Eastern Holdings

[orang]

I just took a look at Eastern's AR 2011. In the operating cash flow statement, $43.465 mil was deducted for "gain on disposal of a subsidiary's business" (for Eastern Directories) and this amount with $35,000 amounting to a total of $43.5 mil was added back to investing activities statement under "proceeds from disposal of a subsidiary's business".

I don't have accounting background but why is this done? It's not left under operating cash flow since it was part of investments and not daily operations?

Erm......relax, man

The Cashflow Statement begins with the header - Operating activities

It kicks off with a Loss before income tax of 0.177m and bumped up with a profit of 46.673m from discontinued operations (plural) to arrive at a profit before tax of 46.496m which is for the year

Ok, this is only an accounting or book profit - not cash profit or cash inflow

So adjustments are needed to arrive at a operating cashflow (inflow or outflow) before movement in working capital

The gain on disposal of a subsidiary's business - 43.465m - is only part of the aggregate gain from discontinued operations.

The other item of 43.5m is the actual cash received

Hope this helps