Lenovo 2011 Annual Report Download - page 23

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2010/11 Annual Report Lenovo Group Limited 25
At March 31
2011
US$ million
2010
US$ million
Bank deposits and cash and cash equivalents 2,997 2,439
Less: total borrowings (272) (495)
2,725 1,944
The Group adopts a consistent hedging policy for business transactions to reduce the risk of currency fluctuation arising from
daily operations. At March 31, 2011, the Group had commitments in respect of outstanding forward foreign exchange contracts
amounting to US$3,190 million (2010: US$2,641 million).
The Group’s forward foreign exchange contracts are either used to hedge a percentage of future transactions which are highly
probable, or used as fair value hedges for the identified assets and liabilities.
On May 17, 2005, the Company issued 2,730,000 convertible preferred shares at the stated value of HK$1,000 per share
and unlisted warrants to subscribe for 237,417,474 ordinary shares in the Company for an aggregate cash consideration of
approximately US$350 million. The convertible preferred shares bear a fixed cumulative preferential cash dividend, payable quarterly,
at the rate of 4.5 percent per annum on the stated value of each convertible preferred share. The convertible preferred shares are
redeemable, in whole or in part, at a price equal to the issue price together with accrued and unpaid dividends at the option of the
Company or the convertible preferred shareholders at any time after the maturity date at May 17, 2012. The warrant holders are
entitled to subscribe for 237,417,474 shares in the Company at HK$2.725 per share.
All warrants were either exercised or repurchased by the Company.
On November 15, 2010, the remaining 769,167 convertible preferred shares were converted into 282,263,115 voting ordinary
shares.
Under the general mandate authorized by the shareholders in the annual general meeting, the Company repurchases ordinary
shares in order to increase shareholder value. For the year ended March 31, 2011, the Company repurchased 157,760,000 ordinary
shares at par value of HK$0.025 each in the capital of the Company at an aggregate consideration of approximately US$87 million
(2010: Nil).
CONTINGENT LIABILITIES
The Group, in the ordinary course of its business, is involved in various claims, suits, investigations, and legal proceedings that arise
from time to time. Although the Group does not expect that the outcome in any of these other legal proceedings, individually or
collectively, will have a material adverse effect on its financial position or results of operations, litigation is inherently unpredictable.
Therefore, the Group could incur judgments or enter into settlements of claims that could adversely affect its operating results or
cash flows in a particular period.
HUMAN RESOURCES
At March 31, 2011, the Group had a total of 27,039 employees.
The Group implements remuneration policy, bonus and long-term incentive schemes with reference to the performance of the
Group and individual employees. The Group also provides benefits such as insurance, medical and retirement funds to employees
to sustain competitiveness of the Group.