Lenovo 2015 Annual Report Download - page 40

38 Lenovo Group Limited 2014/15 Annual Report
MANAGEMENT’S DISCUSSION & ANALYSIS
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. The increase of 155 percent is mainly attributable to the amounts brought in
from Motorola and System X totalling US$183 million.
Deferred income tax liabilities
Deferred income tax liabilities comprise withholding tax on undistributed earnings, tax liabilities on upward valuation
of intangibles arising from business combination and accelerated tax depreciation. The increase of 40 percent over
last year is largely due to the amounts brought in from Motorola and System X totalling US$86 million.
Other non-current liabilities
Other non-current liabilities amounted to US$2,440 million as at March 31, 2015. The increase of 189 percent over
last year is mainly due to the deferred consideration of US$1,393 million payable to Google Inc. in respect of the
business combination activities of Motorola.
Current liabilities (US$’000) 2015 2014
Trade payables 4,662,411 4,751,345
Notes payable 171,049 108,559
Derivative financial liabilities 80,897 58,462
Other payables and accruals 9,066,487 6,658,254
Provisions 1,203,547 852,154
Deferred revenue 640,161 410,330
Income tax payable 168,536 177,741
Borrowings 1,168,274 445,477
17,161,362 13,462,322
Trade payables and Notes payable
Trade payables and notes payable decreased by 1 percent, largely due to fewer purchases activities during the
fourth quarter, which is in line with the business projections.
Other payables and accruals
Other payables and accruals comprise the allowance for billing adjustments relating primarily to allowance for future
volume discounts, price protection, rebates, and customer sales returns. Majority of other payables are obligations
to pay for finished goods that have been acquired in the ordinary course of business from subcontractors. The
increase of 36 percent over last year is mainly due to the amounts brought in from Motorola and System X totalling
US$3,013 million.
Provisions
Provisions comprise warranty liabilities (due within one year) and environmental restorations. The amounts arising
from the business combination activities of Motorola and System X contributed to an increase of US$373 million as
at March 31, 2015.