Financial income of the Group stood at PLN 9.9 million in 2015 compared to PLN 10.4 million in 2014.

Financial income includes mainly interest on bank deposits, financial income on investment in Treasury bonds, as well as positive FX differences. Income from interest on bank deposits was PLN 6.2 million in 2015 and PLN 9.2 million in 2014. Financial income on investment in Treasury bonds was PLN 0.6 million in 2015, the same as in 2014. FX differences were negative in 2015, shown under financial expenses at PLN 0.3 million.

A new tranche of shares of GPW’s associate Aquis Exchange Limited took place without the participation of GPW in Q2 2015. As a result of the transaction, GPW’s share in economic and voting rights decreased from 30.00% to 26.33%. The issue increased the net assets of Aquis, and GPW recognised gains of PLN 2.8 million shown under financial income.

Financial expenses of the Group stood at PLN 9.4 million in 2015 compared to PLN 10.4 million in 2014. The decrease of expenses in 2015 was mainly driven by interest cost on debt under bonds, which stood at PLN 7.7 million in 2015 compared to PLN 9.5 million in 2014.

In December 2011 and February 2012, GPW issued bonds with a total nominal value of PLN 245.0 million. The bonds are due for redemption on 2 January 2017. The bonds bear interest at a floating rate equal to WIBOR 6M + 1.17%, interest is paid semi-annually.

The cost of the bond offering was PLN 2.2 million, recognised as prepayments and charged to the Company’s financial expenses on a straight-line basis from the issue date of the series A bonds (23 December 2011) to the redemption date of the series A and B bonds (2 January 2017). The prepayments reduce the Company’s liabilities in respect of the bond issue. The cost of the offering added PLN 0.8 million to the Group’s financial expenses in 2015 and PLN 0.5 million in 2014.

On 18 September 2015, GPW announced its intention to buy back series A and B bonds issued by GPW from bond holders for cancellation. On 29 September 2015, the GPW Management Board passed a resolution on the issue of series C unsecured bearer bonds. The bonds were issued on 6 October 2015.

On 6 October 2015, GPW issued 1,250,000 series C bearer bonds in a total nominal amount of PLN 125,000,000. The nominal amount and the issue price was PLN 100 per bond. The series C bonds bear interest at a fixed rate of 3.19% p.a. Interest on the bonds is paid semi-annually. The bonds are due for redemption on 6 October 2022 against the payment of the nominal value to the bond holders. The bonds have been introduced into the alternative trading system on Catalyst.

On 12 October 2015, GPW completed the purchase of its series A and B bonds from bond holders at a price of PLN 101.20 per bond. On 6-12 October 2015, GPW bought back 1,245,163 bonds for a total price of PLN 126,010,495.60. The early redemption of the series A and B bonds was paid for with cash raised by GPW through the issue of series C bonds.

Interest on the bonds is the main contributor to the financial expenses of the Company. The interest rate on the series A and B bonds is 2.94% p.a. in H1 2016 compared to 2.96% in H2 2015. The series C bonds bear interest at a fixed rate of 3.19% p.a.

GPW uses hedge accounting since 1 January 2012. As at the end of December 2015, the hedge covers cash flows arising from the agreement concerning acquisition and delivery of a new trading system (UTP-Derivatives). The Company has decided to recognise the cash held in EUR for such purpose as a hedging instrument. FX differences on the balance-sheet valuation of the assets since 1 January 2012 are taken to equity and not charged against financial income and expenses. FX differences taken to equity were positive at PLN 0.1 million in 2015 and PLN 0.2 million in 2014.