Orbit Garant 2012 annual rep O rt 41 Acquisition of Morris Drilling Inc.: On December 13, 2010, the Company acquired all issued and outstanding shares of Morris Drilling Inc., a surface diamond drilli ng business in Canada. This acquisition is directly in line with the growth strategy, enhancing the presence in Northern Ontario. The purchase price for the transaction was for a total net consideration of $3,427 payable for a cash consideration of $2,595 and $832 through the issuance of 173,010 common shares of the company. Furthermore, the Company received a cash consideration of $100 as compensation of the net working capital of the company on the acquisition date. The account receivable as compensation of the net working capital does not bear interest and was received ten days after the deliverance of the fnancial statements of Morris Drilling Inc. An amount of $1,900 has been accounted for as intangible assets and $1,171 as goodwill. The amount of goodwill will not be deductible for income tax purposes. The results of operations of 1085820 Ontario Limited, Morris Drilling Inc. and Lantech Drilling Services Inc. are included in the consolidated fnancial statements from November 8, 2010, December 13, 2010 and December 16, 2011 respectively. On January 1, 2011, Morris Drilling Inc. merged with 1085820 Ontario Inc. and on February 8, 2011, the legal corporate name of 1085820 Ontario Limited was changed to Orbit Garant Ontario Inc. The purchase price of these above transactions was allocated to the net assets acquired on the basis of their estimated fair va lues as follows: Lantech Drilling 1085820 Morris Services Inc. Ontario Ltd. Drilling Inc. (December 16 (November 8 (December13 2011) 2010) 2010) Business acquisitions date: $ $ $ Cash (bank overdraft) (1,939) 70 17 Accounts receivable 4,588 632 667 Other current assets 4,497 626 262 Property, plant and equipment 5,240 524 738 Goodwill 4,056 1,846 1,171 Intangible assets 1,050 4,322 1,900 Current liabilities (3,976) (407) (922) Long-term debt (2,935) – — Deferred income taxes (858) (1,118) (506) Purchase price 9,723 6,495 3,327 Consideration Cash 3,506 3,310 2,595 Issuance of common shares 989 650 832 Account payable (receivable) related to net working capital adjustment 3,109 521 (100) Contingent consideration 2,119 2,014 — 9,723 6,495 3,327 Goodwill arising on business acquisitions Goodwill arose in the business combinations because the consideration paid for the combinations effectively included amounts i n relation to the beneft of expected synergies, revenue growth, future market development and the assembled workforce. These benefts are not recognized separately from goodwill as the future economic benefts arising from them cannot be reliably measured. Business acquisition costs For the year ended June 30, 2012, business acquisition costs of $372 (2011: $328) related to the transactions described above and were included in the general and administrative expenses in the consolidated statement of earnings. Impact of business acquisitions on the results The Company’s consolidated revenues and net income attributable to the Company’s shareholders in 2012 included approximately $12,629 and $1,804, respectively, from business acquisitions completed in 2012. Had 2012 business acquisitions all occurred on July 1, 2011, the Company’s pro-forma consolidated revenues and net income attributable to the Company’s shareholders would have been approximately $25,748 and $2,890, respectively. These pro-forma fgures have been estimated based on the results of the acquired business prior to being purchased by the Company’s adjusted to refect the Company’s accounting policies when signifcant di fferences existed, and should not be viewed as indicative of the Company’s future results. For the acquisitions completed in 2011, it is impracticable to estimate the revenue and net i ncome attributed to the additional business generated because the operations have been integrated with existing operations.