Preamble

This Policy Document regulates dealings in the Company's securities by Directors, Executive Officers and Employees. The Directors will monitor and review the application of the policy to ensure its appropriateness and relevance as the Company continues to grow.

The fundamental principle is that Directors, Executive Officers and Employees are not permitted to trade in the Company’s Securities while in possession of information that is not generally available in the public domain in order to ensure compliance with the insider trading provisions of the Corporations Act. In addition, this policy applies to advisers, contractors and consultants who may obtain confidential or price sensitive information in relation to the Company.

Insider trading occurs when a person trades in a Company's shares while the person is in possession of information that is not generally available and which, if generally available, a reasonable person would expect it to have a material effect on the price or value of the Company’s shares. This extends to passing on price sensitive information to family, friends or other persons who may use that information to trade in the Company’s securities.

The penalty for breach of the insider trading provisions of the Corporations Act includes fines and, in some circumstances, a jail term.

It is the responsibility of the individual to ensure they do not buy or sell or trade or provide relevant information or advice to third parties while in possession of price sensitive information. This responsibility remains with the individual and cannot be varied or absolved by seeking to rely on statements by any Executive Officer or Director of the Company.

Directors

A "No Objection" notice will be issued by the Company Secretary, after consultation with the Board, following a Director confirming to the Board in writing that they are not in possession of any price sensitive information. Such written confirmation must be on the “No Objection Request” form attached to this policy and submitted to the Company Secretary. Any Director seeking a "No Objection" notice will be precluded from voting and approval to issue the notice will be by a simple majority of Directors.

Directors may trade once a "No Objection" notice has been issued but only until the earlier of 10 business days after issue of the notice, the date they become aware of unpublished price sensitive information or the date the “No Objection” notice is withdrawn by the Company.

Executive Officers

Executive Officers must confirm in writing that they are not aware of any unpublished price sensitive information prior to being issued with a "No Objection" notice. Such written confirmation must be on the "No Objection Request" form attached to this policy and submitted to the Company Secretary. A "No Objection" notice will be issued by either the Managing Director or the Chairman.

Executive Officers may buy or sell securities in the Company once a "No Objection" notice has been issued but only until the earlier of 10 business days after issue of the notice, the date they become aware of unpublished price sensitive information or the date the "No Objection" notice is withdrawn by the Company.

Employees

Employees are expected to comply with the rules set out in this policy and to comply with the law in regard to “insider trading” but do not need to apply for a "No Objection" notice.

Directors, Executive Officers and Employees

General Restrictions on the ability of Directors, Executive Officers and Employees to trade in Securities

Notwithstanding the above:

• Directors, Executive Officers and Employees are prohibited from buying or selling Securities before they are vested in the Company at any time if they are aware of any information of a potentially price sensitive nature which has not been released to ASX or has not otherwise been made public.
  
  
• Directors, Executive Officers and Employees shall in all circumstances be prohibited from:
  
  
  • "short-selling" Securities (or an interest in Securities) - that is selling Securities, or an interest in Securities, beyond the level of the Employee’s holdings
    
    
  • trading in Securities which operate to limit the economic risk associated with an Employee’s holding of unvested Securities which are to be issued, subject to the Employee having satisfied certain performance conditions, under the Company's Performance Equity Plan or the Employee Tax Exempt Share Acquisition Plan or
    
    
  • trading in Securities which enable an Employee to profit from a decrease in the market price of Securities.
    
    

For the Purpose of this Policy:

Chairman means the Chairman of the Board of Cardno Limited.

Company means Cardno Limited.

Director means a Director of Cardno Limited.

Employee means a person employed by Cardno Limited (or one of its subsidiaries) not being a Director or Executive Officer or, for the purpose of this policy, an advisor, consultant or contractor who may be in possession of price sensitive information.

Executive Officer means a person reasonably considered to be an Executive Officer of Cardno Limited and includes persons nominated who may not be Employees but have a contractual agreement in respect of personal services offered to the Company. The Company may from time to time nominate persons deemed to be Executive Officers for the purposes of this Policy.

Policy Document means the document restricting the times and circumstances in which Directors, Executive Officers and Employees may buy or sell securities in the Company.

Securities includes Shares, Convertible Notes and options of Cardno Limited and financial products issued or created over and/or Convertible Notes by third parties as well as structured financial products, swaps, futures contracts, contracts for difference, spread bets, options, warrants, depositary receipts or other derivatives over, or related to the performance of, Shares and/or Convertible Notes.

Shares means ordinary shares of Cardno Limited.

Convertible Notes mean convertible notes of Cardno Limited.

APPROVED BY THE BOARD OF DIRECTORS ON 29 JUNE 2006 IN ACCORDANCE WITH THE COMPANY'S CONSTITUTION.