Consolidated cash flow statement

For the year ended December 31, 2007
	Notes	2007 £m	Restated* 2006 £m
Reconciliation of cash flows from operating activities
Profit before taxation		733	1,391
Share of profit of joint ventures	10	(66)	(47)
Loss/(profit) on sale or termination of businesses	25	2	(1)
Loss/(profit) on sale of property, plant and equipment		1	(9)
Net interest payable	4	6	18
Net post-retirement scheme financing	4	(30)	(3)
Net other financing	4	(197)	(713)
Taxation paid		(71)	(25)
Amortisation of intangible assets	8	63	60
Depreciation of property, plant and equipment	9	170	161
Decrease in provisions		(42)	(36)
Increase in inventories		(359)	(226)
Increase in trade and other receivables		(128)	(397)
Increase in trade and other payables		778	879
Decrease in other financial assets and liabilities		357	250
Additional cash funding of post-retirement schemes		(441)	(21)
Share-based payments charge	21	36	36
Transfers of hedge reserves to income statement	16	(149)	(289)
Dividends received from joint ventures	10	42	44
Net cash inflow from operating activities		705	1,072

Cash flows from investing activities
Additions of unlisted investments		(5)	—
Additions to intangible assets		(294)	(219)
Disposals of intangible assets		—	7
Purchases of property, plant and equipment		(304)	(298)
Disposals of property, plant and equipment		47	55
Acquisition of businesses	25	(6)	(5)
Disposals of businesses	25	3	1
Investments in joint ventures		(13)	(11)
Disposals of joint ventures		—	1
Net cash outflow from investing activities		(572)	(469)
Cash flows from financing activities
Borrowings due within one year – repayment of loans		(350)	(53)
Capital element of finance lease payments		(5)	(8)
Net cash outflow from decrease in borrowings		(355)	(61)
Interest received		95	84
Interest paid		(93)	(96)
Interest element of finance lease payments		(3)	(2)
(Increase)/decrease in government securities and corporate bonds		(6)	3
Issue of ordinary shares		29	9
Purchase of own shares		(77)	(44)
Other transactions in own shares		34	78
Redemption of B Shares		(97)	(93)
Net cash outflow from financing activities		(473)	(122)
(Decrease)/increase in cash and cash equivalents		(340)	481
Cash and cash equivalents at January 1		2,171	1,745
Foreign exchange		41	(60)
Net cash of businesses acquired/disposed		—	5
Cash and cash equivalents at December 31		1,872	2,171

* See notes 11 and 15.
Reconciliation of increase in cash and cash equivalents to movements in net funds
(Decrease)/increase in cash and cash equivalents	(340)	481
Cash outflow/(inflow) from increase/(decrease) in government securities and corporate bonds	6	(3)
Net cash outflow from decrease in borrowings	355	61
Change in net funds resulting from cash flows	21	539
Net funds of businesses acquired	—	1
Exchange adjustments	41	(49)
Fair value adjustments	(18)	77
Movement in net funds	44	568
Net funds at January 1 excluding the fair value of swaps	829	261
Net funds at December 31 excluding the fair value of swaps	873	829
Fair value of swaps hedging fixed rate borrowings	15	(3)
Net funds at December 31	888	826

The movement in net funds (defined by the Group as including the items shown below) is as follows:
	At January 1, 2007 £m	Cash flow £m	Exchange adjustments £m	Fair value adjustments £m	Reclassi- fications £m	At December 31, 2007 £m
Cash at bank and in hand	757	465	43	—	—	1,265
Overdrafts	(14)	(11)	—	—	—	(25)
Short-term deposits	1,428	(794)	(2)	—	—	632
Cash and cash equivalents	2,171	(340)	41	—	—	1,872
Investments	34	6	—	—	—	40
Other borrowings due within one year	(379)	350	—	27	(2)	(4)
Borrowings due after one year	(983)	—	—	(45)	2	(1,026)
Finance leases	(14)	5	—	—	—	(9)
	829	21	41	(18)	—	873
Fair value of swaps hedging fixed rate borrowings	(3)			18		15
	826	21	41	—	—	888