QUESTE COMMUNICATIONS LIMITED — Annual Report 2011

Oct 10, 2011

2011

ANNUAL REPORT

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A.B.N 58 081 688 164

30 JUNE 2011

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

CONTENTS

CORPORATE DIRECTORY

Overview of Results 2 The Board’s Report 3 Directors’ Report 6 Auditor’s Independence Declaration 18 Consolidated Statement of 19 Comprehensive Income Consolidated Statement of 20 Financial Position Consolidated Statement of 21 Changes in Equity Consolidated Statement of Cash Flows 22 Notes to the Consolidated Financial 23 Statements Directors’ Declaration 46 Independent Auditor’s Report 47 Corporate Governance 49 Additional ASX Information 59 www.queste.com.au Visit our website for:  Latest News  Market Announcements  Financial Reports Register your email with us to receive latest Company announcements and releases EMAIL US AT: info@queste.com.au

BOARD Farooq Khan (Chairman & Managing Director) Simon Cato (Director) Azhar Chaudhri (Director) Yaqoob Khan (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 Suite 2, 150 Stirling Highway Nedlands Western Australia 6009 Telephone: (08) 9389 8033 Facsimile: (08) 9389 7871 Level 6, 225 Clarence Street Sydney New South Wales 2000 Telephone: (02) 8096 3502 Email: admin@advancedshare.com.au Website: www.advancedshare.com.au STOCK EXCHANGE Australian Securities Exchange Perth, Western Australia ASX CODE QUE AUDITORS BDO Audit (WA) Pty Ltd 38 Station Street Subiaco, Western Australia 6008 Telephone: (08) 6382 4600 Facsimile: (08) 6382 4601 Website: www.bdo.com.au

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OVERVIEW OF RESULTS

Queste Communication Ltd is listed on the Australian Securities Exchange ( ASX ) (under ASX Code: QUE). Queste has a controlling (51%) interest in Orion Equities Limited, an investment company ( LIC ) listed on ASX (ASX Code: OEQ).

CONSOLIDATED	2011 2010
	$ $
Total revenues Total expenses Profit/(Loss) before tax Income tax benefit/(expense) Profit/(Loss) from continuing operations Net profit/(loss) attributable to non controlling interest Profit/(Loss) after tax attributable to owners of the Company Basic earnings/(loss) per share (cents) Diluted earnings/(loss) per share (cents) Undiluted NTA backing per share (cents) Diluted NTA Backing per share (cents)	1,226,091 4,798,785 (4,183,538) (4,743,171)
	(2,957,447) 55,614 (82,211) 694,440
	(3,039,658) 750,054 (1,386,384) 578,521
	(1,653,274) 171,533
	(5.5) 0.6 (3.4) 0.4 36 40 30 32

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

At the Consolidated Entity level:

Revenues include:

• (1) $500,186 net gain on sale of investments (2010: $873,554 loss)

• (2) $450,027 income from sale of olive oils (2010: $1,200,987);

• (3) $181,205 share of Associate entity’s profit (net of dividends received from Associate of $445,089) (2010: $874,850 net of dividends received from Associate of $445,089); and

• (4) $15,332 dividend income (2010: $14,060).

Expenses include:

• (1) $1,997,098 net loss in fair value in investments (2010: $2,572,398 gain);

• (2) $846,501 personnel expenses (2010: $932,525);

• (3) $601,024 olive grove and oils operations (which does not include revaluation and depreciation expenses) (June 2010: $1,023,130); and

• (4) $201,041 olive grove and oils operation’s revaluation and depreciation expenses (June 2010: $450,883).

The principal components of the $1,997,098 net loss in fair value in securities are:

• (a) $2.51 million unrealised loss on Orion’s investment in ASX listed Strike Resources Limited (SRK), which declined in value from 50 cents to 24.5 cents during the financial year;

• (b) $1.5 million unrealised gain on Orion’s investment in ASX listed Alara Resources Limited (AUQ), which increased in value from 8.7 cents to 36.5 cents during the financial year; and

• (c) $1 million reversal of net unrealised gain on Orion’s share investments sold (and unlisted options in SRK exercised) during the financial year.

Please refer to the Directors’ Report and Financial Report for further information on a review of the Consolidated Entity’s operations and the financial position and performance of the Consolidated Entity and Company for the year ended 30 June 2011.

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THE BOARD’S REPORT

The Board reports a consolidated after tax net loss of $1.65 million for the financial year ended 30 June 2011.

Queste’s consolidated results incorporates the results of controlled entity, ASX listed investment company, Orion Equities Limited ( Orion ). Queste has a 51% shareholding interest in Orion (30 June 2010: 48%).

Whilst no dividend has been declared for the 2011 financial year, the Board looks forward to a return to sustained profitability by the Company and the resumption of regular dividend payments. The payment of future dividends cannot be guaranteed and will be driven by the performance of the underlying assets of the Queste group.

Queste’s Assets

In addition to the investment in controlled entity, Orion, which is valued at $2,718,946 (30 June 2010: $3,252,088) and Associate entity, Bentley Capital Limited ( Bentley or BEL ), which is valued at $382,938 (30 June 2010: $391,641), Queste holds cash of $1,395,504 (30 June 2010: $2,188,451), a loan owing from Orion of $516,712 (30 June 2010: Nil) and investments in other listed securities of $5,854 (30 June 2010: $110,770).

During the year, Queste’s investments in ASX listed securities have generated:

• (a) $3,506 net realised losses (30 June 2010: Nil realises gains/losses); and

• (b) $7,836 net unrealised gain (30 June 2010: $173,016 net unrealised loss).

Queste will continue to look at undertaking investments in listed securities where appropriate to endeavour to achieve a return on investments beyond that afforded by the interest rates applicable on term deposits.

Orion’s Assets

An outline of the major assets of Orion is described below:

Strike Resources Limited (ASX Code: SRK)

During the year, Strike suffered a significant decline in its share price, from $0.50 as at 30 June 2010 to $0.245 on 30 June 2011. This resulted in Orion booking an unrealised loss on its Strike investment (16,690,802 shares) of $2.51 million (2010: $1,167,447 unrealised gain). The Company notes that Strike’s closing share price as at 5 October 2011 was $0.26.

The investment in Strike was predominantly earned through the sale of various mining assets to Strike. These assets were acquired and funded to the point of sale to Strike at a cost of approximately $1.25 million. They were subsequently on-sold to Strike in tranches in consideration of 11,166,667 Strike shares and 3.5 million unlisted Strike options (with exercise prices of $0.25 and $0.35 per option, which were exercised during the course of the year).

Orion Executive Director, William Johnson, is on the board of Strike.

Alara Resources Limited (ASX Code: AUQ)

During the year, Alara’s share price increased significantly, from $0.087 as at 30 June 2010 to $0.365 on 30 June 2011. Orion generated a realised gain of $0.299 million from the sale of 3 million Alara shares together with an unrealised gain of $1.5 million on the remainder of its holding (6,332,744 shares), during the year.

The shareholding in Alara occurred through the sale of Orion’s 25% interests in various mining tenements to Alara in conjunction with Strike Resources Limited (who held the balance of 75% interest in the same). These assets were acquired and funded to the point of sale to Strike previously at a cost of approximately $0.05 million. Orion’s residual 25% interest was free-carried by Strike thereafter.

Orion’s interests in these mining tenements were subsequently on-sold to Alara for vendor shares in the initial public offering ( IPO ) of Alara for a consideration of $1,562,500 comprising 6,250,000 Alara shares.

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THE BOARD’S REPORT

Orion also acquired 3,082,744 additional Alara shares via the Alara IPO, on-market purchases and via an in-specie distribution from Strike.

The value of Orion’s current holding of Alara shares of $2.311 million (based on an Alara share price of $0.365 as at 30 June 2011) together with the $1.055 million proceeds from the sale of 3 million Alara shares during the year, constitutes a significant value gain for the Queste group.

Orion Executive Chairman, Farooq Khan and Executive Director, William Johnson, are both on the board of Alara.

Bentley Capital Limited (ASX Code: BEL)

Bentley is an investment company listed on the ASX. Orion holds 20,513,783 shares (28.3%) and Queste holds 1,740,625 shares (2.4%), being a total of 30.7% of the issued capital of Bentley as at 30 June 2011 (2010: total of 30.9%).

Bentley has net assets of $28.806 million (as at 30 June 2011) and returned an after tax net profit of $0.574 million for the financial year. Bentley’s asset weighting as at 30 June 2011 was 98.8% Australian equities and 1.2% net cash/ other assets.

Queste and Orion have been in receipt of significant dividend payments from Bentley, having received three fully franked dividends totalling 4.4 cents in the past 12 months (October 2010 to September 2011).

Furthermore, on 4 October 2001, Bentley shareholders approved a 5 cents per share return of capital, which will deliver an additional $1,025,689 to Orion and $87,031 to Queste, being a total of $1,112,720 to the Queste group.

Queste and Orion Chairman, Farooq Khan and Orion Director, William Johnson, are on the board of Bentley.

Agribusiness Assets

Orion owns a 143 hectare commercial olive grove operation located in Gingin, Western Australia together with the Dandaragan Estate Ultra Premium Olive Oil brand. The Dandaragan Estate Ultra premium brand facilitates the transition of oil production from the grove from the wholesale market to the higher value retail market. During the year, total income from the sale of bulk and premium olive oils was $450,027 (2010: $1,200,987) with total olive grove and oils operations costs (excluding revaluation and depreciation expenses) of $601,024 (2010: $1,023,130). It is noted that due to the timing of the annual harvest in approximately March - April of each year, there is some carry-over of costs (and oil inventories) from one financial year to the next.

Other Property Assets

Orion owns a property located in Mandurah, Western Australia, which was originally acquired as a multiunit development site. In 2009/2010, Orion sought development approval for the subdivision of the property into 4 survey-strata title lots. This application was rejected by the Western Australian Planning Commission. Subsequently Orion undertook a sale process of the property by way of public auction, with such auction failing to attract any bids. Orion then determined to renovate the dwelling on the property such that it can generate a rental return until market conditions for a sale improve. Based on an independent valuation of the property, the asset was re-valued upwards to $1,800,000 (2010: $1,500,000).

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THE BOARD’S REPORT

Financial Performance

The Board has elected to report only consolidated financial statements as permitted under the Corporations Act. This has streamlined Queste’s reporting obligations. An abridged set of financial data at the Company level is disclosed in Note 2 to the financial statements (at page 29 of this Annual Report).

The major consolidated revenue and expense items are as follows:

Item	Comments
Revenues
$500,186 gain on sale of investments (2010: $873,554 loss)	This relates predominantly to Orion’s share investment portfolio – 3 million shares in Alara Resources Limited were sold during the year, realising gross proceeds of $1.06 million and a $299,198 net gain on disposal; other listed securities were sold realising a net gain of $197,482.
$450,027 income from sale of olive oils (2010: $1,200,987)	This relates to Orion’s bulk extra virgin olive oil sales and sales under the Dandaragan Estate Ultra Premium Olive Oil label.
$181,205 share of Associate entity’s profit (2010: $874,850 profit)	This relates to Queste’s 2.40% and Orion’s 28.26% share of the net profit attributable to Associate entity, Bentley Capital Limited, net of dividends received of $445,089. Bentley returned an after tax net profit of $0.574 million and paid 2 cents of fully franked dividends during the year.
Expenses
$1,997,098 net loss in fair value in investments (2010: $2,572,398 gain)	This relates predominantly to movements in Orion’s share investment portfolio (comprising unrealised gains/losses and reversals of previous years’ provisions for diminution in value of investments sold during the year). The major movements were in relation to Strike Resources Limited (which depreciated in value by $2,506,155 from 50 cents to 24.5 cents) and Alara Resources Limited (which appreciated in value by $1,499,503 from 8.7 cents to 36.5 cents) and $1,004,433 reversal of previous years’ net unrealised gains on share investments sold (being $569,000 attributable to 3 million Alara Resources Limited shares sold, $374,333 attributable to 3.5 million options in Strike Resources Limited exercised during the year and $61,100 attributable to other listed shares sold). Orion’s share investment portfolio are held as current assets.
$601,024 olive grove and oils operations (June 2010: $1,023,130), which does not include $201,041 revaluation and depreciation expenses (2010: $450,883)	This relates to Orion’s commercial olive grove operations located in Gingin, Western Australia, and the Dandaragan Estate Olive Oil business.
$(300,000) reversal of previous years’ impairment of property held for development and resale (2010: $950,000 impairment loss)	This relates to Orion’s property located in Mandurah, south of Perth, Western Australia, held for redevelopment and sale, which is recognised as Inventory. Orion has renovated the property for the rental market. An independent qualified valuer has determined the value of the property as $1,800,000 (2010: $1,500,000).
$846,501 personnel expenses (2010: $932,525)	This includes aggregate personnel expenses associated with both Queste and Orion.

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DIRECTORS’ REPORT

The Directors present their report on Queste Communications Ltd ( Company or Queste ) and its controlled entities (the Consolidated Entity ) for the financial year ended 30 June 2011 ( Balance Date ).

Queste is a public company limited by shares that is incorporated and domiciled in Western Australia and has been listed on the Australian Securities Exchange ( ASX ) since November 1998.

The Consolidated Entity’s results incorporates the results of controlled entity, ASX listed investment company, Orion Equities Limited ( Orion or OEQ ). The Company has a 51% shareholding interest in Orion (30 June 2010: 48%).

PRINCIPAL ACTIVITIES

The principal activity of the Company during the financial year was the management of its assets.

The principal activities of controlled entity, Orion, during the financial year were the management of its investments, including investments in listed and unlisted securities, real estate held for development and resale, an olive grove and the ultra premium ‘Dandaragan Estate’ Olive Oil operation.

OPERATING RESULTS

CONSOLIDATED ENTITY	2011 2010
	$ $
Total revenues Total expenses Profit/(Loss) before tax Income tax benefit/(expense) Profit/(Loss) for the year Net profit/(loss) attributable to non controlling interest Profit/(Loss) after tax attributable to owners of the Company Basic earnings/(loss) per share (cents) Diluted earnings/(loss) per share (cents)	1,226,091 4,798,785 (4,183,538) (4,743,171)
	(2,957,447) 55,614 (82,211) 694,440 (3,039,658) 750,054
	1,386,384 578,521
	(1,653,274) 171,533
	(5.5) 0.6 (3.4) 0.4

At the Consolidated Entity level:

Revenues include:

• (1) $500,186 net gain on sale of investments (2010: $873,554 loss)

• (2) $450,027 income from sale of olive oils (2010: $1,200,987);

• (1) $181,205 share of Associate entity’s profit (net of dividends received from Associate of $445,089) (2010: $874,850 net of dividends received from Associate of $445,089); and

• (3) $15,332 dividend income (2010: $14,060).

Expenses include:

• (1) $1,997,098 net loss in fair value in investments (2010: $2,572,398 gain);

• (2) $846,501 personnel expenses (2010: $932,525);

• (3) $601,024 olive grove and oils operations (which does not include revaluation and depreciation expenses) (June 2010: $1,023,130); and

• (4) $201,041 olive grove and oils operation’s revaluation and depreciation expenses (June 2010: $450,883).

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DIRECTORS’ REPORT

The principal components of the $1,997,098 net loss in fair value in securities are:

• (a) $2.51 million unrealised loss on Orion’s investment in ASX listed Strike Resources Limited (SRK), which declined in value from 50 cents to 24.5 cents during the financial year;

• (b) $1.5 million unrealised gain on Orion’s investment in ASX listed Alara Resources Limited (AUQ), which increased in value from 8.7 cents to 36.5 cents during the financial year; and

• (c) $1 million reversal of net unrealised gain on Orion’s share investments sold (and unlisted options in SRK exercised) during the financial year.

EARNINGS/(LOSS) PER SHARE

CONSOLIDATED ENTITY	2011 2010
Basic earnings/(loss) per share (cents) Diluted earnings/(loss) per share (cents) Weighted average number of fully paid ordinary shares in the Company outstanding during the year used in the calculation of basic earnings per share Weighted average number of fully paid ordinary shares in the Company outstanding during the year used in the calculation of diluted earnings per share	(5.52) 0.57 (3.42) 0.35 29,927,379 29,927,379
	48,404,879 48,404,879

The Company’s 20,000,000 partly paid ordinary shares, to the extent that they have been paid (1.5225 cent per share), have been included in the determination of the basic earnings per share.

DIVIDENDS

The Directors have not declared a dividend in respect of the financial year ended 30 June 2011.

FINANCIAL POSITION

CONSOLIDATED ENTITY	2011 $ 2010 $
Cash Current investments - equities Investments - listed Associate entities Inventory Receivables Intangibles Deferred tax assets Other assets Total Assets Tax liabilities (current and deferred) Other payables and liabilities Net Assets Issued capital Reserves Non- controlling interests Retained earnings Total Equity	1,684,644 2,585,981 6,475,856 8,629,841 7,571,638 7,835,522 2,799,430 2,119,400 94,025 211,577 782,058 884,683 1,165,888 2,102,191 1,811,166 2,169,180
	22,384,705 26,538,375 (1,165,888) (2,102,191) (819,716) (585,917) 20,399,101 23,850,267
	6,192,427 6,192,427 2,351,465 2,431,707 8,913,462 10,961,550 2,941,747 4,264,583
	20,399,101 23,850,267

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DIRECTORS’ REPORT

SECURITIES IN THE COMPANY

At Balance Date and the date of this report, the Company has the following securities on issue:

• (i) 28,404,879 listed fully paid ordinary shares; and

• (ii) 20,000,000 unlisted partly paid ordinary shares, each paid to 1.5225 cent with 18.4775 cents per partly paid ordinary share outstanding (or $3,695,000 in total).

There were no securities issued or granted by the Company during or since the financial year.

The terms of issue of the partly paid shares are disclosed in the Prospectus for the initial public offering of shares in the Company dated 6 August 1998.

REVIEW OF OPERATIONS

1. Orion Equities Limited (OEQ)

1.1. Current Status of Investment in Orion

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

The Company holds 9,063,153 shares in Orion, being 50.875% of its issued ordinary share capital (30 June 2010: 8,558,127 shares or 48.041%). Orion has been recognised as a controlled entity and included as part of the Queste Consolidated Entity’s results since 1 July 2002.

Queste shareholders are advised to refer to the 30 June 2011 Directors’ Report and financial statements and monthly NTA disclosures lodged by Orion for further information about the status and affairs of this 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 1.4 below contain information extracted from Orion’s public statements.

1.2. Orion’s Operating Results for year ended 30 June 2011

ORION EQUITIES LIMITED Consolidated Entity	2011 2010
	$ $
Total revenues Total expenses Profit/(loss) before tax Income tax benefit/(expense) Profit/(Loss) attributable to members of Orion Basic and diluted earnings/(loss)cents per share	1,124,813 4,692,025 (3,800,821) (4,273,059)
	(2,676,008) 418,966 (82,211) 694,440
	(2,758,219) 1,113,406
	(15.48) 6.25

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DIRECTORS’ REPORT

ORION EQUITIES LIMITED Consolidated Entity	2011 2010
	$ $
Net tangible assets (before tax) Pre-Tax NTA Backing per share Less deferred tax assets and tax liabilities Net tangible assets (after tax) Pre-Tax NTA Backing per share Based on total issued share capital	17,364,240 20,211,658
	0.975 1.135
	- -
	17,364,240 20,211,658
	0.975 1.135
	17,814,389 17,814,389

Orion’s revenues include:

• (1) $496,680 gain on sale of securities (June 2010: $887,317 loss);

• (2) $450,027 income from olive grove operations (June 2010: $1,200,987); and

• (3) $167,032 share of Associate entity’s profit (net of dividends received from Associate of $410,276) (June 2010: $890,284 net of dividends received from Associate of $410,276).

Orion’s expenses include:

• (1) $2,013,636 net loss in fair value in securities (June 2010: $2,583,275 net gain);

• (2) $601,024 olive grove and oils operations (which does not include revaluation and depreciation expenses) (June 2010: $1,023,130);

• (3) $201,041 olive grove impairment and depreciation expenses (June 2010: $123,303); and

• (4) $617,837 personnel costs (including Directors’ fees) (June 2010: $539,042).

The principal components of Orion’s $2,013,636 net loss in fair value in securities are:

• (a) $2.51 million unrealised loss on a share investment in ASX listed Strike Resources Limited (SRK), which declined in value from 50 cents to 24.5 cents per share during the financial year;

• (b) $1.5 million unrealised gain on a share investment in ASX listed Alara Resources Limited (AUQ), which increased in value from 8.7 cents to 36.5 cents per share during the financial year; and

• (c) $1 million reversal of net unrealised gain on share investments sold (and unlisted options in SRK exercised) during the financial year.

1.3. Orion’s Dividends

Orion has not declared a dividend in respect of the financial year ended 30 June 2011.

1.4. Orion’s Portfolio Details as at 30 June 2011

Asset Weighting
	% of Net Assets
	2011 2010
Australian equities Agribusiness1 Property held for development and resale Net tax liabilities (current year and deferred tax assets/liabilities) Net cash/other assets and provisions TOTAL	75% 75% 14% 16% 10% 10% - -% 1% (1%)
	100% 100%

1 Agribusiness net assets include olive grove land, olive trees, water licence, buildings, plant and equipment and inventory (bulk and packaged oils)

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DIRECTORS’ REPORT

Major Holdings in Securities Portfolio

	Fair Value % of ASX
Equities	$’million Net Assets Code Industry Sector Exposures
1. Bentley Capital Limited 2. Strike Resources Limited 3. Alara Resources Limited TOTAL	4.51 24.87% BEL Diversified Financials 4.09 22.53% SRK Materials 2.31 12.74% AUQ Materials 10.91 60.14%

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Consolidated Entity that occurred during the financial year not otherwise disclosed in this Directors’ Report or the Consolidated Financial Statements.

FUTURE DEVELOPMENTS

In the opinion of the Directors, it may prejudice the interests of the Consolidated Entity to provide additional information (beyond that reported in this Directors’ Report) in relation to future developments and the business strategies and operations of the Consolidated Entity and the expected results of those operations in subsequent financial years.

Orion has advised that it intends to continue its investment activities in future years. The results of these investment activities depend upon the performance of the underlying companies and securities in which the company invests. The investments’ performance depends on many economic factors and also industry and company specific issues. In the opinion of the Orion Directors, it is not possible or appropriate to make a prediction on the future course of markets, the performance of the company’s investments or the forecast of the likely results of the company’s activities.

ENVIRONMENTAL REGULATION

The Consolidated Entity notes the reporting requirements of both the Energy Efficiency Opportunities Act 2006 ( EEOA ) and the National Greenhouse and Energy Reporting Act 2007 ( NGERA ). The Energy Efficiency Opportunities Act 2006 requires affected companies to assess its energy usage, including the identification, investigation and evaluation of energy saving opportunities, and to report publicly on the assessments undertaken, including what action the company intends to take as a result. The National Greenhouse and Energy Reporting Act 2007 requires affected companies to report its annual greenhouse gas emissions and energy use.

The Consolidated Entity has determined that it does not operate a recognised facility requiring registration and reporting under the NGERA and in any event, it would fall under the threshold of greenhouse gas emissions required for registration and reporting. Similarly, the Consolidated Entity’s energy consumption would fall under the threshold required for registration and reporting under the EEOA.

The Consolidated Entity is not otherwise subject to any particular or significant environmental regulation under either Commonwealth or State legislation. To the extent that any environmental regulations may have an incidental impact on the Consolidated Entity's operations, the Directors are not aware of any breach by the Consolidated Entity of those regulations.

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DIRECTORS’ REPORT

DIRECTORS

Information concerning Directors in office during or since the financial year are:

Farooq Khan	Executive Chairman and Managing Director
Appointed	10 March 1998
Qualifications	BJuris , LLB. (Western Australia)
Experience	Mr Khan is a qualified lawyer having previously practised principally in the field of corporate law.
	Mr Khan has extensive experience in the securities industry, capital markets and the executive
	management of ASX listed companies. In particular, Mr Khan has guided the establishment and
	growth of a number of public listed companies in the investment, mining and financial services
	sector. He has considerable experience in the fields of capital raisings, mergers and acquisitions
	and investments.
Relevant interest in	6,129,944 shares
shares
Other current	Executive Chairman of:
directorships in listed	(1) Bentley Capital Limited (since 2 December 2003)
entities	(2) Orion Equities Limited (since 23 October 2006)
	Non-Executive Director of:
	(3) Alara Resources Limited (director since 18 May 2007)
Former directorships	(1) Yellow Brick Road Holdings Limited (formerly ITS Capital Investments Ltd) (27 April 2006 to
in other listed entities	18 March 2011)
in past 3 years	(2) Strike Resources Limited (3 September 1999 to 3 February 2011)
	(3) Scarborough Equities Limited (merged with Bentley on 13 March 2009 and delisted)

Azhar Chaudhri	Non-Executive Director
Appointed	4 August 1998
Qualifications	Bachelor of Science degree in Maths and Physics and a Masters degree in Economics and
	postgraduate computer studies
Experience	Mr Chaudhri has considerable expertise in computer systems, analysis and design and advanced
	programming experience, particularly with respect to business and information technology
	systems and Data Base computing. In particular Mr Chaudhri has formed and led software
	development teams creating integrated database and management information systems for
	utilities, local government land tax departments, hospitals, libraries and oil terminals.
Relevant interest in	4,337,780 shares
shares	20,000,000 partly paid shares
Other current	None
directorships in listed
entities
Former directorships	None
in other listed entities
in past 3 years

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DIRECTORS’ REPORT

Yaqoob Khan	Non-Executive Director
Appointed	10 March 1998
Qualifications	BCom (Western Australia), Master of Science in Industrial Administration (Carnegie Mellon)
Experience	After working for several years in the Australian Taxation Office, Mr Khan completed his
	postgraduate Masters degree and commenced work as a senior executive responsible for product
	marketing, costing systems and production management. Mr Khan has been an integral member
	of the team responsible for the pre-IPO structuring and IPO promotion of a number of ASX floats
	and has been involved in the management of such companies. Mr Khan brings considerable
	international experience in key aspects of corporate finance and the strategic analysis of listed
	investments.
Relevant interest in	68,345 shares
shares
Other current	Non-Executive Directors of Orion Equities Limited (since 5 November 1999).
directorships in listed
entities
Former directorships	None
in other listed entities
in past 3 years

Simon K. Cato	Non-Executive Director
Appointed	6 February 2008
Qualifications	B.A. (USYD)
Experience	Mr Simon Cato has had over 25 years capital markets experience in broking, regulatory roles and
	as director of listed companies. He initially was employed by the ASX in Sydney and in Perth.
	Over the last 17 years he has been an executive director and/or responsible executive of three
	stockbroking firms and in those roles he has been involved in many aspects of broking including
	management issues such as credit control and reporting to regulatory bodies in the securities
	industry. As a broker he has also been involved in the underwriting of a number of IPO’s and has
	been through the process of IPO listing in the dual role of broker and director. Currently he holds
	a number of executive and non executive roles with listed companies in Australia.
Relevant interest in	193,000 shares
shares
Other current	Chairman of:
directorships in listed	(1) Convergent Minerals Limited (since 25 July 2006)
entities	(2) Advanced Share Registry Limited (since 22 August 2007)
	Non-Executive Director of:
	(3) Transactions Solutions International Limited (since 24 February 2010)
	(4) Greenland Minerals and Energy Ltd (since 21 February 2006)
Former directorships	(1) Bentley Capital Limited (5 February 2004 to 29 April 2010)
in other listed entities	(2) Scarborough Equities Limited (merged with Bentley on 13 March 2009 and delisted)
in past 3 years

At the Balance Date, Messrs Azhar Chaudhri and Yaqoob Khan were resident overseas.

ANNUAL REPORT | 12

30 JUNE 2011

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

DIRECTORS’ REPORT

COMPANY SECRETARY

Information concerning the Company Secretary in office during or since the financial year are:

Victor P. H. Ho	Company Secretary
Appointed	30 August 2000
Qualifications	BCom, LLB (Western Australia)
Experience	Mr Ho has been in executive and company secretarial roles with a number of public
listed companies since early 2000. Previously, Mr Ho had 9 years experience in the
taxation profession with the Australian Tax Office and in a specialist tax law firm. Mr Ho
has been actively involved in the structuring and execution of a number of corporate
transactions, capital raisings and capital management matters and has extensive
experience in public company administration, corporations law, stock exchange
compliance and shareholder relations.
Relevant interest in shares	17,500 shares
Other current positions	Executive Director and Company Secretary of:
held in listed entities	(1) Orion Equities Limited (Secretary since 2 August 2000 and Director since 4 July
	2003)
	Company Secretary of:
	(2) Bentley Capital Limited (since 5 February 2004)
	(3) Alara Resources Limited (since 4 April 2007)
Former positions in other	(1) Strike Resources Limited (secretary between 9 March 2000 and 30 April 2010
listed entities in past 3	and director between 12 October 2000 and 25 September 2009)
years	(2) Scarborough Equities Limited (secretary between 29 November 2004 and 13
	March 2009)

DIRECTORS' MEETINGS

The following table sets out the numbers of meetings of the Company's Directors held during the financial year (including Directors’ circulatory resolutions), and the numbers of meetings attended by each Director of the Company:

Name of Director	Meetings Attended	Maximum Possible Meetings
Farooq Khan	5	5
Simon Cato	8	8
Yaqoob Khan	5	5
Azhar Chaudhri	8	8

There were no meetings of committees of the Board of the Company.

Board Committees

During the financial year and as at the date of this Directors’ Report, the Company did not have separate designated Audit or Remuneration Committees. In the opinion of the Directors, in view of the size of the Board and nature and scale of the Consolidated Entity's activities, matters typically dealt with by an Audit or Remuneration Committee are dealt with by the full Board.

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

DIRECTORS’ REPORT

REMUNERATION REPORT

This report details the nature and amount of remuneration for each Director and Company Executive (being a company secretary or senior manager) ( Key Management Personnel ) of the Consolidated Entity.

The information provided under headings (1) to (3) below has been audited as required under section 308(3)(C) of the Corporations Act 2001.

(1) Remuneration Policy

The Board determines the remuneration structure of all Key Management Personnel having regard to the Consolidated Entity’s nature, scale and scope of operations and other relevant factors, including the frequency of Board meetings, length of service, particular experience and qualifications, market practice (including available data concerning remuneration paid by other listed companies in particular companies of comparable size and nature), the duties and accountability of Key Management Personnel and the objective of maintaining a balanced Board which has appropriate expertise and experience, at a reasonable cost to the Company.

Fixed Cash Short Term Employment Benefits: The Key Management Personnel of the Company are paid a fixed amount per annum plus applicable employer superannuation contributions. The NonExecutive Directors of the Company are paid a maximum aggregate base remuneration of $55,000 per annum inclusive of minimum employer superannuation contributions where applicable, to be divided as the Board determines appropriate.

The Board has determined current Company Key Management Personnel remuneration as follows:

• (a) Mr Farooq Khan (Executive Chairman and Managing Director) – a base salary of $125,000 per annum plus employer superannuation contributions (currently 9%);

• (b) Mr Azhar Chaudhri (Non-Executive Director) – a base fee of $15,000 per annum;

• (c) Mr Simon Cato (Non-Executive Director) – a base fee of $15,000 per annum plus employer superannuation contributions (currently 9%);

• (d) Mr Yaqoob Khan (Non-Executive Director) – a base fee of $15,000 per annum; and

• (e) Mr Victor Ho (Company Secretary) – a base salary of $45,000 per annum plus employer superannuation contributions (currently 9%).

Key Management Personnel can also opt to “salary sacrifice” their cash fees/salary and have them paid wholly or partly as further employer superannuation contributions or benefits exempt from fringe benefits tax.

Special Exertions and Reimbursements: Pursuant to the Company’s Constitution, each Director is entitled to receive:

• (a) Payment for the performance of extra services or the making of special exertions at the request of the Board and for the purposes of the Company.

• (b) Payment for reimbursement of all reasonable expenses (including traveling and accommodation expenses) incurred by a Director for the purpose of attending meetings of the Company or the Board, on the business of the Company, or in carrying out duties as a Director.

Long Term Benefits: Key Management Personnel have no right to termination payments save for payment of accrued annual leave and long service leave (other than Non-Executive Directors).

Equity Based Benefits: The Company does not presently have any equity (shares or options) based remuneration arrangements for any personnel pursuant to any executive or employee share or option plan or otherwise.

Post Employment Benefits: The Company does not presently provide retirement benefits to Key Management Personnel.

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

DIRECTORS’ REPORT

Performance Related Benefits/Variable Remuneration: The Company does not presently provide short or long incentive/performance based benefits related to the Company’s performance to Key Management Personnel, including payment of cash bonuses. The current remuneration of Key Management Personnel is fixed, is not dependent on the satisfaction of a performance condition and is unrelated to the Company’s performance.

Service Agreements: The Company does not presently have formal service agreements or employment contracts with any Key Management Personnel.

Financial Performance of Company: There is no relationship between the Company’s current remuneration policy and the Company’s performance.

The Board does not believe that it is appropriate at this time to implement an equity based benefit scheme or a performance related/variable component to Key Management Personnel remuneration or remuneration generally linked to the Company’s performance but reserves the right to implement these remunerative measures if appropriate in the future (subject to prior shareholder approval where applicable).

(2) Details of Remuneration of Key Management Personnel

Details of the nature and amount of each element of remuneration of each Key Management Personnel of the Company paid or payable by the Consolidated Entity during the financial year are as follows:

Paid by the Company (Queste) to its Key Management Personnel

2011	Performance related	Short-term Benefits	Short-term Benefits	Post Employment Benefits	Other Long-term Benefits	Equity Based
Key Management Person	%	Cash, salary and commissions	Non-cash benefit	Superannuation	Long service leave	Shares & Options	Total
		$	$	$	$	$	$
Executive Director: Farooq Khan -		123,798	-	11,142	-	-	134,940
Non-Executive Directors: Yaqoob Khan - Azhar Chaudhri - Simon Cato -		15,000 15,000 15,577	- - -	- - 1,402	- - -	- - -	15,000 15,000 16,979
Company Secretary: Victor Ho -		46,731	-	4,206	-	-	50,937

2010	Performance related	Short-term Benefits	Short-term Benefits	Post Employment Benefits	Other Long-term Benefits	Equity Based
Key Management Person	%	Cash, salary and commissions	Non-cash benefit	Superannuation	Long service leave	Shares & Options	Total
		$	$	$	$	$	$
Executive Director: Farooq Khan -		125,000	-	11,250	-	-	136,250
Non-Executive Directors: Yaqoob Khan - Azhar Chaudhri - Simon Cato -		15,000 15,000 1,731	- - -	- - 14,619	- - -	- - -	15,000 15,000 16,350
Company Secretary: Victor Ho -		31,998	-	2,960	-	-	34,958

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30 JUNE 2011

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

DIRECTORS’ REPORT

Paid by Orion to Key Management Personnel (who are also Key Management Personnel of Queste)

2011		Short-term Benefits	Short-term Benefits	Post Employment Benefits	Other Long-term Benefits	Equity Based
Key Management Personnel	Performance related	Cash, salary and commissions	Non-cash benefit	Superannuation	Long service leave	Shares & Options	Total
	%	$	$	$	$	$	$
Executive Directors: Farooq Khan - William Johnson - Victor Ho -		230,769 77,885 77,885	- - -	20,769 7,010 7,010	- - -	- - -	251,538 84,895 84,895
Non-Executive Director: Yaqoob Khan -		25,000	-	-	-	-	25,000

2010		Short-term Benefits	Short-term Benefits	Post Employment Benefits	Other Long-term Benefits	Equity Based
Key Management Personnel	Performance related	Cash, salary and commissions	Non-cash benefit	Superannuation	Long service leave	Shares & Options	Total
	%	$	$	$	$	$	$
Executive Directors: Farooq Khan - William Johnson - Victor Ho -		250,000 100,962 62,018	- - -	22,500 12,087 5,582	- - -	- - -	272,500 113,049 67,600
Non-Executive Director: Yaqoob Khan -		25,000	-	-	-	-	25,000

(3) Other Benefits Provided to Key Management Personnel

No Key Management Personnel has during or since the end of the financial year, received or become entitled to receive a benefit, other than a remuneration benefit as disclosed above, by reason of a contract made by the Company or a related entity with the Director or with a firm of which he is a member, or with a Company in which he has a substantial interest.

This concludes the audited remuneration report.

DIRECTORS’ AND OFFICERS’ INSURANCE

The Company does not have any directors’ and officers insurance policy. Orion has a directors’ and officers insurance policy; the nature of the liabilities covered or the amount of premiums paid in respect of this policy has not been disclosed as such disclosure is prohibited under the terms of the policy.

DIRECTORS DEEDS

In addition to the rights of indemnity provided under the Company’s Constitution (to the extent permitted by the Corporations Act), the Company has also entered into a deed with each of the Directors and the Company Secretary ( Officer ) to regulate certain matters between the Company and each Officer, both during the time the Officer holds office and after the Officer ceases to be an officer of the Company, including the following matters:

• (i) The Company’s obligation to indemnify an Officer for liabilities or legal costs incurred as an officer of the Company (to the extent permitted by the Corporations Act); and

• (ii) Subject to the terms of the deed and the Corporations Act, the Company may advance monies to the Officer to meet any costs or expenses of the Officer incurred in circumstances relating to the indemnities provided under the deed and prior to the outcome of any legal proceedings brought against the Officer.

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

DIRECTORS’ REPORT

LEGAL PROCEEDINGS ON BEHALF OF CONSOLIDATED ENTITY

No person has applied for leave of a court to bring proceedings on behalf of the Consolidated Entity or intervene in any proceedings to which the Consolidated Entity is a party for the purpose of taking responsibility on behalf of the Consolidated Entity for all or any part of such proceedings. The Consolidated Entity was not a party to any such proceedings during and since the financial year.

AUDITOR

Details of the amounts paid or payable to the auditor (BDO Audit (WA) Pty Ltd) for audit and non-audit services provided during the financial year are set out below:

Consolidated Entity		Company
Audit & Review Fees Non-Audit Services Total	Audit & Review Fees	Non-Audit Services Total
$ $ $	$	$ $
64,042 6,850 70,892	27,233	3,000 30,233

The Board is satisfied that the provision of non-audit services by the auditor during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Board is satisfied that the nature of the non-audit services disclosed above did not compromise the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants: Professional Independence, including reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and rewards.

BDO Audit (WA) Pty Ltd continues in office in accordance with section 327B of the Corporations Act 2001.

AUDITORS’ INDEPENDENCE DECLARATION

A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 forms part of this Directors Report and is set out on page 18. This relates to the Audit Report, where the Auditors state that they have issued an independence declaration.

EVENTS SUBSEQUENT TO BALANCE DATE

The Directors are not aware of any matters or circumstances at the date of this Directors’ Report, other than those referred to in this Directors’ Report (in particular, in Review of Operations) or the financial statements or notes thereto (in particular Subsequent Events Note 26), that have significantly affected or may significantly affect the operations, the results of operations or the state of affairs of the Company in subsequent financial years.

Signed for and on behalf of the Directors in accordance with a resolution of the Board.

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Farooq Khan Chairman 31 August 2011

Simon Cato Director

ANNUAL REPORT | 17

38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au

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31 August 2011

The Board of Directors Queste Communications Ltd Level 14, The Forrest Centre 221 St Georges Terrace Perth, Western Australia, 6000

Dear Sirs

DECLARATION OF INDEPENDENCE BY CHRIS BURTON TO THE DIRECTORS OF QUESTE COMMUNICATIONS LTD

As lead auditor of Queste Communications Ltd for the year ended 30 June 2011, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

• the auditor independence requirements of the Corporations Act 2001 in relation to the audit

• any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Queste Communications Ltd and the entities it controlled during the period.

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Chris Burton Director

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BDO Audit (WA) Pty Ltd Perth, Western Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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

30 JUNE 2011

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 30 June 2011

		2011	2010
	Note	$	$
Revenue from continuing operations	3 a	544,690	1,351,129
Other income
- Net gain on sale of financial assets held at fair value		500,186
- Net change on financial assets held at fair value through profit or loss		-	2,572,398
- Share of Associate entity's net profits	13	181,205	874,850
- Other		10	408
		1,226,091	4,798,785
Expenses	3 b
Net change on financial assets held at fair value through profit or loss		(1,997,098)	-
Net loss on sale of financial assets held at fair value		-	(873,554)
Costs of goods sold in relation to olive oils operations		(802,065)	(1,474,013)
Impairment of property held for development and resale		300,000	(950,000)
Other costs in relation to land operations		(367,300)	(130,080)
Occupancy		(112,624)	(67,167)
Personnel		(846,501)	(932,525)
Financing		(5,447)	(6,046)
Borrowing cost		(424)	(2,729)
Corporate		(133,509)	(189,579)
Other administration expenses
– depreciation		(6,403)	(6,656)
– other		(212,167)	(110,822)
Profit/(Loss) before income tax		(2,957,447)	55,614
Income tax benefit/(expense)	4	(82,211)	694,440
Profit/(Loss) after income tax		(3,039,658)	750,054
Other comprehensive income
Changes in asset revaluation reserve, net of tax		(80,242)	(13,938)
Total comprehensive income/(loss), net of tax		(3,119,900)	736,116
Profit attributable to:
Owners of Queste Communications Ltd		(1,653,274)	171,533
Non-controlling interest		(1,386,384)	578,521
		(3,039,658)	750,054
Total comprehensive income/(loss) for the year attributable to
Owners of Queste Communications Ltd		(1,733,516)	157,595
Non-controlling interest		(1,386,384)	578,521
		(3,119,900)	736,116
Basic earnings/(loss) per share	7	(5.5)	0.6
Diluted earnings/(loss) per share	7	(3.4)	0.4

The accompanying notes form part of these consolidated financial statements

ANNUAL REPORT | 19

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

30 JUNE 2011

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2011

		2011	2010
	Note	$	$
CURRENT ASSETS
Cash and cash equivalents	8	1,684,644	2,585,981
Financial assets held at fair value through profit and loss	9	6,475,856	8,629,841
Trade and other receivables	10	61,202	178,754
Inventories - Olive Oils	11	999,430	619,400
Other current assets	12	5,057	-
TOTAL CURRENT ASSETS		9,226,189	12,013,976
NON CURRENT ASSETS
Trade and other receivables	10	32,823	32,823
Inventories - Land	11	1,800,000	1,500,000
Investments in Associate entity	13	7,571,638	7,835,522
Property, plant and equipment	14	1,740,609	2,103,680
Olive trees	15	65,500	65,500
Intangible assets	16	782,058	884,683
Deferred tax assets	19	1,165,888	2,102,191
TOTAL NON CURRENT ASSETS		13,158,516	14,524,399
TOTAL ASSETS		22,384,705	26,538,375
CURRENT LIABILITIES
Trade and other payables	17	622,237	432,415
TOTAL CURRENT LIABILITIES		622,237	432,415
NON CURRENT LIABILITIES
Provisions	18	197,479	153,502
Deferred tax liabilities	19	1,165,888	2,102,191
TOTAL NON CURRENT LIABILITIES		1,363,367	2,255,693
TOTAL LIABILITIES		1,985,604	2,688,108
NET ASSETS		20,399,101	23,850,267
EQUITY
Issued capital	20	6,192,427	6,192,427
Reserves	21	2,351,465	2,431,707
Retained earnings		2,941,747	4,264,583
Parent interest		11,485,639	12,888,717
Non-controlling interest		8,913,462	10,961,550
TOTAL EQUITY		20,399,101	23,850,267

The accompanying notes form part of these consolidated financial statements

ANNUAL REPORT | 20

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

30 JUNE 2011

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2011

			Option	Asset		Non-
	Note	Issued	Premium	Revaluation	Retained	controlling
		Capital	Reserves	Reserves	earnings	Interest	Total
		$	$	$	$	$	$
Balance as at 1 July 2009		6,192,427	2,138,012	307,633	4,093,050	10,398,104	23,129,226
Profit for the year		-	-	-	171,533	578,521	750,054
Changes in asset revaluation reserve		-	-	(13,938)	-	-	(13,938)
Total comprehensive income for the year		-	-	(13,938)	171,533	578,521	736,116
Transactions with owners in
their capacity as owners:
Transactions with non-controlling interest		-	-	-	-	(15,075)	(15,075)
Balance as at 30 June 2010		6,192,427	2,138,012	293,695	4,264,583	10,961,550	23,850,267
Balance as at 1 July 2010		6,192,427	2,138,012	293,695	4,264,583	10,961,550	23,850,267
Loss for the year		-	-	-	(1,653,274)	(1,386,384)	(3,039,658)
Changes in asset revaluation reserve		-	-	(80,242)	-	-	(80,242)
Total comprehensive loss for the year		-	-	(80,242)	(1,653,274)	(1,386,384)	(3,119,900)
Transactions with owners in
their capacity as owners:
Transactions with non-controlling interest		-	-	-	330,438	(661,704)	(331,266)
Balance as at 30 June 2011		6,192,427	2,138,012	213,453	2,941,747	8,913,462	20,399,101

The accompanying notes form part of these consolidated financial statements

ANNUAL REPORT | 21

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

30 JUNE 2011

CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 30 June 2011

	Note	Note	2011	2010
CASH FLOWS FROM OPERATING ACTIVITIES			$	$
Receipts from customers			450,037	1,149,196
Sale proceeds from trading portfolio			1,321,780	1,059,608
Payments for trading portfolio			(957,857)	-
Payments to suppliers and employees			(2,348,434)	(2,998,989)
Interest received			117,664	118,914
Interest paid			(424)	(2,729)
Income tax paid			-	-
Dividends received			460,421	459,149
NET CASH OUTFLOW FROM OPERATING ACTIVITIES	8	b	(956,813)	(214,851)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment			(17,987)	(21,302)
Proceeds from disposal of plant and equipment			-	2,593
Payments for investment securities			293,150	(1,046,752)
Proceeds from sale of investment securities			(219,687)	426,205
NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES			55,476	(639,256)
NET DECREASE IN CASH AND CASH EQUIVALENTS HELD			(901,337)	(854,107)
Cash and cash equivalents at beginning of the financial year			2,585,981	3,440,088
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR	8		1,684,644	2,585,981

The accompanying notes form part of these consolidated financial statements

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30 JUNE 2011

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

1. SUMMARY OF ACCOUNTING POLICIES

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

The financial statement includes the financial statements for the Consolidated Entity consisting of Queste Communications Ltd and its subsidiary. Queste Communications Ltd is a company limited by shares, incorporated in Western Australia, Australia and whose shares are publicly traded on the Australian Securities Exchange ( ASX ).

1.1. Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Compliance with IFRS

The consolidated financial statements of the Consolidated Entity, Queste Communications Ltd, also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Reporting Basis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, and financial assets and financial liabilities for which the fair value basis of accounting has been applied.

1.2. Principles of Consolidation

The consolidated financial statements incorporate the assets and liabilities of the subsidiaries of Queste Communications Ltd as at 30 June 2011 and the results of its subsidiaries for the year then ended. Queste Communications Ltd and its subsidiary are referred to in this financial statement as the Consolidated Entity.

Subsidiaries are all entities over which the Consolidated Entity has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Consolidated Entity controls another entity. Information on the controlled entity is contained in Note 2 to the financial statements. Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated Entity. They are de-consolidated from the date that control ceases.

All controlled entities have a June financial year-end. All intercompany balances and transactions between entities in the consolidated entity, including any unrealised profits or losses, have been eliminated on consolidation.

1.3. Investments in Associates

Associates are all entities over which the Consolidated Entity has significant influence but not control or joint control, generally accompanying a shareholding of between 20% and

50% of the voting rights. Investments in associates in the consolidated financial statements are accounted for using the equity method of accounting, after initially being recognised at cost. Under this method, the Consolidated Entity’s share of the post-acquisition profits or losses of associates are recognised in the consolidated Statement of Comprehensive Income, and its share of post-acquisition movements in reserves is recognised in other comprehensive income. The cumulative postacquisition movements are adjusted against the carrying amount of the investment (refer to Note 13).

Dividends receivable from associates are recognised in the Company’s Statement of Comprehensive Income, while in the consolidated financial statements they reduce the carrying amount of the investment. When the Consolidated Entity’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long-term receivables, the Consolidated Entity does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Consolidated Entity and its associates are eliminated to the extent of the Consolidated Entity’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Consolidated Entity. All associated entities have a June financial year-end.

1.4. Operating Segment

The Consolidated Entity has applied AASB 8: Operating Segments which requires that segment information be presented on the same basis as that used for internal reporting purposes.

In this financial year, the operating segments have been determined by the Board, to be investments comprising of investments in shares, land and Associate entity and the olive grove. The Consolidated Entity’s segment reporting is contained in Note 22 of the notes to the financial statements.

1.5. Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Consolidated Entity and the revenue can be reliably measured. All revenue is stated net of the amount of goods and services tax ( “GST” ) except where the amount of GST incurred is not recoverable from the Australian Tax Office. The following specific recognition criteria must also be met before revenue is recognised:

Sale of Goods and Disposal of Assets - Revenue from the sale of goods and disposal of other assets is recognised when the Consolidated Entity has passed control of the goods or other assets to the buyer.

Contributions of Assets - Revenue arising from the contribution of assets is recognised when the Consolidated Entity gains control of the asset or the right to receive the contribution.

Interest Revenue - Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

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30 JUNE 2011

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

Dividend Revenue - Dividend revenue is recognised when the right to receive a dividend has been established. The Consolidated Entity brings dividend revenue to account on the applicable ex-dividend entitlement date.

Other Revenues - Other revenues are recognised on a receipts basis.

1.6. Income Tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the notional income tax rate for each taxing jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses (if applicable).

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each taxing jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The amount of deferred tax assets benefits brought to account or which may be realised in the future, is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax balances attributable to amounts recognised directly in other comprehensive income or equity are also recognised directly in other comprehensive income or equity.

1.7. Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of

acquisition of the asset or as part of an item of the expense. Receivables and payables in the Statement of Financial Position are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

1.8. Employee Benefits

Short term obligations - Provision is made for the Consolidated Entity’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Employer superannuation contributions are made by the Consolidated Entity in accordance with statutory obligations and are charged as an expense when incurred.

Other long term employee benefit obligations - The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.

1.9. Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts (if any) are shown within short-term borrowings in current liabilities on the Statement of Financial Position.

1.10. Receivables

Trade and other receivables are recorded at amounts due less any provision for doubtful debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when considered non-recoverable.

1.11. Dividends Policy

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at balance date.

1.12. Investments and Other Financial Assets and Liabilities

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Financial assets at fair value through profit and loss - A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial Instruments. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the Statement of Comprehensive Income in the period in which they arise.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

Available for sale financial assets- Available for sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any other categories. Realised and unrealised gains and losses arising from changes in the fair value of these assets are recognised in equity in the period in which they arise.

Loans and receivables - Loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Financial liabilities - Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

At each reporting date, the consolidated entity assesses whether there is objective evidence that a financial instrument has been impaired. Impairment losses are recognised in the profit and loss. The Consolidated Entity’s investment portfolio (comprising listed and unlisted securities) is accounted for as “financial assets at fair value through profit and loss”.

1.13. Fair value Estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the balance date. The quoted market price used for financial assets held by the consolidated entity is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price.

The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined using valuation techniques, including but not limited to recent arm’s length transactions, reference to similar instruments and option pricing models. The consolidated entity may use a variety of methods and makes assumptions that are based on market conditions existing at each balance date. Other techniques, such as estimated discounted cash flows, are used to determine fair value for other financial instruments.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Consolidated Entity for similar financial instruments.

The Consolidated Entity’s investment portfolio (comprising listed and unlisted securities) is accounted for as a “financial assets at fair value through profit and loss” and is carried at fair value based on the quoted last bid prices at reporting date (refer to Note 9).

1.14. Property held for Resale

Property held for development and sale is valued at lower of cost and net realisable value. Cost includes the cost of acquisition, development, borrowing costs and holding costs until completion

of development. Finance costs and holding charges incurred after development are expensed. Profits are brought to account on the signing of an unconditional contract of sale.

1.15. Property, Plant and Equipment

All plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Freehold Land is not depreciated. Increases in the carrying amounts arising on revaluation of land and buildings are recognised, net of tax, in other comprehensive income and accumulated in reserves in equity. To the extent that the increase reverses a decrease previously recognised in profit or loss, the increase is first recognised in profit or loss. Decreases that reverse previous increases of the same asset are first recognised in other comprehensive income to the extent of the remaining surplus attributable to the asset; all other decreases are charged to profit or loss. It is shown at fair value, based on periodic valuations by external independent valuers.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets’ employment and subsequent disposal. The expected net cash flows have been discounted to their present value in determining recoverable amount.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Comprehensive Income during the financial period in which they are incurred.

The depreciation rates used for each class of depreciable assets are:

are:
Class of Fixed Asset	Depreciation	Depreciation Method
Plant and Equipment	Rate 15-33.3%	Diminishing Value
Furniture and Equipment	15-20%	Diminishing Value
Leasehold Improvements	15%	Diminishing Value

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the profit and loss. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

1.16. Impairment of Assets

At each reporting date, the consolidated entity reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

amount is expensed to the profit or loss. Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. Where it is not possible to estimate the recoverable amount of an individual asset, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.17. Payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

1.18. Provisions

Provisions for legal claims, service warranties and make good obligations has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

1.19. Issued Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.

costs during development. When development is completed borrowing costs and other holding charges are expensed as incurred.

Borrowing costs included in the cost of land held for resale are those costs that would have been avoided if the expenditure on the acquisition and development of the land had not been made. Borrowing costs incurred while active development is interrupted for extended periods are recognised as expenses.

1.22. Leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Consolidated Entity as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the profit or loss on a straight-line basis over the period of the lease.

1.23. Intangible Assets

The intangible assets acquired in a business combination are initially measured at its purchase price as its fair value at the acquisition date. The revaluation method states that after the initial recognition, an intangible asset shall be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated amortisation and any subsequent accumulated impairment losses. For the purpose of revaluations under AASB 138: Intangible Assets, fair value shall be determined by reference to an active market. Revaluations shall be made with such regularity that at the end of the reporting period the carrying amount of the asset does not differ materially from its fair value.

1.20. Earnings Per Share

Basic Earnings per share is determined by dividing the operating result after income tax by the weighted average number of ordinary shares on issue during the financial period.

Diluted Earnings per share adjusts the figures used in the determination of basic earnings per share by taking into account amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise from the exercise of options outstanding during the financial period.

1.24. Biological Assets

Biological assets are initially, and subsequent to initial recognition, measured at their fair value less any estimated point-of-sale costs. Gains or losses arising on initial or subsequent recognition are accounted for via the profit or loss for the period in which the gain or loss arises. Agricultural produce harvested from the biological assets shall be measured at its fair value less estimated point-of-sale costs at the point of harvest.

1.25. Comparative Figures

1.21. Inventories

(i) Raw materials and stores, work in progress and finished goods

Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. They include the transfer from equity of any gains or losses on qualifying cash flow hedges relating to purchases of raw material. Costs are assigned to individual items of inventory on basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

(ii) Land held for resale/capitalisation of borrowing costs

Land held for resale is stated at the lower of cost and net realisable value. Cost is assigned by specific identification and includes the cost of acquisition, and development and borrowing

Certain comparative figures have been adjusted to conform to changes in presentation for the current financial year.

1.26. Critical accounting judgements and estimates

The preparation of the Consolidated Financial Statements requires Directors to make judgements and estimates and form assumptions that affect how certain assets, liabilities, revenue, expenses and equity are reported. At each reporting period, the Directors evaluate their judgements and estimates based on historical experience and on other various factors they believe to be reasonable under the circumstances, the results of which form the basis of the carrying values of assets and liabilities (that are not readily apparent from other sources, such as independent valuations). Actual results may differ from these estimates under different assumptions and conditions.

The Consolidated Entity carries its freehold land and intangible assets (water licence) at fair value with changes in the fair values recognised in equity. It also carries inventory (land held for development and resale) and olive trees at fair value with changes in the fair value recognised in the Statement of Comprehensive Income. Independent valuations are obtained for these non-current assets at least annually.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

1.27. Summary Of Accounting Standards Issued Not Yet Effective

The following new Accounting Standards and Interpretations (which have been released but not yet adopted) have no material impact on the Consolidated Entity’s financial statements or the associated notes therein.

AASB reference	Title and Affected Standard(s):	Nature of Change	Application date:
AASB 9 (issued December 2009 and amended December 2010)	Financial Instruments	Amends the requirements for classification and measurement of financial assets. Requirements have generally been carried forward unchanged from AASB 139 Financial Instruments: Recognition and Measurement into AASB 9. These include the requirements relating to: (a) Classification and measurement of financial liabilities; and (b) Derecognition requirements for financial assets and liabilities. However, AASB 9 requires that gains or losses on financial liabilities measured at fair value are recognised in profit or loss, except that the effects of changes in the liability’s credit risk are recognised in other comprehensive income.	Periods beginning on or after 1 January 2013
AASB 2010-4 (issued June 2010)	Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13]	Not urgent but necessary changes to IFRSs as a result of IASB’s 2009 annual improvements project.	Periods commencing on or after 1 January 2011.
AASB 2010-8 (issued December 2010)	Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets [AASB 112]	For investment property measured using the fair value model, deferred tax assets and liabilities will be calculated on the basis of a rebuttable presumption that the carrying amount of the investment property will be recovered through sale. This presumption is rebutted if the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale. However, this presumption cannot be rebutted for the land portion of investment property which is not depreciable.	Periods commencing on or after 1 January 2012
AASB 2010-9 (issued December 2010)	Amendments to Australian Accounting Standards – Severe Hyperinflation and Removal of Fixed Dates for First-Time Adopters [AASB 1]	A first-time adopter of Australian Accounting Standards must apply the derecognition requirements in AASB 139 Financial Instruments: Recognition and Measurement prospectively for transactions occurring on or after the date of transition to Australian Accounting Standards, rather than 1 January 2004.	Periods commencing on or after 1 July 2011 (i.e. date of transition would be 1 July 2010)
AASB 124 (issued December 2009)	Related Party Disclosures	Simplifies disclosure requirements for government-related entities and clarifies the definition of a related party.	Annual reporting periods commencing on or after 1 January 2011.
AASB 2010-6 (issued November 2010)	Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets	Additional disclosures required for entities that transfer financial assets, including information about the nature of financial assets involved and the risks associated with them.	Annual reporting periods commencing on or after 1 July 2011

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

1.27 Summary Of Accounting Standards Issued Not Yet Effective (continued)

AASB reference	Title and Affected Standard(s):	Nature of Change	Application date:
IFRS 10 (issued May 2011)	Consolidated Financial Statements	Introduces a single ‘control model’ for all entities, including special purpose entities (SPEs), whereby all of the following conditions must be present: (a) Power over investee (whether or not power used in practice) (b) Exposure, or rights, to variable returns from investee (c) Ability to use power over investee to affect the entity’s returns from investee. Introduces the concept of ‘de facto’ control for entities with less than a 50% ownership interest in an entity, but which have a large shareholding compared to other shareholders. This could result in more instances of control and more entities being consolidated. Potential voting rights are only considered when determining of there is control when they are substantive (holder has practical ability to exercise) and the rights are currently exercisable. This may result in possibly fewer instances of control. Additional guidance included to determine when decision making authority over an entity has been delegated by a principal to an agent. Factors to consider include: (a) Scope of decision making authority (b) Rights held by other parties, e.g. kick-out rights (c) Remuneration and whether commensurate with services provided (d) Decision maker’s exposure to variability of returns from other interests held in the investee.	Annual reporting periods commencing on or after 1 January 2013
IFRS 13 (issued May 2011)	Fair Value Measurement	Currently, fair value measurement requirements are included in several Accounting Standards. IFRS 13 establishes a single framework for measuring fair value of financial and non-financial items recognised at fair value in the statement of financial position or disclosed in the notes in the financial statements.	Annual reporting periods commencing on or after 1 January 2013

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 30 June 2011

2. PARENT ENTITY INFORMATION

The	following information provided relates to the Company, Queste Communications Ltd as at 30 June	Company	Company
2011. The information presented here has been prepared using accounting policies outlined in Note 1.		2011	2010
Statement of Financial Position		$	$
Current assets		1,905,541	2,770,250
Non	current assets	3,343,942	3,399,173
Total assets		5,249,483	6,169,423
Current liabilities		151,841	143,106
Non	current liabilities	-	132,196
Total liabilities		151,841	275,302
Net	assets	5,097,642	5,894,121
Issued capital		6,192,427	6,192,427
Reserves		1,892,657	2,419,637
Accumulated losses		(2,987,442)	(2,717,943)
Total equity		5,097,642	5,894,121
Total comprehensive loss for the year		(269,500)	(475,244)
(a)	Current assets
	(i) Cash and cash equivalents
	Cash at bank	1,363,415	543,179
	Term deposit	32,089	1,645,272
	Total cash and cash equivalents	1,395,504	2,188,451
	(ii) Other current assets	510,037	581,799
	Total current assets	1,905,541	2,770,250
(b)	Non current assets
	(i) Available for sale financial asset
	Shares in controlled entity - at cost	3,069,452	2,849,766
	Net change in fair value	(350,506)	402,322
	Market value of listed securities	2,718,946	3,252,088
	(ii) Other non current assets	624,996	147,085
	Total non current assets	3,343,942	3,399,173
	Details of the percentage of ordinary shares held in controlled entity:	Ownership	interest
	Investment in Controlled Entities:	2011	2010
	Orion Equities Limited (A.C.N. 000 742 843) (OEQ)Incorporated in Australia	50.88%	48.04%

(c) Transactions with related parties

The Company is deemed to control Orion Equities Limited (OEQ). During the financial year, there were transactions between the Company, OEQ and Associate entity of OEQ, Bentley Capital Limited (BEL), pursuant to shared office and administration expense arrangements. Interest is not charged on such outstanding amounts and amounts were fully received/(paid) by balance date. The following transactions also occurred with related parties:

	2011	2010
Dividends received from:	$	$
Bentley Capital Limited	34,813	410,276
Administration expenses receivable/(payable)
Bentley Capital Limited	-	560
Orion Equities Limited	-	(2,077)

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30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 30 June 2011

2.	PARENT ENTITY INFORMATION (continued)	PARENT ENTITY INFORMATION (continued)
	(c)	Transactions with related parties (continued)	2011	2010
			$	$
		The Company advanced to OEQ $500,000. The loan facility is unsecured and attracts 10% interest
		per annum.
		Loan advance to Orion Equities Limited	500,000		-
		Interest owed on loan advance	16,712		-
		Interest revenue on loan advance	17,945		-

3. CONSOLIDATED PROFIT/(LOSS) FOR THE YEAR Profit/(Loss) for the year includes the following items of revenue and expenses below. (a) Revenue from continuing operations Income from sale of olive oils Dividends received Interest received - other Other income Share of Associate entity's profit Net gain on sale of financial assets held at fair value Net change on financial assets held at fair value through profit or loss Other income (b) Expenses from continuing operations Net change on financial assets held at fair value through profit or loss Net loss on sale of financial assets held at fair value Costs in relation to olive oil operations - Cost of goods sold - Depreciation expenses - Other expenses - Revaluation of trees Costs in relation to land operations - Impairment/(reversal) of property held for development and resale - Other expenses Personnel - remuneration and other - employee entitlements Occupancy expenses Corporate expenses - Consultancy - Other corporate expenses Finance expenses Borrowing cost Administration expenses - Professional fees - Communications - Realisation cost of share portfolio written back - Brokerage fees - Depreciation expenses - other assets - Write off fixed assets - Write off lapsed options - Other expenses	15,332 14,060 1,200,987 79,331 136,082 450,027
	1,351,129 544,690
	- 181,205 874,850 500,186 - 2,572,398 10 408
	681,401 3,447,656
	1,226,091 4,798,785
	- 873,554 - - 97,490 6,656 (1,072) 79,082 11,830 12,700 3,014 (12,043) 5,447 424 2,729 112,624 54,427 6,403 201,041 1,997,098 (300,000) 367,300 950,000 881,715 92,089 123,303 18,416 80,164 1,200 - (35,214) 8,735 37,212 78,002 67,167 (19,927) 130,080 952,452 6,046 910,006 327,580 98,059 2,202 582,608 113,124 2,986
	4,183,538 4,743,171

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30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

4. INCOME TAX EXPENSE

(a) Income tax expense Current tax Under/(over) provision in prior years Deferred tax Current year deferred tax expense/(benefit) Total income tax expense/(benefit) per income statement (b) Numerical reconciliation of income tax expense to prima facie tax payable Profit/(loss) before income tax Tax at the Australian tax rate of 30% (2010: 30%) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Other assessable income Other non-deductible items Share of Associate's (profits)/loss Current year revenue losses not brought to account Derecognition of prior year revenue loss Derecognition of prior year capital loss Derecognition of deferred taxes on investment in associate Utilisation of previously unrecognised capital loss Movement in unrecognised temporary differences Excess current year franking credits converted to recognised tax losses Income tax expense attributable to operating loss Deferred tax assets not previously brought to account Income tax expense (benefit) (c) Deferred tax recognised directly in equity Revaluations of land and intangibles (d) Deferred tax assets not brought to account at 30%: Revenue losses Capital losses Temporary differences	82,211 (694,440) 2011 2010 $ $ - -
	82,211 (694,440)
	55,614 (2,957,447) (887,233) 16,684
	(54,362) (262,455) 195,555 94,524 680,789 - (316,500) (1,200) 264,268 69,001 48,642 - (177,011) (42,787) 44,057 192,046 57,593 1,793 4,023 -
	82,211 (154,784) - (539,656)
	82,211 (694,440)
	(82,211) 262,006
	1,589,972 518,075 246,719 295,802 48,155 90,942
	1,884,846 904,819

The Deferred Tax Asset not brought to account for the period will only be obtained if:

i) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit to be realised; ii) the Company continues to comply with the conditions for deductibility imposed by tax legislation; and

iii) the Company is able to meet the continuity of ownership and/or continuity of business tests under tax legislation.

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30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

5. KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Key management personnel compensation Directors Short-term employee benefits - cash fees Post-employment benefits - superannuation Other key management personnel Short-term employee benefits - cash fees Post-employment benefits - superannuation	2011 2010 $ $ 580,914 532,693 47,333 60,456
	628,247 593,149
	46,731 94,016 4,206 8,542
	50,937 102,558

Detailed remuneration disclosures are provided in the Remuneration Report section of the Directors' Report.

(b) Compensation of other key management personnel

The Consolidated Entity do not have any key executives (other than executive directors).

(c) Options, rights and equity instruments provided as remuneration

There were no options, rights and equity instruments provided as remuneration to key management personnel and no shares issued on the exercise of any such instruments, during the financial year.

(d)	Shareholdings of key management personnel	Balance at	Net Changes	Balance at
	2011	start of the year	during the year	end of the year
	Directors
	Farooq Khan	6,398,044	-	6,398,044
	Simon Cato	193,000	-	193,000
	Azhar Chaudhri	4,724,280	826,950	5,551,230
	Yaqoob Khan	68,345	-	68,345
	Other key management personnel
	Victor Ho (Company Secretary)	17,500	-	17,500
	2010
	Directors
	Farooq Khan	6,398,044	-	6,398,044
	Simon Cato	193,000	-	193,000
	Azhar Chaudhri	4,724,280	-	4,724,280
	Yaqoob Khan	68,345	-	68,345
	Other key management personnel
	Victor Ho (Company Secretary)	17,500	-	17,500
(e)	Partly paid shareholding of key management personnel	Balance at	Net Changes	Balance at
	2011	start of the year	during the year	end of the year
	Directors
	Farooq Khan	-	-	-
	Azhar Chaudhri	20,000,000	-	20,000,000
	Yaqoob Khan	-	-	-
	2010
	Directors
	Farooq Khan	-	-	-
	Azhar Chaudhri	20,000,000	-	20,000,000
	Yaqoob Khan	-	-	-

The disclosures of equity holdings above are in accordance with the accounting standards which requires a disclosure of shares held directly, indirectly or beneficially by each key management person, a close member of the family of that person, or an entity over which either of these persons have, directly or indirectly, control, joint control or significant influence (as defined under Accounting Standard AASB 124 Related Party Disclosures). The 2010 comparatives have been restated to reflect the above definition as they were previously incorrectly disclosed based on a previous wider definition under the standard and to correct an incorrect attribution of certain shareholdings.

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30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 30 June 2011

5. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

(f) Option holdings of key management personnel

The Consolidated Entity does not have any options on issue.

(g) Loans to key management personnel

There were no loans to key management personnel (or their personally related entities) during the financial year.

(h) Other transactions with key management personnel

Director, Mr Simon Cato, is a director of Advanced Share Registry Limited, which provides share registry services to the Consolidated Entity.

Amounts recognised as expense

Share registry fees

2011	2010
$	$
7,475	8,179

There were no other transactions with key management personnel (or their personally related entities) during the financial year.

6. AUDITORS' REMUNERATION

	During the year the following fees were paid or payable for services provided by the auditor of the parent entity and its related	During the year the following fees were paid or payable for services provided by the auditor of the parent entity and its related	During the year the following fees were paid or payable for services provided by the auditor of the parent entity and its related	practices:
			2011	2010
	BDO	Audit (WA) Pty Ltd	$	$
	Audit	and review of financial reports	64,042	53,874
	Taxation services		6,850	2,100
	Other	services	-	1,050
			70,892	57,024
7.	EARNINGS/(LOSS) PER SHARE		2011	2010
	Basic	earnings/(loss) per share (cents)	(5.5)	0.6
	Diluted earnings/(loss) per share (cents)		(3.4)	0.4
	Profit/(loss) used to calculate earnings per share ($)		(1,653,274)	171,533
	(a)	Basic earnings/(loss) per share
		The earnings/(loss) and weighted average number of ordinary shares used in the calculation of basic
		earnings per share are as follows:
		Net Profit/(loss) ($)	(1,653,274)	171,533
		Weighted average number of ordinary shares (i)	29,927,379	29,927,379

(i) The Consolidated Entity's partly paid shares, to the extent that they have been paid (1.5225 cent per share), have been included in the determination of the basic earnings per share.

The Consolidated Entity's partly paid shares, to the extent of the balance of the call (18.4775 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 partly paid share will become fully paid.

(b) Diluted earnings/(loss) per share

(b) Diluted earnings/(loss) per share
The earnings/(loss) and weighted average number of ordinary and potential ordinary shares used in	2011	2010
the calculation of diluted earnings per share are as follows:
Net Profit/(loss) ($)	(1,653,274)	171,533
Weighted average number of ordinary shares (i)	48,404,879	48,404,879
Weighted average number of shares used as the denominator
The weighted average number of ordinary shares used as the denominator in calculating basic
earnings) per share	29,927,379	29,927,379
Adjustments for calculation of diluted earnings per share
Portion of partly-paid ordinary shares that remain unpaid	18,477,500	18,477,500
	48,404,879	48,404,879

ANNUAL REPORT | 33

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 30 June 2011

8. CASH AND CASH EQUIVALENTS

Cash at bank Term deposit

2011	2010
$	$
1,652,555	940,709
32,089	1,645,272
1,684,644	2,585,981

(a) Risk exposure

The Consolidated Entity’s exposure to interest rate risk is discussed in Note 23. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above.

(b) Reconciliation of Net Profit/(Loss) after Tax to Net Cash Flow from Operations

Reconciliation of Net Profit/(Loss) after Tax to Net Cash Flow from Operations Profit/(Loss) after income tax Net change in fair value in trading portfolio Net loss/(gain) on sale of financial assets held at fair value Impairment/(reversal) of property held for development and resale Depreciation - olive oil and other assets Share of Associate entity's profit Write off fixed assets Revaluation of trees Write off lapsed options Gain on sale of fixed assets (Increase)/Decrease in Assets: Financial assets held at fair value through profit or loss Trade and other receivables Inventories - Olive Oils Investments in Associate entity Other current assets Increase/(Decrease) in Liabilities: Trade and other payables Provisions Tax liabilities Net cash outflow from operating activities

(874,850) 129,959 $ (3,039,658) 750,054 873,554 (500,186) 1,997,098 (2,572,398) - 327,580 (300,000) 950,000 (181,205) 207,444 2011 2010 $ 222,748 445,089 445,089 (5,057) 5,294 189,827 (836,988) 43,977 81,735 82,211 (694,440) - 1,200 2,202 2,986 - (408) 363,923 1,059,608 117,552 (85,574) (380,030)

(956,813) (214,851)

9. FINANCIAL ASSETS HELD AT FAIR VALUE THROUGH PROFIT AND LOSS

Current

Listed securities at fair value Unlisted options in listed corporations at cost Add: net change in fair value	6,475,856 7,669,346
	950,495 - 10,000 -
	960,495 -
	6,475,856 8,629,841

Risk Exposure

Information about the Consolidated Entity's exposure to market and price risk is provided in Note 23.

ANNUAL REPORT | 34

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

TRADE AND OTHER RECEIVABLES Current Trade debtors GST receivable Other receivables Amount receivable from related parties Deposit Non Current Bonds and guarantees	2011 2010 935 935 1,199 1,203 4,766 111,492 19,515 13,333 $ $ 34,787 51,791
	61,202 178,754
	32,823 32,823
	32,823 32,823

10. TRADE AND OTHER RECEIVABLES

(a) Risk exposure

Information about the Consolidated Entity's exposure to credit risk, foreign exchange risk and interest rate risk is in Note 23.

(b) Impaired receivables and receivables

None of the receivables are impaired or past due.

11. INVENTORIES

Current - Olive Oil Inventory Bulk oils - at cost Packaged oils - at cost Non Current - Land Development Property held for development and resale - at cost Revaluation of property	109,337 103,875 2011 2010 $ $ 890,093 515,525
	999,430 619,400
	(1,997,339) (2,297,339) 3,797,339 3,797,339
	1,800,000 1,500,000

Property held for development and resale was valued by an independent qualified valuer (an Associate member of the Australian Property Institute) on 6 June 2011 and the upwards revaluation has been recognised as an impairment reversal through profit or loss.

12. OTHER CURRENT ASSETS

Prepayments - Director's & Officers' insurance

2011	2010
$	$
5,057		-

ANNUAL REPORT | 35

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

13. INVESTMENTS IN ASSOCIATE ENTITY

Name of Associate Principal Activity Bentley Capital Limited (BEL) Investments Movement in Investments in Associate Shares in listed Associate entity brought forward Share of profit before income tax expense Dividend from Associate entity Acquisition of BEL shares Share of income tax expense Carrying amount at the end of the financial period Fair value of listed investments in Associate Net tangible asset value of listed investments in Associate Share of Associate's profits Profit before income tax Share of income tax expense Profit after income tax Summarised Financial Position of Associate Current assets Non current assets Total assets Current liabilities Non current liabilities Total liabilities Net assets Revenues Profit after income tax of Associate 30.65% Ownership Interest Group share of: 2011 2010 30.90%	Carrying Amount $ $ 2011 2010 7,571,638 7,835,522
	7,835,522 7,571,638
	7,835,522 6,851,981 181,205 553,780 - (445,089) - - (445,089) 874,850
	7,571,638 7,835,522
	4,895,970 5,007,242
	8,830,325 9,124,307
	- - 181,205 874,850
	181,205 874,850
	8,830,096 9,169,156 23,411 42,624
	9,211,780 8,853,507
	(5,154) (44,567) (18,028) (39,368)
	(23,182) (83,935)
	8,830,325 9,127,845
	874,850 573,751 1,282,312 181,205

Bentley Capital Limited - Lease Commitments

BEL and its subsidiary, Scarborough Equities Pty Ltd , have the same lease commitments as disclosed in Note 24.

ANNUAL REPORT | 36

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

14. PROPERTY, PLANT AND EQUIPMENT At 1 July 2009 At cost Revaluation Reserve/(Accumulated depreciation) Net carrying amount Year ended 30 June 2010 Carrying amount at beginning Asset revaluation (Note 21) Additions Depreciation expense Disposals Write off obsolete assets Carrying amount at balance date At 30 June 2010 At cost Revaluation Reserve/(Accumulated depreciation) Net carrying amount Year ended 30 June 2011 Carrying amount at beginning Asset revaluation (Note 21) Additions Depreciation expense Disposals Carrying amount at balance date At 30 June 2011 At cost Revaluation Reserve/(Accumulated depreciation) Net carrying amount	Land Freehold Land Equipment $ $ $ $ $ Improvement Total 861,214 112,432 1,368,318 367,236 (18,551) (454,758) 44,305 2,386,269 (34,119) (140,192) Freehold Buildings on Plant & Leasehold
	1,228,450 93,881 913,560 10,186 2,246,077
	1,228,450 93,881 913,560 10,186 2,246,077 (28,569) - - - - (7,041) - - - (2,986) - (2,986) (28,569) (2,185) - (2,185) 21,302 - - - 21,302 (121,434) (1,484) (129,959) -
	86,840 808,257 1,199,881 8,702 2,103,680
	861,214 112,432 1,368,846 44,305 2,386,797 338,667 (25,592) (560,589) (35,603) (283,117)
	1,199,881 86,840 808,257 8,702 2,103,680
	1,199,881 86,840 808,257 8,702 2,103,680 - (6,788) (199,393) (1,264) (207,445) - - (2,202) - (2,202) (171,411) - - - (171,411) - 5,444 12,543 - 17,987
	1,028,470 85,496 619,205 7,438 1,740,609
	167,256 (32,380) (759,982) (36,867) (661,973) 861,214 117,876 1,379,187 44,305 2,402,582
	1,028,470 85,496 619,205 7,438 1,740,609

15. OLIVE TREES Olive trees - at cost Revaluation of trees	300,000 300,000 (234,500) (234,500) 2011 2010 $ $
	65,500 65,500

Nature of asset

The olive trees are on the Olive Grove property (approximately 64,500, 12 year old trees planted over 143 hectares). The fair value is at the Directors' valuation having regard to, amongst other matters, the replacement cost of the trees and the trees being in commercial production.

ANNUAL REPORT | 37

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

INTANGIBLE ASSETS Year ended 30 June 2010 Opening net book amount Asset revaluation Closing net book amount At 30 June 2010 Cost Asset revaluation (Note 21) Net book amount Year ended 30 June 2011 Opening net book amount Asset revaluation Closing net book amount At 30 June 2011 Cost Asset revaluation (Note 21) Net book amount	Water Licence Brand name Total $ $ $ 523,125 99,996 623,121 261,562 - 261,562
	784,687 99,996 884,683
	250,000 99,996 349,996 534,687 - 534,687
	784,687 99,996 884,683
	(102,625) - (102,625) 784,687 99,996 884,683
	682,062 99,996 782,058
	250,000 99,996 349,996 432,062 - 432,062
	682,062 99,996 782,058

16. INTANGIBLE ASSETS

Nature of asset

The Water Licence pertains to the Consolidated Entity's Olive Grove property in Gingin, Western Australia. As at 30 June 2011, an independent qualified valuer (a Certified Practising Valuer and Associate member of the Australian Property Institute) revalued the water licence downwards by $102,625 from the previous balance date. The Brand name pertains to the ultra premium Dandaragan Estate Olive Oil Brand.

17. TRADE AND OTHER PAYABLES Trade payables Other creditors and accruals Dividend payable	28,302 28,309 2011 2010 $ $ 260,095 57,317 333,840 346,789
	622,237 432,415

(a) Amounts not expected to be settled within the next 12 months

Other creditors and accruals include accruals for annual leave. The entire obligation is presented as current since the Consolidated Entity does not have an unconditional right to defer settlement. However based on past experience, the Consolidated Entity does not expect all employees to take the full amount of their accrued leave within the next 12 months. The following amount reflects leave that is not expected to be taken within the next 12 months.

Annual leave obligation expected to be settled after 12 months	2011 2010 $ $ 18,488 71,465

(b) Risk exposure Details of the Consolidated Entity's exposure to risks arising from current payables are set out in Note 23.

PROVISIONS Employee benefits - long service leave	197,479 153,502 2011 2010 $ $

18. PROVISIONS

The current provision for long service leave includes all unconditional entitlements where employees have completed the required period of service and accrued long service leave benefits. The entire obligation is presented as current since the Consolidated Entity does not have an unconditional right to defer settlement. However based on past experience, the Consolidated Entity does not expect all employees to take their full amount of the accrued long service leave or require payment within the next 12 months. The amounts above reflect leave that is not expected to be taken or paid within the next 12 months.

ANNUAL REPORT | 38

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

19. DEFERRED TAX ASSETS AND LIABILITIES

		2011	2010
(a)	Assets - Non Current	$	$
	Deferred tax asset comprises:
	Provisions & accruals	99,568	108,577
	Revenue tax losses	321,292	1,008,506
	Other	745,028	985,108
		1,165,888	2,102,191
(b)	Liabilities - Non Current
	Deferred tax liability comprises:
	Fair Value Gain Adjustments	1,057,472	1,899,035
	Other	108,416	203,156
		1,165,888	2,102,191
(c)	Reconciliations
(i)	Gross movements
	The overall movement in the deferred tax account is as follows:
	Opening balance	-	(432,432)
	Charged to equity	82,211	(262,006)
	(Charged)/credited to profit or loss	(82,211)	694,438
	Closing balance	-	-
(ii)	Deferred tax asset:
	The movement in deferred tax asset for each temporary difference during the year is as follows:
	Provisions & accruals
	Opening balance	108,577	130,640
	Charged to profit or loss	(9,009)	(22,063)
	Closing balance	99,568	108,577
	Revenue tax losses
	Opening balance	1,008,506	760,155
	Charged to profit or loss	(687,214)	248,351
	Closing balance	321,292	1,008,506
	Other
	Opening balance	985,108	404,278
	Charged to profit or loss	(240,080)	580,830
	Closing balance	745,028	985,108
	Total	1,165,888	2,102,191
**(iii) **	Deferred tax liability:
	The overall movement in recognised deferred tax liabilities for each temporary difference is as follows
	Fair Value Gain Adjustments
	Opening balance	1,899,035	1,455,846
	Charged to profit or loss	(841,563)	443,189
	Closing balance	1,057,472	1,899,035
	Other
	Opening balance	203,156	271,659
	Charged to equity	(82,211)	262,006
	Charged to profit or loss	(12,529)	(330,509)
	Closing balance	108,416	203,156
	Total	1,165,888	2,102,191

ANNUAL REPORT | 39

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

ISSUED CAPITAL	2011	2010	2011	2010
	shares	shares	$	$
Fully paid ordinary shares	28,404,879	28,404,879	5,887,927	5,887,927
Partly paid ordinary shares	20,000,000	20,000,000	304,500	304,500
			6,192,427	6,192,427
		Date of	Number of
30 June 2010		issue	shares	$
At 1 July 2009			28,404,879	5,887,927
			-	-
At 30 June 2010			28,404,879	5,887,927
30 June 2011
At 1 July 2010			28,404,879	5,887,927
			-	-
At 30 June 2011			28,404,879	5,887,927

20. ISSUED CAPITAL

(a) Ordinary shares

Fully paid ordinary shares carry one vote per share and carry the right to dividends. There were no movements during the year for fully paid ordinary shares.

(b) Partly paid ordinary shares

There were no movements during the year for partly paid ordinary shares.

At any meeting, each shareholder present in person or by proxy, attorney or representative has one vote for each ordinary fully paid share held either upon a show of hands or by a poll. Holders of partly paid shares have a fraction of a vote for each partly paid share held with the fractional vote of each share being equivalent to the proportion which the amount actually paid (not credited) for that share is of the total amounts paid and payable (excluding amounts credited) for that share. Amounts paid in advance of a call are ignored when calculating proportions. The holder of a partly paid share is not entitled to vote at a meeting in respect of those shares on which calls are outstanding. No voting rights are attached to the Consolidated Entity's options on issue.

The profits of the Consolidated Entity, which the Directors may from time to time determine to distribute to shareholders by way of dividends, will be divisible amongst the shareholders in proportion to the amounts paid on the shares held by them. An amount paid in advance of a call is not to be included as an amount paid on a share for the purposes of calculating entitlement to dividends for such share.

(c) Capital risk management

The Consolidated Entity's objectives when managing its capital are to safeguard their ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain a capital structure balancing the interests of all shareholders.

The Board will consider capital management initiatives as is appropriate and in the best interests of the Consolidated Entity and shareholders from time to time, including undertaking capital raisings, share buy backs, capital reductions and the payment of dividends.

The Consolidated Entity has no borrowings. The Consolidated Entity's non-cash investments can be realised to meet accounts payable arising in the normal course of business.

21. RESERVES

RESERVES Option Premium Reserve Property, plant and equipment Intangibles Deferred tax liability movement Asset revaluation reserve Total reserves	$ $ 2,138,012 2,138,012 2011 2010
	256,867 219,833 162,697 85,100
	304,933 419,564 (91,480) (125,869)
	213,453 293,695
	2,351,465 2,431,707

ANNUAL REPORT | 40

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

21. RESERVES (continued)

Movement of asset revaluation reserve Opening balance Asset revaluation reserve brought to account Deferred tax liability movement Closing balance	$ $ 293,695 307,633 (114,631) 111,931 34,389 (125,869) 2011 2010
	213,453 293,695

The Option Premium Reserve comprised consideration received on the issue of options in prior years which have lapsed.

The Asset Revaluation Reserve is used to record increments and decrements on the revaluation of non-current assets. The Asset Revaluation Reserve relates to the revaluation of OEQ's Olive Grove Land from cost of $1,199,881 to $1,028,470 and the Water Licence from a cost of $784,687 to $682,062, as assessed by an independent qualified valuer (a Certified Practising Valuer and Associate member of the Australian Property Institute). The movement in the Asset revaluation reserve relates to the Consolidated Entity's share of OEQ's revaluation.

22. SEGMENT INFORMATION

The Consolidated Entity has considered the product and geographical perspective of the operating results and determined that the Consolidated Entity operates only in Australia with segments in Investments and Olive Oil production. Unallocated items comprise predominantly of corporate assets, office expenses and income tax assets and liabilities.

		Investments	Olive Oil	Unallocated	Total
2011		$	$	$	$
Total segment revenue		696,723	450,027	79,341	1,226,091
Adjusted EBITDA		318,904	(197,775)	(1,257,335)	(1,136,206)
Total segment asset		15,847,492	3,580,510	2,956,703	22,384,705
Total segment liabilities		-	(398,116)	(1,587,488)	(1,985,604)
2010
Total segment revenue		3,461,308	1,200,987	136,490	4,798,785
Adjusted EBITDA		2,442,830	177,857	(1,283,335)	1,337,352
Total segment asset		17,965,361	3,725,056	4,847,958	26,538,375
Total segment liabilities		(116,455)	(147,245)	(2,424,408)	(2,688,108)
(a)	Other segment information			2011	2010
(i)	Segment revenues			$	$
	Any sales between segments are carried out at arm's length and are eliminated on consolidation.
	Total segment revenue			1,146,750	4,662,295
	Unallocated:
	Interest received - other			79,331	136,082
	Other income			10	-
	Gain on sale of assets			-	408
	Total revenue from continuing operations (Note 3)			1,226,091	4,798,785
(ii)	Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
	The adjusted EBITDA excludes net change in fair value in investments	and impairment	of assets.
	Adjusted EBITDA			(1,136,206)	1,337,352
	Net change on financial assets held at fair value through profit or loss			(1,997,098)	-
	Impairment/(reversal) of property held for development and resale			300,000	(950,000)
	Depreciation			(207,444)	(129,959)
	Interest revenue			79,331	136,082
	Realisation cost of share portfolio written back			12,043	1,072
	Finance cost			(5,871)	(8,775)
	Fixed assets written off			(2,202)	(2,986)
	Revaluation of trees			-	(327,580)
	Gain on sale of assets			-	408
	Profit/(loss) before income tax			(2,957,447)	55,614

ANNUAL REPORT | 41

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

22. SEGMENT INFORMATION (continued)

(iii) Segment assets Unallocated: Cash and cash equivalents Trade and other receivables Other current assets Property, plant and equipment Deferred tax asset Total assets as per the Statement of Financial Position (iv) Segment liabilities Unallocated: Trade and other payables Provisions Deferred tax liability Total liabilities as per the Statement of Financial Position	19,428,002 21,690,417 21,018 5,057 - 2,585,981 159,786 1,684,644 1,165,888 2,102,191 80,096 - 2011 2010 $ $
	22,384,705 26,538,375
	(168,715) (224,121) (153,502) (1,165,888) (197,479) (398,116) (263,700) (2,102,191)
	(1,985,604) (2,688,108)

23. FINANCIAL RISK MANAGEMENT

The Consolidated Entity's financial instruments comprise of deposits with banks, accounts receivable and payable and investments in listed securities. The principal activity of the Consolidated Entity is the management of these investments - "financial assets held at fair value" (refer to Note 9). The Consolidated Entity's investments are subject to price risk (which includes interest rate and market risk), credit risk and liquidity risks.

The Board of Directors is responsible for the overall internal control framework (which includes risk management) but no cost-effective internal control system will preclude all errors and irregularities. The system is based, in part, on the appointment of suitably qualified management personnel. The effectiveness of the system is continually reviewed by management and at least annually by the Board.

The financial receivables and payables of the Consolidated Entity in the table below are due or payable within 30 days. The financial investments are held for trading and are realised at the discretion of the Board of Directors.

The Consolidated Entity held the following financial instruments:

Financial assets Cash and cash equivalents Trade and other receivables Financial assets at fair value through profit or loss Financial liabilities Trade and other payables Net Financial Assets	$ $ 1,684,644 2,585,981 61,202 178,754 6,475,856 8,629,841 2011 2010
	8,221,702 11,394,576
	(622,237) (432,415)
	(622,237) (432,415)
	7,599,465 10,962,161

ANNUAL REPORT | 42

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

23. FINANCIAL RISK MANAGEMENT (continued)

(a) Market Risk

• (i) Price risk

The Consolidated Entity is exposed to equity securities price risk. This arises from investments held by the Consolidated Entity and classified in the Statement of Financial Position at fair value through profit or loss. The Consolidated Entity are not exposed to commodity price risk, save where this has an indirect impact via market risk and equity securities price risk.

The value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual instrument or its issuer or factors affecting all instruments in the market. The Consolidated Entity will be subject to market risk as it invests its capital in securities that are not risk free - the market price of these securities can and will fluctuate. The Consolidated Entity does not manage this risk through entering into derivative contracts, futures, options or swaps.

Equity price risk is minimised through ensuring that investment activities are undertaken in accordance with Board established mandate limits and investment strategies.

The Consolidated Entity has performed a sensitivity analysis on its exposure to market price risk at balance date. The analysis demonstrates the effect on the current year results and equity which could result from a change in these risks. The ASX All Ordinaries Share Index was utilised as the benchmark for the listed share investments which are available for sale assets or at fair value through profit or loss.

(i)	Equity Price risk - listed investments	2011	2010
	Change in profit	$	$
	Increase by 15%	445,767	1,111,102
	Decrease by 15%	(445,767)	(1,111,102)
	Change in equity
	Increase by 15%	445,767	1,111,102
	Decrease by 15%	(445,767)	(1,111,102)

• (ii) Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The Consolidated Entity's exposure to market risk for changes in interest rates relate primarily to investments held in interest bearing instruments. The average interest rate of the term deposits for the year for the table below is 4.64% (2010: 5.93%).

Cash at bank Term deposit	2011 2010 $ $ 1,652,555 940,709 32,089 1,645,272
	1,684,644 2,585,981

The Consolidated Entity has no borrowings and no material exposure to interest rate risk.

(iii) Foreign exchange risk

The Consolidated Entity is not exposed to foreign exchange risk as at Balance Date. The Consolidated Entity's current policy is not to hedge any overseas currency exposure.

The Consolidated Entity has no foreign exchange funds or investments, therefore no asset or liability exposure to foreign exchange risk. There is no revenue or expense exposure in terms of the possible impact on profit or loss or total equity.

ANNUAL REPORT | 43

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

23. FINANCIAL RISK MANAGEMENT (continued)

(b) Credit risk

Credit risk refers to the risk that a counterparty under a financial instrument will default (in whole or in part) on its contractual obligations resulting in financial loss to the Consolidated Entity. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, including outstanding receivables and committed transactions. Concentrations of credit risk are minimised primarily by undertaking appropriate due diligence on potential investments, carrying out all market transactions through approved brokers, settling non-market transactions with the involvement of suitably qualified legal and accounting personnel (both internal and external), and obtaining sufficient collateral or other security (where appropriate) as a means of mitigating the risk of financial loss from defaults. The Consolidated Entity's business activities do not necessitate the requirement for collateral as a means of mitigating the risk of financial loss from defaults.

The credit quality of the financial assets are neither past due nor impaired and can be assessed by reference to external credit ratings (if available with Standard & Poor's) or to historical information about counterparty default rates. The maximum exposure to credit risk at reporting date is the carrying amount of the financial assets as summarised below:

Cash and cash equivalents AA BBB+ Trade and other receivables (due within 30 days) No external credit rating available	2011 2010 $ $ 1,683,781 1,568,285 863 1,017,696
	1,684,644 2,585,981
	61,202 178,754

The Consolidated Entity measures credit risk on a fair value basis. The carrying amount of financial assets recorded in the financial statements, net of any provision for losses, represents the Consolidated Entity’s maximum exposure to credit risk.

(c) Liquidity risk Liquidity risk is the risk that the Consolidated Entity will encounter difficulty in meeting obligations associated with financial liabilities. The Consolidated Entity has no borrowings. The Consolidated Entity's non-cash investments can be realised to meet trade and other payables arising in the normal course of business. The financial liabilities disclosed in the above table have a maturity obligation of not more than 30 days.

(d) Fair value measurements

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The Consolidated Entity has adopted the amendment to AASB 7 FinancialInstruments: Disclosures which requires disclosure of fair value measurements by level of the following fair value measurement hierarchy :

(i) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

(ii) Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices), and

(iii) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

The following table presents the Consolidated Entity’s assets and liabilities measured and recognised at fair value at 30 June 2011.

	Level 1	Level 2	Level 3		Total
Consolidated - 2011	$	$	$		$
Financial assets held at fair value through profit or loss
- Listed investments at fair value	6,475,856	-		-	6,475,856
- Unlisted options in listed corporations at cost	-	-		-	-
Consolidated - 2010
Financial assets held at fair value through profit or loss
- Listed investments at fair value	7,669,346	-		-	7,669,346
- Unlisted options in listed corporations at cost	-	960,495		-	960,495

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

30 JUNE 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2011

24. COMMITMENTS

COMMITMENTS
Not longer than one year Between 12 months and 5 years	104,929 82,633 110,176 $ 170,384 2010 2011 $
	215,105 253,017

The non-cancellable operating lease commitment is the Consolidated Entity'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%.

25. CONTINGENT ASSETS AND LIABILITIES

(a) Directors' Deeds

The Company and OEQ have entered into deeds of indemnity with each of their Directors indemnifying them against liability incurred in discharging their duties as directors/officers of the Company. At the end of the financial period, 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.

(b) Royalty on Tenements

The Consolidated Entity is entitled to receive a royalty of 2% of gross revenues (exclusive of GST) from any commercial exploitation of any minerals from various Australian tenements - EL 47/1328 and PL 47/1170 (the Paulsens East Project tenements currently held by Strike Resources Limited), EL 24879, 24928 and 24929 and ELA 24927 (the Bigryli South Project tenements in the Northern Territory, currently held by Alara Resources Limited (Alara)) and EL 46/629 and a right to earn and acquire a 85% interest in ELA 46/585 (excluding all manganese mineral rights) (the Canning Well Project tenements in Western Australia, currently held by Alara).

26. EVENTS AFTER BALANCE DATE

• (a) On 25 August 2011, Associate entity, Bentley Capital Limited, announced the declaration of a one cent final dividend and a 2.4 cent special dividend per share (totalling 3.4 cents fully franked), to be paid on or about 26 September 2011. Orion's share of this dividend will be $697,469 and the Company's share of this dividend will be $59,181 (being a total of $756,650). Orion and the Company have not elected to participate under Bentley's Dividend Reinvestment Plan and will therefore be receiving cash dividends.

• (b) On 25 August 2011, Bentley Capital Limited, announced its intention to seek shareholder approval to undertake a 5 cent per share return of capital (Return of Capital). The Return of Capital is to be effected by Bentley seeking shareholder approval for a reduction in the share capital of the company by returning 5 cents per share to shareholders – this equates to an aggregate reduction of share capital by approximately $3.63 million based upon the company’s 72,598,802 shares currently on issue. No shares will be cancelled as a result of the Return of Capital. Accordingly, the number of shares held by each shareholder will not change as a consequence of the Return of Capital. The Return of Capital is subject to shareholder approval which will be sought at a general meeting of shareholders anticipated to be held in late September /early October 2011. If Bentley shareholders approve this Return of Capital, Orion's share will be $1,025,676 and the Company's share will be $87,031 (being a total of $1,112,720).

No other matter or circumstance has arisen since the end of the financial period 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 periods.

ANNUAL REPORT | 45

30 JUNE 2011

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

DIRECTORS’ DECLARATION

The Directors of the Company declare that:

1. The financial statements, comprising the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Statement of Cash Flow and accompanying notes as set out on pages 19 to 45 are in accordance with the Corporations Act 2001 and:

2. (a) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting; and

3. (b) give a true and fair view of the Company’s and Consolidated Entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date;

4. In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;

5. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 by the Executive Chairman and Managing Director (the person who performs the chief executive function) and the Company Secretary (the person who, in the opinion of the Directors, performs the chief financial officer function); and

6. The Company has included in the notes to the Financial Statements an explicit and unreserved statement of compliance with the International Financial Reporting Standards.

This declaration is made in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act 2001.

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Farooq Khan Chairman 31 August 2011

Simon Cato Director

ANNUAL REPORT | 46

Tel: +8 6382 4600 38 Station Street Fax: +8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF QUESTE COMMUNICATIONS LTD.

Report on the Financial Report

We have audited the accompanying financial report of Queste Communications Ltd, which comprises the consolidated statement of financial position as at 30 June 2011, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards .

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Queste Communications Ltd, would be in the same terms if given to the directors as at the time of this auditor’s report.

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Opinion

In our opinion:

• (a) the financial report of Queste Communications Ltd is in accordance with the Corporations Act 2001 , including:

• (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date; and

• (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and

• (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2011. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Queste Communications Ltd for the year ended 30 June 2011 complies with section 300A of the Corporations Act 2001 .

BDO Audit (WA) Pty Ltd

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Chris Burton Director

Perth, Western Australia Dated this 31[th] day of August 2011

30 JUNE 2011

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

CORPORATE GOVERNANCE

Compliance with Corporate Governance Council’s Principles

The extent to which the Company has followed the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations with 2011 Amendments (2[nd] Edition, August 2007) is as follows:

Principle	Compliance	CGS References / Comments
Principle 1: Lay solid foundations for management and oversight Companies should establish and disclose the respective roles and responsibilities of board and management
1.1 Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions.	Yes	2, 3.3, 4.1, 4.2
1.2 Companies should disclose the process for evaluating the performance of senior executives.	Yes	3.11
1.3 Companies should provide the information indicated in the Guide to Reporting on Principle 1. The following material should be included in the corporate governance section of the annual report:  an explanation of any departure from Recommendations 1.1, 1.2 or 1.3; and  whether a performance evaluation for senior executives has taken place in the reporting period and whether it was in accordance with the process disclosed. A statement of matters reserved for the board or the board charter or the statement of areas of delegated authority to senior executives should be made publicly available, ideally by posting it to the company’s website in a clearly marked corporate governance section.	Yes	Annual Reports Website CGS
Principle 2: Structure the board to add value Companies should have a board of an effective composition size and commitment to adequately discharge its responsibilities and duties
2.1 A majority of the board should be independent directors.	No	3.5
2.2 The chair should be an independent director.	No	3.2, 3.5
2.3 The roles of chair and chief executive officer should not be exercised by the same individual.	No	3.2
2.4 The board should establish a nomination committee.	No	4.2
2.5 Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.	Yes	3.11
2.6 Companies should provide the information indicated in the Guide to Reporting on Principle 2. The following material should be included in the corporate governance statement in the annual report:  the skills, experience and expertise relevant to the position of director held by each director in office at the date of the annual report;  the names of the directors considered by the board to constitute independent directors and the company’s materiality thresholds;  the existence of any of the relationships listed in Box 2.1 and an explanation of why the board considers a director to be independent, notwithstanding the existence of these relationships;  a statement as to whether there is a procedure agreed by the board for directors to take independent professional advice at the expense of the company;  the period of office held by each director in office at the date of the annual report;  the names of members of the nomination committee and their attendance at meetings of the committee, or where a company does not have a nomination committee, how the functions of a nomination committee are carried out;  whether a performance evaluation for the board, its committees and directors has taken place in the reporting period and whether it was in accordance with the process disclosed; and	Yes (as applicable)	Annual Reports Website CGS

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CORPORATE GOVERNANCE

Principle	Compliance	CGS References / Comments
 an explanation of any departures from Recommendations 2.1, 2.2, 2.3, 2.4, 2.5 or 2.6. The following material should be made publicly available, ideally by posting it to the company’s website in a clearly-marked corporate governance section:  a description of the procedure for the selection and appointment of new directors and the re-election of incumbent directors;  the charter of the nomination committee or a summary of the role, rights, responsibilities and membership requirements for that committee; and  the board’s policy for the nomination and appointment of directors.
Principle 3: Promote ethical and responsible decision-making Companies should actively promote ethical and responsible decision-making
3.1 Companies should establish a code of conduct and disclose the code or a summary of the code as to:	Yes	6 Code of Conduct Website
3.1.1 the practices necessary to maintain confidence in the company’s integrity;
3.1.2 the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders;
3.1.3 the responsibility and accountability of individuals for reporting and investigating reports of unethical practices;
3.2 Companies should establish a policy concerning trading in company securities by directors, officers and employees and disclose the policy or a summary of that policy.	Yes	3.8 Share Trading Policy Website
3.3 Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress towards achieving them.	No	3.16
3.4 Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board.	Yes	3.16 Annual Reports
3.5 Companies should provide the information indicated in the Guide to Reporting on Principle 3. An explanation of any departures from Recommendations 3.1, 3.2, 3.3, 3.4 or 3.5 should be included in the corporate governance statement in the annual report. The following material should be made publicly available, ideally by posting it to the company’s website in a clearly marked corporate governance section:  any applicable code of conduct or a summary; and  the diversity policy or a summary of its main provisions.	Yes	Annual Reports Website CGS
Principle 4: Safeguard integrity in financial reporting Companies should have a structure to independently verify and safeguard the integrity of their financial reporting
4.1 The board should establish an audit committee.	No	4.2
4.2 Structure the audit committee so that it:  consists only of non-executive directors;  consists of a majority of independent directors;  is chaired by an independent chair, who is not chair of the board; and  has at least three members.	Not applicable	4.2
4.3 The audit committee should have a formal charter.	Not applicable	4.2
4.4 Companies should provide the information indicated in the Guide to Reporting on Principle 4. The following material should be included in the corporate governance statement in the annual report:  details of the names and qualifications of those appointed to the audit committee	Yes (as applicable)	Annual Reports Website CGS

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CORPORATE GOVERNANCE

Principle	Compliance	CGS References / Comments
and their attendance at meetings of the committee or, where a company does not have an audit committee, how the functions of an audit committee are carried out;  the number of meetings of the audit committee and the names of the attendees; and  explanation of any departures from Recommendations 4.1, 4.2, 4.3 or 4.4. The following material should be made publicly available, ideally by posting it to the company’s website in a clearly marked corporate governance section:  the audit committee charter; and  information on procedures for the selection and appointment of the external auditor and for the rotation of external audit engagement partners.
Principle 5: Make timely and balanced disclosure Companies should promote timely and balanced disclosure of all material matters concerning the company
5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.	Yes	8.2
5.2 Companies should provide the information indicated in the Guide to Reporting on Principle 5. An explanation of any departures from Recommendations 5.1 or 5.2 should be included in the corporate governance statement in the annual report. The policies or a summary of those policies designed to guide compliance with Listing Rule disclosure requirements should be made publicly available, ideally by posting them to the company's web site in a clearly marked corporate governance section.	Yes	Annual Reports Website CGS
Principle 6: Respect the rights of shareholders Companies should respect the rights of shareholders and facilitate the effective exercise of those rights
6.1 Companies should design and disclose a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.	Yes	8.1
6.2 Companies should provide the information indicated in Guide to Reporting on Principle 6. An explanation of any departures from best practice Recommendations 6.1 or 6.2 should be included in the corporate governance statement in the annual report. The company should describe how it will communicate with its shareholders publicly, ideally by posting the information on the company’s website in a clearly marked corporate governance section.	Yes	Annual Reports Website CGS
Principle 7: Recognise and manage risk Companies should establish a sound system of risk oversight and management and internal
	control
7.1 Companies should establish policies for oversight and management of material business risks and disclose a summary of those policies.	Yes	7.1
7.2 The board should require management to design and implement the risk management and internal control system to manage the company's material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company's management of its material business risks.	Yes	7.1
7.3 The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.	Yes	7.1
7.4 Companies should provide the information indicated in the Guide to Reporting on Principle 7. The following material should be included in the corporate governance section of the annual report:  an explanation of any departures from best practice recommendations 7.1, 7.2, 7.3 or 7.4;	Yes	Annual Reports Website CGS

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CORPORATE GOVERNANCE

Principle	Compliance	CGS References / Comments
 whether the board has received the report from management under Recommendation 7.2; and  whether the board has received assurances from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) under Recommendation 7.3. The following material should be made publicly available, ideally by posting it to the company’s website in a clearly marked corporate governance section:  a summary of the company’s policies on risk oversight and management of material business risks.
Principle 8: Remunerate fairly and responsibly Companies should ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to performance is clear
8.1 The board should establish a remuneration committee.	No	4.2
8.2 Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.	Yes	Remuneration Report in the Directors’ Report (within Annual Reports)
8.3 Companies should provide the information indicated in the Guide to Reporting on Principle 8. The following material or a clear cross-reference to the location of the material should be included in the corporate governance statement in the annual report:  the names of the members of the remuneration committee and their attendance at meetings of the committee or, where a company does not have a remuneration committee, how the functions of a remuneration committee are carried out;  the existence and terms of any schemes for retirement benefits, other than superannuation, for non-executive directors; and  an explanation of any departure from Recommendations 8.1, 8.2 or 8.3. The following material should be made publicly available, ideally by posting it to the company’s website in a clearly marked corporate governance section:  the charter of the remuneration committee or a summary of the role, rights, responsibilities and membership requirements for that committee; and  a summary of the company’s policy on prohibiting entering into transactions in associated products which limit the economic risk of participating in unvested entitlements under any equity-based remuneration schemes.	Yes (as applicable)	Annual Reports Website CGS

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

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE STATEMENT (CGS)

1. Framework and Approach to Corporate Governance and Responsibility

The Board is committed to maintaining high standards of corporate governance. Good corporate governance is about having a set of core values and behaviours that underpin the Company’s activities and ensure transparency, fair dealing and protection of the interests of stakeholders.

The Board of Directors supports the Corporate Governance Principles and Recommendations developed by the ASX Corporate Governance Council (“ Council ”).

The Company’s practices are largely consistent with the Council’s guidelines - the Board considers that the implementation of some recommendations are not appropriate having regard to the nature and scale of the Company’s activities and size of the Board.

The Board uses its best endeavours to ensure exceptions to the Council’s guidelines do not have a negative impact on the Company and the best interests of shareholders as a whole.

Details of the Council’s recommendations can be found on the ASX website at:

• http://www.asx.com.au/governance/corporate governance.htm

2. Board of Directors - Role and Responsibilities

In general the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Company.

The Board is also responsible for the overall corporate governance of the Company, and recognises the need for the highest standards of behaviour and accountability in acting in the best interests of the Company as a whole. The Board also ensures that the Company complies with all of its contractual, statutory and any other legal or regulatory obligations. The Board has the final responsibility for the successful operations of the Company.

Where the Board considers that particular expertise or information is required, which is not available from within their number, appropriate external advice may be taken and reviewed prior to a final decision being made by the Board.

Without intending to limit the general role of the Board, the principal functions and responsibilities of the Board include the matters set out below, subject to delegation as specified elsewhere in this Statement or as otherwise appropriate:

• (1) formulation and approval of the strategic direction, objectives and goals of the Company;

• (2) the prudential control of the Company’s finances and operations and monitoring the financial performance of the Company;

• (3) the resourcing, review and monitoring of executive management;

• (4) ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained;

• (5) the identification of significant business risks and ensuring that such risks are adequately managed;

• (6) the timeliness, accuracy and effectiveness of communications and reporting to shareholders and the market;

• (7) the establishment and maintenance of appropriate ethical standards;

• (8) responsibilities typically assumed by an audit committee including:

• (a) reviewing and approving the audited annual and reviewed half-yearly financial reports; and

• (b) reviewing the appointment of the external auditor, their independence, the audit fee, and any questions of resignation or dismissal;

• (9) responsibilities typically assumed by a remuneration committee including:

• (a) reviewing the remuneration and performance of Directors;

• (b) setting policies for Executives' remuneration, setting the terms and conditions of employment for Executives, undertaking reviews of Executives’ performance, including setting goals and reviewing progress in achieving those goals; and

• (c) reviewing the Company’s Executive and employee incentive schemes and making recommendations on any proposed changes; and

• (10) responsibilities typically assumed by a nomination committee including:

• (a) devising criteria for Board membership, regularly reviewing the need for various skills and experience on the Board and identifying specific individuals for nomination as Directors; and

• (b) oversight of Board and Executive succession plans.

3. Board of Directors – Composition, Structure and Process

The Board has been formed so that it has effective composition, size and commitment to adequately discharge its responsibilities and duties given the current size and the scale and nature of the Company’s activities. The names of the Directors currently in office and their qualifications and experience are stated in the Directors’ Report for the financial year ended 30 June 2011.

3.1. Skills, Knowledge and Experience

Directors are appointed based on the specific corporate and governance skills and experience required by the Company.

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CORPORATE GOVERNANCE

The Board recognises its need to contain Directors with a relevant blend of personal experience in accounting and finance, law, financial and investment markets, financial management and public company administration and Director-level business or corporate experience, having regard to the scale and nature of the Company’s activities. A Director is initially appointed by the Board and retires (and may stand for re-election) at the next Annual General Meeting after their appointment.

• (6) is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.

Mr Farooq Khan (Executive Chairman and Managing Director) is not regarded as an independent Director, being an Executive Director of the Company and being a substantial shareholder of the Company.

3.2. Executive Chairman and Managing Director

The Executive Chairman/Managing Director leads the Board and has responsibility for ensuring that the Board receives accurate, timely and clear information to enable Directors to perform their duties as a Board. The Executive Chairman and Managing Director of the Company is Mr Farooq Khan, whose qualifications and experience are stated in the Directors’ Report for the financial year ended 30 June 2011.

3.3. Non-Executive Directors

The Company recognises the importance of Non-Executive Directors and the external perspective and advice that Non-Executive Directors can offer. Three of the current Board’s four Directors are Non-Executive Directors – Mr Yaqoob Khan, Mr Azhar Chaudhri and Mr Simon Cato. Their qualifications and experience are stated in the Directors’ Report for the financial year ended 30 June 2011.

3.4. Company Secretary

The Company Secretary is appointed by the Board and is responsible for developing and maintaining the information systems and processes that are appropriate for the Board to fulfil its role and is responsible to the Board for ensuring compliance with Board procedures and governance matters. The Company Secretary is also responsible for overseeing and coordinating disclosure of information to the ASX as well as communicating with the ASX. The Company Secretary is Mr Victor Ho, whose qualifications and experience are stated in the Directors’ Report for the financial year ended 30 June 2011.

3.5. Independence

An independent Director, in the view of the Company, is a Non-Executive Director who:

• (1) is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;

• (2) within the last 3 years has not been employed in an Executive capacity by the Company;

• (3) within the last 3 years has not been a principal of a material professional adviser or a material consultant to the Company or another group member, or an employee materially associated with the provision of material professional or consulting services;

Mr Azhar Chaudhri is not regarded as an independent Director as he does not meet the above criteria for independence adopted by the Company, being a substantial shareholder of the Company.

Mr Yaqoob Khan is regarded as an independent Director under the criteria referred to above.

Mr Simon Cato is regarded as an independent Director under the criteria referred to above.

3.6. Conflicts of Interest

To ensure that Directors are at all times acting in the interests of the Company, Directors must:

• (1) disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought to exist between the interests of the Director or his duties to any other parties and the interests of the Company in carrying out the activities of the Company; and

• (2) if requested by the Board, within 7 days or such further period as may be permitted, take such necessary and reasonable steps to remove any conflict of interest.

If a Director cannot or is unwilling to remove a conflict of interest then the Director must, as per the Corporations Act, absent himself from the room when Board discussion and/or voting occurs on matters to which the conflict relates (save with the approval of the remaining Directors and subject to the Corporations Act).

3.7. Related-Party Transactions

Related party transactions include any financial transaction between a Director and the Company as defined in the Corporations Act or the ASX Listing Rules. Unless there is an exemption under the Corporations Act from the requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction. The Company also discloses related party transactions in its financial report as required under relevant Accounting Standards.

3.8. Share Dealings and Disclosures

The Company has adopted a Share Trading Policy (dated 31 December 2010), a copy of which is available for viewing and downloading from the Company’s website.

• (4) is not a material supplier or customer of the Company, or an officer of or otherwise associated directly or indirectly with a material supplier or customer;

• (5) has no material contractual relationship with the Company other than as a Director of the Company; and

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

CORPORATE GOVERNANCE

3.9. Board Nominations

The Board will consider nominations for appointment or election of Directors that may arise from time to time having regard to the corporate and governance skills required by the Company and procedures outlined in the Constitution and the Corporations Act.

3.10. Terms of Appointment as a Director

The current Directors of the Company have not been appointed for fixed terms. The constitution of the Company provides that a Director (other than a Managing Director) may not retain office for more than three calendar years or beyond the third Annual General Meeting following their election, whichever is longer, without submitting himself or herself for re-election. One third of the Directors (save for a Managing Director) must retire each year and are eligible for re-election. The Directors who retire by rotation at each Annual General Meeting are those with the longest length of time in office since their appointment or last election.

The initial appointment and last re-election dates of each Director are listed below.

Director are listed	below.
Director	Appointed	AGM Last Re-elected
Farooq Khan	10 March 1998	N/A – being the Managing Director
Yaqoob Khan	10 March 1998	18 November 2009
Azhar Chaudhri	4 August 1998	20 November 2008 (standing for re- election at 2011 AGM)
Simon Cato	11 February 2008	10 November 2010

It is recognised and accepted that Board members may also concurrently serve on other boards, either in an executive or non-executive capacity.

3.13. Independent Professional Advice

Subject approval by the Chairman, each Director has the right to seek independent legal and other professional advice at the Company’s expense concerning any aspect of the Company’s operations or undertakings in order to fulfil their duties and responsibilities as Directors.

3.14. Company Information and Confidentiality

All Directors have the right of access to all relevant Company books and to Company Executives. In accordance with legal requirements and agreed ethical standards, Directors and Executives of the Company have agreed to keep confidential all information received in the course of the exercise of their duties and will not disclose non-public information except where disclosure is authorised or legally mandated.

3.15. Directors’ and Officers’ Deeds

The Company has also entered into a deed with each of the current Directors and the Company Secretary to regulate certain matters between the Company and each officer, both during the time the officer holds office and after the officer ceases to be an officer of the Company (or of any of its wholly-owned subsidiaries). A summary of the terms of such deeds is contained within the Remuneration Report in the Director’s Report for the financial year ended 30 June 2011 and in the 2005 Notice of AGM dated 18 October 2005.

3.11. Performance Review and Evaluation

3.16 Board Diversity

It is the policy of the Board to ensure that the Directors and Executives of the Company be equipped with the knowledge and information they need to discharge their responsibilities effectively and that individual and collective performance is regularly and fairly reviewed. Directors are encouraged to attend director training and professional development courses, as required, at the Company’s expense. New Directors will have access to all employees to gain full background on the Company’s operations.

Although the Company is not of a size to warrant the development of formal processes for evaluating the performance of its Board, individual Directors and Executives, there is on-going monitoring by the Chairman and the Board. The Non-Executive Directors are responsible for reviewing the performance and remuneration of the Executive Chairman/Managing Director. The Chairman also speaks to Directors individually regarding their role and performance as a Director.

3.12. Meetings of the Board

The Board holds meetings whenever necessary to deal with specific matters requiring attention. Directors’ Circulatory Resolutions are also utilised where appropriate either in place of or in addition to formal Board meetings.

Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a Director of the Company.

The Board, senior management and workforce of the Company currently comprises individuals that are multiculturally diverse together with an appropriate blend of qualifications and skills.

The Company recognises the positive advantages of a diverse workplace and is committed to:

• (1) creating a working environment conducive to the appointment of well qualified employees senior management and Board candidates; and

• (2) identifying ways to promote a corporate culture which embraces diversity.

The Board has delegated the responsibility of monitoring and ensuring workplace diversity to the Executive Chairman/Managing Director.

Given the relatively small size of the Company workforce and the current nature and scale of the Company’s activities at this time, the Board has determined that it is not practicable to set measurable objectives for achieving gender diversity.

The Board will monitor the progress and assess the effectiveness of diversity within the Company on an ongoing basis. The Board will further consider the establishment of objectives for achieving gender diversity as the Company develops and its circumstances change.

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CORPORATE GOVERNANCE

The Company does not currently have any women in senior executive roles or on the Board. 50% of the Company’s current employees are female.

4. Management

4.1. Executives

The Managing Director is responsible and accountable to the Board for the Company’s management. The Company’s Executive Chairman and Managing Director roles are fulfilled by one person – Mr Farooq Khan. The Company presently has one other Executive Officer being the Company Secretary. The Board considers that the Company is not currently of a size, nor are its affairs of such complexity, to justify the expense of the appointment of an independent Non-Executive Chairman.

The Board is of the opinion that all Directors exercise and bring to bear an unfettered and independent judgement towards their duties and the Board is satisfied that Mr Farooq Khan as both Chairman and as Managing Director plays an important role in the continued success and performance of the Company and is able to and does bring quality and independent judgment to all relevant issues falling within the scope of the role of a Chairman and does not consider that his dual role in any way diminishes the efficient organisation and conduct of the Board’s overall function.

The Company does not have a Chief Financial Officer.

The Board has determined that the Executive Chairman/Managing Director is the appropriate person to make the Chief Executive Officer equivalent declaration and the Company Secretary is the appropriate person to make the Chief Financial Officer equivalent declaration in respect of the financial year ended 30 June 2011, as required under section 295A of the Corporations Act and recommended by the Council.

6. Code of Conduct and Ethical Standards

The Company has developed a formal Code of Conduct, which may be viewed and downloaded from the Company’s website. The Code sets and creates awareness of the standard of conduct expected of Directors, officers, employees and contractors in carrying out their roles.

The Company seeks to encourage and develop a culture which will maintain and enhance its reputation as a valued corporate citizen of the countries where it operates and an employer which personnel enjoy working for. The Code sets out policies in relation to various corporate and personal behaviour including safety, discrimination, respecting the law, anti-corruption, interpersonal conduct, conflicts of interest and alcohol and drugs.

7. Internal Control, Risk Management and Audit

7.1. Internal Control and Risk Management

The Board of Directors is responsible for the overall internal control framework (which includes risk management) and oversight of the Company’s policies on and management of risks that have the potential to impact significantly on operations, financial performance or reputation.

The Board recognises that no cost-effective internal control system will preclude all errors and irregularities. The system is based, in part, on the appointment of suitably- qualified and experienced service providers and suitably-qualified and experienced management personnel. The effectiveness of the system is monitored and reviewed by management on an on-going basis and at least annually by the Board.

On a day-to-day basis, managing the various risks inherent in the Company’s operations is the responsibility of the Executive Directors and the Company Secretary.

4.2. Board and Management Committees

In view of the current composition of the Board (which comprises three Non-Executive Directors and one Executive Chairman/Managing Director) and the nature and scale of the Company’s activities, the Board has considered that establishing formally-constituted committees for audit, board nominations and remuneration is not necessary or required.

Accordingly audit matters, the nomination of new Directors and the setting, or review, of remuneration levels of Directors and Executives are reviewed by the Board as a whole and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest). That is, matters typically dealt with by audit, nominations and remuneration committees are dealt with by the full Board.

5. Remuneration Policy

Please refer to the Remuneration Report in the Director’s Report for the financial year ended 30 June 2011. Directors do not currently have any equity-based remuneration.

Risks facing the Company can be divided into the broad categories of operations, compliance and market risks.

Operations risk refers to risks arising from day to day operational activities which may result in direct or indirect loss from inadequate or failed internal processes, decisionmaking, exercise of judgment, people or systems or external events. The Executive Chairman/Managing Director and the Company Secretary have delegated responsibility from the Board for identification of operations risks generally, for putting processes in place to mitigate them and monitoring compliance with those processes. The Company has clear accounting and internal control systems to manage risks to the accuracy of financial information and other financial risks.

Compliance risk is the risk of failure to comply with all applicable legal and regulatory requirements and industry standards and the corresponding impact on the Company’s business, reputation and financial condition. The Company’s compliance risk management strategy ensures compliance with key legislation affecting the Company’s activities.

A key principle of the Company’s compliance risk management strategy is to foster an integrated approach where line managers are responsible and accountable for compliance, within their job descriptions and within overall

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CORPORATE GOVERNANCE

guidance developed by the Company Secretary assisted by the General Counsel.

The Company’s compliance strategy is kept current with advice from senior external professionals and the ongoing training of Executives and other senior personnel involved in compliance management.

The Company has policies on responsible business practices and ethical behaviour including conflict of interest and share trading policies to maintain confidence in the Company’s integrity and ensure legal compliance.

Market risk encompasses risks to the Company’s performance from changes in equity prices, interest rates, currency exchange rates, capital markets and economic conditions generally. The Board assesses the Company’s exposure to these risks and sets the strategic direction for managing them.

The Company’s approach to risk management is not stationary; it evolves constantly in response to developments in operations and changing market conditions.

Further details are also in Note 23 (Financial Instruments) to the financial statements for the financial year ended 30 June 2011.

The Board has determined that the Executive Chairman/Managing Director is the appropriate person to make the Chief Executive Officer equivalent declaration and the Company Secretary is the appropriate person to make the Chief Financial Officer equivalent declaration in respect of the financial year ended 30 June 2011, on the risk management and internal compliance and control systems recommended by the Council.

Management has reported to the Board as to the effectiveness of the Company's management of its material business risks.

7.2. Audit

The Company's external auditor ( Auditor ) is selected for its professional competence, reputation and the provision of value for professional fees. Within the audit firm, the partner responsible for the conduct of the Company’s audits is rotated every three years.

The Auditor is invited to attend the Company’s annual general meetings to answer shareholder questions about the conduct of the audit and the preparation and content of the Auditor’s report.

8. Communications

8.1. Market and Shareholder Communications

The Company is owned by shareholders. Increasing shareholder value is the Company’s key mission. Shareholders require an understanding of the Company’s operations and performance to enable them to see how that mission is being fulfilled. The Directors are the shareholders’ representatives. In order to properly perform their role, the Directors need to be able to ascertain the shareholders’ views on matters affecting the Company.

The Board therefore considers it paramount to ensure that shareholders are informed of all major developments affecting the Company and have the opportunity to communicate their views on the Company to the Board. Information is communicated to shareholders and the market through various means including:

• (1) monthly NTA Backing announcements released to ASX, which are posted on the Company’s website;

• (2) the Annual Report which is distributed to shareholders if they have elected to receive a printed version and is otherwise available for viewing and downloading from the Company’s website;

• (3) the Annual General Meeting ( AGM ) and other general meetings called in accordance with the Corporations Act and to obtain shareholder approvals as appropriate. The Executive Chairman/Managing Director gives an address at the AGM updating shareholders on the Company's investment activities;

• (4) Half-Yearly Directors’ and Financial Reports which are posted on the Company’s website; and

• (5) other announcements released to ASX as required under the continuous disclosure requirements of the ASX Listing Rules and other information that may be mailed to shareholders, which is also posted on the Company’s website.

Shareholders communicate with Directors through various means including:

• (1) having the opportunity to ask questions of Directors at all general meetings;

• (2) the presence of the external auditor at Annual General Meetings to take shareholder questions on any issue relevant to their capacity as auditor;

• (3) the Company’s policy of expecting Directors to be available to meet shareholders at Annual General Meetings; and

• (4) the Company making Directors and selected senior employees available to answer shareholder questions submitted by telephone, email and other means.

The Company actively promotes communication with shareholders through a variety of measures, including the use of the Company’s website and email. The Company’s reports and ASX announcements may be viewed and downloaded from its website: www.queste.com.au or the ASX website: www.asx.com.au under ASX code “QUE”. The Company also maintains an email list for the distribution of the Company’s announcements via email in a timely manner.

8.2. Continuous Disclosure to ASX

The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure of information to ASX as well as communicating with ASX.

In accordance with the Corporations Act and ASX Listing Rule 3.1 the Company immediately notifies ASX of information concerning the Company that a reasonable person would expect to have a material effect on the price

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CORPORATE GOVERNANCE

or value of the Company’s securities, subject to exceptions permitted by that rule. A reasonable person is taken to expect information to have a material effect on the price or value of the Company’s securities if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of the Company’s securities.

All staff are required to inform their reporting manager of any potentially price-sensitive information concerning the Company as soon as they become aware of it. Reporting managers are in turn required to inform the Executive Director to whom they report or, in their absence, another Executive Director of any potentially price-sensitive information.

In general, the Company will not respond to market speculation or rumours unless required to do so by law or by the ASX Listing Rules.

Only the Executive Chairman has general responsibility to speak to the media, investors and analysts on the Company’s behalf. Other Directors or senior Executives may be given a brief to do so on particular occasions.

The Company will keep a summary record for internal use of the issues discussed at group or one-on-one briefings with investors and analysts, including a record of those present and the time and place of the meeting.

The Company may request a trading halt from ASX to prevent trading in its securities if the market appears to be uninformed. The Executive Directors are authorised to determine whether to seek a trading halt.

10 October 2011

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ADDITIONAL ASX INFORMATION as at 30 September 2011

DISTRIBUTION OF LISTED ORDINARY FULLY PAID SHARES

Spread	of	Holdings	Number of Holders	Number of Units	% of Total Issue
					Capital
1	-	1,000	12	8,251	0.029%
1,001	-	5,000	62	183,548	0.646%
5,001	-	10,000	75	705,165	2.483%
10,001	-	100,000	117	3,233,792	11.385%
100,001	-	and over	27	24,274,123	85.458%
Total			293	28,404,879	100.00%

Unmarketable Parcels

Spread of Holdings Number of Holders	Number of Units % of Total Issue Capital
1 - 4,347 61 4,348 - over 232	128,499 0.452% 28,276,380 99.548%
Total 293	28,404,879 100.00%

An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of 3,846 shares or less, being a value of $500 or less in total, based upon the Company’s closing share price on 30 September 2011 of 11.5 cents per share.

DISTRIBUTION OF UNLISTED PARTLY PAID ORDINARY SHARES

Name	No. of Partly Paid
	Shares
Chi Tung Investments Ltd	20,000,000

These 20,000,000 ordinary shares were issued at a price of 20 cents per share and have been partly paid to 1.5225 cents each and have an outstanding amount payable of 18.4775 cents per share.

VOTING RIGHTS

Subject to any rights or restrictions for the time being attached to any class or classes of shares (at present there are none), at meetings of shareholders of the Company:

• (1) each shareholder entitled to vote may vote in person or by proxy, attorney or representative;

• (2) on a show of hands, every person present who is a shareholder or a proxy, attorney or corporate representative of a shareholder has one vote;

• (3) on a poll, every person present who is a shareholder or a proxy, attorney or corporate representative of a shareholder shall, in respect of each fully paid share held by such person, or in respect of which such person is appointed a proxy, attorney or corporate representative, have one vote for that share;

• (4) The Company’s partly paid shares have a proportional voting entitlement in accordance with the amount paid up for that share.

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ADDITIONAL ASX INFORMATION as at 30 September 2011

TOP 20 ORDINARY FULLY PAID SHAREHOLDERS

Rank Shareholder	Shares Held Total Shares % Issued Capital
1 BELL IXL INVESTMENTS LIMITED CELLANTE SECURITIES CLEOD PTY LTD 2 MR FAROOQ KHAN ISLAND AUSTRALIA PTY LTD 3 MR AZHAR CHAUDHRI CHI TUNG INVESTMENTS LTD RENMUIR HOLDINGS LTD 4 MANAR NOMINEES PTY LTD MANAR NOMINEES PTY LTD	3,799,747 2,053,282 867,644 Sub-total 6,720,673 23.660 2,461,367 3,668,577 Sub-total 6,129,944 21.581 10,000 1,050,000 3,277,780 Sub-total 4,337,780 15.271 1,725,663 180,500 Sub-total 1,906,163 6.711
5 MRS AMBREEN CHAUDHRI DATABASE SYSTEMS LTD 6 COWOSCO CAPITAL PTY LTD 7 MR DONALD GORDON MACKENZIE & MRS GWENNETH EDNA MACKENZIE 8 MS ROSANNA DE CAMPO 9 MR AYUB KHAN 10 MRS AFIA KHAN	386,500 0 0 826,950 0 0 Sub-total 1,213,450 4.272 1,150,000 4.049 761,260 2.680 268,100 0.944 215,000 0.757 215,000 0.757
11 GIBSON KILLER PTY LTD 12 ROSEMONT ASSET PTY LTD MR SIMON KENNETH CATO 13 TOMATO 2 PTY LTD 14 SAMDY NOMINEES PTY LTD 15 GLENVIEW SERVICES PTY LTD	200,000 0.704 75,000 118,000 Sub-total 193,000 0.679 185,019 0.651 150,000 0.528 145,000 0.510
16 MR JOHN CHENG-HSIANG 17 MR ANTHONY NEALE KILLER & MRS SANDRA MARIE KILLER 18 MR GREGORY JOHN MATHESON 19 MR EUGENE RODRIGUEZ 20 MR NICHOLAS PASTERNATSKY	136,125 0.479 130,000 0.458 110,742 0.390 110,000 0.387 103,750 0.365
Total	24,381,006 85.833%

• A substantial shareholder of the Company

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ASX Code: QUE

Queste Communications Ltd A.B.N. 58 081 688 164

PRINCIPAL & REGISTERED OFFICE:

Level 14, The Forrest Centre 221 St Georges Terrace Perth, Western Australia 6000

Local T | 1300 762 678 T | (08) 9214 9777 F | (08) 9322 1515

E | info@queste.com.au W | www.queste.com.au

SHARE REGISTRY:

Advanced Share Registry Limited

Suite 2, 150 Stirling Highway Nedlands, Western Australia 6009 PO Box 1156, Nedlands, WA 6909

T | (08) 9389 8033 F | (08) 9389 7871 E | admin@advancedshare.com.au W | www.advancedshare.com.au

Level 6, 225 Clarence Street Sydney, New South Wales 2000

PO Box Q1736, Queen Victoria Building, NSW 1230

T | (02) 8096 3502