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, long-term 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 — Long-term debt 26,372 14,841 375 Share capital 54,411 53,386 51,898 Equity settled reserve 3,524 2,520 1,703 Retained earnings 57,797 47,437 35,991 Cash (1,959) — (8,114) 140,145 118,882 81,853 The Company’s 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 Company’s 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 Company’s 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 Company’s 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 33,048,937 53,406 32,738,684 51,918 Shares issued: For business acquisitions (a) 217,082 989 305,753 1,482 Stock option exercised 10,500 16 4,500 6 33,276,519 54,411 33,048,937 53,406 Share purchase fnancing (b) — — — (20) Balance, end of the year 33,276,519 54,411 33,048,937 53,386 (a) Inssuance of common shares: As at December 16, 2011, the Company issued a total of 217,082 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 305,753 common shares in November and December 2010 for a total amount of $1,482 as part of the consideration for the acquisitions of 1085820 Ontario Limited and Morris Drilling Inc. (see Note 2).