Lenovo 2013 Annual Report Download - page 30
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Lenovo Group Limited 2012/13 Annual Report
28
MANAGEMENT’S DISCUSSION & ANALYSIS
Deposits, prepayments and other receivables
Majority of other receivables of the Group are amounts due from subcontractors for part components sold in the ordinary
course of business.
Non-current liabilities (US$’000)
March 31,
2013
March 31,
2012
Bank borrowings 303,133 –
Warranty provision 279,255 291,111
Deferred revenue 403,540 381,593
Retirement benefit obligations 163,883 204,818
Deferred income tax liabilities 113,992 83,594
Other non-current liabilities 846,539 641,986
2,110,342 1,603,102
Bank borrowings
The Group drew down a bank loan of US$300 million during the year.
Warranty provision
The Group records warranty liabilities at the time of sale for the estimated costs that will be incurred under its basic
limited warranty. The specific warranty terms and conditions vary depending upon the product and the country in which
it was sold, but generally includes technical support, repair parts and labor associated with warranty repair and service
actions. The period ranges from one to three years. The aggregate current and non-current amounts of warranty provision
increased by 4 percent when compared with last year. The increase is partly attributable to the increased business activities
of the year, and the amounts arising from the acquisition of CCE of US$21 million. The Group reevaluates its estimates on
a quarterly basis to assess the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.
Deferred revenue
Revenue from extended warranty contracts is deferred and amortized as earned over the contract period, ranging from
one to four years. The aggregate current and non-current amounts of deferred revenue increased by 15% when compared
with last year. The increase is attributable to the increased business activities of the year.
Retirement benefit obligations
The Group operates various pension schemes. The schemes are generally funded through payments to insurance
companies or trustee-administered funds, determined by periodic actuarial calculations. The Group has both defined
benefit and defined contribution plans.