Cogeco 2008 Annual Report Download - page 64

Notes to the Consolidated Financial Statements COGECO CABLE INC. 2008 63
Deferred Share Unit Plan
In April 2007, the Corporation established a Deferred Share Unit Plan (“DSU Plan”) to assist in the attraction and retention of
qualified individuals to serve on the Board of the Corporation. Each existing or new member of the Board may elect to be paid a
percentage of the annual retainer in the form of deferred share units (“DSUs”) with the balance, if any, being paid in cash. The
number of DSUs that a member is entitled to receive is based on the average closing price of the subordinate shares on the Toronto
Stock Exchange for the twenty consecutive trading days immediately preceding the date of grant. Dividend equivalents are awarded
with respect to DSUs in a member’s account on the same basis as if the member was a shareholder of record of subordinate shares
on the relevant record date, and the dividend equivalents are credited to the individual’s account as additional DSUs. DSUs are
redeemable upon an individual ceasing to be a member of the Board or in the event of the death of a member. A compensation
expense of $153,000 was recorded for the year ended August 31, 2008 related to this plan.
Performance Unit Plan
The Corporation also had a Performance Unit Plan for key employees, which was terminated in June 2007. The value of a
performance unit granted was equal to the closing price of the subordinate voting shares of the Corporation on the Toronto Stock
Exchange on the trading day preceding the date of grant of the unit. The units credited to the participant’s account became vested to
the participant on the third anniversary of the date of grant of the said performance units. During fiscal 2007, no performance units
were granted to employees by the Corporation. In 2007, an expense amounting to $608,000 was recorded and in the fourth quarter
of 2007, payments totalling $1,125,000 were made related to the termination of this plan.
14. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
2008 2007
TRANSLATION OF
NET INVESTMENTS
IN SELF-
SUSTAINING
FOREIGN
SUBSIDIARIES
CASH
FLOW
HEDGES TOTAL
TRANSLATION OF
NET INVESTMENTS
IN SELF-
SUSTAINING
FOREIGN
SUBSIDIARIES
(in thousands of dollars) $ $ $ $
BALANCE, BEGINNING OF YEAR (3,110) – (3,110) (4,452)
CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING
POLICIES (NOTE 1 B)) – (2,231) (2,231) –
OTHER COMPREHENSIVE INCOME 18,770 1,925 20,695 1,342
BALANCE, END OF YEAR 15,660 (306) 15,354 (3,110)
15. FINANCIAL INSTRUMENTS
FAIR VALUE
The Corporation uses the following methods and assumptions to evaluate fair value of financial instruments:
Cash and cash equivalents, accounts receivable, bank indebtedness and accounts payable and accrued liabilities
The carrying amount in the consolidated balance sheets approximates fair value because of the short-term nature of these
instruments.
Long-term debt
a) Financial expense under the terms of the Corporation’s Term Facility is based on bankers’ acceptance, LIBOR, EURIBOR,
bank prime rate loan or US base rate loan plus stamping fees. Therefore, the carrying value is considered to represent fair
value for the Term Facility.
b) The fair value of the Senior Secured Debentures Series 1, Senior Secured Notes Series A and B and Second Unsecured
Debenture are based upon current trading values for similar financial instruments.
c) The carrying values of obligations under capital leases approximate fair value of these financial instruments due to their terms.