits paid out to Management Board members
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Base salary 62 21
Compensation for duties performed 1 985 1 942
Bonuses and compensation contingent upon the Company’s financial result
for the previous year
106 198 16 129
Total 108 245 18 092
Benefits paid out to other top executives
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Base salaries 24 600 11 423
Compensation for duties performed 547 228
Bonuses and compensation contingent upon the Company’s financial result 36 898 4 574
Total 62 045 16 225
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 43. Employment
Average employment
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Average employment 384 320
Total 384 320
Churn rate
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Employees hired 106 122
Employees dismissed 65 26
Total 41 96
Employment in the scope of R&D activities
31.12.2021 31.12.2020
Employees 195 166
Total 195 166
Separate financial statement of CD PROJEKT S.A. 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.
77
Note 44. Activated borrowing costs
Not applicable.
Nota 45. Fiscal settlements
Fiscal settlements and other areas of activity governed by legal regulations (such as import duties or currency exchange) 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 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 Company the status
of an R&D center. This status entitles the 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 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 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 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
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 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
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 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.
Suspension of distribution of the 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 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 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 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.”
Separate financial statement of CD PROJEKT S.A. 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.
78
The 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 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 Company. The
agreement is regarded as strategically important for both parties.
Under the agreement the 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 Company.
Updated decision concerning diversification of surplus cash assets, as disclosed in Current Report no. 8/2022
On 25 March 2022 the Company announced that it had changed its existing surplus cash asset diversification policy.
The updated policy specifies that debt instruments held by the 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 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 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 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 Company has terminated, or is in the process of terminating collaboration with Russian suppliers. At the present time the
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.
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 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 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 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.
Separate financial statement of CD PROJEKT S.A. 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.
79
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 100 100
for other attestation services, including reviewing financial statements and the
consolidated financial statement
60 60
Total 160 160
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 345 795 422 914
Cash on balance sheet 345 795 422 914
Depreciation: 12 658 5 647
Depreciation of intangibles 2 730 1 576
Depreciation of PP&E 9 889 3 992
Depreciation of investment properties 39 79
Profit (loss) from exchange rate differences (15 118) 2 223
Exchange rate differences on valuation of bonds (15 047) 2 220
Exchange rate differences on valuation of loans granted as of the balance sheet date (71) 3
Interest and share in profits consist of: (343) (7 246)
Interest on bank deposits (68) (7 426)
Interest on bonds (534) 31
Interest charged on loans granted (205) (142)
Interest on lease agreements 464 291
Profit (loss) from investment activities results from: 41 323 (5 438)
Revenues from sales of PP&E (1 014) (17)
Net value of PP&E sold 878 -
Net value of PP&E liquidated 668 49
Net value of intangibles liquidated - 3
Net value of investment properties liquidated 51 1 630
Impairment allowances on PP&E, intangibles and expenditures on development
projects
20 806 -
Impairment allowances on shares in subsidiaries 1 668 -
PP&E received free of charge - (62)
Settlement and estimation of derivative instruments 16 466 (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: (307 704) 359 214
Balance of changes in provisions for liabilities (393 418) 439 109
Balance of changes in provisions for employee benefits (7) 132
Provisions for compensation contingent upon the Company’s financial result
aggregated with expenses on development projects
85 721 (80 027)
Changes in inventory status result from: (9 712) 4 658
Balance of changes in inventory status (9 712) 4 658
Separate financial statement of CD PROJEKT S.A. 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.
80
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Changes in receivables result from: 1 067 693 (1 110 415)
Balance of changes in short-term receivables 1 067 805 (1 093 448)
Balance of changes in long-term receivables (341) 34
Balance of changes in advance payments for investment properties 9 70
Income tax set against withholding tax 8 197 3 878
Withholding tax paid abroad (5 858) (13 762)
Current income tax adjustments (8 197) (23 114)
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: (57 773) 47 553
Balance of changes in short-term liabilities (18 154) 49 756
Current income tax adjustments (23 149) (1 296)
Changes in financial liabilities (16 567) (621)
Adjustments for changes in liabilities due to purchase of PP&E 118 (1 138)
Adjustments for changes in liabilities due to purchase of intangibles 62 745
Adjustment for 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: (13 846) (111 936)
Balance of changes in prepaid expenses 145 (3 270)
Balance of changes in deferred revenues (13 751) (108 406)
Adjustment for prepaid expenses booked on the other side as liabilities (240) (260)
Other adjustments include: 2 277 16 566
Cost of incentive program (895) 14 140
Depreciation aggregated with cost of products, services, goods and materials sold,
consortium settlements and other operating expenses
3 190 2 426
Miscellaneous adjustments (18) -
Separate financial statement of CD PROJEKT S.A. 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.
81
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 shares
Resolution
concerning
purchase of
own shares
Resolution
concerning
dividend
payment
Lease
liabilities
16 970 (3 259) 1 236 (18) 78 464 - - - 15 471
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 16 970 (504 804) 1 236 (18) 78 464 (2 149) - 503 694 15 471
Separate financial statement of CD PROJEKT S.A. 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.
82
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 shares
Resolution
concerning
purchase of
own shares
Resolution
concerning
dividend
payment
Lease
liabilities
17 347 (2 306) 1 517 - 121 291 - - - 16 970
Liabilities
associated
with purchase
of own shares
- (214 259) - - - - - 214 259 - -
Receivables
from entitled
parties under
the incentive
program
- 126 124 - - - - (126 124) - - -
Total 17 347 (90 441) 1 517 - 121 291 (126 124) 214 259 - 16 970
Separate financial statement of CD PROJEKT S.A. 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.
83
Note 50. Expenditures on development projects
01.01.2021 –
31.12.2021
01.01.2020 –
31.12.2020
Employee remuneration 17 614 43 628
Compensation of collaborators 27 020 84 615
Purchases, including: 6 762 9 999
machinery and equipment 4 750 3 093
computer software 1 859 4 953
intangibles 153 1 953
Other expenditures 31 225 73 769
Total expenditures on development projects 82 621 212 011
Information presented in this note covers R&D expenditures, as well as expenditures on development projects presented in Note
11 as Development projects in progress and Development projects completed.
Further information concerning R&D work underway at the Company can be found in the Management Board report on
CD PROJEKT Group and CD PROJEKT S.A. activities in 2021.
Statement of the Management Board
With regard to the correctness of the annual separate 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 Company hereby states that, to the best of its knowledge, this annual separate financial statement
and comparative data contained herein have been prepared in accordance with all accounting regulations applicable to
CD PROJEKT S.A. and that they constitute a true, unbiased and clear description of the finances and assets of the Company as well
as its current profit and loss balance.
This separate 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 annual separate financial statement
On 14 May 2020 the Supervisory Board of the 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 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.
Separate financial statement of CD PROJEKT S.A. 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.
84
Approval of financial statement
This separate financial statement of CD PROJEKT S.A. was signed and approved for publication by the Management Board of
CD PROJEKT S.A. on 14 April 2021 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
85
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