Lenovo 2015 Annual Report Download - page 42

40 Lenovo Group Limited 2014/15 Annual Report
MANAGEMENT’S DISCUSSION & ANALYSIS
At March 31, 2015, the Group’s outstanding borrowings represented by the term bank loan of US$395 million
(2014: US$310 million), short-term bank loans of US$1,168 million (2014: US$145 million) and long term notes of
US$1,491 million (2014: Nil). When compared with total equity of US$4,106 million (2014: US$3,025 million), the
Group’s gearing ratio was 0.74 (2014: 0.15). The net debt position of the Group at March 31, 2015 is US$28 million
(2014 net cash position: US$3,498 million).
The Group is confident that all the facilities on hand can meet the funding requirements of the Group’s operations
and business development.
2015 2014
At March 31 US$ million US$ million
Bank deposits and cash and cash equivalents 3,026 3,953
Less: total borrowings (3,054) (455)
(28) 3,498
The Group adopts a consistent hedging policy for business transactions to reduce the risk of currency fluctuation
arising from daily operations. At March 31, 2015, the Group had commitments in respect of outstanding forward
foreign exchange contracts amounting to US$9,822 million (2014: US$6,513 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 identified assets and liabilities.
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
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, 2015, the Group had a headcount of more than 60,000 worldwide.
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.