10. Pension Benefits

12 Months Ended

Oct. 31, 2011

Notes

10. Pension Benefits:

10.  PENSION BENEFITS:

   Effective July 15, 2010 the Companies’ sponsored defined benefit pension plan was amended such that future benefit accruals ceased effective as of August 31, 2010.  Benefits under the plan were based on average compensation and years of service.  The Companies’ funding policy is to contribute annually at least the minimum amounts required under the Employee Retirement Income Security Act of 1974.

Weighted Average Assumptions	10/31/11	10/31/10	10/31/09
Discount Rates used to determine net periodic  pension cost as of October 31, 2011, 2010 and 2009	5.26%	5.67%	8.25%
Expected long-term rates of return on assets	7.50%	7.50%	7.50%
Rates of increase in compensation levels	N/A	N/A	4.00%

Change in Benefit Obligation	10/31/11	10/31/10
Benefit obligation at beginning of year	$7,583,064	$7,392,287
Service cost (net of expenses)	55,788	186,427
Interest cost	391,258	415,441
Curtailment	0	(164,981)
Actuarial loss	1,010,136	19,173
Benefits paid	(275,040)	(265,283)
Benefit obligation at end of year	$8,765,206	$7,583,064

Change in Plan Assets	10/31/11	10/31/10
Fair value of plan assets at beginning of year	$4,869,192	$4,199,624
Actual return on plan assets	267,951	598,148
Employer contributions	637,600	402,126
Benefits paid	(275,040)	(265,283)
Administrative expenses	(46,813)	(65,423)
Fair value of plan assets at end of year	$5,452,890	$4,869,192

Reconciliation of Funded Status of the Plan	10/31/11	10/31/10
Funded status at end of year	($3,312,316)	($2,713,872)
Unrecognized transition obligation	0	0
Unrecognized net prior service cost	0	0
Unrecognized net actuarial loss	3,824,812	2,867,261
Net amount recognized at end of year	$512,496	$153,389

Amounts Recognized in the Combined Balance Sheet	10/31/11	10/31/10
Accrued pension expense	($3,312,316)	($2,713,872)
Accumulated other comprehensive loss (pre-tax)	3,824,812	2,867,261
Net amount recognized	$512,496	$153,389

Additional Year-End Information for Pension Plan with Accumulated Benefit Obligation in Excess of Plan Assets	10/31/11	10/31/10
Projected benefit obligation	$8,765,206	$7,583,064
Accumulated benefit obligation	$8,765,206	$7,583,064
Fair value of plan assets	$5,452,890	$4,869,192

Amounts Recognized in Accumulated Other Comprehensive Loss	10/31/11	10/31/10
Net actuarial loss	$3,824,812	$2,867,261
Prior service cost	0	0
Unrecognized net initial obligation	0	0
Total (before tax effects)	$3,824,812	$2,867,261

Components of Net Periodic Benefit Cost	10/31/11	10/31/10	10/31/09
Service cost	$55,788	$186,427	$133,037
Interest cost	391,258	415,441	352,191
Expected return on plan assets	(369,382)	(316,795)	(265,883)
Amortization of transition obligation	0	2,868	2,868
Amortization of prior service cost	0	274	274
Amortization of accumulated loss	200,829	268,919	60,656
Total net periodic benefit expense	$278,493	$557,134	$283,143

Other changes in plan assets and benefit obligations recognized in other comprehensive loss	10/31/11	10/31/10
Net loss (gain)	$1,111,567	($262,180)
Recognized net actuarial gain (loss)	(200,829)	(268,919)
Prior service cost (credit)	0	0
Recognized prior service (cost) credit	0	(274)
Recognized net transition (obligation) asset	0	(2,868)
Total recognized in other comprehensive loss   (before tax effects)	$910,738	($534,241)
Total recognized in net periodic benefit cost and   other comprehensive income (before tax effects)	$1,189,231	$22,893

Amounts expected to be recognized into net periodic cost in the coming year	10/31/11	10/31/10
Loss recognition	$334,273	$201,428
Prior service cost recognition	$0	$0
Net initial obligation/(asset) recognition	$0	$0

Estimated Future Benefits Payments	Fiscal Year	Benefits
	2012	$348,379
	2013	$347,424
	2014	$365,018
	2015	$385,135
	2016	$468,794
	2017-2021	$2,654,169

   The Companies expect to contribute $545,687 to the pension plan in fiscal 2012.

   Measurement Date   October 31

Weighted Average Assumptions	For Determination of:
	Benefit Obligations as of October 31, 2011	Benefit Obligations as of October 31, 2010
Discount rate	4.48%	5.26%
Rate of compensation increase	N/A	N/A

Weighted-Average Asset Allocations	10/31/11	10/31/10
Asset Category
Equity	62.86%	63.32%
Fixed Income	35.92%	36.03%
Cash Equivalents	1.22%	.65%
Total	100.00%	100.00%

   The Companies’ goal is to conservatively invest the plan assets in high-grade securities with a minimum risk of market fluctuation.  Based on the allocation of our assets between equity, fixed income and money market funds, we estimate our long term rate of return to be approximately 7.5%.

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction value hierarchy which requires an entity to maximize the use of observable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure fair value:

Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the Plan for identical assets.  These generally provide the most reliable evidence and are used to measure fair value whenever available.

Level 2 – Fair value is based on significant inputs, other than level 1 inputs, that are observable either directly or indirectly for substantially the full term of the asset through corroboration with observable market data.  Level 2 inputs include quoted market prices in active markets for similar assets, quoted market prices in markets that are not active for identical or similar assets, and other observable inputs.

Level 3 – Fair value would be based on significant unobservable inputs.  Examples of valuation methodologies that would result in level 3 classification include option pricing models, discounted cash flows, and other similar techniques.

Information about the Plan’s fair value levels follows as at October 31, 2011:

	Level 1	Level 2	Level 3	Total
Money Market Fund	$66,594			$66,594
Common Collective Trust Funds:
Strategic Bond Portfolio		$614,794		614,794
Long Duration Portfolio		610,900		610,900
Intermediate Fixed Income Portfolio		559,924		559,924
Strategic Growth Portfolio		429,711		429,711
Large Company Domestic Growth Portfolio		428,527		428,527
Fundamental Value Portfolio		426,977		426,977
Large Company Value Portfolio		431,316		431,316
International Core Portfolio		344,025		344,025
International Value Portfolio		335,582		335,582
Small Company Growth Portfolio		259,632		259,632
Mid-Cap Growth Portfolio		252,851		252,851
Mid-Cap Fundamental Value Portfolio		260,101		260,101
Small Company Value Portfolio		259,062		259,062
Guaranteed Investment Contract			$172,894	172,894
Total	$66,594	$5,213,402	$172,894	$5,452,890

	GIC Portfolio	Assets at Fair Value
Balance, beginning of year	$173,652	$173,652
Purchases, sales, issuances and settlements, net	(758)	(758)
Balance, end of year	$172,894	$172,894

Information about the Plan’s fair value levels follows as at October 31, 2010:

	Level 1	Level 2	Level 3	Total
Money Market Fund	$31,448			$31,448
Common Collective Trust Funds:
Strategic Bond Portfolio		$552,976		552,976
Long Duration Portfolio		535,164		535,164
Intermediate Fixed Income Portfolio		492,702		492,702
Strategic Growth Portfolio		394,777		394,777
Large Company Domestic Growth Portfolio		388,282		388,282
Fundamental Value Portfolio		370,668		370,668
Large Company Value Portfolio		376,815		376,815
International Core Portfolio		316,470		316,470
International Value Portfolio		314,915		314,915
Small Company Growth Portfolio		240,743		240,743
Mid-Cap Growth Portfolio		229,719		229,719
Mid-Cap Fundamental Value Portfolio		228,283		228,283
Small Company Value Portfolio		222,578		222,578
Guaranteed Investment Contract			$173,652	173,652
Total	$31,448	$4,664,092	$173,652	$4,869,192

	GIC Portfolio	Fair Value
Balance, beginning of year	$174,297	$174,297
Purchases, sales, issuances and settlements, net	(645)	(645)
Balance, end of year	$173,652	$173,652

   The following is a description of the valuation methodologies used for assets measured at fair value.  There have been no changes in the methodologies used at October 31, 2011 and 2010.

   Money market fund is valued at cost, which approximates fair value.

   Common collective trust funds are valued based upon the unit values of such collective trust funds held by the Plan at year end.  Unit values are based on the fair value of the underlying assets of the fund.  The fair value of the level 2 funds are derived from inputs principally from or corroborated by observable market data by correlation or other means.  Included in the common collective trust funds is a level 3 GIC Portfolio which includes both traditional and separate account guaranteed investment contracts (GICs) as well as synthetic GICs.  The traditional and separate account GICs are valued by calculating the sum of the present values of all projected future cash flows of each investment.  The synthetic GIC wrapper contracts are valued by determining the replacement cost of the wrapper contract and the present value of the contractually obligated payments in the original wrapper contract.  Debt securities underlying synthetic GICs are traded primarily in the over-the-counter (“OTC”) markets and are valued at the latest available price in the OTC market or on the basis of values obtained by an independent pricing service.

   The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.