27 Shareholders' equity
Shares and share capital
Lemminkäinen Corporation has one share class. On 31 December 2014, the company had a total of 23,219,900 (19,650,176) shares and 16,687 (34,915) treasury shares. The increase of the total number of shares was due to the rights offering held in 2014. In the offering 3,569,724 new shares were subscribed. All issued shares are fully paid up. The shares do not have a nominal value.
Share premium account
Share premiums are recognised in the share premium account.
Hedging reserve includes the effective portion of the fair value changes of interest rate derivatives designated for hedge accounting. Cash flow hedging is applied for hedging interest rate risk. During 2014, a fair value change of interest rate derivatives EUR -0.1 milllion before deferred taxes has been removed from the hedging reserve into the income statement (in 2013 EUR 0.5 mill. recognised in hedging reserve). Hedging instruments have matured and hedge accounting terminated during the reporting period. An amount of EUR -0.1 million (EUR -0.5 mill.) has been recognised in interest expences in profit and loss during the financial year arising from cash flow hedging.
Invested unrestricted equity fund
Invested unrestricted equity fund includes the subscription prices of shares to the extent that they are not entered into share capital on the basis of a separate decision. The company arranged a rights offering in 2014 and as a result, the gross proceeds deducted by the transactions costs less taxes, a total of EUR 27.7 million, were recognised in the invested unrestricted equity fund.
Hybrid bond eligible for equity classification
Shareholders' equity includes two EUR 70 million hybrid bonds, one issued in 2012 and the other in 2014. The bonds have no maturity dates but the company has the right to redeem the hybrid bonds after four years of the issue date. The bonds are unsecured and in a lower priority than the company's other debt obligations. A holder of Hybrid bond notes does not possess any of the rights of a shareholder, and the bond does not dilute shareholders' holdings in the company. The annual coupon rate of the bond issued in 2012 is 10% and the annual coupon rate of the bond issued in 2014 is 8.75%.
Translation differences include the differences arising from the translation of the Group’s foreign entities’ non-Euro denominated financial statements into Euros. In previous years the Group hedged the net investment in foreign entities and hedging gains and losses from hedge instruments are also included in the translation differences, provided they qualified for hedge accounting. The Group has not applied hedge accounting for hedging the net investment in foreign entities during the reporting period.
At the end of 2014 the translation difference amounted to EUR -21.7 million (EUR -3.1 mill.). The change of the translation difference was EUR -18.6 million during 2014. The impact of Russian exchange rate changes on the translation difference was a total of EUR -15.8 million and the impact of Norwegian exchange rate changes was a total of EUR -2.7 million. The change includes EUR 0.9 million related to termination of control or joint control which has been recognised in the income statement.