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Notes to the Statements of Cash Flows

The cash flow statement shows how the liquidity of the Bayer Group was affected by the inflow and outflow of cash and cash equivalents during the year. The effects of changes in the scope of consolidation are stated separately. Cash flows are classified by operating, investing and financing activities in accordance with IAS7 (Cash Flow Statements). The cash and cash equivalents shown in the cash flow statement comprise cash, checks and balances with banks and public-sector entities. Also included are financial instruments with an original maturity of up to three months.

The amounts reported by consolidated companies outside the euro zone are translated at average exchange rates for the year, with the exception of cash and cash equivalents, which are translated at closing rates as in the balance sheet. The effect of changes in exchange rates on cash and cash equivalents is shown separately.

Cash and cash equivalents contain both the proceeds from divestitures of discontinued operations and the cash inflows from these operations prior to the divestitures. In principle, therefore, the statement of cash flows must account for all cash inflows and outflows from continuing and discontinued operations. However, IFRS5 (Non-current Assets Held for Sale and Discontinued Operations) specifies that cash flows from operating, investing and financing activities be classified by continuing and discontinued operations. The discontinued operations’ shares of the cash flows from operating, investing and financing activities are stated separately in Note [6.3].

In both the balance sheet and the income statement, however, the amounts corresponding to the components of the net operating cash flow are shown for continuing operations only. This is the case, for example, with the amounts of inventories, receivables and payables recognized in the balance sheet that determine the changes in working capital shown in the cash flow statement. The income from continuing operations after taxes that is recognized in the income statement forms the starting point for the cash flow statement. To ensure that the operating activities are consistently presented in the cash flow statement, income statement and balance sheet, the net operating cash flow from continuing operations is stated first on the face of the cash flow statement. The total net operating cash flow from discontinued operations is shown in the next line, by analogy with the presentation of the income statement. The cash flows from continuing and discontinued operations are added together to give the net operating cash flow (total) for the entire business.

33. Net cash provided by (used in) operating activities