Related Parties

Related parties as defined in IAS 24 (Related Party Disclosures) are those legal entities and natural persons that are able to exert influence on Bayer AG and its subsidiaries or over which Bayer AG or its subsidiaries exercise control or joint control or have a significant influence. They include, in particular, nonconsolidated subsidiaries, joint ventures and associates included in the consolidated financial statements at cost of acquisition or using the equity method, and post-employment benefit plans, as well as the corporate officers of Bayer AG whose compensation is reported in Note “Total Compensation of the Board of Management and the Supervisory Board, Advances and Loans” and in the Compensation Report, which forms part of the Combined Management Report.

Transactions with nonconsolidated subsidiaries, joint ventures and associates included in the consolidated financial statements at cost of acquisition or using the equity method, and post-employment benefit plans are carried out on an arm’s-length basis.

The following table shows the volume of transactions with related parties included in the consolidated financial statements of the Bayer Group at amortized cost or using the equity method, and with post-employment benefit plans:

Intercompany profits and losses for companies accounted for in the consolidated financial statements using the equity method were immaterial in 2017 and 2016.

In the second quarter of 2017, Bayer AG increased the coverage of Bayer Pension Trust e. V. through a deposit of 8 million of the shares it held in Covestro AG. The shares deposited amounted to 4.0% of the outstanding shares of Covestro AG and had a value of €504 million.

Due to the loss of control at the end of the third quarter of 2017, Covestro is now an associate. Consequently, receivables from and payables to associates both increased from €0.0 billion as of December 31, 2016, to €0.1 billion as of December 31, 2017. In this connection, goods and services received from associates declined from €0.6 billion to €0.1 billion. From the end of the third quarter of 2017, transactions in goods and services between Covestro and its associates are no longer reflected in the consolidated financial statements of the Bayer Group.

Bayer AG has undertaken to provide jouissance right capital (Genussrechtskapital) in the form of an interest-bearing loan with a nominal volume of €150 million (2016: €150 million) for Bayer-Pensionskasse VVaG. The entire amount remained undrawn as of December 31, 2017. The carrying amount as of December 31, 2017, was €152 million (2016: €154 million). Loan capital was first provided to Bayer-Pensionskasse VVaG in 2008 for its effective initial fund. This capital had a nominal volume of €595 million as of December 31, 2017 (2016: €595 million). The carrying amount as of December 31, 2017, was €605 million (2016: €612 million). The outstanding receivables, comprised of different tranches, are each subject to a five-year interest-rate adjustment mechanism. Interest income of €15 million was recognized for 2017 (2016: €18 million).

Impairment losses of €2 million were recognized on receivables from associates in 2017 (2016: €0 million).

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