Directors’ Report  Cardno Limited and its Controlled Entities for the year ended 30 June 2010  3. Principal  Activities  4. Review of Results and Operations The principal activity of the consolidated entity during the financial year was operating as a provider of  professional services in physical and social infrastructure. There were no changes to the principal activities  of the Cardno Group during the financial year under review.  Cardno achieved a record net profit after tax of $37.60 million for the year ended 30 June 2010, a 10.1%  increase over the 2009 financial year. Basic earnings per share increased to 43.86 cents.  Cardno had strong operating cash flow of $46.75 million in 2010, an increase of 21% over 2009, and had  cash of $56.28 million at 30 June 2010.  The Company’s balance sheet remains strong with low net debt. In August 2010, the company completed a  successful Rights issue raising $49 million.  The Board has declared a fully franked final dividend of 15 cents per share to be paid on 15 October 2010 to  all shareholders registered on 17 September 2010. With the interim dividend of 14 cents per share in March  2010, this will result in a full year dividend of 29 cents, which is also a record for Cardno.  Revenue was $477.24 million, which was slightly down from 2009, with most of this reduction resulting from  the strengthening Australian dollar in 2010. Cardno delivered another record profit for its shareholders during a period of significant adverse economic  conditions. This is the sixth consecutive year of record profit and earnings per share growth since listing in  2004 with total shareholder return in this period of over 400%.  Cardno has performed strongly through the global financial crisis. The company’s strategy of diversifying its  operations through acquisitions and growth across multiple geographic regions and disciplines has proven  successful. The company now employs over 3,700 staff worldwide, operating out of 150 offices.  During the financial year Cardno made four acquisitions. The 615-person Cardno ENTRIX and the  155  person Cardno ERI have increased Cardno’s exposure to the highly strategic and growing  environmental consulting market, as well as the oil and gas sector in the US and internationally. In  Australia, Cardno acquired two specialist businesses: Cardno ITC a 100-person Australia wide electrical,  mechanical and specialist engineering group providing services to the building sector; and Cardno AUS a  utility detection and mapping services business based in Victoria.  The Board noted that the Company’s second half performance was stronger than the first half as expected,  reflecting the impact of improving market conditions and the benefit of acquisitions undertaken in recent  months.  Cardno’s markets continue to improve. Cardno has traditionally achieved organic growth of 7% to 9% before  the global financial crisis. With the strong performance of recent major acquisitions and a return to organic  growth, the company is well positioned for 2011.  Page 7 of 80 