Notes to the Consolidated Financial Statements  Cardno Limited and its Controlled Entities for the year ended 30 June 2010 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (a) Statement of compliance  (b) Basis of Preparation  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 2010 encompasses the Company and its subsidiaries (together referred to  as the “Group”).  The financial report was authorised for issue by the Board of Directors on 16 August 2010.  The financial report is a general purpose financial report which has been prepared in accordance with Australian  Accounting Standards (AASBs including Australian Interpretations) adopted by the Australian Accounting Standards  Board (AASB), Urgent Issues Group Interpretations (“UIG”) and the Corporations Act 2001. The financial report of the  consolidated entity also complies with International Financial Reporting Standards and interpretations adopted by the  International Accounting Standards Board.  The financial report has been prepared on an accrual and historical cost basis.  The consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency.  The following new standards, amendments to standards and new interpretations have been identified as those which  may impact the entity in the period of initial application. They are available for early adoption at 30 June 2010, but have  not been applied in preparing this financial report.  AASB 9  Financial Instruments  includes requirements for the classification and measurement of financial assets  resulting from the first part of Phase 1 of the project to replace AASB 139  Financial Instruments: Recognition and  Measurement. AASB 9 will become mandatory for the Group’s 30 June 2014 financial statements. Retrospective  application is generally required, although there are exceptions, particularly if the entity adopts the standard for the  year ended 30 June 2012 or earlier. The Group has not yet determined the potential effect of the standard. AASB 2009-5  Further amendments to Australian Accounting Standards arising from the Annual Improvements  Process  affect various AASBs resulting in minor changes for presentation, disclosure, recognition and measurement  purposes. The amendments, which become mandatory for the Group’s 30 June 2011 financial statements, are not  expected to have significant impact on the financial statements.  AASB 2009-8  Amendments to Australian Accounting Standards – Group Cash-settled Share-based Payment  Transactions  resolves diversity in practice regarding the attribution of cash-settled share-based payments between  different entities within a group. As a result of the amendments Australian Interpretation (AI) 8  Scope of AASB 2  and  AI 11  AASB 2 – Group and Treasury Share Transactions  will be withdrawn from the application date. The  amendments, which become mandatory for the Group’s 30 June 2011 financial statements, are not expected to  have a significant impact on the financial statements. (c) Basis of Consolidation  Subsidiaries  The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 (updated by CO 05/641 effective  28 July 2005 and CO 06/51 effective 31 January 2006) and in accordance with that Class Order, amounts in the financial  report and Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated.  Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or  indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. 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  the Company.  A list of the controlled entities is contained in Note 38 to the financial statements. All controlled entities have a June  financial year-end.  Page 31 of 80 