DOOSAN HEAVY INDUSTRIES & CONSTRUCTION CO., LTD. AND ...

Doosan Heavy Industries & Construction Co., Ltd. and SubsidiariesNotes to the Consolidated Financial StatementsFor the years ended December 31, 2012 and 201136. Cash Flow Statemetns, Continued(2) Cash inflows an outflows from short-term financial instruments and short-term borrowings maturing inthe short term and with large amount due to the frequent transactions are presented on net basis.37. Discontinued Operations(1) Loss of control in exchange for potential voting rights of Doosan Engineering & Construction Co., Ltd.The Controlling Company issued exchangeable bonds which are exchangeable to the stock of DoosanEngineering & Construction Co., Ltd. on June 14, 2011 and Doosan Engineering & Construction Co., Ltd.issued bonds with warrants and convertable bonds on May 24, 2011. As the rights to exchange and convertand warrants are exercisable as of December 31, 2011, the Group lost the control with the potential votingrights reduced to less than 50%. Accordingly the ownerships were accounted for in accordance with K-IFRSNo. 1028 'Investmentns in Associates' since it still holds significant influence. Results from operations, netof tax for the period until the control was lost and losses of disposal (difference between fair value andcarrying value of existing equity interest, net of tax) were reflected as loss from discontinued operations.Loss from discontinued operations due to the loss of control over Doosan Engineering & Construction Co.,Ltd. and cash flow arising from discontinued operations are as follows:(In millions of won) 2011Results of discontinued operations :Operating income ₩ 21,807Loss on disposal of discontinued operation (494,254)Finance costs, net (35,624)Income tax benefit 28,583(479,488)Cash flows from discontinued operations :Cash flows used in operating activities (334,495)Cash flows from investing activities 179,418Cash flows from financing activities 230,135Changes in cash due to foreign currency translation (55)₩ 75,00383