Sun Life 2012 Annual Report Download - page 86

In November 2009, IFRS 9 Financial Instruments (“IFRS 9”) was issued and subsequently amended in October 2010. The current
IFRS 9, which addresses the classification and measurement of financial assets and liabilities, is the first phase of the project to
replace IAS 39 Financial Instruments: Recognition and Measurement. It requires financial assets to be measured at fair value or
amortized cost on the basis of their contractual cash flow characteristics and the entity’s business model for managing the assets. It
also changes the accounting for financial liabilities measured using the fair value option. In December 2011, the effective date was
deferred to January 1, 2015.The December amendments also provide relief from the requirements to restate comparative financial
statements. We are currently monitoring the continuing IASB developments and changes relating to this standard and assessing the
impact of the adoption of this standard may have on our Consolidated Financial Statements.
In October 2012, Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) was issued. The amendments apply to
investment entities, which are entities that evaluate the performance of their investments on a fair value basis and whose business
purpose is to invest funds solely for returns from capital appreciation, investment income or both. The amendments provide an
exemption to the consolidation requirements in IFRS 10 for investment entities and require investment entities to measure certain
subsidiaries at fair value through profit or loss rather than consolidate them. The amendments are effective from January 1, 2014 with
early adoption permitted. The exemption from consolidation for investment entities is not retained by a non-investment entity parent,
and as a result, we do not expect the adoption of this standard to have an impact on our Consolidated Financial Statements.
Disclosure Controls and Procedures
The Company has established disclosure controls and procedures that are designed to provide reasonable assurance that all relevant
information is gathered and reported to senior management, including the Company’s CEO, Executive Vice-President and CFO and
Executive Vice-President, Corporate Development and General Counsel, on a timely basis so that appropriate decisions can be made
regarding public disclosure.
An evaluation of the effectiveness of our disclosure controls and procedures, as defined under rules adopted by the Canadian
securities regulatory authorities and the SEC, as of December 31, 2012, was carried out under the supervision of and with the
participation of the Company’s management, including the CEO and the CFO. Based on our evaluation, the CEO and the CFO
concluded that the design and operation of these disclosure controls and procedures were effective as of December 31, 2012.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable
assurance regarding the reliability of our financial reporting and the preparation of our financial statements in accordance with IFRS.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis.
Projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that
the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
We conducted an assessment of the effectiveness of our internal control over financial reporting, as of December 31, 2012, based on
the framework and criteria established in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations
of the Treadway Commission. Based on that assessment, we have concluded that our internal control over financial reporting was
effective as of December 31, 2012.
Our internal control over financial reporting, as of December 31, 2012, has been audited by Deloitte LLP, the Company’s Independent
Registered Chartered Accountants, who also audited our Consolidated Financial Statements for the year ended December 31, 2012.
As stated in the Report of Independent Registered Chartered Accountants, they have expressed an unqualified opinion on our internal
control over financial reporting as of December 31, 2012.
Changes in Internal Control over Financial Reporting
No changes were made in our internal control over financial reporting for the period beginning January 1, 2012, and ended
December 31, 2012, that have materially affected or are reasonably likely to materially affect our internal control over financial
reporting.
Legal and Regulatory Proceedings
SLF Inc. and its subsidiaries are regularly involved in legal actions, both as a defendant and as a plaintiff. In addition, government and
regulatory bodies in Canada, the United States, the United Kingdom and Asia, including federal, provincial and state, securities and
insurance regulators in Canada, the United States, the United Kingdom and other jurisdictions, the SEC, the United States Financial
Industry Regulatory Authority and state attorney generals in the United States, from time to time, make inquiries and require the
production of information or conduct examinations or investigations concerning compliance by SLF Inc. and its subsidiaries with
insurance, securities and other laws. Management does not believe that the conclusion of any current legal or regulatory matters, either
individually or in the aggregate, will have a material adverse effect on the Company’s financial condition or results of operations.
84 Sun Life Financial Inc. Annual Report 2012 Management’s Discussion and Analysis