Lenovo 2016 Annual Report Download - page 40

38 Lenovo Group Limited 2015/16 Annual Report
MANAGEMENT’S DISCUSSION & ANALYSIS
Other non-current liabilities
Other non-current liabilities mainly comprise the deferred consideration to Google Inc. in respect of
the business combination activities, written put option liability in connection with a joint venture and
government incentives and grants received in advance. The decrease of 11 percent over last year is mainly
due to the classification of all contingent consideration into current liabilities based on its maturity term.
Current liabilities
2016
US$’000
2015
US$’000
Trade payables 4,266,687 4,664,065
Notes payable 234,661 171,049
Derivative financial liabilities 150,864 80,897
Other payables and accruals 8,305,844 9,278,052
Provisions 1,157,257 1,223,488
Deferred revenue 710,164 693,406
Income tax payable 188,968 169,161
Borrowings 745,815 1,168,274
15,760,260 17,448,392
Trade payables and Notes payable
Trade payables and notes payable decreased in line with fewer purchases activities during the fourth
quarter of current year.
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 balances decreased in line with business activities during the fourth
quarter of current year.
Provisions
Provisions comprise warranty liabilities (due within one year), environmental restorations and restructuring
provision. The decrease of 5 percent over last year is mainly due to the drop in warranty provision, partly
offset by the restructuring provision amounted to US$123 million as at March 31, 2016, which mainly
comprises lease termination obligations and employee termination payments, arising from a series of
restructuring activities to reduce costs and enhance operational efficiency.
Borrowings
Borrowings (classified as current) amounted to US$746 million as at March 31, 2016, representing a
decrease of 36 percent, which is mainly attributable to the net repayment of revolving loans and short
term loans during the year.