Shaw 2010 Annual Report Download - page 105

Download and view the complete annual report

Please find page 105 of the 2010 Shaw 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 126

  • 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
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126

Guarantees
In the normal course of business the Company enters into indemnification agreements and has
issued irrevocable standby letters of credit and performance bonds with and to third parties.
Indemnities
Many agreements related to acquisitions and dispositions of business assets include
indemnification provisions where the Company may be required to make payment to a vendor or
purchaser for breach of contractual terms of the agreement with respect to matters such as
litigation, income taxes payable or refundable or other ongoing disputes. The indemnification
period usually covers a period of two to four years. Also, in the normal course of business, the
Company has provided indemnifications in various commercial agreements, customary for the
telecommunications industry, which may require payment by the Company for breach of contractual
terms of the agreement. Counterparties to these agreements provide the Company with comparable
indemnifications. The indemnification period generally covers, at maximum, the period of the
applicable agreement plus the applicable limitations period under law.
The maximum potential amount of future payments that the Company would be required to make
under these indemnification agreements is not reasonably quantifiable as certain indemnifications
are not subject to limitation. However, the Company enters into indemnification agreements only
when an assessment of the business circumstances would indicate that the risk of loss is remote. At
August 31, 2010, management believes it is remote that the indemnification provisions would
require any material cash payment.
The Company indemnifies its directors and officers against any and all claims or losses reasonably
incurred in the performance of their service to the Company to the extent permitted by law.
Irrevocable standby letters of credit and performance bonds
The Company and certain of its subsidiaries have granted irrevocable standby letters of credit and
performance bonds, issued by high rated financial institutions, to third parties to indemnify them in
the event the Company does not perform its contractual obligations. As of August 31, 2010, the
guarantee instruments amounted to $1,110 (2009 – $1,032). The Company has not recorded any
additional liability with respect to these guarantees, as the Company does not expect to make any
payments in excess of what is recorded on the Company’s consolidated financial statements. The
guarantee instruments mature at various dates during fiscal 2011 to 2013.
17. PENSION PLANS
Defined contribution pension plans
The Company has defined contribution pension plans for all non-union employees and contributes
5% of eligible earnings to the maximum amount deductible under the Income Tax Act. For union
employees, the Company contributes amounts up to 7.5% of earnings to the individuals’ registered
retirement savings plans. Total pension costs in respect of these plans for the year were $23,550
(2009 – $21,148; 2008 – $17,622) of which $13,755 (2009 – $12,281; 2008 – $10,214) was
expensed and the remainder capitalized.
101
Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2010, 2009 and 2008
[all amounts in thousands of Canadian dollars except share and per share amounts]