Lenovo 2015 Annual Report Download - page 41

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2014/15 Annual Report Lenovo Group Limited
Borrowings
Borrowings (classified as current) amounted to US$1,168 million as at March 31, 2015, representing an increase of
162 percent over last year, which is mainly attributable to the drawdown of loans of US$1,431 million offset by loan
repayment of US$678 million during the year.
CAPITAL EXPENDITURE
The Group incurred capital expenditure of US$972 million (2014: US$675 million) during the year ended March 31,
2015, mainly for the acquisition of property, plant and equipment, prepaid lease payments, additions in construction-
in-progress and intangible assets.
LIQUIDITY AND FINANCIAL RESOURCES
At March 31, 2015, total assets of the Group amounted to US$27,081 million (2014: US$18,357 million), which
were financed by equity attributable to owners of the Company of US$4,084 million (2014: US$3,010 million), non-
controlling interests (net of put option written on non-controlling interest) of US$22 million (2014: US$15 million), and
total liabilities of US$22,975 million (2014: US$15,332 million). At March 31, 2015, the current ratio of the Group
was 0.90 (2014: 1.00).
The Group had a solid financial position. At March 31, 2015, bank deposits, cash and cash equivalents totaled
US$3,026 million (2014: US$3,953 million), of which 53.2 (2014: 66.9) percent was denominated in US dollar, 35.6
(2014: 23.8) percent in Renminbi, 2.8 (2014: 4.1) percent in Euro, 0.7 (2014: 2.2) percent in Japanese Yen, and 7.7
(2014: 3.0) percent in other currencies.
The Group adopts a conservative policy to invest the surplus cash generated from operations. At March 31, 2015,
75.4 (2014: 81.8) percent of cash are bank deposits, and 24.6 (2014: 18.2) percent of cash are investments in liquid
money market funds of investment grade.
Although the Group has consistently maintained a very liquid position, banking facilities have nevertheless been put
in place for contingency purposes.
The Group entered into 5-Year revolving loan facility agreement with syndicated banks for US$500 million on
February 2, 2011. The facility was utilized to the extent of US$300 million as at March 31, 2015 (2014: Nil).
In addition, on December 18, 2013, the Group entered into another 5-Year loan facility agreement with syndicated
banks for US$1,200 million, comprising US$800 million as short term. The facility was utilized to the extent of
US$1,100 million, comprising US$700 million short-term, as at March 31, 2015 (2014: Nil).
On May 8, 2014, the Group completed the issuance of 5-Year US$1.5 billion notes bearing annual interest at 4.7%
due in May 2019. The proceeds would be used for general corporate purposes including working capital, and to
fund any acquisition activities.
The Group has also arranged other short-term credit facilities. At March 31, 2015, the Group’s total available credit
facilities amounted to US$12,223 million (2014: US$7,890 million), of which US$1,353 million (2014: US$489 million)
was in trade lines, US$339 million (2014: US$325 million) in short-term and revolving money market facilities and
US$10,531 million (2014: US$7,076 million) in forward foreign exchange contracts. At March 31, 2015, the amounts
drawn down were US$316 million (2014: US$214 million) in trade lines, US$9,822 million (2014: US$6,513 million)
being used for the forward foreign exchange contracts, and US$177 million (2014: US$145 million) in short-term
bank loans.