The balance-sheet total of the Group was PLN 1.02 billion as at 31 December 2015, a decrease of 0.1% compared to PLN 1.02 billion as at 31 December 2014.
ASSETS
The Group’s non-current assets stood at PLN 580.6 million representing 57% of total assets as at 31 December 2015 compared to PLN 572.7 million or 56% of total assets as at 31 December 2014. The increase of property, plant and equipment as well as intangible assets in the last year was driven by capital expenditures of the PolPX Group including the acquisition of infrastructure for a new trading and clearing system, participation in the Price Coupling or Regions (PCR) and launch of the LITPOL link.
The Group’s current assets stood at PLN 442.2 million representing 43% of total assets as at 31 December 2015 compared to PLN 451.4 million or 44% of total assets as at 31 December 2014. The decrease in current assets in the last year was driven by a decrease of cash due to capital expenditures (increase of non-current assets) and the dividend pay-out. In current assets, cash decreased while other receivables increased due to an increase of receivables in respect of VAT settlements (receivables in respect of VAT settlements stood at PLN 38.0 million as at 31 December 2015 compared to PLN 0.5 million as at 31 December 2014), which was VAT due to the PolPX Group for clearing.
Consolidated statement of financial position of GPW Group at the year’s end in 2013 - 2015 (assets)
| As at | ||||||
|---|---|---|---|---|---|---|
| PLN'000 | 31 December 2015 | % | 31 December 2014 | % | 31 December 2013 | % |
| Non-current assets | 580 645 | 57% | 572 710 | 56% | 576 421 | 62% |
| Property, plant and equipment | 125 229 | 12% | 119 762 | 12% | 124 042 | 13% |
| Intangible assets | 261 728 | 26% | 261 019 | 25% | 269 155 | 29% |
| Investment in associates | 188 570 | 18% | 188 104 | 18% | 158 540 | 17% |
| Investment in subsidaries | - | 0% | - | 0% | - | 0% |
| Deferred income tax | - | - | - | - | - | 0% |
| Available-for-sale financial assets | 282 | 0% | 207 | 0% | 20 955 | 2% |
| Financial assets held to maturity | - | 0% | - | 0% | - | 0% |
| Prepayments | 4 836 | 0% | 3 618 | 0% | 3 729 | 0% |
| Current assets | 442 170 | 43% | 451 449 | 44% | 357 381 | 38% |
| Inventory | 135 | 0% | 120 | 0% | 166 | 0% |
| Corporate income tax receivables | 369 | 0% | 8 378 | 1% | 10 797 | 1% |
| Trade and other receivables | 81 273 | 8% | 42 594 | 4% | 34 792 | 4% |
| Available-for-sale financial assets | - | 0% | 10 503 | 1% | 118 | 0% |
| Assets held for sale | - | 0% | 812 | 0% | - | 0% |
| Financial assets held to maturity | - | 0% | - | 0% | - | 0% |
| Other current assets | - | 0% | - | 0% | 3 | 0% |
| Cash and cash equivalents | 360 393 | 35% | 389 042 | 38% | 311 505 | 33% |
| Total assets | 1 022 815 | 100% | 1 024 159 | 100% | 933 802 | 100% |
EQUITY AND LIABILITIES
The equity of the Group stood at PLN 721.3 million representing 71% of the Group’s total equity and liabilities as at 31 December 2015 compared to PLN 700.5 million or 68% of total equity and liabilities as at 31 December 2014.
Non-controlling interests stood at PLN 0.5 million as at 31 December 2015 compared to PLN 1.1 million as at 31 December 2014.
Non-current liabilities of the Group stood at PLN 258.8 million representing 25% of the Group’s total equity and liabilities as at 31 December 2015 compared to PLN 259.4 million or 25% of total equity and liabilities as at 31 December 2014.
Current liabilities of the Group stood at PLN 42.7 million representing 4% of the Group’s total equity and liabilities as at 31 December 2015 compared to PLN 64.3 million or 7% of total equity and liabilities as at 31 December 2014. The decrease of current liabilities was driven mainly by a decrease of other liabilities including:
- decrease of PolPX Group’s VAT liabilities from PLN 33.0 million as at 31 December 2014 to PLN 8.1 million as at 31 December 2015 (including market coupling and a change of the proportion of energy purchase and sale transactions of PolPX’s EU members at the end of the year).
Consolidated statement of financial position of GPW Group at the year’s end in 2013 - 2015 (equity and liabilities)
| As at | ||||||
|---|---|---|---|---|---|---|
| PLN'000 | 31 December 2015 | % | 31 December 2014 | % | 31 December 2013 | % |
| Equity | 721 267 | 71% | 700 466 | 68% | 638 105 | 68% |
| Share capital | 63 865 | 6% | 63 865 | 6% | 63 865 | 7% |
| Other reserves | 1 455 | 0% | 1 930 | 0% | 1 278 | 0% |
| Retained earnings | 655 401 | 64% | 633 555 | 62% | 571 842 | 61% |
| Non-controlling interests | 546 | 0% | 1 116 | 0% | 1 120 | 0% |
| Non-current liabilities | 258 799 | 25% | 259 419 | 25% | 249 578 | 27% |
| Liabilities under bond issue | 243 800 | 24% | 244 078 | 24% | 243 617 | 26% |
| Employee benefits payable | 4 046 | 0% | 5 562 | 1% | 4 456 | 0% |
| Finance lease liabilities | 84 | 0% | 205 | 0% | 439 | 0% |
| Deferred income tax liability | 10 869 | 1% | 9 574 | 1% | 1 066 | 0% |
| Provisions for other liabilities and charges | - | 0% | - | - | - | - |
| Other non-current liabilities | - | 0% | - | - | - | - |
| Liabilities arising from loans and credits | - | 0% | - | - | - | - |
| Current liabilities | 42 749 | 4% | 64 274 | 6% | 46 119 | 5% |
| Liabilities under bond issue | 682 | 0% | - | 0% | - | 0% |
| Trade payables | 8 597 | 1% | 10 017 | 1% | 12 738 | 1% |
| Employee benefits payable | 9 457 | 1% | 9 911 | 1% | 11 511 | 1% |
| Finance lease liabilities | 55 | 0% | 154 | 0% | 365 | 0% |
| Corporate income tax payable | 2 833 | 0% | 1 250 | 0% | 657 | 0% |
| Liabilities arising from loans and credits | - | 0% | - | - | - | - |
| Accruals and deferred income | 7 263 | 1% | 5 115 | 0% | 4 328 | - |
| Provisions for other liabilities and charges | 621 | 0% | 1 346 | 0% | 2 139 | 0% |
| Other current liabilities | 13 241 | 1% | 36 206 | 4% | 14 381 | 2% |
| Liabilities held for sale | - | 0% | 275 | 0% | - | - |
| Total equity and liabilities | 1 022 815 | 100% | 1 024 159 | 100% | 933 802 | 100% |
Liquidity, Financial Assets and Financial Risk Management of the GROUP
The activities of the Company and the Group are exposed to three types of financial risks: market risk, credit risk, and liquidity risk. Details of how financial risks are identified and managed have been described in the Consolidated Financial Statements.
In 2015, the Company’s liquidity risk, which means inability to timely meet its payment obligations, was minor in view of material financial assets held and positive cash flows from operating activities which exceeded the value of existing liabilities. The current liquidity ratio amounted to 10.3 as at 31 December 2015 and 7.0 as at 31 December 2014.
GPW manages financial liquidity in accordance with the “Current Assets Allocation Procedure” adopted by the Management Board. Pursuant to this document, the procedures for investing free cash should be handled in view of the due dates of liabilities so as to minimise the liquidity risk for the parent entity and, at the same time, to maximise its financial income. In practical terms, this means that the Company invests its current assets in bank deposits and the average duration of a financial asset portfolio was around 120 days as at 31 December 2015.
As of 1 January 2012, GPW applies hedge accounting. As at 31 December 2015, hedging covered cash flows under the agreement concerning the acquisition of a licence and delivery of a new trading system (UTP-Derivatives).
In the opinion of the Management Board, the Company’s financial assets and financial risk management process is effective and ensures timely meeting of payment obligations.
No threats have been identified to the Company’s liquidity.
The risks inherent in financial instruments held are described in Note 3 to the financial statements.
CASH FLOWS
The Group generated positive cash flows from operating activities at PLN 93.1 million in 2015 compared to positive cash flows of PLN 161.7 million in 2014. The lower cash flows from operating activities in 2015 were mainly driven by an increase in PolPX’s taxation receivables resulting from VAT settlements as well as GPW’s trade receivables, combined with a decrease of PolPX’s current liabilities.
The cash flows from investing activities were negative at PLN 14.6 million in 2015, mainly driven by investments in intangible assets in the PolPX Group. The cash flows from investing activities were negative at PLN 23.1 million in 2014 and were mainly driven by GPW’s acquisition of the second tranche of shares of Aquis Exchange Ltd for PLN 15.2 million (GBP 3.0 million).
The cash flows from financing activities were negative in 2015, mainly due to the payment of dividend to the shareholders of GPW at PLN 100.7 million, interest paid on bonds at PLN 6.7 million, and substitution of some of GPW’s floating-rate bonds with fixed-coupon bonds. The cash flows from financing activities were negative at PLN 60.5 million in 2014, mainly relating to a payment of dividend to the shareholders of GPW at PLN 50.2 million as well as interest paid on bonds at PLN 9.5 million.
Consolidated cash flows of the Group
| Cash flows for the 12-month periodended 31 December | |||
|---|---|---|---|
| PLN'000 | 2015 | 2014 | 2013 |
| Cash flows from operating activities | 93 090 | 161 669 | 172 385 |
| Cash flows from investing activities | (14 631) | (23 146) | (74 813) |
| Cash flows from financing activities | (107 163) | (60 450) | (44 352) |
| Net increase / (decrease) in cash and cash equivalents | (28 704) | 78 073 | 53 220 |
| Moved to assets held for sale | - | (565) | - |
| Impact of change of fx rates on cash balances in foreign currencies | 55 | 29 | 891 |
| Cash and cash equivalents - opening balance | 389 042 | 311 505 | 257 394 |
| Cash and cash equivalents - closing balance | 360 393 | 389 042 | 311 505 |
CAPITAL EXPENDITURE
The Group’s total capital expenditure in 2015 amounted to PLN 30.8 million including expenditure for property, plant and equipment at PLN 23.9 million and expenditure for intangible assets at PLN 6.9 million. The Group’s total capital expenditure in 2014 amounted to PLN 18.4 million including expenditure for property, plant and equipment at PLN 12.0 million and expenditure for intangible assets at PLN 6.4 million.
The capital expenditure for property, plant and equipment in 2015 included the PolPX Group’s capital expenditure in the acquisition of infrastructure for a new trading and clearing system, participation in the Price Coupling or Regions (PCR) and launch of the LITPOL link.
The Group’s biggest financial investment in 2014 was the acquisition of the second tranche of shares of Aquis Exchange Ltd for PLN 15.2 million (GBP 3.0 million).
The Group’s expected capital expenditure for property, plant and equipment and intangible assets will be ca. PLN 50 million in 2016, including mainly the implementation of the PolPX Group’s trading and clearing system, reorganisation of office space of GPW Group companies, on-going IT investments and development projects of GPW and the GPW Group. The amount of capital expenditure is subject to change depending on the actual scale and timeline of the investment process.
The value of contracted future investment commitments for property, plant and equipment was PLN 1,094 thousand as at 31 December 2015, including mainly reconstruction of rooms in the GPW building (there were no contracted future investment commitments for property, plant and equipment as at 31 December 2014).
The value of contracted future investment commitments for intangible assets was PLN 13,884 thousand as at 31 December 2015, including mainly the UTP-Derivatives system, the Electronic Document Flow system, Microsoft product licences, the PolPX Group trading and clearing system, and the AX system in GPW CU. Contracted future investment commitments were PLN 13,192 thousand as at 31 December 2014 including mainly the UTP-Derivatives system, the billing system in BondSpot, the AX system in GPW CU and the new X-Tream Trading system in PolPX.
The decision to implement the derivatives module of the trading system UTP (UTP-Derivatives) is conditional on GPW’s on-going analysis of the business aspects of the project as well as negotiations with the vendor.