Omron 2003 Annual Report Download - page 53

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Guarantees
The Company provides guarantees to third parties of bank loans of associates and other companies. The guaran-
tees for the associates and other companies are made to ensure that those companies operate with less costs of
finance. The maximum payments in the event of default is ¥2,287 million ($19,058 thousand) at March 31, 2003. The
carrying amounts of the liabilities recognized under those guarantees at March 31, 2003 were immaterial.
Bank loans of ¥994 million ($8,283 thousand) of an unaffiliated company were jointly and severally guaranteed by
the Company and six other unaffiliated companies. According to an agreement between the seven companies, any
loss on these guarantees are to be equally borne among the companies.
The Company also provides guarantees to third parties of certain obligations of consolidated subsidiaries. At
March 31, 2003, these guarantees amounted to ¥113 million ($942 thousand). All intercompany guarantees are
eliminated in consolidation.
Product Warranties
The Companies issue contractual product warranties under which they generally guarantee the performance of
products delivered and services rendered for a certain period or term. Changes in accrued product warranty cost
for the year ended March 31, 2003 are summarized as follows:
Thousands of
Millions of yen U.S. dollars
2003 2003
Balance at beginning of year ...................................................................................... ¥1,890 $ 15,750
Addition................................................................................................................... 3,493 29,108
Utilization................................................................................................................. (2,631) (21,925)
Balance at end of year ................................................................................................ ¥2,752 $ 22,933
On May 8, 2003, the Company management declared a plan to repurchase the Company’s outstanding shares,
subject to approval at the general meeting of shareholders. The execution of the plan is at the Company’s discre-
tion with a maximum limit of ¥10,000 million ($83,333 thousand), or 5,000,000 shares, for the period up to the date
of the June 2004 general meeting of shareholders.
19. Subsequent
Events
Annual Report 2003 • 51