Orbit Garant 2012 annual rep O rt 21 RELATED PARTY TRANSACTIONS The Company is related to 28673820 Quebec Inc which is owned by Mr Pierre Alexandre ViceChairman of the Company The Company was also related to 6483976 Canada inc Usinage XSpec until January 31 2011 due to signifcant infuence exercised by the Company During the year the company entered into the following transactions with related companies June 30 June 30 thousands 2012 2011 Sales 47 Purchases 1267 Rent 20 95 All these related party transactions are measured at fair value SIGNIFICANT ACCOUNTING POLICIES The consolidated fnancial statements refect the frsttime adoption of International Financial Reporting Standards IFRS whi ch replaced Canadian Generally Accepted Accounting Principles GAAP as of January 1 2011 All disclosures and explanations rel ated to the frsttime adoption of IFRS are presented in note 22 which provides information that is considered material to the understandi ng of the Companys frst IFRS fnancial statements It also presents a reconciliation of the 2011 fnancial fgures prepared under Canadi an GAAP to the 2011 fnancial fgures prepared under IFRS including a reconciliation of the consolidated statements of earnings c omprehensive earnings and cash fows for the year ended June 30 2011 as well as a reconciliation of the consolidated balance sheets and equity as of July 1 2010 and as of June 30 2011 The IFRS consolidated fnancial statements have been prepared based on the following accounting policies The consolidated fnancial statements have been prepared in accordance with IFRS as issued by the International Accounting S tandards Board IASB and IFRS 1 Firsttime Adoption of IFRS These consolidated fnancial statements should be read in conjunction with IFRS transition disclosures included in note 22 The consolidated fnancial statements were approved for issue by the Board of Directors of Orbit Garant Drilling Inc on September 19 2012 The consolidated fnancial statements have been prepared on a historical cost basis except for the contingent liability whic h have been measured at fair value and are presented in Canadian dollars which is the currency of the primary economic environment in whic h the Company and its subsidiaries operate functional currency Foreign currency translation Financial statements of foreign operations are translated using the rate in effect at the balance sheet date for assets and li abilities and using the average exchange rates during the period for revenues and expenses Adjustments arising from foreign currency transl ation are recorded in other comprehensive earnings Foreign currency transactions are transactions in a currency other than the Companys functional currency Foreign currency transactions are translated to the functional currency by applying the exchange rate prevailing at the date of the transactions Translati on gains and losses on assets and liabilities denominated in a foreign currency are included in the statement of comprehensive earnings Financial instruments Financial assets and fnancial liabilities are initially recognized at fair value and their subsequent measurement is dependent on their classifcation as described below Their classifcation depends on the purpose for which the fnancial instruments were acqui red or issued their characteristics and the Companys designation of such instruments Settlement date accounting is used Goodwill Goodwill initially arising from a business acquisition is measured and recognized as the excess of the fair value of the consi deration paid over the fair value of the recognized identifable assets acquired and liabilities assumed When the Company acquires less than 100 of the equity interests in the business acquired at the acquisition date goodwill attributable to the noncontrolling interest is also recognized at fair value