QUESTE COMMUNICATIONS LIMITED — Annual Report 2007

Sep 2, 2007

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ASX Appendix 4E Preliminary Final Report

30 June 2007

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www.queste.com.au

QUESTE COMMUNICATIONS LTD

ASX Code: QUE A.B.N. 58 081 688 164

Level 14, 221 St Georges Terrace, Perth WA 6000 T | + 61 (8) 9214 9777 F | + 61 (8) 9322 1515

E | info@queste.com.au

30 JUNE 2007

QUESTE COMMUNICATIONS LTD A.B.N. 58 081 688 164

CONTENTS

CONTENTS
Results For Announcement	2
To The Market
Status of Audit	3
Dividends	3
Brief Explanation of Results	3
Associate Entities	4
Controlled Entities	4
Commentary On Results	5
And Other Significant Information
Status of Annual General Meeting	9
Income Statement	10
Balance Sheet	11
Statement of Changes in Equity	12
Statement of Cash Flows	13
Notes to Financial Statements	14

CORPORATE DIRECTORY

BOARD

Farooq Khan (Executive Chairman) Michael J van Rens (Non-Executive Director) Azhar Chaudhri (Non-Executive Director) Yaqoob Khan (Non-Executive Director)

COMPANY SECRETARY

Victor Ho

PRINCIPAL & REGISTERED OFFICE

Level 14, The Forrest Centre 221 St Georges Terrace

Perth Western Australia 6000

Telephone: (08) 9214 9777 Facsimile: (08) 9322 1515 Email: info@queste.com.au Website: www.queste.com.au

SHARE REGISTRY

Advanced Share Registry Services KMC House

110 Stirling Highway

Nedlands Western Australia 6009 Telephone: (08) 8 9389 8033 Facsimile: (08) 8 9389 7871 Email: admin@advancedshare.com.au Website: www.asrshareholders.com

www.queste.com.au

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STOCK EXCHANGE

Australian Securities Exchange Perth, Western Australia

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ASX CODE

QUE

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EMAIL US AT:

info@queste.com.au

AUDITORS

BDO Kendalls Audit and Assurance (WA) Pty Ltd 128 Hay Street Subiaco, Western Australia 6008 Telephone: (08) 9380 8400 Facsimile: (08) 9380 8499 Website: www.bdo.com.au

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APPENDIX 4E PRELIMINARY FINAL REPORT

This Preliminary Final Report is provided to the Australian Securities Exchange ( ASX ) under ASX Listing Rule 4.3A

Current Reporting Period: Financial year ended year ended 30 June 2007 Previous Corresponding Period: Financial year ended year ended 30 June 2006 Balance Date: 30 June 2007 Company: Queste Communications Ltd ( Queste or QUE ) Consolidated Entity: Queste and controlled entities:

(1) Orion Equities Limited (ACN 000 742 843) ( Orion or OEQ ) and controlled entities of Orion:

(i) Silver Sands Developments Pty Ltd (ACN 094 097 122), a wholly owned subsidiary;

(ii) Central Exchange Mining Ltd (ACN 119 438 265), a wholly owned subsidiary;

(iii) Koorian Olives Pty Ltd (ACN 120 616 891) (formerly OEQO Pty Ltd) incorporated in Western Australia on 7 July 2006, a wholly owned subsidiary;

(iv) Orion Indo Operations Pty Ltd (ACN 124 702 245) incorporated in Western Australia on 30 March 2007, a wholly owned subsidiary;

(v) PT Orion Indo Mining, incorporated in Indonesia on 4 April 2007, 100% beneficially owned by Orion Indo Operations Pty Ltd; and

(vi) Hume Mining NL (ACN 064 994 945), a wholly owned subsidiary sold to Alara Uranium Limited ( Alara or AUQ) on 18 May 2007.

Accounting policies, estimation methods and measurement bases used in this Appendix 4E are the same as those used in the last annual report and the last half-year report.

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Total revenues Total expenses Profit before tax Income tax expense Profit from continuing operations Loss from discontinued operations Profit for the year Net profit attributable to minority interests Profit after tax attributable to members of the Company Basic earnings/(loss) per share (cents) Diluted earnings/(loss) per share (cents)	Consolidated Company 2007 2006 % Change 2007 2006 % Change $ $ $ $
	28,188,248 26,676,739 +6% 1,342,009 3,773,671 -64% (11,789,443) (20,709,580) -43% (1,077,600) (3,293,463) -67%
	16,398,805 5,967,159 +175% 264,409 480,208 -45% (5,459,387) (1,369,682) +299% (12,626) - N/A
	10,939,418 4,597,477 +138% 251,783 480,208 -48% (1,852,990) 2,049,410 -190%
	9,086,428 6,646,887 +37% 251,783 480,208 -48% (4,374,403) (3,119,114) +40% - - N/A
	4,712,025 3,527,773 +34% 251,783 480,208 -48%
	16.0 12.0 +34% 0.9 1.6 -48% 9.7 7.3 +34% 0.5 1.0 -48%

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APPENDIX 4E PRELIMINARY FINAL REPORT

Undiluted NTA backing per share (cents) Diluted NTA Backing per share (cents)	Consolidated Company 2007 2006 % Change 2007 2006 % Change
	66.2 52.6 +26% 41.5 29.0 +43% 48.1 39.8 +21% 33.1 25.5 +30%

In %Change columns:

• “+” means “Up” from previous corresponding period or balance date (as the case may be)

• “-“means “Down” from previous corresponding period or balance date (as the case may be)

NTA backings at the Consolidated Entity level are reported net of minority interests.

STATUS OF AUDIT

This Preliminary Final Report is based on:

X Accounts that are in the process of being audited.

DIVIDENDS

The Company will be paying a final dividend as follows:

Dividend Rate	Record Date	Expected	Franking	Total Dividends Payable
		Payment Date
0.25 cent per share	17 September 2007	21 September 2007	Fully Franked	$73,512

The Company also paid the following interim dividend during the financial year:

Dividend Rate	Record Date	Payment Date	Franking	Total Dividends Paid
0.5 cent per share	8 March 2007	15 March 2007	Fully Franked	$147,024

BRIEF EXPLANATION OF RESULTS

The Consolidated Entity’s results incorporates the results of controlled entity, ASX listed investment company, Orion Equities Limited ( Orion or OEQ ).

At the Company level:

The Company decreased its post tax net profit by 45% during the current reporting period to $264,409 compared with $480,208 in the previous corresponding period.

Total revenues include:

• (1) $422,408 unrealised gains on share investments (2006: Nil);

• (2) $391,976 dividend income (2006: $256,744); and

• (3) $332,929 gross proceeds from the sale of share investments (2006: $3,392,544); and

• (4) $191,829 interest received (2006: $118,783).

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APPENDIX 4E PRELIMINARY FINAL REPORT

Total expenses include:

• (1) $678,867 costs of disposal of equity investments (2006: $2,912,982); and

• (2) $267,649 personnel expenses (2006: $288,430).

Please also refer to the attached financial statements and notes thereto.

ASSOCIATE ENTITIES

The Company does not have any interest in associate entities or in joint venture entities during the current reporting period.

Orion Equities has accounted for the following share investments at Balance Date as investments in an Associate entity (on an equity accounting basis):

• (1) 28.22% interest in ASX listed Scarborough Equities Limited (ACN 061 287 045) ( SCB ) (30 June 2006: 27.86%); and

• (2) 28.38% interest in ASX listed Bentley International Limited (ACN 008 108 218) ( BEL ) (30 June 2006: 27.93%).

CONTROLLED ENTITIES

The Company did not gain or lose control over entities during the current reporting period.

• Orion ceased control of the following entity during the financial year:

• (1) Hume Mining NL, formerly a wholly owned subsidiary, was sold to Alara on 18 May 2007 in consideration for 6,250,000 Alara shares; Alara was admitted to the Official List of ASX and commenced trading on ASX on 24 May 2007.

• Orion gained control of the following entities during the financial year:

• (1) Koorian Olives Pty Ltd (formerly OEQO Pty Ltd) incorporated on 7 July 2006 as a wholly owned subsidiary, the owner of the Koorian Olive Grove operations;

• (2) Orion Indo Operations Pty Ltd incorporated on 30 March 2007 as a wholly owned subsidiary, the parent company of PT Orion Indo Mining; and

• (3) PT Orion Indo Mining, incorporated on 4 April 2007 in Indonesia and 100% beneficially owned by Orion Indo Operations Pty Ltd, currently engaged in the exploration, evaluation and development of resource projects in Indonesia.

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APPENDIX 4E PRELIMINARY FINAL REPORT

COMMENTARY ON RESULTS AND OTHER SIGNIFICANT INFORMATION

The principal activities of the Company during the financial year were the pursuit of opportunities to commercially exploit the Company’s VoiceNet System Voice-over-Internet Protocol ( “VoIP” ) technology and the management of its net assets/investments.

1.1. Current Status of Investment in Orion Equities Limited

Orion Equities Limited is an ASX listed investment entity (ASX Code: OEQ).

The Company holds 8,558,127 shares in Orion, being 48.04% of Orion’s issued ordinary share capital (30 June 2006: 8,558,127 shares and 48.04%).

In light of such significant shareholding, Orion Equities has been recognised as a controlled entity and included as part of the Consolidated Entity since 1 July 2002.

Shareholders are advised to refer to the 30 June 2007 Preliminary Final Report and monthly NTA disclosures lodged by Orion on ASX for further information about the status and affairs of such company.

Information concerning Orion may be viewed from its website: www.orionequities.com.au.

Orion’s market announcements may also be viewed from the ASX website (www.asx.com.au) under ASX code “OEQ”.

Sections 1.2 to 1.6 below contain information extracted from Orion’s 30 June 2007 Preliminary Final Report (unaudited) lodged on ASX on 31 August 2007.

1.2. Orion Equities’ Unaudited Performance for 30 June 2007

Consolidated Entity Total revenues Total expenses Profit before tax Income tax expense Profit from continuing operations Loss from discontinued operations Profit attributable to members of the Company Basic and diluted earnings per share Pre-tax NTA backing per share Post-tax NTA backing per share	2007 2006 Up/ $ $ % Change Down
	18,184,064 6,576,731 176% Up (1,663,789) (718,791) 131% Up
	16,520,275 5,857,940 182% Up (5,296,760) (1,369,682) 287% Up
	11,223,515 4,488,258 150% Up (1,852,990) 2,049,410 190% Down
	9,370,525 6,537,668 43% Up
	0.53 0.37 43% Up
	2.237 1.557 44% Up 1.907 1.426 34% Up

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APPENDIX 4E PRELIMINARY FINAL REPORT

Total revenues of $15,541,564 (2006: $9,552,565) comprise:

• (1) $11,593,494 net income from the Company’s share trading portfolio including:

• (a) $8,583,740 unrealised gains on securities (2006: $5,536,239 unrealised loss);

• (b) $2,840,719 realised gains on sale of securities (2006: $1,868,639);

• (c) $169,034 dividend income (2006: $141,161);

• (2) $49,200 net income from the Company’s options portfolio (2006: $126,579);

• (3) $1,562,500 net profit from the sale of a subsidiary (2006: Nil);

• (4) $1,668,955 share of Associate entities’ net profits (2006: $1,146,453);

• (5) $481,726 dividend income received from Associate entities (2006: $343,080);

• (6) $58,095 income from olive grove operations (2006: Nil); and

• (7) $127,595 interest and other income (2006: $76,921).

• Total expenses of $1,666,192 (2006: $761,397) include:

• (1) $613,171 personnel costs (including employee entitlements) (2006: $269,693);

• (2) $418,467 olive grove operations (2006: Nil);

• (3) $66,515 brokerage costs (2006: $88,184);

• (4) $79,708 exploration and evaluation expenses (2006: $62,065); and

• (5) $20,678 legal and other professional fees (2006: $105,060).

ASSOCIATE ENTITIES

Orion Equities has accounted for the following share investments at Balance Date as investments in an Associate entity (on an equity accounting basis):

• (1) 28.22% interest in ASX listed Scarborough Equities Limited (ACN 061 287 045) ( SCB ) (30 June 2006: 27.86%); and

• (2) 28.38% interest in ASX listed Bentley International Limited (ACN 008 108 218) ( BEL ) (30 June 2006: 27.93%).

• The Company did not gain or lose an interest in joint venture entities during the current reporting period.

1.3. Orion Equities’ Dividends

Orion will be paying a final dividend as follows:

Dividend Rate	Record Date	Expected	Franking	Total Dividends Payable
		Payment Date
2 cents per share	17 September 2007	21 September 2007	Fully franked	$356,288
Orion also paid the	following interim dividend	during the financial	year:
Dividend Rate	Record Date	Payment Date	Franking	Total Dividends Paid
1.5 cents per share	8 March 2007	15 March 2007	Fully franked	$267,216

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APPENDIX 4E PRELIMINARY FINAL REPORT

1.4. Orion Equities’ Top 20 Holdings in Securities as at 30 June 2007

Equities

Fair Value $’million % of Net Assets ASX Code Industry Sector Exposures

1. Strike Resources Limited+ 2. Scarborough Equities Limited* 3. Bentley International Limited 4. Alara Uranium Limited 5. Oilex NL 6. Katana Capital Limited 7. Metcash Limited 8. BHP Billiton Limited 9. Zinifex Limited 10. RuralAus Investments Limited 11. Emeco Holdings Limited 12. Telstra Corporations Limited 13. Woodside Petroleum Ltd. 14. Chemrok Pty Ltd 15. OM Holdings Limited 16. Malagasy Minerals Limited 17. Magma Metals Limited 18. Newsat Limited 19. Elixir Petroleum 20. Jutt Holdings Limited *TOTAL

13.04 38.5% SRK Materials 5.78 17.1% SCB Diversified Financials 4.40 13.0% BEL Diversified Financials 2.25 6.6% AUQ Energy 1.43 4.2% OEX Energy 1.12 3.3% KAT Diversified Financials 0.72 2.1% MTS Retailing 0.53 1.6% BHP Materials 0.28 0.8% ZFX Materials 0.27 0.8% RUR Materials 0.24 0.7% EHL Capital Goods 0.23 0.7% TLSCA Telecommunications 0.19 0.6% WPL Energy 0.16 0.5% Unlisted Materials 0.13 0.4% OMH Materials 0.08 0.2% Unlisted Materials 0.07 0.2% MMB Materials 0.05 0.1% NWT Software & Services 0.05 0.1% EXR Energy 0.04 0.1% JUT Materials 31.01 91.7%

• BEL and SCB have been accounted for as investments in Associate entities

• The investment in Strike Resources Limited comprise the following securities:

(a) Listed shares (b) Listed $0.20 (30 June 2008) Options (c) Unlisted $0.20 (9 Feb 2011) Options (d) Unlisted $0.30 (9 Feb 2011) Options Sub-total	Fair Value $’million % of Net Assets ASX Code
	4.81 14.2% SRK 1.82 5.4% SRKO 3.42 10.1% 2.99 8.8% Unlisted 13.04 38.5%

• Fair value is based on a Black-Scholes options valuation model applying the following assumptions: (i) SRK’s share price being $2.02 (the last bid price as at 30 June 2007). This compares with a last bid price of $1.70 as at 31 August 2007.

• (ii) A risk free rate of return of 6.41% (based on the Commonwealth 5 year bond yield rate as at 30 June 2007).

• (iii) An estimated future volatility of SRK’s share price of 65%.

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APPENDIX 4E PRELIMINARY FINAL REPORT

1.5. Uranium Assets Spin-Off to Alara Uranium Limited

Orion’s subsidiary, Hume Mining NL, retained a 25% interest in various uranium tenement interests sold to Strike Resources Limited ( Strike ) in February 2006.

It was announced on 16 February 2007 that Alara was acquiring Strike and Orion’s uranium tenement interests and would be undertaking an Initial Public Offering ( IPO ) of up to $10 million at 25 cents per share.

Alara lodged its IPO Prospectus on 3 April 2007, which successfully closed on 9 May 2007 with 40 million shares issued raising $10 million. Alara was admitted to the Official List of the ASX and AUQ shares commenced trading on ASX on 24 May 2007.

On 18 May 2007, Orion completed the sale of Hume Mining NL to Alara and received 6,250,000 Alara shares as consideration. These shares are subject to escrow for 24 months from 24 May 2007.

Orion recorded a gain on disposal of Hume Mining NL of $1.56 million.

1.6. Koorian Olive Grove

On 21 February 2007, Koorian Olives Pty Ltd (formerly OEQO Pty Ltd) (a wholly owned subsidiary of Orion incorporated on 7 July 2007) ( Koorian ) settled on the acquisition of a 143 hectare property in Gingin, Western Australia (approximately 100 kilometres north of Perth) comprising the Koorian Olive Grove (which has approximately 64,500, 8 year old olive tree plantings), certain grove related equipment/infrastructure and a approximately one gigalitre per annum water licence and related bore assets, in consideration of payment of approximately $2.6 million.

The Koorian Olive Grove was set up as a managed investment scheme approximately 8 years ago with over $10 million having been invested into the scheme. The grove has to date had 3 harvests of oil and table olives, including the season just completed in May 2007.

A summary of olive grove operations during the 2007 financial year are as follows:

• (1) The 2007 harvesting season yielded ~1,416 tonnes of fruit from which ~205,000 million litres of extra virgin olive oil ( EVOO ) were extracted;

• (2) Orion record an Inventory of $646,864 on its Balance Sheet which reflects the cost of harvesting and processing the fruit into EVOO as at Balance Date;

• (3) Koorian has subsequently reached agreement with a local supplier for the sale of ~200,000 litres of EVOO for $1.02 million payable in 4 tranches between August and November 2007;

• (4) Income received totalled $58,095 comprising $49,595 from the provision of harvesting services to a third party grove in the Gingin region and $8,500 from the sale of table olive varieties; and

• (5) Expenses from Olive Grove operations (excluding depreciation) were $418,467.

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APPENDIX 4E PRELIMINARY FINAL REPORT

STATUS OF ANNUAL GENERAL MEETING

Details of the Company’s Annual General Meeting (which is required to be held by no later than 30 November 2006) is still to be determined by the Board.

Date: 31 August 2007

For and on behalf of the Directors,

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Victor Ho Company Secretary

Telephone: (08) 9214 9777 Email: info@queste.com.au

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30 JUNE 2007

INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2007

Revenue from continuing operations Other income Share of Associate entities' profits Total revenue Cost of investments sold Cost of olive grove operations Cost of resource projects sold Unrealised net change in fair value Occupancy expenses Finance expenses Borrowing costs Corporate expenses Administration expenses - personnel - others Profit before income tax expense Income tax expense Profit from continuing operations Loss from discontinued operations Profit for the year Net profit attributable to minority interests Net profit attributable to members of the company Dividends per share Earnings per share Basic earnings (cents per share) Diluted earnings (cents per share) 2 Note 1 1 1 3 4 1 4 1 1 1 1 1 1 1 1 1	657,621 391,976 484,241 950,033 256,744 $ $ 2007 25,046,045 1,668,955 $ $ 2006 Company 3,516,927 Consolidated Entity 25,861,672 2006 2007 - 1,146,453 -
	(21,293) (22,691) (267,649) (22,946) - - (19,564,407) (21,143) - - - (24,605) (2,029) (56) (35) (678,867) (46,385) (288,430) (21,143) (56) (74,383) (19,840) (418,467) (558,123) (30,083) (2,299) (161,227) (1,462) (75,955) (330,951) (6,042) (6,535) (9,792,672) (129,154) (487,357) (880,819) - - - (2,912,982) 26,676,739 1,342,009 3,773,671 28,188,248
	- 480,208 (12,626) 264,409 16,398,805 (1,369,682) 5,967,159 (5,459,387)
	- - 480,208 4,597,477 251,783 (1,852,990) 2,049,410 10,939,418
	480,208 6,646,887 9,086,428 251,783 - - (3,119,114) (4,374,403)
	480,208 3,527,773 4,712,025 251,783
	0.99 1.63 0.05 0.86 1.00 0.05 16.02 0.52 12.00 1.00 7.29 9.73

The accompanying notes form part of these financial statements

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30 JUNE 2007

BALANCE SHEET AS AT 30 JUNE 2006

CURRENT ASSETS Cash and cash equivalents Trade and other receivables Financial assets at fair value Inventory Other

TOTAL CURRENT ASSETS

NON CURRENT ASSETS

Trade and other receivables Inventory Available for sale asset Investments in Associate entities (equity accounted) Property, plant and equipment Olive trees Resource projects Intangibles

TOTAL NON CURRENT ASSETS

TOTAL ASSETS

CURRENT LIABILITIES Trade and other payables Current tax liabilities

TOTAL CURRENT LIABILITIES

NON CURRENT LIABILITIES

Deferred tax liabilities

TOTAL NON CURRENT LIABILITIES

TOTAL LIABILITIES

NET ASSETS

EQUITY

Contributed equity Reserves Retained earnings /(Accumulated losses) Parent interest Minority interest

TOTAL EQUITY

8 7 Note 5 6	- 646,864 34,849 - 12,671,627 2,112 - - 2007 2006 $ 1,029 Company 155,236 3,161,560 3,154,207 2006 4,774,405 2007 $ 21,088,044 196,921 Consolidated Entity $ 4,264,218 - 695,422 62,542 $ 152,390
	3,352,674 3,369,139 26,706,234 17,633,379
	- - 2,392,427 - - 3,821,038 60,578 - - 3,821,038 - 32,823 11,639,534 9,726,370 - - 6,290,223 22,032 - - 32,823 - - 300,000 - 26,211 11,596,262 - - - - -
	13,640,809 18,185,822 6,316,434 11,618,294
	9,669,108 44,892,056 31,274,188 14,987,433
	- 538,860 1,404,348 152,130 - 110,205 261,679 1,807,112
	110,205 152,130 3,211,460 800,539
	1,032,137 2,636,575 4,631,600 1,799,674
	1,032,137 2,636,575 1,799,674 4,631,600
	1,142,342 7,843,060 2,600,213 2,788,705
	8,526,766 12,198,728 37,048,996 28,673,975
	6,087,927 (2,107,492) 8,260,558 4,546,331 (2,149,757) 6,087,927 6,087,927 7,247,580 11,249,024 2,138,012 2,138,012 6,087,927
	19,474,963 - 13,200,456 8,526,766 12,198,728 17,574,033 - 15,473,519
	28,673,975 37,048,996 12,198,728 8,526,766

The accompanying notes form part of these financial statements

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30 JUNE 2007

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2007

Consolidated Entity At 1 July 2005 Profit attributable to members of the Company Profit attributable to minority interest Total income and expense recognised for the year Dividend paid Movement in minority interest At 30 June 2006 At 1 July 2006 Profit attributable to members of the Company Profit attributable to minority interest Total income and expense recognised for the year Dividend paid Movement in minority interest At 30 June 2007 Company At 1 July 2005 Adjustment on adoption of AASB 132 and 139 Changes in fair value of available for sale assets (net of tax) Net income directly recognised in equity Profit for the year Total income and expense recognised for the year Dividend paid At 30 June 2006 At 1 July 2006 Changes in fair value of available for sale assets (net of tax) Net income directly recognised in equity Profit for the year Total income and expense recognised for the year Dividend paid At 30 June 2007 - - - Issued (2,149,757) 12,198,728 Total 560,372 - - 4,144,781 9,520,970 6,087,927 2,138,012 6,087,927 - 2,138,012 $ Equity $ Reserves $ 7,247,580 13,200,456 28,673,975 560,372 21,891,690 $ $ 3,527,773 3,119,114 251,783 (294,048) - 3,714,227 - (294,048) 8,260,558 6,087,927 Contributed Retained Interest Minority Earnings - 4,374,403 4,374,403 - - 4,712,025 4,374,403 - - 9,086,428 - 4,712,025 - 4,712,025 7,247,580 3,119,114 28,673,975 13,200,456 6,646,887 3,119,114 (424,974) 6,087,927 2,138,012 - - (424,974) - 3,527,773 - - 3,527,773 - - - - (710,581) - - - - 6,087,927 2,138,012 11,249,024 17,574,033 - 1,162,692 - 251,783 (147,024) 251,783 1,162,692 4,546,331 4,546,331 - 3,714,227 Total $ $ $ (147,024) - 480,208 (710,581) - - 1,162,692 37,048,996.00 (826) (826) (3,365,521) - - (3,365,521) Accumulated Losses (2,440,676) 10,396,411 - - - 6,087,927 - 480,208 3,966,010 1,642,900 - 3,714,227 8,526,766 - 8,526,766 3,714,227 (2,107,492) 3,714,227 (2,107,492) 480,208 6,087,927 - 6,087,927 6,749,160 1,162,692 - - 1,162,692 $ Capital Reserves	- Total 4,144,781 9,520,970 $ Equity $ Reserves $ 21,891,690 $ $ 3,527,773 3,119,114 Contributed Retained Interest Minority Earnings 3,119,114 6,087,927 2,138,012 - - 3,527,773 - - -	- Total 4,144,781 9,520,970 $ Equity $ Reserves $ 21,891,690 $ $ 3,527,773 3,119,114 Contributed Retained Interest Minority Earnings 3,119,114 6,087,927 2,138,012 - - 3,527,773 - - -
	- -	560,372 560,372 - 6,646,887 3,119,114 (424,974) (424,974) - 3,527,773 - - -
	6,087,927	2,138,012 7,247,580 28,673,975 13,200,456
	- 6,087,927 -	- 2,138,012 7,247,580 13,200,456 28,673,975 - 4,374,403 4,374,403 - 4,712,025 - 4,712,025
	- - -	- - 4,712,025 4,374,403 9,086,428 (710,581) - - (710,581) - (826) (826)
	6,087,927	2,138,012 11,249,024 17,574,033 37,048,996.00
		Issued Total $ $ $ 1,162,692 (3,365,521) - (3,365,521) Accumulated Losses (2,440,676) 10,396,411 - 6,087,927 6,749,160 1,162,692 $ Capital Reserves
		1,162,692 - - 480,208 480,208 - - 1,162,692
		- 1,162,692 (147,024) (147,024) - 480,208 - 1,642,900
		4,546,331 8,526,766 (2,107,492) 6,087,927
		4,546,331 3,714,227 6,087,927 - - 3,714,227 8,526,766 (2,107,492)
		251,783 - - 251,783 - - 3,714,227 3,714,227
		- (294,048) - 3,714,227 (294,048) 251,783 - 3,966,010
		(2,149,757) 12,198,728 8,260,558 6,087,927

The accompanying notes form part of these financial statements

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30 JUNE 2007

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2007

		Consolidated Entity	Consolidated Entity	Company	Company
		2007	2006	2007	2006
	Note	$	$	$	$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers		60,354	27,660	2,867	5,600
Payments to suppliers and employees		(1,613,071)	(1,233,303)	(258,171)	(521,065)
Payments for exploration and evaluation		(79,708)	(46,443)	-	-
Sale proceeds from trading portfolio		12,328,482	18,187,241	-	-
Payments for trading portfolio		(6,483,983)	(15,337,708)	-	-
Proceeds from portfolio options		49,200	137,579	-	-
Payments for options portfolio		-	(18,333)	-	-
Dividends received		423,818	257,682	391,976	256,744
Income tax paid		(970,058)	(259,248)	-	-
Interest received		265,384	173,644	191,829	118,783
Interest paid		(56)	(1,462)	(56)	(35)
NET CASH INFLOW/(OUTFLOW) FROM
OPERATING ACTIVITIES		3,980,362	1,887,309	328,445	(139,973)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment		(2,711,041)	(10,750)	(1,567)	-
Proceeds from sale of plant and equipment		889	-	889	-
Payments for inventory		-	(24,486)	-	-
Payments for investment securities		(380,657)	(680,531)	(374,000)	-
Proceeds from sale of investment securities		332,929	3,392,544	332,929	3,392,544
NET CASH INFLOW/(OUTFLOW) FROM
INVESTING ACTIVITIES		(2,757,880)	2,676,777	(41,749)	3,392,544
CASH FLOWS FROM FINANCING ACTIVITIES
Payments in relation to sale of unmarketable parcels		(1,591)	-	-	-
Dividends paid		(710,704)	(424,974)	(294,049)	(147,025)
NET CASH OUTFLOW FROM FINANCING ACTIVITIES		(712,295)	(424,974)	(294,049)	(147,025)
NET DECREASE IN CASH AND CASH EQUIVALENTS HELD		510,187	4,139,112	(7,353)	3,105,546
Add opening cash and cash equivalents brought forward		4,264,218	125,106	3,161,560	56,014
NET CASH AND CASH EQUIVALENTS AT END OF YEAR	5	4,774,405	4,264,218	3,154,207	3,161,560

The accompanying notes form part of these financial statements

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30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2007

1. PROFIT FOR THE YEAR

Profit for the year includes the following items of revenue	Profit for the year includes the following items of revenue	Consolidated Entity	Consolidated Entity	Company	Company
and expenses below (including the revenue and expenses of the discontinued operations of Hume Mining NL,		2007	2006	2007	2006
formerly a subsidiary of Orion Equities Limited (refer	to	$	$	$	$
Note 2)).
(a) Revenue from continuing operations	Note
Dividend received		657,621	484,241	391,976	256,744
Other income
Proceeds from sale of resource projects		-	333,333	-	-
Proceeds from sale of Hume Mining NL		1,562,500	-	-	-
Proceeds from sale of securities
- investments portfolio		332,929	3,392,544	332,929	3,392,544
- trading portfolio		11,888,009	18,420,880	-	-
- options portfolio		49,200	137,579	-	-
Unrealised gains on fair value of investments	2	9,006,149	5,536,239	422,408	-
Income from sale of olives		58,095	-	-	-
Interest received - other		265,384	173,644	191,829	118,783
Other		56,906	27,660	2,867	5,600
		23,219,172	28,021,879	950,033	3,516,927
Share of Associate entities' profits		1,668,955	1,146,453	-	-
Total revenue		25,545,748	29,652,573	1,342,009	3,773,671
(b) Expenses
Cost of resource projects sold		-	19,840	-	-
Cost of securities sold
- non-current investments portfolio		678,867	2,912,982	678,867	2,912,982
- trading portfolio		9,047,290	16,552,241	-	-
- options portfolio		-	11,000	-	-
- brokerage cost		66,515	88,184	-	-
Unrealised loss on fair value of investments		-	21,143	-	21,143
Cost of olive grove operations		418,467	-	-	-
Operating expenses
Occupancy expenses		74,383	46,385	22,691	24,605
Finance expenses	2	6,684	6,228	2,299	2,029
Borrowing costs - interest paid		56	1,462	56	35
Corporate expenses
Consultancy		63,730	73,760	38,110	(6,140)
Professional fees		(4,941)	25,160	-	-
Other corporate expenses	2	71,365	63,372	37,845	29,086
Administration expenses
Depreciation		78,303	12,300	4,857	5,183
Fixed assets write off		-	1,990	-	1,497
Personnel expenses - remuneration and other		803,234	535,233	238,570	272,953
Employee entitlements		77,585	22,890	29,079	15,477
Investment costs		29,245	26,482	-	4,504
Provision for realisation cost of share portfolio		119,868	-	-	-
Other administrative expenses	2	180,722	155,222	25,226	10,109
(Gain)/ loss on dilution		765	(134,406)	-
Loss from decrease in control of subsidiary
after share issue by subsidiary		-	248,653	-	-
Exploration and evaluation expenses	2	79,708	62,065	-	-
		11,791,846	20,752,186	1,077,600	3,293,463

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30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2007

1. PROFIT (continued)

(c) Sale of Assets Net gains / (losses): - tenement - subsidiary - non-current investments portfolio - trading portfolio - options portfolio Sale of assets in the ordinary course of business have given rise to the following net gains and losses:	(345,938) Consolidated Entity 2007 2006 1,562,500 - - - Company $ - - 479,562 - - - 479,562 2007 (345,938) - 313,493 2,840,719 49,200 126,579 1,868,639 $ $ $ - 2006
	4,106,481 2,788,273 (345,938) 479,562

2. DISCONTINUED OPERATIONS

On 18 May 2007, controlled entity Orion Equities Limited (OEQ) disposed of its uranium assets via the sale of its subsidiary, Hume Mining NL (Hume) to Alara Uranium Limited (Alara) in consideration for the issue of 6,250,000 ordinary shares in Alara. Alara completed its initial public offering of $10 million at $0.25 per share and commenced trading (ASX Code: AUQ) on ASX on 24 May 2007. Financial information relating to the discontinued operations of Hume from 1 July 2006 to the date of cessation is set out below.

		Consolidated Entity	Consolidated Entity	Company	Company
Financial information relating to the discontinued operation, which has been incorporated into the Income		2007	2006	2007	2006
Statement, is as follows:		$	$	$	$
Revenue		-	2,975,834	-	-
Expenses		(2,644,903)	(42,606)	-	-
Loss before income tax		(2,644,903)	2,933,228	-	-
Income tax expense		791,913	(883,818)	-	-
Loss after income tax		(1,852,990)	2,049,410	-	-
The carrying amounts of assets and liabilities of the
operation at the date of cessation were:
Total assets		-	3,009,245	-	-
Total liabilities		(11)	(969,226)	-	-
Net asset		(11)	2,040,019	-	-
The net cash flows of the business, which have been
incorporated into the Cash Flows Statement, are as
follows:
Net cash outflow from operating activities		(25,634)	(94,664)	-	-
Net cash inflow from investing activities		27,896	91,415	-	-
Net increase/(decrease) in cash from businesses		2,262	(3,249)	-	-
DIVIDENDS
Declared and paid during the year	Date paid
Dividends on ordinary shares
by OEQ - 1.5 cents per share fully franked	07-Apr-06	-	138,846	-	-
by OEQ - 1.5 cents per share fully franked	13-Oct-05	-	138,846	-	-
by QUE - 0.5 cents per share fully franked	07-Apr-06	-	147,024	-	147,024
by OEQ - 3 cents per share fully franked	19-Oct-07	277,688	-	-	-
by OEQ - 1.5 cents per share fully franked	15-Mar-07	138,845	-	-	-
by QUE - 0.5 cent per share fully franked	29-Sep-06	147,024	-	147,024	-
by QUE - 0.5 cent per share fully franked	15-Mar-07	147,024	-	147,024	-
		710,581	424,716	294,048	147,024

3. DIVIDENDS

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30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2007

3. DIVIDENDS (continued)

DIVIDENDS (continued)
Dividends declared post balance date		Consolidated	Entity	Company
Dividends on ordinary shares	Date paid	2007	2006	2007	2006
		$	$	$	$
by QUE - 0.5 cent per share fully franked	29-Sep-06	-	147,024	-	147,024
by OEQ - 3 cents per share fully franked	19-Oct-07	-	534,432	-	-
by QUE - 0.25 cent per share fully franked	21-Sep-07	73,512	-	73,512	-
by OEQ - 2 cents per share fully franked	21-Sep-07	356,288	-	-	-

(both having a record date of 17 September 2007 with payment to be effected on or about 21 September 2007)

Franking credit balance Payment of provision for income tax Franking debits arising from payment of proposed dividends 4. EARNINGS PER SHARE Basic earnings per share (cents) Diluted earnings per share (cents) (a) Basic earnings per share Net Profit ($) Weighted average number of ordinary shares The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows: Balance of franking account at year end adjusted for franking credits arising from:	159,343 1,812,007 452,190 - 1,186,057 159,248 - (63,010) (260,547) (292,053) (31,505) 1,116,710
	2,668,170 1,346,194 127,743 96,333
	12.0 2006 2007 Consolidated Entity 16.0 Company 2007 0.9 2006 1.6
	9.7 1.0 7.3 0.5
	4,712,025 29,404,879 480,208 29,404,879 29,404,879 3,527,773 29,404,879 251,783

(i) The Company's partly paid shares, to the extent that they have been paid (one cent per share), have been included in the determination of the basic earnings per share.

The Company's options and partly paid shares, to the extent of the balance of the call (19 cents per share), have not been included in the determination of basic earnings per share. These securities are included in the determination of diluted earnings per share on the basis that each option will convert to one ordinary share and each partly paid share will become fully paid.

(b) Diluted earnings per share

Diluted earnings per share
Net Profit ($) (i) Portion of partly-paid ordinary shares that remain unpaid The weighted average number of ordinary shares and potential ordinary shares used in calculation of diluted earnings per share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows: Consolidated Entity Weighted average number of ordinary shares used in the calculation of diluted EPS Weighted average number of ordinary shares (i) 2006 48,404,879 2007 3,527,773 48,404,879 Weighted average number of ordinary shares used in the calculation of basic EPS The earnings and weighted average number of ordinary and potential ordinary shares used in the calculation of diluted earnings per share are as follows: 4,712,025	29,404,879 29,404,879 No. 2007 251,783 19,000,000 19,000,000 48,404,879 2006 No. 48,404,879 Company 2007 2006 480,208
	48,404,879 48,404,879

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30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2007

the year ended 30 June 2007
5. CASH AND CASH EQUIVALENTS Cash at bank Term deposit Bank Bills	$ 24,555 2,970,033 $ 2006 25,543 Company 3,128,664 994,507 2006 166,972 3,754,355 Consolidated Entity 1,269,630 2007 24,555 2007 - 25,543 2,970,033 $ $
	4,264,218 4,774,405 3,154,207 3,161,560

The effective interest rate on short term deposits and bank bills was 6.1% (2006: 5.7%); these deposits have an average maturity of a month.

Disclosure of non-cash financing and investing activities

On 18 May 2007, controlled entity Orion Equities Limited completed the sale of its uranium tenement interests in the Northern Territory and Western Australia to Alara Uranium Limited (Alara) (ASX Code: AUQ) through the sale of its wholly owned subsidiary Hume Mining NL in consideration for 6.25 million Alara shares. After successfully completing a $10 million Initial Public Offering (IPO) (at $0.25 per share) in May 2007, Alara was admitted to the Official List of the ASX and AUQ shares commenced trading on ASX on 24 May 2007.

6. FINANCIAL ASSETS AT FAIR VALUE Investments in listed companies comprise: Listed investments at fair value Listed investments (suspended from ASX) - at cost Add: Directors' valuation Unlisted options in listed corporations at cost Add: net change in fair value 7. AVAILABLE FOR SALE ASSET Shares in controlled entities - at cost Net change in fair value Market value of listed securities	$ $ 2006 Consolidated Entity Company - 11,005,112 19,271,541 2006 2007 $ $ 152,390 2007
	(380,322) (380,322) (12,304) 415,171 (12,304) 415,171 12,304 12,304
	34,849 - 34,849 -
	1,806,503 10,000 10,000 - 1,621,666 - - -
	1,816,503 1,631,666 - -
	152,390 34,849 12,671,627 21,088,044
	- - 3,440,457 - 2,849,766 8,746,496 2,849,766 -
	- - 11,596,262 6,290,223
	- 4,484,042 11,596,262 -

(a) Investment in Controlled Entities

Orion Equities Limited (A.C.N. 000 742 843) (OEQ)

Ownership	Interest
2007	2006
48.04%	48.04%

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30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2007

8. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Name of Associate Principal Activity Investments Investments 2007 Scarborough Equities Limited (SCB) Bentley International Limited (BEL) 27.93% 27.86% 28.38% 28.22% Ownership Interest 2006	Carrying Amount 4,357,549 7,012,570 4,626,964 5,368,821 $ 2007 2006 $
	11,639,534 9,726,370

On 5 July 2006, OEQ purchased 7,335 shares in SCB for $6,656. On 31 August 2006, OEQ received 299,098 shares in BEL for $109,769 and 151,223 shares in SCB for $134,440 when it participated in the respective BEL and SCB Dividend Reinvestment Plans.

			2007	2006
Movement in Investments in Associates			$	$
Shares in listed Associate entities brought forward			9,726,370	7,085,260
Share of profit before income tax expense			2,577,652	1,869,980
Share of income tax expense			(426,992)	(380,427)
Dividends received			(481,705)	(343,100)
Acquisition of shares			244,210	1,494,657
Carrying amount at the end of the financial year			11,639,535	9,726,370
Fair value of listed investments in associates
Bentley International Limited			4,397,645	4,226,113
Scarborough Equities Limited			5,776,706	5,316,972
			10,174,351	9,543,085
Net tangible asset value of listed investments in associates
Bentley International Limited			5,704,535	5,414,913
Scarborough Equities Limited			6,926,572	5,272,310
			12,631,107	10,687,223
Share of Associates' profits
Profit before income tax			2,577,652	1,869,980
Income tax expense			(426,992)	(380,427)
Profit after income tax			2,150,660	1,489,553
Summarised Financial Position of Associates		Group share of:
	Bentley International Limited		Scarborough Equities Limited
	2007	2006	2007	2006
	$	$	$	$
Current assets	5,835,090	5,461,429	2,130,829	1,025,519
Non current assets	1,749	2,527	5,504,145	4,716,645
Total assets	5,836,839	5,463,955	7,634,974	5,742,164
Current liabilities	(131,830)	(50,030)	(42,064)	(22,170)
Non current liabilities	-	-	(668,938)	(446,688)
Total liabilities	(131,830)	(50,030)	(711,002)	(468,858)
Net assets	5,705,009	5,413,926	6,923,972	5,273,306
Revenues	995,411	791,176	2,745,757	1,920,920
Profit after income tax of associates	382,154	538,998	1,768,506	950,555

Scarborough Equities Limited and Bentley International Limited - Lease Commitments

Each of SCB and BEL have the same lease commitments disclosed in note 10(a).

PRELIMINARY FINAL REPORT | 18

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30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2007

9. CONSOLIDATED SEGMENT REPORTING

The Consolidated entity operates predominantly within Australia in the investments, olive grove operations and resources sectors. The Consolidated entity has resource project interests in Indonesia and Pakistan.

BUSINESS SEGMENT

Resources Olive grove operations Share of associates' profit Resources Olive grove operations Other Acquisition of segment assets Other non-cash expenses - Unrealised gains on securities GEOGRAPHICAL SEGMENT Australia Indonesia Pakistan Segment Liabilities Segment revenue Segment results 8,900,387 13,753,902 (1,799,674) $ (1,843,969) (2,600,213) (800,539) 2007 $ - 25,545,748 29,729,174 Acquisitions of segment assets - - Segment Assets - $ 8,643,235 (4,727) 41,500,885 7,528,304 8,643,236 - 13,875,372 - (71,874) 15,541,564 - - - (651,549) - 251,428 $ 2007 $ 2006 (7,843,060) Olive grove operations (7,843,060) 2007 2007 2007 2007 $ $ 44,892,056 - Segment liabilities (1,202,739) (764,758) 2006 - 333,333 - 179,244 Segment Assets - - 4,614,679 31,274,188 $ 29,652,573 $ 21,987,948 268,250 (5,347,542) 1,668,955 (360,372) - 1,146,453 Segment Revenues & Results Segment Assets & Liabilities 2007 $ $ Segment revenue - 1,482,792 $ Resources 2007 26,659,509 2006 2006 4,926,592 44,892,056 3,416,848 2007 - Investments Investments 2006 2007 Unallocated 2007 $ 2006 Segment result 2007 2006 Investments $ 9,413,717 $ 27,993,543 12,165,266 Profit before income tax 25,545,748 Total segment revenue 1,562,500 58,095 1,668,955 Unallocated 36,548,616 5,935,246 $ 11,624,134 $ 9,006,149 5,557,382 $ - - - - - 2,707,989 -	Resources Olive grove operations Share of associates' profit Resources Olive grove operations Other Acquisition of segment assets Other non-cash expenses - Unrealised gains on securities GEOGRAPHICAL SEGMENT Australia Indonesia Pakistan Segment Liabilities Segment revenue Segment results 8,900,387 13,753,902 (1,799,674) $ (1,843,969) (2,600,213) (800,539) 2007 $ - 25,545,748 29,729,174 Acquisitions of segment assets - - Segment Assets - $ 8,643,235 (4,727) 41,500,885 7,528,304 8,643,236 - 13,875,372 - (71,874) 15,541,564 - - - (651,549) - 251,428 $ 2007 $ 2006 (7,843,060) Olive grove operations (7,843,060) 2007 2007 2007 2007 $ $ 44,892,056 - Segment liabilities (1,202,739) (764,758) 2006 - 333,333 - 179,244 Segment Assets - - 4,614,679 31,274,188 $ 29,652,573 $ 21,987,948 268,250 (5,347,542) 1,668,955 (360,372) - 1,146,453 Segment Revenues & Results Segment Assets & Liabilities 2007 $ $ Segment revenue - 1,482,792 $ Resources 2007 26,659,509 2006 2006 4,926,592 44,892,056 3,416,848 2007 - Investments Investments 2006 2007 Unallocated 2007 $ 2006 Segment result 2007 2006 Investments $ 9,413,717 $ 27,993,543 12,165,266 Profit before income tax 25,545,748 Total segment revenue 1,562,500 58,095 1,668,955 Unallocated 36,548,616 5,935,246 $ 11,624,134 $ 9,006,149 5,557,382 $ - - - - - 2,707,989 -	- 333,333 179,244 21,987,948 268,250 1,146,453 Segment revenue $ 2007 2006 $ 27,993,543 1,562,500 58,095 1,668,955	251,428 (1,202,739) (764,758) 1,668,955 (360,372) - - 1,482,792 $ 2007 2006 Segment result 9,413,717 $ 12,165,266
		29,652,573 25,545,748
		Segment Assets - - 4,614,679 $ $ 26,659,509 2006 4,926,592 3,416,848 2007 - 36,548,616	8,900,387 13,753,902
			(1,799,674) $ (1,843,969) (800,539) (651,549) - - Segment liabilities 2006 (5,347,542) 2007 $ -
		31,274,188 44,892,056	(2,600,213) (7,843,060)
	41,500,885 7,528,304 8,643,236 13,875,372 15,541,564

PRELIMINARY FINAL REPORT | 19

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30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2007

ITMENTS ase Commitments n-cancellable operating lease commitments: Not longer than one year Between 12 months and 5 years Greater than 5 years	$ 2007 2006 49,920 24,960 24,960 $ Consolidated Entity 49,920 49,920 49,920 99,840 199,680 199,680 2007 Company 2006 99,840 $ $ 24,960 99,840
	149,760 174,720 299,520 349,440

10. COMMITMENTS

(a) Lease Commitments

Non-cancellable operating lease commitments:

The lease commitment is the Company and Orion Equities Limited's share of the office premises at Level 14, The Forrest Centre, 221 St Georges Terrace, Perth, Western Australia, and includes all outgoings (exclusive of GST). The lease is for a 7 year term expiring 30 June 2013 and contains a rent review increase each year alternating between 5% and the greater of market rate or CPI + 1%.

Orion Equities Limited and controlled entities

(b) Exploration Tenement Leases - Commitments for Expenditure

• (i) In order to maintain current rights of tenure to its Australian exploration tenements, the consolidated entity is required to outlay lease rentals and meet minimum expenditure commitments. Based on tenements which have been granted as at the date of this report, the consolidated entity has a 12 month commitment of $45,154.

• (ii) The consolidated entity also has exploration and evaluation commitments in relation to mineral licences held or applied for (upon grant) in Pakistan. The consolidated entity previously held a reconnaissance licence (RL) over a 5,000 square kilometre area in the Chitral Region, North-West Frontier Province, Pakistan, prospective for gold and copper. There was a US$250,000 expenditure commitment under the terms of such licence within the first 12 months; A$71,874 was actually incurred on the RL during the financial year; however, an application for an exploration licence over 493 square kilometres in this RL area was filed in March 2007 prior to the expiry of this RL. The consolidated entity has also recently applied for another RL in the province of 3,000 square kilometres and a similar US$250,000 expenditure commitment is expected to apply to this RL upon its grant.

Financial commitments for subsequent periods are contingent upon future exploration and evaluation results and cannot be estimated. These obligations are subject to renegotiation upon expiry of the tenement lease or when application for a mining lease is made and have not been provided for in the accounts.

11. CONTINGENT LIABILITIES AND ASSETS

The Company

(a) Directors' Deeds

The Company has entered into deeds of indemnity with each of its Directors indemnifying them against liability incurred in discharging their duties as directors/officers of the Consolidated Entity. At the end of the financial year, no claims have been made under any such indemnities and accordingly, it is not possible to quantify the potential financial obligation of the Consolidated Entity under these indemnities.

The Company does not have any other material contingent assets or liabilities at Balance Date.

Orion Equities Limited and controlled entities

(a) Cooperation Agreement - Berau Coal Project (East Kalimantan, Indonesia)

• On 27 June 2007, Orion Indo Operations Pty Ltd (OIO) and its Indonesian subsidiary PT Orion Indo Mining (PTOIM) reached agreement with Strike Operations Pty Ltd (SOPL) and its Indonesian subsidiary PT Indo Batubara (PTIB) for PTIB to assign a 70% interest in the Berau Coal Project to PTOIM; PTOIM has agreed to assume the obligations (effective from 19 June 2007) under an original cooperation agreement with the vendor, PT Kaltim Jaya Bara (KJB); PTIB's 30% interest is free-carried until a decision to mine is made by PTOIM.

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30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2007

11. CONTINGENT LIABILITIES AND ASSETS

(a) Cooperation Agreement - Berau Coal Project (East Kalimantan, Indonesia) (continued)

By the original cooperation agreement dated 12 April 2007 between SOPL, PTIB and KJB, PTIB had acquired the right to exclusively conduct general survey activities, explore for, exploit, mine and sell coal and methane gas and other minerals in the concession area of 5,000 hectares located approximately 40 kilometres south-west of Tanjungredeb (Berau) and approximately 350 kilometres north of Balikpapan (the capital city of Kalimantan).

Orion Equities Limited and controlled entities (continued)

(a) Cooperation Agreement - Berau Coal Project (East Kalimantan, Indonesia) (continued)

Under the terms of the original cooperation agreement, PTOIM has the following future payment and royalty obligations to KJB:

• (i) Three staged cash payments totalling US$0.50 million over a 12 month period; and

• (ii) Royalties of between US$1.00 to $4.00 per dry metric tonne of coal mined and sold from the concession area, depending on the calorific value of the coal (ranging from 5,000 to 6,000 KCal and above) and the waste to ore ratio incurred in mining operations.

If PTIB elects not to contribute to expenditure after a decision to mine is made by PTOIM, its interest in the project shall be diluted on a pro-rata basis. If PTIB’s interest is diluted to below 10%, PTIB’s interest shall be transferred to PTOIM in consideration for a royalty to PTIB of 7.5% of net profits derived from coal resources produced and sold.

PTOIM (as assignee) is entitled to terminate the original cooperation agreement with KJB at any time and is only liable for the staged payments due and payable as at the date of termination.

(b) Royalty Owed To Central Exchange Mining Ltd

By an agreement entered into between Hume Mining NL (Hume), Strike Resources Limited (Strike), Alara Operations Pty Ltd (then known as Strike Uranium Pty Ltd) and Central Exchange Mining Ltd (CXML) (a wholly owned subsidiary of Orion) dated 9 February 2007 for the assignment by Hume of a 2% royalty entitlement (owed to Hume by Strike under a tenement acquisition agreement between Hume and Strike dated 15 September 2005 (as amended)) to CXML. Under the above agreements, CXML is entitled to receive a royalty of 2% of gross revenues (exclusive of GST) arising from any commercial exploitation of any minerals from the tenements the subject of the abovementioned 15 September 2005 Agreement from Alara Uranium Limited (Alara) (the parent of Alara Operations Pty Ltd, the present owner of the tenements) .

(c) Native Title

The Consolidated Entity's tenements in Australia may be subject to native title applications in the future. At this stage it is not possible to quantify the impact (if any) that native title may have on the operations of the Consolidated Entity.

(d) Directors' Deeds

Orion Equities Limited has entered into deeds of indemnity with each of its Directors indemnifying them against liability incurred in discharging their duties as directors/officers of the Consolidated Entity. At the end of the financial year, no claims have been made under any such indemnities and accordingly, it is not possible to quantify the potential financial obligation of the Consolidated Entity under these indemnities.

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QUESTE COMMUNICATIONS LTD A.B.N. 58 081 688 164

30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2007

12. EVENTS AFTER BALANCE SHEET DATE

The Company

• (a) The Company will pay a final dividend of 0.25 cents per share (100% franked) in respect of net profits derived for the year ended 30 June 2007. The record date will be 17 September 2007 with payment to be effected on or about 21 September 2007.

Orion Equities Limited

• (b) OEQ will pay a final dividend of 2 cents per share (100% franked) in respect of net profits derived for the year ended 30 June 2007. The record date will be 17 September 2007 with payment to be effected on or about 21 September 2007.

• (c) On 24 August 2007, Koorian Olives Pty Ltd reached agreement with a local supplier for the sale of ~200,000 litres of extra virgin olive oil (EVOO) harvested from the Koorian Oliver Grove during the 2007 harvest season completed in May 2007 for $1.02 million payable in 4 tranches between August and November 2007; this EVOO is recorded as Inventory to the value of $646,864 as at balance date.

No other matter or circumstance has arisen since the end of the financial year that significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

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