content_image/248025.jpg
## Cardno Limited and its Controlled Entities for the year ended 30 June 2010 

## 23. ISSUED CAPITAL OF CARDNO LIMITED CONTINUED 

Movements in rights throughout the year were as follows: 

<img src='content_image/248025.jpg'>

The fair values of rights granted during the year with a total shareholder return 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 rights with the EPS growth hurdle was calculated using a Black-Scholes model taking into account price volatility, risk free interest rates and the dividend yield. 

The model inputs for the fair value of rights granted during the year ended 30 June 2010 include share price of $5.03 (22 October 2009) and $4.07 (2 December 2009) at grant date, expected price volatility of 42%, expected dividend spread of 8.00% and risk free interest rate of 5.25% (22 October 2009) and 4.61% (2 December 2009). 

The rights are subject to performance hurdles being 50% of the Rights, may vest, on a sliding scale, dependent on relative total shareholder return performance and 50% of the Rights, may vest, on a sliding scale, dependent on earnings per share growth. The EPS performance hurdle tranche of the rights vest on a sliding scale depending on EPS growth averaged over 3 years. 

## Employee Share Acquisition Plans (“ESAP”) 

Shares are issued under the ESAP (made in accordance with thresholds set out in plans approved by shareholders at the 2009 AGM). It provides 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 have worked an average of 100 hours or more per month are entitled to $1,000 of shares each year and employees with 6 to 12 months service are entitled to $500 of shares each year. Employees who work part time, who have greater than 12 months service and who have worked more than 600 hours per year are also entitled to $500 of shares each year. 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 

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. 

