The individual financial statements of each Group entity are prepared in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group entity are expressed in euros (EUR), which is the functional currency of the Company and the presentation currency of the Group’s consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entities’ functional currency are recognized at the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the closing rate.

Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate when the fair value was measured. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated at the closing rate.

Exchange differences are recognized in profit or loss in the period in which they arise except for:

  • exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
  • exchange differences on transactions entered into in order to hedge certain foreign currency risks (see note F32 Financial instruments and financial risk management for hedge accounting policies); and
  • exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income under “currency translation differences”.

The main exchange rates used are:

 

 

Year-end rate

 

Average rate

 

2016

 

2015

 

2016

 

2015

1 Euro =

 

 

 

 

 

 

 

 

 

 

Argentine Peso

 

ARS

 

16.7006

 

14.1601

 

16.3226

 

10.2349

Brazilian Real

 

BRL

 

3.4297

 

4.3117

 

3.8558

 

3.7014

Yuan Renminbi

 

CNY

 

7.3231

 

7.0608

 

7.3516

 

6.9729

Pound Sterling

 

GBP

 

0.8551

 

0.7340

 

0.8195

 

0.7259

Japanese Yen

 

JPY

 

123.3626

 

131.0700

 

120.1886

 

134.3069

Russian Ruble

 

RUB

 

64.2959

 

80.6736

 

74.1393

 

68.1152

Thai Baht

 

THB

 

37.7353

 

39.2480

 

39.0409

 

38.0270

US Dollar

 

USD

 

1.0538

 

1.0887

 

1.1068

 

1.1094