Management’s Discussion and Analysis Dollar amounts are in thousands of Canadian dollars (except as noted) IFRS 9, as issued in 2010, reflects the first phase of the IASB’s work on the replacement of IAS 39 and applies to classification and measurement  of financial assets and financial liabilities as defined in IAS 39. The standard was initially effective for annual periods beginning on or after January  1, 2013. In November 2013, Chapter 6 of IFRS 9 on hedge accounting was published. At the same time, Chapter 7, containing the effective date  and transition provisions, was amended to remove the mandatory effective date of IFRS 9. This was intended to provide sufficient time for  preparers to make the transition to the new requirements. The Company may still choose to apply IFRS immediately, but is not required to do so.  IFRIC 21 clarifies that an entity recognises a liability for a levy when the activity that triggers payment, as identified by the relevant legislation,  occurs. IFRIC 21 is effective for annual periods beginning on or after January 1, 2014. The Company is in the process of assessing the impact IFRIC  21 may have on future financial statements. The Company’s management, including the Chief Executive Officer and the Chief Financial Officer, does not expect that the Company’s Disclosure  Controls and Procedures and Internal Controls will prevent or detect all error and all fraud. Because of the inherent limitations in all control  systems, an evaluation of controls can provide only reasonable, not absolute, assurance that all control issues and instances of fraud or error, if  any, within the company have been detected. As of December 31, 2013, the Company’s management evaluated the effectiveness of the operation of its disclosure controls and procedures  (“Disclosure Controls”), as defined under rules adopted by the Canadian Securities Administrators. This evaluation was performed under the  supervision of, and with the participation of, the Chief Executive Officer and the Chief Financial Officer. Disclosure controls and procedures are designed to ensure that information required to be disclosed in documents filed with securities  regulatory authorities is recorded, processed, summarized and reported on a timely basis, and is accumulated and communicated to the  Company’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding  required disclosure. Based on the evaluation of Disclosure Controls, the Chief Executive Officer and the Chief Financial Officer have concluded that, subject to the  inherent limitations noted above, the Company’s Disclosure Controls are effective in ensuring that material information relating to the Company  and its consolidated subsidiaries is made known to the Company’s management on a timely basis by others within those entities, and is included  as appropriate in this mD&a. Internal controls over financial reporting (“ICFR”) are designed to provide reasonable assurance regarding the reliability of the Company’s  financial reporting and its preparation of financial statements for external purposes in accordance with IFRS. Management’s documentation and  assessment of the effectiveness of the Company’s ICFR continues as of the date of this MD&A with the focus on processes and controls in areas  identified as being “key risks”. on January 20, 2014, and February 18, 2014, the company announced dividends of $0.05 per share, payable on February 17, 2014, and march  17, 2014, to shareholders of record on January 31, 2014, and February 28, 2014. Future Accounting Policy Changes In subsequent phases, the IASB is addressing impairment of financial assets. The adoption of the first phase of IFRS will have an effect on the  classification and measurement of the Company’s financial assets, but will not have an impact on the classification measurements of financial  liabilities. The Company is in the process of assessing the impact IFRS 9 may have on future financial statements. Disclosure Controls and Procedures and Internal Controls IFRIC Interpretation 21 ‑ Levies (“IFRIC 21”) Disclosure Controls and Procedures Internal Controls over Financial Reportin Subsequent Events As of the financial year ended December 31, 2013, the certifying Officers have evaluated the design and effectiveness of such ICFR, or caused  them to be designed and evaluated under their supervision. The certifying Officers have concluded that the design and effectiveness of ICFR  were operating effectively as at December 31, 2013, to provide reasonable assurance regarding the reliability of financial reporting and the  preparation of financial statements for external purposes in accordance with IFRS. The certifying Officers have evaluated whether there were  any changes to the Company’s ICFR during the year ended December 31, 2013 that have materially affected, or are reasonably likely to materially  affect its ICFR. No changes were identified through their evaluation. Killam ProPerties inc | 2013  63 IFRS 9 ‑ Financial Instruments (“IFRS 9”)