Cardno Limited and its Controlled Entities for the year ended 30 June 2010 2010 $’000  2009  $’000  4. INCOME TAX EXPENSE CONTINUED  (b) Numerical reconciliation between tax expense and pre-tax profit  Profit before tax  43,579 42,092 Income tax using the Australian corporation tax rate of 30% (2009: 30%)  13,074  12,628  Increase (decrease) in income tax expense due to:  Non-deductible expenses  338 218 Adjustment for branch office taxation  326 623 Allowances for R&D expenditure  (5,329) (1,855) Tax exempt revenue  (162) (840) Benefit arising from amendment to Australian tax legislation (1,335) - Sundry items (407) (879) Effect of tax rates in foreign jurisdictions  (9) - 6,496 9,895 Under / (over) provided in prior years  (514) (1,956) Income tax expense  5,982 7,939 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% (2009: 30%) (Refer Note 29)  15,840 11,798 (b) Dividends paid during the year (28 cents per share)  100% franked dividend at 30% (2009: 30%)  23,955 21,434 (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  7,021  3,186  9,384  2,273  10,207 11,657 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 $6,788,546  (2009: $5,056,335)  6. CASH AND CASH EQUIVALENTS  Cash at bank and on hand  34,438 34,796 Restricted cash (project advances)  - 5,005 Bank short term deposits  21,844 26,007 56,282 65,808 7. TRADE & OTHER RECEIVABLES (CURRENT) Trade debtors  109,366 93,283 Provision for doubtful debts  (8,986) (5,403) 100,380 87,880 Sundry debtors 2,895 3,976 Forward exchange contract  - 216 103,275 92,072 8. INVENTORIES (CURRENT) Work in progress  71,496 56,419 Page 41 of 80  Notes to the Consolidated Financial Statements 