content_image/163808.jpg
## Cardno Limited and its Controlled Entities for the year ended 30 June 2010 

## 34. BUSINESS COMBINATIONS CONTINUED 

(c) On 10 June 2010 the Group acquired 100% of Environmental Resolutions, Inc, an environmental soil and groundwater remediation firm primarily focussed on the petro-chemical market in the US. The effective date was 1 June 2010. 

For the period 1 January 2010 – 30 June 2010, the acquired business contributed revenues of $1,456,831 and net profit after tax of $425,548. 

If the acquisition had occurred on 1 July 2009 revenue and NPAT for the Group would have been $517,633,465 and $42,052,758 respectively. 

## Details of acquisitions 

<img src='content_image/163808.jpg'>

* The acquisition of ERI was completed on 10 June 2010. Accordingly, the accounting for this acquisition has been completed on a provisional basis. Further analysis will be performed to determine the existence and fair value of any identifiable intangible assets acquired as part of the acquisition. 

At the time of purchase the vendors of Environmental Resolutions Inc. subscribed for shares in Cardno Limited to the value of $6,784,390. The fair value of the ordinary shares issued based on the 10 day VWAP of Cardno Limited shares. The fair value price was $3.71 for the purchase of shares by vendors of Environmental Resolutions Inc issued 10 June 2010. 

## Contingent consideration 

Cardno Limited has agreed to pay the selling shareholders of Environmental Resolutions, Inc additional consideration of USD8,089,000 if the acquiree’s normalised EBITDA over the period 1 June 2010 to 31 May 2011 exceeds USD6,371,000. This amount has been included in the purchase consideration based on estimates of the acquiree’s financial performance over the earn-out period. 

The goodwill is attributable to the skills and technical talent of the employee’s of Environmental Resolutions Inc, the synergies expected to be achieved from integrating the Company into the Group’s existing operations. 

