Blackberry 2007 Annual Report Download - page 27

Download and view the complete annual report

Please find page 27 of the 2007 Blackberry annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 106

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106

25
Notice of Application”) by the shareholder. The Amended
Notice of Application seeks an order for a declaration that
various actions of the Company and the named directors
were oppressive or unfairly prejudicial to, or unfairly
disregard, the interests of the pension fund. In addition, the
pension fund seeks various orders that would restrict the
members of Company’s Audit Committee and that would
add one or more new members to the Board of Directors,
and establish a special committee to do an investigation
of the Company’s option granting practices. The pension
fund seeks, in the alternative, various orders relating to the
investigation of RIM’s option granting practices and orders
that would affect the Company’s Compensation Committee.
Last, the pension fund seeks an order granting it leave to
commence a derivative action in the name and on behalf of
the Company relating to RIM’s option granting practices,
seeking damages and ancillary relief against certain of RIM’s
directors. RIM and the other defendants have served notices
of motion to strike the claim in whole or in part, and have
served a notice of motion to strike summonses to witness
issued by the pension fund for the motion to strike the claim.
Both motions are pending but no date has been selected for
the hearing of either of the motions.
Additional lawsuits, including purported class actions
and additional derivative actions, may be filed based upon
allegations substantially similar to those described in the
Amended Notice of Application or otherwise relating to the
Company’s historical option grant practices. The Company
does not intend to issue any press releases describing the
filing of any such additional lawsuits, except as required by
law.
Canadian GAAP Considerations
Prior to fiscal 2004, Canadian GAAP did not generally
require accounting for stock-option based compensation
arrangements with employees as an expense. For fiscal years
2004 and 2005 (the last year the Company reported under
Canadian GAAP), the Company applied fair value accounting
for stock options granted or modified in those years as
required by new accounting rules introduced under Canadian
GAAP. The Company has determined that the accounting
impact of the errors in the determination of measurement
dates in 2004 and 2005 do not result in a material adjustment
to the Canadian GAAP financial statements and, therefore,
the Company does not intend to restate its previously filed
Canadian GAAP financial statements.
Restatement of Financial Statements
The following tables set forth the effects of the restatement
on the Company’s consolidated statements of operations for
the fiscal years ended March 4, 2006 and February 26, 2005,
the consolidated balance sheet as at March 4, 2006 and the
effect on the Company’s net cash provided by operating
activities within the consolidated statements of cash flows for
the fiscal years ended March 4, 2006 and February 26, 2005.
Cash flows from financing and investing activities were not
affected by the Restatement.