Cardno Limited Annual Report 2015

FY2015 Annual Report · Cardno Limited
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2015
CARDNO 
A NNUAL 
RE PORT

CARDNO’S VISION
is to be a world leader in 
the provision of professional 
services to improve the physical 
and social environment.

MISSION

Attracting, developing, retaining and rewarding valued people

Understanding and meeting the expectations of our clients 

Sustaining the growth of our profile and markets 

Continually improving the safety and quality of our service delivery 

Creating shareholder value through high performance 

IN 2015, CARDNO CELEBRATES  
70 YEARS OF OPERATIONS

At the end of WWII, engineers Gerry Cardno and 
Harold Davies combined their expertise to establish 
the Brisbane-based consultancy - Cardno & 
Davies. Cardno today has more than 8,000 staff 
worldwide, delivering physical, environmental 
and social infrastructure projects in more than 
100 countries. We have much to celebrate in 
our history, and our future.

ANNUAL REPORT 2015   01 

02  Performance 

04  Chairman’s statement

06  CEO’s message

08  Working globally

10  Featured projects

12  About Cardno

18  Operational review

22  Financial review

28  Board of Directors 

30  Senior Executives

32  Financial report

104  Corporate directory

The Company’s Corporate 
Governance Statement can be 
viewed on the website at 
www.cardno.com/
corporategovernance

Cover:
Left: Cardno restored riverine wetland habitat along a 
portion of the Hudson River in New York.

Centre: Cardno’s dedicated professionals promote 
sustainable economic development and improve the 
wellbeing of people in developing countries.

Right: Cardno provided civil, structural and traffic 
engineering, as well as town planning services to 
Australia’s largest and most advanced paediatric 
facility, the Lady Cilento Children’s Hospital in  
Brisbane, Queensland.

Opposite:
Cardno delivered construction materials testing for the 
Bruce Highway Upgrade in South East Queensland.

02   CARDNO LIMITED 

PERFORMANCE

Cardno achieved a net operating proﬁt after tax of 
A$50.3 million, a 35.6 per cent decrease compared 
to the 2014 ﬁnancial year. Reﬂecting the impact  
of goodwill impairment in the Americas and a  
write-down of our investment in Ecuador, we 
recorded a net loss after tax of $145.2 million.

FIVE YEAR PERFORMANCE (A$M)

2011

2012

2013

2014

2015

 831.2 

 100.2 

 88.0 

 58.8 

 58.8 

 73.5 

 56.29 

 56.29 

 34.0 

 965.8 

 1,195.4 

 1,309.6 

 1,426.9 

 128.7 

 111.1 

 74.2 

 74.2 

 72.6 

 61.73 

 61.73 

 36.0 

 138.0 

 114.3 

 77.6 

 77.6 

 95.7 

 55.09 

 55.09 

 36.0 

 141.7 

 115.2 

 78.1 

 78.1 

 84.6 

 52.04 

 52.04 

 36.0 

108.4

(148.4)

(145.2)

50.3

 48.1 

(88.32)

30.59

 20.0 

Gross Revenue

EBITDA (i)

EBIT

NPAT

NOPAT (ii)

Operating Cash Flow

EPS - basic (cents)

NOPAT EPS - basic (cents)

Dividends per share (cents)

SEGMENT GROSS REVENUE (iii)

Americas

Asia Paciﬁc

510.3

319.0

522.0

441.9

664.2

529.8

774.4

534.2

928.9

497.5

SEGMENT RESULT (before ﬁnancing costs and taxation) (iii)

Americas

Asia Paciﬁc

54.5

35.5

51.9

58.5

59.8

62.2

63.2

56.4

(178.2)

38.8

(i) EBITDA = EBIT plus depreciation and amortisation and impairment losses
(ii) NOPAT = NPAT plus tax effected impairment losses
(iii) During the year the Group changed its internal reporting structure which resulted in a change to its reportable 
segments. Comparative segment information has been represented.

EBITDA and EBIT are unaudited. However, they are based on amounts extracted from the audited ﬁnancial statements as 
reported in the consolidated statement of ﬁnancial performance on page 53. These metrics provide a measure of Cardno’s 
performance before the impact of non-cash expense items, such as depreciation and amortisation and impairment losses, 
as well as interest costs associated with Cardno’s external debt facility and hire purchase arrangements.

NOPAT is unaudited. However it is based on amounts extracted from the audited ﬁnancial statements. Refer to the 
NPAT to NOPAT reconciliation on page 27. This metric provides a measure of Cardno’s operating performance  
before the impact of one off adjustments such as impairment losses write down to fair value for assets held for  
sale incurred during the current ﬁnancial year.

Left and Right: Cardno has provided wetland monitoring services at the San Pedro Bay  
Mitigation Bank in Florida since 2008.

ANNUAL REPORT 2015   03 

GROUP FEE REVENUE BY SEGMENT FY14 v FY15*

Inner Circle: 
June 2014

Outer Circle: 
June 2015

62%

64%

36%

38%

Americas 

Asia Paciﬁc

GROUP REVENUE
A$ billion

NET PROFIT/LOSS AFTER TAX
A$ million

$1.4B              9.0%

-$145.2M    

-285.9%

.

8
8
5

1
1
0
2

.

2
4
7

2
1
0
2

.

6
7
7

3
1
0
2

.

1
8
7

4
1
0
2

.

3
0
5

5
1
0
2

2
.
1
3
8

1
1
0
2

8
.
5
6
9

2
1
0
2

4
.
5
9
1
,
1

3
1
0
2

6
.
9
0
3
,
1

4
1
0
2

9
.
6
2
4
,
1

5
1
0
2

GROUP FEE REVENUE BY SERVICE FY14 v FY15*

Based on NOPAT (i)

2
.
5
4
1
-

11%

12%

Inner Circle: 
June 2014

Outer Circle: 
June 2015

EARNINGS PER SHARE (BASIC)
A$ cents per share

OPERATING CASH FLOW
A$ million

-88.32c     

-269.7%

$48.1M       

-43.1%

9
2
6
5

.

1
1
0
2

3
7
1
6

.

2
1
0
2

9
0
5
5

.

3
1
0
2

4
0
2
5

.

4
1
0
2

Based on NOPAT (i)

9
5
0
3

.

5
1
0
2

.

2
3
8
8
-

5

.

3
7

1
1
0
2

6

.

2
7

2
1
0
2

7

.

5
9

3
1
0
2

6

.

4
8

4
1
0
2

1

.

8
4

5
1
0
2

29%

37%

51%

60%

Engineering Survey & Planning

Environment & Natural Resources

Social Infrastructure, Economics & Software

GROUP FEE REVENUE BY MARKET FY14 v FY15*

15%

11%

27%

26%

Inner Circle: 
June 2014

Outer Circle: 
June 2015

22%

24%

29%

31%

12%

3%

Contractors

Oil & Gas

Resources

Government

Other Private

(i) NOPAT = NPAT plus tax effected impairment losses

* Graph detail for FY2014 is presented on a proforma basis which 
assumes Cardno acquired its FY2014 merger partners on 1 July 2013.

04   CARDNO LIMITED 

CHAIRMAN’S 
STATEMENT

2015 was a challenging year for Cardno 
resulting in a decline in proﬁtability 
across several markets in Australia and 
North America.
The company achieved a net operating proﬁt after tax of A$50.3 million,  
which is considerably lower than our FY2014 result.

As a result of a non-cash impairment charge relating to the carrying value of  
our businesses in the US and Ecuador, Cardno recorded a net loss after tax of  
A$145.2 million and negative earnings per share of 88.32c.

Gross revenue increased 9 per cent, to A$1,426.9 million. The company will pay a  
full-year, fully franked dividend of 20 cents, which is a payout ratio of 66 per cent  
of net operating proﬁt after tax.

MARKET CONDITIONS
Like many in the engineering and construction sector, Cardno’s performance was 
affected by adverse economic conditions in our key markets.

Our US business encountered a reduction in the demand for oil and gas services, 
slower than anticipated conversion of backlog into project starts and harsh winter 
weather in a number of locations.

In Australia, a continuing slowdown in the resource sector, a wind-down of major 
project work, and delays in infrastructure investment resulted in a lessening 
demand for services and intensiﬁed competition for consulting work. This 
impacted both our revenue and margins.

The economic outlook for Ecuador has deteriorated due to signiﬁcant declines 
in oil revenue and general economic uncertainty.  As at 30 June 2015, our 
Cardno Caminosca subsidiary in Ecuador has been written down to its fair 
value of zero and disclosed as held for sale.

IMPROVEMENT
Despite the external challenges, we are not satisﬁed with our results and  
are undertaking signiﬁcant actions to improve overall business 
performance and proﬁtability.

ANNUAL REPORT 2015   05 

We continue to evaluate all components 
of our business with a view to improving 
margins and positioning Cardno for a return 
to organic growth.

In difﬁcult markets, it is important we 
continue to match our resources to client and 
market demand, while retaining a collective 
focus on safety, streamlined service delivery 
and improving the cost effectiveness of 
internal functions.

We will continue to prudently invest in  
our people and systems to ensure our  
long-term success despite revenues being 
under pressure.

Cardno’s backlog of work is strong and 
includes a range of high-quality clients.  
We are optimistic about the company’s 
potential in the future.

OUR PEOPLE
Cardno’s greatest asset is our people and we 
are committed to attracting, developing and 
retaining the very best staff for the company. 

Cardno University provides training and 
personal development opportunities to 
ensure our global team of technical experts 
and professionals has the necessary range of 
skills, knowledge and experience to serve our 
global clients.

In FY2015, a Grow Cardno Academy was 
created to provide business development skills 
training to employees in client-facing roles, 
while we also improved operational efﬁciency 
of ﬁeld staff through use of mobile technology.

With a workforce of 8,100 employees in 100 
countries, staff diversity is a key competitive 
advantage, as greater diversity supports 
stronger operational and ﬁnancial success. 
A new policy has been launched which 
highlights Cardno’s commitment to a range 
of diversity initiatives across all aspects of 
business activities within the company.

SAFETY
The safety of our employees, contractors 
and clients is Cardno’s top priority. This 
commitment is underpinned by our policies, 
processes and systems. Our Zero Harm 
program provides the resources for staff to 
fulﬁl their roles and responsibilities with a 
strong safety awareness.

Cardno works collaboratively with our 
clients to deliver specialist services and 
comprehensive project solutions. We must 
deliver this capability along with excellent 
safety procedures and performance.
Cardno’s rigorous approach to risk awareness 
and communication helped us achieve 
improved Lost Time Injury Frequency and Total 
Recordable Injury Frequency rates in FY2015.
The safety of our people will continue to be 
of paramount importance, for employees in 
both ﬁeld work and ofﬁce-based activities. 

LEADERSHIP
After an extensive search, the Board was 
pleased to announce the appointment of 
Richard Wankmuller, who commenced 
as CEO and Managing Director in June 
2015. Richard will be a strong contributor 
for the company, with more than 30 years’ 
experience successfully growing professional 
engineering services businesses. 
He is a disciplined leader, focuses on 
priorities and performance, and has a deep 
understanding of client service delivery.
On behalf of the Board, I extend a sincere 
thanks to Graham Yerbury for the leadership 
and endeavour he demonstrated during his 
six months as Acting CEO. The team achieved 
much in difﬁcult circumstances under his 
guidance. Graham resigned from Cardno in 
July to pursue an opportunity in the oil and 
gas sector. We wish him success. 
I would also like to thank Michael Renshaw 
for his efforts during his time as CEO.

BOARD 
Cardno’s corporate governance practices are 
designed to deliver responsible stewardship, 
business integrity, accountability and effective 
risk management.
Our Directors bring a range of complementary 
skills to the Board, and all are committed to 
ensuring Cardno is an ethical, sustainable and 
responsible corporate citizen that delivers 
attractive returns for our shareholders.
After 10 years of diligent service, our longest-
serving non-executive director, Ian Johnston, 
will retire from the Board following the Annual 
General Meeting in September 2015. We 
will miss Ian’s collegiate style and signiﬁcant 
capabilities. He has been a hard-working and 
committed colleague. A replacement for Ian 
will be announced in coming months.

OUTLOOK
Cardno continues to face challenges across 
a number of our key markets, however, we 
remain positive about the opportunities for 
the coming year.
In the Americas, we are well positioned with 
a record pipeline of work. A commitment 
to increased government spending in Asia 
Paciﬁc should drive demand for engineering 
consulting services, although the timing of 
such investment is uncertain.
Merger and acquisition activity slowed 
in FY2015 due to the underlying business 
performance and our efforts to improve 
proﬁtability. We continue to look for 
complementary businesses that will add 
relevant geography and skills to our current 
service platform.
Cardno has the capabilities and technical 
expertise to deliver the highest standard of 
professional services for our clients on projects 
across the world. Our new leadership team is 
committed to this objective.

THANK YOU
I wish to recognise Cardno’s professional 
and dedicated staff for their commitment to 
working safely and delivering high quality 
client service over the past 12 months.

I would also like to thank my colleagues  
on the Board for their diligence and  
continued support. 

Importantly, I thank our clients and 
shareholders for their conﬁdence in this  
great company.  

John Marlay
Chairman

Far left: Cardno worked with government agencies, 
consultants and the community to prepare structure plans 
for the award-winning Cockburn Central Town Centre and 
Cockburn Central West projects in Western Australia. 

Left: Cardno delivered environmental and cultural resource 
ﬁeld survey and permitting support for a 500-mile natural 
gas pipeline from Alabama to Florida.

06   CARDNO LIMITED 

CEO’S MESSAGE

Since joining the company in June 2015,  
I have met with thousands of Cardno 
people while visiting more than 40 of  
our ofﬁces throughout the world. 

WHAT WE DO IS IMPORTANT
Along the way, I have seen ﬁrsthand some of the great work we do. This includes 
the international development assistance work we undertake, such as helping 
to eliminate human trafﬁcking in Southeast Asia. We also support AIDS orphans 
and sustain HIV treatment in Uganda, and tackle poverty in Timor Leste through 
improved local governance and food security. 

Our expert teams perform crucial transport infrastructure work, including light rail 
and streetcar projects in Sydney and the Gold Coast, Australia, and Atlanta in the 
United States. In addition, we also fulﬁl important human health risk assessment, 
water supply and environmental restoration activities, such as working for over  
10 years to restore the fragile Tahoe Basin ecosystem in Nevada and California.

OUR PEOPLE MAKE A DIFFERENCE
As I reﬂect on this great work, I have to say that I am very proud to be part of 
a company that is truly making a difference and helping so many communities 
across the globe. What has really struck me is the quality of our people and 
their determination, hard work and commitment to success. 

This allows me to remain conﬁdent about Cardno’s future despite the 
challenges which the company has faced during recent times. While 
economic conditions remain difﬁcult in a number of key markets, the 
response by our people over the past few months has convinced me 
that Cardno has a strong workforce that can successfully meet these 
challenges. We will do this through a renewed focus on teamwork and 
the delivery of superior client service throughout the world.

I look forward to continuing a dialogue on how we can improve  
our teamwork and client service capabilities as we develop our  
long-term plan, which I expect we will be able to communicate  
later this calendar year.

ANNUAL REPORT 2015   07 

“I am very proud to be part of a company that is 
truly making a difference and helping so many 
communities across the globe.”

This client recognition is important to us, 
particularly when it comes as a result 
of our commitment to improved safety 
performance. In 2015, Cardno received a 
second consecutive award from a major 
global oil and gas company due to our 
ﬂawless execution of environmental 
services work (see page 14).

THANK YOU
In closing, I would like to acknowledge and 
thank our people. I am grateful they choose 
to work for us and give us their best every 
day. I appreciate their effort and understand 
the road has not been easy. In the last four 
years alone we have brought in over 3,500 
new people, all of whom came from other 
companies with their own ways of serving 
clients and delivering successful results. 

It is impressive to see how they now work 
together as a team across Cardno and 
deliver the type of results I have highlighted. 
This teamwork and an ability to learn from 
one another will drive our success and allow 
us to continue to be the great company we 
are, making a difference to the lives of so 
many people across the globe.  

Richard Wankmuller 
CEO and Managing Director

TEAMWORK  
DRIVES SUCCESS
Another clear message I received while 
visiting Cardno ofﬁces was that we 
have only just begun to capitalise on the 
synergies of our expert teams across the 
world. However, some of the results of our 
teamwork to date are very impressive. For 
example, we have been able to utilise “big 
data” management techniques developed 
during our work on the Gulf of Mexico oil 
spill on the Ichthys LNG project in Darwin. 
We have also successfully transferred our 
strong environmental remediation skills 
from the US to win similar work for a global 
oil and gas major in Australia.

CLIENT SERVICE MATTERS 
The ﬁrms that win work are the ones which 
can better serve their clients and are more 
responsive to their needs over time. To 
accomplish this, Cardno must continue 
to understand our clients’ requirements 
better than our competitors. We must then 
satisfy these requirements more efﬁciently. 
Cardno is committed to structuring our 
business to achieve this outcome. This 
means our organisational structure and 
business processes must align with our 
clients’ needs, and we must have a culture 
which prioritises client relationships and 
responsiveness above everything else.

Great things happen when we get this 
alignment right. We win accolades from our 
clients, putting us ahead of our competitors 
and positioning Cardno as a pre-eminent 
ﬁrm in the markets in which we operate.

Left: Cardno provided specialist utility engineering 
services for the landmark Sydney Light Rail transportation 
infrastructure project.

Right: Cardno provided structural engineering for a  
three-phase campus development in Houston, Texas.

08   CARDNO LIMITED 

WORKING 
GLOBALLY

Our global team is extraordinarily diverse, with roles 
ranging from environmental scientists, engineering 
professionals and planners, to economists, emergency 
response personnel, large scale project managers, 
technical experts, industry specialists and designers of 
sustainable projects and community programs.

Anchorage

11

>  Environmental 
Planning and 
Engineering Services 
for the US Navy and  
US Marine Corps

Worldwide

>  Metro Parkway 
Widening and 
Reconstruction

Fort Myers, Florida

Portland

5

Los Angeles

Washington DC

2222

Tampa

>  Upper Truckee 
River Streambed 
Environment Zone 
Restoration Project 

Lake Tahoe, California

Bogotá

Quito

Lima

Retford

Thame
Newbury

Brussels

Nigeria

KEY

Countries where Cardno is currently delivering projects

Cardno ofﬁces

1

Featured projects

P 10

FOR THE FEATURED  
PROJECT DETAILS

ANNUAL REPORT 2015   09 

PEOPLE

8,100

OFFICES

259

COUNTRIES

100

Abu Dhabi

4

Nairobi

>  Public-Private 
Partnerships under 
the US President’s 
Emergency Plan  
for AIDS Relief 
Countries Project

Sub-Saharan Africa

>  Curtis Island LNG

Gladstone, Queensland

>  Lady Cilento 
Children’s Hospital

Brisbane, Queensland

Manila

Singapore

Jakarta

Darwin

Port Moresby

Cairns

333

Brisbane

666666

Perth

Melbourne

Sydney
Canberra

Wellington

Christchurch

WHAT WE DO  /  BUILDINGS  /  LAND  /  ENVIRONMENT  /  INTERNATIONAL DEVELOPMENT ASSISTANCE 
MANAGEMENT SERVICES  /  ENERGY AND RESOURCES  /  TRANSPORTATION  /  WATER  /  DEFENCE

10   CARDNO LIMITED 

FEATURED 
PROJECTS

1   ENVIRONMENTAL 
PLANNING AND ENGINEERING 
SERVICES FOR THE US NAVY 
AND US MARINE CORPS

2   METRO PARKWAY 
WIDENING AND 
RECONSTRUCTION

Fort Myers, Florida

Worldwide

3   CURTIS ISLAND LNG

Gladstone, Queensland

As part of a ﬁve-year contract, Cardno 
is delivering worldwide environmental 
planning and engineering services to the 
US Navy and US Marine Corps. This is in 
addition to another contract with Naval 
Facilities Engineering Command (NAVFAC) 
Atlantic to support at-sea testing and 
training requirements, and working on 
similar initiatives with NAVFAC Paciﬁc.
The global contract covers a wide variety 
of projects such as in-water noise 
modelling and marine mammal exposure 
impacts, dredging permitting and disposal, 
in-water construction, shoreline training 
and restoration. 
Additionally, Cardno may be called upon to 
help with aircraft homebasing initiatives 
throughout the world.
Cardno’s stellar record of performance 
supporting the US Navy’s operational 
requirements was recognised by the Chief 
of Naval Operations, who awarded us 
their 2014 Environmental Planning Award 
for outstanding support in preparation of 
the Environmental Impact Statement for 
Homebasing the F-35C Joint Strike Fighter 
on the West Coast of the US.

Cardno provided design and engineering 
services for the Metro Parkway widening 
and reconstruction from 1999 to 2014. The 
road required a major upgrade, including 
widening to six lanes, bridge construction, 
and the realignment and reconstruction of 
adjacent railroad tracks. 
Cardno liaised with the Florida Department 
of Transportation (FDOT), emergency 
services and the community throughout the 
design and construction process. Our team 
conducted a detailed review of the Project 
Development and Environment study, which 
included public workshops. 
Our team delivered techniques for the 
bridge construction, detailing alternative 
methods and cost analysis for each option. 
Cardno also collaborated with Lee County, 
City of Fort Myers, Seminole Gulf Railroad 
and Southwest Florida Water Management 
District to address construction concerns.
Cardno delivered professional engineering 
services in connection with the design of 
utility relocations impacted by the Metro 
Parkway improvements. This included the 
relocation of water pipelines, a submersible 
sewage pump station and several  
roadway crossings.

Cardno is providing a range of services for 
the multi-billion dollar Australia Paciﬁc, 
Queensland Curtis and Gladstone LNG 
projects in Queensland.

We have worked with clients at the sites 
on Curtis Island for several years and, due 
to exceptional service and value for money, 
have received numerous contract upgrades 
and extensions. 

Our experts have delivered geotechnical 
engineering, construction materials testing, 
environmental testing, concrete integrity 
testing and quality assurance services.

Cardno teams work on projects from our 
National Association of Testing Authorities 
accredited site laboratories located on 
each of the Curtis Island projects. Through 
forging strong client relationships, Cardno 
is actively developing future partnering 
opportunities for LNG plant construction 
globally, particularly in the United States.

Continuing to capitalise on a superb 
reputation and client relationships, Cardno 
has also provided similar services to the 
Macedon, Wheatstone, Ichthys, Pluto and 
PNGLNG liquefaction projects.

ANNUAL REPORT 2015   11 

P 08

FOR THE MAP OF 
PROJECT LOCATIONS

For more information about 
Cardno’s global projects visit 
www.cardno.com

4   PUBLIC-PRIVATE 
PARTNERSHIPS UNDER THE 
US PRESIDENT’S EMERGENCY 
PLAN FOR AIDS RELIEF 
COUNTRIES PROJECT

Sub-Saharan Africa

Cardno is providing strategic services to 
a portfolio of public-private partnerships 
(PPPs) combatting the global HIV/AIDS 
epidemic. The Centers for Disease Control 
and Prevention (CDC) awarded Cardno a 
ﬁve-year cooperative agreement to manage 
the second phase of the PPPs under the US 
President’s Emergency Plan for AIDS Relief 
(PEPFAR) Countries Project (P4).
Cardno collaborates with CDC and the 
Ofﬁce of the US Global AIDS Coordinator 
to leverage US Government resources 
and private sector partners to meet the 
PEPFAR goals of improved health outcomes, 
sustainability and country ownership.
Our role includes funds management and 
governance, program technical support, PPP 
strategic expansion, capacity building and 
institutional strengthening, communications 
services, performance monitoring and 
evaluation and results impact assessments.
With a focus on Sub-Saharan Africa, these 
PPPs contribute to PEPFAR’s goal of an 
AIDS-free generation through innovative 
interventions in the areas of health systems 
strengthening, treatment, and prevention of 
mother-to-child transmission.

5   UPPER TRUCKEE RIVER 
STREAMBED ENVIRONMENT 
ZONE RESTORATION PROJECT

Lake Tahoe, California

6   LADY CILENTO  
CHILDREN’S HOSPITAL

Brisbane, Queensland

Cardno has been working on projects to 
restore the fragile Tahoe Basin ecosystem 
in Nevada and California for more than  
10 years. 
We recently completed project 
management and engineering services 
for the Upper Truckee River Streambed 
Environment Zone Restoration Project in 
California, which rehabilitated 3,500 linear 
feet of stream habitat.
The ﬁnal design of this work included new 
channel and ﬂoodplain construction that 
increased ﬂoodplain connectivity, improved 
ﬁsh and wildlife habitats, and improved the 
quality of the water entering Lake Tahoe.
Our tasks comprised the analysis of 
hydrology and hydraulics of river, wetland, 
and upland habitats, an effective 
restoration design that addressed public 
access issues, the development of complete 
plans, speciﬁcations, and bid support.
For the construction management aspects 
of the project, Cardno served as resident 
engineer and resident inspector, ensured 
storm water pollution prevention planning 
compliance, prepared record drawings, and 
coordinated project close-out.

Cardno’s role on a state-of-the-art Brisbane 
health facility shows how we help deliver 
critical infrastructure needs to communities. 
We provided civil, structural and trafﬁc 
engineering, and town planning services to 
Australia’s most advanced paediatric facility, 
the Lady Cilento Children’s Hospital.

It features eight main hospital levels, all 
requiring variations in the footprint to 
accommodate the internal atriums and the 
radiating “branches” which cantilever across 
the streetscape. To optimise the design, our 
team utilised 3D structural modelling, while 
wind tunnel testing was carried out to more 
accurately predict pressures on the building.

During the site investigations and acquisition 
process, Cardno provided town planning 
and trafﬁc engineering advice and assisted 
the Queensland government to prepare the 
planning instrument regulating development 
in the precinct. Cardno also prepared the 
development applications for Queensland 
Health for all aspects of the project.

Trafﬁc forecasting and road network analysis 
was also conducted, which informed the 
design of surrounding intersections, service 
entries and car parking arrangements.

12   CARDNO LIMITED 

ABOUT  
CARDNO

We are a global services 
company with expertise in the 
development and improvement 
of physical, social and 
environmental infrastructure for 
communities around the world. 

Above: Cardno’s marine and freshwater ecology 
group is undertaking statistical analysis of ‘sponge 
garden’ habitat in Melbourne’s Port Phillip Heads.

ANNUAL REPORT 2015   13 

AT CARDNO . . .  
IT’S MORE THAN A JOB

We are committed to respecting and encouraging 
the unique contributions of people with diverse 
backgrounds, experiences and perspectives. 

“No limits  
and endless 
opportunities.”

“Calling on our global 
expertise to deliver world 
class local solutions.”

“My job helps  
improve people’s health  
and wellbeing in  
vulnerable countries.”

Melissa Kattenberg, 
Hervey Bay, Australia

Kyle Christensen, 
Wellington, New Zealand

Violet Ketani,  
Washington DC, United States

From trainee to international manager based on Melissa Kattenberg’s 20-year career with 
Cardno has grown from strength to strength. 

“The best part of my job is going into different parts of the business and seeing what they’ve 
developed and sharing the good ideas with others. Cardno is a great place to work because it 
is full of opportunities. You are only limited by the ceiling that you place upon yourself.”

Kyle Christensen works on projects across New Zealand ranging from urban stormwater to river 
engineering, hydrogeology, ecology, contaminated land, planning and landscape architecture.

“The ability to call on our global expertise to deliver world class local solutions is what makes 
coming into work every day so satisfying.”

Violet Ketani is a passionate public health specialist, with strong expertise in health  
systems strengthening, monitoring and evaluation, capacity building, HIV/AIDS, and  
public-private partnerships.

“Cardno has provided me mentorship and opportunity to grow within the company.  
My work is far from monotonous and I’m always learning something new about the  
business, which is an invaluable beneﬁt to me.”  

14   CARDNO LIMITED 

. . .  IT’S ABOUT  
KEEPING OUR PEOPLE SAFE

Cardno takes individual and company-wide 
responsibility for safety in everything we do. 

GROUP TOTAL RECORDABLE INJURY FREQUENCY RATE

As at end of  
June 2015:
3.16 per million  
person-hours
(0.63 per two 
hundred thousand 
person-hours  
– US equivalent)

7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0

Jul-12

Jun-15

Cardno’s Zero Harm safety program fosters an environment of shared responsibility and 
accountability, risk awareness and clear communication. 

Our commitment to the continual improvement of our safety performance has been rewarded 
with two consecutive awards from a major global oil and gas company. The recognition came 
as a result of Cardno’s ﬂawless execution of environmental services work across a number 
of projects in the United States.

The awards highlight Cardno’s extensive pre-ﬁeld planning, management presence in the 
ﬁeld, as well as the effectiveness of our safety tools. Speciﬁc actions included adding core 
safety expectations to job safety analysis, conducting injury and case management drills, 
implementing hazard identiﬁcation best practice and an independent review process for 
construction and demolition projects to ensure thorough safety and technical planning.

Cardno’s rigorous approach to risk management and the continual improvement in our 
safety culture played a key role in securing a ﬁve-year Master Services Agreement for 
Environmental Services with another global oil and gas major. Renowned for requiring 
a high safety standard, the client selected Cardno for our ability to service a nationwide 
contract safely through collective technical strength and extensive service offerings.

Above: Cardno is committed to ensuring a safe and healthy 
environment for employees and clients.

ANNUAL REPORT 2015   15 

. . . IT’S DEVELOPING  
OUR PEOPLE

Enhancing the skills, knowledge and experience of 
Cardno’s talented pool of 8,100 employees is critical to 
our success as a global organisation. 

Cardno University delivers training aligned with the company’s strategic plan and aims to 
inspire every employee to engage and exceed expectations.

In FY2015, a number of global training initiatives were introduced including: 

>  A learning management system that houses over 200 courses and can track, monitor 

and record all eLearning and facilitator-led training

>  Project management for staff in technical and business services roles

>  Training to provide employees with advice and tactics about how to enhance client 

relationships and implement effective bid strategies

>  Compliance and occupational health and safety training to support and reinforce our 

Zero Harm safety program

>  Leadership development programs, including executive development in line with our 

succession planning program.

The company’s best performers are rewarded with scholarships designed to further their 
career development in line with their talents and career goals. These include our Future 
Leader Scholarship to support Cardno’s next generation of leaders; the Harold Davies 
Scholarship that rewards an outstanding performer in a professional role; our Richard Kell 
Scholarship awarded to exceptional engineers; and the Gerry Cardno Scholarship, which 
recognises an exceptional performer in a services role.  

Above: Cardno University equips employees with the skills to shape 
their future and realise possibilities for career progression.

16   CARDNO LIMITED 

. . .  IT’S BEING  
INNOVATIVE 

Cardno empowers our people to think innovatively, to 
develop creative solutions and put them into action 
when solving complex project challenges. 

Recently, our experts played a leading role on a pioneering project to boost transport 
infrastructure in Papua New Guinea (PNG). Working with the PNG Department of Works 
and other partners, Cardno developed a technological ﬁrst that will assist with the planning 
of road improvement initiatives.

A Visual Road Condition Survey (VRCS) was conducted to collect and process data for a 
total of 6,025 kilometres – or 70 per cent - of national roads in the developing nation. This 
information now provides network managers with a useful tool to permit more accurate 
programming and budgeting of maintenance works.

Using footage captured during the VRCS, Cardno then delivered PNG’s ﬁrst ‘Road Viewer 
Application’ system. This tool allows users to view an interactive map and detailed video 
of various sections of road, often in remote locations, from their computer.

A comprehensive survey of this kind had never been successfully attempted before in PNG 
and Cardno was proud to play a key role in such an important development for the country.

The work was funded through the Papua New Guinea – Australia Transport Sector Support 
Program and Cardno was able to display how we make innovation happen in partnership 
with our clients.

Above: Cardno works innovatively with clients to develop solutions to 
complex project challenges.

ANNUAL REPORT 2015   17 

. . . IT’S ABOUT  
CLIENT SERVICE

Cardno is committed to working collaboratively 
with clients to create lasting beneﬁts for 
communities around the world.

Cardno has developed an important strategic partnership with property company Amex 
Corporation to develop the new township of Providence in Ripley Valley, which is located in 
the fastest-growing corridor in South East Queensland. The Valley will provide 50,000 new 
homes in the City of Ipswich over the next 20 years.

Since 2006, Cardno has provided extensive engineering and environmental services to  
help deliver the vision of a high quality, affordable and sustainable community. 

Cardno has mobilised specialist expertise to add value and meet the project time and 
budget demands across a signiﬁcant range of disciplines. As our trusting relationship 
has developed over time, the services we have provided have expanded. These include 
structural and geotechnical engineering, trafﬁc and transport advice, detailed civil  
design integrating stormwater and reticulated networks, acoustic assessment, visual 
amenity and signiﬁcant landscape masterplanning.

We are proud to collaborate with Amex on this pioneering project that aims to  
deliver best practice in design and an equally strong sense of community.  

Above and right: Cardno’s strategic partnership with Amex Corporation 
is delivering a crucial new community for South East Queensland.

18   CARDNO LIMITED 

OPERATIONAL REVIEW

AMERICAS

Cardno’s Americas Region comprises 5,000 multi-
disciplinary professionals who deliver services 
and expertise from more than 190 ofﬁces.

THE REGION 

PROVIDES 64%

OF CARDNO’S  
FEE REVENUE

 A$m (i)

Fee revenue

Recoverable expenses

Total revenue

EBITDA

EBITDA margin

The Americas Region 
delivers expertise to private 
and public sector clients 
across the environmental, 
water, transportation, 
energy and resources, land, 
buildings, international 
development assistance 
and management services 
sectors.

FY2015

FY2014

 660.9 

 268.0 

 928.9 

 68.2 

10.3%

AMERICAS FEE REVENUE  
BY MARKET FY14 v FY15

 561.3 

 213.1 

 774.4 

 78.1 

13.9%

Inner Circle: 
June 2014

Outer Circle: 
June 2015

25%

25%

32%

30%

28%

29%

8%

9%

13%

1%

(i) During the year the Group changed its internal 
reporting structure which resulted in a change to 
its reportable segments. Comparative segment 
information has been represented.

Contractors

Oil & Gas

Resources

Government

Other Private

ANNUAL REPORT 2015   19 

AMERICAS EXECUTIVES

>  Paul Gardiner 

General Manager

>  Marian Boreland

International Development 
Assistance

>  Chip Blankenhorn

Natural Resources and Health 
Sciences

>  Mark Gundacker
Human Resources

>  Bob Kroeger

Engineering and Environmental 
Services

>  Michael Landry

Chief Financial Ofﬁcer

>  Colby Manwaring

XP Solutions

>  Bill Halperin

Government Services 

>  Randy Sullivan

Oil and Gas Services

>  Edgar Uribe
Latin America

Far Left: Cardno operates a full-service native plant 
nursery in the United States to provide quality-assured 
native seed and plant material for restoration, mitigation 
and native landscaping projects.

Left: Cardno helped develop the design and guided 
construction for expansion work on Alfred I. DuPont 
Hospital for Children in Delaware.

Right: Cardno delivers surveying and  
mapping, subsurface utility engineering and  
utility coordination services for transport 
infrastructure projects.

HIGHLIGHTS
Our team of experts in the Americas Region 
provide a range of services including site 
planning, environmental permitting, health 
and ecological risk assessment, remediation 
and quality assurance through to civil 
design, subsurface utility engineering and 
construction management.

The region’s performance was impacted by 
the wind-down of several large projects, 
winter weather conditions, a reduction in 
US Government expenditure and business 
integration costs. Our oil and gas operations 
also experienced a decline, with work  
in this sector affected by a drop in prices. 

Fee revenue for FY2015 was $660.9 million, 
an increase of 17.8 per cent on the previous 
year, reﬂecting full-year contributions from 
Cardno PPI and Cardno Haynes Whaley 
and currency movements. EBITDA margin 
declined from 13.9 per cent to 10.3 per cent.

The challenging conditions contributed to 
an organic revenue decline of 6.8 per cent. 
However, our backlog of secured work grew 
by 2.5 per cent to US$554.8 million due to 
a recovery in the US economy, including 
increased defence spending. 

In FY2015, the Americas Region’s ongoing 
commitment to Zero Harm was rewarded 
with two consecutive safety awards from a 
major global oil and gas company.

The region undertook a range of integration 
activities in FY2015, implementing common 
ﬁnancial systems and streamlining reporting 
structures, as well as introducing a shared 
services model for business services.

Additionally, components of the former 
Emerging Markets Division and Cardno’s 
software division, XP Solutions, joined the 
Americas Region. Improved alignment of 
our engineering and social infrastructure 
teams has enhanced our ability to offer a 
range of services to clients. 

XP Solutions has experienced strong 
growth in FY2015, driven by the success of 
new software products and strong demand 
across a range of markets.

Our US expertise was rewarded with a 
number 24 ranking in Engineering News 
Record’s annual Top 225 International Design 
Firms, and the number 6 spot in the United 
States region list.

These results are improvements on previous 
rankings and strong evidence that Cardno’s 
business in the Americas Region is highly 
respected and meeting the needs of our 
diverse client base. 

FUTURE OUTLOOK
The region is focused on deepening our 
service delivery offerings, winning more 
work with new and existing clients, and 
growing revenues organically and through 
strategic acquisitions.

The US economic recovery appears to 
be slower than expected. We do expect 
opportunities will emerge from an expected 
increase in government expenditure.

We are well positioned to beneﬁt from the 
FY2015 integration activities, allowing us 
to pass on these efﬁciencies to our clients 
through greater responsiveness and a 
broader range of services.

Recent wins will help ﬁll the gap created 
by cancelled work and the completion of 
major projects, with the environmental and 
transport markets set for improvement.

We will continue to make adjustments 
to our business in response to market 
conditions, including the dramatic drop  
in oil prices.

Despite challenging market conditions, the 
Americas Region has the expertise and 
diverse platform from which to strengthen 
performance in FY2016.

Our team will capitalise on our local 
presence, strong client relationships and 
ability to cross-sell services so as to be 
the provider of choice for the physical and 
social infrastructure needs of our clients.  

20   CARDNO LIMITED 

OPERATIONAL REVIEW

ASIA PACIFIC

Cardno’s Asia Paciﬁc Region comprises  
3,100 professional staff operating from  
more than 60 ofﬁces.

THE REGION 

PROVIDES 36%

OF CARDNO’S  
FEE REVENUE

A$m (i)

Fee revenue

Recoverable expenses

Total revenue

EBITDA

EBITDA margin

The Asia Paciﬁc Region 
provides services in civil, 
structural, water, environmental, 
coastal, bridge, geotechnical, 
subsurface utility, trafﬁc 
and transport engineering, 
as well as environmental 
science, surveying, landscape 
architecture, construction 
materials testing, planning 
and asset management, and 
international development 
assistance.

(i) During the year the Group changed its internal 
reporting structure which resulted in a change to 
its reportable segments. Comparative segment 
information has been represented.

FY2015

FY2014

 361.2 

 136.3 

 497.5 

 49.3 

13.6%

ASIA PACIFIC FEE REVENUE  
BY MARKET FY14 v FY15

6%

8%

31%

28%

 404.4 

 129.8 

 534.2 

 68.0 

16.8%

Inner Circle: 
June 2014

Outer Circle: 
June 2015

10%

17%

15%

19%

32%

34%

Contractors

Oil & Gas

Resources

Government

Other Private

ANNUAL REPORT 2015   21 

ASIA PACIFIC EXECUTIVES

>  Paul Gardiner

Acting General Manager

>  Jamie Alonso

Victoria and International 
Development Assistance

>  Matt Courtney

Construction Sciences 

>  Troy Donovan

Chief Financial Ofﬁcer

>  Michael Drake-Brockman 

Cardno BEC and Western Australia 

>  Geoff Hadwen

Northern Division

>  Janelle Mellor

Human Resources

>  Martin Wells

New South Wales, Australian 
Capital Territory and New Zealand

Far Left: Cardno provided specialist utility engineering 
services for the landmark Sydney Light Rail 
transportation infrastructure project.

Left: The Sydenham Street subdivision is an  
urban regeneration project in the City of Gosnells, 
Western Australia.

Right: Cardno adopts a stringent approach to 
evaluating project and economic feasibility, based 
on rigorous research and experience.

HIGHLIGHTS
Cardno’s Asia Paciﬁc Region was formed 
during FY2015, incorporating the company’s 
Australia and New Zealand Region and 
components of the former Emerging 
Markets Division. 

This new structure allows for improved 
integration of our engineering and social 
infrastructure teams, as well as an 
increased focus on expanding service 
offerings to clients throughout Asia.

The region encountered uneven market 
conditions in FY2015 resulting in fee 
revenue of $361.2 million, down 10.7 per 
cent on the prior year. Our operations 
suffered from a slowdown in resources 
sector expenditure with a decline in global 
commodity prices and lessening demand 
for mining services in divisions such as 
Construction Sciences and BEC/WA.

The change of state governments in 
Victoria and Queensland adversely 
impacted performance following delays and 
cancellations of a number of publicly-funded 
infrastructure programs, particularly in the 
transport sector. 

Cardno also completed work on a number of 
major projects that have yet to be replaced, 
such as INPEX LNG, Legacy Way and the 
Gold Coast Light Rail. 

These conditions resulted in increased market 
competition and the downsizing of a number 
of our operations impacting on the region’s 
EBITDA margin, which declined to 13.6 per 
cent from 16.8 per cent the previous year.

In FY2015, the region reinforced its Zero 
Harm program through the introduction of a 
Health and Safety Management System to 
improve performance and prevent injuries.

Despite the difﬁcult market conditions, the 
Asia Paciﬁc Region’s backlog of future work 
grew 8.8 per cent to $305.5 million and this 
can be partially attributed to recent success 
with infrastructure bids.

Our services to oil and gas clients in 
Australia continue to expand, and we have 
won contracts with new global clients.

Good results were achieved by our teams 
that operate in the transport and property 
sectors in NSW, while urban development 

showed signs of improvement in Queensland, 
and Victoria posted a steady result. 

While our operations in New Zealand 
experienced a decline in revenue, the 
International Development Assistance 
business had a positive year, ﬁnishing well 
ahead of budget.

The Asia Paciﬁc Region did not undertake 
any acquisitions in FY2015, retaining a focus 
on improving service offerings, delivering 
high quality work on numerous small and 
medium-sized projects and strengthening 
relationships with long-term clients. 

FUTURE OUTLOOK
The outlook for the Asia Paciﬁc Region 
remains variable in FY2016 due to the 
continued scaling back of investment in 
mineral and energy developments. This will 
affect the demand for consultancy services, 
intensifying competition for work and 
reducing margins.

Despite the winding back of resources 
activity, Cardno will have opportunities 
to assist clients with the ongoing service 
requirements on major LNG facilities in 
Queensland, Western Australia and PNG.

There are good prospects in the transport 
infrastructure sector, particularly in 
NSW, as governments deliver on funding 
commitments for road and rail projects. 

While there remains uncertainty surrounding 
public sector spending and investment 
conﬁdence in some states, it is expected 
projects delayed from the previous year will 
start up in FY2016.

We are enthusiastic about the collaboration 
opportunities provided by the new regional 
structure, as we aim to increase Cardno’s 
share of the resources, transport and 
environment markets across Asia.

Further efﬁciency measures will be 
implemented in a bid to match our staff 
offerings to client needs, and we will retain 
a steadfast commitment to safety and  
staff development.

Our expertise across a range of disciplines 
will help us navigate the challenges of the 
next 12 months as we work closely with our 
clients to improve communities throughout 
the region. 

22   CARDNO LIMITED 

FINANCIAL  
REVIEW

Challenging markets resulted in a 
signiﬁcant decline in ﬁnancial and 
operational performance for Cardno 
during the 2015 ﬁnancial year. 

FINANCIAL PERFORMANCE

PERFORMANCE (A$m)

Gross Revenue

EBITDA

EBIT

NPAT

NOPAT

Operating Cash Flow

EPS - basic (cents)

NOPAT EPS - basic (cents)

Dividends per share (cents)

Jun-15

1,426.9

108.4

(148.4)

(145.2)

50.3

48.1

(88.32)

30.59

20.0

Jun-14

1,309.6

141.7

115.2

78.1

78.1

84.6

52.04

52.04

36.0

Cardno reported a net operating proﬁt after tax (NOPAT) of $50.3 million, a decline  
of 35.6 per cent over the prior year. Net loss after tax, after the inclusion of a post  
tax non-cash impairment charge of $195.5 million, was $145.2 million. The impairment 
charge is associated with the reduced carrying value of our business in the United 
States and the write-down of part of our Ecuadorian business which is being held  
for sale.

This disappointing set of results reﬂects a slow down in the Asia Paciﬁc Region, 
dominated by the decline of resource-related activity in Australia, combined with a 
lower than expected performance in the Americas. The Americas’ performance is a 
result of variable growth in the markets we serve, costs associated with integration 
and centralisation, and severe impacts of winter weather from December through  
to February.

Gross revenue for the Group was $1.4 billion, an increase of 9 per cent over the prior 
year. Similarly, net fee revenue increased by 5.9 per cent to $1 billion reﬂecting the 

full year contribution of merger partners 
acquired in 2014. Organic fee revenue 
declined by 7.9 per cent during the year 
when the impact of M&A is excluded. Both 
Americas and Asia Paciﬁc reported declines 
in net fee revenue on an organic basis.

Operating EBITDA was $108.4 million for the 
year, a decline of 23.5 per cent over the prior 
year result. The steeper percentage decline 
in EBITDA versus fee revenue reﬂects the 
lower margins earned as Cardno transitioned 
off higher margin, longer-term projects 
in both Asia Paciﬁc and the Americas. 
In addition, the businesses experienced 
higher restructure and redundancy costs 
as management responded to changes in 
market demands. Overall EBITDA margin  
for the year declined to 10.6 per cent versus 
14.7 per cent in FY2014. EBITDA margins 
in Asia Paciﬁc continued to outperform the 
Americas due to business mix.

The post-tax impairment charge of  
$147.9 million associated with the US 
business and the $47.6 million write-
down of our investment in Ecuador. The 
lower-than-expected performance of the 
US business in the second half of FY2015 
triggered a reassessment by management 
of the pace of recovery in that market and a 
downgrade in our future proﬁt expectations. 
As a result, Cardno has written down the 
carrying value of goodwill associated with 
past acquisitions in the Americas region. 

In February 2015, Cardno advised 
shareholders that it was investigating a 
series of transactions in Cardno Caminosca, 
Ecuador. That investigation is ongoing 
and Cardno continues to cooperate with 
the relevant regulatory authorities. In the 
intervening period the economic outlook 
for Ecuador has deteriorated as a result 
of signiﬁcant declines in oil revenue and 
general economic uncertainty. As at 30 
June 2015, that part of the business has 
been written down to its fair value and 
disclosed as held for sale. In addition, 
Cardno has commenced legal action against 

the previous owners of Caminosca S.A. 
for breach of sale and purchase contract 
conditions including representations and 
warranties. Under the terms of the sale 
and purchase agreement this matter is 
now before arbitrators in Florida, USA. It is 
expected that the binding arbitration will be 
resolved in FY2016.

As a result of the impairment charges basic 
earnings per share were negative 88.32 
cents. Excluding these impacts the operating 
earnings per share was 30.59 cents. This 
normalised result was 41.2 per cent lower 
than the prior year. 

The effective tax rate for the group was  
9.1 per cent, reﬂecting the tax effect of 
the impairment charges. On a NOPAT basis 
the effective tax rate was 21.9 per cent in 
FY2015 versus 26.9 per cent in the prior 
year. This rate reﬂects an increase in income 
earned in lower tax jurisdictions largely from 
Cardno PPI and a lower proﬁt contribution 
from the United States operations. We 
expect the taxation rate to return to prior 
year levels of between 27 per cent and  
30 per cent in FY2016.

During the year Cardno commenced 
a restructure of the business with a 
consequent change to the segment 
reporting disclosures. To achieve improved 
cross-selling and integration the Emerging 
Markets business was divided into two 
parts: Asia Paciﬁc and Americas, Europe 
and Africa with these two operations 
being absorbed by the newly-formed Asia 
Paciﬁc Region and the Americas Region 
respectively. Operationally these reporting 
line changes were effected by May 2015. 
In addition, the XP Solutions business 
that develops and distributes engineering 
software has been absorbed into the 
Americas Region. As a result, Cardno will 
now report only two segments, being  
Asia Paciﬁc and the Americas – all tables 
and analysis has been updated to reﬂect 
these changes. 

ANNUAL REPORT 2015   23 

ASIA PACIFIC REGION

The Asia Paciﬁc Region fee revenue declined 
by 10.7 per cent to $361.2 million with a 
consequent reduction in EBITDA margin to 
13.6 per cent from 16.8 per cent in the prior 
year. These results reﬂect the conclusion of 
resource-related major projects in Australia, 
typically at higher margin, and subsequent 
reduced activity in that sector due to 
commodity price volatility, especially for 
the bulk commodities of coal and iron ore. 
Challenged public sector ﬁscal positions 
have inhibited the expected growth in 
infrastructure spend in all Australian states 
except New South Wales. Cardno has been 
fortunate to secure infrastructure planning 
and design work in that state as well as 
securing water and urban development work 
for private sector land developers and local 
authorities in Queensland.

Elsewhere in Australia, Cardno has secured 
signiﬁcant environmental planning and 
remediation work in Victoria for a multi-
national oil and gas company. New Zealand 
was a disappointing market for Cardno in 
FY2015 due to the deferral of some major 
water infrastructure projects as well as a 
rundown in Christchurch work. To counter 
these factors Cardno has opened an ofﬁce in 
Auckland and recruited specialists in service 
areas with increased demand. 

Recent project wins are reﬂected in an 
improved backlog for the Asia Paciﬁc  
region with an 8.8 per cent increase over the 
prior year to $305.5 million. This provides 
some comfort that there is a reasonable 
platform of committed work to support the 
business in FY2016. In addition, subsequent 
to 30 June 2015, Cardno negotiated a 
signiﬁcant multi-year materials testing 
services supply agreement with a multi-
national concrete and quarrying organisation 
adding an additional $100 million to the Asia 
Paciﬁc region backlog.  

Far left: Cardno provided structural engineering services for 
the Tysons Corner Center in McLean, Virginia. Photographer: 
Alan Karchmer

Left: Cardno develops sustainable approaches to 
water resource management by integrating science and 
engineering, economics and regulatory compliance expertise 
with an understanding of natural systems.

24   CARDNO LIMITED 

FINANCIAL PERFORMANCE continued

Segment revenue

EBIT

EBITDA

EBITDA margin*

A$m

Americas

Asia Paciﬁc

2015

 928.9 

 497.5 

2014

 774.4 

 534.2 

2015

(178.2)

 38.8 

2014

 63.2 

 56.4 

2015

 68.2 

 49.3 

2014

 78.1 

 68.0 

2015

10.3%

13.6%

2014

13.9%

16.8%

Total segment

 1,426.4 

 1,308.6 

(139.4)

 119.6 

 117.5

 146.1 

11.5%

15.1%

*Based on fee revenue

There is a positive outlook for the Asia 
Paciﬁc Region with an increase in backlog 
and recent project wins. These indicate that 
the recent restructuring of the business away 
from the resources sector and matching 
of resource levels to market demand are 
starting to pay dividends. We consider the 
eastern states of Victoria, New South Wales 
and Queensland hold the most promise for 
recovery, although we expect this to be 
variable in terms of activity and timing. The 
creation of the Asia Paciﬁc Region has also 
spurred greater activity in the development 
of a broader service offering across Asia 
and we believe that our environmental 
services will be an important component of 
that expansion. Cardno is well positioned in 
terms of stafﬁng levels, geographic coverage 
and service offering to continue to improve 
proﬁtability as the Australian economy pivots 
away from its dependence on the resources 
sector towards an investment in public and 
private infrastructure.

Right: Cardno is a key member of an alliance that will 
deliver new water and wastewater infrastructure to Logan 
City, in Australia, over the next three years.

AMERICAS REGION

The fee revenue in the Americas increased 
by 17.8 per cent in Australian dollar terms to 
$660.9 million but only by 8.5 per cent in US 
dollar terms. This increase reﬂected the full-
year contribution of Cardno Haynes Whaley 
and Cardno PPI. Of these recent acquisitions 
Cardno PPI has faced the headwinds of a 
signiﬁcantly lower oil price and the impact 
this has had on the demand for services. 
This business is performing below the 
expectations that we had at acquisition in 
March 2014, however it continues to be 
proﬁtable and has taken necessary steps to 
match resources to demand.

EBITDA for the region was $68.2 million, 
a decrease of 12.7 per cent compared to 
FY2014. EBITDA margin also declined to 
10.3 per cent for the year from 13.9 per cent 
in FY2014. This reﬂects the completion of 
higher margin, major projects during the 
year without similar replacement projects, 
increased costs associated with normalising 
employee beneﬁts as the businesses are 
integrated, restructure costs including 
centralisation costs and the effects of 
severe winter weather from December 
through to February. 

In response to these challenges the 
Americas Region has been focused on 
ensuring the correct match between 

resources and market demands, operations 
with marginal proﬁtability are being closed, 
co-location of ofﬁces is being accelerated 
and the centralisation of functional support 
in Denver is nearing completion. 

Backlog for the region has increased in  
both Australian and US dollar terms with a  
2.5 per cent increase to US$554.8 million. 
This represents almost 12 months of 
revenue for the region suggesting that 
the business outlook is well supported by 
committed projects. The Natural Resources 
and Health Sciences Division that previously 
completed the work around the Gulf of 
Mexico oil spill has increased its backlog of 
work and continues to see a strong pipeline 
of opportunities. Similarly, after a slower 
than expected recovery in work for the  
US Government, the Government Services 
Division has improved both its backlog  
and ability to bid for task orders. The 
outlook for the Oil and Gas Division will 
continue to be subdued in the operational  
support and development drilling 
areas. However, the quality and asset 
management area has a positive 
outlook and is expected to grow in  
the coming year. The remaining 
parts of our Americas operation are 
expected to perform in line with 
growth in the economy.

ANNUAL REPORT 2015   25 

FINANCIAL POSITION

BALANCE SHEET (A$m)

Trade and other receivables
Inventories
Other assets
Trade and other payables
Other liabilities
Total working capital

Cash and cash equivalents
Loans and borrowings
Net debt*

Other ﬁnancial assets
Property, plant and equipment
Intangible assets
Provisions
Net deferred taxes
Current tax assets / (liabilities)

NET ASSETS

Ratio:

Net debt to EBITDA
Net debt* to equity

2015

266.5
154.6
12.8
(150.6)
(43.9)
239.4

84.8
(396.1)
(311.3)

7.6
64.9
668.3
(47.4)
43.4
4.6

669.5

2014

245.5
142.6
11.2
(137.0)
(49.5)
212.8

85.9
(306.1)
(220.2)

3.6
60.7
751.6
(45.0)
15.9
(15.9)

763.5

2.9
46.5%

1.6
28.8%

* Total loans and borrowings less cash and cash equivalents

Net Assets for the Group declined over FY2014 due to the impact 
of the impairment of the Americas goodwill and the write-down 
of Cardno Caminosca. Absent these impacts the balance sheet is 
largely unchanged, however the lower proﬁtability of the Group 
combined with lower operating cash ﬂow has resulted in an 
increase in the Net Debt position and a deterioration of net debt to 
equity ratio, which increased to 46.5 per cent. Net Debt to EBITDA 
ratio increased to 2.9 times.
The focus of the Group is to signiﬁcantly improve operating cash 
ﬂow through the improvements in working capital performance. 
This will greatly assist in the reduction of debt and an overall 
improvement in key ﬁnancial ratios. The second half of FY2015 
saw a signiﬁcant improvement in cash ﬂow due to changes to 
processes and increased accountability. 
The Group continues to have signiﬁcant ﬁnancial capability with 
$258.9 million of undrawn bank facilities at year end. Total interest 
expense and ﬁnance costs are low, reﬂecting the Group’s ability to 
borrow in US dollars and access the historically low rates available 
in that market without having to put in place ﬁnancial derivatives 
to hedge the Australian dollar. The Group remains within its 
covenant obligations.

CASH FLOW

CASH FLOW (A$m)

Net cash provided by  
operating activities

Investing activities

Acquisition of subsidiaries
Purchase/sale of ﬁxed assets
Purchase of intangible assets

Net cash used in investing activities

Financing activities

Proceeds from issue of shares
Share issue transaction costs
Purchase of own shares
Proceeds from borrowings
Repayment of borrowings
Finance lease payments
Dividends paid

Net cash provided by / (used in) 
ﬁnancing activities

Net increase/(decrease) in cash

Cash at 1 July
Transfer to disposal group held for sale
Effects of exchange rate changes 

Cash at 30 June

2015

2014

48.1

84.6

(11.2)
(23.0)
(1.0)
(35.2)

6.1
(0.0)
1.2
707.2
(688.8)
(2.0)
(42.1)

(191.6)
(19.1)
(0.6)
(211.3)

94.0
(1.0)
9.4
224.8
(152.1)
(2.0)
(50.9)

(18.4)

122.3

(5.5)

85.9
(1.5)
5.9

84.8

(4.4)

90.6
0.0
(0.3)

85.9

After a slow start in the ﬁrst half of FY2015, the Group delivered 
a strong full-year operating cash ﬂow. This was achieved through 
greatly improved working capital management in the second half. 

Cash ﬂows associated with investing activities were down 
signiﬁcantly compared to the prior year due to the absence of any 
merger or acquisition activity. There was the payment of deferred 
settlement amounts to the vendors of GMTS and Haynes Whaley. 
Investment in property plant and equipment was up marginally on 
FY2014 reﬂecting investments in new computer software systems 
and hardware.

Financing activities during the year reﬂect the receipt of the 
proceeds of the US Private Placement funds that were used to 
replace existing bank debit. The Group actively manages the 
amounts drawn down on the revolving bank facilities by applying 
surplus cash to reduce debt levels. Overall cash on hand at year end 
of $84.8 million was broadly ﬂat with the prior year.  

26   CARDNO LIMITED 

DEBT STRATEGY

TERM DEBT REPAYMENT PROFILE 
A$ million

391.4

196.9

64.8

129.7

Existing 
Group Term 
Debt

 Repay 
Dec 2019

 Repay 
Aug 2021

 Repay 
Aug 2024

During FY2015, Cardno completed two 
important funding activities closing its 
debut long term note issue in the US Private 
Placement (USPP) market in August 2014 
and successfully renegotiating an annual 
extension of term of its existing ﬁve-year, 
multi-currency revolving bank debt facilities, 
in December 2014.

The annual extension of term improved 
pricing on Cardno’s bank debt facilities and 
extended maturity until December 2019. 

DIVIDENDS

functional currency given the size of Cardno’s 
signiﬁcant US operations. Cardno’s US dollar 
debt facilities are naturally hedged against 
US dollar investment and revenue streams. 

Cardno’s combined term debt facilities 
comprise the USPP long term note and term 
bank debt facilities of US$480 million and 
working capital facilities of $10 million and 
US$15 million. As at 30 June 2015, Cardno 
has term debt totalling $391.4 million, an 
increase of $88.3 million from FY2014, 
primarily due to AUD/USD foreign exchange 
rate revaluations on US dollar debt of  
$70.2 million. The weighted average interest 
rate of term debt (including the impact of 
interest rate hedges) as at 30 June 2015 is 
1.74 per cent (2014:1.94 per cent). 

Cardno has $258.9 million (2014: $72.1 
million) of undrawn bank debt facilities 
available to support the business through 
both organic and future M&A expansion.

Cardno’s banking partners Commonwealth 
Bank of Australia, Hong Kong and 
Shanghai Banking Corporation, Standard 
Chartered Bank and Westpac Banking 
Corporation collectively provide a strong 
mix of ancillary service capabilities and 
geographical presence supporting Cardno’s 
global operations. 

The long term note includes seven-year 
tranche of US$50 million maturing August 
2021 and US$100 million 10-year tranche 
maturing August 2024. The proceeds  
were used to replace a portion of the 
Group’s existing bank loans and increased 
the Group’s average debt maturity by  
2.1 years. This transaction has allowed 
Cardno to achieve its debt strategy objective 
of establishing its brand in the USPP market 
and developing relationships with blue chip 
institutional investors that it can grow with 
over the long term. 

Simultaneously, Cardno issued ﬁxed to 
ﬂoating US dollar interest rate swaps 
matching the tranches and elected to 
fair value hedge the interest rate risk in 
accordance with AASB139. There was no 
requirement to swap the US dollar note 
proceeds into the Group’s Australian dollar 

Cardno has declared a 7 cent per share fully 
franked ﬁnal dividend for FY2015. This will 
result in a full-year dividend of 20 cents 
per share fully franked. This is below the 
full year dividend of 36 cents per share in 
FY2014 but represents a similar payout 
level of 66 per cent of full year NOPAT. 

The Board has determined to maintain the 
current Dividend Reinvestment Program. 
The Board has determined that it will 
prudently distribute as many franking credits 
as possible. The amount of franking credits 
available will depend on the future mix of 
Australian and international proﬁts.  

Right: Cardno is helping to improve the safety and efﬁciency 
of international and national shipping in the coastal areas 
and waterways of Papua New Guinea.

ANNUAL REPORT 2015   27 

NPAT TO NOPAT RECONCILIATION

Revenue
EBITDA
Depreciation & amortisation
Impairment of intangibles and goodwill
EBIT
Interest expense
Tax beneﬁt / (expense)
NPAT
EPS (basic - cents per share)
Dividend (cents per share)

Statutory Result

FY2015 RESULT (A$m)

Impairment of 
Goodwill

Write down in fair 
value for assets held 
for sale

NOPAT Result

1,426,916
108,406
(32,821)
(224,023)
(148,438)
(11,179)
14,450
(145,168)
(88.32)
20

(177,856)
(177,856)

30,013
(147,843)

(46,167)
(46,167)

(1,442)
(47,609)

1,426,916
108,406
(32,821)
0
75,585
(11,179)
(14,121)
50,284
30.59
20

10 YEAR PERFORMANCE

PERFORMANCE (A$M)

Revenue

EBITDA

EBIT

NPAT

NOPAT

Operating Cash Flow

EPS - basic (cents)

NOPAT EPS - basic (cents)

Dividend per share (cents)

SEGMENT REVENUE

2006

2007

2008

2009

2010

 186.8 

 265.3 

 399.0 

 515.8 

 477.2 

 25.6 

 22.1 

 12.7 

 12.7 

 13.4 

 31.37 

 31.37 

 19.0 

 33.2 

 28.0 

 18.5 

 18.5 

 25.8 

 37.29 

 37.29 

 22.5 

 50.6 

 42.5 

 27.5 

 27.5 

 37.5 

 42.00 

 42.00 

 27.0 

 57.7 

 46.7 

 34.2 

 34.2 

 38.6 

 43.82 

 43.82 

 28.0 

 55.3 

 46.5 

 37.6 

 37.6 

 46.8 

 43.86 

 43.86 

 29.0 

2011

 831.2 

 100.2 

 88.0 

 58.8 

 58.8 

 73.5 

 56.29 

 56.29 

 34.0 

2012

2013

2014

2015

 965.8 

 1,195.4 

 1,309.6 

 1,426.9 

 128.7 

 111.1 

 74.2 

 74.2 

 72.6 

 61.73 

 61.73 

 36.0 

 138.0 

 114.3 

 77.6 

 77.6 

 95.7 

 55.09 

 55.09 

 36.0 

 141.7 

 115.2 

 78.1 

 78.1 

 84.6 

 52.04 

 52.04 

 36.0 

108.4

(148.4)

(145.2)

50.3

 48.1 

(88.32)

30.59

 20.0 

Americas

Asia Paciﬁc

15.4

171.0

51.1

213.9

129.9

267.3

215.2

299.2

193.6

282.3

510.3

319.0

522.0

441.9

664.2

529.8

774.4

534.2

928.9

497.5

SEGMENT RESULT (before ﬁnancing costs and taxation)

Americas

Asia Paciﬁc

1.1

20.7

4.1

23.5

8.5

32.2

11.4

32.3

13.8

35.5

54.5

35.5

51.9

58.5

59.8

62.2

63.2

56.4

(178.2)

38.8

28   CARDNO LIMITED 

BOARD OF 
DIRECTORS

To view each director’s full proﬁle,  
see pages 33 - 35, or visit  
www.cardno.com

Board proﬁles listed left to right.

Ian Johnston
DipCM, GradDip App Fin & Inv, ASIA, 
ACSA, ACIS, FAICD

Non-Executive Director
Age 66

> 

Ian Johnston became a Non-
Executive Director of Cardno 
Limited in November 2004, 
bringing with him extensive 
experience in treasury, 
corporate banking and equity 
capital markets.

>  Following a career in the 

banking industry, Ian joined 
Morgans Stockbroking Limited 
in 1988 as an Executive Director 
and Head of Corporate Finance 
and was Chairman Corporate 
Finance until his retirement in 
October 2013.  

>  He is currently an independent 
Non-Executive Director of 
Data#3 Limited.

Tonianne Dwyer
BJuris (Hons), LLB (Hons), GAICD

Non-Executive Director
Age 52

Anthony (Tony) Barnes
BCom

Non-Executive Director
Age 65

Grant Murdoch
M Com (Hons), FAICD, FICAA

Non-Executive Director
Age 63

>  Tonianne Dwyer became a Non-
Executive Director of Cardno 
Limited in June 2012.

>  Tony Barnes has been a Non-
Executive Director of Cardno 
since July 2008.

>  Grant Murdoch became a  
Non-Executive Director of 
Cardno Limited in January 2013.

>  She is also a Non-Executive 
Director of DEXUS Property 
Group and of DEXUS Wholesale 
Property Fund, a Non-Executive 
Director of Metcash Limited 
and a Director of Queensland 
Treasury Corporation.

>  Tonianne’s executive career 

has included roles as Executive 
Director and Head of Funds 
Management at Quintain 
Estates and Development.

>  He was formerly the Chief 
Financial Ofﬁcer of Zinifex 
Limited, an international  
mining, exploration and 
development company.

>  Tony is also a Director of the 
Victorian Rugby Union Inc,  
the Parent-Infant Research 
Institute and the Leo Cussen 
Centre for Law.

>  For eight years, up to his 

retirement from the practice 
in July 2011, he headed the 
Corporate Finance team for Ernst 
& Young in Queensland Australia.

>  He is an independent  

Non-Executive Director of  
ALS Limited, OzForex Limited 
and QIC Limited, and is 
Chairman of the Board of 
Directors of The Endeavour 
Foundation and Senator of the 
University of Queensland.

ANNUAL REPORT 2015   29 

John Marlay
B.Sc. (Chemistry major), FAICD

Chairman
Age 66

Richard Wankmuller
BCE, MCSE

Chief Executive Ofﬁcer and 
Managing Director

Age 57

Trevor Johnson
BE, MEngSc, PhD, FIEAust, CPEng,  
RPEQ, MAICD

Executive Director
Age 58

Elizabeth Fessenden
MBA, MS Systems Engineering,  
BS Electrical Engineering 

Non-Executive Director
Age 60

>  John Marlay joined Cardno 
as a Non-Executive Director 
in November 2011 and was 
appointed Chairman in  
August 2012.

>  From 2002 to 2008, he held 

the position of Chief Executive 
Ofﬁcer and Managing Director 
of Alumina Limited.

>  Prior to that, John also held 
executive management 
positions with James Hardie Ltd 
and Esso Australia Ltd.

>  Richard joined Cardno as Chief 

>  Trevor Johnson has been a 

Executive Ofﬁcer and Managing 
Director in 2015. 

>  He has more than 30 years’ 
experience in professional 
engineering services, 
implementing several successful 
growth and transformation 
strategies across international 
and domestic markets.

>  Prior to joining Cardno, Richard 
was a Director of GHD Group 
Pty Limited and President 
of GHD Americas, where he 
helped grow the ﬁrm from 350 
employees to about 4,000.

Director of the Cardno Group 
since 1996, and an employee  
of the company for more than 
35 years.

>  He is also a member of the 
Executive Leadership Team 
which oversees Cardno’s 
worldwide operations and 
assists the Managing Director in 
running the company.

>  Trevor has more than 35 years’ 
experience as a civil engineer, 
with special expertise in the 
ﬁelds of hydraulics, water quality 
and environmental analysis.

>  Elizabeth Fessenden joined 
Cardno as a Non-Executive 
Director in June 2014. 

>  She is retired from a career with 
Alcoa where she last held the 
position of president of their 
worldwide ﬂexible packaging 
business.

>  She is currently an independent 
non-executive director for 
Quarles Petroleum and was 
previously a director for Polymer 
Group Inc. from 2008-2011 and 
a Trustee for Clarkson University 
from 1990-2012. 

30   CARDNO LIMITED 

SENIOR 
EXECUTIVES

Executive proﬁles listed left to right.

Cardno is 
helping to shape 
the future for 
communities 
around the world. 

Richard Wankmuller 
Chief Executive Ofﬁcer  
and Managing Director

Graham Yerbury 
Chief Financial Ofﬁcer

As Chief Executive Ofﬁcer and Managing 
Director, Richard is responsible for growth, 
performance, proﬁtability, marketing, 
operations, client relations and technical 
development. In addition to managing the 
company, he spends time meeting with the 
investment community, giving presentations 
and roadshows, and hosting discussions with 
industry analysts and shareholders.

Richard manages Cardno’s interaction with 
the media and other public engagements and 
maintains relationships with major clients and 
Cardno’s senior executives. He also has a deep 
understanding of client service delivery and 
plays a signiﬁcant role identifying and executing 
merger opportunities.

Richard joined Cardno in 2015 and has more 
than 30 years’ experience in professional 
engineering services.

Graham joined Cardno in March 2013 to  
oversee the ﬁnancial, treasury, accounting,  
tax, commercial, risk management and internal 
audit services.

He also leads the company’s investor relations, 
statutory and corporate governance functions. 
Graham has held senior ﬁnancial management 
positions in several countries, including that 
of chief ﬁnancial ofﬁcer in several ASX listed 
companies.

He has extensive experience in large multi-
national mining and oil and gas companies,  
and is highly skilled in capital raising,  
business integration, governance and 
shareholder engagement.

Graham resigned from Cardno in July 2015 to 
pursue an opportunity in the oil and gas sector 
and will leave the company in October.

ANNUAL REPORT 2015   31 

Trevor Johnson 
General Manager  
Global Technical Leadership

Kylie Sprott
General Manager  
Global Business Services

Paul Gardiner 
General Manager Americas 
Acting General Manager Asia Paciﬁc

Trevor Johnson has a multi-disciplinary role 
supporting the enhancement of Cardno’s 
technical reputation and capabilities, as well as 
acting as a link between operational units and 
business service functions of the company. 
As a member of the Executive Leadership Team, 
he has a principal role in assisting the Managing 
Director and the other members of the team with 
communication activities with both internal and 
external stakeholders.

Trevor has been an Executive Director of the 
Cardno group since 1996, and an employee of 
the company for more than 35 years. He holds 
Bachelor, Masters and Doctoral degrees in civil 
engineering from the University of Queensland, 
and is a water engineering specialist. Trevor 
maintains signiﬁcant connections with the 
professional engineering community, and was 
recently appointed as an Adjunct Professor in 
the School of Civil Engineering at the University 
of Queensland. He remains signiﬁcantly involved 
in the company’s operational activities, and is 
frequently commissioned as a technical expert 
witness on civil engineering matters.

Kylie Sprott manages Cardno’s global 
business services team including Information 
Technology, Human Resources, Marketing and 
Communications, and Health, Safety, Security, 
Environment and Quality.

Kylie also holds the position of Global Human 
Resources Manager which includes overseeing 
the company’s succession and development 
programs, including Cardno University.

She plays a key role in the cultural due diligence 
aspect of merger and acquisition activities and is 
chair to several resulting integration committees. 

Kylie is the Chairperson of the Women in Cardno 
Governing Body that works to improve the 
diversity of the workforce. In addition, Kylie 
leads the Grow Cardno initiative that is focused 
on improving organic growth across Cardno’s 
global business.

As General Manager of Cardno’s Americas 
Region, Paul leads about 5,000 staff across 
190 ofﬁces in North and South America. During 
his tenure, Paul has strengthened Cardno’s 
core capabilities in the oil and gas, mining and 
natural resource management sectors. He has 
also focused on creating operational efﬁciencies 
by aligning services and enabling Cardno 
professionals to seamlessly deliver diverse 
services to address complex client challenges.

In FY2015, Paul also oversaw Cardno’s Asia 
Paciﬁc business, which has nearly 3,000 staff 
operating from more than 60 ofﬁces. The 
region provides services in civil, structural, 
water, environmental, coastal, bridge, water 
infrastructure, geotechnical, subsurface utility, 
trafﬁc and transport and building services 
engineering, as well as environmental science, 
survey, landscape architecture, construction 
materials testing, and planning.

32   CARDNO LIMITED 

FINANCIAL 
REPORT

33  Directors’ Report

53  Consolidated Statement of Financial Performance

53  Consolidated Statement of Comprehensive Income

54  Consolidated Statement of Financial Position

55  Consolidated Statement of Changes in Equity

56  Consolidated Statement of Cash Flows

57  Notes to the Financial Statements

98  Directors’ Declaration

99 

Independent Auditor’s Report

101 Additional Shareholder Information

104 Corporate Directory

FINANCIAL CALENDAR

2014/2015
Record Date for Final Dividend 
Final Dividend Paid 
Annual General Meeting 

2015/2016
Half-Year End  
Half-Year Results Announced 

Note: Dates subject to alteration

8 September 2015
2 October 2015
23 September 2015

31 December 2015
23 February 2016

Left: Cardno is at the forefront of planning the world we live in. Our work is underpinned by 
a necessity to be forward-thinking, resourceful and contemporary.

DIRECTORS’ 
REPORT

Cardno Limited and its Controlled Entities  
for the year ended 30 June 2015

The Directors present their report 
together with the consolidated financial 
statements of Cardno Limited (the 
Company) being the Company and the 
entities it controlled at the end of, or 
during, the year ended 30 June 2015.

ANNUAL REPORT 2015   33 

1:  DIRECTORS

The Directors of the Company in office during or since the year 
ended 30 June 2015 are set out below:

John Marlay (Chairman - Non-Executive) 

Anthony Barnes (Non-Executive)

Tonianne Dwyer (Non-Executive)

Elizabeth Fessenden (Non-Executive)

Trevor Johnson (Executive)

Ian Johnston (Non-Executive)

Grant Murdoch (Non-Executive)

Michael Renshaw (Managing Director – Executive) 
(resigned 12 January 2015)

Graham Yerbury (Acting Managing Director – Executive) 
(12 January 2015 – 29 June 2015)

Richard Wankmuller (Managing Director – Executive) 
(appointed 29 June 2015)

Details of the qualifications, experience and responsibilities of the 
Directors follow.

John Marlay - Chairman
B.Sc. (Chemistry major), FAICD
Age 66

John Marlay joined Cardno as a Non-Executive Director in November 
2011 and was appointed Cardno Chairman in August 2012. He is also 
a Non-Executive Director of Incitec Pivot Limited (since 2006), Boral 
Limited (since 2009) and Independent Chairman of Flinders Ports 
Holdings Limited (since 2013).

From 2002 to 2008 John held the position of Chief Executive Officer 
and Managing Director of Alumina Limited.

John held various senior management roles with Pioneer 
International Limited and Hanson PLC from 1995 to 2002. Prior to that 
John also held executive management positions with James Hardie 
Ltd and Esso Australia Ltd.

SPECIAL RESPONSIBILITIES 
John is Chairman of the Nominations Committee and a member of 
the Remuneration Committee.

34   CARDNO LIMITED 

Richard Wankmuller -Chief Executive Officer  
and Managing Director
BCE, MCSE
Age 57

Tonianne Dwyer - Non-Executive Director
BJuris (Hons), LLB (Hons), GAICD
Age 52

Richard joined Cardno as Chief Executive Officer and Managing 
Director in 2015. 

He has more than 30 years’ experience in professional engineering 
services, implementing several successful growth and transformation 
strategies across international and domestic markets.

Prior to joining Cardno, Richard was a Director of GHD Group Pty 
Limited and President of GHD Americas, where he helped grow the 
firm from 350 employees to about 4,000.

Tonianne Dwyer became a Non-Executive Director of Cardno  
Limited in June 2012. She is also a Non-Executive Director of  
DEXUS Property Group and of DEXUS Wholesale Property Fund, a 
Non-Executive Director of Metcash Limited and a Non-Executive 
Director of Queensland Treasury Corporation.

Tonianne’s executive career has included roles as Executive 
Director and Head of Funds Management at Quintain Estates and 
Development (2003-2010), and Director, Investment Banking at 
Societe Generale/SG Cowen/Hambros Bank in London (1987-2003).

From 2007 to 2010, he had global responsibility for Parsons’ Water 
and Infrastructure business. During this time Parsons moved their 
global market position from outside the top 20 to number eight.

SPECIAL RESPONSIBILITIES
Tonianne is a member of the Audit, Risk & Compliance Committee 
and the Nominations Committee.

Prior to joining Parsons, he spent 17 years in senior executive roles 
at international infrastructure engineering company, MWH, working 
across the water, infrastructure, environment, construction, mining, 
and oil and gas industries.

He was also a member of GHD’s Board of Directors from 2013 to 
2015, and served on MWH’s parent company’s Board of Directors 
(MWH Global Inc.) from 2002 to 2007.

Anthony (Tony) Barnes - Non-Executive Director
BCom
Age 65

Tony Barnes has been a Non-Executive Director of Cardno since  
31 July 2008. He was formerly the Chief Financial Officer of Zinifex 
Limited, an international mining, exploration and development 
company. He also held the position of Chief Executive Officer of 
Zinifex Limited for a period.

He played a key role in the successful IPO of Zinifex Limited in May 
2004 and in its subsequent restructure, culminating in the merger with 
Oxiana Limited in July 2008 to form Oz Minerals Limited. Tony has 
extensive financial experience following a career which included more 
than 32 years with BHP, both within Australia and internationally.

Tony is also a Director of the Victorian Rugby Union Inc, the Parent-
Infant Research Institute and the Leo Cussen Centre for Law.

SPECIAL RESPONSIBILITIES
Tony is Chairman of the Audit, Risk & Compliance Committee and a 
member of the Remuneration Committee.

Elizabeth Fessenden - Non-Executive Director 
MBA, MS Systems Engineering, BS Electrical Engineering 
Age 60

Elizabeth Fessenden joined Cardno as a Non-Executive Director on 1 
June 2014. She is retired from a career with Alcoa where she last held 
the position of president of worldwide flexible packaging business. 

Elizabeth’s US-based Alcoa career also included positions in 
engineering management, marketing, smelting plant management, 
and executive development and staffing. Early in her career she held 
a Professional Engineering license. 

Following her retirement from Alcoa, she joined a private equity firm 
where she advised portfolio company executive teams and served on 
the boards of several manufacturing companies. 

In May 2014, she completed her six year term as a director of O’Brien 
& Gere, a consulting engineering firm in the US. She is currently an 
independent non-executive director for Quarles Petroleum. 

Previously she was a director for Polymer Group Inc. from 2008-2011 
and a Trustee for Clarkson University from 1990-2012. 

As an experienced corporate and not-for-profit board director, she is 
cited for driving change and adding value in the area of operations, 
financials and strategic direction. 

SPECIAL RESPONSIBILITIES
Elizabeth is a member of the Remuneration Committee.

ANNUAL REPORT 2015   35 

Trevor Johnson - Executive Director
BE, MEngSc, PhD, FIEAust, CPEng, RPEQ, MAICD 
Age 58

Grant Murdoch - Non-Executive Director 
M Com (Hons), FAICD, FICAA
Age 63

Trevor Johnson has been a Director of the Cardno group since 1996, 
and an employee of the company for more than 35 years. He is also a 
member of the Executive Leadership Team which oversees Cardno’s 
worldwide operations and assists the Managing Director in running 
the company.

In his executive role as General Manager Global Technical 
Leadership, Trevor is primarily responsible for the maintenance of 
technical capability and standards across the group. He also carries 
out a number of acquisition, coordination and communication 
activities within Cardno.

Trevor has more than 35 years’ experience as a civil engineer, 
with special expertise in the fields of hydraulics, water quality and 
environmental analysis. He remains significantly involved in the 
company’s operational activity and is frequently commissioned as a 
technical expert witness on engineering matters. In 2015, Trevor was 
appointed as an Adjunct Professor in the School of Civil Engineering 
at the University of Queensland.

Ian Johnston - Non-Executive Director
DipCM, GradDip App Fin & Inv, ASIA, ACSA, ACIS, FAICD
Age 66

Ian Johnston became a Non-Executive Director of Cardno Limited in 
November 2004, bringing with him extensive experience in treasury, 
corporate banking and equity capital markets.

Following a career of nearly 25 years in the banking industry, Ian 
joined Morgans Stockbroking Limited (now Morgans Financial 
Limited) in 1988 as an Executive Director and Head of Corporate 
Finance. He was Chairman Corporate Finance until his retirement in 
October 2013. He remains a member of its Advisory Board.

Ian has served as a director of ASX-listed companies, private 
companies, government-owned corporations and not-for-profit 
organisations. He is currently an independent Non-Executive Director 
of Data#3 Limited. Ian is a Fellow of the Australian Institute of 
Company Directors.

SPECIAL RESPONSIBILITIES
Ian is a member of the Audit, Risk & Compliance Committee and the 
Nominations Committee.

Grant Murdoch became a Non-Executive Director of Cardno Limited 
in January 2013. Grant is a Chartered Accountant with over 38 
years of experience as a partner in audit and corporate finance with 
international accounting firms. For eight years, up to his retirement 
from the practice in July 2011, he headed the Corporate Finance team 
for Ernst & Young in Queensland Australia.

He is an independent Non-Executive Director of ALS Limited, OzForex 
Limited and QIC Limited, and is Chairman of the Board of Directors 
of The Endeavour Foundation and Senator of the University of 
Queensland. He is a Non-Executive Director of UQ Holdings and an 
Adjunct Professor of the BEL faculty at UQ.

Grant is a Fellow of the Australian Institute of Company Directors 
and a Fellow of the Institute of Chartered Accountants in Australia. 
He has a Master of Commerce (Honours) from the University of 
Canterbury, New Zealand and is a Graduate of the Kellogg Advanced 
Executive Program at the North Western University, Chicago USA.

SPECIAL RESPONSIBILITIES
Grant is a member of the Audit, Risk & Compliance Committee and 
Chairman of the Remuneration Committee.

2:  COMPANY SECRETARY

Michael Pearson LLB, BA, ACIS, GAICD (Company Secretary).

3:  PRINCIPAL ACTIVITIES

The principal activity of the consolidated entity during the financial 
year was operating as a professional infrastructure and environmental 
services company, with expertise in the development and improvement 
of physical and social infrastructure for communities around the world. 
There were no changes to the principal activities of the Cardno Group 
during the financial year under review. 

36   CARDNO LIMITED 

4:  REVIEW OF RESULTS AND OPERATIONS

PERFORMANCE (A$m)
Revenue

EBITDA*

EBIT

NPAT

NOPAT**

Operating Cash Flow

EPS - basic (cents)

NOPAT EPS - basic (cents)

Dividend per share (cents)

2015
1,426.9

108.4

(148.4)

(145.2)

50.3

48.1

(88.32)

30.59

20.0

2014
1,309.6

141.7

115.2

78.1

78.1

84.6

52.04

52.04

36.0

* EBITDA = EBIT plus depreciation and amortisation and impairment losses

** NOPAT = NPAT plus tax effected impairment losses

EBITDA and EBIT are unaudited. However, they are based on amounts extracted from 
the audited financial statements as reported in the consolidated statement of financial 
performance on page 53. These metrics provide a measure of Cardno’s performance 
before the impact of non-cash expense items, such as depreciation and amortisation and 
impairment losses, as well as interest costs associated with Cardno’s external debt facility 
and hire purchase arrangements.

NOPAT is unaudited. However it is based on amounts extracted from the audited financial 
statements. Refer to the NPAT to NOPAT reconciliation on page 27. This metric provides a 
measure of Cardno’s operating performance before the impact of one off adjustments such 
as impairment losses write down to fair value for assets held for sale incurred during the 
current financial year.

A detailed analysis of the financial performance of Cardno is set 
out in the Financial Review and Operations Review Sections of the 
Annual Report. The Directors report that Cardno’s result for the year 
ended 30 June 2015 showed a significant decline from FY2014 due to 
challenging markets in Australia and the United States.
Highlights of Cardno’s financial performance are as follows:
 > Cardno delivered a net operating profit after tax (NOPAT) of 

$50.3 million for FY2015. This was a 35.6 per cent decrease from 

5:  DIVIDENDS

FY2014. Net loss after tax, after the inclusion of a post tax non-
cash impairment charge of $195.5 million, was $145.2 million. 
The impairment charge is associated with the reduced carrying 
value of our business in the United States and the write down of 
part of the Ecuadorian business which is being held for sale.

 > Revenue of $1,426.9 million was up 9.0 per cent on FY2014. 

This was mainly due to full year contributions of FY2014 merger 
partners. Organic revenue declined for the second year in a row 
as long term major projects in Australia and the United States 
wound down without similar engagements to replace them.

 > Cardno achieved an EBITDA of $108.4 million in FY2015 which 
is a decrease of 23.5 per cent compared to the record EBITDA 
achieved in FY2014. The steeper percentage decline in EBITDA 
versus fee revenue reflects the lower margins earned as Cardno 
transitioned off higher margin longer term projects in both Asia 
Pacific and the Americas. In addition, the businesses experienced 
higher restructure and redundancy costs as management 
responded to changes in market demands.

 > Basic earnings per share (EPS) was negative 88.32 cents  

per share as a result of the impairment charges recognised. 
Excluding these impacts the operating earnings per share was 
30.59 cents. This operating result is a decrease of 41.2 per cent 
over FY2014. 

 > Cardno achieved an operating cash flow of $48.1 million which 
represents a solid result at 96 per cent of NOPAT. This result 
however represents a 43.1 per cent decrease on FY2014.
 > The Board has declared a final dividend of 7 cents per share  
(100 per cent franked) to be paid on 2 October 2015 to all 
shareholders registered on 8 September 2015. With the interim 
dividend of 13 cents per share (100 per cent franked) in April 
2015, this will result in a full year dividend of 20 cents per share 
(100 per cent franked), which is a 44.4 per cent decrease to that 
delivered in FY2014.

Dividends paid or declared by the Company to members since the end of the previous financial year were:

Type

Declared and paid during the year

- Final 2014 ordinary

- Interim 2015 ordinary

Declared after end of year

- Final 2015 ordinary

Dealt with in the financial report as:

- Dividends paid or provided

- Noted as a subsequent event (note 29)

Cents per share

Total amount 
$’000

Franked

Date of payment

17.0

13.0

7.0

28,060

21,391

100%

100%

10 October 2014

7 April 2015

11,594

100%

2 October 2015

49,451

11,594

61,045

ANNUAL REPORT 2015   37 

6:  EVENTS SUBSEQUENT TO THE REPORTING DATE

9: 

INDEMNIFICATION AND  
INSURANCE OF OFFICERS

The Company has agreements with each of the Directors and Officers 
of the Company in office at the date of this report indemnifying 
them against liabilities to any person other than the Company or a 
related body corporate that may arise from their acting as Directors 
or Officers of the Company. The indemnity continues to have effect 
when the Directors and Officers cease to hold office, other than 
where such liabilities arise out of conduct involving a wilful breach of 
duty by the Officers or the improper use by the Directors or Officers of 
their position or of information to gain advantage for themselves or 
someone else or to cause detriment to the Company.

The Directors have not included details of the nature of the 
liabilities covered or the amount of the premium paid in respect 
of the Directors’ and Officers’ liability, as such disclosures are 
prohibited under the terms of the contract.

On 17 August 2015, the Directors of Cardno Limited declared a 
final dividend of 7 cents per share (100 per cent franked) for the 
2015 financial year. The dividend will be paid on 2 October 2015 
to shareholders registered on 8 September 2015 and will total 
$11,594,347. The dividend has not been provided for in the  
30 June 2015 financial statements.

7:  LIKELY DEVELOPMENTS

Cardno will continue to manage its global business in physical 
and social infrastructure and pursue its policy of growing both 
organically and by acquisition during the next financial year.

8:  SIGNIFICANT CHANGES IN THE  

STATE OF AFFAIRS

Other than as disclosed elsewhere in this Directors’ Report,  
there have been no significant changes in the state of affairs since 
30 June 2014.

10:  DIRECTORS’ MEETINGS

Attendance at Board meetings and Board Committee meetings for the year ended 30 June 2015 is set out below:

No. of Meetings Held

A H Barnes

T Dwyer

E A Fessenden

T C Johnson

I J Johnston

J Marlay

G Murdoch

M J Renshaw (i)

R N Wankmuller (ii)

G K Yerbury (iii)

- = not a member of this committee

A = number of meetings attended.

Board of 
Directors

Audit, Risk & 
Compliance 
Committee

Remuneration 
Committee

Nominations 
Committee

A

18

19

19

19

19

19

17

8

-

9

B

19

19

19

19

19

19

19

8

-

9

A

4

4

-

-

4

-

4

-

-

-

B

4

4

-

-

4

-

4

-

-

-

A

7

-

8

-

-

7

8

-

-

-

B

8

-

8

-

-

8

8

-

-

-

A

-

5

-

-

5

5

-

-

-

-

B

-

5

-

-

5

5

-

-

-

-

B = number of meetings held during the time the Director held office during the year or was a committee member.

(i) Michael Renshaw resigned from the Board on 12 January 2015.

(ii) Richard Wankmuller was appointed to the Board on 29 June 2015.

(iii) Graham Yerbury was appointed to the Board on 12 January 2015 and resigned on 29 June 2015.

 
 
38   CARDNO LIMITED 

11:  REMUNERATION REPORT - AUDITED

The Directors of Cardno Limited present the Remuneration Report 
for the Company for the financial year ended 30 June 2015. The 
information contained in the Report, which forms part of the 
Directors’ Report, has been audited by KPMG.

This Report details remuneration information for the Managing 
Director, Key Management Personnel and Non-Executive Directors 
who have responsibility for controlling the activities of Cardno.

TABLE OF CONTENTS

PAGE

11.1

11.2

11.3

11.4

11.5

11.6

11.7

11.8

How does the Company’s remuneration strategy 
take into account shareholders’ interests?

How is executive pay structured at Cardno?

How does company performance impact on 
executives’ remuneration?

How is Cardno’s short term program structured 
and how does it drive value for shareholders?

How is Cardno’s long term incentive  
program structured and how does it drive value 
for shareholders?

Managing Director and Key Management 
Personnel Employment Agreements

How is Non-Executive Director pay structured?

The Value and Measure of LTI in 2015

39

39

41

42

43

44

45

48

SUMMARY OF REMUNERATION MATTERS IN 2015
Cardno’s group remuneration strategy is designed to attract, 
retain and incentivise qualified and experienced Key Management 
Personnel in the engineering, environment and professional 
consulting services sector.

In June 2015 Richard Wankmuller was appointed Chief Executive 
Officer and Managing Director of Cardno taking over from Chief 
Financial Officer Graham Yerbury who had performed the role in 
an acting capacity since January 2015 following the resignation of 
Michael Renshaw. 

Other key executive changes were undertaken to streamline the 
Executive Leadership Team (ELT). The roles of General Manager 
Australia and New Zealand performed by Mr Roger Collins-Woolcock 
and Division Manager Emerging Markets, performed by Ross 
Thompson were made redundant. A new role of General Manager 
Asia Pacific was created and continues to be performed in an acting 
capacity by Paul Gardiner, General Manager Americas pending 
completion of the recruitment process for the position. A new 
executive role, General Manager Strategic Business Development 
was created and will be filled in early FY2016. 

Due to the failure of the Company to meet specific financial goals, 
Key Management Personnel and the Acting CEO did not earn any 
Short Term Incentives (STI) in FY2015.

Long Term Incentives (LTI) were awarded to Key Management 
Personnel for the 2015 year to continue to drive the long term 
performance of the business. It is proposed to seek shareholder 
approval for Mr Wankmuller’s LTI at the Annual General Meeting in 
September 2015.

OUTLOOK FOR 2016 REMUNERATION 
Changes planned for the remuneration structure in 2016 are 
adjustments to the weighting of STI for “at target” goals and for 
outperformance. It is also planned to increase the percentage of fixed 
annual remuneration available to be awarded as an LTI. This means 
a significant proportion of Key Management Personnel remuneration 
will continue to be “at risk” and subject to specific financial and non-
financial key performance indicators (KPI’s).

During FY2016, a targeted retention incentive will be introduced 
for certain key management to support the retention of a stable 
senior leadership team during the important business transformation 
underway. This is designed to improve Cardno’s financial performance 
and to grow shareholder value as a result. The retention incentive will 
be issued in the form of retention rights to acquire ordinary shares 
for no consideration and will vest 24 months from date of issue if the 
executive remains employed with Cardno. No performance conditions 
will attach to retention rights.

ANNUAL REPORT 2015   39 

11:  REMUNERATION REPORT - AUDITED CONTINUED

11.1 

How does the Company’s remuneration strategy take 
into account shareholders’ interests?

The ability of Cardno to deliver long term shareholder value relies 
significantly upon the capability of Key Management Personnel to 
drive business performance and growth, employee engagement, 
client service satisfaction, safety and quality.

Cardno’s financial performance and resultant benefits for shareholder 
return are demonstrated in the below table.

Despite the decline in FY2015 net profit, over the past five years, 
Cardno’s revenue has grown from $831.2m (2011) to $1,426.9m 
(2015). During the same period average Key Management Personnel 
(excluding executive and non-executive directors) total remuneration 
has increased by approximately 7.3 per cent per annum.

Gross Revenue (000’s)

Net Profit / (Loss) After Tax (000’s)

Dividends Paid or Provided (000’s)

Change in Share Price – year on year ($ per share)

Basic Earnings Per Share Growth

Return on Capital Employed

Total Key Management Personnel Remuneration (000’s) (i)

(i) Key Management Personnel excluding executive and non-excutive directors.

2015

2014

2013

2012

2011

$1,426,916

$1,309,597

$1,195,352

$965,820

$831,201

($145,168)

$49,452

($3.09)

(269.7%)

(22.2%)

$3,175

$78,134

$56,530

$1.14

(5.5%)

15.1%

$2,819

$77,639

$50,766

($2.38)

(10.8%)

17.6%

$3,707

$74,168

$43,488

$2.18

9.7%

20.5%

$3,534

$58,802

$33,975

$1.49

28.3%

24.9%

$2,446

11.2 

How is executive pay structured at Cardno?

Cardno’s remuneration strategy is offered through a mix of fixed and 
variable remuneration including short and long term performance-
based incentives (Total Remuneration). This is designed to maximise 
the financial performance and growth of the Company over time. 

Exceptional performance by Key Management Personnel which 
exceeds at-target performance outcomes can result in Total 
Remuneration for that person being towards the 75th percentile 
compared to similar roles in the comparator group (which is detailed 
in section 11.5 on page 43).

The primary source for remuneration benchmarking is a group of 
Australian listed companies in the Industrial Sector in the range 
of half to double Cardno’s market capitalisation. For the Managing 
Director and Key Management Personnel, remuneration levels for 
comparable roles in appropriate international jurisdictions are also 
taken into account.

The Cardno Board retains discretion in approving the Managing 
Director’s and the Key Management Personnel’s STI payment and for 
the awarding of any Performance Rights as a LTI award under the 
Performance Equity Plan (PEP).

STI rewards the achievement or exceeding of both financial and 
non-financial group, divisional, and personal objectives. The STI also 
provides alignment with shareholder rewards through improved short 
term earnings growth and business development. 

LTI rewards Key Management Personnel for Cardno’s performance 
over a three year period. The LTI provides a retention element through 
an exposure to Cardno equities and an alignment with shareholder 
rewards through increasing total shareholder return (TSR).

Fixed Annual Remuneration (FAR) for Key Management Personnel is 
generally targeted at median levels compared to similar roles in the 
Cardno comparator group. 

The remuneration of the Managing Director and Key Management 
Personnel are set out in the table on the following page. 

40   CARDNO LIMITED 

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(

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNUAL REPORT 2015   41 

11:  REMUNERATION REPORT - AUDITED CONTINUED

During FY2015, Michael Renshaw and Roger Collins-Woolcock ceased 
employment with Cardno. Amounts paid to both as part of their 
employment contracts and deeds of release, have been recognised in 
the above remuneration table as termination benefits. The breakdown 
of these termination benefits are detailed below.

Payment in 
lieu of notice

Redundancy 
Severance

Accrued 
Leave 

Performance 
Rights(i)

Total 
Termination 
Benefits

573,749 

-   

155,174 

204,013 

932,936 

192,170 

269,043 

138,260 

129,315 

728,788 

Executive Director

Michael Renshaw 
(resigned 12/01/2015)

Executives

Roger Collins-Woolcock 
(ceased 29/01/2015)

(i) The Performance Rights termination benefits provided, relate to unvested Performance Rights which Michael Renshaw and Roger Collins-Woolcock retain on ceasing employment 
and remains subject to EPS and TSR performance conditions details on page 43.

11.3 

How does company performance impact on 
executives’ remuneration?

Executives

Name

STI FY2015

STI FY2014

LTI FY2015

LTI FY2014

Potential  
$

Awarded 
%

Paid   
%

Potential  
$

Paid   
%

Performance 
Rights 
Granted (i)

To Vest 
%

Performance 
Rights 
Granted

Vested 
%

Michael Renshaw (ii) 

Trevor Johnson

Roger Collins-Woolcock (iii)

Paul Gardiner

Kylie Sprott

Graham Yerbury

563,836

195,750

169,816

324,000

252,000

300,000

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

586,841

120,000

256,461

263,755

166,261

248,461

0%

0%

0%

0%

0%

0%

50,000

30,000

40,000

40,000

30,000

-

0%

0%

0%

0%

0%

-

50,000

30,000

40,000

40,000

30,000

-

39%

39%

39%

39%

39%

-

(i) Performance Rights granted in 2012 to vest based on achievement of performance hurdles for the period 2012 to 2015.
(ii) Potential STI for Michael Renshaw has been pro rated for the year ended 30 June 2015.
(iii) Potential STI for Roger Collins-Woolcock has been pro rated for the year ended 30 June 2015.

Above are details of the vesting profile for 2015 and the previous year 
of the STI cash bonuses and LTI awarded as remuneration to each of 
the named Key Management Personnel.

Performance Rights due to vest in FY2016 were granted in October 
and November 2012 and are assessed on performance hurdles over 
the three year period to 30 June 2015. These Performance Rights will 
not vest as performance hurdles were not achieved. 

Performance Rights which partially vested in FY2015 were granted 
in October and November 2011 and were assessed on performance 
hurdles over the three year period to 30 June 2014. These 
Performance Rights vested in October 2014 and November 2014.  
The number of Performance Rights vested was adjusted in 
accordance with the Listing Rules to take into account the pro-rata 
issue of shares during the three year period to 30 June 2014.

42   CARDNO LIMITED 

11:  REMUNERATION REPORT - AUDITED CONTINUED

11.4  How is Cardno’s short term incentive  

program structured and how does it drive value  
for shareholders?

STI is assessed over the duration of Cardno’s financial year, and consists 
of cash payments to key management personnel, with 50 per cent of 
any award being deferred and paid 12 months after achievement.

There are two components to the STI structure.

Firstly, up to 70 per cent of “at target” performance STI is assessed 
on financial KPI’s such as the Group’s overall financial and Key 
Management Personnel’s divisional and functional financial 
performance (where relevant) against budget. 

The second component is assessed on non-financial KPIs including 
safety, business growth, working capital reduction, staff turnover, 
succession planning and executive leadership. These vary according to 
position, responsibility and areas assessed by the Managing Director 
to be integral to each area of accountability.

For the Managing Director, STIs are assessed against two separate 
performance measures. These measures relate to specific, financial, 
strategic and corporate development targets.

Key Management Personnel can earn an STI ranging between  
40-50 per cent of FAR (depending on position) for achieving at-target 
performance outcomes and up to an additional 20 per cent of FAR for 
out-performance through achievement of exceptional financial results. 
This payment is based on the Managing Director’s and Remuneration 
Committee’s assessment and judgment of performance, measured 
against the key management person’s outperformance against 
individual specific goals.

In FY2015, no STI was payable to the Acting Chief Executive Officer, 
Mr Yerbury or Key Management Personnel due to the failure of the 
Company to meet specific financial goals.

In FY2016, Key Management Personnel (excluding the Managing 
Director) will be able to earn STI of 40 per cent of FAR for achieving “at 
target” performance and an additional 20 per cent for outperformance 
and LTI of up to 50 per cent of FAR. Details of the Managing Director’s 
STI for FY2016 are set out in section 11.6 on page 44.

The financial KPI’s for the “at target” portion of STI is Group NPAT 
and a combination of organic growth and revenue factor performance 
drivers. Non-financial KPI’s are safety measures including Lost Time 
Injury Rate (LTIR) and operational measures such as staff turnover, 
succession planning and executive leadership.

The following tables provides a summary of achievement against performance measures for Key Management Personnel in FY2015.

Key Performance Indicators (KPI) to 
achieve 100% of STI Target 

Performance Measure

People

Working Capital

Growth & Clients

Safety & Quality

Unmanaged staff turnover (% rolling 12 months)

20%

Day sales outstanding for debtors

Fee Growth from strategic clients

10%

Loss Time Injury Frequency Rate

Financial Performance

Overall Company performance Vs Budget

70%

Region performance Vs Budget

Days sales outstanding for debtors

Results (i, ii)

Partially Achieved

Partially Achieved

Partially Achieved

Achieved

Not Achieved

Not Achieved

Partially Achieved

Key Performance Indicators (KPI) to achieve 
additional STI of 10% of FAR for Outperformance (iii)

Performance Measure

Results (i)

Financial Overachievement

Regional Performance > 10% Vs Budget

Not Achieved

(i) The results have not been audited.
(ii) Although some performance measures were partially achieved Key Management Personnel did not receive any STI award for FY2015.
(iii) Each of these criteria may vary slightly depending on the role of the Key Management Personnel.

ANNUAL REPORT 2015   43 

11:  REMUNERATION REPORT - AUDITED CONTINUED

11.5 

How is Cardno’s long term incentive program structured 
and how does it drive value for shareholders?

The LTI program seeks to align the Managing Director and Key 
Management Personnel decision making with the interests of 
shareholders. It also encourages the achievement of performance 
conditions likely to sustain long term business growth for Cardno.  
The delivery of LTI is made under the Performance Equity Plan (PEP).

Any LTI award is paid in Performance Rights. These may vest after 
3 years from the date of issue and are dependent on continuing 
employment and the achievement of performance outcomes over 
the period. These outcomes are both the compound annual growth 
in Cardno’s earnings per share (up to 50 per cent potential) and 
the relative TSR achieved by Cardno compared with an ASX-listed 
comparator group (up to 50 per cent potential).

The issue of Performance Rights is discretionary and applies to 
eligible staff considered to have been high performers in their 
respective roles by the Board.

For the Managing Director, in FY2016 LTI entitlements up to  
60 per cent of FAR may be awarded at the discretion of the Board 
on the recommendation of the Remuneration Committee. These are 
based on the overall performance and growth of Cardno Earnings 
Per Share (EPS) growth and relative Total Shareholder Return 

(TSR) performance. For Key Management Personnel (excluding the 
Managing Director) in FY2016, the potential award is up to 50 per 
cent of FAR. Each Performance Right is convertible to one ordinary 
share. All Performance Rights expire on the earlier of their expiry 
date or termination of employment unless the Board determines 
otherwise. The Performance Rights may be exercised at any time 
during a one year period commencing three years after the date the 
Performance Rights are issued provided the performance hurdles 
have been met.

There are no voting or dividend rights attached to the Performance 
Rights. Voting Rights and dividends will attach to the ordinary shares 
issued when the Performance Rights have vested and are exercised.

The PEP operates by granting a Performance Right to acquire an 
ordinary share at nil consideration at a predetermined time in the 
future. During 2015 2,999,568 Performance Rights with a grant date 
fair value of $9,691,131 were issued with a vesting period of three 
years from the grant dates of October 2014 and November 2014.

Further details of how LTI was valued and measured in 2015 can be 
found in section 11.8 on page 48.

The Board considers the issue of Performance Rights based on the 
achievement of specific EPS and TSR targets to align the performance 
of Key Management Personnel and those selected staff who 
participate in the PEP with the interests and objectives of shareholders.

The Performance Rights are subject to performance hurdles of TSR (Tranche 1: 50%) and EPS growth (Tranche 2: 50%) in accordance with  
the following scale: 

TSR of Cardno Relative to TSRs of 
Companies in Comparator Group

Over 3 Years

<50th percentile

50th percentile

>50th & <75th percentiles

75th percentile and above

% of Performance 
Rights to Vest

(Tranche 1 50%)

0%

50%

Pro rata

100%

EPS Growth Over 3 Years

<12.5% (<4% pa)

12.5% (4% pa)

>12.5% (4% pa) & <26% (8% pa)

26% (8% pa)

>26% (8% pa) & <40% (12% pa)

≥40% (12% pa)

% of Performance 
Rights to Vest

(Tranche 2 50%)

0%

30%

Pro rata

70%

Pro rata

100%

a)  TSR

b)  EPS

In FY2015 the TSR Comparator Group comprised companies ranked 
between 101-200 in the S&P/ASX 300 (i.e. the second 100  
companies in the S&P/ASX 300) based on market capitalisation as 
at 1 July 2014 excluding companies’ classified in Financial, Energy, 
Metals and Mining GICS sectors. Based on the TSR result, it is 
expected that no Performance Rights granted in 2012 will vest on 
October 2015 and November 2015.

The growth in earnings per share is calculated by comparing the 
basic earnings per share ‘EPS’ achieved by Cardno in the base year 
(i.e. year to June 2012) with that achieved in the final year of the 
performance period (i.e. year to June 2015). The compound annual 
growth rate (CAGR) of EPS over the three year period to 30 June 2015 
was -205.36 per cent.

Based on the EPS result, none of the Performance Rights granted in 
2012 in Tranche 2 will vest in October 2015 and November 2015.

44   CARDNO LIMITED 

11:  REMUNERATION REPORT - AUDITED CONTINUED

11.6  Managing Director and Key Management Personnel 

Employment Agreements

MANAGING DIRECTOR

Mr Wankmuller commenced as Managing Director on 29 June 2015 
and is paid a cash fixed annual remuneration of $950,000 inclusive 
of superannuation. His employment contract has no fixed term and 
provides both fixed and incentive based remuneration which includes 
STI and LTI.

Mr Wankmuller is able to earn a maximum STI of up to $1,425,000,  
if he is able to achieve the following performance measures;
 > Specific strategic and corporate development measures  

- $950,000,

 > Exceptional financial outperformance of the company is  

excess of budget targets - $475,000. 

LTI in the form of Performance Rights equivalent to 60 per cent of FAR 
will be granted to Mr Wankmuller subject to receiving shareholder 
approval at the Annual General Meeting in 2015.

Mr Wankmuller will also be entitled to a one off payment of 
US$600,000 payable in three tranches over 3 years provided he 

remains in continued employment with Cardno at specific milestone 
dates in recognition of his forfeiture of entitlements at this former 
employer GHD Group. 

Cardno will also pay Mr Wankmuller’s relocation expenses 
including airfares from the US for him and his family, removal and 
transportation costs, accommodation in Brisbane for a period up to  
12 months and financial and non-financial assistance with 
immigration, visa and tax advice. Such expenses are repayable by 
Mr Wankmuller on a pro rata basis if he voluntarily resigns or his 
employment is terminated by Cardno within 12 months.

Details of termination benefits payable by way of cash or Performance 
Rights to Mr Wankmuller are outlined in the following table.

Mode of retirement 
from office

Notice by Mr Wankmuller

Termination by the Company  
(except for misconduct)

Notice 
period

12 
months 

12  
months 

Benefits Payable

Unpaid / 
accrued 
FAR

Accrued 
but untaken 
annual leave

Yes 

Yes 

Long 
service 
leave

Yes 

Yes 

Yes 

Yes

Unpaid /
Accrued 
STI

Yes, at 
Board’s 
discretion

Yes, at 
Board’s 
discretion

Termination by the Company for misconduct Nil

Yes 

Yes 

Yes 

No

Severance 
payment

No 

No 

No 

Unvested 
Performance 
Rights

At Board’s 
discretion

At Board’s 
discretion

No

Former Managing Director and Chief Executive Officer Michael Renshaw 
resigned on 12 January 2015. Mr Renshaw did not receive any STI 
relative to the financial performance measures of Cardno for FY2015. 

Mr Renshaw will retain unvested Performance Rights previously 
awarded following shareholder approval at the 2012, 2013 and 
2014 Annual General Meetings. These Performance Rights, totalling 
250,000, will remain subject to both EPS and TSR performance hurdles 
for any future payment. Specific details of the termination payments 
paid to Mr Renshaw in accordance with his employment agreement 
are contained in the table on page 41.

11:  REMUNERATION REPORT - AUDITED CONTINUED

KEY MANAGEMENT PERSONNEL
Each agreement varies according to the individual Key Management 
Person but typically includes:
(a) Termination provisions incorporating notice periods and payments 

of 6 months, except that notice periods are reduced where 
termination is for performance reasons.

(b) Performance and confidentiality obligations on the part of both the 

employer and employee.

(c)  Employee covenants that during the term of employment and for 
at least six months after termination the employee will not solicit 
any existing client or employee of the Company.

(d) Eligibility to participate in the Performance Equity Plan, based on 

financial and non-financial KPI’s.

(e) With the exception of the notice period, the termination  

benefits payable to Mr Wankmuller in the above table, are 
generally replicated in the Employment Agreements with Key 
Management Personnel.

Between 12 January 2015 and 30 June 2015 Mr Yerbury’s salary was 
increased to $700,000 per annum in consideration of him performing 
the role as Acting Chief Executive Officer, meaning he received 
additional payments totaling $92,055 during this period.

In recognition of higher duties performed by each of the Key 
Management Personnel between January and June 2015, each 
received a one-time payment to reflect their individual contribution 
details of which are as follows:
 > Paul Gardiner (paid in USD) 
 > Kylie Sprott 
 > Trevor Johnson 

$50,000
$30,000
$30,000

Mr Collins–Woolcock ceased employment on 29 January 2015.  
Mr Collins- Woolcock did not receive any STI, relative to the financial 
performance measures of Cardno for FY2015. 

Mr Collins-Woolcock will retain unvested Performance Rights  
and these Performance Rights, totalling 171,000, will remain  
subject to both EPS and TSR performance hurdles for any future 
payment. Specific details of the termination payments paid to  
Mr Collins-Woolcock are contained in the table on page 41.

ANNUAL REPORT 2015   45 

11.7  How is Non-Executive Director pay structured?

Non-Executive Directors’ remuneration is reviewed annually by 
the Board. The review takes account of recommendations form the 
Remuneration Committee and external benchmarking of  
comparable companies.

In considering the level of remuneration for Non-Executive  
Directors, the Remuneration Committee uses independent external 
advice, industry survey data and other information about the level 
of fees and benefits being paid to Non-Executive Directors within 
comparator companies. 

Non-Executive Directors of Cardno Limited are entitled to a fee 
that is determined by the Board on commencement of the role 
and reviewed on an annual basis thereafter. The fee includes 
compulsory superannuation contributions. Non-Executive Directors 
do not participate in equity plans of the Company and do not receive 
retirement benefits. Cardno targets to set Non-Executive Director 
fees at approximately the median of Non-Executive Director fees in 
the comparator group.

As part of the need to plan for Non-Executive Director succession, 
approval was sought and obtained from shareholders at the 2014 
Annual General Meeting for an increase in the maximum aggregate 
remuneration payable to Non-Executive Directors of $900,000 to a 
maximum sum of $1,150,000 a year. The benchmarking of  
Non-Executive Directors fees compared with companies in the market 
comparator group, the increasing time commitment and complexity 
for Directors. 
The fee structure (which is inclusive of superannuation contributions 
where compulsory) for Non-Executive Directors has remained constant 
since 2011 and from 23 October 2014 was adjusted as follows:
 > Chairman of the Board: $275,000 (covering all responsibilities  
as Chairman of the Board and Chairman and/or member of any 
Board Committee)

 > Other Non-Executive Directors: $110,000 (covering responsibilities 
as a member of the Board and other duties including representing 
the Company externally)

 > Committee Chairman: $22,000, and Committee member: $11,000 

(covering all responsibilities as either chairman or member 
respectively of the Audit, Risk & Compliance Committee and of 
the Remuneration Committee)

 > No fees are payable to either the Chairman or a member of the 

Nominations Committee

The remuneration of the Non-Executive Directors is set out in the 
following table on the next page.

46   CARDNO LIMITED 

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ANNUAL REPORT 2015   47 

11:  REMUNERATION REPORT - AUDITED CONTINUED

REMUNERATION COMMITTEE ROLE

The Committee is responsible for reviewing and advising the Board 
on remuneration policies and practices. The Committee also reviews 
and advises the Board on the design and implementation of short 
and long term incentive performance packages, superannuation 
entitlements, retirement and termination entitlements and fringe 
benefits policies.

The remuneration of Directors, the Managing Director, Key 
Management Personnel, managers and staff is reviewed by the 
Remuneration Committee which then provides recommendations to 
the Board.

Board decisions on the remuneration of the Managing Director 
and Key Management Personnel are made in the absence of the 
Executive Directors as appropriate.

The Committee obtains independent advice from remuneration 
consultants on the appropriateness of remuneration based trends in 
comparative countries, both locally and internationally.

In 2015, the Remuneration Committee appointed Ernst & Young as an 
adviser to assist with remuneration advice in relation to the provision 
of market remuneration data for Executive and Non-Executive 
Director roles, general executive remuneration trends and information 
and advice regarding termination arrangements for the departing 
Managing Director and Chief Executive Officer and the incoming 
Chief Executive Officer Richard Wankmuller. Ernst & Young were 
engaged by and reported to the Remuneration Committee. During the 
2015 financial year no remuneration recommendations, as defined by 
the Corporations Act, were provided by Ernst & Young.

The members of the Committee during the year were: Grant 
Murdoch (Committee Chair), Tony Barnes, John Marlay and Elizabeth 
Fessenden, all independent Non-Executive Directors.

The Committee met eight times during the year and committee 
members’ attendance record is disclosed in the table of Directors’ 
meetings (refer to page 37).

48   CARDNO LIMITED 

11:  REMUNERATION REPORT - AUDITED CONTINUED

11.8 

The Value and Measure of LTI in 2015

PERFORMANCE RIGHTS GRANTED AS REMUNERATION

Details of vesting profiles of Performance Rights granted as remuneration to the Executive Directors and Key Management Personnel of Cardno 
and still outstanding at 30 June 2015, including those granted during the financial year are as follows in the table below:

Key Management 
Personnel

Executive Directors

Trevor Johnson

Michael Renshaw 
(resigned 12/01/2015)

Key Management 
Personnel

Roger Collins-Woolcock 
(ceased 29/01/2015)

Paul Gardiner

Kylie Sprott

Graham Yerbury

Outstanding 
Performance 
Rights

Grant Date

Vesting 
Date

% Vested  
in Year

% Forfeited  
in Year

Fair Value at 
Grant Date

30,000

40,000

68,000

50,000

70,000

130,000

40,000

55,000

76,000

40,000

55,000

94,000

30,000

40,000

66,000

50,000

78,000

18-Oct-12

17-Oct-13

23-Oct-14

1-Nov-12

11-Nov-13

23-Oct-14

1-Nov-12

11-Nov-13

10-Nov-14

1-Nov-12

11-Nov-13

10-Nov-14

1-Nov-12

11-Nov-13

10-Nov-14

11-Nov-13

10-Nov-14

18-Oct-15

17-Oct-16

23-Oct-17

1-Nov-15

11-Nov-16

23-Oct-17

1-Nov-15

11-Nov-16

10-Nov-17

1-Nov-15

11-Nov-16

10-Nov-17

1-Nov-15

11-Nov-16

10-Nov-17

11-Nov-16

10-Nov-17

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

5.60

4.75

3.46

5.56

5.47

3.46

5.56

5.47

3.22

5.56

5.47

3.22

5.56

5.47

3.22

5.47

3.22

Performance Rights granted to Executive Directors and Key Management Personnel have a one year exercise period after the vesting date. 
The expiry date of the Performance Rights is one year subsequent to the vesting date. Non-Executive Directors do not participate in any of the 
Company’s incentive plans.

No Performance Rights granted during 2015 have vested. No Performance Rights have been granted since the end of the financial year and 
up to the date of this report. Details of the performance criteria are included on page 43.

ANNUAL REPORT 2015   49 

11:  REMUNERATION REPORT - AUDITED CONTINUED

During the reporting period, the following shares were issued on the 
exercise of Performance Rights previously granted as compensation

Executive Directors &  
Key Management Personnel

Number of 
shares

Amount 
paid $/share

Roger Collins-Woolcock

Paul Gardiner

Trevor Johnson

Michael Renshaw

Kylie Sprott

15,518

15,518

11,638

19,397

11,638

Nil

Nil

Nil

Nil

Nil

The movement during the reporting period, by value, of Performance Rights over ordinary shares in Cardno Limited held, directly, indirectly or 
beneficially, by each key management person, including their related parties, is as follows:

Executive Directors and Key Management Personnel

Granted in year $ (a)

Exercised in year $ (b)

(Performance Rights)

(Performance Rights)

Vested in year $

(not exercised)

234,940

449,150

244,340

302,210

212,190

250,770

66,919

107,653

86,125

86,125

64,591

-

-

-

-

-

-

-

Executive Directors

Trevor Johnson

Michael Renshaw

Key Management Personnel

Roger Collins-Woolcock

Paul Gardiner

Kylie Sprott

Graham Yerbury

(a)  The value of Performance Rights granted in the year is the fair 
value of the Performance Rights calculated at grant date using 
the Monte-Carlo and Black-Scholes pricing models. The total 
value of the Performance Rights is allocated to remuneration 
over the vesting period (i.e. in years 18 October 2012 –  
18 October 2015 and 1 November 2012 – 1 November 2015).

(b)  The value of Performance Rights exercised during the year is 
calculated as the market price of the shares of the Company  
as at closing of trading on the date the Performance Rights  
were exercised.

50   CARDNO LIMITED 

11:  REMUNERATION REPORT - AUDITED CONTINUED

2015 Performance Rights

Held at
1 July 2014

Granted as 
compensation 

Vested

Lapsed

Held at  
30 June 2015

Vested and 
exercisable at 
30 June 2015

Executive Directors

Trevor Johnson

Michael Renshaw (i)

Senior Executives

Roger Collins-Woolcock (ii)

Paul Gardiner

Kylie Sprott

Graham Yerbury

100,000

170,000

135,000

135,000

100,000

50,000

68,000

130,000

76,000

94,000

66,000

78,000

11,638

19,397

15,518

15,518

11,638

-

18,362

30,603

24,482

24,482

18,362

-

138,000

250,000

171,000

189,000

136,000

128,000

-

-

-

-

-

-

(i) Michael Renshaw resigned as a director on 12 January 2015
(ii) Roger Collins-Woolcock ceased to be a Key Management Person on 29 January 2015

The movement during the reporting period in the number of ordinary shares in Cardno Limited held, directly, indirectly or beneficially, by each 
director and key management person, including their related parties, is as follows:

Share Movements Directors and  
Key Management Personnel

Held at
1 July 2014

Purchases

Received as 
Compensation

Sales

Held at  
30 June 2015

Non–Executive Directors

Anthony Barnes
Tonianne Dwyer
Elizabeth Fessenden
Ian Johnston
John Marlay
Grant Murdoch

Executive Directors

Richard Wankmuller (i)
Trevor Johnson
Michael Renshaw (ii)

Senior Executives

Roger Collins-Woolcock (iii)
Paul Gardiner
Kylie Sprott
Graham Yerbury

5,657
3,000
-
268,839
16,095
43,555

-
1,649,964
313,305

761,122
821,682
10,971
5,889

399
9,000
3,982
30,000
14,000
59

-
61,638
69,789

731,257
65,418
18,351
8,750

-
-
-
-
-
-

-
-
-

-
-
-
-

-
-
-
68,839
-
-

-
-
50,314

681,966
49,900
30
-

6,056
12,000
3,982
230,000
30,095
43,614

-
1,711,602
N/A

N/A
837,200
29,292
14,639

(i) Richard Wankmuller was appointed as a director on 29 June 2015
(ii) Michael Renshaw resigned as a director on 12 January 2015
(iii) Roger Collins-Woolcock ceased to be a Key Management Person on 29 January 2015

ANNUAL REPORT 2015   51 

12:  DIRECTORS’ INTERESTS

As at the date of this report, the interests of the Directors in the  
shares of Cardno Limited were:

Anthony Barnes

Tonianne Dwyer

Elizabeth Fessenden

Trevor Johnson

Ian Johnston

John Marlay

Grant Murdoch

Richard Wankmuller (i)

Ordinary 
Shares

6,056

12,000

3,982

1,711,602

230,000

30,095

43,614

-

Shares held 
 in Escrow

Performance 
Options 

Performance  
Rights

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

138,000

-

-

-

-

(i) Richard Wankmuller was restricted from acquiring shares in Cardno in accordance with the Cardno Securities Trading Policy.

13:  NON-AUDIT SERVICES

During the year KPMG, the Company’s auditor, has performed 
certain other services in addition to their statutory duties.

The Board has considered the non-audit services provided 
during the year by the auditor and in accordance with written 
advice provided by resolution of the Audit, Risk and Compliance 
Committee, is satisfied that the provision of those non-audit 
services during the year by the auditor is compatible with, and did 
not compromise, the auditor independence requirements of the 
Corporations Act 2001 for the following reasons:

 > All non-audit services were subject to the corporate governance 
procedures adopted by the Board and have been reviewed by 
the Audit, Risk and Compliance Committee to ensure they do not 
impact the integrity and objectivity of the auditor; and

 > The non-audit services provided do not undermine the general 
principles relating to auditor independence as set out in APES 
110 Code of Ethics for Professional Accountants, as they did not 
involve reviewing or auditing the auditor’s own work, acting in a 
management or decision making capacity for Cardno, acting as an 
advocate for Cardno or jointly sharing risks and rewards.

Details of the amounts paid to the auditor and its related practices 
for audit and non-audit services provided during the year are set 
out in note 31.

14:  LEAD AUDITOR’S INDEPENDENCE  

DECLARATION UNDER SECTION 307C  
OF THE CORPORATIONS ACT 2001

The lead auditor’s independence declaration is set out on  
page 52 and forms part of the Directors’ report for the year ended 
30 June 2015.

15:  ROUNDING OF AMOUNTS

The Company is of a kind referred to in Class Order 98/100, issued 
by the Australian Securities and Investments Commission, relating 
to the ‘rounding off’ of amounts in the Directors’ report and financial 
statements. Amounts in the Directors’ report and financial report have 
been rounded off in accordance with that Class Order to the nearest 
thousand dollars, or in certain cases, to the nearest dollar.

Signed in accordance with a resolution of Directors.

On behalf of the Directors

JOHN MARLAY

Chairman

Brisbane

17 August 2015

 
 
52   CARDNO LIMITED 

AUDITOR’S INDEPENDENCE DECLARATION 

ABCD 

Lead Auditor’s Independence Declaration under Section 307C of the Corporations 
Act 2001  

To: the Directors of Cardno Limited 

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial 
year ended 30 June 2015 there have been: 

(i) 

no contraventions of the auditor independence requirements as set out in the Corporations 
Act 2001 in relation to the audit; and 

(ii) 

no contraventions of any applicable code of professional conduct in relation to the audit. 

KPMG 

Mitchell Petrie 
Partner 

Brisbane 
17 August 2015 

KPMG, an Australian partnership and a member firm of the KPMG 
network of independent member firms affiliated with KPMG 
International Cooperative (“KPMG International”), a Swiss entity.  

Liability limited by a scheme approved under 
Professional Standards Legislation. 

 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

Revenue 

Other Income
Employee expenses
Consumables and materials used
Sub-consultant and contractor costs
Impairment losses
Depreciation and amortisation expenses
Financing costs
Other expenses

Profit / (loss) before income tax
Income tax (expense) / benefit
Profit / (loss) for the year

Profit / (loss) attributable to:
Owners of the Company

Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)

Note

2A

2B

3
3
3

4

30
30

The statement of financial performance should be read in conjunction with notes 1 to 38 which form part of the financial statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

Profit / (loss) for the year

Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translation of foreign operations

Other comprehensive income for the year, net of tax

Total comprehensive income for the year

Total comprehensive income attributable to:
Owners of the Company

The statement of comprehensive income should be read in conjunction with notes 1 to 38 which form part of the financial statements.

ANNUAL REPORT 2015   53 

2015

$’000

2014

$’000

1,426,916

1,309,597

11,449
(705,806)
(403,478)
(174,754)
(224,023)
(32,821)
(11,179)
(45,922)

(159,618)
14,450
(145,168)

(145,168)
(145,168)

(88.32)
(88.32)

6,595
(628,647)
(293,063)
(204,600)
-
(26,493)
(8,465)
(48,158)

106,766
(28,632)
78,134

78,134
78,134

52.04
50.61

2015
$’000

2014
$’000

(145,168)

78,134

82,993

82,993

(62,175)

(62,175)
(62,175)

(5,698)

(5,698)

72,436

72,436
72,436

54   CARDNO LIMITED 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Cardno Limited and its Controlled Entities as at 30 June 2015

Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Current tax receivable
Assets held for sale
Total Current Assets

Non-Current Assets
Trade and other receivables
Other financial assets, including derivatives
Property, plant and equipment
Deferred tax assets
Intangible assets
Total Non-Current Assets

Total Assets

Current Liabilities
Trade and other payables
Loans and borrowings
Current tax liabilities
Short term provisions
Other current liabilities
Liabilities held for sale
Total Current Liabilities

Non-Current Liabilities
Loans and borrowings
Deferred tax liabilities
Long term provisions
Other non-current liabilities
Total Non-Current Liabilities

Total Liabilities

Net Assets

Equity
Issued capital
Reserves
Retained earnings
Total Equity

* Restated (refer to note 34).

Note

6
7
8
9

10

11
12
13
14
15

16
17

18
19
10

20
14
21
22

23

2015
$’000

84,750
266,513
154,611
12,794
19,349 
9,191
547,208

-
7,625
64,851
45,167
668,265
785,908

2014 
Restated*
$’000

85,885
244,885
142,586
11,196
-
-
484,552

605
3,610
60,709
16,671
760,832
842,427

1,333,116

1,326,979

150,566
2,982
14,785
36,959
43,047
9,191
257,530

393,108
1,752
10,342
876
406,078

663,608

669,508

641,661
62,082
(34,235)
669,508

146,254
3,149
15,870
32,181
48,306
-
245,760

302,927
816
12,854
1,106
317,703

563,463

763,516

623,875
(20,744)
160,385
763,516

The statement of financial position should be read in conjunction with notes 1 to 38 which form part of the financial statements.

ANNUAL REPORT 2015   55 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

Note

Share 
Capital
Ordinary

$’000

Retained 
Earnings

Foreign 
Translation
Reserve

$’000

$’000

Reserve 
for Own 
Shares

$’000

Total

$’000

Balance at 1 July 2013

500,374

138,781

(602)

(6,029)

632,524

Profit for the year

Exchange differences on translation of foreign 
operations

Total comprehensive income for the year

Transactions with owners in their 
capacity as owners:

Shares issued

Employee share based payments

Own shares issued*

Own shares sold*

Dividends paid or provided

Balance at 30 June 2014

Loss for the year

Exchange differences on translation of  
foreign operations

Total comprehensive income for the year

Transactions with owners in their 
capacity as owners:

Shares issued

Employee share based payments

Own shares issued*

Own shares sold*

Dividends paid or provided

Balance at 30 June 2015

23

23

5

23

23

5

-

-

-

100,879

4,790

17,832

-

-

123,501

623,875

78,134

-

78,134

-

-

-

-

(56,530)

(56,530)

160,385

-

(5,698)

(5,698)

-

-

-

-

-

-

(6,300)

-

-

-

(145,168)

-

-

(145,168)

82,993

82,993

13,512

2,946

1,328

-

-

17,786

641,661

-

-

-

-

(49,452)

(49,452)

(34,235)

-

-

-

-

-

-

-

-

-

-

-

(17,832)

9,417

-

(8,415)

(14,444)

-

-

-

-

-

(1,328)

1,161

-

(167)

78,134

(5,698)

72,436

100,879

4,790

-

9,417

(56,530)

58,556

763,516

(145,168)

82,993

(62,175)

13,512

2,946

-

1,161

(49,452)

(31,833)

669,508

76,693

(14,611)

* Shares issued are held in trust by the Cardno Limited Performance Equity Plan Trust which has been formed solely for the purpose of subscribing for, acquiring and holding 
shares for the benefit of employees participating in the Performance Equity Plan (PEP) of Cardno Limited. Own Shares sold are those shares transferred to PEP participants on 
exercise of Performance Options.

The statement of changes in equity should be read in conjunction with notes 1 to 38 which form part of the financial statements.

56   CARDNO LIMITED 

CONSOLIDATED STATEMENT OF CASH FLOWS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

Cash Flows from Operating Activities

Cash receipts from customers

Interest received

Finance costs paid

Cash paid to suppliers and employees

Income tax paid

Net Cash Provided by Operating Activities 

Cash Flows from Investing Activities

Acquisition of subsidiaries, net of cash acquired

Acquisition of subsidiaries, deferred consideration paid

Payments for intangible assets

Proceeds from sale of property, plant and equipment

Payments for property, plant and equipment

Net Cash Used in Investing Activities

Cash Flows from Financing Activities

Proceeds from issue of shares

Share issue transaction costs

Sale of own shares*

Proceeds from borrowings

Repayment of borrowings

Finance lease payments

Dividends paid

Net Cash Provided by/(Used in) Financing Activities

Note

25(a)

25(d)

2015

$’000

1,474,734

506

(7,456)

2014

$’000

1,370,518

978

(10,440)

(1,395,805)

(1,249,117)

(23,856)

48,123

-

(11,187)

(1,005)

1,288

(24,273)

(35,177)

6,135

(18)

1,161

707,228

(688,849)

(2,028)

(42,055)

(18,426)

(27,328)

84,611

(163,265)

(28,319)

(603)

2,257

(21,390)

(211,320)

94,003

(1,036)

9,417

224,837

(152,075)

(1,978)

(50,873)

122,295

Net Increase/(Decrease) in Cash and Cash Equivalents Held

(5,480)

(4,414)

Cash and Cash Equivalents at 1 July

Reclassification of cash included in disposal group held for sale (refer note 10)

Effects of exchange rate changes on cash and cash equivalents at the end of year 

85,885

90,635

(1,592)

5,937

-

(336)

Cash and Cash Equivalents at 30 June

25(b)

84,750

85,885

* Own shares sold are those shares transferred to PEP participants on exercise of Performance Options. 

The statement of cash flows should be read in conjunction with notes 1 to 38 which form part of the financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

ANNUAL REPORT 2015   57 

1.  STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Cardno Limited (the “Company”) is a company incorporated and 
domiciled in Australia. The consolidated financial report of the 
Company for the year ended 30 June 2015 encompasses the Company 
and its subsidiaries (together referred to as “Cardno” or the “Group”).

Cardno is a for-profit entity that operates as a professional 
infrastructure and environmental services company, with expertise in 
the development and improvement of physical and social infrastructure 
for communities around the world.

The financial report was authorised for issue by the Board of Directors 
on 17 August 2015.

(a)  Statement of compliance

The consolidated financial statements are general purpose 
financial statements which have been prepared in accordance 
with Australian Accounting Standards adopted by the Australian 
Accounting Standards Board (AASB) and the Corporations Act 
2001. The financial statements of the consolidated entity also 
comply with International Financial Reporting Standards (IFRSs) 
adopted by the International Accounting Standards Board (IASB).

(b)  Basis of Preparation

The financial report has been prepared on a historical cost basis 
except where otherwise noted.

The consolidated financial statements are presented in Australian 
dollars, which is the Company’s functional currency.

The Company is of a kind referred to in ASIC Class Order 98/100 
dated 10 July 1998 and in accordance with that Class Order, all 
financial information presented in Australian dollars has been 
rounded to the nearest thousand unless otherwise stated.

Certain comparative amounts in the financial report have been 
reclassified to conform with the current year’s presentation.

Impact of new or amended accounting standards
The Group has adopted the following new standards and 
amendments to standards, including any consequential 
amendments to other standards, with a date of initial application of 
1 July 2014. These standards are not expected to have a significant 
impact on the Group’s consolidated financial statements.

AASB 2013-4 Novation of derivatives and hedge accounting

Annual improvements project – 2010-2012 cycle  
(AASB 2014-1 Part A)

Annual improvements project – 2011-2013 cycle 
(AASB 2014-1 Part A)

AASB 2013-4 Novation of derivatives and hedge accounting
AASB 2013-4 makes amendments to AASB 139 to permit the 
continuation of hedge accounting in circumstance where a 
derivative, which has been designated as a hedging instrument, 
is novated from one counterparty to a central counterparty as a 
consequence of laws or regulation. There has been no impact on 
the recognised assets, liabilities and comprehensive income of 
the Group.

Annual improvements project – 2010-2012
Minor amendments have been made to AASB 3 Business 
Combinations relating to accounting for contingent consideration. 
This is effective for business combinations acquired after 1 July 
2014 thus has no impact on the Group for this financial year.

Annual Improvements project – 2011-2013
Amendments have been made to AASB 140 to clarify the 
interrelationship of AASB 3 Business Combinations and AASB 140 
Investment Property. This amendment has no impact on the Group.

A number of new standards, amendments to standards and 
interpretations are effective for annual periods beginning after 
1 July 2014, and have not been applied in preparing these 
consolidated financial statements. Those which may be relevant 
to the Group are set out below. The Group does not plan to adopt 
these standards early.

AASB 9 Financial Instruments
AASB 9 (2009) includes revised guidance on the classification and 
measurement of financial instruments, including a new expected 
credit loss model for calculating impairment on financial assets, 
and the new general hedge accounting requirements. It also 
carries forward the guidance on recognition and derecognition of 
financial instruments.

AASB 9 is effective for annual periods beginning on or after 1 
January 2018 with early adoption permitted. The adoption of 
these standards is expected to have an impact on the Group’s 
financial assets, but no impact on the Group’s financial liabilities.

AASB 15 Revenue from Contracts with Customers (2015)
AASB 15 (2015) establishes a comprehensive framework for 
determining whether, how much and when revenue is recognised. 
It replaces AASB 111 Construction Contracts, AASB 118 Revenue 
and AASB 1004 Contributions. The new standard’s core principle 
requires entities to recognise revenue to depict the transfer 
of goods or services to customers in amounts that reflect the 
consideration to which the company expects to be entitled in 
exchange for those goods or services.

AASB 15 is effective for annual reporting periods beginning on or 
after 1 January 2017 with early adoption permitted. The Group 
is assessing the potential impact on its consolidated financial 
statements resulting from the application of AASB 15.

58   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

1.  STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

(c)  Basis of Consolidation

Subsidiaries
Subsidiaries are entities controlled by Cardno. Control exists when 
the Company is exposed to, or has rights to, variable returns from 
its involvement with an entity and has the ability to affect those 
returns through its power over the entity. In assessing control, 
potential voting rights that presently are exercisable or convertible 
are taken into account. The financial statements of subsidiaries are 
included in the consolidated financial statements from the date that 
control commences until the date that control ceases.

The accounting policies of subsidiaries have been changed when 
necessary to align them with the policies adopted by Cardno.

A list of the significant subsidiaries is contained in note 38 to  
the financial statements. All controlled entities have a June 
financial year-end.

Transactions eliminated on consolidation
Intra-group balances and transactions, unrealised gains and losses 
and inter-entity balances resulting from transactions with or 
between controlled entities are eliminated in full on consolidation.

(d)  Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount 
of goods and services tax (GST), except where the amount of 
GST incurred is not recoverable from the taxation authority. In 
these circumstances, the GST is recognised as part of the cost of 
acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST 
included. The net amount of GST recoverable from, or payable to, 
the tax authority is included as a current asset or liability in the 
consolidated statement of financial position.

Cash flows from operating activities are included in the cash 
flow statements on a gross basis. The GST components of cash 
flows arising from investing and financing activities which are 
recoverable from, or payable to, the tax authority are classified as 
operating cash flows.

(e)  Foreign Currency 

(i)  Foreign currency transactions
Transactions in foreign currencies are translated to the respective 
functional currencies of Group entities at exchange rates at 
the dates of the transactions. Monetary assets and liabilities 
denominated in foreign currencies at the reporting date are 
translated to the functional currency at the foreign exchange 
rate at that date. The foreign currency gain or loss on monetary 
items is the difference between amortised cost in the functional 
currency at the beginning of the period, adjusted for effective 
interest and payments during the period, and the amortised cost 
in foreign currency translated at the exchange rate at the end of 
the period. Non-monetary assets and liabilities denominated in 
foreign currencies that are measured at fair value are translated 

to the functional currency at the exchange rate at the date that 
the fair value was determined. Foreign currency differences 
arising on retranslation are recognised in profit or loss, except for 
differences arising on the translation of available-for-sale equity 
instruments, a financial liability designated as a hedge of the net 
investment in a foreign operation, (see (ii) below) or qualifying 
cash flow hedges, which are recognised in other comprehensive 
income. Non-monetary items that are measured in terms of 
historical cost in a foreign currency are translated using the 
exchange rate at the date of the transaction.

(ii) Foreign operations
The assets and liabilities of foreign operations, including goodwill 
and fair value adjustments arising on acquisition, are translated 
to Australian dollars at exchange rates at the reporting date. The 
revenue and expenses of foreign operations are translated to 
Australian dollars at rates approximating the foreign exchange 
rates at the dates of the transactions.

Foreign currency differences are recognised in other 
comprehensive income in the foreign currency translation reserve 
(FCTR). When a foreign operation is disposed of, in part or in full, 
the relevant amount in the FCTR is transferred to profit or loss.

Foreign exchange gains and losses arising from a monetary item 
receivable from or payable to a foreign operation, the settlement 
of which is neither planned nor likely in the foreseeable future, 
are considered to form part of a net investment in a foreign 
operation and are recognised in other comprehensive income and 
are presented within equity in the FCTR.

(f)  Revenue Recognition

Revenue is recognised at fair value of the consideration received 
net of the amount of goods and services tax (GST) payable to the 
taxation authority.

Sale of goods
Revenue from the sale of goods is recognised (net of rebates, 
discounts and other allowances) upon the delivery of goods to  
the customer.

Consulting services revenue
Revenue from consulting services which are provided on a time 
and material basis is recognised at the contractual hourly rates as 
labour hours are delivered and recoverable expenses are incurred. 
For long term contracts, revenue and expenses are recognised in 
accordance with the percentage of completion method. Where a 
loss is expected to arise from a contract, the loss is recognised 
immediately as an expense. The percentage of completion is 
determined by costs to date versus estimated total project costs.

Dividends
Revenue from dividends is recognised by the consolidated entity 
when dividends are received.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

ANNUAL REPORT 2015   59 

1.  STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

(g)  Leases

Leases in terms of which Cardno assumes substantially all the risks 
and rewards of ownership are classified as finance leases. Upon 
initial recognition the leased asset is measured at an amount equal 
to the lower of its fair value and the present value of the minimum 
lease payments. Subsequent to initial recognition, the asset is 
accounted for in accordance with the accounting policy applicable 
to that asset. The corresponding rental obligations, net of finance 
charges, are included in current and non-current interest-bearing 
loans and borrowings. Minimum lease payments are apportioned 
between the finance charge and the reduction of the outstanding 
liability. The finance charge is allocated to each period during the 
lease term so as to produce a constant periodic rate of interest on 
the remaining balance of the liability.

Other leases are operating leases and are not recognised in 
Cardno’s statement of financial position. Payments made under 
operating leases which are subject to fixed annual increments are 
recognised in the income statement on a straight-line basis over 
the term of the lease. Lease incentives received are recognised in 
the profit or loss as an integral part of the total lease expense and 
are spread over the lease term.

(h)  Net Financing Costs

Interest income is recognised in profit or loss as it accrues, using 
the effective interest method.

Borrowing costs are calculated using the effective interest 
method and include interest, amortisation of discounts or 
premiums relating to borrowings and amortisation of ancillary 
costs incurred in connection with arrangement of borrowings 
and foreign exchange differences arising from foreign currency 
borrowings to the extent that they are regarded as an adjustment 
to interest costs.

Borrowing costs are expensed as incurred unless they relate 
to qualifying assets. Qualifying assets are assets which take a 
substantial period of time to get ready for their intended use or 
sale. Where funds are borrowed specifically for the acquisition, 
construction or production of a qualifying asset, the amount of 
borrowing costs capitalised is the amount incurred in relation to 
that borrowing, net of any interest earned on those borrowings. 
Where funds are borrowed generally, borrowing costs are 
capitalised using a weighted average capitalisation rate.

(i) 

Income Tax
Income tax expense comprises current and deferred tax. Income 
tax expense is recognised in profit or loss except to the extent 
that it relates to items recognised directly in equity, in which case 
it is recognised in equity.

Current tax is the expected tax payable on the taxable income for 
the year, using tax rates enacted or substantively enacted at the 
reporting date, and any adjustment to tax payable in respect of 
previous years.

Deferred tax is recognised using the balance sheet liability 
method, providing for temporary differences between the carrying 
amounts of assets and liabilities for financial reporting purposes 

and the amounts used for taxation purposes. Deferred tax is not 
recognised for the following temporary differences: the initial 
recognition of assets or liabilities in a transaction that is not a 
business combination and that affects neither accounting or taxable 
profit, and differences relating to investments in subsidiaries and 
jointly controlled entities to the extent that it is probable that they 
will not reverse in the foreseeable future. In addition, deferred tax 
is not recognised for taxable temporary differences arising on the 
initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be 
applied to the temporary differences when they reverse, based 
on the laws that have been enacted or substantively enacted by 
the reporting date. Deferred tax assets and liabilities are offset if 
there is a legally enforceable right to offset current tax liabilities 
and assets, and they relate to income taxes levied by the same tax 
authority on the same taxable entity, or on different tax entities, but 
they intend to settle current tax liabilities and assets on a net basis 
or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable 
that future taxable profits will be available against which the 
temporary difference can be utilised. Deferred tax assets are 
reviewed at each reporting date and are reduced to the extent that 
it is no longer probable that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of 
dividends are recognised at the same time as the liability to pay 
the related dividend is recognised.

Tax consolidation
The Company and its wholly-owned Australian resident entities 
are part of a tax-consolidated group. As a consequence, all 
members of the tax-consolidated group are taxed as a single 
entity from the date of forming the tax consolidated Group. The 
head entity within the tax-consolidated Group is Cardno Limited.

Nature of tax funding arrangements and  
tax sharing arrangements
The head entity, in conjunction with other members of the tax-
consolidated Group, has entered into a tax funding arrangement 
which sets out the funding obligations of members of the tax-
consolidated Group in respect of tax amounts. The tax funding 
arrangements require payments to/from the head entity equal to 
the current tax liability/(asset) assumed by the head entity and 
any tax-loss deferred tax asset assumed by the head entity.

(j)  Segment Reporting

Segment results that are reported to the chief operating decision 
makers include items directly attributed to the segment as well 
as those that can be allocated on a reasonable basis. Unallocated 
items mainly comprise head office expenses, financing costs, and 
income tax expense.
Segment capital expenditure is the total cost incurred during the 
period to acquire property, plant and equipment, and intangible 
assets other than goodwill. Intersegment pricing is determined on 
an arm’s length basis.

60   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

1.  STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

(k)  Trade and Other Receivables

(n)  Property, Plant and Equipment

Trade receivables are recognised and carried at original invoice 
amount less a provision for any uncollectible debts. The 
recoverability of trade receivables is reviewed on an ongoing basis 
and a provision for impairment determined at both a specific and 
collective level. All individually significant receivables are assessed 
for specific impairment. Those found not to be specifically impaired 
are then collectively assessed for any impairment that has been 
incurred but not yet identified. Receivables that are not individually 
significant are collectively assessed for impairment by grouping 
together assets with similar risk characteristics.
In assessing collective impairment the Group uses historical 
trends of the probability of default adjusted for management’s 
judgement around current economic and credit conditions. Bad 
debts are written off as incurred.

(l) 

Inventories
Work in progress is stated at the aggregate of contract costs 
incurred to date plus recognised profits less recognised losses and 
progress billings. If there are contracts where progress billings 
exceed the aggregate costs incurred plus profits less losses, the net 
amounts are presented as unearned revenue under other liabilities.

Contract costs include all costs directly related to specific contracts, 
costs that are specifically chargeable to the customer under the 
terms of the contract and an allocation of overhead expenses 
incurred in connection with Cardno’s activities in general.

The recoverability of work in progress is reviewed on an ongoing 
basis. Amounts assessed as not recoverable from future billings are 
written off when identified.

(m)  Assets held for sale

Non-current assets, or disposal groups comprising assets and 
liabilities, are classified as held for sale if it is highly probable 
that they will be recovered primarily through sale rather through 
continuing use.

Such assets, or disposal groups, are generally measured at the 
lower of their carrying amount and fair value less costs to sell. Any 
impairment loss on a disposal group is allocated first to goodwill, 
and then to the remaining assets and liabilities on a pro rata basis, 
except that no loss is allocated to inventories, financial assets, 
deferred tax assets, employee benefit assets, investment property 
or biological assets, which continue to be measured in accordance 
with the Group’s other accounting policies. Impairment losses 
on initial classification as held-for-sale and subsequent gains or 
losses on remeasurement are recognised in profit and loss.

Once classified as held-for-sale, intangible assets and property, 
plant and equipment are no longer amortised or depreciated.

Recognition and measurement
Items of property, plant and equipment are measured at cost less 
accumulated depreciation and accumulated impairment losses. 

Cost includes expenditure that is directly attributable to the 
acquisition of the asset. The cost of self-constructed assets 
includes the cost of materials and direct labour, any other costs 
directly attributable to bringing the asset to a working condition 
for its intended use, the costs of dismantling and removing the 
items and restoring the site on which they are located, and 
capitalised borrowing costs. Purchased software that is integral 
to the functionality of the related equipment is capitalised as part 
of that equipment.

Subsequent costs are included in the asset’s carrying amount or 
recognised as a separate asset, as appropriate, only when it is 
probable that future economic benefits associated with the item 
will flow to Cardno and the cost of the item can be measured 
reliably. The carrying amount of the replaced part is derecognised. 
All other repairs and maintenance are charged to profit or loss 
during the reporting period in which they are incurred.

Subsequent costs
Subsequent costs are included in the asset’s carrying amount or 
recognised as a separate asset, as appropriate, only when it is 
probable that future economic benefits associated with the item 
will flow to Cardno and the cost of the item can be measured 
reliably. The carrying amount of the replaced part is derecognised. 
All other repairs and maintenance are charged to profit or loss 
during the reporting period in which they are incurred.

Depreciation
Depreciation is calculated on the depreciable amount, which is 
the cost of an asset, or other amount substituted for cost, less its 
residual value.

Depreciation is recognised in profit or loss on a straight-line 
basis over the estimated useful lives of each part of an item of 
property, plant and equipment. Leased assets are depreciated 
over the shorter of the lease term and their useful lives unless it 
is reasonably certain that Cardno will obtain ownership by the 
end of the lease term. Land is not depreciated.

The estimated useful lives for the current and comparative 
periods are as follows:

laboratory equipment, instruments and amenities 

>  buildings 
> 
>  motor vehicles 
> 
leasehold improvements 
>  office furniture and equipment 
Depreciation methods, useful lives and residual values are 
reviewed at each reporting date.

40 years
4-7 years
4-7 years
4-5 years
3-11 years

ANNUAL REPORT 2015   61 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

1.  STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

(o) 

 Intangible Assets

Business Combinations and Goodwill
Business combinations are accounted for using the acquisition 
method as at the acquisition date, which is the date on which 
control is transferred to Cardno.

Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is 
capitalised only when it increases the future economic benefits 
embodied in the specific asset to which it relates. All other 
expenditure is expensed as incurred.

Cardno measures goodwill at the acquisition date as:

(p)   Amortisation

>  the fair value of the consideration transferred; plus 

>  the recognised amount of any non-controlling interests in 
the acquiree; plus if the business combination is achieved 
in stages, the fair value of the existing equity interest in the 
acquiree; less

>  the net recognised amount (generally fair value) of the 
identifiable assets acquired and liabilities assumed.

Subsequent to initial recognition, goodwill is measured at cost 
less accumulated impairment losses.

The consideration transferred does not include amounts related 
to the settlement of pre-existing relationships. Such amounts are 
generally recognised in profit or loss.

Costs related to the acquisition, other than those associated 
with the issue of debt or equity securities, that Cardno incurs in 
connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at 
the acquisition date. If the contingent consideration is classified as 
equity, it is not remeasured and settlement is accounted for within 
equity. Otherwise, subsequent changes to the fair value of the 
contingent consideration are recognised in profit or loss.

When share-based payment awards (replacement awards) are 
required to be exchanged for awards held by the acquiree’s 
employees (acquiree’s awards) and relate to past services, then all 
or a portion of the amount of the acquirer’s replacement awards is 
included in measuring the consideration transferred in the business 
combination. This determination is based on the market-based 
value of the replacement awards compared with the market-
based value of the acquiree’s awards and the extent to which the 
replacement awards relate to past and/or future service.

Works contracts, software intangibles and  
customer relationships
Works contracts, software intangibles and customer relationships 
are acquired by Cardno and are stated at cost less accumulated 
amortisation and impairment losses. Amortisation is calculated 
based on the timing of projected cash flows of the contracts over 
their estimated useful lives, which currently vary from 1 to 7 years.

Patents and Trademarks
Patents and trademarks acquired by Cardno are considered 
to have indefinite useful lives and are stated at cost less any 
impairment losses. Patents and trademarks are not amortised but 
tested for impairment annually.

Amortisation is calculated over the cost of the asset, or other 
amount substituted for cost, less its residual value.

Amortisation is charged to the profit and loss on a systematic 
basis over the estimated useful lives of intangible assets unless 
such lives are indefinite. Goodwill and intangible assets with an 
indefinite life are not amortised but are systematically tested for 
impairment each year at the same time. Works contracts which 
are assigned a value are amortised over the life of the contract 
from the date they are available for use.

Amortisation methods, useful lives and residual values are 
reviewed at each reporting date. 

(q)   Derivatives and hedging activities

Derivatives are initially recognised at fair value on the date 
a derivative contract is entered into and are subsequently 
remeasured to their fair value at the end of each reporting period. 
The accounting for subsequent changes in fair value depends on 
whether the derivatives are designated as a hedging instrument, 
and if so, the nature of the item being hedged. The Group 
designates certain derivatives as either:

>  hedges of fair value of recognised assets or liabilities or a firm 

commitment (fair value hedges)

>  hedges of a particular risk associated with the cash flows of 
recognised assets and liabilities and highly probably forecast 
transactions (cash flow hedges), or

>  hedges of a net investment in a foreign operation (net 

investment hedges).

Cardno documents at the inception of the hedging transaction 
the relationship between hedging instruments and hedged 
items, as well as its risk management objective and strategy for 
undertaking various hedge transactions. Cardno also documents 
its assessment, both at hedge inception and on an ongoing basis, 
of whether the derivatives that are used in hedging transactions 
have been and will continue to be highly effective in offsetting 
changes in fair values or cash flows of hedged items.

(i)  Fair value hedge
Changes in the fair value of derivatives that are designated and 
qualify as fair value hedges are recorded in profit or loss, together 
with any changes in the fair value of the hedged asset or liability 
that are attributable to the hedged risk.

62   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

1.  STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

(q)   Derivatives and hedging activities continued

(ii)  Hedge of net investment in foreign operation
Foreign currency differences arising on the translation of a 
financial liability designated as a hedge of a net investment in a 
foreign operation are recognised in other comprehensive income 
to the extent that the hedge is effective, and are presented within 
equity in the FCTR. To the extent that the hedge is ineffective, 
such differences are recognised in profit or loss. When the 
hedged part of a net investment is disposed of, the relevant 
amount in the FCTR is transferred to profit or loss as part of the 
profit or loss on disposal.

(r) 

Impairment
The carrying amount of Cardno’s assets, other than inventories 
(see paragraph (l)), and deferred tax assets (see paragraph (i)), 
are reviewed at each reporting date to determine whether there 
is any indication of impairment. If any such indication exists, an 
impairment test is performed. Cardno performs impairment testing 
of goodwill and intangibles with indefinite useful lives annually.

An impairment loss is recognised whenever the carrying amount of 
an asset or its cash generating unit exceeds its recoverable amount. 
Impairment losses are recognised in the profit and loss unless the 
asset has previously been revalued, in which case the impairment 
loss is recognised as a reversal to the extent of that previous 
revaluation with any excess recognised through the profit and loss.

Impairment losses recognised in respect of cash-generating units 
are allocated first to reduce the carrying amount of any goodwill 
allocated to the cash-generating unit (group of units) and then to 
reduce the carrying amount of the other assets in the unit (group of 
units) on a pro rata basis.

Calculation of recoverable amount
The recoverable amount of Cardno’s receivables carried at 
amortised cost is calculated as the present value of estimated 
future cash flows, discounted at the original effective interest  
rate (i.e. the effective interest rate computed at initial recognition 
of these financial assets). Receivables with a short duration are 
not discounted.

The recoverable amount of other assets is the greater of their fair 
value less costs of disposal and value in use. In assessing value 
in use, the estimated future cash flows are discounted to their 
present value using a pre-tax discount rate that reflects current 
market assessments of the time value of money and the risks 
specific to the asset. For an asset that does not generate largely 
independent cash inflows, the recoverable amount is determined 
for the cash-generating unit to which the asset belongs.

Subject to an operating segment ceiling test, for the purposes of 
goodwill impairment testing, CGUs to which goodwill has been 
allocated are aggregated so that the level at which impairment 
is tested reflects the lowest level at which goodwill is monitored 
for internal reporting purposes. Goodwill acquired in a business 
combination is allocated to groups of CGUs that are expected to 
benefit from the synergies of the combination.

Reversals of impairment
An impairment loss in respect of receivables carried at amortised 
cost is reversed if the subsequent increase in recoverable 
amount can be related objectively to an event occurring after the 
impairment loss was recognised.

An impairment loss in respect of goodwill is not reversed.

In respect of other assets, an impairment loss is reversed if 
there has been a change in the estimates used to determine the 
recoverable amount.

An impairment loss is reversed only to the extent that the asset’s 
carrying amount does not exceed the carrying amount that would 
have been determined, net of depreciation or amortisation, if no 
impairment loss had been recognised.

(s)  Trade and Other Payables

Liabilities are recognised for amounts to be paid in the future for 
goods and services received, whether or not billed to Cardno. 
Trade accounts payable are normally settled within 60 days.  
Trade and other payables are stated at cost.

(t) 

Interest Bearing Borrowings
Interest bearing borrowings are recognised initially at fair 
value less attributable transaction costs. Subsequent to initial 
recognition, interest bearing borrowings are stated at amortised 
cost with any difference between cost and redemption value 
being recognised in the profit and loss over the period of the 
borrowings on an effective interest rate basis.

(u)  Employee Benefits

Wages, salaries and annual leave
Liabilities for employee benefits for wages, salaries and annual 
leave expected to be settled within 12 months of the period end 
represent present obligations resulting from employees’ services 
provided to reporting date, calculated at undiscounted amounts 
based on remuneration wage and salary rates that Cardno 
expects to pay as at reporting date including related on-costs.

Long-term service benefits
The provisions for employee entitlements to long service leave 
and other deferred employee benefits represent the present value 
of the estimated future cash outflows to be made by the employer 
resulting from employees’ services provided up to the balance 
date and include related on-costs. In determining the liability 
for long service leave, consideration has been given to future 
increases in wage and salary rates, and the consolidated entity’s 
experience with staff departures.

Liabilities for employee entitlements which are not expected to be 
settled within 12 months are discounted using the rates attached 
to corporate bonds at balance date, which most closely match the 
terms of maturity of the related liabilities.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

ANNUAL REPORT 2015   63 

1.  STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

(u)  Employee Benefits continued

Diluted EPS is determined by adjusting the profit or loss attributable 
to ordinary shareholders and the weighted average number of 
ordinary shares outstanding, for the effects of all dilutive potential 
ordinary shares, which comprise share Performance Options and 
Performance Rights granted to employees.

The bonus element in a rights issue to existing shareholders 
increases the number of ordinary shares outstanding without a 
corresponding change in resources. In this case, the number of 
ordinary shares outstanding before the event is adjusted for the 
proportionate change in the number of ordinary shares outstanding 
as if the event had occurred at the beginning of the earliest period 
presented. If the changes occur after the reporting period but before 
the financial statements are authorised for issue, the per share 
calculations for those and any prior period financial statements 
presented shall be based on the new number of shares. The fact 
that per share calculations reflect such changes in the number of 
shares shall be disclosed. In addition, basic and diluted earnings 
per share of all periods presented shall be adjusted for the effects 
of errors and adjustments resulting from changes in accounting 
policies, accounted for retrospectively.

(y)  Critical Accounting Estimates and Judgements

Estimates and judgements are continually evaluated and are based 
on historical experience and other factors, including expectations 
of future events that may have a financial impact on the entity and 
that are believed to be reasonable under the circumstances.

Cardno makes estimates and assumptions concerning the future. 
The resulting accounting estimates will, by definition, seldom 
equal the related actual results. The estimates and assumptions 
that have a significant risk of causing a material adjustment to the 
carrying amounts of assets and liabilities within the next financial 
year are discussed below.

>  Estimating impairment of goodwill – refer to notes 1(r) and 15.

>  Revenue recognition in relation to long term contracts 

including estimating stage of completion and total contract 
costs – refer notes 1(f) and 2A.

>  Accounting for business combinations including estimating fair 
values of identifiable assets acquired and liabilities assumed 
– refer notes 1(o) and 34.

Defined contribution plans
A defined contribution plan is a post-employment benefit plan under 
which an entity pays fixed contributions into a separate entity and 
will have no legal or constructive obligation to pay further amounts. 
Obligations for contributions to defined contribution plans are 
recognised as an employee benefit expense in profit or loss in the 
periods during which services are rendered by employees. Prepaid 
contributions are recognised as an asset to the extent that a cash 
refund or a reduction in future payments is available. Contributions 
to a defined contribution plan that are due more than 12 months 
after the end of the period in which the employees render the 
service are discounted to their present value.

Share-based payment transactions
The grant date fair value of share-based payment awards  
granted to employees is recognised as an employee expense, 
with a corresponding increase in equity, over the period that  
the employees unconditionally become entitled to the awards. 
The amount recognised as an expense is adjusted to reflect  
the number of awards for which the related service and  
non-market vesting conditions are expected to be met, such  
that the amount ultimately recognised as an expense is based  
on the number of awards that meet the related service and  
non-market performance conditions at the vesting date.

(v)  Provisions

A provision is recognised in the balance sheet when Cardno has 
a present legal, equitable or constructive obligation as a result of 
a past event, and it is probable that a future sacrifice of economic 
benefits will be required to settle the obligation, the timing or 
amount of which is uncertain. If the effect is material, provisions 
are determined by discounting the expected future cash flows at 
the pre-tax rate that reflects current market assessments of the 
time value of money and, where appropriate, the risks specific to 
the liability.

Dividends
A provision for dividends payable is recognised in the reporting 
period in which the dividends are declared.

(w)  Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand and 
investments in money market instruments. Bank overdrafts are 
shown with interest-bearing loans and borrowings in current 
liabilities on the statement of financial position.

(x)  Earnings per Share

Cardno presents basic and diluted earnings per share (EPS) data 
for its ordinary shares. Basic EPS is calculated by dividing the 
profit or loss attributable to ordinary shareholders of the Company 
by the weighted average number of ordinary shares outstanding 
during the period. 

64   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

2A.  REVENUE 
Fees from consulting services 
Fees from sale of goods
Fees from recoverable expenses 
Interest received
Royalties
Rental income
Other
Revenue 

2B.  OTHER INCOME 
Non-refundable R&D tax incentives
Reversal of contingent consideration liability
Foreign exchange gains
Other Income

3.  EXPENSES, LOSSES AND (GAINS)

Depreciation 

Motor vehicles
Other property, plant and equipment

Total Depreciation

Amortisation of non-current assets

Works contracts
Software intangibles
Customer relationships

Total Amortisation
Total Depreciation & Amortisation

Impairment losses

Impairment of goodwill (note 15)
Impairment loss on remeasurement of disposal group (note 10)

Total Impairment Losses

Bad and doubtful debts

Financing costs

Interest and finance charges

Total Financing Costs

Rental expense relating to operating leases
Minimum lease payments 

Net loss/(gain) on disposal of property, plant and equipment

2015
$’000

1,004,479
13,094
404,333
506
158
226
4,120
1,426,916

2,413
-
9,036
11,449

4,841
17,747
22,588

2,076
1,711
6,446
10,233
32,821

177,856
46,167
224,023

9,847

11,179
11,179

41,937

185

2014
$’000

951,518
10,955
342,992
978
118
45
2,991
1,309,597

2,415
3,453
727
6,595

4,790
14,992
19,782

3,674
256
2,781
6,711
26,493

-
-
-

2,503

8,465
8,465

39,040

(518)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

4. 

INCOME TAX EXPENSE

(a)  The components of tax expense comprises:
Current tax expense

Current year
Adjustments for prior years

Deferred tax expense

Current year
Adjustments for prior years

Total income tax expense / (benefit)

(b)  Numerical reconciliation between tax expense and pre-tax profit
Profit / (loss) before tax
Income tax using the Australian corporation tax rate of 30% (2014: 30%)
Increase (decrease) in income tax expense due to:

Non-deductible expenses
Effect of tax rates in foreign jurisdictions
Allowances for R&D expenditure
Impairment of goodwill
Sundry items 

Under / (over) provided in prior years
Income tax expense / (benefit)

The effective tax rate for FY2015 was 9.1 per cent as compared to 26.8 per cent in FY2014. 
The tax benefit on losses reflects the tax effect of the impairment charges where goodwill is 
deductible for tax in the USA. This rate also reflects an increase in income earned in lower tax 
jurisdictions and a lower profit contribution from the United States.

(c)  Amounts recognised directly in equity
Share based payments

5.  DIVIDENDS PAID OR PROVIDED FOR ON ORDINARY SHARES

(a)  Dividends proposed subsequent to year end not recognised as a liability 
100% franked dividend at 30% (2014: 100% at 30%)  (Refer note 30)

(b)  Dividends paid during the year (30 cents per share, 100% franked at 30%)  
(2014: all dividends 100% franked at 30%)

(c)  Franking credit balance 
The amount of franking credits available for the subsequent financial year are:

>  franking account balance as at the end of the financial year at 30%

>  franking credits that will arise from the payment of income tax payable  

as at the end of the financial year

The impact on the franking account of dividends proposed after the balance sheet date but not 
recognised as a liability is to reduce it by $4,968,857 (2014: $11,895,165)

ANNUAL REPORT 2015   65 

2015
$’000

2014
$’000

15,145
(5,553)
9,592

(26,963)
2,921
(24,042)
(14,450)

(159,618)
(47,885)

5,776
(11,187)
(734)
43,430
(1,218)
(11,818)
(2,632)
(14,450)

37,835
(257)
37,578

(6,291)
(2,655)
(8,946)
28,632

106,766
32,030

3,640
(1,057)
(725)
-
(2,344)
31,544
(2,912)
28,632

283

1,989

11,594

27,755

49,452

56,530

2,325

13,059

15,384

5,781

11,971

17,752

 
 
 
66   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

6  CASH AND CASH EQUIVALENTS

Cash at bank and on hand
Restricted cash (project advances)
Bank short term deposits

7 

TRADE & OTHER RECEIVABLES (CURRENT)

Trade debtors
Provision for doubtful debts (note 33)

Sundry debtors 

INVENTORIES (CURRENT)

8 
Work in progress

9.  OTHER CURRENT ASSETS
Prepayments
Project advances
Security deposits

10.  DISPOSAL GROUP HELD FOR SALE

2015
$’000

79,510
5,118
122
84,750

265,146
(16,252)
248,894

17,619
266,513

2014
$’000

62,258
3,030
20,597
85,885

247,757
(11,376)
236,381

8,504
244,885

154,611

142,586

8,871
1,709
2,214
12,794

7,981
1,090
2,125
11,196

In May 2015, management committed to a plan to sell Caminosca S.A., a controlled entity based in Ecuador and part of the Americas segment. 
Accordingly, Caminosca S.A. is presented as a disposal group held for sale.

(a)  Impairment losses relating to the disposal group
Total impairment losses of $46.2 million for write downs of the disposal group to the lower of its carrying amount and its fair value less costs to 
sell have been included in ‘impairment losses’ in the consolidated statement of financial performance. The impairment losses have been applied 
to adjust the carrying amount of the following assets and liabilities within the disposal group.

Inventories
Vendor liability
Investments
Trade receivables
Goodwill and intangibles
Accruals

2015
$’000

21,926
(566)
1,549
7,074
12,351
3,833
46,167

The net contribution to the Group’s profit after tax by the disposal group, prior to being classified as held for sale, was $4.7 million (before the 
impact of the write down).

 
ANNUAL REPORT 2015   67 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

10.  DISPOSAL GROUP HELD FOR SALE continued

(b)  Assets and liabilities of disposal group held for sale
At 30 June 2015, the disposal group was stated at fair value less costs to sell and comprised the following assets and liabilities.

Cash and cash equivalents
Trade and other receivables
Property, plant and equipment
Deferred tax assets
Other current assets
Assets held for sale

Trade and other payables
Interest bearing loans and borrowings
Employee benefits
Current tax liabilities
Liabilities held for sale

2015
$’000

1,592
5,538
1,919
58
84
9,191

3,674
119
1,748
3,650
9,191

(c)  Cumulative income or expenses included in Other Comprehensive Income
Cumulative income included within the foreign currency translation reserve relating to the disposal group is $3,792,447.

(d)  Measurement of fair values

Fair value hierarchy

i. 
The non-recurring fair value measurement of the disposal group is classified as a Level 3 fair value (refer note 33(a)) and is based on 
management’s estimate of expected cash flows adjusted for risk and uncertainty associated with the sale process.

11.  TRADE & OTHER RECEIVABLES (NON CURRENT)

Sundry debtors

12.  OTHER FINANCIAL ASSETS (NON-CURRENT)

Investments in non-related entities
Interest rate swaps used for hedging

2015
$’000

-

3,496
4,129
7,625

2014
$’000

605

3,610
-
3,610

68   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

13.  PROPERTY, PLANT & EQUIPMENT

Laboratory equipment, instruments & amenities
Less accumulated depreciation

Motor vehicles
Less accumulated depreciation

Office furniture & equipment 
Less accumulated depreciation

Leasehold improvements
Less accumulated amortisation

Land and buildings
Less accumulated depreciation

Total Property Plant & Equipment

2015
$’000

49,604
(33,143)
16,461

31,335
(21,524)
9,811

88,735
(63,320)
25,415

21,922
(11,181)
10,741

3,578
(1,155)
2,423

64,851

2014
$’000

41,357
(25,920)
15,437

30,248
(17,499)
12,749

72,897
(52,094)
20,803

17,927
(8,361)
9,566

3,270
(1,116)
2,154

60,709

Movements in carrying amounts
Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current 
financial year.

Movements in carrying amounts
Movements in the carrying amounts for each class of property, plant and equipment between the 
beginning and the end of the current financial year.

Laboratory equipment, instruments & amenities
Carrying amount at the beginning of the year
Additions
Increase through merger acquisition
Reclass to assets held for sale
Disposals
Depreciation expense
Foreign exchange
Transfer between classes

Carrying amount at the end of the year

2015
$’000

2014
$’000

15,437
4,837
-
(226)
(325)
(5,013)
1,222
529

16,461

13,072
4,820
2,209
-
(199)
(4,287)
(52)
(126)

15,437

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

13.  PROPERTY, PLANT & EQUIPMENT continued

Motor vehicles
Carrying amount at the beginning of the year
Additions
Increase through merger acquisition
Reclass to assets held for sale
Disposals
Depreciation and amortisation expense
Foreign exchange
Transfer between classes
Carrying amount at the end of the year

Office furniture & equipment
Carrying amount at the beginning of the year
Additions
Increase through merger acquisitions
Reclass to assets held for sale
Disposals
Depreciation and amortisation expense
Foreign exchange
Transfer between classes
Carrying amount at the end of the year

Leasehold improvements
Carrying amount at the beginning of the year
Additions
Increase through merger acquisitions
Disposals
Depreciation and amortisation expense
Foreign exchange
Transfer between classes
Carrying amount at end of the year

Land & buildings
Carrying amount at the beginning of the year
Additions
Increase through merger acquisition
Disposals
Depreciation expense
Foreign exchange
Transfer between classes
Carrying amount at the end of the year

Carrying amount at the end of the year

ANNUAL REPORT 2015   69 

2015
$’000

12,749
1,465
-
(497)
(262)
(4,841)
1,419
(222)
9,811

20,803
13,962
-
(1,196)
(642)
(10,448)
1,562
1,374
25,415

9,566
3,924
-
(213)
(2,175)
1,320
(1,681)
10,741

2,154
109
-
(32)
(111)
303
-
2,423

2014
$’000

13,425
3,969
587
-
(497)
(4,790)
(36)
91
12,749

21,145
7,656
865
-
(445)
(8,840)
19
403
20,803

7,845
4,334
167
(598)
(1,748)
(66)
(368)
9,566

1,375
754
163
(118)
-
(20)
-
2,154

64,851

60,709

70   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

14.  DEFERRED TAX ASSETS & LIABILITIES

Recognised deferred tax assets and liabilities
Assets
Accruals
Provisions
Work in progress 
Intangibles
Other
Total deferred tax assets
Set-off of deferred tax liabilities
Net deferred tax assets

Liabilities
Work in progress
Property, plant and equipment
Intangibles
Prepayments
Other
Total deferred tax liabilities
Set-off of deferred tax assets
Net deferred tax liabilities

NET DEFERRED TAX ASSETS (LIABILITIES)

2015
$’000

2014
$’000

24,517
21,772
-
15,591
5,663
67,543
(22,376)
45,167

21,313
-
755
1,047
1,013
24,128
(22,376)
1,752

43,415

26,759
17,034
662
-
3,715
48,170
(31,499)
16,671

17,445
1,473
12,948
1,477
(1,028)
32,315
(31,499)
816

15,855

 
ANNUAL REPORT 2015   71 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

14.  DEFERRED TAX ASSETS & LIABILITIES continued

30 June 2015

Movement in temporary differences during the year:

Accruals
Provisions
Sundry items
Prepayments
Work in progress
Intangibles

30 June 2014

1 July 
2014

$’000

Recognised 
in profit or 
loss 
$’000

Adjustments 
to prior 
years
$’000

Other*

30 June 
2015

$’000

$’000

26,760
17,034
3,269
(1,477)
(16,783)
(12,948)
15,855

(5,886)
3,616
2,059
523
(1,600)
28,251
26,963

(829)
(814)
(236)
224
(666)
(600)
(2,921)

1 July 
2013

$’000

Recognised 
in profit or 
loss 
$’000

Adjustments 
to prior 
years
$’000

4,472
1,936
(442)
(317)
(2,264)
133
3,518

Other*

24,517
21,772
4,650
(1,047)
(21,313)
14,836
43,415

30 June 
2014

$’000

$’000

Movement in temporary differences during the year:

Accruals
Provisions
Unearned revenue
Sundry items
Property, plant and equipment
Prepayments
Work in progress
Goodwill on acquisition (USA)

16,021
20,899
-
817
(3,541)
(1,067)
(16,309)
(8,982)
7,838

11,128
(2,285)
-
613
2,448
(460)
(1,001)
(4,152)
6,291

713
(193)
-
750
1,448
24
(39)
(47)
2,656

(1,102)
(1,387)
-
847
(113)
26
566
233
(930)

* Other adjustments relate to impacts of translating foreign operations and acquisitions

15.  INTANGIBLE ASSETS

Goodwill at cost

Works contracts
Accumulated amortisation

Patents and trademarks

Software intangibles
Accumulated amortisation

Customer relationships
Accumulated amortisation

Total Intangible Assets

2015
$’000

640,685
640,685

18,574
(18,290)
284

2,081

7,265
(3,406)
3,859

35,184
(13,828)
21,356

668,265

26,760
17,034
-
3,027
242
(1,477)
(16,783)
(12,948)
15,855

2014 
Restated
$’000

728,085
728,085

17,825
(15,249)
2,576

2,081

5,446
(1,416)
4,030

29,900
(5,840)
24,060

760,832

72   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

15.  INTANGIBLE ASSETS continued

Reconciliation of movement in carrying amounts 
from beginning of year to end of year:

2014
Balance at the beginning of year
Additions:
> 
>  acquisition through business combinations

internal development

- current year*

Write off
Amortisation charges
Effect of foreign exchange
Closing value at 30 June 2014

* Restated (refer to note 34)

internal development

2015
Balance at the beginning of year
Additions:
> 
Impairment on remeasurement of  
disposal group (note 10)
Amortisation charges
Impairment of goodwill*
Effect of foreign exchange
Closing value at 30 June 2014

Goodwill

Works 
Contracts 

Patents and 
Trademarks

Software 
Intangibles

Customer
Relationships

$’000

$’000

$’000

$’000

$’000

617,733

3,603

2,081

-

117,942
-
-
(7,590)
728,085

-

2,621
-
(3,674)
26
2,576

-

-
-
-
-
2,081

728,085

2,576

2,081

-

(12,024)
-
(177,856)
102,480
640,685

-

(327)
(2,076)
-
111
284

-

-
-
-
-
2,081

754

603

2,883
-
(256)
46
4,030

4,030

1,005

-
(1,711)
-
535
3,859

5,869

-

20,993
-
(2,781)
(21)
24,060

24,060

-

-
(6,446)
-
3,742
21,356

* During the year ended 30 June 2015, the Americas CGU achieved earnings results below management’s expectations, particularly in the second half of the year, stemming from patchy 
growth in various sectors across the region, severe impacts of winter weather in December 2014 through February 2015 and a significantly lower oil price. This triggered a reassessment 
by management of the pace of recovery in this market and the forecasts used to estimate the recoverable amount of goodwill attaching to this CGU. Based on this assessment an 
impairment loss of $177.9 million (2014: Nil) has been recognised.

Goodwill is allocated to the following groups of cash-generating units:
>  Americas
>  Asia Pacific

2015
$’000

412,497
228,188
640,685

2014
$’000

499,764
228,321
728,085

For the purposes of impairment testing, goodwill is allocated to Cardno’s management divisions which represent the lowest level within Cardno 
at which the goodwill is monitored for internal management purposes. During the year the Group changed its internal reporting structure 
which resulted in a change to the allocation of goodwill to groups of cash generating units (CGU). In the prior year there were four CGU’s being 
Americas, Emerging Markets, Australia & New Zealand and Software. As a result of the change, Software and parts of Emerging Markets 
are now included in the Americas CGU. Australia & New Zealand, along with the rest of the Emerging Markets is now the Asia Pacific CGU.  
Comparative information above has been restated to maintain consistency with current year presentation.

The Group uses the value in use method to estimate the recoverable amount of its CGU. Value in-use is calculated based on the present value 
of cash flow projections over a five year period and include a terminal value at the end of year five. The cash flow projections over the five year 
period are based on the Group’s budget for 2016 and year on year growth rates over the forecasted period based on management’s estimates 
of underlying economic conditions, past performance and other factors anticipated to impact the CGU’s performance. The long term growth rate 
used in calculating the terminal value is based on long term growth estimates for the countries and industries in which the CGU operates.

The cash flows are discounted to their present value using a pre-tax discount rate on Cardno’s weighted average cost of capital adjusted for 
country and industry specific risks associated with the CGU.

ANNUAL REPORT 2015   73 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

15.  INTANGIBLE ASSETS continued

The key assumptions used in the estimation of recoverable amount are set out below:

>  Americas
>  Asia Pacific

Five year compound 
average Growth Rate

Terminal Growth Rate

Pre-Tax Discount Rate

2015

10.00%
2.68%

2014

9.68%
2.09%

2015

3.00%
3.00%

2014

3.00%
3.00%

2015

12.70%
12.30%

2014

14.00%
14.70%

Sensitivity analysis performed indicates a reasonable possible change in any of the key assumptions for the Asia Pacific CGU would not 
result in impairment. 
The carrying amount of the Americas CGU was determined to be higher than its recoverable amount of $711.0 million and an impairment 
loss of $177.9 million was recognised in 2015 (2014: Nil). The impairment loss was fully allocated to goodwill and included in ‘impairment 
losses’ in the consolidated statement of financial performance.
Following the impairment loss recognised in the Group’s Americas CGU, the recoverable amount was equal to the carrying amount. 
Therefore, any adverse movement in a key assumption would lead to further impairment.

16.  TRADE & OTHER PAYABLES (CURRENT)

Trade payables & accruals
Vendor liability 

17.  LOANS & BORROWINGS (CURRENT)

Lease liabilities
Hire purchase liabilities
Bank loans (i) 

(i)  Details of the terms and conditions of loans and borrowings are set out in note 20

18.  SHORT-TERM PROVISIONS

Employee benefits
Legal provision

Movements in legal provision:
Balance at 1 July
Increase through merger acquisition
Provision made during the year
Provision used during the year
Provision reversed during the year
Effect of foreign exchange
Balance at 30 June

2015
$’000

127,466
23,100
150,566

1,849
40
1,093

2,982

33,549
3,410
36,959

4,157
-
1,243
(959)
(1,484)
453
3,410

2014
$’000

115,409
30,845
146,254

1,944
57
1,148

3,149

28,024
4,157
32,181

9,629
93
1,143
(1,922)
(4,794)
8
4,157

The Group makes provision for legal claims not covered by the Group’s professional indemnity policy and as at 30 June 2015 an estimate of 
the potential impact of these claims have been provided for.

 
74   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

19.  OTHER CURRENT LIABILITIES

Unearned revenue
Deferred rent

20.  LOANS & BORROWINGS (NON-CURRENT)
Lease liabilities
Hire purchase liabilities
Bank loans
Long term notes

2015
$’000

40,187
2,860
43,047

1,580
-
192,870
198,658
393,108

2014
$’000

47,289
1,017
48,306

3,548
40
299,339
-
302,927

Long Term Notes
On 15 August 2014, the Group closed long term note issue in the US Private Placement debt market. The note is subject to a fixed rate of  
interest and is denominated in US dollars with a $65.8 million tranche maturing August 2021 and a $132.9 million tranche maturing August 2024. 
The proceeds were used to repay a portion of the Group’s existing bank loans. 
The long term note has been designated as part of a fair value hedge in relation to interest rate risk management. The note carrying value includes 
a fair value adjustment uplift of $4.1 million (2014: Nil), being the revaluation of the debt for the hedged risk. This fair value loss in the carrying 
value of the notes is offset by a gain of $4.1 million (2014: Nil) on the interest rate swap instruments which are designated as an effective fair 
value hedge and recognised as a fair value derivative asset (note 12). 
Interest is payable semi-annually to noteholders. The weighted average interest rate (including the impact of interest rate hedge) of the long term 
note as at 30 June 2015 is 1.74 per cent (2014: Nil). 
Under the terms of the note agreement, the Company and a number of its wholly-owned subsidiaries jointly and severally guarantee and indemnify 
the noteholders in relation to the issuer’s obligations. 

Bank Loans 
The Group has bank loans of $194.0 million (2014: $300.5 million) as at 30 June 2015 with weighted average interest rate of 1.75 per cent  
(2014: 1.94 per cent). Funding available to the Group from undrawn facilities is $258.9 million (2014: $72.1 million). The loans disclosed as current 
represents amounts repayable within one year. 
The Group’s facility limits comprise working capital facilities of $10.0 million (2014: $10.0 million) and US$15.0 million (2014: US$15.0 million) as 
well as a multi-currency bilateral revolving term facility of US$330.0 million (2014: US$330.0 million). The Group completed a one year extension of 
the revolving term facility during the year extending the maturity until December 2019. 
There were no bank overdrafts in existence at 30 June 2015 (2014: Nil).
Under the terms of the agreements, the Company and a number of its wholly-owned subsidiaries jointly and severally guarantee and indemnify the 
banks in relation to each borrower’s obligations.

21.  LONG-TERM PROVISIONS 

Employee benefits

22.  OTHER NON-CURRENT LIABILITIES

Deferred rent
Other

2015
$’000

2014
$’000

10,342

12,854

589
287
876

854
252
1,106

 
ANNUAL REPORT 2015   75 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

23.  ISSUED CAPITAL OF CARDNO LIMITED

Balance at the beginning of the period
Shares issued during the period:
>  Dividend reinvestment scheme
>  Shares issued for cash (net of transaction costs)
>  Employee Tax Exempt Share Acquisition Plan
>  Employee share based payments
>  Own shares issued (i)
>  Exercise of Performance Options (ii)

30 June 2015

30 June 2014

No. of 
shares

$’000

No. of 
shares

$’000

162,627,638

623,875

143,726,327

500,374

1,667,137
1,088,757
-
-
250,000
-

7,397
6,115
-
2,946
1,328
-

872,488
15,077,784
351,039
-
2,600,000
-

5,658
92,966
2,255
4,790
17,832
-

Balance at the end of the year

165,633,532

641,661

162,627,638

623,875

(i)  Shares issued are held in trust by the Cardno Limited Performance Equity Plan Trust which has been formed solely for the purpose of subscribing for, acquiring and holding shares 
for the benefit of employees participating in the Performance Equity Plan (PEP) of Cardno Limited.

(ii)  During 2015, 245,831 (2014: 2,481,030) shares delivered on exercise of Performance Options and Performance Rights were obtained from shares held in trust by the Cardno 
Limited Performance Equity Plan Trust and recognised in the Group’s reserve for own shares (refer note 24).

The Company does not have authorised capital or par value in respect of its issued shares.

All shares are ordinary shares and have the right to receive dividends as declared and, in the event of winding up the Company, to participate in 
the process from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their 
holder to one vote, either in person or by proxy, at a meeting of members.

Performance Equity Plan (PEP) 

The PEP is designed to reward strong performance by individuals within the Cardno Group of companies. Performance Options and Performance  
Rights are issued under the PEP (made in accordance with thresholds set in the plan approved at the 2009 AGM) which provides certain 
employees (as determined by the Board) with the opportunity to acquire shares in the Company, or the option to acquire shares in the Company. 

Movements in Performance Options throughout the year were as follows:

Grant Date

Vesting
Date

Expiry Date

1 November
2011

1 November
2014

1 November
2015

Weighted average exercise price

Weighted average remaining contract life

Total expense recognised Nil (2014: $510,034)

Exercise
Price
$

Fair Value at 
Grant Date
$

Number of 
Performance 
Options at 
Beginning  
of Year

Performance 
Options 
Granted

Performance 
Options 
Lapsed

Performance 
Options 
Exercised

Performance 
Options 
Vested not 
Exercised

Number of 
Performance 
Options as 
at 30 June 
2015

5.26

0.81

3,053,000

5.26

-

-

3,053,000

5.26

-

-

-

-

-

0.00

0 days

76   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

23.  ISSUED CAPITAL OF CARDNO LIMITED continued

Performance Options are subject to a performance hurdle and to vest the Company must achieve earnings per share (EPS) growth in 
accordance with the following scale:

EPS Growth Over 3 Years

<12.5% (<4% pa)
12.5% (4% pa)
>12.5% (4% pa) & <26% (8% pa)

26% (8% pa)

>26% (8% pa) & <40% (12% pa)
≥40% (12% pa)

% of Performance Options  
in Tranche to Vest
0%
30%
Pro rata

70%

Pro rata
100%

There were no Performance Options granted in FY2015. The fair value of Performance Options granted in previous financial years was 
calculated using the Black-Scholes model, taking into account price volatility, risk free interest rates and the dividend yield. 

Movements in Performance Rights throughout the year were as follows:

Grant Date

Vesting
Date

Expiry Date

Performance 
Hurdle

Fair Value at 
Grant Date
$

Number of 
Performance 
Rights at 
Beginning  
of Year

Performance 
Rights 
Granted

Performance 
Rights 
Lapsed

Performance 
Rights 
Exercised

Performance 
Rights 
Vested not 
Exercised  
as at 30 June 
2015 

Number of 
Performance 
Rights as  
at 30 June 
2015

20 October 
2011

20 October 
2014

20 October 
2015

1 November
2011

1 November
2014

1 November
2015

18 October 
2012

18 October 
2015

18 October 
2016

1 November 
2012

1 November 
2015

1 November 
2016

17 October
2013

17 October
2016

17 October
2017

11 November 
2013

11 November 
2016

11 November 
2017

23 October 
2014

23 October 
2017

23 October 
2018

10 November 
2014

10 November 
2017

10 November 
2018

EPS Growth

TSR

EPS Growth

TSR

EPS Growth

TSR

EPS Growth

TSR

EPS Growth

TSR

EPS Growth

TSR

EPS Growth

TSR

EPS Growth

4.21

2.81

4.38

2.97

6.74

4.46

6.68

4.43

5.50

3.99

6.10

4.84

4.63

2.28

4.47

TSR

 1.96

Total expense recognised $2,662,501 (2014: $2,290,744)

55,000

55,000

208,750

208,750

60,000

60,000

704,270

704,270

80,000

80,000

939,960

939,960

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

99,000

99,000

1,400,784

1,400,784

33,663

33,663

127,767

127,767

-

-

68,787

68,787

-

-

70,200

70,200

-

-

1,780

1,780

21,337

21,337

75,164

75,164

-

-

5,819

5,819

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

60,000

60,000

635,483

635,483

80,000

80,000

869,760

869,760

99,000

99,000

1,399,004

1,399,004

ANNUAL REPORT 2015   77 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

23.  ISSUED CAPITAL OF CARDNO LIMITED continued

The fair values of Performance Rights granted during the year with a total shareholder return (TSR) performance hurdle, have been calculated 
using a Monte-Carlo simulation valuation model taking into account price volatility, risk free interest rates and comparator company shareholder 
return performance. The fair value of Performance Rights with the EPS growth hurdle was calculated using a Black-Scholes model taking into 
account risk free interest rates and the dividend yield.

The model inputs for the fair value of Performance Rights granted during the year ended 30 June 2015 include share price of $5.46 for Performance 
Rights granted on 23 October 2014 (2014: $6.49, 17 October 2013) and $5.27 for Performance Rights granted on 10 November 2014 (2014: $7.19,  
11 November 2013), expected price volatility of 30 per cent and 30 per cent respectively (2014: 31 per cent and 31 per cent), expected dividend yield 
of 5.5 per cent (2014: 5.5 per cent) and risk free interest rate of 2.57 per cent and 2.57 per cent (2014: 2.99 per cent and 3.06 per cent).

The Performance Rights are subject to performance hurdles measured over three financial years. 50 per cent of the Performance Rights may 
vest, on a sliding scale, in accordance with the following scale:

TSR of Cardno Relative 
to TSRs of Companies in 
Comparator Group
Over 3 Years
<50th percentile
50th percentile

>50th & <75th percentiles

75th percentile and above

% of Performance  
Rights to Vest
(Tranche 1 50%)

0%
50%

Pro rata

100%

EPS Growth  
Over 3 Years

<12.5% (<4% pa)
12.5% (4% pa)
>12.5% (4% pa)  
& <26% (8% pa)
26% (8% pa)
>26% (8% pa)  
& <40% (12% pa)
≥40% (12% pa)

% of Performance  
Rights to Vest
(Tranche 2 50%)

0%
30%

Pro rata

70%

Pro rata

100%

Employee Share Acquisition Plans (ESAP)
No shares were issued under the ESAP in FY2015. In prior years, shares were issued under the ESAP in accordance with thresholds set out 
in plans approved by shareholders at the 2009 AGM. It provided employees with the opportunity to acquire shares in the Company for no 
consideration as a bonus component of their remuneration. Employees with 12 months service or greater who had worked an average of 100 
hours or more per month were entitled to $500 of shares and employees with 6 to 12 months service were entitled to $250 of shares. Shares 
issued under ESAP rank equally with other fully paid ordinary shares from the date of issue.

Shares are issued in the name of the participating employee and are subject to a restriction period. The shares are restricted under the plan 
until the earlier of three years from the date of acquisition or the date they cease to be an employee. Once the restriction period is lifted the 
shares can be traded as fully paid ordinary shares. The ESAP has no conditions that could result in the recipient forfeiting ownership of shares.

24.  RESERVES

Foreign Currency Translation Reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements 
of foreign Group entities where their functional currency is different to the presentation currency of the reporting entity as well as from the 
translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.

Reserve for Own Shares
The reserve for the Company’s own shares comprises the cost of the Company’s shares held by the Group. The shares are held in trust by the 
Cardno Limited Performance Equity Plan Trust which has been formed solely for the purpose of subscribing for, acquiring and holding shares for 
the benefit of employees participating in the Performance Equity Plan (PEP) of Cardno Limited and its associates employees. At 30 June 2015 the 
Group held 357,716 of the Company’s shares (2014: 353,547).

78   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

25.  NOTES TO THE CASH FLOW STATEMENT

(a)  Reconciliation of Net Cash from Operating 

Activities to Net profit for the year

Net profit for the year

Adjust for non-cash items

Depreciation and amortisation

Impairment loss

Gain/(loss) on sale of property, plant and equipment

Unrealised foreign exchange (gain)/loss

Net unrealised (gain)/loss on fair value hedge

Share based remuneration

Adjust for changes in assets and liabilities  
(increase) / decrease in assets:

Inventories

Deferred tax assets

Trade receivables

Provision for doubtful debts

Other receivables

Prepayments

Other assets

Increase / (decrease) in liabilities:

Trade payables

Income tax payable

Employee provisions

Unearned revenue

Other liabilities

Deferred tax liabilities

2015
$’000

2014
$’000

(145,168)

78,134

32,821

224,023

185

(9,036)

83

2,946

(7,687)

(25,153)

7,918

5,556

(8,593)

(1,024)

(13,218)

4,002

(16,785)

4,761

(7,677)

(767)

936

48,123

26,493

-

(518)

(727)

-

7,033

190

(8,343)

5,632

(1,717)

(1,826)

(123)

(3,445)

(16,122)

7,332

(1,702)

(2,000)

(4,007)

327

84,611

 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

ANNUAL REPORT 2015   79 

2015

$’000

2014

$’000

25.  NOTES TO THE CASH FLOW STATEMENT continued

(b)  Reconciliation of cash

For the purposes of the cash flow statements, cash includes cash on hand, restricted cash and 
bank deposits at call net of bank overdrafts. Cash at the end of the year as shown in the cash 
flow statements is reconciled to related items in the accounts as follows:

Cash and cash equivalents (note 6)

84,750

85,885

Restricted cash (project advances) can only be drawn in relation to specific projects for  
which it has been provided.

(c)  Non-cash financing and investing activities

During the financial year, the consolidated entity acquired property, plant and equipment  
with an aggregate fair value of $27,094 (2014: $154,863) by means of finance leases.  
These acquisitions are not reflected in the cash flow statement.

(d)  Acquisition of entities

Details of significant acquisitions are set out in note 34. Summarised financial information 
relating to items presented in the cash flow statement is as follows:

Purchase consideration

Cash consideration paid

Vendor liability

Consideration

Assets and liabilities held at acquisition date:*

Cash

Receivables

Deferred tax assets

Property, plant and equipment

Intangibles

Inventories

Creditors and borrowings

Deferred tax liabilities

Provisions

Goodwill on acquisition

Consideration

Net cash outflow on acquisition

Cash consideration paid

Less cash acquired

* Comparative information has been restated (refer to note 34)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

170,044

25,003

195,047

6,779

49,673

-

4,186

26,496

7,851

(15,221)

(1,341)

(1,318)

77,105

117,942

195,047

170,044

(6,779)

163,265

80   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

26.  CAPITAL AND LEASING COMMITMENTS

(a)  Finance leases and hire purchase
Commitments in relation to finance leases are payable as follows:
>  Within one year
>  Later than one year but not later than 5 years
>  Later than 5 years
Minimum lease payments
Less: Future finance charges
Recognised as a liability

Present value of minimum lease and hire purchase payment
Commitments in relation to finance leases are payable as follows:
>  Within one year
>  Later than one year but not later than 5 years
>  Later than 5 years
Recognised as a liability

Finance leases are taken out over motor vehicle, leasehold improvements and  
plant and equipment, with terms varying between 3 and 5 years.
Representing lease and hire purchase liabilities:
Current (note 17)
Non-current (note 20)

(b)  Operating Leases
>  Within one year
>  Later than one year but not later than 5 years
>  Later than 5 years
Commitments not recognised in the financial statements

2015
$’000

2,251
1,779
-
4,030
(561)
3,469

1,889
1,580
-
3,469

1,889
1,580
3,469

2014
$’000

2,491
4,152
-
6,643
(1,054)
5,589

2,001
3,588
-
5,589

2,001
3,588
5,589

43,123
80,317
15,779
139,219

40,445
87,431
18,400
146,276

The Group leases office premises under non-cancellable operating leases, with terms varying from three to 10 years. The majority of leases 
provide for an option of renewal at the end of the lease term. Premise leases are subject to annual review for changes in the CPI index and 
contain restrictions on sub-leasing. The Group also leases various plant and equipment under terms between two and five years as well as 
software licenses with a term of three years subject to annual review based on the number of licenses exercised.

27.  EMPLOYEE BENEFITS

The aggregate employee benefit liability is comprised of:
Accrued wages, salaries and on-costs (included in payables)
Provisions (current) (note 18)
Provisions (non-current) (note 21)

Defined contribution superannuation expense 

2015
$’000

25,655
33,549
10,342
69,546

21,221

2014
$’000

28,525
28,024
12,854
69,403

21,445

ANNUAL REPORT 2015   81 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

28.  CONTINGENT LIABILITIES

As at the date of this report, there is no current litigation or pending or threatened litigation which would not be covered by professional 
indemnity insurance or has not already been provided for in the financial statements of Cardno, or which is likely to have a material effect on 
the financial performance of Cardno.
Cardno had contingent liabilities at 30 June 2015 in respect of:

Bank guarantees

2015
$’000
35,390

2014
$’000
26,043

Cardno has bank guarantee facilities/bond facilities with financial institutions denominated in Australian dollars, United States dollars, 
Great British pounds and United Arab Emirates Dirham. The guarantee facilities available to Cardno total $97.8 million (2014: $78.3 million). 
These facilities are secured by an unlimited interlocking guarantee and indemnity or a parent company guarantee. 

29.  SUBSEQUENT EVENTS

On 17 August 2015, the Directors of Cardno Limited declared a final dividend of 7 cents per share (100 per cent franked) for the 2015 
financial year. The dividend will be paid on 2 October 2015 to shareholders registered on 8 September 2015 and will total $11,594,347.  
The dividend has not been provided for in the 30 June 2015 financial statements.

30.  EARNINGS PER SHARE

Basic earnings per share

The calculation of basic earnings per share was based on the following:

Profit attributable to ordinary shareholders

Weighted average number of ordinary shares
Issued ordinary shares at 1 July
Effect of shares issued for cash consideration
Effect of shares issued in respect of employee share scheme

2015
$

2014
$

(145,167,785)

78,134,444

No.
162,627,638
1,740,614
-

No.
143,726,327
6,329,844
100,022

Weighted average number of ordinary shares at 30 June

164,368,252

150,156,193

Basic Earnings per Share

Cents
(88.32)

Cents
52.04

Performance Options and Performance Rights are considered to be potential ordinary shares and are therefore excluded from the weighted 
average number of ordinary shares used in the calculation of basic earnings per share. Where dilutive, potential ordinary shares are included 
in the calculation of diluted earnings per share.

82   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

2015
$

2014
$

30.  EARNINGS PER SHARE continued

Diluted earnings per share

The calculation of diluted earnings per share was based on the following:

Profit attributable to ordinary shareholders (diluted)

(145,167,785)

78,134,444

Weighted average number of ordinary shares (diluted)
Weighted average number of ordinary shares at 30 June
Effect of Performance Options and Performance Rights on issue

No.
164,368,252
-

No.
150,156,193
4,218,881

Weighted average number of ordinary shares (diluted) at 30 June

164,368,252

154,375,074

Diluted Earnings per Share

31.  AUDITOR’S REMUNERATION

Audit services
Auditors of the Company

KPMG Australia:
>  Audit and review of financial reports
>  Other regulatory requirements

Overseas KPMG firms:
>  Audit and review of financial reports

Other services
Auditors of the Company

KPMG Australia:
>  Other assurance services

Cents
(88.32)

2015
$

Cents
50.61

2014
$

579,500
-

445,000
-

887,528
1,467,028

737,795
1,182,795

6,000

6,000

6,000

6,000

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

32.  KEY MANAGEMENT PERSONNEL DISCLOSURES

Key management personnel compensation included in employee benefits are as follows:

Short-term employee benefits
Post-employment benefits
Equity compensation benefits
Termination benefits

ANNUAL REPORT 2015   83 

2015
$
3,698,041
204,314
532,949
1,661,724
6,097,028

2014
$
4,471,229
263,680
700,797
485,547
5,921,253

Apart from the details disclosed in this note, no Director has entered into a material contract with the Company or the consolidated entity since 
the end of the previous financial year and there were no material contracts involving Directors’ interests existing at year-end.

Other key management personnel transactions with the Company or its controlled entities
A number of key management persons, or their related parties, hold positions in other entities that result in them having control or significant 
influence over the financial or operating policies of those entities.

None of these entities transacted with the Company or its subsidiaries in the reporting period. 

33.  FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT

(a)  Determination of fair values
In determining fair value measurement for disclosure purposes, the Group uses the following fair value measurement hierarchy that reflects 
the significance of the inputs used in making the measurements:

Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique 
includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation.

(b)  Fair values of financial instruments
The Group’s financial assets and liabilities are included in the balance sheet at amounts that approximate fair values with the exception 
of fixed rate long term notes which have a fair value of $197.8 million (2014: Nil). The basis for determining fair value of long term notes 
is calculated based on discounted expected future principal and interest cash flows, discounted at the market rate of interest at the 
measurement date.

The fair value at 30 June 2015 of derivative assets (2014: Nil) held for risk management, which are the Group’s only financial instruments 
carried at fair value, was a net gain of $4.1 million (2014: Nil) measured using Level 2 valuation techniques as defined in the fair value 
hierarchy above. The Group does not have any financial instruments that are categorised as Level 1 or Level 3 in the fair value hierarchy. 

84   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

33.  FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT continued

(c)  Financial risk management
The main risks arising from Cardno’s financial instruments are interest rate risk, foreign exchange risk, credit risk and liquidity risk. Cardno uses 
different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest 
rate and foreign exchange risks and ageing analysis for credit risk. The Board through the Audit, Risk & Compliance Committee (ARCC) reviews 
and agrees policies for managing these risks and ensures strategies are implemented in the business. A Quality Management System and 
an Operational Risk Committee supports consistent risk mitigation practices and procedures in order to maintain a consistent level of quality 
across Cardno which includes the minimisation of risk. The policies for managing each of Cardno’s financial risks are summarised below and 
remain unchanged from the prior year.

Credit risk
Credit risk is the risk of financial loss to Cardno if a customer or counterparty to a financial instrument fails to meet its contractual obligations, 
and arises principally from Cardno’s receivables from customers. 
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised below.
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on 
customers in accordance with the policy.
Cardno does not require collateral in respect of financial assets.
In line with the Group’s Treasury policy, investments are allowed only in liquid securities and only with counterparties that have a credit rating 
equal to or better than a rating approved by the ARCC. The Treasury policy is reviewed by the ARCC annually.
There are no material concentrations of credit risk.

Trade receivables
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:

Australia & New Zealand
Americas
Asia Pacific
Europe & Africa

The ageing of Cardno’s trade receivables at the reporting date was:

2015
$’000
47,496
164,276
12,757
24,365
248,894

2014
$’000
64,621
138,051
14,445
19,264
236,381

Not past due (current)
Past due 0-30 days (30 day ageing)
Past due 31-60 days (60 day ageing)
Past due more than 60 days

2015

2014

Gross
$’000
120,844
47,811
26,124
70,367
265,146

Impairment
$’000
-
-
-
16,252
16,252

Gross
$’000
131,727
37,009
21,911
57,110
247,757

Impairment
$’000
-
-
-
11,376
11,376

Cardno establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. 
The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss 
component established for groups of similar assets in respect of losses that have been incurred but not yet identified. 

ANNUAL REPORT 2015   85 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

33.  FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT continued

Credit risk continued
The movement in the provision for impairment in respect of trade receivables of Cardno during the year was as follows:

Balance at 1 July
Impairment loss recognised
Receivables written off
Increase through entities acquired
Effect of foreign exchange

Balance at 30 June

2015
$’000
11,376
9,487
(5,457)
-
846

16,252

2014
$’000
12,777
2,503
(4,125)
316
(95)

11,376

Liquidity risk
Liquidity risk is the risk that Cardno will not be able to meet its financial obligations as they fall due. Prudent liquidity risk management 
implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. Due to the 
dynamic nature of the underlying businesses, Cardno aims to maintain flexibility in funding by keeping sufficient committed credit lines 
available to meet Cardno’s requirements.
The following are the contractual maturities of financial liabilities at the reporting date, including estimated interest payments and excluding 
the impact of netting agreements:

30 June 2015

Non-derivative financial liabilities
Trade and other payables
Finance leases & hire purchase
Bank loans
Long term notes

Derivative financial instruments
Interest rate swaps used for hedging

30 June 2014

Non-derivative financial liabilities
Trade and other payables
Finance leases & hire purchase
Bank loans

Carrying 
amount
$’000

Contractual 
cash flows
$’000

Less than  
1 year
$’000

1 – 5 years

Over 5 years

$’000

$’000

150,566
3,469
193,963
198,658

(4,129)
542,527

150,566
4,030
225,687
261,019

(6,696)
634,606

150,566
2,251
5,170
7,748

(3,752)
161,983

-
1,779
220,517
30,992

(3,640)
249,648

-
-
-
222,279

696
222,975

Carrying 
amount
$’000

Contractual 
cash flows
$’000

Less than  
1 year
$’000

1 – 5 years

Over 5 years

$’000

$’000

146,254
5,589
300,487
452,330

146,254
6,643
350,170
503,067

146,254
2,491
7,380
156,125

-
4,152
342,789
346,941

-
-
-
-

The long term note includes US$50.0 million seven year tranche maturing August 2021 and US$100.0 million 10 year tranche maturing 
August 2024. Bank loans are term facilities maturing in December 2019. 
The gross outflows/(inflows) disclosed in the tables above for derivative financial assets represent the contractual undiscounted cash flows 
of derivative financial instruments held for risk management purposes and which are usually not closed out prior to contractual maturity.  
The disclosure shows net cash flow amounts for derivatives that are net cash settled.

86   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

33.  FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT continued

Market risk
(a)  Foreign exchange risk 
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is 
not the functional currency of the respective Group entities. Cardno operates internationally and is exposed to foreign exchange risk arising 
from the currency exposure to the Australian dollar.
Cardno does not engage in any transactions which are of a speculative nature. 
Cardno borrows funds in foreign currencies to hedge its net investments in foreign operations. Cardno has loans totalling $357.3 million  
(2014: $294.0 million) denominated in US dollars (USD) and $12.8 million (2014: $10.8 million) denominated in pounds sterling (GBP) which 
have been designated as hedges of Cardno’s net investments in subsidiaries with functional currencies in those currencies. Cardno also has 
working capital loans totalling $25.2 million (2014: Nil) denominated in USD and $0.2 million (2014: Nil) denominated in GBP.
As at 30 June 2015, a 10 per cent strengthening of the Australian dollar against the USD and GBP would have increased equity by  
$34.8 million (2014: $26.7 million) and $1.2 million (2014: $1.0 million) respectively. A 10 per cent weakening of the Australian dollar  
against the USD and GBP would have decreased equity by $42.5 million (2014: $32.7 million) and $1.4 million (2014: $1.2 million) respectively. 
There would be no impact on profit and loss as the loans are designated as net investment hedges.
Other than interest bearing liabilities, there are no other significant foreign currency exposures in relation to financial instruments at year end.

(b)  Interest rate risk
Cardno manages its exposure to interest rate fluctuation by continuously monitoring its debt to ensure any significant movement would not 
have a material impact on the performance of Cardno. Cardno does not engage in any transactions which are of a speculative nature.
At the reporting date the interest rate profile of Cardno’s interest-bearing financial instruments was:

Variable rate instruments
Cash assets
Bank loans

Effect of interest rate swaps*

Fixed rate instruments
Finance leases & hire purchase
Bank loans
Long term notes

Effect of interest rate swaps*

*Represents the net notional amount of interest rate swaps used for hedging.

June 2015

June 2014

Effective 
Interest 
Rate

0.62%
1.74%

6.30%
-
3.98%

Effective 
Interest 
Rate

1.43%
1.94%

6.48%
1.94%
-

Balance 
$’000

84,750
(193,963)
(109,213)
(194,502)
(303,715)

(3,469)
-
(198,658)
(202,127)
194,502
(7,625)

Balance 
$’000

85,885
(299,339)
(213,454)
-
(213,454)

(5,589)
(1,148)
-
(6,737)
-
(6,737)

ANNUAL REPORT 2015   87 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

33.  FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT continued

Group sensitivity

Cash flow sensitivity analysis for variable rate instruments
At 30 June 2015, if interest rates had changed by -/+ 50 basis points from the year-end rates with all other variables held constant, profit after 
tax for the year would have been $1,063,000 higher/lower (2014: $747,000 higher/lower), mainly as a result of lower/higher interest expense 
on variable term debt partially offset by higher/lower interest income from cash and cash equivalents. There have been no changes in the 
underlying assumptions from the previous year.

Fair value sensitivity analysis for fixed rate instruments
The Group has designated interest rate contracts as hedging instruments under a fair value hedge accounting model in relation to its fixed rate 
long term notes. The interest rate contracts swap the fixed interest payable on the long term loan notes to variable interest rates for the term 
of the debt. In accordance with the Group’s accounting policy (refer note 1(q)(i)) changes in fair value of the interest rate contracts together 
with the change in fair value of the debt arising from changes in interest rates are recognised in the profit and loss (to the extent the fair value 
hedge is effective). In 2015, the change in fair value of interest rate contracts was $4.1 million (2014: Nil) and was offset in the Group’s profit 
and loss statement by change in fair value of the hedged risk of $4.1 million (2014:Nil). A change of 50 basis points in interest rates at the 
reporting date would not materially impact the Group’s profit and loss before income tax (2014: Nil).

Capital risk management
Cardno’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide 
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, Cardno may adjust the amount of dividends paid to shareholders, return capital to 
shareholders, issue new shares or sell assets to reduce debt.
The Board of Directors monitors the return on capital, which Cardno defines as net operating income divided by total shareholders’ equity.  
The Board of Directors also monitors the level of dividends to ordinary shareholders.

34.  BUSINESS COMBINATIONS

Year Ended 30 June 2015

(a)  Businesses acquired

There were no acquisitions made during the year ended 30 June 2015.

Year Ended 30 June 2014

(a)  Businesses acquired

2014

Country of 
Incorporation

Principal Activity

Haynes Whaley Associates Inc
PPI Group of Companies
I.T. Transport Limited

USA
Various
UK

Structural Engineering
Oil and Gas Engineering
Transportation Consulting

Effective 
Acquisition Date

8 October 2013
1 March 2014
1 April 2014

Proportion 
of Shares 
Acquired (%)

N/A
100%
100%

In the Group’s Americas segment, a subsidiary, Cardno Haynes Whaley Inc was established to acquire the business assets of Haynes Whaley 
Associates Inc, a 100 person structural engineering firm headquartered in Houston, Texas with additional offices in Reston, Virginia and Austin, 
Texas. The acquisition of Haynes Whaley Associates Inc (HWA) enhances the Group’s structural engineering capabilities across a broad range 
of commercial, public and institutional clients. The Group also acquired the PPI group of companies (PPI) with an effective date of 1 March 2014. 
PPI provides specialist engineering services to the oil and gas sector in the United States, West Africa and Asia Pacific and employs 760 staff. 
The addition of PPI’s engineering services to the midstream and upstream oil and gas sector is expected to complement the Group’s existing 
environmental and permitting capabilities in this market as well as new capabilities and proprietary systems in asset and quality management.

During the year the Group also acquired I.T. Transport Limited (ITT) with an effective date of 1 April 2014. Headquartered in Oxfordshire, UK, ITT 
is a specialist boutique transportation consulting firm who work in the international development sector. ITT have a solid history of delivering 
on complex transport projects and providing high quality services across the world, particularly in Africa, South Asia and Latin America. ITT was 
acquired to enhance Cardno’s transport policy formulation, transport planning, program implementation and capacity building capabilities.

88   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

34.  BUSINESS COMBINATIONS continued

The acquired businesses contributed revenue and net profit after tax (NPAT) to the Group for the year ended 30 June 2014 as follows:

2014

Cardno Haynes Whaley Inc
PPI Group of Companies
I.T. Transport Limited

Revenues 
Contributed
($)

18,486,094
61,011,642
984,154

NPAT 
Contributed 
($)

1,820,679
2,719,094
169,639

If all of the acquisitions during the year ended 30 June 2014 had occurred on 1 July 2013, the Group’s revenue and NPAT for the year would have 
been $1,420,891,008 and $89,974,068 respectively.

(b)  Purchase consideration

2014

Cash
Deferred settlement
Contingent consideration
Total

HWA

$’000
17,654
3,451
2,385
23,490

Americas

PPI

$’000
150,189
17,491
-
167,680

ITT

$’000
2,201
1,676
-
3,877

Deferred and contingent purchase considerations

Purchase consideration of HWA includes deferred settlement of US$3,400,000 which is payable 24 months after completion. Cardno Limited 
has also agreed to pay the selling shareholders of HWA additional consideration of US$2,000,000 if the acquiree’s earnings before interest, tax, 
depreciation and amortisation (EBITDA) on a stand alone basis over the period 1 November 2013 to 31 October 2014 is US$4,800,000 or more. 
This amount has been included in the purchase consideration based on estimates of the acquiree’s financial performance over the earn-out 
period. This was achieved and paid during the year 30 June 2015.

Purchase consideration of PPI includes deferred settlement of US$14,500,000 which is payable 18 months after completion.

Purchase consideration of ITT includes deferred settlement of GBP220,000 which is payable 24 months after completion.

Acquisition of ordinary shares in Cardno Limited

At the time of acquisition, the vendors of each acquiree were required to use a portion of the cash consideration paid to subscribe for 
ordinary shares in Cardno Limited. A summary of the number and fair value of ordinary shares issued in relation to each acquisition during 
2014 is set out below:

2014

Cardno Haynes Whaley Inc
PPI Group of Companies
I.T. Transport Limited

Shares subscribed 
in Cardno Limited 
($)

Fair Value of 
Shares Issued 
($)

Shares Issue Date

3,418,230
34,476,710
548,499

6.21
6.38
7.02

9 October 2013
14 March 2014
14 April 2014

The Fair value of the ordinary shares issue for each acquisition was based on the 10 day volume weighted average price (VWAP).

ANNUAL REPORT 2015   89 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

34.  BUSINESS COMBINATIONS continued

(c)  Assets acquired and liabilities assumed at the date of acquisition

2014

Americas

Cash 
Receivables
Property, plant and equipment
Inventories
Deferred revenue
Intangible assets
Creditors & borrowings
Deferred taxes
Provisions
Total

HWA

$’000
-
7,645
168
488
(424)
2,637
(1,214)
-
(514)
8,786

PPI*

$’000
4,639
41,769
4,012
6,521
-
23,859
(12,401)
(1,341)
(733)
66,325

ITT*

$’000
2,140
259
6
842
(509)
-
(673)
-
(71)
1,994

* At 30 June 2014, the Group had completed the accounting for the acquisition of PPI and ITT on a provisional basis. The finalisation of the assessment of the fair values of the 
identifiable assets and liabilities acquired resulted in adjustments to previously reported items and in particular, the recognition of identifiable intangible assets separate from 
goodwill. Comparative information has been restated to recognise the adjustments as if they had been completed at the acquisition date in accordance with the requirements 
of accounting standards.

The fair value of receivables acquired includes trade receivables with a fair value of $43,616,853. The gross amount due is $43,932,720 of which 
$315,867 is considered doubtful.

(d)  Goodwill arising on acquisition

2014

Consideration transferred
Less: fair value of net identifiable assets acquired
Goodwill arising on acquisition

HWA

$’000
23,490
(8,786)
14,704

Americas

PPI

$’000
167,680
(66,325)
101,355

ITT

$’000
3,877
(1,994)
1,883

The goodwill recognised in relation to the acquisitions is attributable to the skills and technical talent of the employees of the acquisition and 
the synergies expected to be achieved from integrating the businesses into the Group’s existing operations. Goodwill is not expected to be 
deductible for tax.

(e)  Net cash outflow on acquisition of subsidiaries

Cash consideration paid
Cash balance acquired
Outflow of cash

2014
$’000
170,044
(6,779)
163,265

90   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

35.  SEGMENT INFORMATION

Cardno has two reportable segments managed separately by location and services provided. Internal management reports on the performance of 
these reportable segments are reviewed monthly by the Managing Director, Chief Financial Officer and Regional CFO’s. The following summary 
describes the operations in each of Cardno’s reportable segments:

>  Professional Services Asia Pacific – provides consulting engineering, planning, surveying, landscape architecture, environmental 
services, electrical engineering, geotechnical services as well as managing aid projects on behalf of unilateral and multilateral 
government agencies and private clients in that region.

>  Professional Services Americas – provides consulting engineering, planning, surveying, landscape architecture, environmental services 
and software sales globally. It also manages aid projects on behalf of unilateral and multilateral government agencies and private 
clients in that region.

During the year, the Group changed its internal reporting structure which resulted in a change to its reportable segments. Comparative segment 
information has been represented in conformity with the requirement of AASB 8 Operating Segments.

2015

Professional Services
Asia Pacific

Professional Services
Americas

Segment revenue

Fees from services and sale of goods

Fees from recoverable expenses

Inter-segment revenue

External sales

Other revenue

Total segment revenue

Other Income

Segment result before financing costs

Segment assets

Segment liabilities

Other

Acquisitions of non-current assets

Depreciation and amortisation of assets

Impairment losses

$’000

364,135

136,299

(3,168)

497,266

211

497,477

2,413

38,779

396,248

81,167

9,220

10,491

-

Total

$’000

1,058,409

404,332

(40,835)

1,421,906

4,504

1,426,410

$’000

694,274

268,033

(37,667)

924,640

4,293

928,933

-

2,413

(178,186)

(139,407)

857,136

1,253,384

148,435

229,602

24,205

22,330

33,425

32,821

224,023

224,023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

35.  SEGMENT INFORMATION continued

2014*

Professional Services
Asia Pacific

Professional Services
Americas

Segment revenue

Fees from services and sale of goods

Fees from recoverable expenses

Inter-segment revenue

External sales

Other revenue

Total segment revenue

Other Income

Segment result before financing costs

Segment assets

Segment liabilities

Other

Acquisitions of non-current assets

Depreciation and amortisation of assets

$’000

412,234

129,875

(8,111)

533,998

234

534,232

2,415

56,366

409,376

88,791

8,121

11,649

* The Group has changed the composition of its reportable segments during the year end and restates its comparative information accordingly.

ANNUAL REPORT 2015   91 

Total

$’000

976,743

342,992

(14,270)

1,305,465

3,154

1,308,619

$’000

564,509

213,117

(6,159)

771,467

2,920

774,387

-

2,415

63,232

119,598

876,831

1,286,207

143,197

231,988

144,837

152,958

14,844

26,493

92   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

35.  SEGMENT INFORMATION continued

Reconciliations of reportable segment revenues, profit or loss, assets and liabilities

Revenues
Total revenue for reportable segments
Interest revenue
Consolidated revenue

Profit or loss
Reportable segment result before net financing costs
Interest Revenue
Other income – contingent consideration
Finance costs
Other corporate (costs) / gains
Profit before tax
Income tax expense
Profit after tax

Assets
Total assets for reportable segments
Other assets
Unallocated assets
Consolidated total assets

Liabilities
Total liabilities for reportable segments
Bank loans unallocated
Other unallocated liabilities
Consolidated total liabilities

Geographical information

2015
$’000

1,426,410
506
1,426,916

(139,407)
506
-
(11,179)
(9,538)
(159,618)
14,450
(145,168)

1,253,384
7,400
72,332
1,333,116

229,602
401,576
32,430
663,608

2014
$’000

1,308,619
978
1,309,597

119,598
978
3,453
(8,465)
(8,798)
106,766
(28,632)
78,134

1,286,207
20,484
20,288
1,326,978

231,988
300,487
30,988
563,463

In presenting information on a geographical basis segment revenue from external customers and segment assets are attributed based on 
geographic locations of business unit. 

Australia & New Zealand
Americas
Asia Pacific
UK & Africa
Other segments

2015

2014

Total  
Non-Current 
Assets
$’000
254,915
376,354
12,669
83,429
58,541
785,908

Revenues
$’000
384,705
830,208
121,469
90,028
-
1,426,410

Total  
Non-Current 
Assets
$’000
262,889
460,479
25,358
73,407
20,294
842,427

Revenues
$’000
466,268
721,295
77,528
43,528
-
1,308,619

ANNUAL REPORT 2015   93 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

36.  PARENT ENTITY DISCLOSURES

As at, and throughout, the financial year ending 30 June 2015 the parent Company of Cardno was Cardno Limited.

Results of the parent entity

Profit / (loss) for the year
Other comprehensive income
Total comprehensive income for the year

Financial position of the parent entity at year end

Current assets
Total assets

Current liabilities
Total liabilities

Total equity of the parent entity comprising of:

Share capital
Revaluation reserve
Retained earnings
Total equity

Parent entity contingencies
Bank guarantees

Company

2015
$’000

(5,758)
-
(5,758)

696,610
904,099

273,720
273,720

641,661
-
(11,282)
630,379

2014
$’000

39,191
-
39,191

553,234
862,344

194,541
194,541

623,875
-
43,928
667,803

2,018

2,107

A multiple guarantee facility is available to Cardno totalling $15 million (2014: $15 million). The facility is secured by an unlimited interlocking 
guarantee and indemnity.

The directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacrifice of 
economic benefits will be required or the amount is not capable of reliable measurement.

Parent entity guarantees in respect of debts of its subsidiaries

The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in respect of its subsidiaries.

Further details of the Deed of Cross Guarantee and the subsidiaries subject to the deed, are disclosed below in note 37.

94   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

37.  DEED OF CROSS GUARANTEE

Pursuant to ASIC Class Order 98/1418 (as amended) dated 13 August 1998, the wholly-owned subsidiaries listed below are relieved from the 
Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and Directors’ reports.

It is a condition of the Class Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee. The effect of the 
Deed is that the Company guarantees to each creditor payment in full for any debt in the event of winding up of any of the subsidiaries 
under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be 
liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the 
event that the Company is wound up.

The subsidiaries subject to the Deed are:

>  Cardno Holdings Pty Ltd
>  Cardno (Qld) Pty Ltd
>  Cardno Staff Pty Ltd
>  Cardno Bowler Pty Ltd
>  Cardno Emerging Markets (Australia) Pty Ltd
>  Cardno (NSW/ACT) Pty Ltd

A consolidated statement of comprehensive income and consolidated statement of financial position, comprising the Company and 
controlled entities which are a party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee, for the 
year ended 30 June 2015 is set out as follows:

Statement of comprehensive income and retained earnings

Revenue

Employee expenses
Consumables and materials used
Sub-consultant and contractor costs
Depreciation and amortisation expenses
Impairment losses
Finance costs
Other expenses

Profit / (loss) before income tax
Income tax expense
Net profit / (loss) for the year

Other comprehensive income for the year
Total comprehensive income for the year

Retained earnings at the beginning of the year
Transfers to and from reserves
Dividends recognised during the year
Retained earnings at the end of the year

Attributable to:
Owners of the Company

2015
$’000
451,550

(191,314)
(104,714)
(80,672)
(84)
(162,760)
(9,380)
10,119

(87,225)
(19,103)
(106,358)

17,744
(88,614)

96,236
(17,744)
(49,452)
(59,574)

2014
$’000
459,939

(202,840)
(118,093)
(56,005)
(83)
-
(7,174)
2,620

78,364
(17,868)
60,496

(1,113)
59,383

92,270
1,113
(56,530)
96,236

(59,574)

96,236

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

37.  DEED OF CROSS GUARANTEE continued

Statement of financial position

Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total Current Assets
Non-Current Assets
Trade and other receivables
Other financial assets, including derivatives
Property, plant and equipment
Deferred tax assets
Intangible assets
Other non-current assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Interest-bearing loans and borrowings
Current tax liabilities
Short term provisions
Other current liabilities
Total Current Liabilities
Non-Current Liabilities
Interest-bearing loans and borrowings
Deferred tax liabilities
Long term provisions
Other non-current liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Retained earnings

Total Equity

ANNUAL REPORT 2015   95 

2015
$’000

2,024
1,091,398
32,351
1,063
1,126,836

-
361,814
129
17,167
41,849
-
420,959
1,547,795

500,441
-
11,226
15,393
9,089
536,149

391,528
5,577
10,008
-
407,113
943,262
604,533

641,661
22,446
(59,574)

604,533

2014
$’000

21,735
953,055
25,253
2,995
1,003,038

-
461,067
137
11,414
41,849
2,094
516,561
1,519,599

438,470
-
10,561
13,911
12,174
475,116

303,081
5,643
10,867
-
319,591
794,707
724,892

623,875
4,781
96,236

724,892

96   CARDNO LIMITED 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

38.  CONTROLLED ENTITIES

Cardno’s significant subsidiaries are listed below.

Name
Cardno Holdings Pty Ltd
Cardno (Qld) Pty Ltd
Cardno Staff Pty Ltd
Cardno Staff No. 2 Pty Ltd
Cardno Operations Pty Ltd
Cardno International Pty Ltd
Cardno (WA) Pty Ltd 
Cardno CCS Pty Ltd
Cardno Lawson Treloar Pty Ltd 
Cardno (NSW/ACT) Pty Ltd 
Cardno Willing Pty Ltd 
Cardno Victoria Pty Ltd
Cardno Emerging Markets (Australia) Pty Ltd
Cardno UK Limited
Cardno Emerging Markets (UK) Limited
Cardno Emerging Markets (East Africa) Limited
Cardno NZ Limited
Cardno Holdings New Zealand Limited
Cardno USA, Inc.
Cardno, Inc.
Cardno Emerging Markets Belgium s.a.
Cardno (NT) Pty Ltd
Cardno (PNG) Ltd
XP Software Pty Ltd
XP Software, Inc.
XP Software Solutions Ltd
Cardno Construction Sciences Pty Ltd
Cardno ITC Pty Ltd
Cardno Australian Underground Services Pty Ltd
Environmental Resolutions, Inc
ENTRIX, Inc.
ENTRIX Americas, SA
J.F. New & Associates, Inc.
Cardno Roadtest Pty Ltd
Cardno BEC Pty Ltd
Cardno BEC (Qld) Pty Ltd
Cardno (Colombia) S.A.S.
Cardno Emerging Markets (USA), Ltd

Country of 
Incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United Kingdom
United Kingdom
Kenya
New Zealand
New Zealand
United States of America
United States of America
Belgium
Australia
Papua New Guinea
Australia
United States of America
United Kingdom
Australia
Australia
Australia
United States of America
United States of America
Ecuador
United States of America
Australia
Australia
Australia
Colombia
United States of America

Equity 
Holding 
2015
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Equity 
Holding 
2014
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

38.  CONTROLLED ENTITIES continued

Name
Cardno Humphrey Reynolds Perkins Pty Ltd
Cardno Humphrey Reynolds Perkins Jewell Pty Ltd
Cardno Humphrey Reynolds Perkins Gold Coast Pty Ltd
Cardno Humphrey Reynolds Perkins Sunshine Coast Pty Ltd
Cardno Chenoweth Environmental Planning &  
Landscape Architecture Pty Ltd
Cardno LP Pty Ltd
Moriedale Holdings Pty Ltd
Geotech Solutions Pty Limited
Cardno GS, Inc.
ATC Group Holdings, Inc.
Marshall Miller & Associates, Inc.
Cardno EM-Assist, Inc.
Cardno BTO Limited
Cardno Hard & Forester Pty Ltd
Cardno ChemRisk, LLC
Caminosca S.A.S
Cardno Geotech Pty Ltd
Cardno Haynes Whaley, Inc.
Cardno PPI, LLC
Cardno PPI Engineering & Construction Services, LLC
Cardno PPI Quality & Asset Management, LLC
Cardno PPI Technology Services, LLC
PPI Australia Pty Ltd
PPI Quality & Asset Management (Singapore) Pte Ltd
PPI Quality & Asset Management (Malaysia) Sdn Bhd
Cardno PPI Technology Services Nigeria Limited
Cardno South Africa (Pty) Ltd
I.T. Transport Limited

Country of 
Incorporation
Australia
Australia
Australia
Australia

Australia
Australia
Australia
Australia
United States of America
United States of America
United States of America
United States of America
New Zealand
Australia
United States of America
South America
Australia
United States of America
United States of America
United States of America
United States of America
United States of America
Australia
Singapore
Malaysia
Nigeria
South Africa
United Kingdom

ANNUAL REPORT 2015   97 

Equity 
Holding 
2015
100%
100%
100%
100%

Equity 
Holding 
2014
100%
100%
100%
100%

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

98   CARDNO LIMITED 

DIRECTORS’ DECLARATION
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

1. 

In the opinion of the Directors of Cardno Limited (the Company):

(a) 

the consolidated financial statements and notes set out on pages 53 to 97 and the Remuneration Report in section 11 of the Directors’ 
Report, set out on pages 38 to 50, are in accordance with the Corporations Act 2001, including:

(i)  giving a true and fair view of Cardno’s financial position as at 30 June 2015 and of its performance for the financial year  

ended on that date; and

(ii)  complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations 

Regulations 2001; and

(b) 

there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

2.  There are reasonable grounds to believe that the Company and Cardno entities identified in note 38 will be able to meet any obligations 

or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and those Group 
entities pursuant to ASIC Class Order 98/1418. 

3.  The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and 

Chief Financial Officer for the financial year ended 30 June 2015.

4.  The Directors draw attention to note 1(a) to the consolidated financial statements, which includes a statement of compliance with 

International Financial Reporting Standards.

Dated at Brisbane on the 17th day of August 2015.

Signed in accordance with a resolution of the Directors.

JOHN MARLAY

Chairman

ANNUAL REPORT 2015   99 

INDEPENDENT AUDITOR’S REPORT

ABCD 

Independent auditor’s report to the members of Cardno Limited 

Report on the financial report 

We have audited the accompanying financial report of Cardno Limited (the Company), which 
comprises the consolidated statement of financial position as at 30 June 2015, and the 
consolidated statement of financial performance, consolidated statement of comprehensive 
income, consolidated statement of changes in equity and consolidated statement of cash flows 
for the year ended on that date, notes 1 to 38 comprising a summary of significant accounting 
policies and other explanatory information and the Directors’ declaration of the Group 
comprising the Company and the entities it controlled at the year’s end or from time to time 
during the financial year. 

Directors’ responsibility for the financial report  

The Directors of the Company are responsible for the preparation of the financial report that 
gives a true and fair view in accordance with Australian Accounting Standards and the 
Corporations Act 2001 and for such internal control as the Directors determine is necessary to 
enable the preparation of the financial report that is free from material misstatement whether due 
to fraud or error. In note 1(a), the Directors also state, in accordance with Australian Accounting 
Standard AASB 101 Presentation of Financial Statements, that the financial statements of the 
Group comply with International Financial Reporting Standards. 

Auditor’s responsibility 

Our responsibility is to express an opinion on the financial report based on our audit. We 
conducted our audit in accordance with Australian Auditing Standards. These Auditing 
Standards require that we comply with relevant ethical requirements relating to audit 
engagements and plan and perform the audit to obtain reasonable assurance whether the financial 
report is free from material misstatement.  

An audit involves performing procedures to obtain audit evidence about the amounts and 
disclosures in the financial report. The procedures selected depend on the auditor’s judgement, 
including the assessment of the risks of material misstatement of the financial report, whether 
due to fraud or error. In making those risk assessments, the auditor considers internal control 
relevant to the entity’s preparation of the financial report that gives a true and fair view in order 
to design audit procedures that are appropriate in the circumstances, but not for the purpose of 
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes 
evaluating the appropriateness of accounting policies used and the reasonableness of accounting 
estimates made by the Directors, as well as evaluating the overall presentation of the financial 
report.  

We performed the procedures to assess whether in all material respects the financial report 
presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting 
Standards, a true and fair view which is consistent with our understanding of the Group’s 
financial position and of its performance.  

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a 
basis for our audit opinion. 

KPMG, an Australian partnership and a member firm of the KPMG 
network of independent member firms affiliated with KPMG 
International Cooperative (“KPMG International”), a Swiss entity.  

Liability limited by a scheme approved under 
Professional Standards Legislation. 

 
 
 
 
   
 
 
100   CARDNO LIMITED 

INDEPENDENT AUDITOR’S REPORT continued

ABCD 

Independence 

In conducting our audit, we have complied with the independence requirements of the 
Corporations Act 2001.  

Auditor’s opinion 

In our opinion: 

(a) 

the financial report of the Group is in accordance with the Corporations Act 2001, 
including:   

(i)  giving a true and fair view of the Group’s financial position as at 30 June 2015 and of 

its performance for the year ended on that date; and  

(ii)  complying with Australian Accounting Standards  and the Corporations Regulations 

2001. 

(b)   the financial report also complies with International Financial Reporting Standards as 

disclosed in note 1(a).  

Report on the Remuneration Report 

We have audited the Remuneration Report included in section 11 of the Directors’ report for the 
year ended 30 June 2015. The Directors of the Company are responsible for the preparation and 
presentation of the Remuneration Report in accordance with Section 300A of the Corporations 
Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our 
audit conducted in accordance with auditing standards. 

Auditor’s opinion 

In our opinion, the Remuneration Report of Cardno Limited for the year ended 30 June 2015 
complies with Section 300A of the Corporations Act 2001. 

KPMG 

Mitchell Petrie  
Partner 

Brisbane 
17 August 2015 

 
 
 
 
 
 
 
 
 
ADDITIONAL SHAREHOLDER INFORMATION
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

DISTRIBUTION OF ORDINARY SHAREHOLDERS

The number of shareholders, by size of holding, as at 11 August 2015 were:

1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Total

ANNUAL REPORT 2015   101 

Ordinary Shares

Number of 
Holders
8,346
4,062
1,262
1,227
111
15,008

Number of 
Shares
2,617,200
10,396,510
9,291,236
29,526,974
113,801,612
165,633,532

As at 11 August 2015 there were 3,379 shareholders who held less than a marketable parcel of 180 shares.  

TWENTY LARGEST ORDINARY SHAREHOLDERS

The names of the twenty largest holders as at 11 August 2015 were:

MALVERN CAPITAL INVESTMENTS
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
TREVOR JOHNSON
HALJAN MANAGEMENT LP
BRAMS HOLDING LP
LAGOMAR VENTURES LP
MILTON CORPORATION LIMITED
ANDREW DAVID BUCKLEY
MR STEPHEN GRANT PEDERICK + MISS DENISE ANNE PEDERICK 
BNP PARIBAS NOMS PTY LTD 
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
PAUL GARDINER
ROGER COLLINS-WOOLCOCK
TAMBLYN INVESTMENTS PTY LTD
ANNE FELICITY PHILLIPS
ANCAM PTY LTD 
MR MALCOLM DAVID POUND
TOTAL

Listed Ordinary Shares
Number 
Held
29,526,217
27,890,261
11,512,656
7,916,049
2,757,751
1,711,602
1,523,123
1,523,123
1,523,123
1,204,699
1,174,261
974,446
892,280
878,690
837,200
810,413
800,000
780,000
619,087
573,284
95,428,265

Percentage
17.83%
16.84%
6.95%
4.78%
1.66%
1.03%
0.92%
0.92%
0.92%
0.73%
0.71%
0.59%
0.54%
0.53%
0.51%
0.49%
0.48%
0.47%
0.37%
0.35%
57.62%

102   CARDNO LIMITED 

ADDITIONAL SHAREHOLDER INFORMATION
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

SUBSTANTIAL SHAREHOLDERS

The names of substantial shareholders who have notified the company in accordance with section 671B of the Corporations Act 2001 are:

Malvern Capital Investments Pty Limited
Invesco Australia Limited

Number 
Held

29,526,188*
12,002,686

Percentage

17.83%
7.25%

* The 29,526,188 shares (constituting 17.83 per cent of Cardno shares) represents Malvern Capital Investments’ (Malvern) actual votes arising from relevant interests. As disclosed in the Notice of 
change of interest of substantial holder form dated 17 July 2015, Malvern has entered into an arrangement under which Deutsche Bank AG, Sydney branch (DB) can elect to require Malvern to acquire 
1,780,000 shares (constituting 1.07 per cent of Cardno shares) but Malvern does not presently have a relevant interest arising from this arrangement.

VOTING RIGHTS

All ordinary shares (whether fully paid or not) carry one vote per share without restriction.

ESCROWED SHARES

There are currently 5,693,849 ordinary shares held in escrow. This is approximately 3.44 per cent of the company’s issued share capital.  
The details are as follows:- 

 > In accordance with the Share Sale Agreement between Cardno Limited and the shareholders of the PPI Group completed on 14 March 2014, 
ordinary shares issued as part of the purchase price are escrowed for a period of 18 months to 14 September 2015. This agreement affects 
5,332,268 shares, being approximately 3.22 per cent of the company’s issued share capital.

 > In accordance with the Share Sale Agreement between Cardno Limited and the shareholders of the IT Transport Limited completed on  

14 April 2014, ordinary shares issued as part of the purchase price are escrowed for a period of 18 months to 14 October 2015. This agreement 
affects 78,117 shares, being approximately 0.05 per cent of the company’s issued share capital.

 > In accordance with the Share Sale Agreement between Cardno Limited and the shareholders of Geotech Material Testing Services Pty Ltd 

completed on 20 February 2013, ordinary shares issued on 1 May 2014 as part of the purchase price are escrowed for a period of 18 months to 
1 November 2015. This agreement affects 283,464 shares, being approximately 0.17 per cent of the company’s issued share capital.

ANNUAL REPORT 2015   103 

ADDITIONAL SHAREHOLDER INFORMATION
Cardno Limited and its Controlled Entities for the year ended 30 June 2015

RIGHTS

As at 11 August 2015 the details of Performance Rights on issue are as follows:

Number of Rights Holders

1,003

Number of Rights on Issue

5,983,039

VOTING RIGHTS OF RIGHTS

The ordinary shares issued on exercise of the rights will rank equally with all other ordinary shares.

104   CARDNO LIMITED 

CORPORATE 
DIRECTORY

BOARD OF DIRECTORS

SHARE REGISTRY

LAWYERS

Computershare Investor Services  
Pty Limited
117 Victoria Street
West End QLD 4101

Phone   1300 552 270  

(within Australia) 
+61 3 9415 4000  
 (outside Australia)
www.computershare.com.au

AUDITORS

KPMG
Level 16, Riparian Plaza
71 Eagle Street
Brisbane QLD 4000

Phone +61 7 3233 3111
Fax +61 7 3233 3100
www.kpmg.com.au

McCullough Robertson Lawyers
Level 11, Central Plaza Two
66 Eagle Street
Brisbane QLD 4000

Phone +61 7 3233 8888
Fax +61 7 3229 9949
www.mccullough.com.au

Kirkland & Ellis LLP
300 North LaSalle
Chicago, Illinois 60654
USA

Phone +1 312 862 2000
Fax +1 312 862 2200
www.kirkland.com

BANKERS

HSBC Bank Australia Limited

Commonwealth Bank of Australia

Westpac Banking Corporation

Standard Chartered Bank

Chairman
John Marlay

Chief Executive Officer  
and Managing Director
Richard Wankmuller

Directors
Anthony Barnes
Tonianne Dwyer
Elizabeth Fessenden
Trevor Johnson
Ian Johnston
Grant Murdoch

Chief Financial Officer 
Graham Yerbury

Company Secretary
Michael Pearson

REGISTERED OFFICE

Cardno Limited 
ABN 70 108 112 303

Level 11, North Tower 
Green Square 
515 St Paul’s Terrace 
Fortitude Valley 
QLD 4006 Australia

Phone + 617 3369 9822 
Fax + 617 3369 9722

cardno@cardno.com 
www.cardno.com

Right: Cardno provided 
construction engineering 
inspection services for the 
I-275 design-build project 
located in Tampa, Florida. 

Registered office

Cardno Limited 
ABN 70 108 112 303

Level 11, North Tower 
Green Square 
515 St Paul’s Terrace 
Fortitude Valley 
QLD 4006 Australia

Phone + 617 3369 9822 
Fax + 617 3369 9722

cardno@cardno.com 
www.cardno.com

Follow us on
www.linkedin.com/company/cardno

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www.twitter.com/cardno

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www.facebook.com/CardnoGlobal

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www.cardno.com/youtube