Orbit Garant 2012 annual rep O rt 61 22. TRANSITION TO IFRS These consolidated fnancial statements are prepared in accordance with IFRS, as described under accounting policies (note 3 ). The date of the opening balance sheet under IFRS and the Company’s date of transition to IFRS is July 1, 2010. The IFRS 1 requires the presentation of Comparative Financial Information and imposes to the First-time adopters to apply retrospectively, all the IFRS standards in effect for the Company, for the year ended June 30, 2012. However, it provides certain optional exemptions and certai n mandatory exceptions for the First-time IFRS adopters. Prior to the adoption of IFRS, for all periods up to and including the year ended June 3 0, 2010, the Company’s consolidated fnancial statements were prepared in accordance with Canadian GAAP. The Company applied IFRS 1 First-time Adoption of IFRS to prepare its frst consolidated fnancial statements. The transition incidence to IFRS on equity, net earnings, comprehensive earnings and cas h fows is presented and described in this note and is explained in more detail in the notes relative to the chart . Initial choices on adoption The Company has applied IFRS 1 in preparing these consolidated fnancial statements. The Company is required to establish IFRS accounting policies as of the transition date and, in general, to apply these retrospectively to determine the IFRS opening bal ance sheet at July 1, 2010. This Standard provides a number of mandatory exceptions and optional exemptions to this general principl e of retrospective application when implementing the translation of Canadian GAAP to IFRS for the Company. Descriptions of applicable exemptions and exceptions are set out below, together with the Company’s elections: Mandatory exceptions to IFRS adopted by the Company Estimates - In accordance with IFRS 1, an entity’s estimates under IFRS as of the transition date to IFRS must be consistent wi th estimates made for the same date under previous Canadian GAAP, unless there is objective evidence that those estimates were i n error. The estimates previously made by the Company under Canadian GAAP were not revised on the application of IFRS. Optional choices applied by the Company Business Combinations – IFRS 1 provides the option to apply IFRS 3R (revised), Business Combinations , retrospectively or prospectively from the transition date. A retrospective basis would require restatement of al l business combinations that occurred prior to the transition date. The Corporation has elected not to apply IFRS 3R retrospectively to business combinations that occ urred before the date of transition. These business combinations were not restated. Accordingly, IAS 27, Consolidated and Separate Financial Statements, is also applied prospectively. Any goodwill arising on acquisition differences has not been adjusted from the carrying value previously determined under Canadian GAAP as a result of applying this exemption. Reconciliation of Canadian GAAP to IFRS IFRS 1 requires an entity to reconcile equity, comprehensive income and cash fows for prior years. The Company’s frst ti me adoption of IFRS did not have an impact on the total operating, investing or fnancing cash fows. The following represents the reconciliati ons from Canadian GAAP to IFRS for the respective years noted: the equity, earnings and comprehensive earnings. Reconciliation of Equity June 30, 2011 July 1, 2010 As at: Explanation $ $ Equity under Canadian GAAP 103,787 89,592 Differences with the Canadian GAAP decreasing reported equity: Business acquisition expenses (c) (328) — Contingent consideration (b) (116) — Total equity under IFRS 103,343 89,592