Annual Financial Review Summary

7/28/2019 Annual Financial Review Summary

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Deloitte LLP and affiliated entities. 1

2012 annual financial reporting

document review guide

An all -in-one disc losure assessment tool

2012 was a year that continued to be dominated by uncertainty in the global economic and capitalmarkets. Throughout the year, organizations and their boards continued to face an environment of rapidchange and considerable uncertainty.

During such turbulent times, it may sometimes be difficult for directors and management to analyze all ofthe regulatory standards and guidance issued and to develop an action plan to ensure that they fulfill allof their responsibilities.

To this end, Deloitte has prepared a comprehensive assessment package to help you determine whetheror not your organizations financial statements and other financial filings meet the continuous disclosureobligations as established by the Canadian Securities Administrators (CSA). Correspondingly, usingthese tools to analyze your organizations financial filings may assist you in performing your due diligenceresponsibilities. The assessment package is comprised of four parts:

1. Deloittes standard-setting activities digestThis document will allow you to ensure that all of the relevant financial reporting standards adopted inCanada and effective from 2012 onwards have been properly considered by your organization.

2. Review o f t he 2012 financial statements .This document will allow you to specifically address the impact of new accounting developmentsduring your review of your organizations financial statements. A series of suggested questions hasbeen included to assist you in ascertaining whether the standards were appropriately applied andwhether all of the options/alternatives available, as well as the impact on the financial statements,were considered prior to the selection of an accounting treatment.

This document will also allow you to specifically consider the impact of the adoption of a new financialreporting framework on the financial statements. For those few entities still applying Canadiangenerally accepted accounting principles (GAAP), this document will help you to ensure you properlyaddress the potential impact of adopting a new framework in the near future.

3. MD&A evaluationAn assessment tool to evaluate your organizations Managements Discussion & Analysis (MD&A).The requirements, as set out in National Instrument 51-102, Continuous Disclosure Obligations, areincluded, along with an area for you to include commentary specific to your organization.

4. AIF evaluation An assessment tool to evaluate your organizations Annual Information Form (AIF). Therequirements, as set out in National Instrument 51-102, Continuous Disclosure Obligations, areincluded, along with an area for you to include commentary specific to your organization.


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5. Statement of Executive Compensation evaluationAn assessment tool to evaluate your organizations Statement of Executive Compensation. Therequirements, as set out in National Instrument 51-102, Continuous Disclosure Obligations, areincluded, along with an area for you to include commentary specific to your organization.

The information which follows prov ides an overview of the assessment too ls described above.The full assessment package may be accessed through our Centre for Corporate Governance

(www.corpgov.deloitte.ca/self-assessments).
http://www.corpgov.deloitte.com/site/CanEng/self-assessments-tools-and-other-resources/financial-reporting-tools/http://www.corpgov.deloitte.com/site/CanEng/self-assessments-tools-and-other-resources/financial-reporting-tools/http://www.corpgov.deloitte.com/site/CanEng/self-assessments-tools-and-other-resources/financial-reporting-tools/http://www.corpgov.deloitte.com/site/CanEng/self-assessments-tools-and-other-resources/financial-reporting-tools/


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Deloittes standard-setting activities

digest

International f inancial reporting standards (Part 1)

Final standard Effective date Addressed? Comments

Amendments to IAS 1, Presentation of Financial Statements:Other Comprehensive Income

Entities are required to group together items within OtherComprehensive Income that may be reclassified to the profitor loss section of the income statement and to separatelygroup together items that will not be reclassified to the profitor loss section of the income statement.

J uly 1, 2012

Amendments to IAS 19, Post-employment Benefits

Amendments will:

Eliminate the option to defer the recognition of gains andlosses, known as the corridor method or the deferral andamortization approach

Streamline the presentation of changes in assets andliabilities arising from defined benefit plans, includingrequiring re-measurements to be presented in OCI

Enhance the disclosure requirements for defined benefitplans, providing better information about thecharacteristics of defined benefit plans and the risks thatentities are exposed to through participation in those plans.

J anuary 1, 2013

(early applicationpermitted)

Amendments to IFRS 1, First-time Adoption of InternationalFinancial Reporting Standards, with respect to LoansReceived from Governments at below market rate of interest

The amendments give first-time adopters of IFRSs relief fromfull retrospective application of IFRSs when accounting forthese loans on transition.

J anuary 1 2013.Early adoption ispermitted.

Amendments to IFRS 7, Financial Instruments: Disclosuresand IAS 32, Financial Instruments: Presentation in respect ofOffsetting

IFRS 7: Amendments relate to offsetting financial assets andfinancial liabilities. Disclosure required to help users assessthe effect or potential effect of offsetting arrangements on acompany's financial position.

IAS 32: Amendments address inconsistencies in currentpractice when applying the requirements.

IFRS 7amendments J anuary 1, 2013,including interimperiods within theannual periods

IAS 32amendments J anuary 1, 2014


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Amendments to IFRS 10, Consolidated FinancialStatements, IFRS 11, J oint Arrangements, and IFRS 12,Disclosure of Interests in Other Entities: Transition Guidance

The amendments clarify the transition guidance in IFRS 10and provide additional transition relief in IFRS 10, 11 and 12,limiting the requirement to provide adjusted comparative

information to only the preceding comparative period.For disclosures related to unconsolidated structured entities,there is no requirement to present comparative informationfor periods before IFRS 12 is first applied.

J anuary 1, 2013

Adoption of IFRSs by Entities with Rate-regulated Activities

The mandatory date for first-time adoption of IFRS by entitieswith rate-regulated activities is interim and annual financialstatements relating to annual periods beginning on or afterJ anuary 1, 2012.

J anuary 1, 2014


Adoption of IFRSs by Investment Companies

The deferral of the mandatory IFRS changeover date hasbeen extended by one year for these entities.

J anuary 1, 2014


Annual Improvements to IFRSs: 2009-2011 CycleThe amendments affect IFRS 1, IAS 1, IAS 16, IAS 32 andIAS 34 and are largely of the nature of clarifications orremovals of unintended inconsistencies between IFRSs.

The amendments to IAS 1 reduce the amount of informationfrom previous reporting periods which is required to berepeated in the event of:

a change in accounting policy

reclassification or restatement

by limiting the requirement to present an additional statementof financial position to circumstances when the statement ismaterially affected and by clarifying that related notes to anadditional statement of financial position are not required.

J anuary, 1 2013(earlierapplicationpermitted,retrospectiveapplicationrequired)

IFRS 9, Financial Instruments

This new standard replaces the requirements in IAS 39,Financial Instruments: Recognition and Measurement.

The amendments provide relief from the requirement torestate comparative financial statements for the effect ofapplying IFRS 9. Additional transition disclosures will berequired to help investors understand the effect that the initialapplication of IFRS 9 has on the classification andmeasurement of financial instruments.

J anuary 1, 2015

(early applicationcontinues to bepermitted).

IFRS 10, Consolidated Financial Statements

IFRS 10 replaces the consolidation requirements in IAS 27,Consolidated and Separate Financial Statements, and SIC-12Consolidation Special Purpose Entities.

IFRS 10 identifies the concept of control as the determiningfactor in whether an entity should be included within theconsolidated financial statements of the parent company andprovides guidance to determine if control exists.

J anuary 1, 2013

(early applicationpermitted,provided IFRS 11,

IFRS 12 and therelatedamendments toIAS 27 and 28 areadopted at thesame time)


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IFRS 11, J oint Arrangements

IFRS 11 supersedes IAS 31, Interests in Joint Ventures, andSIC-13, Jointly Controlled Entities Non-MonetaryContributions by Venturer.

IFRS 11 requires a party to a joint arrangement to determinethe type of joint arrangement in which it is involved by

assessing its rights and obligations arising from thearrangement. To account for interests in jointly controlledentities, the equity method is required.

J anuary 1, 2013

(early applicationpermitted,provided IFRS 10,IFRS 12 and theamendments to

IAS 27 and 28 areadopted at thesame time)

IFRS 12, Disclosure of Interests in Other Entities

IFRS 12 is a new and comprehensive standard on disclosurerequirements for all forms of interests in other entities,including subsidiaries, joint arrangements, associates andunconsolidated structured entities.

J anuary 1, 2013

(early applicationpermitted,provided IFRS 10,IFRS 11 and therelatedamendments toIAS 27 and 28 areadopted at thesame time)

IFRS 13, Fair Value MeasurementIFRS 13 defines, sets out in a single IFRS a framework formeasuring and requires disclosures about fair valuemeasurements. It does not determine when an asset, aliability or an entitys own equity instrument is measured atfair value. The measurement and disclosure requirements ofIFRS 13 apply when another IFRS requires or permits theitem to be measured at fair value (with limited exceptions).

J anuary 1, 2013(early applicationpermitted)

IAS 12 (amendments), Deferred Tax: Recovery of UnderlyingAssets and SIC-21 (amendments), Income TaxesRecoveryof Revalued Non-Depreciable Assets

The amendment introduces a rebuttable presumption that aninvestment property measured using the fair value model isrecovered entirely through sale unless the investmentproperty is depreciable and is held within a business modelwhose objective is to consume substantially all of theeconomic benefits over time. As a result of the amendments,SIC-21 would no longer apply to investment propertiescarried at fair value.

J anuary 1, 2012(early applicationpermitted)

IFRIC 20, Stripping Costs in the Production Phase of aSurface Mine

IFRIC 20 requires that costs associated with a strippingcampaign be accounted for as an additional component ofan existing asset if certain criteria are met, and that thisstripping component shall be depreciated, over the expecteduseful life of the specific section of the ore body thatbecomes directly accessible as a result of the stripping

campaign. The units of production method should be applied.

J anuary 1, 2013

(earlierapplicationpermitted)

Investment Entities (Amendments to IFRS 10, IFRS 12 andIAS 27)

Provides an exception to the consolidation requirements inIFRS 10 and require investment entities to measureparticular subsidiaries at fair value through profit or loss, notconsolidation. Also sets out disclosure requirements forinvestment entities.

J anuary 1, 2014

Early adoptionpermitted.


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Private enterprises standards (Part II)


2012 Annual Improvements

The AcSB approved certain amendments to its accountingstandards for private enterprises.

They include changes to (i) Section 1520, Income Statement;

(ii)Section 1582, Business Combinations; (iii) Section 1590,Subsidiaries; (iv) Section 1651, Foreign CurrencyTranslation; and (v) Section 3051, Investments.

J anuary 1, 2013


Section 1500 (amendments) Employee Future Benefits

The AcSB has amended paragraph 1500.14 to permit anentity that accounts for its defined benefit plans using thedeferral and amortization approach to carry forward at thedate of transition to accounting standards for privateenterprises any unrecognized actuarial gains and losses andpast service costs that were determined previously.

Coincides with theeffective date ofPart II

Pension plans standards (Part IV)

Final standards Effective date Addressed? Comments

Fair Value Measurement

A pension plan applies IFRS 13, Fair Value Measurement, inPart I to annual periods beginning on or after January 1,2013.

Further, the fair value disclosures in paragraphs 27-27B ofIFRS 7, Financial Instruments: Disclosures,will continue tobe required for pension plans that have adopted themeasurement requirements of IFRS 13.

Prospectively fromJ anuary 1, 2013

(early adoption ispermitted)

Section 4600, Pension Plans

The amendment clarifies that benefit plans that providebenefits to employees during their active service are within

the scope of Section 4600.

J anuary 1, 2012

(earlier adoptionpermitted)


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Public sector accounting standards


Amendments to the Transition Provisions of Section PS2601, Foreign Currency Translation, and Section PS 3450,Financial Instruments

The PSAB approved amendments to the transition

provisions of Section PS 2601and Section PS 3450. Themeasurement provisions of the new Sections are to beapplied prospectively.

Fiscal yearsbeginning on orafter April 1, 2012for governmentorganizations, andApril 1, 2015 forgovernments

Consequential Amendments Resulting from the Issue ofSection PS 3450, Financial Instruments, including a newSection PS 3041, Portfolio Investments

The amendments include a new Section PS 3041 and thewithdrawal of Section PS 3030, Temporary Investments, andSection PS 3040, Portfolio Investments.

An ED was approved proposing amendments to certainparagraphs in Section PS 3450, which ensure that thereporting of income on externally restricted financialinstruments aligns with the requirements in Section PS3100, Restricted Assets and Revenues.

Fiscal yearsbeginning on orafter April 1, 2012for governmentorganizations, andApril 1, 2015 forgovernments

Introduction to Public Sector Accounting Standards Government Not-for-Profit Organizations

For purposes of their financial reporting, government not-for-profit organizations should adhere to the standards for not-for-profit organizations in the CICA PSA Handbook or thestandards in the CICA PSA Handbook without Sections PS4200 to PS 4270.

J anuary 1, 2012

Section PS 1201, Financial Statement Presentation

The new Section PS 1201 replaces existing Section PS1200 and includes a new statement of remeasurement gainsand losses. The new statement will report:

unrealized gains and losses associated with financial

instruments in the fair value category exchange gains and losses associated with monetary

assets and monetary liabilities denominated in a foreigncurrency that have not been settled

amounts reclassified to the statement of operations uponderecognition or settlement; and other comprehensiveincome reported when a public sector entity includes theresults of its government business enterprises andgovernment business partnerships in the summaryfinancial statements.

Governmentorganizations:

April 1, 2012

Governments:

April 1, 2015

Section PS 2601, Foreign Currency Translation

The new Section PS 2601 replaces existing Section PS2600, Foreign Currency Translation.

Major changes from Section PS 2600 include: elimination of deferral and amortization of unrealized gains

and losses arising from foreign currency translation beforesettlement

withdrawal of hedge accounting as it is unnecessary underthe new treatment of unrealized gains and losses

separating realized and unrealized foreign exchange gainsand losses and reporting them in different statements.


April 1, 2012

Governments: April 1, 2015


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Section PS 3260, Liability for Contaminated Sites

This new Section establishes recognition, measurement anddisclosure standards for liabilities relating to contaminatedsites of governments and those organizations applying theCICA Public Sector Accounting Handbook.

April 1, 2014

Section PS 3410 (Revised), Government Transfers

Establishes standards on how governments should accountfor and report government transfers to individuals,organizations and other governments from both atransferring government and a recipient governmentperspective.

April 1, 2012

Section PS 3450, Financial Instruments

Provides comprehensive guidance on the recognition,measurement, presentation and disclosure of financialinstruments, including derivatives, by governmentorganizations.


April 1, 2012

Governments:

April 1, 2015

Section PS 3510, Tax Revenue

Establishes recognition, measurement, presentation anddisclosure standards relating to tax revenue reported infinancial statements.

April 1, 2012

Section PS 4200 PS 4270, Government Not-for-profitOrganizations

The PSAB approved the inclusion of the PS 4200 to PS4270 series of standards into the PSA Handbook for use bygovernment organizations applying the standards for not-for-profit organizations.

J anuary 1, 2012

Securities

Instruments, rules and polic ies Issued Addressed? Comments

CSA Staff Notice 52-306 (Revised), Non-GAAP Measuresand Additional GAAP Measures

An additional GAAP measure presented in financialstatements under IFRS is: (i) a line item, heading or subtotalthat is relevant to an understanding of the financialstatements and is not a minimum line item mandated byIFRS, or (ii) a financial measure in the notes to financialstatements that is relevant to an understanding of thefinancial statements and is a measure not presentedelsewhere in the financial.

February 17, 2012

CSA Multilateral Instrument 51-105, Issuers Quoted In theU.S. Over The-Counter Markets

This instrument: (i) requires disclosure by issuers with a

significant connection to a Canadian jurisdiction whosesecurities are quoted in the U.S. OTC markets; and (ii)discourages the manufacture and sale in a Canadianjurisdiction of U.S. OTC quoted shell companies that can beused for abusive purposes.

May 10, 2012

OSC Staff Notice 52-720 Office of the Chief AccountantFinancial Reporting Bulletin (February 2012)

The objective of the bulletin is to provide information tomarket participants that may be useful in preparing financialreports during 2012.

February 23, 2012


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Financial institutions requirements

Final Standards Effective date Addressed? Comments

Capital Adequacy Deposit-Taking Institutions

Advisory Enhanced Pillar 3 Disclosures under Basel II

OSFI expects that the first quarter of fiscal 2012 disclosuresshould include full qualitative disclosuresin Pillar 3

enhancements and revisions to complement the requiredquantitative disclosures.

J anuary 1, 2012


Advisory Pillar 3 Disclosure Requirements forRemuneration under Basel II

OSFI expects all institutions to implement the remunerationdisclosure requirements. At a minimum, the frequency ofremuneration disclosures should be made on an annualbasis and published as soon as practicable.

2012 fiscal year-end


Amendments to Capital Adequacy Requirements Guideline A and Guideline A-1

OSFI issued guidelines to include changes to Guidelines Aand A-1 based on the Basel guidance, Enhancements tothe Basel II framework, and Guideline for computing capitalfor incremental risk in the trading book, (both dated J uly2009), and Revisions to the Basel II market risk frameworkupdated as of 31 December 2010,(issued in February 2011).

First quarter of2012


Capital Adequacy Assessment Process

OSFI issued implementation guidance to clarify itsexpectations regarding the Internal Capital AdequacyAssessment Process and Stress Testing for theStandardized DTIs.

First quarter of2013

Capital Adequacy Deposit-Taking InstitutionsAdvisory Treatment of Non-qualifying Capital Instruments

This Advisory clarifies OSFIs expectations with respect torights of redemption under regulatory event clauses andapplies to all DTIs under Basel III.

J anuary 1, 2013

Capital Adequacy Insurers

Minimum Continuing Capital and Surplus Requirementsfor 2012

OSFI published revisions to Guideline A, MinimumContinuing Capital and Surplus Requirements, for lifeinsurance companies and fraternal benefit societies. Thechanges primarily reflect more appropriate risk-basedguidance.

J anuary 1, 2012


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Final Standards Effective date Addressed? Comments

Prudential Requirements Insurers

Memorandum to the Appointed Actuary (Life) for 2012

This years Memorandum includes the following changesfrom the 2011 Memorandum:

1. The ongoing low interest rates continue to be ofconcern. As a result, OSFI requires disclosure forscenarios of 1.5%, 2%, 2.5% and 3% for all futurereinvestment assumptions.

2. For insurers who have included the costs and benefitsof any hedge programs in the valuation, OSFI hasrequested additional information.

3. OSFI has modified its disclosure requirements on non-fixed income assets and asset liability management inthe memorandum. OSFI encourages insurers toimprove the clarity of these disclosures.

The Appointed Actuary should ensure that the disclosure ofmethods, assumptions and the rationale for assumptionsare clear in his/her report.

September 2012


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Annual financial statement review tool

Questions to ask

It is not possible to anticipate all of the questions that may be required to ensure a proper and full duediligence for accounting developments which arose throughout the year. Therefore, these questionsprovide the director with a starting point from which a full and complete due diligence of material issuesmay be conducted. The questions to be asked always depend on the materiality of the impact on yourorganizations public filings which are subject to board approval. Material items often require more duediligence by the board of directors. The following questions have been proposed assuming that eachissue is material to the shareholder. The director must use judgment in determining to what extent each ofthe questions should be raised.

The following questions should be considered by directors and management to ascertain whether theaccounting standards were appropriately applied, and whether all of the options/alternatives available, as

well as the impact on the financial statements were considered, prior to the selection of an accountingtreatment.

New accounting policies Comments

Note to reader: review this section as well as the Conversion to a new financial reportingframework section below if your organization benefits from an IFRS adoption deferral(for example. rate-regulated entities and investment enterprises) and has not yetconverted to either IFRS or U.S. GAAP or will adopt another framework in the nearfuture.

What, if any, changes in accounting policies, procedures or disclosures were required asa result of the recommendations made by the Canadian Accounting Standards Board(AcSB) or the International Accounting Standards Board (IASB)?

What alternatives were considered and what was the impact of these alternatives on thefinancial statement results and/or disclosures?

Why were the selected new accounting policies adopted over the available alternatives?

What, if any, voluntary changes in accounting policies, procedures or disclosures weremade this year that were not related to the issuance of new accountingrecommendations made by the AcSB or the IASB?

What was the rationale for any voluntary changes in accounting policies?

For example, did your organization appropriately document that any voluntary change inaccounting policy resulted in the financial statements providing reliable and morerelevant information about the effects of transactions, other events or conditions on itsfinancial position, financial performance or cash flows as required by AccountingChanges (CICA 1506) and accounting policies, changes in accounting estimates anderrors (IAS 8)?

What was the overall impact on the financial information of adopting the newrecommendations?

How has it been ensured that all of the disclosure and other requirements relating to therecommendations have been properly included in the notes to the financial statements?

How was it decided whether to apply these changes prospectively or retrospectively andwhy?

What were the required changes to prior years and interim periods financial statementsas a result of applying the change retrospectively?


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New accounting policies Comments

How was it ensured that subsidiaries, interests in joint ventures and investments inassociates have properly adopted accounting policy changes in their financial statementsthat were used for consolidation purposes?

Did any of the required disclosure changes cause difficulty and why?

Why do you believe your organizations set of adopted accounting policies presents fairly

its financial position/condition, results of operations and cash flows?

Were there any disagreements with the external auditors as to the appropriateaccounting treatment to be applied and, if so, please describe them?

What comments do the external auditors have in respect of your organizations answersto the above questions?

Newly adopted financial reporting framework Comments

When compared to the current years balance sheet, does the opening balance sheetprovide the same level of detail as required to provide consistent information to users?

Do the reconciliations between the historical financial information and that reportedunder the new financial reporting framework properly explain the identified differences?

Do the accounting practices clearly explain the policies adopted and significant

judgments and estimates made by the organizations management?

What alternatives were considered and what was the impact of these alternatives on thefinancial statement results and/or disclosures?

Why were the selected new accounting policies adopted over the available alternatives?

Why do you believe your organizations set of adopted accounting policies present fairlyits financial position/condition, results of operations and cash flows?

Where non-GAAP or additional GAAP measures are reported in the financial statements,does management explain in sufficient detail differences from the corresponding GAAPmeasures?

Where financial information is provided for the first time, was sufficient comfort obtainedby the organizations management to ensure reliability of the supporting data?

How has it been ensured that all of the disclosure and other requirements relating to thenew framework recommendations have been properly included in the notes to thefinancial statements?

Did any of the required disclosure changes cause difficulty and why?

Were there any disagreements with the external auditors as to the appropriateaccounting treatment to be applied and, if so, please describe them?

What comments do the external auditors have in respect of your organizations answersto the above questions?


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Conversion to a new financial reporting framework Comments

Has the conversion plan been reviewed and updated for current progress on a regularbasis? Have any unforeseen obstacles been identified?

Is a communication strategy in place for investors, analysts and other stakeholders toaddress reporting under the new financial reporting framework?

What is the status of the following key elements of the conversion plan:

Selection of all accounting policies (including first time adoption choices)

Preparation of the opening balance sheet

Restatement of Q1, Q2 and Q3 interim information

Preparation of interim and annual financial statement drafts

Should an agreed-upon level of assurance be obtained from the external auditors onyour organizations opening balance sheet?

Do your organizations year-end financial filings meet the standard-setter requirementswith regards to communications regarding its conversion?

Where management believes that the adoption of a new accounting recommendation does not result infair presentation, management must explain the alternative presentation in your organizations MD&A in

order for the CEO and CFO to be able to properly certify the financial statements in conformity withMultilateral Instrument 52-109. In these circumstances it is very important that the board of directorsconduct a thorough due diligence of the matter.

Next steps

Now that you have completed the analysis of your organizations 2012 financial statements, listed beloware some suggested next steps in performing your due diligence.

Evaluate your result s Comments

Discuss your findings with the other members of the board of directors, management andyour external auditors.

Establish your action plan

Identify what needs to be done to ensure the financial statements are compliant, relevantand transparent.

Review with your external auditors their quality assessment of the financial statements.

Inquire as to the processes put in place to enable the CEO and CFO to fulfill theircertification obligations for 2012.

Ensure the audit committee minutes document your review process and conclusionsregarding the financial statements and other financial filings.

Ensure you understand the external auditors summary of unadjusted misstatements both quantitative misstatements and disclosure deficiencies, and the impact on controls.


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Keep current with the new accounting and regulatory pronouncements affectingyour financial reporting.

Please consider subscribing to the following Deloitte periodicals as sources of information that have beendeveloped to help you to stay abreast of accounting and regulatory developments:

Centre for Corporate Governance

A web site specifically designed to help board members with their responsibilities. It provides thelatest information on regulatory and legislative developments, accounting and financial reporting,board roles and responsibilities, and best practices. (www.CorpGov.Deloitte.ca)

Deloit te Learning AcademyThe Deloitte Learning Academy offers a range of courses targeted to accounting professionals whichcan be selected a la carte, bundled into a specific learning program, or delivered as a full start-to-finish suite. Our current offerings include International Financial Reporting Standards (IFRS);Accounting Standards for Private Enterprises (ASPE); and Public Sector Standards (PSAS).(www.deloittelearningacademy.ca/welcomecanada)

DeloitteLINK A weekly e-newsletter that helps you stay on top of standard-setting initiatives.

Deloit te UpdateOur new live webcast series featuring our professionals discussing critical issues that affect yourbusiness.

On the AgendaA periodic e-newsletter that advises directors about recent developments affecting theirresponsibilities, including the points of view of Deloitte specialists.

Standard-setting Act ivit ies IndexProvides you with monthly updates on recent developments in standard-setting from acomprehensive list of standard-setting organizations.

Audi t Commit tee BriefAn e-newsletter of key U.S. regulatory, technical and professional developments in corporategovernance and accounting.

You may subscribe to our periodicals by completing this online form on our Web site:https://events.deloitte-canada.12hna.com/preferences/
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MD&A review tool

In performing your review of the MD&A, we suggest you consider the following steps as a guide (thesequestions have been developed for non-venture issuers. Venture issuers are not required to makedisclosures regarding disclosure controls and procedures (DC&P) or internal control over financialreporting (ICFR)).

Procedure Comments

Understand any new or amended disclosure requirements issued by the CSA for thecurrent year.

Read the complete MD&A and ensure that:

There is no contradiction with what you know.

There are no significant omissions based on what you know. The discussion is well balanced between the positive and negative news.

The discussion between GAAP/IFRS and non-GAAP/non-IFRS measures is balancedand meets regulatory requirements.

The document is written in plain language.

The document focuses on material information.

The document improves your organizations overall financial disclosure by providing abalanced discussion of the results of operations and financial condition.

The document helps investors understand what the financial statements show and donot show.

The document discusses in further details material transactions giving rise to itemssuch as contingent liabilities, defaults under debt, off-balance sheet financingarrangements, or other contractual obligations.

The document discusses important trends and risks that have affected the financialstatements, and trends and risks that are reasonably likely to affect them in the future.

The document provides information about the quality, and potential variability, of yourorganizations earnings and cash flow, to assist investors in determining if pastperformance is indicative of future performance.

The document explains how new regulatory and financial reporting requirements mayaffect your organization.

The DC&P worked as designed and that the evaluation of their effectiveness is fairlydescribed.

The ICFR worked as designed, and the evaluation of their effectiveness is fairlydescribed.

The name of the framework used in the design of ICFR is disclosed.

If any material weakness in the design or operation of ICFR was identified, and existsat the end of the annual reporting period, ensure that a description of the weakness isdisclosed along with the impact of the weakness on the financial reporting and ICFR,and the current plans, or any actions already taken, to remediate the weakness.

If there were any limitations imposed on the scope of design of either DC&P or ICFRto exclude controls, policies and procedures, this fact is disclosed.

Any material changes in ICFR that have occurred since the last filing are disclosed.


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Procedure Comments

With regards to the annual certificates required to be filed as per National Instrument52-109, review the certificates and ensure the following:

They are filed in the exact wording prescribed by the required form

The representations included are consistent with the disclosure in the MD&A

Your IFRS transition plan is clearly disclosed. [For details as to specific disclosure

requirements regarding the changeover to IFRS, review CSA Staff Notice 52-320Disclosure of expected changes in accounting policies relating to changeover to IFRS.]Note: this applies only to those organizations who benefit from an IFRS adoptiondeferral (for example. rate-regulated entities and investment enterprises) and have notyet converted to either IFRS or U.S. GAAP.

The impact of the transition to IFRS on ICFR and DC&P has been disclosed (i.e., any material change in ICFR that may occur due to the transition and the ongoingpreparation of financial statements in accordance with IFRS must be disclosed). Note:this applies only to those organizations who benefit from an IFRS adoption deferral (forexample. rate-regulated entities and investment enterprises) and have not yetconverted to either IFRS or U.S. GAAP.

Meet with management and discuss any findings arising from your review. You may wantto hold discussions with your internal auditors as well.

Review with your external auditors their assessment of the MD&A.

Document your review.


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Annual Information Form (AIF)

review tool

In performing your review of the AIF, we suggest you consider the following steps as a guide.

Procedure Comments

Read the full document and ensure that:


There are no significant omissions based on what you know.

The discussion is well balanced between the positive and negative news.

The document describes your organization, its operations and prospects, risks andother external factors that impact it specifically.

The document focuses on material information; and

The document is written in plain language


Review with your external auditors their assessment of the AIF.



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Statement of Executive Compensation

review tool

In performing your review of the Statement of Executive Compensation, we suggest you consider thefollowing steps as a guide.

Procedure Comments

Read the full document and ensure that:


There are no significant omissions based on what you know.

The document clearly communicates the compensation the board of directors intendedyour organization to pay, make payable, award, grant, give or otherwise provide toeach Named Executive Officer and director for the financial year.

The disclosures made in the document will help investors understand how decisionsabout executive compensation are made.

The document focuses on material information; and

The document is written in plain-language.


Review with your external auditors their assessment of the Statement of ExecutiveCompensation.



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Conclusion

If you have any questions or require clarification on any of the referenced matters please contact one ofthe professionals listed hereunder. Deloittes professionals have a broad range of expertise and are ableto offer a range of solutions whether it be technical accounting, governance or technological skills thatcan be customized to meet your organizations specific compliance needs.

Subject to appropriate independence safeguards and service pre-approval, Deloitte can assist you toensure that your financial filings are in compliance in all respects.

Let us help design a strategy that can turn the continuous disclosure obligations into value generators foryour organization.

If you would like further information, please contact a Deloitte professional in your region.

Vancouver Olin Anton 604-640-3006 [email protected]

Calgary Bryan Pinney

Sippy Chhina

403-503-1401

403-503-1314

[email protected]

[email protected]

Edmonton Bill Howden 780-421-3636 [email protected]

Saskatoon Marla Adams 306-343-4205 [email protected]

Regina Cathy Warner 306-565-5230 [email protected]

Winnipeg David Sachvie 204-944-3623 [email protected]

Windsor Mark Morrison 519-967-7713 [email protected]

London Paul Kensit 519-640-4603 [email protected]

Kitchener J im Pryce 519-650-7779 [email protected] Steve Irvine

J amie Barron

905-315-6687

905-315-5747

[email protected]

[email protected]

Niagara Mike Boucher 905-323-6021 [email protected]

Toronto Don Wilkinson

Mark Whitmore

416-601-6263

416-874-3399

[email protected]

[email protected]

Ottawa Paul Stauch 613-751-5420 [email protected]

Montreal Alain Ct

Eddie Leschiutta

514-393-5317

514-393-5132

[email protected]

[email protected]

Quebec City J ean Lamy 418-624-5359 [email protected]

Saint John Lloyd Foote 506-663-6605 [email protected]

Halifax Shannon MacDonald 902-721-5560 [email protected]

St. Johns Brian Groves 709-758-5225 [email protected]


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Disclaimer

This guide is limited in nature, and does not comprehend all matters relating to an organizations financial filings and its continuousdisclosure obligations. We make no representation as to the sufficiency of this guide for your purposes.

This guide should not be viewed as a substitute for other forms of analysis that directors and management should undertake inorder to assess whether their financial reporting or corporate governance practices are adequate or appropriate for your purposes.

The information in this guide is not intended to constitute legal, accounting, tax, investment, consulting, or other professional adviceor services. Before making any decision or taking any action which might affect your personal finances or business, you shouldconsult a qualified professional advisor.

The guide, and the information contained herein is provided as is, and Deloitte makes no express or implied representations orwarranties regarding this guide or the information. Your use of this guide and information is at your own risk. Deloitte will not beliable for any direct, indirect, incidental, consequential, punitive damages or other damages, whether in an action of contract, statute,tort (including, without limitation, negligence) or otherwise, relating to the use of this guide or information.

Documents

Annual Financial Review Summary