Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
2
Disclaimer
This English language translation has been prepared solely for the convenience of English speaking
readers. Despite all the efforts devoted to this translation, certain discrepancies, omissions or
approximations may exist. In case of any differences between the Polish and the English versions, the
Polish version shall prevail. CD PROJEKT, its representatives and employees decline all responsibility in
this regard.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
3
Selected financial data translated into EUR
PLN EUR
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Net sales of products, services, goods for resale and
materials
772 500 692 196 164 772 151 217
Cost of sales of products, services, goods for resale and
materials
118 275 111 002 25 228 24 249
Operating profit/(loss) 370 998 265 323 79 133 57 962
Profit/(loss) before tax 384 893 254 234 82 096 55 540
Net profit/(loss) attributable to owners of
CD PROJEKT S.A.
341 073 240 113 72 750 52 455
Net cash from operating activities 435 369 1 039 282 92 863 227 041
Net cash from investing activities (340 989) (611 597) (72 732) (133 609)
Net cash used in financing activities (203 102) (504 804) (43 321) (110 279)
Net increase/(decrease) in cash and cash equivalents (108 722) (77 119) (23 190) (16 847)
Number of shares (in thousands) 100 741 100 718 100 741 100 718
Net earnings/(loss) per share (in PLN) 3.39 2.38 0.72 0.52
Diluted earnings/(loss) per share (in PLN/EUR) 3.38 2.38 0.72 0.52
Book value per share (in PLN/EUR) 19.87 18.56 4.24 4.03
Diluted book value per share
(in PLN/EUR)
19.87 18.55 4.24 4.03
Dividend declared or paid per share (in PLN/EUR) 1.00 5.00 0.21 1.09
PLN EUR
31.12.2022 31.12.2021 31.12.2022 31.12.2021
Total assets 2 183 974 2 061 164 465 676 448 138
Liabilities and provisions for liabilities
(excluding accruals)
163 511 162 670 34 864 35 368
Non-current liabilities 36 106 29 756 7 699 6 470
Current liabilities 146 103 162 359 31 153 35 300
Equity 2 001 765 1 869 049 426 825 406 368
Share capital 100 771 100 739 21 487 21 903
The financial data presented above was translated into EUR as follows:
Items of the separate income statement and the separate cash flow statement were translated at exchange rates calculated as
an arithmetic mean of the exchange rates announced by the National Bank of Poland for the euro applicable as at the last day
of each month in a given reporting period. These rates were, respectively, as follows: from 1 January to 31 December 2022:
4.6883 PLN/EUR and from 1 January to 31 December 2021: 4.5775 PLN/EUR.
Items of assets, liabilities and equity in the separate statement of financial position were translated at exchange rates
announced by the National Bank of Poland for the euro applicable on the last day of the reporting period. These rates were,
respectively, as follows: 4.6899 PLN/EUR as at 31 December 2022 and 4.5994 PLN/EUR as at 31 December 2021.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
4
Table of contents
Key financial data of CD PROJEKT S.A. ............................................................................................................................................................................. 6
Income statement ................................................................................................................................................................................................................. 7
Statement of comprehensive income ............................................................................................................................................................................ 7
Statement of financial position ......................................................................................................................................................................................... 8
Statement of changes in equity ..................................................................................................................................................................................... 10
Statement of cash flows ................................................................................................................................................................................................... 12
Notes to the separate financial statements ..................................................................................................................................................................... 14
General information ........................................................................................................................................................................................................... 15
Changes in accounting policies ..................................................................................................................................................................................... 15
Going concern assumption ............................................................................................................................................................................................. 15
Quotations on the regulated market ............................................................................................................................................................................ 16
Compliance with the International Financial Reporting Standards ..................................................................................................................... 16
Amendments to standards or interpretations effective from 1 January 2022 applicable and adopted by the Company ......... 16
Description of adopted accounting policies ....................................................................................................................................................................18
Revenue and operating expenses .........................................................................................................................................................................18
Finance income and costs ........................................................................................................................................................................................18
State subsidies .............................................................................................................................................................................................................18
Current and deferred income tax ...........................................................................................................................................................................18
Value added tax (VAT) .............................................................................................................................................................................................. 19
Property, plant and equipment ............................................................................................................................................................................... 19
Intangible assets - Expenditure on development projects ............................................................................................................................ 19
Intangible assets - Other .......................................................................................................................................................................................... 21
Goodwill ......................................................................................................................................................................................................................... 21
Mergers of business entities under common control ...................................................................................................................................... 21
Impairment of non-financial assets ........................................................................................................................................................................ 21
Investment properties .............................................................................................................................................................................................. 22
Rights to perpetual usufruct of land ..................................................................................................................................................................... 22
Leases ........................................................................................................................................................................................................................... 22
Investments in subordinated entities ................................................................................................................................................................... 22
Financial assets ...........................................................................................................................................................................................................23
Financial liabilities .......................................................................................................................................................................................................23
Inventories ....................................................................................................................................................................................................................24
Trade and other receivables ...................................................................................................................................................................................24
Prepayments and accruals .......................................................................................................................................................................................24
Cash and cash equivalents ......................................................................................................................................................................................24
Assets held for sale and discontinued operations ...........................................................................................................................................24
Equity ..............................................................................................................................................................................................................................24
Provisions for liabilities ............................................................................................................................................................................................. 25
Employee benefits ..................................................................................................................................................................................................... 25
Loans granted ............................................................................................................................................................................................................. 25
Trade and other payables ....................................................................................................................................................................................... 25
Payment of dividend ................................................................................................................................................................................................. 25
Functional currency and presentation currency ........................................................................................................................................................... 25
Functional currency and presentation currency .............................................................................................................................................. 25
Transactions and balances ..................................................................................................................................................................................... 25
Critical accounting estimates and judgements ............................................................................................................................................................. 26
Professional judgement ........................................................................................................................................................................................... 26
Uncertainty of estimates .......................................................................................................................................................................................... 26
Assumption of comparability of the financial statements, changes in accounting policies and estimates ................................................. 27
Changes in accounting policies ............................................................................................................................................................................. 27
Presentation changes ................................................................................................................................................................................................ 27
Notes – other explanatory notes to the separate financial statements ................................................................................................................ 28
Note 1. Sales revenue ............................................................................................................................................................................................... 29
Note 2. Operating segments .................................................................................................................................................................................. 30
Note 3. Operating expenses .................................................................................................................................................................................. 30
Note 4. Other operating income and expenses ................................................................................................................................................. 31
Note 5. Finance income and costs ........................................................................................................................................................................32
Note 6. Corporate income tax and deferred income tax................................................................................................................................ 33
Note 7. Discontinued operations .......................................................................................................................................................................... 36
Note 8. Earnings per share ..................................................................................................................................................................................... 36
Note 9. Dividend paid (or declared) and received .......................................................................................................................................... 36
Note 10. Disclosure of other comprehensive income items and their tax effect ................................................................................... 36
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
5
Note 11. Property, plant and equipment ............................................................................................................................................................... 37
Note 12. Intangible assets and expenditure on development projects....................................................................................................... 41
Note 13. Goodwill ........................................................................................................................................................................................................ 44
Note 14. Investment properties ............................................................................................................................................................................... 44
Note 15. Investments in subordinated entities .................................................................................................................................................. 46
Note 16. Other financial assets ...............................................................................................................................................................................48
Note 17. Joint operations ..........................................................................................................................................................................................48
Note 18. Inventories....................................................................................................................................................................................................48
Note 19. Trade receivables ..................................................................................................................................................................................... 49
Note 20. Other receivables .................................................................................................................................................................................... 52
Note 21. Prepayments and deferred costs ..........................................................................................................................................................53
Note 22. Cash and cash equivalents ................................................................................................................................................................... 54
Note 23. Share capital .............................................................................................................................................................................................. 54
Note 24. Treasury shares ........................................................................................................................................................................................ 55
Note 25. Other reserves .......................................................................................................................................................................................... 55
Note 26. Retained earnings / (Accumulated losses) ....................................................................................................................................... 58
Note 27. Loans and borrowings ............................................................................................................................................................................ 58
Note 28. Other financial liabilities ......................................................................................................................................................................... 58
Note 29. Other non-current liabilities .................................................................................................................................................................. 59
Note 30. Trade payables ......................................................................................................................................................................................... 59
Note 31. Other current liabilities ............................................................................................................................................................................ 60
Note 32. Social assets and the Company’s Social Fund liabilities .............................................................................................................. 61
Note 33. Contingent liabilities ................................................................................................................................................................................. 61
Note 34. Lease and sublease contracts ............................................................................................................................................................. 63
Note 35. Deferred income ...................................................................................................................................................................................... 66
Note 36. Provision for retirement and similar benefits .................................................................................................................................... 67
Note 37. Other provisions ....................................................................................................................................................................................... 68
Note 38. Information on financial instruments .................................................................................................................................................. 69
Note 39. Capital management ................................................................................................................................................................................ 78
Note 40. Employee benefit schemes ................................................................................................................................................................... 78
Note 41. Transactions with related entities ......................................................................................................................................................... 79
Note 42. Remuneration of the senior management and the Supervisory Board.....................................................................................81
Note 43. Number of employees ..............................................................................................................................................................................81
Note 44. Capitalization of borrowing costs ........................................................................................................................................................ 82
Note 45. Tax settlements ........................................................................................................................................................................................ 82
Note 46. Post-balance sheet date events .......................................................................................................................................................... 82
Note 47. Transactions with entities performing the audits of the financial statements ........................................................................83
Note 48. Explanations to the statement of cash flows ....................................................................................................................................84
Note 49. Cash flows and non-monetary changes resulting from changes in liabilities in financing activities .............................. 86
Note 50. Research and development expenditure .......................................................................................................................................... 87
Representations of the Management Board .................................................................................................................................................................. 87
Approval of the financial statements................................................................................................................................................................................ 88
Key financial data of CD PROJEKT S.A.
1
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
7
Income statement
Note
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Sales revenue 772 500 692 196
Sales of products 1 761 508 678 566
Sales of services 1 1 745 5 502
Sales of goods for resale and materials 1 9 247 8 128
Cost of sales of products, services, goods for resale and materials 118 275 111 002
Costs of products and services sold 3 110 851 102 946
Cost of goods for resale and materials sold 3 7 424 8 056
Gross profit/(loss) on sales 654 225 581 194
Selling expenses 3 184 162 241 785
Administrative expenses 3 63 651 59 030
Other operating income 1,4 17 192 19 321
Other operating expenses 4 52 599 34 371
(Impairment)/reversal of impairment
of financial instruments
(7) (6)
Operating profit/(loss) 370 998 265 323
Finance income 1,5 64 712 3 876
Finance costs 5 50 817 14 965
Profit/(loss) before tax 384 893 254 234
Income tax 6 43 820 14 121
Net profit/(loss) 341 073 240 113
Net earnings/(loss) per share (in PLN)
Basic for the reporting period 8 3.39 2.38
Diluted for the reporting period 8 3.38 2.38
Statement of comprehensive income
Note
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Net profit/(loss) 341 073 240 113
Other comprehensive income subject to reclassification to gains or losses
after specific conditions have been met:
10 (12 724) 4 342
Measurement of derivative financial instruments - fair value through other
comprehensive income, taking into account the tax effect
(12 724) 4 342
Other comprehensive income not subject to reclassification to gains or
losses
10 - -
Total comprehensive income 328 349 244 455
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
8
Statement of financial position
Note 31.12.2022 31.12.2021*
NON-CURRENT ASSETS 1 094 596 887 663
Property, plant and equipment 11 143 439 103 986
Intangible assets 12 70 324 59 086
Expenditure on development projects 12 471 537 347 822
Investment properties 14 42 560 57 082
Goodwill 12,13 49 168 49 168
Investments in subordinated entities 15 53 566 43 447
Prepayments and deferred costs 21 5 314 4 741
Other financial assets 16,38 207 437 178 540
Deferred tax assets 6 50 868 43 418
Other receivables 20.38 383 373
CURRENT ASSETS 1 089 378 1 173 501
Inventories 18 9 886 13 539
Trade receivables 19,38 164 708 123 821
Other receivables 20 54 677 113 163
Prepayments and deferred costs 21 6 189 4 015
Other financial assets 16,38 279 515 308 168
Bank deposits over 3 months 38 337 330 265 000
Cash and cash equivalents 22,38 237 073 345 795
TOTAL ASSETS 2 183 974 2 061 164
* restated data
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
9
Note 31.12.2022 31.12.2021
EQUITY 2 001 765 1 869 049
Share capital 23 100 771 100 739
Supplementary capital 25 1 539 437 1 366 952
Share premium 25 116 700 115 909
Treasury shares 25 (99 993) -
Other reserves 25 3 777 49 515
Retained earnings /(Accumulated losses) 26 - (4 179)
Net profit (loss) for the period 341 073 240 113
NON-CURRENT LIABILITIES 36 106 29 756
Other financial liabilities 28,34,38 18 883 14 757
Other liabilities 29 2 620 2 860
Deferred income 35 3 666 6 403
Provision for retirement and similar benefits 36 339 368
Other provisions 37 10 598 5 368
CURRENT LIABILITIES 146 103 162 359
Other financial liabilities 28,34,38 1 788 18 620
Trade payables 30,38 39 587 16 028
Current income tax liabilities 2 116 24 445
Other liabilities 31 4 350 4 059
Deferred income 35 15 032 23 042
Provision for retirement and similar benefits 36 9 5
Other provisions 37 83 221 76 160
TOTAL LIABILITIES AND EQUITY 2 183 974 2 061 164
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
10
Statement of changes in equity
Share capital
Supplementary
capital
Share premium Treasury shares Other reserves
Retained
earnings /
(Accumulated
losses)
Net profit (loss)
for the period
Total equity
01.01.2022 – 31.12.2022
Equity
as at 01.01.2022
100 739 1 366 952 115 909 - 49 515 235 934 - 1 869 049
Costs of the incentive
scheme
- - - - 4 275 - - 4 275
Share-based payments 32 1 549 791 - (1 548) - - 824
Purchase of treasury
shares for redemption
- - - (99 993) - - - (99 993)
Release of reserve
capital from previous
years created for the
purpose of purchasing
treasury shares
- 35 741 - - (35 741) - - -
Payment of dividend - - - - - (100 739) - (100 739)
Appropriation of the net
profit/offset of loss
- 135 195 - - - (135 195) - -
Total comprehensive
income
- - - - (12 724) - 341 073 328 349
Equity
as at 31.12.2022
100 771 1 539 437 116 700 (99 993) 3 777 - 341 073 2 001 765
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
11
Share capital
Supplementary
capital
Share premium Treasury shares Other reserves
Retained
earnings /
(Accumulated
losses)
Net profit (loss)
for the period
Total equity
01.01.2021 – 31.12.2021
Equity
as at 01.01.2021
100 655 737 542 113 844 - 47 068 1 132 235 - 2 131 344
Corrections of errors - - - - - (4 179) - (4 179)
Equity, as adjusted 100 655 737 542 113 844 - 47 068 1 128 056 - 2 127 165
Costs of the incentive
scheme
- - - - (1 025) - - (1 025)
Share-based payments 84 869 2 065 - (869) - - 2 149
Payment of dividend - - - - - (503 694) - (503 694)
Appropriation of the net
profit/offset of loss
- 628 541 - - - (628 541) - -
Total comprehensive
income
- - - - 4 341 - 240 113 244 454
Equity
as at 31.12.2021
100 739 1 366 952 115 909 - 49 515 (4 179) 240 113 1 869 049
The Company adjusted the calculation of the deferred tax asset as at 31 December 2020 by re-classifying a part of deductible temporary differences from the category of taxed at 19% to taxed at 5%.
As a result of the adjustment, equity decreased by PLN 4 179 thousand.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
12
Statement of cash flows
Note
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
OPERATING ACTIVITIES
Net profit /(loss) 341 073 240 113
Total adjustments: 48 91 805 802 191
Depreciation and amortization of property, plant and equipment, intangible
assets, expenditure on development projects and investment properties
10 676 12 658
Amortization of development projects recognized as cost of goods sold 103 530 82 736
Foreign exchange gains/(losses) 4 584 (15 118)
Interest and participation in profits (41 131) (343)
Gains/(Losses) on investing activities 44 980 41 323
Increase/(Decrease) in provisions (3 651) (307 704)
(Increase)/Decrease in inventories 3 653 (9 712)
(Increase)/Decrease in receivables (43 660) 1 067 693
Increase/(Decrease) in liabilities, excluding loans and borrowings 18 175 (57 773)
Change in other assets and liabilities (13 736) (13 846)
Other adjustments 8 385 2 277
Cash from operating activities 432 878 1 042 304
Income tax expense 11 550 8 263
Withholding tax paid abroad 32 270 5 858
Income tax (paid)/refunded (41 329) (17 143)
Net cash from operating activities 435 369 1 039 282
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
13
Note
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021*
INVESTING ACTIVITIES
Inflows 1 291 485 263 407
Sale of intangible assets and property, plant and equipment 266 1 015
Expenditure on development projects provided as part of a consortium - 152
Repayment of loans granted 13 220 5 301
Sale of shares in a subsidiary 76 19
Expiry of bank deposits over 3 months 975 860 164 368
Redemption of bonds 268 426 82 715
Interest on bonds 7 879 1 703
Interest received on deposits 25 481 68
Inflows from execution of forward contracts - 7 887
Other inflows from investing activities 277 179
Outflows 1 632 474 875 004
Acquisition of intangible assets and property, plant and equipment 47 676 27 789
Expenditure on development projects 207 435 155 265
Acquisition of investment properties and capitalization of expenditure 214 2 085
Loans granted 4 787 7 339
Acquisition of a subsidiary - 7 679
Contribution to the capital of a subsidiary 40 149 13 018
Placement of bank deposits over 3 months 1 048 190 265 000
Purchase of private equity interests in the gaming sector 2 556 -
Purchase of bonds and cost of their purchase 253 580 396 829
Outflows from execution of forward contracts 27 887 -
Net cash from investing activities (340 989) (611 597)
FINANCING ACTIVITIES
Inflows 861 2 189
Net proceeds from the sale of shares and issue of shares in the execution
of the incentive scheme
822 2 149
Payment of finance lease liabilities 39 40
Outflows 203 963 506 993
Purchase of treasury shares for redemption 99 993 -
Dividends and other distributions to shareholders 100 739 503 694
Payment of lease liabilities 2 685 2 834
Interest paid 546 465
Net cash used in financing activities (203 102) (504 804)
Net increase/(decrease) in cash and cash equivalents (108 722) (77 119)
Change in cash and cash equivalents in the balance sheet (108 722) (77 119)
Cash and cash equivalents as at the beginning of the period 345 795 422 914
Cash and cash equivalents at the end of the period 237 073 345 795
* restated data
Notes to the separate financial
statements
2
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
15
General information
Name of reporting entity:
CD PROJEKT S.A.
(there have been no changes in the name of the reporting entity since the end of
the prior reporting period)
Legal form: a joint stock company (spółka akcyjna)
Registered office: ul. Jagiellońska 74, 03-301 Warsaw
Country of registration: Poland
Core activities: Production and publishing of video games and associated products
Principal place of business: Warsaw
Registration body:
District Court for the Capital City of Warsaw in Warsaw, 14th Business Department
of the National Court Register
Statistical number REGON: 492707333
Tax identification number NIP: 7342867148
Number in the BDO register (national
waste management database):
000141053
Duration of the Company: Unspecified
Changes in accounting policies
The accounting policies applied in these separate financial statements, material judgements made by the Management Board with
regard to the accounting policies applied by the Company and the main sources of estimating uncertainties are consistent, in all
material respects, with the policy adopted for preparing the separate annual financial statements of CD PROJEKT for 2021, with the
exception of changes in accounting policies and presentation changes described in the section “Assumption of comparability of
the financial statements, changes in accounting policies and estimates”
Going concern assumption
These separate financial statements have been prepared based on the assumption that the Company will continue in operation as
a going concern in the foreseeable future, i.e. in the period of at least 12 months after the balance sheet date.
As at the date of signing these separate financial statements, the Management Board of the Company has not identified any facts
or circumstances which would indicate any threats to the Company continuing in operation as a going concern for a period of
12 months after the end of the reporting period as a result of the intended or forced discontinuation or significant curtailment of its
existing operations.
By the date of preparing the separate financial statements for the period from 1 January to 31 December 2022, the Management
Board of the Company did not become aware of any events which should have been but were not recognized in the accounting
records for the reporting period. At the same time, no significant prior year events have been disclosed in these separate financial
statements.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
16
Quotations on the regulated market
General Information
Stock exchange
Giełda Papierów Wartościowych w Warszawie S.A.
ul. Książęca 4
00-498 Warsaw
Symbol at WSE CDR
Deposit and settlements system
Deposit and settlements system
Krajowy Depozyt Papierów Wartościowych S.A. (KDPW)
ul. Książęca 4
00-498 Warsaw
Contact with investors
Investor relations gielda@cdprojekt.com
Compliance with the International Financial Reporting
Standards
The Company’s financial statements have been prepared in accordance with International Financial Reporting Standards
(hereinafter “IFRS”), as adopted by the European Union, effective for annual periods beginning on 1 January 2022.
Amendments to standards or interpretations effective from 1 January 2022
applicable and adopted by the Company
In preparing the separate financial statements for 2022, the Company applies the same accounting policies as in preparing the
annual financial statements for 2021, with the exception of amendments to standards and new standards and interpretations
endorsed by the European Union, which are effective for reporting periods beginning on 1 January 2022:
Amendments to IFRS 3 Business combinations, IAS 16 Property, Plant and Equipment, IAS 37 Provisions, Contingent Liabilities
and Contingent Assets and Annual Improvements to IFRS 2018-2020 (IFRS 1, IFRS 9, IFRS 16 and IAS 41) - endorsed on 28 June
2021, applicable to periods beginning on or after 1 July 2022.
Amendments to IFRS 3 Business Combinations, concerning references to the Conceptual Framework.
The amendments introduce an exception to the recognition principle under IFRS 3 to avoid the issue of potential “day two”
gains and losses with reference to liabilities and commitments that were within the scope of IAS 37 Provisions, Contingent
Liabilities and Contingent Assets or IFRIC 21 Levies, if they occurred separately. The exception requires the application of the
criteria under IAS 37 or IFRIC 21, as applicable, rather than the requirements under the Conceptual Framework to determine
whether they have occurred at a particular date.
The amendments do not have a material impact on the accounting policies adopted by the Company with regard to the
Company’s operations or its financial results.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
17
Amendments to IAS 16 Property, Plant and Equipment, relating to revenue earned before an item of property, plant and
equipment is commissioned.
The amendments prohibit entities from reducing the cost of purchase or manufacture of property, plant and equipment by the
amount of proceeds from the sale of products made in the course of bringing an asset to the desired location and condition
necessary for it to be able to operate in the manner intended by management. Instead, the entity recognizes the proceeds from
the sale of such products and the costs of their manufacture in the statement of comprehensive income.
The amendments do not have a material impact on the accounting policies adopted by the Company with regard to the
Company’s operations or its financial results.
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, relating to the costs of fulfilling onerous
contracts.
In May 2020, the IASB published amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, the purpose
of which is to specify which costs should be taken into account by an entity when assessing whether a contract is an onerous
contract or brings losses. In making the changes, the “directly related costs” approach was applied. Costs directly attributable
to a contract for the provision of goods or services include both incremental costs (e.g. direct labour costs) and the allocation
of costs directly attributable to contract activities (e.g. depreciation of equipment used to perform the contract or contract
management and supervision costs). General and administrative expenses are excluded as they do not directly relate to
a contract. The exception is when such costs are re-invoiced to the other party of the contract.
The amendments do not have a material impact on the accounting policies adopted by the Company with regard to the Company’s
operations or its financial results.
Standards published and endorsed by the EU which are not yet effective and their impact on the
Company’s financial statements
The Management Board analysed the impact of the application of the new standards on future financial statements. When approving
these financial statements, the Company did not apply the following standards, amendments and interpretations published and
endorsed by the EU, but not yet effective:
IFRS 17, Insurance Contracts - endorsed on 19 November 2021, applicable to reporting periods beginning on or after 1 January
2023;
Amendments to IAS 1 and Practice Statement 2: Disclosure of Accounting Policies (published on 12 February 2021) – endorsed
on 2 March 2022 and applicable to annual periods beginning on or after 1 January 2023;
Amendments to IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors – endorsed on 2 March 2022 and
applicable to periods beginning on or after 1 January 2023;
Amendments to IAS 12, Deferred Tax related to Assets and Liabilities arising from a Single Transaction – endorsed on 11 August
2022 and applicable to periods beginning on or after 1 January 2023;
Amendments to IFRS 17, Insurance Contracts concerning Initial Application of IFRS 17 and IFRS 9 – Comparative Information
– endorsed on 8 September 2022 and applicable to periods beginning on or after 1 January 2023.
The Company does not expect the introduction of these amendments to have a material impact on the accounting policies adopted
by the Company with regard to the Company’s operations or its financial results.
Standards and interpretations adopted by the IASB but not yet endorsed by the EU
When approving these financial statements, the Company did not apply the following standards, amendments and interpretations
which have not yet been endorsed by the EU:
Amendment to IAS 1 Presentation of financial statements: Classification of liabilities as current or non-current - applicable to
reporting periods beginning on or after 1 January 2024;
Amendments to IFRS 16, “Leases”: Lease Liability in a Sale and Leaseback – applicable to reporting periods beginning on or
after 1 January 2024.
The Company is analysing the estimated impact of the standards and amendments listed above on the Company’s financial
statements.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
18
Description of adopted accounting policies
Revenue and operating expenses
Revenue constitutes inflows of economic benefits, gross, for a given period, arising as a result of ordinary business activities of the
Company, resulting in an increase in equity other than the increases due to contributions made by shareholders.
The Company recognizes revenue using the so-called Five-Step Model provided for in IFRS 15. Revenue includes only amounts
received or receivable equal to the transaction prices that accrue to the Company upon fulfilment (or in the process of fulfilment) of
the performance obligation to transfer the promised good or service (i.e. asset) to the customer. Payment from the customer is
required to meet this performance obligation. The transaction price is the amount of consideration that the Company expects to
receive in exchange for the transfer of the promised goods or services, less any applicable value added tax.
In the case of revenue in the form of royalties from the sale of licences for the distribution of games, which is the Company’s main
source of revenue, revenue depends on the volume of sales realized by the distributor at any given time during the reporting period.
Thus, revenue from the sale of a particular product is recognized in the sales period no sooner than after the delivery of the materials
to start the actual distribution of the completed game, based on sales reports successively provided by the distributor. Payment
from the customer is required upon the distributor submitting the sales reports.
The Company recognizes the costs of materials used, goods for resale and products and service costs in the same period as sales
of these items or sales of the services for which the items are used, in accordance with the principle of matching revenues and
costs.
The Company receives short-term advances from its customers and avails itself of the simplification permitted by IFRS 15 by
presenting advance payments as deferred income instead of recognizing a financing component, if the entity expects, at contract
inception, that the period between when the entity transfers a promised good or service to a customer and when the customer
pays for that good or service will be one year or less.
Finance income and costs
Finance income consists mainly of interest on deposits of surplus cash on bank accounts, commission and interest on loans granted,
interest on late payment of receivables, release of provisions relating to financing activities, proceeds from sale of securities, foreign
exchange gains, restoration of the impaired value of financial investments, forgiven loans and advances and gains on settlement of
derivative instruments.
Finance costs mainly comprise interest on loans and advances, interest on late payment of liabilities, provisions recorded against
certain or probable losses on financial operations, the cost of shares and securities sold, commission and handling charges, write-
downs of interest receivables and the value of short-term investments, discounts and net foreign exchange losses on financing
activities and, in the case of leases, other charges except for capital instalments.
State subsidies
State subsidies are not recorded until obtaining reasonable assurance that the Company will comply with the required terms and
conditions and obtain a subsidy. State subsidies, the principal condition of which is the purchase or manufacture of fixed assets by
the company, are recognized in the balance sheet as deferred income and taken to the income statement on a pro rata basis over
the expected economic useful life of the assets.
Current and deferred income tax
The mandatory profit reductions consist of current tax, withholding tax paid abroad and deferred tax. Current income tax is
calculated on the basis of taxable income (tax base) for a given financial year. Taxable profit/(loss) differs from accounting profit/(loss)
before tax due to the different timing of the recognition of income and expenses for tax and accounting purposes, as well as due
to the permanent differences between the tax and accounting treatment of certain income and expense items. Tax expense is
calculated based on the tax rates in effect for the financial year. Current income tax relating to items recognized directly in equity
is recognized in equity rather than in the income statement.
Deferred tax is calculated using the liability method as tax payable or reimbursable in the future in respect of differences between
carrying amounts of assets and liabilities and the corresponding tax amounts used for the calculation of the tax base.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
19
Deferred tax provision is recorded on all taxable temporary differences, and a deferred tax asset is recorded to the extent that the
future tax profits are likely to be reduced by the amount of recognized deductible temporary differences. An asset or liability does
not arise if the temporary difference arises either from goodwill or from the initial recognition of another asset or liability in
a transaction that affects neither the tax nor the accounting profit or loss.
Deferred tax provision is recognized on temporary differences arising from investments in subsidiaries, associates and joint
ventures, unless the Company is able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
The amount of deferred tax asset is analysed at each balance sheet date, and it is written down if the expected future taxable
income is not sufficient to utilize the asset or its portion.
Deferred tax is calculated using the tax rates which will be binding at the moment when a given asset is realized or a liability
becomes due. Deferred tax is recognized in the income statement, apart from the situations when it relates to items recorded
directly in equity. In the latter case, deferred tax is also recognized directly in equity.
Value added tax (VAT)
Revenues, expenses and assets are recognized net of value added tax, except for
where the value added tax paid on the purchase of assets or services is not recoverable from the tax authorities, in which case
it is recognized as part of the cost of acquiring the asset or as an expense, as appropriate,
receivables and payables which are recorded including the amount of value added tax.
The net amount of value added tax recoverable from or payable to the tax authorities is recognized in the balance sheet as part of
receivables or payables.
Property, plant and equipment
Property, plant and equipment items are initially recognized at cost (cost of purchase or manufacture) and reduced in subsequent
periods by depreciation and impairment. Borrowing costs directly related to the purchase or manufacture of assets that require an
extended period of time to adapt them for use or resale are added to the cost of such assets until such assets are commissioned.
Investment income generated from the short-term investment of funds raised and related to the purchase or manufacture of fixed
assets reduces the value of capitalized borrowing costs. Other borrowing costs are recognized in the income statement in the
period in which they were incurred.
Depreciation is calculated for property, plant and equipment items, excluding land and assets under construction, over their
estimated useful lives, using the straight-line method.
The expected useful life for each category of property, plant and equipment is:
Category Useful life
Buildings and structures 5 – 25 years
Plant and machinery 2 – 10 years
Vehicles 5 years
Other fixed assets 2 – 10 years
Fixed assets with a low initial unit cost of not more than PLN 5 thousand are depreciated in a simplified way by making a one-off
write-off.
Gains or losses on disposal / scrapping or decommissioning of fixed assets are determined by comparing proceeds on disposal
with net book amounts of these assets and included in the Income statement.
Intangible assets - Expenditure on development projects
The Company classifies expenditure on development of games under Expenditure on development projects. Game development
costs incurred prior to the commencement of sales or the application of new solutions are recognized as Expenditure on
development projects in progress. This expenditure includes expenses that are directly related to the project in question.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
20
At the time of completion, the Company verifies whether an intangible asset arising from a development project meets the following
conditions:
a) it is technically feasible to complete the intangible asset so that it is suitable for use or sale;
b) there is a demonstrable intention to complete the asset and use or sell it;
c) the intangible asset can be used or sold;
d) the manner, in which the asset will generate probable future economic benefits is known;
e) adequate technical, financial and other resources will be ensured to complete the development project and to use or sell
the intangible asset;
f) there exists a possibility to reliably determine the expenditure incurred during a development project, which is attributable
to the intangible asset.
When these conditions are met, the Company reclassifies the expenditure from Expenditure on development projects in progress
to Expenditure on development projects completed. In the case of projects for which it is possible to determine reliable estimates
of the volume and value of the sales budget, the Company amortizes the value of these projects based on the consumption of
economic benefits related to the number of copies sold.
The Company determines the amortization period and rates after the release of each title in the course of working on the interim
financial statements while being in possession of the preliminary results of release sales and game ratings. The Company then
establishes:
(i) the useful life based on the historical useful lives of previous comparable titles, normally not less than 3 years and not more than
6 years due to the possibility of making reliable estimates in an industry subject to dynamic change;
(ii) sales forecasts are the basis for determining amortization rates over the useful life;
(iii) then, based on professional judgement, the Company estimates what proportion of the benefits will be realized in the quarter
of release and, in subsequent periods, smooths out the input distribution, eliminating the effect of periodic and one-off promotions
and anticipated but uncertain one-off events (such as the release of the series Cyberpunk: Edgerunners on Netflix), in order to
achieve the effect of constant reducing balance or straight-line amortization from quarter to quarter.
In justified cases, the settlement of expenditure incurred may be of a one-off nature (e.g. Anime Cyberpunk: Edgerunners).
In the table below, the Company presents projects for which reliable estimates of sales volumes and budgets can be determined,
together with the useful lives or amortization rates applied:
Amortization for the period
Title
Release
period
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
The Witcher 3: Wild Hunt on
Nintendo Switch
Q4 2019 40% 12% 8% 6% 6% 6% 6% 4% 4% 3% 3% 2%
Cyberpunk 2077 Q4 2020 40% 60% straight line over 5 years (1% per month)
In other cases, the Company amortizes the value of projects using the straight-line method. Amortization related to Expenditure on
development projects is presented under the Cost of products and services sold in the Income statement.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
21
Intangible assets - Other
Intangible assets are presented at historical cost less amortization and impairment losses. Amortization is recognized on a straight
line basis. Costs of research work are not capitalized and are presented in the Income statement as expenses in the period in which
they are incurred.
The expected useful life for each category of intangible assets is as follows:
Category Useful life
Patents and licenses 2 – 15 years
Computer software 2 – 10 years
Assets with a low initial unit cost not exceeding PLN 5 thousand are amortized on a simplified basis by making a one-off write-off.
The Company’s separate financial statements show the commodity brand The Witcher and the corporate brand CD PROJEKT.
Brands have been valued using the Relief from Royalty capitalization method representing the income approach, which is one of
the primary methods for valuing brands and other intangible assets for the purpose of accounting for business combinations in
accordance with IFRS 3, Business Combinations. Neither of the brands has got a definite useful life. Goodwill of the brands is subject
to an annual impairment test.
Goodwill
Goodwill (gain) is calculated as the balance of two amounts:
the sum of the consideration transferred for control, the non-controlling interests (measured as a proportion of the net assets
acquired) and the fair value of the blocks of interests (shares) held by the acquiree prior to the acquisition date; and
the fair value of the identifiable net assets acquired of the entity.
The excess of the sum calculated as indicated above over the fair value of the identifiable net assets acquired of the entity is
recognized as goodwill on the assets side of the separate statement of financial position. Goodwill represents the payment made
by the acquirer in anticipation of future economic benefits from assets that cannot be individually identified or separately
recognized. After initial recognition goodwill is stated at cost, less accumulated impairment losses.
If the aforementioned sum is less than the fair value of the identifiable net assets acquired of the entity, the difference is recognized
directly in profit or loss. The Company recognizes gain on the acquisition under other operating income.
Mergers of business entities under common control
The legal merger of the parent company with its subsidiary is recognized using the amounts relating to the subsidiary shown in the
parent company’s separate financial statements; these amounts include amounts recognized in the parent company’s consolidated
financial statements arising from the acquisition of the subsidiary. The subsidiary’s results and statement of financial position are
recognized prospectively from the date of the legal merger.
Impairment of non-financial assets
At each balance sheet date, the Company reviews the net book amounts of non-current assets to determine whether there are
indications of their impairment.
If such indications are found the recoverable amount of an asset is estimated to determine the amount of the potential write-down.
If an asset does not generate cash flows that are considerably independent of the cash flows generated by other assets, the analysis
is performed for a group of assets generating cash flows (a cash generating unit) to which the asset belongs.
In the case of intangible assets with an indefinite useful life, impairment tests are carried out annually and additionally when there
are indications of possible impairment.
The recoverable amount is determined as the higher of fair value less costs to sell and value in use. The latter amount corresponds
to the present value of estimated future cash flows discounted using a discount rate that takes into account the current market time
value of money and the risks specific to a given asset.
If the recoverable amount is lower from the net book amount of an asset (or a group of assets) the book value is reduced to
recoverable amount. An impairment loss is recognized as an expense in the period in which it occurs, except when the asset was
recognized in a revalued amount (impairment is then treated as a reversal of previous revaluation).
If impairment is subsequently reversed, the net book value of an asset (or a group of assets) is increased to the lower of the new
estimated recoverable amount and the net book value of the asset that would have been set had impairment not been recognized
in previous years. Reversals of impairment are recognized in income.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
22
Investment properties
Investment properties include properties held for rental income, appreciation in value or both. Consequently, the cash flows
generated by investment properties are largely independent of other assets held by the Company.
Investment properties are valued using the purchase price model.
Rights to perpetual usufruct of land
Land owned by the State Treasury, local government units or their associations may be subject to perpetual usufruct. Perpetual
usufruct is a special type of property right entitling natural or legal persons to use land to the exclusion of others. The perpetual
lessee may also dispose of its right. The right of perpetual usufruct is granted for a period of 99 years or, in exceptional cases –
where the economic purpose of perpetual usufruct does not require the land to be let for such a period – for a shorter period,
however not shorter than 40 years.
The Company has recognized the right of perpetual usufruct of land as a lease in accordance with IFRS 16. The right to use the
leased asset has been presented in accordance with its purpose in the balance sheet either as Investment properties or Property,
plant and equipment.
Leases
The Company as a lessee classifies an agreement as a lease or as containing a lease if it transfers the right to control the use of an
identified asset for a given period in return for a consideration.
Where the Company acts as a lessor, an agreement is treated as a finance lease if substantially all the risks and rewards of
ownership of the underlying asset are transferred. If substantially all the risks and rewards of ownership of the underlying asset are
not transferred, an agreement is treated as an operating lease.
The right to control the use of an asset used under a lease contract primarily means the right to obtain substantially all economic
benefits from the use of the asset and the right to direct the use of the identified asset.
Risks consist of the possibility of losses due to underutilization of capacity, loss of technical usefulness or changes in the level of
return achieved due to changes in economic conditions. Benefits may include the expectation of profitable operation of the asset
over its useful life and the expectation of a profit arising from an increase in its value or the realization of the residual value.
At inception the Company, recognizes the right-of-use asset and the corresponding lease liability. The right of use is initially
measured at cost, consisting of the initial lease liability, initial direct costs, an estimate of the costs expected to be incurred in
dismantling the underlying asset and lease payments made at or before the inception, less lease incentives.
The Company depreciates the right-of-use assets on a straight line basis from the inception to the end of the useful life of the right-
of-use asset or the end of the lease term, whichever is earlier. If there are indications to do so, the rights of use are tested for
impairment in accordance with IAS 36.
At the inception, the Company measures the lease liability at the present value of the lease payments outstanding using the interest
rate on the lease if this can be readily determined. Otherwise, the incremental borrowing rate of the lessee is applied.
Lease payments included in the value of the lease liability consist of fixed lease payments, variable lease payments dependent on
an index or rate, amounts expected to be paid as guaranteed residual value and call option payments if it is reasonably certain that
the option will be exercised. In subsequent periods, the lease liability is reduced by repayments made and increased by accrued
interest. The valuation of the lease liability is updated to reflect changes in the agreement and the reassessment of the lease term,
the exercise of the call option, the guaranteed residual value or index- or rate-dependent lease payments. In principle the
remeasurement of the liability is recognized as an adjustment of the right-of-use asset.
The Company applies the practical expedients permitted by the standard to short-term leases and leases where the underlying
asset is of low value. For such agreements, instead of recognizing right-of-use assets and lease liabilities, lease payments are
recognized in profit or loss on a straight-line basis over the lease term.
Investments in subordinated entities
Shares in subordinated entities are initially measured at cost. As at the balance sheet date, investments in subordinated entities are
stated at cost less impairment losses.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
23
Financial assets
The Company classifies each financial asset upon initial recognition into of one of four categories of financial assets, which are
distinguished based on the Company’s business model for managing the assets and the characteristics of the contractual cash
flows:
assets measured at amortized cost after initial recognition;
assets measured at fair value through other comprehensive income after initial recognition;
assets measured at fair value through profit or loss;
hedging financial instruments.
The classification of financial assets is made upon initial recognition and can only be changed if the business model for managing
financial assets changes. The principal models for managing financial assets include the model of holding for receiving contractual
cash flows, the model of holding for receiving contractual cash flows and selling, and the model of holding for purposes other than
those indicated in the two preceding models (in principle, it is a model of holding assets for disposal). The Company adopts the
principle that the sale of a financial asset just before its maturity does not constitute a change in the business model from holding
for receiving contractual cash flows to holding for receiving contractual cash flows and selling or holding for other purposes.
The Company does not apply hedge accounting and therefore the regulations of IFRS 9 in this respect do not apply to it.
The Company assesses the credit risk associated with assets constituting financial instruments based on the expected loss model.
The primary method of determining impairment losses under the expected loss model is the method under which the Company
monitors changes in the level of credit risk associated with a given financial asset in relation to its initial recognition and classifies
financial assets into one of the three stages of impairment loss determination: stage 1 – financial assets serviced on an ongoing
basis (applied to assets if their credit risk has not materially increased since initial recognition); stage 2 – financial assets with
deteriorated servicing (applied if credit risk has increase materially since initial recognition, while there is no objective evidence of
impairment); stage 3 –– financial assets not serviced (applied when there is objective evidence of impairment).
The Company applies the simplification permitted by IFRS 9 (using an allowance matrix, based on historical data adjusted for the
impact of future factors). The matrix is created on the basis of historical data. The Company does not apply the matrix separately to
receivables portfolios as its business is fairly homogeneous. The Company’s customers are mainly large multinational companies
that settle their liabilities on time. The Company uses quarterly ageing for years X-1 and X-2 in relation to the year for which
allowances are estimated. In addition to the allowances calculated according to the matrix, the Company also calculates allowances
for receivables on a case-by-case basis on the basis of an expert analysis of information on receivables considered to be lost or at
risk, carried out by the finance department. These are usually unique events that are not indicative of the Company’s operations
and business environment, but only of a delay in settlement of a particular customer’s receivables.
Financial liabilities
A financial liability is each liability being:
a contractual obligation to issue cash or another financial asset to another entity or exchange financial assets or liabilities with
another entity on potentially unfavourable terms;
a contract which will be or may be settled in own equity instruments of the entity and is a non-derivative instrument from which
an obligation arises or may arise for the entity to deliver a variable number of its own equity instruments, or a derivative
instrument which will be or may be settled other than through exchanging a fixed amount of cash or another financial asset for
a fixed number of own equity instruments of the entity. For this purpose, pre-emptive rights, options and warrants to purchase
a fixed number of an entity’s own equity instruments in exchange for a fixed amount of cash in any currency are equity
instruments if the entity offers pre-emptive rights, options and warrants pro rata to all current owners of the same class of the
entity’s non-derivative equity instruments.
The Company classifies each component of financial liabilities upon initial recognition as:
financial liabilities measured at fair value through profit or loss;
other financial liabilities measured at amortized cost.
Financial liabilities are initially stated at fair value plus transaction costs, which can be directly attributed to the financial liability, for
financial liabilities not carried at fair value through profit or loss.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
24
Inventories
The initial cost of inventories includes all costs (cost of purchase, production and other) incurred in bringing inventories to their
present location and condition. The purchase price of inventories comprises the purchase price plus import duties and other taxes
(not subsequently recoverable from the tax authorities), transport, loading, unloading and other costs directly related to the
acquisition of the inventories, less discounts, rebates and other similar reductions. Inventories are stated at the lower of the initial
cost (cost of purchase or production) and net realizable value. The net realizable value corresponds to the estimated selling price
less any costs necessary to complete production and the costs of bringing the inventories to market or finding a buyer (i.e. selling,
marketing, etc.). For inventories, cost is determined using the “weighted average” method.
Trade and other receivables
Trade receivables are measured in the books of account at the value corresponding to the transaction prices adjusted for
appropriate impairment allowances under the expected losses model.
The value of receivables corresponding to the revenue from the sale of products, which arose and were recognized during the
reporting period and were reported after the end of the period (in accordance with the contracts concluded), is presented in trade
receivables.
Prepayments and accruals
The Company recognizes accrued income for the purpose of allocating such income to future reporting periods when the income
is realized.
Deferred income includes proceeds received or receivable from royalties on pre-orders for digital distribution of games, or advances
on royalties and advances on goods received from distributors, as well as deferred settlements of subsidies.
Accruals are liabilities falling due for goods or services that have been received or provided, invoiced or formally agreed with the
supplier.
The Company recognizes costs that have been incurred in advance but relate in whole or in part to subsequent periods in
prepayments and deferred costs.
Cash and cash equivalents
Cash consists of cash in hand, demand deposits and bank deposits with a maturity of up to three months. Cash equivalents are
short-term investments with high liquidity easily exchangeable for specific amounts of cash and exposed to insignificant risk of
value fluctuations.
Outstanding overdrafts are presented in cash flows from financing activities under Loans and advances.
Assets held for sale and discontinued operations
Non-current assets (and groups of net assets) classified as held for sale are measured at the lower of their carrying amount and fair
value less costs to sell.
Non-current assets (and groups of net assets) are classified as designated for disposal if it is probable that their carrying value will
be recovered through disposal rather than through their continued use. This condition is considered as met only if the sale
transaction is highly probable and the asset (or a group of net assets designated for disposal, a disposal group) is available in its
current condition for immediate sale. An asset is classified as designated for disposal under the assumption that the Company’s
management intends to complete the transaction within one year from the moment of changing the classification.
Equity
Equity is recorded in the accounting books by types of equity components and in accordance with the binding regulations of the
law and the provisions of the Company’s Articles of Association.
Share capital is shown at the nominal value in an amount consistent with the Company’s Articles of Association and the entry in the
court register.
Supplementary capital is created from profits generated.
Share premium is formed out of the surplus of the issue price of shares above the nominal value, less issue costs. Share issue costs
incurred on formation of a joint stock company or increasing share capital reduce supplementary capital to the amount of share
premium.
Other reserves include Costs of the incentive programme, Reserve capital created for share buybacks and Revaluation reserve.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
25
Provisions for liabilities
Provisions for liabilities are recognized when the Company has a current obligation (legal or constructive) as a result of past events
and it is probable that the discharge of the obligation will result in an outflow of the resources embodying the Company’s economic
benefits and a reliable estimate of the amount of the obligation can be made. No provisions are recorded against future operating
losses.
A provision for restructuring costs is only recognized when the Company has announced a detailed and formal restructuring plan
to all stakeholders.
Employee benefits
Short-term employee benefits other than employment termination benefits and share-based payments are recognized as liabilities,
net of any amounts already paid, and simultaneously as an expense for the period, unless the benefit should be included in the
production cost of an asset. The Company does not offer participation in any post-employment benefit plans to its employees.
In 28 July 2020, a resolution was adopted by the Annual General Meeting of CD PROJEKT S.A. to introduce an incentive scheme
for the years 2020–2025 for selected persons in CD PROJEKT S.A. and its Group companies. Targets have been set for the
realization of which persons selected by the Management and Supervisory Boards of the Company will be granted subscription
warrants entitling to subscribe for shares in the Company as part of a conditional increase in the Company’s share capital, subject
to the fulfilment of the performance and market targets. The incentive scheme is accounted for in accordance with the principles of
IFRS 2, Share-based Payment.
Loans granted
Loans granted are measured at amortized cost using the effective interest rate.
Trade and other payables
Trade payables are shown in the balance sheet at amortized cost. Financial liabilities and equity instruments are classified according
to their contractual economic content. An equity instrument is a contract giving the right to a share of the Company’s assets less all
liabilities.
Payment of dividend
Dividends are recorded at the moment of establishing the rights of the Company’s shareholders to their receipt.
Functional currency and presentation currency
Functional currency and presentation currency
The items contained in the financial statements are valued in the currency of the basic economic environment in which the Company
conducts operations (“the functional currency”). The financial statements are presented in Polish zloty (PLN), which is the functional
and presentation currency of the Company.
Transactions and balances
Transactions expressed in foreign currencies are translated into functional currency based on the exchange rate valid as at the
transaction date. Exchange gains and losses on the settlement of these transactions and on the balance sheet valuation of monetary
assets and liabilities denominated in foreign currencies are recognized in the Income statement.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
26
Critical accounting estimates and judgements
Professional judgement
The Company’s Management Board, based on its assessment performed as at the end of 2021 of the feasibility of achieving the
performance targets set in the 2020–2025 incentive scheme, maintains its assessment, considering it most likely that the
performance targets cannot be achieved over the full duration of the plan.
As at the end of each reporting period, the Company reviews the expected useful lives of internally generated intangible assets. In
the case of intangible assets for which it is possible to determine reliable estimates of the volume and value of the sales budget,
the Company amortizes the value of these projects based on the consumption of economic benefits related to the number of copies
sold. The premiere-linked nature of the game’s life cycle justifies the use of a reducing balance depreciation method, as the highest
sales volumes are achieved during the premiere period, which decline in subsequent periods. In the remaining cases, the Company
amortizes the value of the projects on a straight-line basis over three years. As the video game market is characterized by
technology rotation cycles, a three-year period is the maximum horizon over which the Company can assess whether and what
impact future technological changes will have on the value of an asset.
Uncertainty of estimates
The following are the key assumptions about the future and other key sources of uncertainties at the balance sheet date that carry
a significant risk of material adjustments to the carrying amounts of assets and liabilities in the next financial year.
Impairment of assets
Impairment tests for assets such as goodwill and brand value require estimating the value in use of a cash-generating unit.
Estimating the value in use means forecasting the future cash flows expected to be generated by cash-generating units, and
requires determining a discount rate to be used in order to calculate the present value of these cash flows. The last test of the
CD PROJEKT corporate brand, The Witcher product brand and goodwill was carried out as at 31 December 2022. No indications of
impairment of the brands or goodwill were identified and no impairment of the assets was recognized on the basis of these
tests. Impairment tests were also performed on the shares in subsidiaries as at 31 December 2022. The tests showed no indications
of impairment and no impairment of the shares was recognized on the basis of these tests. A separate test was performed for
Spokko sp. z o.o. in connection with its planned merger with CD PROJEKT S.A. using a valuation model up to the share of the net
assets of the subsidiary.
Assumptions adopted in the valuation of the CD PROJEKT brand, The Witcher trademark and goodwill:
Trademarks Goodwill
Cash flow forecast period 2023-2026 (4 years) 2023-2026 (4 years)
Discount rate (WACC) 13.35% 13.35%
Growth rate (g) for residual value 3% 3%
Valuation of provisions
Provisions for retirement benefits and the share-based incentive scheme were estimated using actuarial methods.
The Company creates provisions for performance-related remuneration and other bonuses. Provisions for performance-related
remuneration are created on an aggregate basis for individual employee groups. As a general rule, provisions are calculated
(depending on the employee group) on the basis of the net profit of the Group, the operating segment or a smaller business segment
economically identified for the purpose of calculating performance-related remuneration. Provisions for performance-related
remuneration are calculated under the principle of recursion - the value of the provisions reduces the underlying results accordingly.
The Company records provisions for refunds, expected adjustments to licence reports and costs not invoiced by suppliers up to
the balance sheet date.
Deferred income tax asset
The Company recognizes a deferred tax asset based on the assumption that a tax profit will be generated in the future enabling its
utilization. Deterioration of tax results in the future might result in the assumption becoming unjustified.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
27
Deferred tax provision
The Company recognizes a deferred tax provision based on the assumption that a future tax obligation will arise from taxable
temporary differences, leading to its utilization. In estimating deferred tax, the Company uses an income ratio calculated on the
basis of the following year’s budget to allocate positive and negative temporary differences.
Fair value of financial instruments
The fair value of financial instruments for which no active market exists is determined using appropriate valuation techniques. The
Company uses professional judgement in selecting appropriate methods and assumptions.
Depreciation and amortization rates
The depreciation and amortization rates are established based on the expected useful lives of property, plant and equipment and
intangible assets. The Company verifies the adopted useful lives on an annual basis, taking into account the current estimates.
For projects for which reliable estimates of sales volumes and budgets can be determined, the Company determines the
amortization method for the published titles based on historical sales data of previous own titles (no useful predictive sales data of
other publishers’ titles is available) and, to a lesser but significant extent, professional judgement.
Assumption of comparability of the financial statements,
changes in accounting policies and estimates
Changes in accounting policies
The accounting policies applied in these interim condensed separate financial statements, material judgements made by the
Management Board with regard to the accounting policies applied by the Company and the main sources of estimating uncertainties
are consistent, in all material respects, with the policy adopted for preparing the annual financial statements of CD PROJEKT S.A.
for 2021, with the exception of changes in the accounting policies and presentation changes described below.
Presentation changes
In these separate financial statements for the period from 1 January to 31 December 2022 changes were introduced in the
presentation of and adjustments of errors in selected financial data. In order to ensure comparability of the financial data in the
reporting period, presentation of the data as at 31 December 2021 was changed. The data is presented after the following
adjustments:
In the statement of financial position as at 31 December 2021, presentation of some of the land held by the Company changed.
Consequently, the following items changed:
- Property, plant and equipment – an increase of PLN 4 354 thousand
- Investment properties – a decrease of PLN 4 354 thousand
The change did not affect the net profit or loss and equity.
In the cash flow statement for the period from 1 January 2021 to 31 December 2021, presentation of interest received on deposits
was changed. Consequently, the following items changed:
- Other inflows from investing activities – a decrease of PLN 68 thousand
- Interest on deposits – an increase of PLN 68 thousand.
Notes – other explanatory notes to
the separate financial statements
3
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
29
Note 1. Sales revenue
Under IFRS 15 revenue from sales of products, goods, materials and services, net of value added tax, rebates and discounts, is
recognized when the performance obligation to deliver the promised goods or services (i.e. assets) to the customer has been
fulfilled (or is in the process of being fulfilled).
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Sales revenue 772 500 692 196
of which revenue from research and development projects 299 720 281 564
Sales of products 761 508 678 566
Sales of services 1 745 5 502
Sales of goods for resale and materials 9 247 8 128
Other income 81 904 23 197
Other operating income 17 192 19 321
Finance income 64 712 3 876
Total 854 404 715 393
Sales revenue – geographical structure*
01.01.2022 – 31.12.2022 01.01.2021 – 31.12.2021
in PLN in % in PLN in %
Domestic sales 25 169 3.26% 23 468 3.39%
Export sales, including: 747 331 96.74% 668 728 96.61%
Europe 89 326 11.56% 42 566 6.15%
North America 598 510 77.48% 568 645 82.15%
South America - - 144 0.02%
Asia 58 519 7.58% 58 066 8.39%
Australia 1 152 0.14% (693) (0.10)%
Africa (176) (0.02)% - -
Total 772 500 100% 692 196 100%
* The data presented relates to the place of residence of the Company’s customers (distributors) and not the end users
Sales revenue – by type of production
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Own production 761 508 678 566
Third party production 9 247 8 128
Other revenue 1 745 5 502
Total 772 500 692 196
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
30
Sales revenue – by distribution channel
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Games - box issues 31 375 87 141
Games - digital issues 676 520 581 016
Other revenue 64 605 24 039
Total 772 500 692 196
Note 2. Operating segments
Information on business segments is provided in Chapter 3 “Notes – Operating segments” of the Consolidated Financial Statements
of the CD PROJEKT Group for the period from 1 January to 31 December 2022.
Note 3. Operating expenses
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021*
Depreciation and amortization of property, plant and equipment, intangible assets,
expenditure on development projects and investment properties, including:
10 676 12 658
depreciation on leased buildings 846 1 323
depreciation of leased vehicles 330 147
Materials and energy used 3 171 2 735
External services, including: 103 598 155 407
costs of short-term leases and low value leases 455 462
Taxes and fees 1 325 1 081
Salaries and wages, social insurance and other benefits 124 271 126 840
Business travel 3 063 519
Cost of using company cars 229 206
Cost of goods for resale and materials sold 7 424 8 056
Costs of products and services sold 110 851 102 946
Other costs 1 480 1 369
Total 366 088 411 817
Selling expenses 184 162 241 785
Total administrative expenses, including: 63 651 59 030
cost of research work 4 593 23 985
Cost of sales 118 275 111 002
Total 366 088 411 817
* restated data
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
31
Depreciation and amortization and impairment write-downs recognized in the income statement
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Items included in cost of sales 1 346 905
Depreciation of tangible fixed assets 1 274 795
Amortization of intangible assets 72 110
Items included in selling expenses 6 832 9 565
Depreciation of tangible fixed assets 5 639 7 565
Amortization of intangible assets 1 193 2 000
Items included in administrative expenses 3 844 3 093
Depreciation of tangible fixed assets 3 074 2 363
Amortization of intangible assets 770 730
Items included in other operating expenses 36 413 22 911
Depreciation of investment properties 2 127 2 105
Impairment of expenditure on development projects 34 286 20 806
Total 48 435 36 474
Costs of employee benefits
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Salaries and wages 112 510 112 956
Social insurance and other benefits 7 716 9 819
Other employee benefits 4 045 4 065
Total costs of employee benefits 124 271 126 840
Items included in selling expenses 82 944 94 810
Items included in administrative expenses 41 327 32 030
Note 4. Other operating income and expenses
Other operating income
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Rental income 7 718 7 122
Other sales 3 696 161
Subsidies 3 188 7 929
Income from re-invoicing 1 206 2 886
Settlement of the financial liabilities in respect of leases 602 -
Fixed assets and goods for resale received free of charge 431 283
Gains on disposal of non-current assets 261 136
Damages received - 468
Release of unused provisions for costs - 271
Other 90 65
Total other operating income 17 192 19 321
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
32
Other operating expenses
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Impairment write-downs of property, plant and equipment, intangible assets and
expenditure on development projects
34 286 20 806
Cost of rental 4 838 4 908
Cost of sales on other sales 4 402 -
Cost of destruction of materials and goods for resale 2 755 963
Depreciation of investment properties 2 127 2 105
Donations and charity 1 211 415
Costs relating to re-invoicing 1 206 2 887
Scrapping of property, plant and equipment items and intangible assets 1 039 668
Costs incurred on redevelopment of the car park 551 -
Provision for the uninsured portion of the US court settlement costs 126 1 502
Scrapping of investment properties - 51
Help Me Refund – funds to be returned - 33
Other 58 33
Total other operating expenses 52 599 34 371
Note 5. Finance income and costs
Finance income
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Interest income 41 946 1 594
on current bank deposits 25 481 68
on bonds 16 231 1 321
on loans 234 205
Other finance income 22 766 2 282
gain on redemption of bonds 22 752 -
forward contracts - Management Board 2 6
settlement and measurement of derivative financial instruments - 2 271
other finance income 12 5
Total finance income 64 712 3 876
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
33
Finance costs
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Interest expense 836 1 288
on lease contracts 546 464
on bonds 269 787
on liabilities to the State Treasury 21 37
Other finance costs 49 981 13 677
net foreign exchange losses 17 312 10 207
impairment of non-current financial assets 30 171 1 668
settlement and measurement of derivative financial instruments 2 172 -
commission and fees on purchase of bonds 326 364
loss on redemption of bonds - 1 436
other finance costs - 2
Total finance costs 50 817 14 965
Net finance income/expense 13 895 (11 089)
Note 6. Corporate income tax and deferred income tax
The main items of income tax expense for the years ended 31 December 2022 and 31 December 2021 are as follows:
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Current income tax 51 270 46 149
For the financial year 18 912 40 291
Adjustments relating to prior years 88 -
Withholding tax paid abroad 32 270 5 858
Deferred income tax (7 450) (32 028)
Related to temporary differences arising and reversed (7 450) (32 028)
Income tax expense shown in the income statement 43 820 14 121
Effective tax rate 11.38% 5.55%
Deferred tax shown in the income statement is the difference between the balance of deferred tax provisions and assets as at the
end and the beginning of the reporting periods.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
34
Current income tax
01.01.2022 – 31.12.2022 01.01.2021 – 31.12.2021
Income from other
sources of
revenue
Income from
capital gains
Income from other
sources of
revenue
Income from
capital gains
Profit/(loss) before tax 403 822 (18 929) 273 636 (19 402)
Income increasing the tax base 967 6 646 2 377 1 606
Income relating to subsequent
periods
(34 296) - 908 111 -
Non-taxable income (4 183) (10 359) (9 009) 5 530
Income from advance payments
disclosed for tax purposes
7 596 - - -
Costs reducing the tax base (110 005) - (14 100) -
Non-deductible costs 153 532 28 822 (95 940) 19 983
Taxable income 417 433 6 180 1 065 075 7 717
Deductions from income – loss - (6 180) (226 106) (7 717)
Deductions from income –
donation and charity
(1 169) - - -
Deductions from income –
research and development relief
(37 567) - (31 741) -
Deductions from income –
tax-free income
(453) - (1 403) -
Tax base, including: 378 244 - 805 825 -
tax base at 5% (profit) 378 244 - 805 825 -
Income tax calculated in Poland
at 5%
18 912 - 40 291 -
Income tax 18 912 - 40 291 -
The current part of the income tax was determined either at the corporate income tax rate of 19% for the tax base corresponding to
income from other sources, and at the rate of 5% for the tax base corresponding to income from qualifying intellectual property
rights (the so-called IP BOX).
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
35
Deductible temporary differences underlying the deferred tax asset
31.12.2021
Differences affecting
the deferred tax
recognized in the
profit or loss
31.12.2022
Provision for other employee benefits 372 (24) 348
Provision for costs of performance-related and
other remuneration
39 400 9 319 48 719
Foreign exchange losses 2 286 4 832 7 118
Difference between the carrying and tax
amount of expenditure on development
projects
24 792 10 056 34 848
Salaries and wages and social security payable
in future periods
61 (14) 47
Other provisions 47 501 (14 219) 33 282
Research and development relief 301 954 15 973 317 927
Prepayments recognized as revenue for tax
purposes
1 469 6 054 7 523
Total deductible differences, including: 417 835 31 977 449 812
taxed at 5% 60 417 11 234 71 651
taxed at 19% 357 418 20 743 378 161
Deferred income tax asset 70 930 4 503 75 433
Taxable temporary differences underlying the deferred tax provision
31.12.2021
Differences affecting
the deferred tax
recognized in the
profit or loss
31.12.2022
Difference between the net carrying amount
and tax amount of property, plant and
equipment and intangible assets
14 129 2 229 16 358
Current period revenue invoiced in the
subsequent period/accrued income
128 789 4 098 132 887
Foreign exchange gains 14 786 (6 369) 8 417
Difference between the carrying and tax
amount of expenditure on development
projects
271 672 (18 078) 253 594
Other 91 94 185
Total taxable differences, including: 429 467 (18 026) 411 441
taxed at 5% 386 323 (3 413) 382 910
taxed at 19% 43 144 (14 613) 28 531
Deferred tax provision 27 513 (2 948) 24 565
The deferred part of the income tax was determined either at the corporate income tax rate of 19% for the tax base corresponding
to income from other sources, or at the rate of 5% for the tax base corresponding to income from qualifying intellectual property
(the so-called IP BOX). When determining the appropriate tax rate for temporary differences, the Company relied on forecasts of
which tax base will give rise to the realization of the temporary differences recognized.
Net deferred tax asset/provision
31.12.2022 31.12.2021
Deferred tax asset 75 433 70 931
Deferred tax provision 24 565 27 513
Net deferred tax – asset/(provision) 50 868 43 418
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
36
Note 7. Discontinued operations
The Company did not discontinue any operations in the current nor in the previous year.
Note 8. Earnings per share
Basic earnings per share are calculated by dividing the net profit for the period attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares in issue outstanding during the period. Diluted earnings per share are
calculated by dividing the net profit for the period attributable to ordinary shareholders of the Company (net of interest on
redeemable preference shares convertible to ordinary shares) by the weighted average number of ordinary shares in issue during
the year (adjusted for the inflow of diluting options or warrants and diluting redeemable preference shares convertible into ordinary
shares).
During the 12 months ended 31 December 2022, the diluting instruments comprised subscription warrants allotted under the
incentive schemes, entitling the holder to take up shares in the Company in the future.
Net profit and number of shares underlying the calculation of earnings per share
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Weighted average number of shares for the calculation of basic earnings per share
(no. of units)
100 741 467 100 717 756
Weighted average number of shares for the calculation of diluted earnings per share
(no. of units)
100 764 969 100 763 966
Net profit/(loss) shown for the purpose of calculating diluted earnings per share 341 073 240 113
Basic net earnings/(loss) per share 3.39 2.38
Diluted net earnings/(loss) per share 3.38 2.38
Note 9. Dividend paid (or declared) and received
On 28 June 2022, the Ordinary Shareholders Meeting of CD PROJEKT S.A. decided to set aside a part of the Company’s net profit
for 2021 for distribution to shareholders as dividend. In accordance with the Resolution adopted, on 12 July 2022, the Company
paid out PLN 100,739 thousand, i.e. 1 PLN per share. The number of the Company’s shares giving right to the dividend was
100,738,800.
Note 10. Disclosure of other comprehensive income items and their tax effect
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Net profit/(loss) 341 073 240 113
Measurement of bonds issued by foreign governments (12 724) 4 238
Tax effect of the measurement of bonds - 104
Total comprehensive income 328 349 244 455
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
37
Note 11. Property, plant and equipment
Ownership structure of property, plant and equipment
31.12.2022 31.12.2021*
Own assets 122 595 88 350
Used under lease contracts 20 844 15 636
Total 143 439 103 986
* restated data
Property, plant and equipment with restricted legal title
31.12.2022 31.12.2021
Used under lease contracts 20 844 15 636
Total 20 844 15 636
Amounts of contractual commitments to purchase property, plant and equipment in future
31.12.2022 31.12.2021
Leasing of passenger cars 599 429
Total 599 429
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
38
Changes in property, plant and equipment (by category) for the period 01.01.2022 – 31.12.2022*
Land
Buildings and
structures
Civil and
marine
engineering
facilities
Plant and
machinery
Vehicles
Other fixed
assets
Assets
under
construction
Total
Gross carrying amount
as at 01.01.2022
40 435 57 033 1 876 43 728 2 986 4 844 2 225 153 127
Increase due to: - 21 055 277 9 254 1 303 1 026 26 973 59 888
purchase - 512 - 8 740 - 987 26 853 37 092
lease contracts
concluded
- 6 831 4 - 1 303 - - 8 138
transfer from assets
under construction
- 197 - 2 - 39 - 238
transfer from
investment
properties
- 13 515 273 - - - 120 13 908
reclassification - - - 81 - - - 81
free of charge
receipt
- - - 431 - - - 431
Decrease due to: - 1 341 228 2 355 1 348 175 1 191 6 638
sale - - - 283 739 1 - 1 023
scrapping - 816 228 1 840 609 93 24 3 610
transfer from assets
under construction
- - - - - - 238 238
reclassification - - - - - 81 929 1 010
lease contracts
terminated
- 525 - - - - - 525
other - - - 232 - - - 232
Gross carrying amount
as at 31.12.2022
40 435 76 747 1 925 50 627 2 941 5 695 28 007 206 377
Accumulated
depreciation as at
01.01.2022
1 250 15 200 558 27 888 1 630 2 615 - 49 141
Increase due to: 567 6 889 239 9 416 458 923 - 18 492
depreciation charge 567 5 654 210 9 365 458 923 - 17 177
transfer from
investment
properties
- 1 235 29 - - - - 1 264
reclassification - - - 51 - - - 51
Decrease due to: - 1 341 80 2 340 810 124 - 4 695
sale - - - 278 739 1 - 1 018
scrapping - 816 80 1 828 71 72 - 2 867
reclassification - - - - - 51 - 51
lease contracts
terminated
- 525 - - - - - 525
other - - - 234 - - - 234
Accumulated
depreciation as at
31.12.2022
1 817 20 748 717 34 964 1 278 3 414 - 62 938
Impairment write-downs
as at 01.01.2022
- - - - - - - -
Impairment write-downs
as at 31.12.2022
- - - - - - - -
Net carrying amount as
at 01.01.2022
39 185 41 833 1 318 15 840 1 356 2 229 2 225 103 986
Net carrying amount as
at 31.12.2022
38 618 55 999 1 208 15 663 1 663 2 281 28 007 143 439
*
restated data
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
39
Changes in property, plant and equipment (by category) for the period 01.01.2021 – 31.12.2021*
Land
Buildings and
structures
Civil and marine
engineering
facilities
Plant and
machinery
Vehicles
Other fixed
assets
Assets under
construction
Total
Gross carrying amount
as at 01.01.2021
35 986 62 145 1 834 31 863 2 538 3 083 1 651 139 100
Increase due to: 4 449 9 231 53 13 164 1 253 1 765 9 429 39 344
purchase - 1 199 53 13 164 17 1 534 9 429 25 396
lease contracts
concluded
- 77 - - 1 236 - - 1 313
transfer from assets
under construction
- 7 955 - - - 231 - 8 186
transfer from
investment
properties
4 449 - - - - - - 4 449
Decrease due to: - 14 343 11 1 299 805 4 8 855 25 317
sale - 815 - 328 189 - - 1 332
scrapping - 186 11 971 616 4 - 1 788
transfer from assets
under construction
- - - - - - 8 855 8 855
transfers to
investment
properties
- 13 342 - - - - - 13 342
Gross carrying amount
as at 31.12.2021
40 435 57 033 1 876 43 728 2 986 4 844 2 225 153 127
Accumulated
depreciation as at
01.01.2021
588 11 181 275 22 454 1 588 1 964 - 38 050
Increase due to: 662 4 733 286 6 582 386 654 - 13 303
depreciation charge 567 4 733 286 6 582 386 654 - 13 208
transfer from
investment
properties
95 - - - - - - 95
Decrease due to: - 714 3 1 148 344 3 - 2 212
transfers to
investment
properties
- 638 - - - - - 638
sale - - - 274 180 - - 454
scrapping - 76 3 874 164 3 - 1 120
Accumulated
depreciation as at
31.12.2021
1 250 15 200 558 27 888 1 630 2 615 - 49 141
Impairment write-downs
as at 01.01.2021
- - - - - - - -
Impairment write-downs
as at 31.12.2021
- - - - - - - -
Net carrying amount as
at 01.01.2021
35 398 50 964 1 559 9 409 950 1 119 1 651 101 050
Net carrying amount as
at 31.12.2021
39 185 41 833 1 318 15 840 1 356 2 229 2 225 103 986
* restated data
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
40
Property, plant and equipment under construction
01.01.2022
Expenditure
incurred in the
financial year
Reclassification
of costs
Settlement of
capital
expenditure
31.12.2022
Redevelopment of the
Jagiellońska 74 property
2 011 1 815 61 228 3 537
Redevelopment of car park - 25 158 862 - 24 296
Other 214 - 7 33 174
Total 2 225 26 973 930 261 28 007
01.01.2021
Expenditure
incurred in the
financial year
Reclassification
of costs
Settlement of
capital
expenditure
31.12.2021
Redevelopment of the
Jagiellońska 74 property
1 612 9 254 - 8 855 2 011
Other 39 175 - - 214
Total 1 651 9 429 - 8 855 2 225
Right-of-use assets relating to property, plant and equipment
31.12.2022 31.12.2021
Gross
amount
Accumulated
depreciation
Net
amount
Gross
amount
Accumulated
depreciation
Net
amount
Land 14 540 669 13 871 14 540 464 14 076
Real properties 10 734 5 348 5 386 4 718 4 357 361
Civil and marine engineering
facilities
99 99 - 94 47 47
Vehicles 1 930 343 1 587 1 236 84 1 152
Total 27 303 6 459 20 844 20 588 4 952 15 636
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
41
Note 12. Intangible assets and expenditure on development projects
Changes in intangible assets and expenditure on development projects for the period
01.01.2022 – 31.12.2022
Expenditure on
development
projects in
progress
Expenditure on
completed
development
projects
Trademarks
Patents and
licenses
Copyright
Computer software
Goodwill
Intangible assets
under construction
Total
Gross carrying amount as
at 01.01.2022
95 172 798 492
34 467
1 497
18 331
30 132
49 168
9
1 027 268
Increase due to: 261 841 88 101
-
2 475
628
14 074
-
422
367 541
purchase - -
-
2 475
520
13 599
-
422
17 016
assets internally
generated
261 841 -
-
-
-
-
-
-
261 841
transfer from
intangible assets
under construction
- -
-
-
108
-
-
-
108
reclassification from
expenditure on
development projects
in progress
- 88 101
-
-
-
-
-
-
88 101
reclassification - -
-
-
-
475
-
-
475
Decrease due to: 109 217 -
-
473
-
13
-
431
110 134
scrapping 283 -
-
-
-
13
-
-
296
utilization of
impairment write-
downs
20 806 -
-
-
-
-
-
-
20 806
transfer from
intangible assets
under construction
- -
-
-
-
-
-
108
108
transfer from
expenditure on
development projects
in progress
88 101 -
-
-
-
-
-
-
88 101
reclassification 27 -
-
473
-
-
-
323
823
Gross carrying amount as
at 31.12.2022
247 796 886 593
34 467
3 499
18 959
44 193
49 168
-
1 284 675
Accumulated
amortization as at
01.01.2022
- 525 036
-
1 273
173
23 904
-
-
550 386
Increase due to: - 103 530
-
834
128
4 482
-
-
108 974
depreciation charge - 103 530
-
834
128
4 482
-
-
108 974
Decrease - -
-
-
-
-
-
-
-
Accumulated
amortization as at
31.12.2022
- 628 566
-
2 107
301
28 386
-
-
659 360
Impairment write-downs
as at 01.01.2022
20 806 -
-
-
-
-
-
-
20 806
Increase due to: 34 286 -
-
-
-
-
-
-
34 286
impairment 34 286 -
-
-
-
-
-
-
34 286
Decrease due to: 20 806 -
-
-
-
-
-
-
20 806
reversal of write-
downs (write-off)
20 806 -
-
-
-
-
-
-
20 806
Impairment write-downs
as at 31.12.2022
34 286 -
-
-
-
-
-
-
34 286
Net carrying amount as
at 01.01.2022
74 366 273 456
34 467
224
18 158
6 228
49 168
9
456 076
Net carrying amount as
at 31.12.2022
213 510 258 027
34 467
1 392
18 658
15 807
49 168
-
591 029
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
42
Changes in intangible assets and expenditure on development projects for the period
01.01.2021 – 31.12.2021
Expenditure on
development
projects in
progress
Expenditure on
completed
development
projects
Trademarks
Patents and
licenses
Copyright
Computer software
Goodwill
Intangible assets
under construction
Total
Gross carrying amount
as at 01.01.2021
28 890
798 035
34 467
1 435
18 331
26 277
49 168
1 129
957 732
Increase due to: 66 891
457
-
153
-
3 855
-
209
71 565
purchase -
-
-
153
-
2 526
-
209
2 888
transfer from
intangible assets
under construction
-
-
-
-
-
1 329
-
-
1 329
reclassification from
expenditure on
development projects
in progress
-
457
-
-
-
-
-
-
457
assets internally
generated
66 891
-
-
-
-
-
-
-
66 891
Decrease due to: 609
-
-
91
-
-
-
1 329
2 029
scrapping -
-
-
91
-
-
-
-
91
transfer from
intangible assets
under construction
-
-
-
-
-
-
-
1 329
1 329
transfer from
expenditure on
development projects
in progress
457
-
-
-
-
-
-
-
457
transfer of
expenditure on
development projects
within the consortium
152
-
-
-
-
-
-
-
152
Gross carrying amount
as at 31.12.2021
95 172
798 492
34 467
1 497
18 331
30 132
49 168
9
1 027 268
Accumulated
amortization as at
01.01.2021
-
442 300
-
1 043
48
20 423
-
-
463 814
Increase due to: -
82 736
-
321
125
3 481
-
-
86 663
amortization charge -
82 736
-
321
125
3 481
-
-
86 663
Decrease due to: -
-
-
91
-
-
-
-
91
scrapping -
-
-
91
-
-
-
-
91
Accumulated
amortization as at
31.12.2021
-
525 036
-
1 273
173
23 904
-
-
550 386
Impairment write-downs
as at 01.01.2021
-
-
-
-
-
-
-
-
-
Increase due to: 20 806
-
-
-
-
-
-
-
20 806
impairment 20 806
-
-
-
-
-
-
-
20 806
Impairment write-downs
as at 31.12.2021
20 806
-
-
-
-
-
-
-
20 806
Net carrying amount as
at 01.01.2021
28 890
355 735
34 467
392
18 283
5 854
49 168
1 129
493 918
Net carrying amount as
at 31.12.2021
74 366
273 456
34 467
224
18 158
6 228
49 168
9
456 076
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
43
Intangible assets – ownership structure
31.12.2022 31.12.2021
Own assets 70 324 59 086
Total 70 324 59 086
Intangible assets under construction
01.01.2022
Expenditure
incurred in the
financial year
Reclassification
of costs
Settlement of
capital
expenditure
31.12.2022
Document flow system 9 - 9 - -
System for virtualization
and cloud computing
- 314 314 - -
cdprojektred.com website - 108 - 108 -
Total 9 422 323 108 -
01.01.2021
Expenditure
incurred in the
financial year
Reclassification
of costs
Settlement of
capital
expenditure
31.12.2021
HR management support
system
1 129 200 - 1 329 -
Document flow system - 9 - - 9
Total 1 129 209 - 1 329 9
Amounts of contractual commitments to purchase intangible assets in future
Not applicable.
Intangible assets – restriction on disposal
Not applicable.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
44
Note 13. Goodwill
Goodwill recognized in business combinations and acquisitions
CD Projekt Red
sp. z o.o.
Strange New
Things business
Total
Gross carrying amount as at 01.01.2022 39 147 10 021 49 168
Gross carrying amount as at 31.12.2022 39 147 10 021 49 168
Impairment write-downs as at 01.01.2022 - - -
Impairment write-downs at 31.12.2022 - - -
Net carrying amount as at 01.01.2022 39 147 10 021 49 168
Net carrying amount as at 31.12.2022 39 147 10 021 49 168
Impairment tests of goodwill require estimating the value in use of the cash-generating unit. In estimating the value in use, the
Company prepared forecasts of the future cash flows to be generated by the cash-generating unit and determined the discount
rate to be applied to calculate the present value of these cash flows. The Company performed the most recent impairment test of
goodwill as at 31 December 2022. The Company identified no indications of impairment of goodwill.
Business combinations
Not applicable.
Note 14. Investment properties
The Company owns a real estate complex located at ul. Jagiellońska 76 in Warsaw. Given that a part of the properties purchased
is leased out to third parties, including CD PROJEKT Group companies, the Company decided to partly classify these properties as
investment properties. The remaining part of the property is used for own needs of the activities conducted.
The Company measures the properties purchased at cost less accumulated depreciation.
The last appraisal report by the expert surveyor, for the buildings recognized as investment properties, was prepared on the basis
of unit prices for the construction of buildings with the most similar parameters included in the Bistyp Catalogue of Unit Prices for
Works and Investment Facilities 2021. The valuation of the individual assets amounted to PLN 60 692 thousand for the building at
ul. Jagiellońska 74, and PLN 13 212 thousand for the building at ul. Jagiellońska 76.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
45
Movements in investment properties for the period 01.01.2022 – 31.12.2022 and
01.01.2021 – 31.12.2021
31.12.2022 31.12.2021*
Gross carrying amount as at the beginning of the period 61 573 50 650
Increase due to: 282 15 428
capitalized expenditure 282 2 086
reclassification of expenditures from property, plant and equipment after
commissioning of the investment property
- 13 342
Decrease due to: 13 908 4 505
scrapping - 56
reclassification to other asset categories 13 908 4 449
Gross carrying amount as at the end of the period 47 947 61 573
Accumulated depreciation as at the beginning of the period 4 491 1 809
Increase due to: 2 160 2 782
amortization charge 2 160 2 144
reclassification from perpetual usufruct of land and from property, plant and
equipment
- 638
Decrease due to: 1 264 100
scrapping - 5
reclassification to other asset categories 1 264 95
Accumulated depreciation as at the end of the period 5 387 4 491
Impairment write-downs as at the beginning of the period - -
Increase - -
Decrease - -
Impairment write-downs as at the end of the period - -
Net carrying amount as at the end of the period 42 560 57 082
* restated data
Contractual liabilities on purchase of investment properties
Not applicable.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
46
Note 15. Investments in subordinated entities
Investments in subordinated entities measured at cost
31.12.2022 31.12.2021
Shares in subordinated entities – subsidiaries 53 566 43 447
Total 53 566 43 447
Movements in investments in subsidiaries
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
As at the beginning of the period 43 447 24 567
Increase due to: 40 475 23 585
acquisition/formation of an entity - 7 679
equity element of the incentive scheme 326 2 888
payments towards increasing share capital of a subsidiary 40 149 13 018
Decrease due to: 30 356 4 705
disposal of a subsidiary/shares in a subsidiary 76 19
impairment write-downs recorded 30 171 1 668
equity element of the incentive scheme 109 3 018
As at the end of the period 53 566 43 447
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
47
Investments in subsidiaries as at 31.12.2022
GOG sp. z o.o. CD PROJEKT Inc.
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
Warsaw Warsaw Vancouver
Percent of shares held
as at 31.12.2022
100% 100% 87.6% 100% 100%
Percent of votes held
as at 31.12.2022
100% 100% 87.6% 100% 100%
Equity investment 15 092 23 344 5 143 - 9 987
Investments in subsidiaries as at 31.12.2021
GOG sp. z o.o. CD PROJEKT Inc.
CD PROJEKT Co., Ltd.
(liquidated)
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
Percent of shares held
as at 31.12.2021
100% 100% 100% 74% 100% 100%
Percent of votes held
as at 31.12.2021
100% 100% 100% 74% 100% 100%
Equity investment 14 978 13 810 - 6 481 500 7 678
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
48
Note 16. Other financial assets
31.12.2022 31.12.2021
Loans granted 739 9 292
Bonds 475 848 477 416
Derivative financial instruments 7 809 -
Private equity interests in the gaming sector 2 556 -
Other financial assets, including: 486 952 486 708
short-term 279 515 308 168
long-term 207 437 178 540
In 2022, CD PROJEKT S.A. granted loans to related parties: CD PROJEKT RED STORE sp. z o.o., Spokko sp. z o.o. and The Molasses
Flood LLC.
Under the loan agreement of 10 February 2022, CD PROJEKT RED STORE sp. z o.o. was granted a loan in the amount of PLN 1 000
thousand. The first of the three contractual tranches, in the amount of PLN 600 thousand, was disbursed on 14 February 2022.
Subsequent tranches of the loan have not been disbursed. The loan was repaid out on 9 May 2022.
In 2022, four tranches were disbursed under the loan agreement of 5 May 2021 granted to Spokko sp. z o.o. in the amount of PLN
5 870 thousand: on 25 February in the amount of PLN 500 thousand, on 30 March and 28 April in the amount of PLN 1 000 thousand
each, and on 5 May in the amount of PLN 500 thousand. The amount of the tranches disbursed in 2021 was PLN 2 800 thousand,
while the total amount of funds disbursed under this agreement was PLN 5 800 thousand. The loan was repaid in full on 27 May
2022. At the same time, on 27 May 2022, the other two loans granted to Spokko sp. z o.o. under the loan agreements of 25 May
2020 in the amount of PLN 3 000 thousand and 12 November 2020 in the amount of PLN 3 040 thousand were repaid in full.
Under the loan agreement dated 16 September 2022, a loan of USD 1 150 thousand was granted to The Molasses Flood. The
agreement provides for the loan to be disbursed in tranches. In 2022, one tranche of USD 166 thousand was paid out. The payment
took place on 2 November 2022. The interest rate on the loan is variable and is subject to quarterly updates. According to the
agreement the loan should be repaid by 31 March 2025.
In March 2022, the Company changed the rules on diversification of investment of current cash surpluses, increasing the possibility
of holding in debt securities up to 80% of the present value of financial resources defined as the sum of the total amount of: cash
and cash equivalents, bank deposits of more than 3 months, bonds of the State Treasury of the Republic of Poland, bonds secured
by a guarantee of the State Treasury of the Republic of Poland, bonds of foreign governments and bonds secured by a guarantee
of foreign governments together with concluded forward hedging transactions. In addition, under the amended assumptions, the
Company may acquire foreign government bonds issued by countries with a rating not lower than Aa3 according to Moody’s rating
agency and foreign bonds backed by a guarantee of countries with a rating not lower than Aa3 according to Moody’s rating agency.
As a result of these changes, the portfolio of bonds held has expanded to include securities of issuers from Canada and Finland.
For more information on the bond portfolio held, see Financial risk management objectives and policies – Liquidity and credit risk.
Note 17. Joint operations
Not applicable.
Note 18. Inventories
31.12.2022 31.12.2021
Goods for resale 9 882 13 535
Other materials 4 4
Gross inventories 9 886 13 539
Inventory write-downs - -
Net inventories 9 886 13 539
Other materials include marketing materials.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
49
Inventories in the period from 01.01.2022 to 31.12.2022
Goods for
resale
Total
Inventories recognized as an expense during the period 7 424 7 424
Total 7 424 7 424
Inventories in the period from 01.01.2021 to 31.12.2021
Goods for
resale
Total
Inventories recognized as an expense during the period 8 056 8 056
Total 8 056 8 056
Changes in inventory write-downs
Not applicable.
Inventories set up as collateral
Not applicable.
Note 19. Trade receivables
31.12.2022 31.12.2021
Trade receivables, gross 164 794 123 900
Write-downs 86 79
Trade receivables 164 708 123 821
from related entities 4 540 3 507
from other entities 160 168 120 314
Changes in write-downs of trade receivables
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
RELATED ENTITIES
Write-downs as at the beginning of the period - -
Increase - -
Decrease - -
Write-downs as at the end of the period - -
OTHER ENTITIES
Write-downs as at the beginning of the period 79 126
Increases, including: 18 12
write-downs recognized for past-due and disputed receivables 18 12
Decreases, including: 11 59
utilization of impairment write-downs - 53
release of write-downs 11 6
Write-downs as at the end of the period 86 79
Total write-downs as at the end of the period
(related and other entities)
86 79
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
50
Current and overdue trade receivables as at 31.12.2022
Total Not overdue
Overdue, in days
1 – 60 61 – 90 91 – 180 181 – 360 >360
RELATED ENTITIES
gross receivables 4 540 3 574 442 35 489 - -
default ratio
0% 0% 0% 0% 0% 0%
write-down resulting
from the ratio
- - - - - - -
write-down
determined
individually
- - - - - - -
total expected credit
losses
- - - - - - -
Net receivables 4 540 3 574 442 35 489 - -
Total Not overdue
Overdue, in days
1 – 60 61 – 90 91 – 180 181 – 360 >360
OTHER ENTITIES
gross receivables 160 254 159 850 318 - - - 86
default ratio
0% 0% 0% 0% 0% 0%
write-down resulting
from the ratio
- - - - - - -
write-down
determined
individually
86 - - - - - 86
total expected credit
losses
86 - - - - - 86
Net receivables 160 168 159 850 318 - - - -
Total
gross receivables 164 794 163 424 760 35 489 - 86
impairment write-
downs
86 - - - - - 86
Net receivables 164 708 163 424 760 35 489 - -
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
51
Current and overdue trade receivables as at 31.12.2021
Total Not overdue
Overdue, in days
1 – 60 61 – 90 91 – 180 181 – 360 >360
RELATED ENTITIES
gross receivables 3 507 2 496 1 010 1 - - -
default ratio
0% 0% 0% 0% 0% 0%
write-down resulting
from the ratio
- - - - - - -
write-down
determined
individually
- - - - - - -
total expected credit
losses
- - - - - - -
Net receivables 3 507 2 496 1 010 1 - - -
Total Not overdue
Overdue, in days
1 – 60 61 – 90 91 – 180 181 – 360 >360
OTHER ENTITIES
gross receivables 120 393 120 103 162 - 8 - 120
default ratio
0% 0% 0% 0% 0% 0%
write-down resulting
from the ratio
- - - - - - -
write-down
determined
individually
79 - - - - - 79
total expected credit
losses
79 - - - - - 79
Net receivables 120 314 120 103 162 - 8 - 41
Total
gross receivables 123 900 122 599 1 172 1 8 - 120
impairment write-
downs
79 - - - - - 79
Net receivables 123 821 122 599 1 172 1 8 - 41
Trade receivables – by currency
31.12.2022 31.12.2021
Value in
foreign
currency
Value in
PLN
Value in
foreign
currency
Value in
PLN
PLN* 134 184 134 184 117 545 117 545
USD 6 777 29 831 102 413
CAD 212 689 316 1 008
EUR 1 4 1 056 4 855
JPY 7 - - -
Total
164 708
123 821
* Under receivables in PLN, the Company also recognizes amounts receivable in respect of licence reports received for the current
period expressed in foreign currencies, invoiced in subsequent periods and charged to the current period directly in PLN.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
52
Note 20. Other receivables
31.12.2022 31.12.2021*
Other gross receivables, including: 55 792 114 268
tax receivables, other than corporate income tax 41 766 75 562
prepayments for inventories 6 826 5 076
settlements with suppliers of property, plant and equipment items 4 160 -
prepayments for development projects 1 433 30 435
security deposits 687 650
prepayments for property, plant and equipment and intangible assets 135 34
settlements with payment operators 7 -
settlements with members of the Management Boards 2 7
consortium settlements - 1 659
prepayments on investment properties - 79
settlements with employees - 3
other 776 763
Write-downs 732 732
Other receivables, including: 55 060 113 536
short-term 54 677 113 163
long-term 383 373
* restated data
Other tax receivables, other than corporate income tax also include withholding tax in the amount of PLN 33 217 thousand to be
deducted by the Company in its annual CIT return after obtaining certificates from foreign counterparties confirming their payment
of tax abroad.
31.12.2022 31.12.2021
Other gross receivables 55 792 114 268
Write-downs 732 732
Other receivables 55 060 113 536
from related entities 995 1 672
from other entities 54 065 111 864
Other receivables claimed in court
31.12.2022 31.12.2021
Other receivables in court 732 732
Write-downs of disputed receivables 732 732
Net other receivables claimed in court - -
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
53
Other receivables – by currency
31.12.2022 31.12.2021
Value in
foreign
currency
Value in
PLN
Value in
foreign
currency
Value in
PLN
PLN* 47 988 47 988 77 909 77 909
USD 1 343 5 038 4 545 17 214
CAD 303 1 003 - -
EUR 122 569 182 837
GBP 82 425 33 161
JPY 1 109 37 496 092 17 214
CNY - - 336 201
Total
55 060
113 536
* Receivables in PLN comprise, among others, receivables in respect of withholding tax deducted by foreign counterparties in
foreign currencies and remaining to be settled with the local Tax Office in the annual corporate income tax return.
Trade and other receivables from related entities
31.12.2022 31.12.2021
Receivables from related entities, gross 5 535 5 179
trade 4 540 3 507
other 995 1 672
Write-downs - -
Receivables from related entities, net 5 535 5 179
Note 21. Prepayments and deferred costs
31.12.2022 31.12.2021*
Software, licences 6 155 3 545
Costs of future marketing services 1 589 1 722
Costs of repairs and maintenance 1 142 1 470
Fees for pre-emptive rights 1 271 1 378
Property and personal insurance 505 344
Costs in connection with redevelopment of the car park 260 -
Business travel (tickets, hotels, insurance) 32 34
Domains, servers 218 9
Marketing campaigns - 7
Other prepayments and deferred costs 331 247
Prepayments and deferred costs, including: 11 503 8 756
short-term 6 189 4 015
long-term 5 314 4 741
* restated data
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
54
Note 22. Cash and cash equivalents
31.12.2022 31.12.2021
Cash in hand and at bank: 152 68 187
current bank accounts 152 68 187
Cash equivalents: 236 921 277 608
short-term deposits maturing up to 3 months 236 590 239 586
cash on investment accounts 331 38 022
Total 237 073 345 795
Restricted cash and cash equivalents
Not applicable.
Note 23. Share capital
The structure of share capital as at 31.12.2022
Series Number of shares in pcs. Series/issue at par value
Method of covering share
capital
A 500 000 500 000 Monetary contribution
B 2 000 000 2 000 000 Monetary contribution
C 6 884 108
6 884 108
Monetary contribution
C1 18 768 216 18 768 216 Monetary contribution
D 35 000 000 35 000 000 In-kind contribution
E 6 847 676 6 847 676 Monetary contribution
F 3 500 000 3 500 000 Monetary contribution
G 887 200 887 200 Monetary contribution
H 3 450 000 3 450 000 Monetary contribution
I 7 112 800
7 112 800
Monetary contribution
J 5 000 000 5 000 000 Monetary contribution
K 5 000 000 5 000 000 Monetary contribution
L 1 170 000 1 170 000 Monetary contribution
M 4 650 800
4 650 800
Monetary contribution
Total 100 770 800 100 770 800 -
On 9 December 2022, as a result of registering in the securities depository maintained by the Polish Central Securities Depository
(KDPW) of 32 000 M-series ordinary bearer shares of the Company with a nominal value of PLN 1.00 each, issued in connection
with the implementation of the incentive scheme operating in the years 2016-2019, the shares were recorded in the securities
account of an authorized participant in the aforementioned scheme, who took them up upon exercising the rights from subscription
warrants, and thus, share capital of the Company was increased from PLN 100 738 800 to PLN 100 770 800. The aforementioned
shares were listed on the GPW Main Market after the balance sheet date - as of 28 February 2023.
The total number of votes arising from all the shares of the Company as at 31 December 2022 was 100 770 800 (subject to 860 290
shares in the Company remaining in its possession as a result of the share buyback carried out on 5-24 October 2022).
There were no changes in the Company’s share capital after the balance sheet date.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
55
Changes in share capital
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Share capital as at the beginning of the period 100 739 100 655
Increase due to: 32 84
issue of shares paid up in cash – incentive scheme 32 84
Decrease - -
As at the end of the period 100 771 100 739
Note 24. Treasury shares
On 4 October 2022, the Company’s Management Board informed that based on the resolution no. 4 of the Extraordinary General
Meeting of the Company dated 29 November 2016, the Management Board decided on the conditions of and procedure for
conducting a buyback of the Company’s treasury shares with a view to their voluntary redemption.
As a result of the buyback conducted based on that decision, between 5 October 2022 and 24 October 2022, the Company
purchased 860 290 of its treasury shares with a nominal value of PLN 1 each, representing 0.85% of its share capital, for the total
price of PLN 99 943 thousand for this purpose. The treasury shares were purchased on the official stock exchange market operated
by the Warsaw Stock Exchange. The Management Board of the Company provided detailed information on the commencement
and course of the buyback in current reports no. 40/2022, 40/2022K, 42/2022, 44/2022 i 45/2022
. As at the date of publication
of this report, the aforementioned treasury shares have not yet been cancelled and remain held by the Company.
Note 25. Other reserves
31.12.2022 31.12.2021
Supplementary capital 1 539 437 1 366 952
Share premium 116 700 115 909
Revaluation reserve (7 941) 4 783
Treasury shares (99 993) -
Other reserve capital - 35 741
Other reserves – incentive scheme 11 718 8 991
Total 1 559 921 1 532 376
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
56
Change in other reserves
Supplementary
capital
Share premium Treasury shares
Revaluation
reserve
Reserve capital
Other reserves –
incentive scheme
Total
As at 01.01.2022 1 366 952 115 909 - 4 783 35 741 8 991 1 532 376
Increase due to: 172 485 791 - - - 4 939 178 215
share-based payments 1 549 791 - - - - 2 340
appropriation of the net profit/offset
of loss
135 195 - - - - - 135 195
release of reserve capital from
previous years created for share
buybacks
35 741 - - - - - 35 741
the equity element of the incentive
scheme
- - - - - 4 939 4 939
Decrease due to: - - 99 993 12 724 35 741 2 212 150 670
purchase of treasury shares for
redemption
- - 99 993 - - - 99 993
release of reserve capital from
previous years created for share
buybacks
- - - - 35 741 - 35 741
share-based payments - - - - - 1 548 1 548
the equity element of the incentive
scheme
- - - - - 664 664
total comprehensive income - - - 12 724 - - 12 724
As at 31.12.2022 1 539 437 116 700 (99 993) (7 941) - 11 718 1 559 921
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
57
Supplementary
capital
Share premium Treasury shares
Revaluation
reserve
Reserve capital
Other reserves –
incentive scheme
Total
As at 01.01.2021 737 542 113 844 - 442 35 741 10 885 898 454
Increase due to: 629 410 2 065 - 4 341 - 41 249 677 065
share-based payments 869 2 065 - - - - 2 934
appropriation of the net profit/offset
of loss
628 541 - - - - - 628 541
the equity element of the incentive
scheme
- - - - - 41 249 41 249
total comprehensive income - - - 4 341 - - 4 341
Decrease due to: - - - - - 43 143 43 143
share-based payments - - - - - 869 869
the equity element of the incentive
scheme
- - - - - 42 274 42 274
As at 31.12.2021 1 366 952 115 909 - 4 783 35 741 8 991 1 532 376
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
58
Note 26. Retained earnings / (Accumulated losses)
31.12.2022 31.12.2021
Retained earnings / (accumulated losses) - (4 179)
Total - (4 179)
Change in retained earnings / (accumulated losses)
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
As at the beginning of the period (4 179) -
Corrections of errors - (4 179)
Retained earnings / (accumulated losses), as adjusted (4 179) (4 179)
Increase due to: 240 113 1 132 235
appropriation of profit / (loss) from previous years 240 113 1 132 235
Decrease due to: 235 934 1 132 235
payment of dividend 100 739 503 694
transfer to supplementary capital 135 195 628 541
As at the end of the period - (4 179)
Note 27. Loans and borrowings
Not applicable.
Note 28. Other financial liabilities
31.12.2022 31.12.2021*
Lease liabilities 20 671 15 471
Cash flow hedges - 17 906
Total financial liabilities 20 671 33 377
Short-term, including: 1 788 18 620
up to one month 98 17 964
from one to three months 445 179
from three months to one year 1 245 477
Long-term, including: 18 883 14 757
from 1 to 5 years 5 171 938
more than 5 years 13 712 13 819
* restated data
As a lessee, the Company is potentially exposed to future cash outflows that are not included in the measurement of lease liabilities,
comprising:
with regard to the contracts indicated in Note 34, the subject matter of which are plots of land located at ul. Jagiellońska 74 and
76, constituting in essence rights of perpetual usufruct of land – variable lease payments resulting from updating the annual
fee for perpetual usufruct of land, meaning a change to the existing fee amount in order to adjust it to the current value of the
property or in order to determine the appropriate rate at which the fee is calculated;
with regard to the contract indicated in Note 34, the subject matter of which is an office space in a building in Kraków, which is
in fact a rental contract – variable lease payments resulting from the building owner’s right to index the amount of fees for the
use of the premises based on the consumer price index;
with regard to the contract indicated in Note 34, the subject matter of which is an office space in a building in Wrocław, which
is in fact a rental contract – variable lease payments resulting from the building owner’s right to index the amount of fees for
the use of the premises based on the consumer price index.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
59
Note 29. Other non-current liabilities
31.12.2022 31.12.2021
Other non-current liabilities, including: 2 620 2 860
liabilities in respect of marketing costs 1 456 1 589
liabilities in respect of pre-emptive rights 1 164 1 271
Other non-current liabilities – maturity structure
31.12.2022 31.12.2021
Other non-current liabilities, including: 2 620 2 860
payable after one to three years 720 720
payable after three to five years 480 480
payable after five years 1 420 1 660
Other non-current liabilities (by currency)
31.12.2022 31.12.2021
Value in
foreign
currency
Value in
PLN
Value in
foreign
currency
Value in
PLN
PLN 2 620 2 620 2 860 2 860
Total
2 620
2 860
Note 30. Trade payables
31.12.2022 31.12.2021
Trade payables, including: 39 587 16 028
to related entities 5 954 2 407
to other entities 33 633 13 621
Trade payables – ageing analysis
Total Not overdue
Overdue, in days
1 – 60 61 – 90 91 – 180 181 – 360 >360
As at 31.12.2022 39 587 34 831 2 286 8 9 186 2 267
to related entities 5 954 4 480 1 474 - - - -
to other entities 33 633 30 351 812 8 9 186 2 267
Total Not overdue
Overdue, in days
1 – 60 61 – 90 91 – 180 181 – 360 >360
As at 31.12.2021 16 028 12 257 1 578 10 43 2 083 57
to related entities 2 407 2 252 155 - - - -
to other entities 13 621 10 005 1 423 10 43 2 083 57
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
60
Trade payables – by currency
31.12.2022 31.12.2021
Value in
foreign
currency
Value in
PLN
Value in
foreign
currency
Value in
PLN
PLN 19 881 19 881 7 024 7 024
USD 3 470 15 276 1 638 6 652
EUR 691 3 240 322 1 483
CNY 1 088 691 1 015 648
JPY 9 921 330 707 25
GBP 22 117 5 29
RUB 846 52 52 3
KZT 7 - - -
CAD - - 51 164
Total
39 587
16 028
Note 31. Other current liabilities
31.12.2022 31.12.2021
Taxes (other than corporate income tax), customs duty, social security and other
payables
3 843 3 584
Withholding tax 32 905
Personal income tax 1 841 1 704
Social security contributions 1 757 876
State Disabled Persons Fund (PFRON) 64 45
PIT-8AR (personal income tax) settlements 132 54
Other 17 -
Other liabilities 507 475
Other settlements with employees 235 125
Other settlements with members of the Management Boards 32 37
Other liabilities 240 313
Total other current liabilities 4 350 4 059
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
61
Other current liabilities – ageing analysis
Total Not overdue
Overdue, in days
1 – 60 61 – 90 91 – 180 181 – 360 >360
As at 31.12.2022 4 350 4 096 253 1 - - -
to related entities 32 - 32 - - - -
to other entities 4 318 4 096 221 1 - - -
Total Not overdue
Overdue, in days
1 – 60 61 – 90 91 – 180 181 – 360 >360
As at 31.12.2021 4 059 3 935 123 - 1 - -
to related entities 162 38 123 - 1 - -
to other entities 3 897 3 897 - - - - -
Other current liabilities – by currency
31.12.2022 31.12.2021
Value in
foreign
currency
Value in
PLN
Value in
foreign
currency
Value in
PLN
PLN 4 200 4 200 3 978 3 978
USD 23 102 17 70
EUR 6 29 2 11
GBP 2 12 - -
JPY 156 5 - -
AUD 1 2 - -
Total
4 350
4 059
Note 32. Social assets and the Company’s Social Fund liabilities
Not applicable.
Note 33. Contingent liabilities
Bills of exchange payable in respect of loans received
Not applicable.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
62
Contingent liabilities in respect of granted guarantees, sureties and collateral
Specification Currency 31.12.2022 31.12.2021
mBank S.A.
Voluntary submission to execution Agreement for payment cards PLN - 920
Bill of exchange agreement Framework agreement on financial market transactions PLN 50 000 50 000
Bill of exchange agreement Bank guarantee securing a rental contract PLN - 667
Bill of exchange agreement Bank guarantee securing a rental contract PLN 427 -
Ingenico Group S.A. (previously: Global Collect Services BV)
Contractual surety Surety against liabilities of GOG sp. z o.o. EUR - 155
Mazowiecka Jednostka Wdrażania Programów Unijnych
Contractual commitment
Commitment to incur operating and renovation expenditures on
leased space
PLN 20 58
Narodowe Centrum Badań i Rozwoju
Bill of exchange agreement Subsidy agreement POIR.01.02.00-00-0105/16 PLN 7 711 7 711
Bill of exchange agreement Subsidy agreement POIR.01.02.00-00-0110/16 PLN 3 846 3 846
Bill of exchange agreement Subsidy agreement POIR.01.02.00-00-0112/16 PLN 3 692 3 692
Bill of exchange agreement Subsidy agreement POIR.01.02.00-00-0118/16 PLN 1 358 5 324
Pekao Leasing Sp. z o.o.
Bill of exchange agreement Lease contract 37/1991/21 PLN 314 442
Santander Bank Polska S.A. (previously: BZ WBK S.A.)
Bill of exchange agreement Framework agreement on financial market transactions PLN 23 500 23 500
Bank Polska Kasa Opieki Spółka Akcyjna
Bill of exchange agreement Framework agreement on financial market transactions PLN 50 000 35 000
BNP Paribas Bank Polska S.A.
Bill of exchange agreement Framework agreement on financial market transactions PLN 26 600 26 600
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
63
Note 34. Lease and sublease contracts
Information on the depreciation of leased assets is presented in Note 3. Interest expense on lease contracts is presented in Note
5. Information on additions to right-of-use assets and the carrying value of right-of-use assets as at the end of the reporting period
by category of an underlying asset is presented in Note 11. Note 49 provides information on the total cash outflows from leases.
Lease liabilities
Present value of payments 31.12.2022 31.12.2021*
Within one month 98 58
From one to three months 445 179
From three months to one year 1 245 477
From one to five years 5 171 938
More than five years 13 712 13 819
Present value of lease payments, including: 20 671 15 471
short-term 1 788 714
long-term 18 883 14 757
* restated data
Gross lease commitments (before deduction of finance costs)
31.12.2022 31.12.2021*
Within one month 187 218
From one to three months 714 400
From three months to one year 1 659 440
From one to five years 6 977 2 071
More than five years 24 006 24 387
Total 33 543 27 516
short-term 2 560 1 058
long-term 30 983 26 458
* restated data
Income received through subleasing of right-of-use assets
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Revenue 39 40
Costs 39 40
Income - -
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
64
Lease and sublease contracts as at 31.12.2022
Leased assets Lessor Contract no. Cost
Opening
balance
(currency)
Currency
Agreement
expiry date
Liabilities as at
the balance
sheet date
Terms of extension or possibility of
purchase
Lease contracts
Passenger car Pekao Leasing Sp. z o.o. 37/1991/21 614 614 PLN 2023-12-14 267
The lessee has the right to purchase the
subject matter of the lease – according to the
contract, the net residual value is PLN 135
thousand.
Passenger car
BMW Financial Services
Polska Sp. z o.o.
LO/40953/0421 377 377 PLN 2023-04-08 161
The lessee has the right to purchase the
subject matter of the lease – according to the
contract, the net residual value is PLN 135
thousand.
Passenger car Carefleet S.A. UG20002163 118 118 PLN 2023-08-06 105
The lessee has the right to purchase the
subject matter of the lease – according to the
contract, the net residual value is PLN 85
thousand.
Passenger car
Sobiesław Zasada
Automotive Sp. z o.o.
Spółka jawna
L4 10439 622 622 PLN 2024-11-15 374
The lessee has the right to purchase the
subject matter of the lease – according to the
contract, the net residual value is PLN 134
thousand.
Jagiellońska 74 –
plots 12 and 13
State Treasury
Notarial Deed of
31.10.2019
8 623 8 623 PLN 2089-12-05 8 440
The lessee does not have the right to buy
back the subject matter of the lease
Jagiellońska 74 –
plot 14
Capital City of Warsaw
Notarial Deed of
31.10.2019
1 468 1 468 PLN 2100-04-12 1 444
The lessee does not have the right to buy
back the subject matter of the lease
Jagiellońska 76 State Treasury
Notarial Deed of
31.12.2018
4 449 4 449 PLN 2089-12-05 4 345
The lessee does not have the right to buy
back the subject matter of the lease
Kraków Office
Prestige Property Group
Sp. z o.o.
Rental contract dated
20.07.2016 with
subsequent annexes
3 715 864 EUR 2025-05-31 2 798
The lessee does not have the right to buy
back the subject matter of the lease
Wrocław Office Cavatina SPV 12 Sp. z o.o.
Rental contract dated
04.11.2022
2 702 576 EUR 2027-10-31 2 737
The lessee does not have the right to buy
back the subject matter of the lease
Parking at
ul. Jagiellońska 78
Sokołowo Sp. z o.o.
D20001730 with
subsequent annexes
174 174 PLN 2023-04-30 27
The lessee does not have the right to buy
back the subject matter of the lease
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
65
Sub-lease contracts
Parking at
ul. Jagiellońska 78
CD PROJEKT S.A.
Contract No. WPA
469/17 dated 31.07.2017,
with subsequent
annexes
79 79 PLN 2023-04-30 27
The lessee does not have the right to buy
back the subject matter of the lease
Total
22 783
20 671
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
66
Leases of low-value assets and short-term leases
The Company concluded lease contracts for office equipment (multifunctional photocopiers, kitchen appliances) and residential
premises which potentially meet recognition criteria for leases under the new IFRS 16. However, the Company considered these
contracts to be short-term leases and leases of low-value assets and decided not to apply the new requirements for leases to these
assets, as permitted by paragraph 5 of the standard. In such cases, lease payments are charged to costs of the period to which
they relate, either on a straight-line basis or in some other systematic way that reflects the distribution of costs over the life of the
contract (information on the cost of these leases incurred in the period from 1 January to 31 December 2022 is included in Note 3).
As at 31 December 2022 and 31 December 2021, future minimum payments in respect of irrevocable short-term leases and leases
of low-value assets were as follows:
31.12.2022 31.12.2021
Up to 1 year 459 118
From 1 to 5 years 334 149
More than 5 years - -
Total 793 267
Note 35. Deferred income
31.12.2022 31.12.2021
Subsidies 5 490 8 224
Animation Excellence (GameINN) 1 385 1 846
City Creation (GameINN) 2 776 3 701
Seamless Multiplayer (GameINN) - 905
Cinematic Feel (GameINN) 1 329 1 772
Deferred income 13 208 21 221
Sales relating to future periods 13 173 21 186
Rental of company phones 35 35
Total deferred income, including: 18 698 29 445
short-term 15 032 23 042
long-term 3 666 6 403
Sales related to future periods include royalty income received or receivable from pre-orders completed by players as part of the
digital distribution of PC games with a release date in future periods, royalty advances received or receivable from publishers and
distribution partners, and advances on goods received from customers.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
67
Note 36. Provision for retirement and similar benefits
31.12.2022 31.12.2021
Provision for retirement and disability bonuses 348 373
Total, including: 348 373
short-term 9 5
long-term 339 368
The main assumptions adopted by the actuary as at the reporting date for the calculation of the provision are as follows:
31.12.2022 31.12.2021
Discount rate (%) 6.87 3.41
Expected inflation rate (%) 6.87 3.41
Employee turnover rate (%) - Age average 12% – 34 years 11.6% – 34 years
Expected salary growth rate (%)
45% – year 2023; 6% –
subsequent years
10% – years 2022 –
2023; 6% - subsequent
years
CSO mortality tables from the year 2021 2020
Probability of disability during the year 0.1% 0.1%
Using statistical methods, the actuary built and calibrated a Multiple Decrement model of employee mobility for the Company.
Historical data provided by the Company was used to calibrate the model. Based on publicly available statistical data and actuarial
studies, the mobility rate was assumed to decrease with age. The valuation model shows significant sensitivity to changes in mobility
parameters and should therefore be continuously reviewed and updated for subsequent estimates.
Change in provisions for retirement and similar benefits
Provisions for
retirement and
disability
bonuses
Total
As at 01.01.2022 373 373
Provision released 25 25
As at 31.12.2022, including: 348 348
short-term 9 9
long-term 339 339
Provisions for
retirement and
disability
bonuses
Total
As at 01.01.2021 380 380
Provision released 7 7
As at 31.12.2021, including: 373 373
short-term 5 5
long-term 368 368
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
68
Note 37. Other provisions
31.12.2022 31.12.2021
Provision for liabilities, including: 93 819 81 528
provision for costs of performance-related and other remuneration 67 121 44 714
provision for costs of the audit and review of the financial statements 137 102
provision for other costs 26 561 36 712
Total, including: 93 819 81 528
short-term 83 221 76 160
long-term 10 598 5 368
Change in other provisions
Provision for
returns
Provision for
costs of
performance-
related and
other
remuneration
Other provisions Total
As at 01.01.2022 - 44 714 36 814 81 528
Provisions recorded during the year - 67 121 57 001 124 122
Provisions utilized/released - 44 714 67 117 111 831
As at 31.12.2022, including: - 67 121 26 698 93 819
short-term - 67 121 16 100 83 221
long-term - - 10 598 10 598
Provision for
returns
Provision for
costs of
performance-
related and
other
remuneration
Other
provisions*
Total
As at 01.01.2021 194 537 246 278 34 131 474 946
Provisions recorded during the year 42 635 46 880 94 956 184 471
Provisions utilized/released 237 172 248 444 92 273 577 889
As at 31.12.2021, including: - 44 714 36 814 81 528
short-term - 44 714 31 446 76 160
long-term - - 5 368 5 368
* restated data
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
69
Note 38. Information on financial instruments
Fair values of specific classes of financial instruments
The Management Board of the Company analysed specific classes of financial instruments. Based on the analysis, it was concluded
that the carrying amounts of the instruments does not materially differ from their fair values, as at both 31 December 2022 and
31 December 2021.
31.12.2022 31.12.2021*
LEVEL 1
Assets measured at fair value
Assets measured at fair value through
other comprehensive income
243 091 228 661
bonds issued by foreign governments – EUR 25 111 24 517
bonds issued by foreign governments – USD 217 980 204 144
LEVEL 2
Assets measured at fair value through profit or loss
Derivatives 7 809 -
currency forwards – EUR 1 249 -
currency forwards – USD 6 560 -
Private equity interests in the gaming sector 2 556 -
private equity interests in the gaming sector – SEK 1 085 -
private equity interests in the gaming sector – USD 1 471 -
Liabilities measured at fair value through profit or loss
Derivatives - (17 906)
currency forwards – EUR - (455)
currency forwards – USD - (17 451)
* restated data
Financial Instruments measured at fair value are classified to 3-stage fair value hierarchy:
Level 1 – quoted prices in active markets for identical assets or liabilities.
Level 2 – fair value based on observable market data.
Level 3 – fair value based on market data that is not observable in the market.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
70
Financial assets – classification and measurement
31.12.2022 31.12.2021
Financial assets measured at amortized cost 972 990 993 036
Other non-current receivables 383 373
Trade receivables 164 708 123 821
Cash and cash equivalents 237 073 345 795
Bank deposits over 3 months 337 330 265 000
Treasury bonds and bonds guaranteed by the State Treasury 232 757 248 755
Loans granted 739 9 292
Financial assets measured at cost 53 566 43 447
Investments in subordinated entities 53 566 43 447
Assets measured at fair value through
other comprehensive income
243 091 228 661
Bonds issued by foreign governments 243 091 228 661
Financial assets measured at fair value through profit or loss: 10 365 -
Derivative financial instruments 7 809 -
Private equity interests in the gaming sector 2 556 -
Total financial assets 1 280 012
1 265 144
Financial liabilities – classification and measurement
31.12.2022 31.12.2021*
Financial liabilities measured at amortized cost 60 258 31 499
Trade payables 39 587 16 028
Other financial liabilities in respect of lease 20 671 15 471
Financial liabilities at fair value
through profit or loss
- 17 906
Derivative financial instruments - 17 906
Total financial liabilities 60 258
49 405
* restated data
In accordance with the requirements of IFRS 9 Financial Instruments, the Company analysed the business model for managing
financial assets and examined the characteristics of contractual cash flows for each component of the bond portfolio, and concluded
that:
the purpose of investments in domestic and foreign Treasury bonds and domestic bonds guaranteed by the Polish State
Treasury is to hold them to maturity and to collect contractual cash flows;
investment mandates for managing the foreign bonds portfolio allow selling bonds before maturity as part of the adopted
strategy;
all bonds purchased meet the SPPI test.
As a result of the analysis conducted, purchased bonds were classified into two financial asset management model which differ in
terms of the entity managing the bond portfolio. Polish Treasury bonds and bonds guaranteed by the Polish State Treasury are
measured at amortized cost, because they are held to collect contractual cash flows. Foreign Treasury bonds are measured at fair
value through other comprehensive income, because of the investment mandate which allows the possibility of the portfolio being
managed by an Asset Manager.
In accordance with the requirements of IFRS 13 Fair Value Measurement, the Company analysed the valuation of financial
instruments measured at amortized cost in the consolidated statement of financial position to determine their fair value and their
classification in the fair value hierarchy.
Listed debt securities were classified as Level 1. These are State Treasury Bonds and bonds secured with a guarantee by the State
Treasury, the fair value of which was determined on the basis of the market valuation provided by the brokerage firm under the
applicable brokerage services agreement.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
71
31.12.2022 31.12.2021
LEVEL 1
Fair value of bonds measured at amortized cost 219 713 240 753
Treasury bonds and bonds guaranteed by the State Treasury
219 713 240 753
Other financial assets and liabilities have been classified as Level 3.
With reference to equity shares in other entities, the Company estimates the fair value of the shares held using the method of
forecasting the future cash flows to be generated by a cash-generating unit, and requires determining a discount rate to be used
in order to calculate the present value of these cash flows. Where appropriate, the Company adopts historical cost as an acceptable
approximation of fair value.
The Company did not measure the fair value of trade receivables and payables, cash and cash equivalents, bank deposits over
3 months and loans granted at variable interest rates as their carrying amount is considered by the Company to be a reasonable
approximation of fair value.
There were no movements between the Levels in the fair value hierarchy in the Company during the reporting period and the
comparative period.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
72
Gains and losses on financial assets and liabilities
01.01.2022 – 31.12.2022
Financial assets measured at amortized cost
Financial assets
measured at cost
Financial assets and
liabilities measured
at fair value through
profit or loss
Financial assets
measured at fair
value through
other
comprehensive
income
Financial liabilities
measured at
amortized cost
Total
Trade
receivables
Treasury bonds
and bonds
secured with
a guarantee by
the State
Treasury
Loans
granted
Cash and
cash
equivalents
and bank
deposits over
3 months
Investments in
subordinated
entities
Derivative financial
instruments
Foreign bonds
Other financial
liabilities
Interest
income/(expense)
- 7 778 234 25 481 - - 8 184 (546) 41 131
Write-downs
recorded
(18) - - - - - - - (18)
Write-downs
released
11 - - - - - - - 11
Gains /(losses) on
disposal of debt
instruments
- - - - - - 22 752 - 22 752
Commission and
fees on purchase of
debt instruments
- - - - - - (326) - (326)
Measurement of
forward contract
- - - - - (2 172) - - (2 172)
Measurement of
shares in related
entities
- - - - (30 171) - - - (30 171)
Measurement of
foreign bonds
- - - - - - (12 724) - (12 724)
Total gains/(losses) (7) 7 778 234 25 481 (30 171) (2 172) 17 886 (546) 18 483
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
73
01.01.2021 – 31.12.2021*
Financial assets measured at amortized cost
Financial assets
measured at cost
Financial assets and
liabilities measured
at fair value through
profit or loss
Financial assets
measured at fair
value through
other
comprehensive
income
Financial liabilities
measured at
amortized cost
Total
Trade
receivables
Treasury bonds
and bonds
secured with
a guarantee by
the State
Treasury
Loans
granted
Cash and
cash
equivalents
and bank
deposits over
3 months
Investments in
subordinated
entities
Derivative financial
instruments
Foreign bonds
Other financial
liabilities
Interest
income/(expense)
- 1 084 205 68 - - (550) (464) 343
Write-downs
recorded
(12) - - - - - - - (12)
Write-downs
released
6 - - - - - - - 6
Gains /(losses) on
disposal of debt
instruments
- - - - - - (1 436) - (1 436)
Commission and
fees on purchase of
debt instruments
- - - - - - (364) - (364)
Measurement of
forward contract
- - - - - 2 271 - - 2 271
Measurement of
shares in related
entities
- - - - (1 668) - - - (1 668)
Measurement of
foreign bonds
- - - - - - 4 342 - 4 342
Total gains/(losses) (6) 1 084 205 68 (1 668) 2 271 1 992 (464) 3 482
* restated data
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
74
Financial risk management objectives and policies
Credit risk
Risk description: The Company is exposed to credit risk in connection with sales with deferred payment, royalty income customarily
reported and settled after the end of the period for which the royalties are due, advance payments and also in connection with
cooperation with banks or Treasury bond issuers. There are instances where the concentration of sales to the largest customers
exceeds 10% of the Company’s total sales revenue.
Actions taken: I
n order to reduce the credit risk related to buyers, the Company is constantly monitoring the settlement of
receivables and collection of difficult cases is outsourced to external specialized entities. As part of its efforts to mitigate the credit
risk of financial institutions, the Company works with several banks, diversifying the allocations of its cash and bank deposits, both
by entity and geography. In addition, in accordance with the policy adopted in March 2022, the Company may invest part of its
financial reserves in the following types of bonds:
domestic Treasury bonds of the Republic of Poland;
domestic bonds secured with a guarantee of the State Treasury of the Republic of Poland;
foreign Treasury bonds issued by countries with the rating not lower than Aa3 according to Moody’s rating agency;
foreign bonds secured with a guarantee of countries with the rating not lower than Aa3 according to Moody’s rating
agency.
These bonds are highly liquid securities, which allows the Company to sell them at any time before maturity.
Liquidity risk
Risk description: Inadequate capital and liquidity risk management may generate liquidity risk resulting in delays or the inability to
settle liabilities.
Actions taken – managing liquidity risk: Capital and liquidity risk management at the Company is aimed at ensuring the financing of
its activities, including the long-term investment projects implemented by the Company.
The pillars of liquidity risk management are as follows:
constantly maintained and updated short-term and long-term cash flow forecasts;
periodic verification, based on cash flow forecasts, of the achievement of liquidity risk management targets in the medium
term, for example, one year after the release of the Company’s next major production;
maintaining its own financial reserves – the Company has no external interest-bearing debt from loans, borrowings or
bonds;
the management of financial reserves (held in the form of cash, bank deposits, domestic and foreign Treasury bonds) in
the Company is carried out taking into account the maturity dates of the individual instruments, the ratings of the banks
or issuers of the Treasury bonds purchased, the interest rates or yields of the investments concerned and always
respecting the principle of diversification in the allocation of the accumulated financial reserves (both by entity and
geography).
As at 31 December 2022, CD PROJEKT S.A. held bank deposits with a carrying amount of PLN 573 920 thousand.
Maturity of the deposit
Carrying amount
Quarter 1 of 2023 337 490
Quarter 2 of 2023 229 070
Quarter 3 of 2023 7 360
Total carrying amount 573 920
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
75
As at 31 December 2022. CD PROJEKT S.A. held Treasury bonds with a carrying value of PLN 475 848 thousand.
Bonds by country of issuer at 31.12.2022 S&P Fitch Moody’s
Carrying amount
Poland A- A- A2 232 757
USA AA+ AAA Aaa 186 439
Germany AAA AAA Aaa 35 316
Canada AAA AA+ Aaa 10 695
Finland AA+ AA+ Aa1 10 641
Total carrying amount 475 848
Bond portfolio as at 31.12.2022 by instrument maturity
Redemption date of purchased bonds as at 31.12.2022
Carrying amount
2023 87 433
2024 106 844
2025 94 053
2026 159 857
2027 27 661
Total carrying amount 475 848
Currency risk
Risk description: Due to the global nature of the Company’s business, where the majority of revenue is generated in foreign
currencies, it is exposed to the risk of sudden changes in exchange rates, including in particular the risk of the strengthening of the
Polish zloty.
The majority of publishing and distribution contracts to which CD PROJEKT S.A. is a party as the game developer are based on
settlement in foreign currencies – mainly in USD and EUR. Therefore, a weakening of the USD or EUR exchange rate in relation to
PLN is an undesirable scenario for the Company, resulting in a reduction of sales revenue.
The Company also purchases goods and services in transactions settled in foreign currencies – in such cases, a weakening of the
PLN exchange rate against the relevant currency of the transaction may result in exchange rate differences unfavourable to the
Company’s results.
Actions taken: The Company seeks to minimize currency exposure in its operations, but nevertheless it is not possible to completely
eliminate the currency risk that is incumbent on it. In the case of the risk associated with CD PROJEKT S.A.’s investment in foreign
Treasury bonds denominated in the issuer’s currency, exposure to exchange rate fluctuations is mitigated by entering into forward
sales of the relevant currency symmetrical to each currency feed to the investment account. The value of forward contracts
concluded as at 31.12.2022 is presented in the table below.
Forward contract
currency
Value of forward contracts in
foreign currency
Value of forward contracts in
PLN at
forward exchange rates
Fair value measurement of
forward contracts as at
31.12.2022 in PLN
EUR 5 550 27 895 1 249
USD 49 740 228 686 6 560
Total 256 581 7 809
At the same time, in accordance with the policy adopted in March 2022 to diversify the investment of current cash surpluses,
CD PROJEKT S.A. may hold up to 15% of total funds in unhedged positions in USD and EUR. As at 31 December 2022, the Company
had an unhedged position in foreign currencies amounting to USD 20 463 thousand. and EUR 40 thousand respectively.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
76
Interest rate and inflation risk
Risk description: The condition of the global economy, including the effects of global political, economic or military crises or the
development of pandemics, may affect the Company’s business, financial position and results. A negative situation related to the
impact of a pandemic, either macroeconomic or political, may result in difficulties in access to finance, changes in the prices of
goods, services and products, conservative consumer attitudes or the emergence of restrictions on sales opportunities as
a consequence of economic sanctions or local regulations introduced.
The monetary policy pursued by the National Bank of Poland in shaping the level of interest rates and consequently influencing the
level of inflation in Poland may affect the financial income achieved by the Company. As surplus cash is invested in, among other
things, bank deposits and Treasury bonds, a drop in interest rates may have a negative impact on the Company’s financial income.
Moreover, financial income generated from bank deposits or investments in Treasury bonds in relation to the Company’s cash
reserves may not compensate for losses caused by inflation.
A change in the level of interest rates affects the carrying value of foreign Treasury bonds and bonds secured with their guarantee,
which are measured at fair value through other comprehensive income. An increase in interest rates may also reduce the valuation
of the Company’s assets (e.g. shares in related entities, brands) carried out as part of impairment tests, potentially leading to the
need to restate their value in the books of account.
Actions taken: The Company endeavours to monitor the impact of the global situation on the markets in which it operates and, as
far as possible, to adapt its operations as much as possible to the changes observed. The Company mitigates some of the risk
associated with interest rate volatility and market inflation expectations by investing a portion of its cash surpluses in deposits,
Polish Treasury bonds, bonds secured by the State Treasury guarantee and foreign Treasury bonds of issuers with credit ratings
not lower than Aa3 according to Moody’s, while diversifying the maturities of the aforementioned instruments. In addition, some of
the Treasury bonds are floating rate securities.
In the current macroeconomic situation, while maintaining the safety of accumulated funds, it is in practice not possible to fully
protect the value of financial reserves held against the negative effects of inflation.
Sensitivity analysis
In accordance with the requirements of IFRS 7, Financial Instruments: Disclosures, the Company performed an analysis for the
identified market risks showing what impact changes in the relevant risk factors would have on the results of operations and equity.
Due to the linear nature of the impact of a change in a factor on the value of the Company’s profit or loss and equity, 5 pps were
adopted for the analysis of the impact of changes in exchange rates and 1 pp for the analysis of the impact of changes in interest
rates and fair value.
The tables below show the sensitivity of profit before tax and equity to the risks identified by the Company over the horizon to the
date of the next financial statements, assuming other risk factors remain constant.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
77
Currency risk concerning the net value of foreign currency assets and liabilities as at the end of 2022
Impact on net profit/loss
Impact on equity
EUR USD Other currencies Total EUR USD Total
Exchange rate fluctuations 5% 5% 5% 5% 5%
As at 31.12.2022
Exchange rate growth (722) (1 516) (75) (2 313) 1 256 10 899 12 155
Exchange rate decline 722 1 516 75 2 313 (1 256) (10 899) (12 155)
As at 31.12.2021
Exchange rate growth (354) (5 562) 842 (5 074) 1 226 10 207 11 433
Exchange rate decline 354 5 562 (842) 5 074 (1 226) (10 207) (11 433)
Exposure to currency risk changes during the year depending on the volume of transactions concluded in the currency. Nevertheless, the above sensitivity analysis can be considered representative of
the Company’s exposure to currency risk as at the balance sheet date.
Interest rate risk relating to interest income on cash held in bank accounts and Polish floating-rate bonds
31.12.2022 31.12.2021
Interest rate fluctuations Impact on net profit/loss Interest rate fluctuations Impact on net profit/loss
Interest rate growth 1 p.p. 6 751 1 p.p. 7 197
Interest rate decline 1 p.p. (6 751) 1 p.p. (7 197)
Fair value change risk relating to the valuation of foreign bonds carried at fair value, which depends on the volatility of market prices
31.12.2022 31.12.2021
Fluctuation
amount
Impact on equity
Impact on net
profit/loss
Fluctuation
amount
Impact on equity
Impact on net
profit/loss
Fair value growth 1 p.p. 2 431 104 1 p.p. 2 287 (175)
Fair value decline 1 p.p. (2 431) (104) 1 p.p. (2 287) 175
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
78
Note 39. Capital management
The principal objective of capital management within the Company is to maintain sound credit rating and safe capital ratios to
support the Company’s operating activity and to increase shareholder value.
The Company manages the capital structure and introduces changes to it based on changes in economic circumstances. In order
to maintain or adjust the capital structure, the Company may pay a dividend to the shareholders, buy back its treasury shares from
the market or issue new shares. The Company monitors its capital balances using the leverage ratio, which is calculated as the ratio
of net debt to total equity plus net debt. As at 31 December 2022, the Company’s balance of cash and cash equivalents was greater
than its trade and other payables, thus the Company had a positive net cash balance.
Note 40. Employee benefit schemes
Incentive scheme for the years 2016–2019
On 24 May 2016, the General Shareholders’ Meeting of the Company passed a resolution introducing an incentive scheme for the
years 2016-2021 for key personnel of the Group. A total of 5 167 500 entitlements were exercisable for eligible persons as a result
of the positive result of the verification performed in 2020, of the achievement of the scheme’s objectives for the period 2016-2019.
As part of the settlement of the scheme, in 2020 the Company sold to the eligible persons 516 700 treasury shares purchased from
the market for this purpose. The remaining part of entitlements was realized in the form of issuing 4 650 800 subscription warrants.
By 31 December 2021, the total of 4 618 800 warrants issued had been exercised. In December 2022, as a result of the exercise of
the last 32 000 subscription warrants issued under the programme by an eligible person, 32 000 M-series ordinary bearer shares
of the Company with a nominal value of PLN 1.00 each were registered in the securities depository maintained by the Polish Central
Securities Depository; the shares were registered in the securities account of the aforementioned eligible scheme participant, and
thus also the share capital of the Company was increased from PLN 100 738 800 to PLN 100 770 800. These shares were
introduced to stock exchange trading on the GPW Main Market after the balance sheet date - as of 28 February 2023. Thus, as at
the date of publication of this report, all shares which the eligible persons were entitled to take up based on the subscription
warrants granted under the incentive scheme in operation in 2016-2019 had been introduced to trading on the main market.
As the 2016–2019 incentive scheme is considered to be completed, the details of the minimum vesting rights awarded under the
scheme in previous financial years and their valuation are available in the previous interim financial statements of the Company and
the Group.
Incentive scheme for the years 2020–2025
Based on the resolutions of the Company’s General Shareholders Meeting of 28 July 2020 and 22 September 2020, another, third
issue of the incentive scheme was introduced for 2020-2025. In accordance with the adopted assumptions, a maximum of
4 000 000 entitlements, understood as a conditional right to take up subscription warrants, entitling to take up shares in the
Company issued separately as part of a conditional share capital increase, or alternatively to purchase, on preferential terms, the
Company’s treasury shares may be granted as part of the implementation of the scheme. Taking up and exercising of rights from
the subscription warrants or, as the case may be, purchasing the Company’s shares by the eligible persons will be conditional upon
the Company’s determination that the objectives and criteria of the scheme have been met. The scheme includes performance-
related objectives (80% of entitlements), market related objectives (20% of entitlements), individual objectives in selected cases
and, in each case, the loyalty criterion which applies until the date of determining that the scheme objectives and criteria have been
met.
As at the date of publication of these financial statements, 2 113 000 of the entitlements granted remained in the incentive scheme
for 2020-2050.
Assumptions adopted to value the incentive scheme
Date of granting the entitlements
CDR volatility
index
WIG volatility
index
Correlation with
WIG index
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%
Valuation Date
During 2020, the Company granted entitlements to participate in the scheme in two tranches. In 2021, additional entitlements were
granted once, as set out in the resolution of the Management Board of 10 August 2021. No new entitlements were granted in 2022.
The fair value of the entitlements was in each case valued as at the grant date using financial engineering methods and numerical
methods (which are a development of the so-called Black-Scholes-Merton model) by a licensed actuary registered in the register
of actuaries maintained by the Polish Financial Supervision Authority in accordance with the information in the table above.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
79
Classification of measurement conditions
The condition relating to the change in the price of the Company’s shares in relation to the change in the WIG index and the
condition that the market price on the exercise date will be above the exercise price have been treated as market conditions. The
conditions relating to net profit growth were treated as non-market. The conditions related to completing paperwork (including the
correct filing of documents within a certain time limit), loyalty conditions and other conditions unrelated to the share price were
treated as non-market conditions. The condition of living to the date of exercising the entitlement rights and other similar conditions
were treated likewise.
Number of shares at the grant date
As at the grant dates in 2020, the Company had 96 120 000 shares in issue.
As at the date of granting additional rights in 2021, the Company had 100 738 800 shares in issue.
No new entitlements were granted in 2022.
Execution of the programme
Based on the results achieved in 2020 and 2021 and the assumptions for the subsequent years of the scheme, the Management
Board assessed the possibility of achieving the performance targets set in the scheme over the entire period of the scheme’s
duration and revised the estimates, considering it most likely that the performance targets would not be achieved over that period.
The above assessment remains valid as at the date of publication of these financial statements.
On 20 December 2022, the Extraordinary General Meeting of the Company passed the resolution no. 5 concerning the
discontinuation of the incentive scheme for the financial years 2020–2025, but as its entry into force was subject to the General
Meeting of the Company adopting certain resolutions on introducing a new incentive scheme, which had not taken place by the
date of publication of this report, the resolution no. 5 had not yet entered into force. Although the resolution on the introduction of
the Incentive scheme for the financial years 2023–2027 was formally adopted, the required majority was not achieved with respect
to the resolution necessary for the implementation of this scheme, i.e. the resolution on the issue of subscription warrants and
conditional increase in the share capital of the Company. Thus, as at the date of publication of this report, the Company has no
actual possibility to implement the Incentive Scheme for the financial years 2023–2027.
Changes in the entitlements granted under the 2020–2025 incentive scheme
Specification
01.01.2022 – 31.12.2022 01.01.2021 – 31.12.2021
Number of
entitlements
(not in
thousands)
Exercise price
in PLN
Number of
entitlements
(not in
thousands)
Exercise price
in PLN
Unrealized as at the beginning of the
period
4 000 000 390.59 or 371.06 4 000 000 390.59 or 371.06
Granted but not realized as at the
beginning of the period
2 275 000 390.59 or 371.06 2 592 000 390.59 or 371.06
Granted during the year - 390.59 or 371.06 30 000 390.59 or 371.06
Lost during the year 162 000 390.59 or 371.06 347 000 390.59 or 371.06
Not realized as at the end of the period 4 000 000 390.59 or 371.06 4 000 000 390.59 or 371.06
Granted but not realized as at the end of
the period
2 113 000 390.59 or 371.06 2 275 000 390.59 or 371.06
Note 41. Transactions with related entities
Terms and conditions of transactions with related entities
The terms and conditions of intra-group transactions were determined on an arm’s length basis. The essence of this principle is
based on the premise that the terms and conditions agreed in transactions between related parties should not differ from those
that would be agreed between independent parties in a comparable situation. Controlled transactions entered into by related
parties belonging to the CD PROJEKT Group are verified to determine whether the agreed terms of the transactions are similar to
the market terms, based on the recommendations and methods provided for in the OECD Guidelines as well as in national
legislation.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
80
Transactions with related parties
Sales to
related parties
Purchases
from related parties
Receivables
from related parties
Liabilities to
related parties
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
31.12.2022 31.12.2021 31.12.2022 31.12.2021
SUBSIDIARIES
GOG sp. z o.o. 15 612 14 048 4 968 1 978 2 798 3 411 2 610 232
CD PROJEKT Inc. 314 515 15 156 12 203 43 511 1 185 948
CD PROJEKT Co., Ltd.
(liquidated)
- - - 6 629 - - - -
Spokko sp. z o.o. 1 321 1 417 - - 156 9 113 - -
CD PROJEKT RED STORE
sp. z o.o.
1 229 1 222 128 243 839 421 19 158
CD PROJEKT RED Vancouver
Studio Ltd.
68 - 16 762 2 889 1 694 1 008 2 746 164
The Molasses Flood LLC 6 - 31 213 2 616 742 - 2 579 1 018
MANAGEMENT BOARD
Marcin Iwiński 1 18 - - - - 7 20
Adam Kiciński - 4 - - - - 13 5
Piotr Nielubowicz 2 5 - - 2 - 13 -
Michał Nowakowski 3 22 - - - - 4 7
Adam Badowski 6 9 - - - 7 6 5
Piotr Karwowski - 1 - - - - 2 -
Paweł Zawodny 7 - - - - - - -
Jeremiah Cohn 1 - - - - - - -
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
81
Note 42. Remuneration of the senior management and the Supervisory
Board
Remuneration paid to the Management Board members
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Basic remuneration from the employment relationship 95 62
Remuneration for the functions performed 3 932 1 985
Bonuses and remuneration linked to the previous year’s result 18 301 106 198
Total 22 328 108 245
Remuneration paid to other members of the Company’s key management personnel
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Basic remuneration from the employment relationship 20 362 24 600
Remuneration for the functions performed 516 547
Bonuses and remuneration linked to the previous year’s result 6 721 36 898
Total 27 599 62 045
Remuneration paid to members of the Supervisory Board
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Remuneration for the functions performed 602 481
Total 602 481
Note 43. Number of employees
Average number of employees
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Average number of employees 453 384
Total 453 384
Employee turnover
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Number of new employees 165 106
Number of dismissed employees 61 65
Total 104 41
Employment in research and development activities
31.12.2022 31.12.2021
Number of employees 262 195
Total 262 195
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
82
Note 44. Capitalization of borrowing costs
Not applicable.
Note 45. Tax settlements
Tax settlements and other activities regulated by the tax law may be subject to inspections by administrative bodies which are
entitled to impose high penalties or sanctions. The lack of reference to established legal regulations in Poland results in ambiguities
and inconsistencies in the binding regulations. Frequent differences of opinion as to the legal interpretation of tax regulations, both
internally within the state bodies and between the state bodies and enterprises, result in uncertainty and conflict arising. Due to
these factors, the tax risk in Poland is considerably higher than that usually existing in countries with better developed tax systems.
In accordance with the general rule, tax settlements may be subject to inspections within five years from the end of the calendar
year in which tax was paid.
Following the fulfilment of the criteria set out in Article 19 of the Act of 30 May 2008 on certain forms of innovation support
(consolidated text, Journal of Laws of 2022, item 2474), the Minister of Development and Technology, by decision No. DNP-
V.4241.16.2022 of 11 August 2022, maintained the status of a research and development centre granted to the Company by decision
No. 4/CBR/18 of 19 June 2018. The status allows the Company to use more broadly the research and development relief provided
for in the Act of 15 February 1992 on corporate income tax (consolidated text, Journal of Laws of 2022, item 2587, as amended).
With effect from 1 January 2019, provisions were introduced into the Act on corporate income tax granting preferential taxation at
the 5% tax rate for qualified income earned by a taxpayer from qualified intellectual property rights. Having met the prerequisites
and formal conditions contained in the said legislation, the Company accounts for income (in respect of selected sources of income)
taking this tax relief into account.
Note 46. Post-balance sheet date events
Issuance of the decision on preliminary approval of a class action settlement in the USA, as reported by the Company in current
report no. 1/2023
On 5 January 2023, the Company announced that it has been advised by the law firm representing the Company in the US class
action that the US District Court for the District of Central California has issued an order granting preliminary approval of the
settlement. The order approves the terms of the settlement relating specifically to the plaintiffs’ complete withdrawal of any claims
against the Company and its Management Board members and the payment to the plaintiffs of USD 1 850 thousand by the Company
and its insurer, Colonnade Insurance S.A.
Acquisition of the remaining shares in the subsidiary Spokko sp. z o.o.
On 31 January 2023, as a result of the Company concluding agreements for the sale of shares with the other shareholders of the
subsidiary Spokko sp. z o.o., the Company acquired from those shareholders a total of 135 shares in Spokko sp. z o.o. with a nominal
value of PLN 50.00 each, as a result of which the Company became the owner of 100% (i.e. 1089) of shares in that subsidiary.
Introducing 32 000 of the Company’s M-series shares to trading on the main market operated by the Warsaw Stock Exchange
and their assimilation with other shares of the Company on the main market, of which the Company informed in current reports
no. 5/2023 and 6/2023
On 21 February 2023, the Management Board of the Warsaw Stock Exchange adopted a resolution on admitting and introducing to
trading on the GPW Main Market of 32 000 M-series ordinary bearer shares of the Company, pursuant to which these shares
(designated with the ISIN code: PLOPTTC00060) were admitted to trading on the main market operated by the WSE. Pursuant to
the aforementioned resolution, as well as a statement issued on 23 February 2023 by Krajowy Depozyt Papierów Wartościowych
S.A. (the Polish Central Securities Depository), as of 28 February 2023 these shares were listed and assimilated with the other
shares of the Company traded on the stock exchange with the ISIN code: PLOPTTC00011. The said shares were issued in connection
with the Company’s incentive scheme operating in 2016-2019 and were subscribed for as a result of a participant in the
aforementioned scheme exercising his rights under 32 000 subscription warrants.
Registration of the merger between the Company and its subsidiary - CD PROJEKT RED STORE sp. z o.o., about which the
Company informed by current report no. 7/2023
On 28 February 2023, the District Court for the Capital City of Warsaw in Warsaw entered in the Register of Businesses the merger
through acquisition of the Company, as the surviving company, with its subsidiary CD PROJEKT RED STORE sp. z o.o. with its
registered office in Warsaw, as the target company. The merger was carried out in accordance with the merger plan announced on
17 November 2022, i.e. by transferring all the assets of CD PROJEKT RED STORE sp. z o.o. to the Company, without increasing the
share capital of the Company and without exchanging shares of the target company for shares of the Company due to the fact that
the Company holds 100% of the shares in the target company. The merger was intended to simplify the structure of the CD PROJEKT
Group in view of the plans to continue the existing activities of the target company in cooperation with a specialized external entity.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
83
The decision to create a write-down relating to the Sirius Project, which the Company announced in current report no. 8/2023
On 20 March 2023, the Company’s Management Board announced that it has decided to recognize an impairment charge in its
books of account in relation to the expenditure incurred to date on Project Sirius developed by The Molasses Flood studio. The
decision was based on the results of evaluation of the scope and commercial potential of the Sirius Project in its original format and
the ongoing work performed to define a new framework for this project. Expenditure on development projects related to Project
Sirius incurred until the end of 2022 amounted to PLN 33.4 million. It is charged to the profit or loss of the Company and the
CD PROJEKT Group for 2022. Expenditure recognized as at the date of publication of the aforementioned report in the Company’s
books of account in January and February 2023 amounted to PLN 9.5 million and will be charged to profit or loss for Q1 2023.
Convening the Extraordinary General Meeting of the Company to which the Company’s current reports no. 9/2023 and 10/2023
relate.
On 22 March 2023, the Company’s Management Board convened an Extraordinary General Meeting of the Company for 18 April
2023. The most important items on the agenda of the Meeting will include the adoption of resolutions on the introduction of new
incentive schemes in the Company for the years 2023–2027 and the redemption of Treasury shares purchased by the Company
as part of the buyback carried out in October 2022, as well as the related reduction of the Company’s share capital. The full content
of the draft resolutions was published in current report no. 10/2023.
Other information on events after the balance sheet date is included in the Directors’ Report on the operations of the CD PROJEKT
Group and CD PROJEKT S.A. for 2022.
Note 47. Transactions with entities performing the audits of the financial
statements
Fees paid or payable for the financial year
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
For the audit of the annual financial statements and the separate financial statements 117 100
For other assurance services, including a review of the financial statements and
separate financial statements
85 60
Total 202 160
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
84
Note 48. Explanations to the statement of cash flows
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Cash and cash equivalents reported in the statement of cash flows 237 073 345 795
Cash and cash equivalents in the balance sheet 237 073 345 795
Depreciation and amortization 10 676 12 658
Amortization of intangible assets 1 962 2 730
Depreciation of property, plant and equipment 8 681 9 889
Depreciation of investment properties 33 39
Foreign exchange gains/(losses) arise on the following items: 4 584 (15 118)
Foreign exchange gains/(losses) on measurement of bonds 4 506 (15 047)
Foreign exchange gains/(losses) on measurement of loans granted as at the balance
sheet date
78 (71)
Interest and shares in profits comprise: (41 131) (343)
Interest on bank deposits (25 481) (68)
Interest on bonds (15 962) (534)
Interest accrued on loans granted (234) (205)
Interest on lease contracts 546 464
(Gains)/losses on investing activities arise on the following items: 44 980 41 323
Proceeds from sale of property, plant and equipment (261) (1 014)
Net carrying amount of property, plant and equipment - 878
Net carrying amount of non-current assets scrapped 743 668
Net carrying amount of intangible assets scrapped 296 -
Net carrying amount of investment properties scrapped - 51
Impairment write-downs of property, plant and equipment, intangible assets and
expenditure on development projects
34 286 20 806
Write-downs of shares in subsidiaries 30 171 1 668
Settlement and measurement of derivative financial instruments 2 172 16 466
Commission and fees on purchase of bonds 326 364
Proceeds from redemption of bonds (202 849) (82 718)
Value of bonds purchased 180 096 84 154
Change in provisions results from the following items: (3 651) (307 704)
Increase/(Decrease) in provisions for liabilities 12 291 (393 418)
Change in provisions for employee benefits (25) (7)
Change in provision for costs of performance-related and other remuneration
recognized under expenditure on development projects
(15 917) 85 721
Change in inventories results from the following items: 3 653 (9 712)
(Increase)/Decrease in inventories 3 653 (9 712)
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
85
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Change in receivables results from the following items: (43 660) 1 067 693
Change in current receivables in the balance sheet 17 599 1 067 805
Change in non-current receivables in the balance sheet (10) (341)
Change in prepayments for investment properties (79) 9
Income tax settled against withholding tax 36 260 8 197
Withholding tax paid abroad (32 268) (5 858)
Adjusted for current income tax (36 260) (8 197)
Change in prepayments for development projects (29 002) 6 082
Change in prepayments for property, plant and equipment and intangible assets 100 (4)
Change in current liabilities, excluding financial liabilities, results from the following
items:
18 175 (57 773)
Change in current receivables in the balance sheet (15 311) (18 154)
Adjusted for current income tax 22 330 (23 149)
Change in financial liabilities 16 832 (16 567)
Change in liabilities resulting from purchase of property, plant and equipment (5 092) 118
Change in liabilities resulting from purchase of intangible assets (594) 62
Change in liabilities resulting from purchase of investment properties 10 (10)
Adjustment for liabilities with the double entry shown under prepayments and
deferred costs
- (73)
Change in other assets and liabilities results from the following items: (13 736) (13 846)
Change in prepayments and accruals in the balance sheet (2 747) 145
Change in deferred income in the balance sheet (10 747) (13 751)
Adjusted for prepayments and deferred costs with the double entry in liabilities (242) (240)
“Other adjustments” comprise: 8 385 2 277
Costs of the incentive scheme 4 058 (895)
Amortization and depreciation written off, reported under cost of sales, consortium
settlements and other operating expenses
1 097 3 190
Amortization and depreciation reported under cost of sales and other operating
expenses
3 524 -
Other adjustments (294) (18)
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
86
Note 49. Cash flows and non-monetary changes resulting from changes in liabilities in financing activities
01.01.2022 Cash flows
Non-monetary changes
31.12.2022
Takeover of
leased fixed
assets
Termination
of a lease
contract
Foreign
exchange
differences
Interest
accrued
Transfer of
own shares
Adopting
a resolution
on purchase
of treasury
shares
Adopting
a resolution
on
the payment
of dividend
Lease liabilities 15 471 (3 192) 8 232 (293) (93) 546 - - - 20 671
Liabilities to shareholders
in respect of dividend
payment
- (100 739) - - - - - - 100 739 -
Receivables from eligible
persons in the incentive
scheme
- 822 - - - - (822) - - -
Liabilities in respect of
purchase of treasury
shares
- (99 993) - - - - - 99 993 - -
Total 15 471 (203 102) 8 232 (293) (93) 546 (822) 99 993 100 739 20 671
01.01.2021 Cash flows
Non-monetary changes
31.12.2021
Takeover of
leased fixed
assets
Termination
of a lease
contract
Foreign
exchange
differences
Interest
accrued
Transfer of
own shares
Adopting
a resolution
on purchase
of treasury
shares
Adopting
a resolution
on
the payment
of dividend
Lease liabilities 16 970 (3 259) 1 236 (18) 78 464 - - - 15 471
Liabilities to shareholders
in respect of dividend
payment
- (503 694) - - - - - - 503 694 -
Receivables from eligible
persons in the incentive
scheme
- 2 149 - - - - (2 149) - - -
Total 16 970 (504 804) 1 236 (18) 78 464 (2 149) - 503 694 15 471
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
87
Note 50. Research and development expenditure
01.01.2022 –
31.12.2022
01.01.2021 –
31.12.2021
Salaries and wages 47 256 17 614
Remuneration of associates 59 318 27 020
Capital expenditure, including: 17 953 6 762
Plant and machinery 4 213 4 750
Computer software 12 995 1 859
Intangible assets 745 153
External services 81 247 31 225
Total expenditure on research and development projects 205 774 82 621
The information contained in the Note relates to research as well as development projects, presented in Note 12 under the headings
Expenditure on development projects in progress and Expenditure on development projects completed.
More information on the research and development projects conducted by the Company has been provided in the Directors’ Report
on the operations of the CD PROJEKT Group and CD PROJEKT S.A. for 2022.
Representations of the Management Board
On the fairness of preparation of the annual separate financial statements
In accordance with the requirements of the Regulation of the Minister of Finance of 29 March 2018 on current and periodical
information submitted by issuers of securities and conditions for considering as equivalent the information required under the
legislation of a non-Member State, the Management Board of the Company declares that, to the best of its knowledge, these annual
separate financial statements and comparative data have been prepared in accordance with the accounting policies applicable in
CD PROJEKT S.A. and that they reflect in a true, fair and clear manner the Company’s financial position and its results of operations.
These separate financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS)
endorsed by the European Union published and effective as at 31 December 2022, and to the extent not governed by the said
standards, in accordance with the Accounting Act of 29 September 1994 and the implementing legislation issued on the basis
thereof and to the extent required by Regulation of the Minister of Finance of 29 March 2018 on current and periodical information
submitted by issuers of securities and conditions for considering as equivalent the information required under the legislation of
a non-Member State.
On the entity authorized to audit the fairness of preparation of the annual separate financial
statements
On 9 March 2022, the Supervisory Board of the Company selected Grant Thornton Polska Prosta spółka akcyjna with its registered
office in Poznań, as recommended by the Audit Committee, as auditor to carry out the review of the semi-annual and the audit of
the annual financial statements of the Company and its Group for 2022 and 2023. Grant Thornton Polska Prosta spółka akcyjna
has been entered on the list of entities authorized to audit financial statements by the Polish Chamber of Statutory Auditors with
the number 4055.
As stated by the Company’s Supervisory Board:
- The audit firm Grant Thornton Polska Prosta spółka akcyjna with its registered office in Poznań and the members of the
audit team fulfilled the conditions for the preparation of an impartial and independent report on the audit of the annual
separate financial statements of CD PROJEKT S.A. and the consolidated financial statements of the CD PROJEKT S.A.
Group for the financial year ending on 31 December 2022, in accordance with the applicable regulations, professional
standards and principles of professional ethics;
- The CD PROJECT Group complies with the applicable regulations relating to the rotation of the audit firm and the key
auditor, as well as mandatory grace periods;
- CD PROJEKT S.A. has a policy on the selection of the audit firm and the provision of additional non-audit services, including
prohibited services conditionally exempted, to CD PROJEKT S.A. by the audit firm, an affiliate of the audit firm or a member
of its network.
Separate financial statements of CD PROJEKT S.A. for the period from 1 January to 31 December 2022
(all amounts in PLN thousand, unless stated otherwise)
The attached notes are an integral part of these financial statements
88
Approval of the financial statements
These separate financial statements of CD PROJEKT S.A. were approved for publication by the Management Board of
CD PROJEKT S.A. on 30 March 2023 and signed on 30 March 2023 pursuant to Art. 52(2b) of the Accounting Act of 29 September
1994 (consolidated text, Journal of Laws of 2023, item 120, as amended). The financial statements will be subject to approval by
the General Meeting of CD PROJEKT S.A.
Warsaw, 30 March 2023
Piotr Nielubowicz Krystyna Cybulska
Vice-President of the Management Board Chief Accountant
89
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