52 Orbit G arant 2012 annual rep O rt N OTES TO CONSOLIDATED FINANCIAL STATEMENTS continued For the years ended June 30 2012 and 2011 in thousands of Canadian dollars except for earnings per share and option data 13 CAPITAL MANAGEMENT The Company includes shareholders equity longterm debt and bank overdraft net of c ash in the defnition of capital Total managed capital was as follows June 30 June 30 July 1 2012 2011 2010 Bank overdraft 698 Longterm debt 26372 14841 375 Share capital 54411 53386 51898 Equity settled reserve 3524 2520 1703 Retained earnings 57797 47437 35991 Cash 1959 8114 140145 118882 81853 The Companys objective when managing its capital structure is to maintain fnancial fexibility in order to i preserve access to capital markets ii meet fnancial obligations and iii fnance internally generated growth and potential new acquisitions To manage its capital structure the Company may adjust spending issue new shares issue new debt or repay existing debt Under the terms of certain of the Companys debt agreements the Company must satisfy certain fnancial covenants such as Seni or debt to earnings before income taxes interest depreciation and amortization ratio Senior debt to capitalization ratio and fxed c harge coverage ratio Such agreements also limit among other things the Companys ability to incur additional indebtedness create liens engage in mergers or acquisitions and make dividend and other payments As of June 30 2012 June 30 2011 and July 1 2010 the Company was and continues to be in compliance with all covenants and other conditions imposed by its debt agreements In order to facilitate the management of its capital requirements the Company prepares annual budgets that are updated as nec essary dependent on various factors The Companys objectives with regards to capital management remain unchanged from the prior year 14 S h ARE CAPITAL Authorized an unlimited number of common and preferred shares Common shares participating and voting without nominal or par value Preferred shares rights privileges restrictions and conditions shall be provi ded before their issuance by a resolution of the Board of Directors of the Company Common shares issued June 30 2012 June 30 2011 Number of Number of shares shares Balance beginning of the year 33048937 53406 32738684 51918 Shares issued For business acquisitions a 217082 989 305753 1482 Stock option exercised 10500 16 4500 6 33276519 54411 33048937 53406 Share purchase fnancing b 20 Balance end of the year 33276519 54411 33048937 53386 a Inssuance of common shares As at December 16 2011 the Company issued a total of 217082 common shares for a total amount of 989 as part of the consideration for the acquisition of Lantech Drilling Services Inc see Note 2 During the year ended in June 30 2011 the Company issued a total of 305753 common shares in November and December 2010 for a total amount of 1482 as part of the consideration for the acquisitions of 1085820 Ontario Limited and Morris Drilling Inc see Note 2