PENSION BENEFITS

12 Months Ended

Oct. 31, 2013

Pension Benefits

PENSION BENEFITS

8.  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	10/31/13	10/31/12	10/31/11
Discount Rates used to determine net periodic pension cost as of October 31, 2013, 2012 and 2011	3.50%	4.48%	5.26%
Expected long-term rates of return on assets	7.50%	7.50%	7.50%
Rates of increase in compensation levels	N/A	N/A	N/A

Change in Benefit Obligation	10/31/13	10/31/12
Benefit obligation at beginning of year	$10,201,594	$8,765,206
Interest cost	350,613	384,941
Curtailment	0	0
Actuarial (gain)loss	(1,376,451)	1,396,244
Benefits paid	(307,815)	(344,797)
Benefit obligation at end of year	$8,867,941	$10,201,594

Change in Plan Assets	10/31/13	10/31/12
Fair value of plan assets at beginning of year	$5,960,630	$5,452,890
Actual return on plan assets	766,479	359,371
Employer contributions	279,000	564,358
Benefits paid	(307,815)	(344,797)
Administrative expenses	(93,696)	(71,192)
Fair value of plan assets at end of year	$6,604,598	$5,960,630

Reconciliation of Funded Status of the Plan	10/31/13	10/31/12
Funded status at end of year	($2,263,343)	($4,240,964)
Unrecognized transition obligation	0	0
Unrecognized net prior service cost	0	0
Unrecognized net actuarial loss	2,782,829	4,960,745
Net amount recognized at end of year	$519,486	$719,781

Amounts Recognized in the Combined Balance Sheet	10/31/13	10/31/12
Accrued pension expense	($2,263,343)	($4,240,964)
Accumulated other comprehensive loss (pre-tax)	2,782,829	4,960,745
Net amount recognized	$519,486	$719,781

Additional Year-End Information for Pension Plan with Accumulated Benefit Obligation in Excess of Plan Assets	10/31/13	10/31/12
Projected benefit obligation	$8,867,941	$10,201,594
Accumulated benefit obligation	$8,867,941	$10,201,594
Fair value of plan assets	$6,604,598	$5,960,630

Amounts Recognized in Accumulated Other Comprehensive Loss	10/31/13	10/31/12
Net actuarial loss	$2,782,829	$4,960,745
Prior service cost	0	0
Unrecognized net initial obligation	0	0
Total (before tax effects)	$2,782,829	$4,960,745

Components of Net Periodic Benefit Cost	10/31/13	10/31/12	10/31/11
Service cost	$56,925	$49,106	$55,788
Interest cost	350,613	384,941	391,258
Expected return on plan assets	(439,344)	(411,247)	(369,382)
Amortization of transition obligation	0	0	0
Amortization of prior service cost	0	0	0
Amortization of accumulated loss	511,101	334,273	200,829
Total net periodic benefit expense	$479,295	$357,073	$278,493

Other changes in plan assets and benefit obligations recognized in other comprehensive loss 10/31/13  10/31/12 

Net loss (gain)	($1,666,815)	$1,470,206
Recognized net actuarial gain	(511,101)	(334,273)
Prior service cost (credit)	0	0
Recognized prior service (cost) credit	0	0
Recognized net transition (obligation) asset	0	0
Total recognized in other comprehensive loss  (before tax effects)	($2,177,916)	$1,135,933
Total recognized in net periodic benefit cost and   other comprehensive income (before tax effects)	($1,698,621)	$1,493,006

Amounts expected to be recognized into net periodic cost in the coming year	10/31/13	10/31/12
Loss recognition	$249,478	$511,101
Prior service cost recognition	$0	$0
Net initial obligation/(asset) recognition	$0	$0

Estimated Future Benefits Payments	Fiscal Year	Benefits
	2014	$332,691
	2015	$359,655
	2016	$449,785
	2017	$506,554
	2018	$509,336
	2019-2023	$2,805,931

   The Companies expect to contribute $491,350 to the pension plan in Fiscal 2014.

   Measurement Date   October 31

Weighted Average Assumptions	For Determination of:
	Benefit Obligations as of October 31, 2013	Benefit Obligations as of October 31, 2012
Discount rate	4.45%	3.50%
Rate of compensation increase	N/A	N/A

Weighted-Average Asset Allocations	10/31/13	10/31/12
Asset Category
Equity	57.13%	49.77%
Fixed Income	39.53%	46.93%
Cash Equivalents	3.34%	3.30%
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, 2013:

	Level 1	Level 2	Level 3	Total
Money Market Fund	$220,587			$220,587
Mutual Funds:
Blackrock EAFE Equity Index Fund	361,837			361,837
Common Collective Trust Funds:
Aggressive Growth Portfolio		$1,136,067		1,136,067
Strategic Bond Portfolio		740,955		740,955
Intermediate Fixed Income Portfolio		1,141,038		1,141,038
Short Duration Portfolio		729,015		729,015
Large Company Value Portfolio		556,764		556,764
Fundamental Value Portfolio		548,138		548,138
International Value Portfolio		356,069		356,069
Small Company Growth Portfolio		174,457		174,457
Small Company Value Portfolio		168,683		168,683
Mid-Cap Growth Portfolio		237,373		237,373
Mid-Cap Fundamental Value Portfolio		233,615		233,615
Total	$582,424	$6,022,174	$0	$6,604,598

Information about the Plan’s fair value levels follows as at October 31, 2012:

	Level 1	Level 2	Level 3	Total
Money Market Fund	$196,903			$196,903
Common Collective Trust Funds:
Aggressive Growth Portfolio		$871,332		871,332
Long Duration Portfolio		748,353		748,353
Strategic Bond Portfolio		702,525		702,525
Intermediate Fixed income Portfolio		677,165		677,165
Short Duration Portfolio		669,261		669,261
Large Company Value Portfolio		499,757		499,757
Fundamental Value Portfolio		481,368		481,368
International Core Portfolio		266,037		266,037
International Value Portfolio		257,014		257,014
Small Company Growth Portfolio		153,363		153,363
Small Company Value Portfolio		147,235		147,235
Mid-Cap Growth Portfolio		146,285		146,285
Mid-Cap Fundamental Value Portfolio		144,032		144,032
Total	$196,903	$5,763,727	$0	$5,960,630

	GIC Portfolio	Fair Value
Balance, beginning of year	$172,894	$172,894
Purchases, sales, issuances and settlements, net	(172,894)	(172,894)
Balance, end of year	$0	$0

   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, 2013 and 2012.

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

   Mutual funds are valued at the quoted net asset value of the shares and 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.  Previously the Common Collective Trust Funds held 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.