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XYRATEX LTDNOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)(U.S. dollars and amounts in thousands, except per share data, unless otherwise stated)14. Commitments and Contingencies (Continued)might arise from claims of patent, copyright, trademark or trade secret infringement by the productsmanufactured by the Company.Contingencies. The Company is involved in lawsuits, claims, investigations and proceedings,including patent and commercial matters that arise in the ordinary course of business. There are nosuch matters pending that the Company expects to be material in relation to its business, consolidatedfinancial position, results of operations or cash flows.Product warranty. The following table provides the changes in the product warranty accrual forthe years ended November 30, 2004 and 2005:Amount ofliabilityBalance at November 30, 2003: ................................ $1,231Acquisition of businesses .................................... 508Accruals for warranties issued during the year ..................... 1,561Settlements made during the year .............................. (1,381)Balance at November 30, 2004: ................................ $1,919Acquisition of businesses .................................... 303Accruals for warranties issued during the year ..................... 2,046Settlements made during the year .............................. (1,723)Balance at November 30, 2005: ................................ $2,54515. Supplemental Cash Flow InformationCash paid for income taxes was $1,733 and cash received was $1,407 for the year endedNovember 30, 2005. Cash paid for income taxes was $1,323 and $3,362 for the years endedNovember 30, 2004 and 2003 respectively. Cash paid for interest was $450, $467 and $725 for the yearsended November 30, 2005, 2004 and 2003, respectively.Non cash investing and financing activities included the recording of an acquisition note payable of$3,000 in connection with the acquisition of Oliver Design during 2005.16. Segment InformationDescription of segments. The Company designs, develops and manufactures enabling technology insupport of high-performance storage and data communication networks. The Company organizes itsbusiness operations into two product groups—Storage & Network Systems and Storage Infrastructure,each of which comprises a reportable segment.Description of the Company’s segments:Storage & Network Systems. Provision of high performance, high density, network storagesubsystem technology to OEMs supplying the network storage and data networking market places.F-37