Lenovo 2016 Annual Report Download - page 42

40 Lenovo Group Limited 2015/16 Annual Report
MANAGEMENT’S DISCUSSION & ANALYSIS
The Group has also arranged other short-term credit facilities. At March 31, 2016, the Group’s total
available credit facilities amounted to US$10,661 million (2015: US$12,223 million), of which US$1,277
million (2015: US$1,353 million) was in trade lines, US$366 million (2015: US$339 million) in short-term
and revolving money market facilities and US$9,018 million (2015: US$10,531 million) in forward foreign
exchange contracts. At March 31, 2016, the amounts drawn down were US$540 million (2015: US$316
million) in trade lines, US$6,872 million (2015: US$9,822 million) being used for the forward foreign
exchange contracts, and US$46 million (2015: US$177 million) in short-term bank loans.
At March 31, 2016, the Group’s outstanding borrowings represented by the term bank loans of US$396
million (2015: US$395 million), short-term bank loans of US$746 million (2015: US$1,168 million) and long
term notes of US$2,109 million (2015: US$1,491 million). When compared with total equity of US$3,026
million (2015: US$4,106 million), the Group’s gearing ratio was 1.07 (2015: 0.74). The net debt position of
the Group at March 31, 2016 is US$1,172 million (2015: US$28 million).
The Group is confident that all the facilities on hand can meet the funding requirements of the Group’s
operations and business development.
The Group adopts a consistent hedging policy for business transactions to reduce the risk of currency
fluctuation arising from daily operations. At March 31, 2016, the Group had commitments in respect of
outstanding forward foreign exchange contracts amounting to US$6,872 million (2015: US$9,822 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, 2016, 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.