Omron 2004 Annual Report Download - page 67

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65
Guarantees
The Company provides guarantees to third parties of bank loans of associates and other companies. The guarantees for the associates
and other companies are made to ensure that those companies operate with less finance costs. The maximum payments in the event
of default is ¥1,527 million ($14,406 thousand) at March 31, 2004. The carrying amounts of the liabilities recognized under those guar-
antees at March 31, 2004 were immaterial.
Bank loans of ¥889 million ($8,387 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
borne equally among the companies.
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, 2004 and 2003
are summarized as follows:
Balance at beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Addition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
¥ 1,890
3,493
(2,631)
¥ 2,752
Millions of yen
2003
¥ 2,752
4,188
(3,787)
¥ 3,153
2004
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Addition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$25,962
39,509
(35,726)
$29,745
Thousands of
U.S. dollars
2004
19. SUBSEQUENT EVENTS
On May 6, 2004, management of the Company resolved to propose the following for approval of the shareholders at the meeting to be
held on June 24, 2004.
(1) A plan to repurchase the Company’s outstanding shares at the Company’s discretion with a maximum limit of ¥5,000 million
($47,170 thousand), or 2,000,000 shares, for the period up to the date of the June 2005 general meeting of shareholders.
(2) Amendment of the Company’s articles of incorporation enabling the repurchase of the Company’s outstanding shares upon
resolution by the Board of Directors.
On May 11, 2004, the Company entered into a joint venture agreement with Hitachi, Ltd. In connection with the joint venture agree-
ment, a corporate separation agreement was approved by the Board of directors, allowing for the transfer of Automated Teller
Machines and other information equipment businesses to the joint venture. The agreement is subject to approval of the shareholders at
the meeting to be held on June 24, 2004. The new company, if approved, will start operations on October 1, 2004, and will be called
Hitachi-Omron Terminal Solutions Corp. ("HOTS"). HOTS will strive for a globally competitive position in the information equipment mar-
ket. The Company will be given a 45% interest in exchange for transferring certain assets and liabilities. The assets and liabilities to be
transferred recorded on the Company’s book of account at March 31,2004 were ¥27,203 million ($256,632 thousand) and ¥3,058 mil-
lion ($28,849 thousand), respectively.