8.1.1Foreign Currency Translation

The Consolidated Financial Statements are presented in EUR, which is the Group’s presentation currency. The functional currency of the Company is CHF.  Each of the Group’s entities determines its own functional currency based on the primary economic environment in which it operates. Transactions in foreign currencies are accounted for at the exchange rates prevailing on the date of the transaction.

Monetary assets and liabilities of the Group’s entities that are denominated in foreign currencies are translated using year-end exchange rates. Resulting exchange differences are recorded in profit or loss unless they form part of a net investment in a foreign operation. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, the related foreign exchange gains and losses are recognized in OCI and presented in the cumulative translation adjustment within equity.

For the translation of a foreign operation into the Group’s presentation currency (EUR), the following rates are applied:

This policy applies to all foreign-currency operations except for those whose functional currency is that of a hyperinflationary economy, for which all amounts - assets, liabilities, income statement items and cash flows - are translated at year-end exchange rates.

Translation differences arising on consolidation are recognized in OCI. Upon disposal of a foreign operation, the related cumulative translation adjustment is reclassified from equity to the income statement as part of the gain or loss on disposal.

The principal exchange rates used were as follows: