QUESTE COMMUNICATIONS LIMITED — Annual Report 2012

Oct 22, 2012

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A.B.N 58 081 688 164

20 12 ANNUAL REPORT

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CONTENTS

CONTENTS
Overview of Results	2
Directors’ Report	3
Auditor’s Independence Declaration	19
Consolidated Statement of	20
Comprehensive Income
Consolidated Statement of	21
Financial Position
Consolidated Statement of	22
Changes in Equity
Consolidated Statement of Cash Flows	23
Notes to the Consolidated Financial	24
Statements
Directors’ Declaration	47
Independent Auditor’s Report	48
Corporate Governance	50
Additional ASX Information	60

CORPORATE DIRECTORY

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 Local Call: 1300 762 678 Telephone: (08) 9214 9777 Facsimile: (08) 9322 1515 Email: info@queste.com.au Website: www.queste.com.au

SHARE REGISTRY

Advanced Share Registry Limited 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

www.queste.com.au

STOCK EXCHANGE

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Australian Securities Exchange Perth, Western Australia

ASX CODE

QUE

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EMAIL US AT:

info@queste.com.au

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	2012 2011
	$ $
Total revenues Total expenses Loss before tax Income tax expense Loss from continuing operations Net loss attributable to non controlling interest Loss after tax attributable to owners of the Company Basic loss per share (cents) Diluted loss per share (cents) Undiluted NTA backing per share (cents) Diluted NTA backing per share (cents)	924,173 725,905 (6,291,035) (3,683,352)
	(5,366,862) (2,957,447) (24,864) (82,211)
	(5,391,726) (3,039,658) (2,443,217) (1,386,384)
	(2,948,509) (1,653,274)
	(9.9) (5.5) (9.9) (5.5) 26 36 38 30

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

At the Consolidated Entity level:

Revenues include:

• (1) $767,427 income from sale of olive oils (2011: $450,027);

• (2) $625,086 share of ASX listed Bentley Capital Limited’s ( BEL ) (Associate entity’s) loss (net of dividends received from Bentley of $756,649) (2011: $181,205 share of Bentley’s profit, net of dividends received from Bentley of $445,089);

• (3) $103,917 interest income (2011: $79,331); and

• (4) $52,531 rental income (2011: nil).

Expenses include:

• (1) $2,648,702 net loss on financial assets held at fair value through profit or loss (2011: $1,496,912 loss);

• (2) $1,274,715 olive grove and oils operations (which does not include revaluation and depreciation expenses) (2011: $601,024);

• (3) $78,361 olive grove and oils operation’s revaluation and depreciation expenses (2011: $201,041); and

• (4) $610,270 personnel expenses (2011: $846,501).

The principal components of the $2,648,702 net loss on financial assets held at fair value through profit or loss are:

• (a) $2.25 million unrealised loss on a share investment in ASX listed Strike Resources Limited ( SRK ), which declined in value from $0.245 to $0.11 per share during the financial year; and

• (b) $0.38 million unrealised loss on a share investment in ASX listed Alara Resources Limited ( AUQ ), which declined in value from $0.365 to $0.305 per share 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 2012.

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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 2012 ( 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 2011: 51%).

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	2012 2011
	$ $
Total revenues Total expenses Loss before tax Income tax expense Loss for the year Net loss attributable to non controlling interest Loss after tax attributable to owners of the Company Basic loss per share (cents) Diluted loss per share (cents)	924,173 725,905 (6,291,035) (3,683,352)
	(5,366,862) (2,957,447) (24,864) (82,211)
	(5,391,726) (3,039,658)
	(2,443,217) (1,386,384)
	(2,948,509) (1,653,274)
	(9.9) (5.5) (9.9) (5.5)

At the Consolidated Entity level:

Revenues include:

• (1) $767,427 income from sale of olive oils (2011: $450,027);

• (2) $625,086 share of ASX listed Bentley Capital Limited’s ( BEL ) (Associate entity’s) loss (net of dividends received from Bentley of $756,649) (2011: $181,205 share of Bentley’s profit, net of dividends received from Bentley of $445,089);

• (3) $103,917 interest income (2011: $79,331); and

• (4) $52,531 rental income (2011: nil).

Expenses include:

• (1) $2,648,702 net loss on financial assets held at fair value through profit or loss (2011: $1,496,912 loss);

• (2) $1,274,715 olive grove and oils operations (which does not include revaluation and depreciation expenses) (2011: $601,024);

• (3) $78,361 olive grove and oils operation’s revaluation and depreciation expenses (2011: $201,041); and

• (4) $610,270 personnel expenses (2011: $846,501).

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DIRECTORS’ REPORT

The principal components of the $2,648,702 net loss on financial assets held at fair value through profit or loss are:

• (a) $2.25 million unrealised loss on a share investment in ASX listed Strike Resources Limited ( SRK ), which declined in value from $0.245 to $0.11 per share during the financial year; and

• (b) $0.38 million unrealised loss on a share investment in ASX listed Alara Resources Limited ( AUQ ), which declined in value from $0.365 to $0.305 per share during the financial year.

LOSS PER SHARE

CONSOLIDATED ENTITY	2012 2011
Basic loss per share (cents) Diluted 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 and diluted earnings per share	(9.85) (5.52) (9.85) (5.52) 29,927,379 29,927,379

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 2012.

FINANCIAL POSITION

CONSOLIDATED ENTITY	2012 $ 2011 $
Cash Current investments - equities Investments in Associate entity 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 interest Retained earnings/(Accumulated losses) Total Equity	2,008,853 1,684,644 3,827,155 6,475,856 4,854,638 7,571,638 1,917,595 2,799,430 363,666 94,025 727,746 782,058 358,251 1,165,888 1,709,078 1,811,166
	15,766,982 22,384,705 (358,251) (1,165,888) (459,372) (819,716) 14,949,359 20,399,101
	6,192,427 6,192,427 2,321,946 2,351,465 6,441,748 8,913,462 (6,762) 2,941,747
	14,949,359 20,399,101

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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:

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

• (b) 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.

On-Market Share Buy-Back Back

On 17 April 2012, the Company announced its intention to conduct an on-market share buy-back of up to 2,700,000 shares ( Buy-Back )[1] .

This represents ~9.1% of the pre Buy-Back and 10% of the post Buy-Back total voting shares of the Company (having regard to the amount paid up on the partly paid shares).

In accordance with ASX Listing Rule 7.33, the Company will not pay any more than 5% above the average of the market price for the Company's shares over the last 5 days on which sales in the shares were recorded prior to the Buy-Back occurring.

The Buy-Back will continue until the earlier of the acquisition of the 2.7 million Buy-Back shares and 30 April 2013, subject to the Company exercising its right to suspend or terminate the Buy-Back, or amend its terms, at any time.

The Company has not bought back any shares pursuant to the Buy-Back, to date.

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 2011: 9,063,153 shares or 50.875%). 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 2012 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 1.6 below contain information extracted from Orion’s public statements.

1 Refer Appendix 3C - Announcement of Buy-Back dated 17 April 2012

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DIRECTORS’ REPORT

1.2. Orion’s Operating Results for year ended 30 June 2012

ORION EQUITIES LIMITED Consolidated Entity	2012 2011
	$ $
Total revenues Total expenses Loss before tax Income tax expense Loss attributable to members of Orion Basic and diluted loss per share (cents)	849,382 628,133 (5,802,549) (3,304,141)
	(4,953,167) (2,676,008) (24,864) (82,211)
	(4,978,031) (2,758,219)
	(27.94) (15.48)

Orion’s revenues include:

• (1) $767,427 income from olive grove operations (June 2011: $450,027); and

• (2) $52,531 rental income (June 2011: nil).

Orion’s expenses include:

• (1) $2,648,619 net loss on financial assets held at fair value through profit or loss (June 2011: $1516,956);

• (2) $576,195 share of ASX listed Bentley Capital Limited’s (BEL) (Associate entity’s) loss (net of dividends received from Bentley of $697,469) (June 2011: $167,032 share of Bentley’s profit, net of dividends received from Bentley of $410,276);

• (3) $1,274,715 olive grove and oils operations (which does not include revaluation and depreciation expenses) (June 2011: $601,024);

• (4) $78,361 olive grove impairment and depreciation expenses (June 2011: $201,041); and

• (5) $610,270 personnel costs (including Directors’ fees) (June 2011: $617,837).

The principal components of Orion’s $2,648,619 net loss on financial assets held at fair value through profit or loss are:

• (a) $2.25 million unrealised loss on Orion’s share investment in ASX listed Strike Resources Limited (SRK), which declined in value from $0.245 to $0.11 per share during the financial year; and

• (b) $0.38 million unrealised loss on Orion’s share investment in ASX listed Alara Resources Limited (AUQ), which declined in value from $0.365 to $0.305 per share during the financial year.

1.3. Orion’s Dividends

Orion has not declared a dividend in respect of the financial year ended 30 June 2012.

1.4. Orion’s Financial Position as at 30 June 2012

ORION EQUITIES LIMITED Consolidated Entity	2012 2011
	$ $
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	12,382,503 17,364,240 0.695 0.975
	- - 12,382,503 17,364,240 0.695 0.975
	17,814,389 17,814,389

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DIRECTORS’ REPORT

ORION EQUITIES LIMITED	2012 2011
Consolidated Entity	$ $
Cash Financial assets at fair value through profit and loss Investments in listed Associate entity Inventory Receivables Intangibles Other assets Deferred tax asset Total Assets Other payables and liabilities Deferred tax liability Net Assets Issued capital Accumulated Losses Reserves Total Equity	365,031 289,140 3,821,383 6,470,003 4,584,254 7,088,745 1,917,595 2,799,430 292,915 106,554 727,746 782,058 1,686,035 1,794,954 352,085 1,165,887
	13,747,044 20,496,771 (284,710) (1,184,586) (352,085) (1,165,887)
	13,110,249 18,146,298
	19,374,007 19,374,007 (6,625,263) (1,647,232) 361,505 419,523
	13,110,249 18,146,298

1.5. Orion’s Portfolio Details as at 30 June 2012

Asset Weighting

	% of Net Assets
	2012 2011
Australian equities Agribusiness2 Property held for development and resale Net tax liabilities (current year and deferred tax assets/liabilities) Net cash/other assets and provisions TOTAL	64% 75% 15% 14% 12% 10% - - 9% 1%
	100% 100%

Major Holdings in Securities Portfolio

Equities	Fair Value $’million % of Net Assets ASX Code Industry Sector Exposures
(1) Bentley Capital Limited (2) Alara Resources Limited (3) Strike Resources Limited TOTAL	3.08 23.47% BEL Diversified Financials 1.93 14.73% AUQ Materials 1.84 14.00% SRK Materials 6.85 52.20%

1.6. Orion’s Assets

(a) Strike Resources Limited (ASX Code: SRK)

Strike Resources Limited ( Strike ) is a resources company with iron ore exploration and development projects in Peru. Orion Director, William Johnson, is on the Board of Strike as a Non-Executive Director.

Orion holds 16,690,802 shares, being 11.71% of Strike’s issued ordinary share capital (30 June 2011: 16,690,802 shares and 11.71%).

2 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

The value of Orion’s holdings in Strike declined by $2.25 million during the course of the financial year, from $4.09 million (at $0.245 per share as at 30 June 2011) to $1.84 million (at $0.110 per share on 30 June 2012).

The Strike share price has appreciated to $0.125 as at 30 August 2012, generating an unrealised gain of $0.25 million subsequent to the 30 June 2012 balance date.

Historically, the shareholding in Strike has predominantly been earned through the sale of various mining assets to Strike. These assets were acquired and funded by Orion to the point of sale to Strike at a cost of approximately $1.25 million. They were subsequently on sold to Strike in tranches for a total consideration of $19 million comprising 11,166,667 Strike shares and 3.5 million unlisted Strike options (with exercise prices of $0.178 and $0.278 per option, which Orion converted into shares in February 2011 at a cost of $0.79 million). Orion has also acquired 2,024,135 additional Strike shares on-market and via the conversion of listed options at $0.20 each.

(b) Alara Resources Limited (ASX Code: AUQ)

Alara Resources Limited ( Alara ) is a minerals exploration and development company with precious and base metals projects in Saudi Arabia, Oman and Chile. Orion Directors, Farooq Khan (also a Queste Director) and William Johnson are both on the Board of Alara as Non-Executive Directors; Alara has announced that Farooq Khan resigned as a Director on 31 August 2012. Orion Director and Company Secretary, Victor Ho (also Company Secretary of Queste), is also Company Secretary of Alara.

Orion holds 6,332,744 shares, being 3% of Alara’s issued ordinary share capital (30 June 2011: 6,332,744 shares and 3%), in Alara.

The value of Orion’s holdings in Alara declined by $0.38 million during the course of the financial year, from $2.31 million (at $0.365 per share as at 30 June 2011) to $1.93 million (at $0.305 per share on 30 June 2012).

The Alara share price has declined to $0.28 as at 30 August 2012, generating an unrealised loss of $0.158 million subsequent to the 30 June 2012 balance date.

Historically, the shareholding in Alara occurred through the sale of Orion’s 25% interest in various uranium 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 by Orion 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. Orion also acquired 3,082,744 additional Alara shares via the Alara IPO, on-market purchases and via an in-specie distribution from Strike.

(c)

Bentley Capital Limited (ASX Code: BEL)

Bentley Capital Limited ( Bentley ) is a listed investment company with a current exposure to Australian equities. Orion Directors, Farooq Khan and William Johnson, are on the board of Bentley as Chairman and Executive Director respectively.

Orion holds 27.97% (20,513,783 shares) of Bentley’s issued ordinary share capital with Queste holding 2.37% (1,740,625 shares) of Bentley’s issued ordinary share capital (30 June 2011: Orion held 20,513,783 shares (28.26%) and Queste held 1,740,625 shares (2.4%)).

Bentley had net assets of $20.07 million as at 30 June 2012 (30 June 2011: $28.81 million) and incurred an after tax net loss of $2.03 million for the financial year (30 June 2011: $0.574 million net profit). Bentley has also returned (via fully franked dividends and capital returns net of the cost of on market share buy-backs) $7.02 million during the financial year (2011: $1.44 million, via fully franked dividends).

Bentley’s asset weighting as at 30 June 2012 was 75.6% Australian equities (30 June 2011: 98.9%) and 4.90% net cash/ other assets (30 June 2011: $1.1%).

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DIRECTORS’ REPORT

Queste and Orion have been in receipt of significant dividend and return of capital payments from Bentley, with distributions received in the past year totalling $1.9 million, as follows:

• (i) Bentley paid a one cent final and a 2.4 cent special (both fully franked) dividend in September 2011, with Orion’s share being $492,331 and Queste’s share being $41,775 (2011: Bentley paid 2 cents of fully franked dividends with Orion’s share being $410,276 and Queste’s share being $34,813); and

• (ii) Bentley returned 5 cents and one cent per share to shareholders in October 2011 and April 2012 respectively (with Orion’s share totalling $1,230,827 and Queste’s share totalling $104,438) under a return of capital approved by Bentley shareholders on 4 October 2011 and 4 April 2012 respectively.

On 31 August 2012, Bentley announced its intention to seek shareholder approval (at the upcoming 2012 AGM) to undertake a one cent per share return of capital. Subject to receipt of Bentley shareholder approval, Orion’s and Queste’s entitlement under the return of capital is expected to be $205,138 and $17,406 respectively.

(d)

Agribusiness Assets

Orion owns the ultra premium “Dandaragan Estate” Extra Virgin Olive Oil business and a 143 hectare commercial olive grove operation located in Gingin, Western Australian (approximately 100 kilometres North of Perth) producing olive oil from approximately 64,500, 13 year old olive tree plantings.

A summary of olive grove operations during the 2012 financial year are as follows:

• (i) The 2012 harvesting season yielded ~170 tonnes of fruit from which ~34,079 litres of oils were extracted (2011: ~1,200 tonnes of fruit and ~200,000 litres of oils);

• (ii) The decrease in tonnes processed reflects the biennial cycle of growth and production from olive trees whereby trees exhibit alternating years of high and low bearing fruit. Furthermore the 2012 harvest was intentionally reduced to save costs. The oils harvested is sufficient for the ultra premium ‘Dandaragan Estate’ Extra Virgin Olive Oil business;

• (iii) Gross revenues were $767,427) (2011: $450,027);

• (iv) Olive grove operation expenses were $1,274,715 (which does not include revaluation and depreciation expenses) (June 2011: $601,024);

• (v) Net revaluation and depreciation expense were $78,361 (2011: $201,041); and

• (vi) Inventory - Bulk Oils of $206,320 reflects the cost of harvesting and processing during the 2012 season incurred up to balance date (June 2011: $890,093).

The carrying values of the olive grove property ($999,901), trees ($65,500) and water licence ($627,750) are based on an independent valuation of the assets undertaken for the 30 June 2012 accounts.

(e) Other Property Assets

This relates to 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 has since renovated and rented out the property.

The carrying value of $1,640,000 is based on an independent valuation of the property undertaken for the 30 June 2012 accounts.

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DIRECTORS’ REPORT

2. Queste’s Other Assets

In addition to the investment in controlled entity, Orion, Queste has:

• (i) a direct share investment in Associate entity, Bentley, being 1,740,625 shares (or 2.37% of Bentley’s issued ordinary share capital) (June 2011: 1,740,625 shares and 2.40%);

• (ii) a cash holding of $1,643,821 (30 June 2011: $1,395,504); and

• (iii) investments in other listed securities of $5,772 (30 June 2011: $5,854).

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

• (i) $17,489 net unrealised losses (30 June 2011: $7,836).

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.

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 notes that it is not directly subject to the Clean Energy Act 2011 (Cth).

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:

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	5,954,944 shares3
shares
Other current	Executive Chairman of:
directorships in listed	(1) Bentley Capital Limited (BEL) (since 2 December 2003)
entities	(2) Orion Equities Limited (OEQ) (since 23 October 2006)
Former directorships	(1) Alara Resources Limited (AUQ) (18 May 2007 to 31 August 2012)
in other listed entities	(2) Yellow Brick Road Holdings Limited (YBR) (27 April 2006 to 18 March 2011)
in past 3 years	(3) Strike Resources Limited (SRK) (3 September 1999 to 3 February 2011)

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) Advanced Share Registry Limited (ASW) (since 22 August 2007)
entities
	Non-Executive Director of:
	(2) Transaction Solutions International Limited (TSN) (since 24 February 2010)
	(3) Greenland Minerals and Energy Ltd (GGG) (since 21 February 2006)
Former directorships	(1) Convergent Minerals Limited (CVG) (25 July 2006 to 19 December 2011))
in other listed entities	(2) Bentley Capital Limited (BEL) (5 February 2004 to 29 April 2010)
in past 3 years

3 Refer also Farooq Khan’s Change of Director’s Interest Notice dated 30 April 2012

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30 JUNE 2012

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

DIRECTORS’ REPORT

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 5,235,230 shares[4] 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

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 (OEQ) (since 5 November 1999). directorships in listed entities Former directorships None in other listed entities in past 3 years

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

4 Refer also Azhar Chaudhri’s Change of Director’s Interest Notice dated 30 April 2012

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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:

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 (OEQ) (Secretary since 2 August 2000 and Director since
	4 July 2003)
	Company Secretary of:
	(2) Bentley Capital Limited (BEL) (since 5 February 2004)
	(3) Alara Resources Limited (AUQ) (since 4 April 2007)
Former positions in other	Strike Resources Limited (SRK) (secretary between 9 March 2000 and 30 April 2010 and
listed entities in past 3	director between 12 October 2000 and 25 September 2009)
years

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	10	10
Simon Cato	13	13
Yaqoob Khan	13	13
Azhar Chaudhri	10	10

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 (audited)

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 (4) 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 during the year 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 Simon Cato (Non-Executive Director) – a base fee of $15,000 per annum plus employer superannuation contributions (currently 9%);

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

• (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 travelling 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

2012				Post	Other
	Performance			Employment	Long-term	Equity
	related	Short-term Benefits		Benefits	Benefits	Based
Key		Cash, salary			Long
Management		and	Non-cash		service	Shares &
Person	%	commissions	benefit	Superannuation	leave	Options	Total
		$	$	$	$	$	$
Executive Director:
Farooq Khan	-	113,942	-	11,250	11,058	-	136,250
Non-Executive Directors:
Yaqoob Khan	-	15,000	-	-	-	-	15,000
Azhar Chaudhri	-	15,000	-	-	-	-	15,000
Simon Cato	-	15,000	-	1,350	-	-	16,350
Company Secretary:
Victor Ho	-	44,900	-	4,041	-	-	48,941

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

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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)

2012				Post	Other
				Employment	Long-term	Equity
		Short-term	Benefits	Benefits	Benefits	Based
Key		Cash, salary			Long
Management	Performance	and	Non-cash		service	Shares &
Personnel	related	commissions	benefit	Superannuation	leave	Options	Total
	%	$	$	$	$	$	$
Executive Directors:
Farooq Khan	-	225,000	-	22,500	25,000	-	272,500
William Johnson	-	45,120	-	4,061	-	-	49,181
Victor Ho	-	75,000	-	6,750	-	-	81,750
Non-Executive Director:
Yaqoob Khan	-	25,000	-	-	-	-	25,000
2011				Post	Other
				Employment	Long-term	Equity
		Short-term Benefits		Benefits	Benefits	Based
Key		Cash, salary			Long
Management	Performance	and	Non-cash		service	Shares &
Personnel	related	commissions	benefit	Superannuation	leave	Options	Total
	%	$	$	$	$	$	$
Executive Directors:
Farooq Khan	-	230,769	-	20,769	-	-	251,538
William Johnson	-	77,885	-	7,010	-	-	84,895
Victor Ho	-	77,885	-	7,010	-	-	84,895
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.

(4) Voting and Comments on the Remuneration Report at the 2011 AGM

At the Company’s most recent (2011) AGM, a resolution to adopt the prior year (2011) Remuneration Report was put to the vote and not passed by a majority of shareholders. This constitutes a “first strike” under the new executive remuneration related provisions of the Corporations Act. The Board has reviewed the Company’s remuneration policy and considered feedback from relevant stakeholders and believes that the Company’s remuneration structure and practices are appropriate as detailed in this Remuneration Report.

This concludes the audited Remuneration Report.

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30 JUNE 2012

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

DIRECTORS’ 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:

• (a) 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

• (b) 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.

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
$ $ $	$ $ $
70,707 5,755 76,462	27,201 3,500 30,701

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 19. This relates to the Audit Report, where the Auditors state that they have issued an independence declaration.

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QUEST E COMMUNICA T IONS LTD A.B.N. 58 0 8 1 688 164

DIRECTORS’ REPORT

EVENTS SUBSEQUENT TO BALANCE DATE

The Dire c tors are not aware of an y matters or c ircumstance s at the date of this Direc t ors’ Report, o ther than those ref e rred to in t h is Directors’ R eport (in pa r ticular, in Re v iew of Oper a tions) or the financial statements or notes th e reto (in particular Subsequent Events Note 26), th a t have signi f icantly affec te d or may significantly affect th e operations, the results o f operations o r the state o f affairs of the Company in subseque n t financial years.

Signed f o r and on beh a lf of the Dire c tors in accor d ance with a r esolution of the Board.

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Farooq Khan Chairman 31 August 2012

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Simon Cato Director

A NNUAL REP O RT | 18

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 2012

The Board of Directors Queste Communications Ltd Level 14, The Forrest Centre 221 St Georges Terrace PERTH WA 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 2012, 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; and

• 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

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 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 30 June 2012

Note 3 3 4 7 Basic and Diluted Loss per Share (cents) TOTAL COMPREHENSIVE LOSS FOR THE YEAR Revaluation of Assets, Net of Tax OTHER COMPREHENSIVE INCOME TOTAL REVENUE Share of Net Profit of Associate Other Revenue Income Tax Expense LOSS BEFORE INCOME TAX Administration Expenses Corporate Expenses Finance Expenses Occupancy Expenses Cost of Goods Sold in relation to Olive Oils Operations Net Loss on Financial Assets at Fair Value through Profit or Loss Share of Net Loss of Associate Other Income LOSS PER SHARE ATTRIBUTABLE TO THE ORDINARY EQUITY HOLDERS OF THE COMPANY: LOSS FOR THE YEAR EXPENSES Personnel Expenses Communication Expenses Gain/(Loss) on Land held for Development or Resale LOSS ATTRIBUTABLE TO: Owners of Queste Communications Ltd Non-Controlling Interest TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO: Owners of Queste Communications Ltd Non-Controlling Interest	2012 2011 $ $ 924,098 544,690 - 181,205 75 10
	924,173 725,905 (2,648,702) (1,496,912) (625,086) - (160,000) 300,000 (1,182,799) (802,065) (904,117) (846,501) (30,983) (37,212) (155,529) (112,624) (4,919) (5,871) (50,224) (133,509) (528,676) (548,658)
	(5,366,862) (2,957,447) (24,864) (82,211)
	(5,391,726) (3,039,658)
	(29,519) (80,242)
	(5,421,245) (3,119,900)
	(2,948,509) (1,653,274) (2,443,217) (1,386,384)
	(5,391,726) (3,039,658)
	(2,978,028) (1,733,516) (2,443,217) (1,386,384)
	(5,421,245) (3,119,900)
	(9.85) (5.52)

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 2012

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2012

Note 8 9 10 11 12 10 11 13 14 15 16 19 17 18 18 19 20 21 Issued Capital Cash and Cash Equivalents CURRENT ASSETS Investment in Associate Entity Land held for Development or Resale Provisions Trade and Other Payables CURRENT LIABILITIES TOTAL ASSETS Intangible Assets Other Current Assets Trade and Other Receivables Financial Assets at Fair Value through Profit or Loss NON CURRENT ASSETS TOTAL CURRENT LIABILITIES Reserves TOTAL EQUITY Retained Earnings/(Accumulated Losses) NET ASSETS TOTAL LIABILITIES TOTAL NON CURRENT LIABILITIES EQUITY Parent Interest Deferred Tax Liability Non-Controlling Interest TOTAL CURRENT ASSETS Olive Trees Inventories Provisions NON CURRENT LIABILITIES TOTAL NON CURRENT ASSETS Deferred Tax Asset Property, Plant and Equipment Trade and Other Receivables	2012 2011 $ $ 2,008,853 1,684,644 3,827,155 6,475,856 330,843 61,202 277,595 999,430 5,895 5,057
	6,450,341 9,226,189
	32,823 32,823 1,640,000 1,800,000 4,854,638 7,571,638 1,637,683 1,740,609 65,500 65,500 727,746 782,058 358,251 1,165,888
	9,316,641 13,158,516
	15,766,982 22,384,705
	256,642 622,237 202,730 -
	459,372 622,237
	- 197,479 358,251 1,165,888
	358,251 1,363,367
	817,623 1,985,604
	14,949,359 20,399,101
	6,192,427 6,192,427 2,321,946 2,351,465 (6,762) 2,941,747
	8,507,611 11,485,639 6,441,748 8,913,462
	14,949,359 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 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2012

Total Comprehensive Loss for the Year Other Comprehensive Income Loss for the Year BALANCE AT 1 JULY 2010 BALANCE AT 30 JUNE 2011 Transactions with Non- Controlling Interest Total Comprehensive Loss for the Year Other Comprehensive Income Loss for the Year BALANCE AT 1 JULY 2011 BALANCE AT 30 JUNE 2012 Transactions with Owners in their capacity as Transactions with Owners in their capacity as Transactions with Non- Controlling Interest	$ $ $ $ $ 6,192,427 2,431,707 4,264,583 10,961,550 23,850,267 - - (1,653,274) (1,386,384) (3,039,658) - (80,242) - - (80,242) Reserves Retained Earnings/ (Accumulated Losses) Non- Controlling Interest Total Issued Capital
	- (80,242) (1,653,274) (1,386,384) (3,119,900) - - 330,438 (661,704) (331,266)
	6,192,427 2,351,465 2,941,747 8,913,462 20,399,101
	6,192,427 2,351,465 2,941,747 8,913,462 20,399,101 - - (2,948,509) (2,443,217) (5,391,726) - (29,519) - - (29,519)
	- (29,519) (2,948,509) (2,443,217) (5,421,245) - - - (28,497) (28,497)
	6,192,427 2,321,946 (6,762) 6,441,748 14,949,359

The accompanying notes form part of these consolidated financial statements

ANNUAL REPORT | 22

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

30 JUNE 2012

CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 30 June 2012

Note 8 14 13 8 Cash and Cash Equivalents at Beginning of Financial Year NET INCREASE/(DECREASE) IN CASH HELD Sale/Redemption of Financial Assets at Fair Value through Profit or Loss Purchase of Financial Assets at Fair Value through Profit or Loss NET CASH PROVIDED BY INVESTING ACTIVITIES Proceeds from Sale of Investment Securities Purchase of Plant and Equipment CASH FLOWS FROM INVESTING ACTIVITIES Interest Received Dividends Received Purchase of Investment Securities Return of Capital Received NET CASH USED IN OPERATING ACTIVITIES Interest Paid Payments to Suppliers and Employees CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR Receipts from Customers CASH FLOWS FROM OPERATING ACTIVITIES	2012 2011 $ $ 570,944 450,037 756,871 460,421 83,365 117,664 (2,409,511) (2,348,434) (868) (424) - 1,321,780 - (957,857)
	(999,199) (956,813)
	(11,857) (17,987) 1,335,265 - - 293,150 - (219,687)
	1,323,408 55,476
	324,209 (901,337) 1,684,644 2,585,981
	2,008,853 1,684,644

The accompanying notes form part of these consolidated financial statements

ANNUAL REPORT | 23

30 JUNE 2012

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

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.

acquisition movements in reserves is recognised in other comprehensive income. The cumulative post-acquisition 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

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 2012 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.

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.

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 exdividend entitlement date.

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-

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

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses (if applicable).

date. Consideration is given to expect future wage and salary levels, experience of employee departures and periods of service.

1.9. Cash and Cash Equivalents

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

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.

Available for sale financial assets- Available for sale financial assets, comprising principally marketable equity securities, are nonderivatives 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 non-derivative 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”.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

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:

Class of Fixed Asset	Depreciation	Depreciation Method
	Rate
Plant and Equipment	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 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 cashgenerating 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.

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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

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

1.25. Comparative Figures

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.

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.

1.24. 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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

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.

	Title	and
	Affected
AASB reference	Standard(s):		Nature of Change	Application date:
AASB 9 (issued	Financial		Amends the requirements for classification and measurement of	Periods beginning on
December 2009 and	Instruments		financial assets. The available-for-sale and held-to-maturity	or after 1 January
amended December			categories of financial assets in AASB 139 have been eliminated.	2015
2010)			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.
AASB 10 (issued	Consolidated		Introduces a single ‘control model’ for all entities, including	Annual reporting
August 2011)	Financial		special purpose entities (SPEs), whereby all of the following	periods commencing
	Statements		conditions must be present:	on or after 1 January
			� Power over investee (whether or not power used in	2013
			practice);
			� Exposure, or rights, to variable returns from investee; and
			� Ability to use power over investee to affect the Entity’s
			returns from investee.
			Introduces the concept of ‘defacto’ control for entities with less
			than 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.
AASB 12 (issued	Disclosure of		Combines existing disclosures from AASB 127 Consolidated and	Annual reporting
August 2011)	Interests in Other		Separate Financial Statements, AASB 128 Investments in	periods commencing
	Entities		Associates and AASB 131 Interests in Joint Ventures. Introduces	on or after 1 January
			new disclosure requirements for interests in associates and joint	2013
			arrangements, as well as new requirements for unconsolidated
			structured entities.
AASB 13 (issued	Fair Value		AASB 13 establishes a single framework for measuring fair value	Annual reporting
September 2011)	Measurement		of financial and non-financial items recognised at fair value in	periods commencing
			the statement of financial position or disclosed in the notes in	on or after 1 January
			the financial statements.	2013
			Additional disclosures required for items measured at fair value
			in the statement of financial position, as well as items merely
			disclosed at fair value in the notes to the financial statements.
			Extensive additional disclosure requirements for items measured
			at fair value that are ‘level 3’ valuations in the fair value
			hierarchy that are not financial instruments.

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

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

	Title	and
	Affected
AASB reference	Standard(s):		Nature of Change	Application date:
AASB 119 (reissued	Employee		Employee benefits expected to be settled (as opposed to due to	Annual periods
September 2011)	Benefits		settled under current standard) wholly within 12 months after	commencing on or
			the end of the reporting period are short-term benefits, and	after 1 January 2013
			therefore not discounted when calculating leave liabilities.
			Annual leave not expected to be used wholly within 12 months
			of end of reporting period will in future be discounted when
			calculating leave liability.
AASB 2010-8	Amendments to		For investment property measured using the fair value model,	Periods commencing
(issued December	Australian		deferred tax assets and liabilities will be calculated on the basis	on or after 1 January
2010)	Accounting		of a rebuttable presumption that the carrying amount of the	2012
	Standards –		investment property will be recovered through sale.
	Deferred Tax:
	Recovery of
	Underlying Assets
	(AASB 112)
AASB 2011-4	Amendments to		Amendments to remove individual key management personnel	Annual periods
(issued July 2011)	Australian		(KMP) disclosure requirements from AASB 124 to eliminate	commencing on or
	Accounting		duplicated information required under the Corporation Act 2001.	after 1 July 2013
	Standards to
	Remove
	Individual Key
	Management
	Personnel
	Disclosure
	Requirements
AASB 2011-9	Amendments to		Amendments to align the presentation of items of other	Annual periods
(issued September	Australian		comprehensive income (OCI) with US GAAP.	commencing on or
2011)	Accounting			after 1 July 2012
	Standards -		Various name changes of statements in AASB 101 as follows:
	Presentation of Items of Other Comprehensive Income		� 1 statement of comprehensive income - to be referred to as ‘statement of profit or loss and other comprehensive income’;
			� 2 statements - to be referred to as ‘statement of profit or
			loss’ and ‘statement of comprehensive income’; and
			� OCI items must be grouped together into two sections:
			those that could subsequently be reclassified into profit or
			loss and those that cannot.
AASB 2012-5	Annual		Non-urgent but necessary changes to IFRSs (IAS1, IAS 16 & IAS	Periods commencing
(issued June 2012)	Improvements to		32).	on or after 1 January
	Australian			2013
	Accounting
	Standards 2009-
	2011 Cycle
IFRS (issued	Mandatory		Entities are no longer required to restate comparatives on first	Annual reporting
December 2011)	Effective Date of		time adoption. Instead, additional disclosures on the effects of	periods commencing
	IFRS 9 and		transition are required.	on or after 1 January
	Transition			2015
	Disclosures

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

2. PARENT ENTITY INFORMATION

The following information provided relates to the Company, Queste Communications Ltd, as at 30 June 2012. The information presented below has been prepared using accounting policies outlined in Note 1.

(a) (b) (i) Incorporated Australia Non Current Assets Reserves Term Deposit Net Change in Fair Value Loss for the Year EQUITY Accumulated Losses Issued Capital NET ASSETS TOTAL COMPREHENSIVE LOSS FOR THE YEAR Other Comprehensive Income TOTAL LIABILITIES Current Liabilities TOTAL ASSETS Non Current Assets Current Assets Cash at Bank Cash and Cash Equivalents Current Assets Shares in Controlled Entity - at cost Investments in Controlled Entity Orion Equities Limited Investment in Controlled Entity Details of percentage of Ordinary Shares held in Controlled Entity:	2012 2011 $ $ 1,678,568 1,905,541 2,534,794 3,343,942
	4,213,362 5,249,483
	130,424 151,841
	130,424 151,841
	4,082,938 5,097,642
	6,192,427 6,192,427 1,321,679 1,892,657 (3,431,168) (2,987,442)
	4,082,938 5,097,642
	(443,726) (269,500) - -
	(443,726) (269,500)
	523,821 1,363,415 1,120,000 32,089
	523,821 1,363,415
	3,069,452 3,069,452 (1,166,190) (350,506)
	1,903,262 2,718,946
	2012 2011 % % 50.88 50.88 Ownership Interest

(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 Bentley Capital Limited (BEL), pursuant to shared office and administration expense arrangements. Interest is not charged on such outstanding amounts and all amounts were fully recovered/repaid by balance date. The following transactions also occurred with related parties:

occurred with related parties:
	2012	2011
Bentley Capital Limited	$	$
Dividends Received	59,181	34,813
Return of Capital Received	1,335,265	-

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30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

2. PARENT ENTITY INFORMATION (continued)

(c) Transactions with Related Parties (continued) The Company has provided a $650,000 unsecured interest bearing (at 10% per annum) loan facility to Orion, with a term currently expiring on 31 December 2013.

(c) The Company has provided a $650,000 unsecured interest bearing (at Orion, with a term currently expiring on 31 December 2013. Transactions with Related Parties (continued)	10% per annum) loan facility to
Note (d) 24 24 Orion Equities Limited Interest Received on Loan Facility Later than one year but not later than five years Not longer than one year Lease Commitments	2012 2011 $ $ 20,060 17,945 78,630 82,633 - 170,384
	78,630 253,017

3. (a) (b) Depreciation Finance Expenses Write-Off of Fixed Assets Realisation Cost of Investment Portfolio Written Back Brokerage Fees Dividend Income Land Operations Other Expenses (Gain)/Loss on Revaluation of Land held for Development or Resale Impairment and Depreciation of Olive Oil Assets Salaries, Fees and Employee Benefits Share of Net Loss of Associate Net Loss on Financial Assets at Fair Value through Profit or Loss Expenses Other Other Expenses Cost of Goods Sold Olive Oil Operations Communications Other Administration Expenses Professional Fees Occupancy Expenses Other Income Share of Net Profit of Associate Rental Income Income from Sale of Olive Oils The Consolidated Entity's Operating Loss before Income Tax includes the following items of expense: LOSS FOR THE YEAR Administration Expenses Other Corporate Expenses Share Registry ASX Fees Corporate Expenses Revenue Interest Income	767,427 450,027 52,531 - 223 15,332 103,917 79,331
	924,098 544,690 - 181,205 75 10
	924,173 725,905
	2,648,702 1,496,912 625,086 - 1,182,799 582,608 78,359 201,041 91,916 18,416 160,000 (300,000) 154,608 367,300 610,270 846,501 94,636 112,624 21,441 5,871 32,780 35,664 11,054 7,475 4,569 90,370 9,448 37,212 6,559 78,002 - 8,735 (14,974) (12,043) - 2,202 7,855 6,403 565,927 98,059
	6,291,035 3,683,352

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30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

4. INCOME TAX EXPENSE

INC	OME TAX EXPENSE		2012	2011
			$	$
(a)	The components of Tax Expense comprise:
	Current Tax		-	-
	Deferred Tax	19	24,864	82,211
			24,864	82,211
(b)	The prima facie tax on Operating Profit before Income Tax is
	reconciled to the income tax as follows:
	Prima facie tax payable on Operating Profit before Income Tax at 30%		(1,610,059)	(887,233)
	(2011: 30%)
	Adjust tax effect of:
	Other Assessable Income		319,664	192,046
	Non-Deductible Expenses		857,260	1,793
	Current Year Tax Losses not brought to account		270,473	195,555
	Share of Net (Profit)/Loss of Associate		187,526	(54,362)
	Derecognition of Prior Year Revenue Losses		-	680,789
	Derecognition of Prior Year Capital Losses		-	264,268
	Utilisation of Prior Year Capital Losses		-	(316,500)
	Movement in Deferred Taxes		-	5,855
	Income tax attributable to entity		24,864	82,211
(c)	Deferred Tax recognised directly in Other
	Comprehensive Income
	Revaluations of Land & Intangible Assets		24,864	82,211
(d)	Unrecognised Deferred Tax balances
	Unrecognised Deferred Tax Asset - Revenue Losses		2,487,319	1,589,972
	Unrecognised Deferred Tax Asset - Capital Losses		246,719	246,719
	Unrecognised Deferred Tax Asset - Temporary Differences		-	48,155
			2,734,038	1,884,846

The above deferred tax assets have not been recognised in respect of the above items because it is not probable that future taxable profit will be available against which the Consolidated Entity can utilise the benefits. Revenue and capital tax losses are subject to relevant statutory tests

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30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

5. INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP)

Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration paid or payable to each member of the Consolidated Entity's KMP for the year ended 30 June 2012.

The total remuneration paid to KMP of the Consolidated Entity during the year is as follows:

Other KMP Short-Term Employment Benefits Directors Other Long-Term Employment Benefits Short-Term Employment Benefits	2012 2011 $ $ 171,542 628,247 11,058 -
	182,600 628,247
	48,950 50,937
	48,950 50,937
	231,550 679,184

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

		Balance at
KMP Shareholdings	Balance at	Appointment		Balance at
Fully Paid Ordinary Shares	Start of Year	/Cessation	Net Change	End of Year
30 June 2012
Directors
Farooq Khan	6,398,044		(175,000)	6,223,044
Simon Cato	193,000		-	193,000
Azhar Chaudhri	5,551,230		(316,000)	5,235,230
Yaqoob Khan	68,345		-	68,345
Other KMP
Victor Ho	17,500		-	17,500
30 June 2011
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 KMP
Victor Ho	17,500		-	17,500

ANNUAL REPORT | 33

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

5. INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP) (continued)

		Balance at
KMP Shareholdings	Balance at	Appointment		Balance at
Partly Paid Ordinary Shares	Start of Year	/Cessation	Net Change	End of Year
30 June 2012
Directors
Farooq Khan	-		-	-
Simon Cato	-		-	-
Azhar Chaudhri	20,000,000		-	20,000,000
Yaqoob Khan	-		-	-
Other KMP
Victor Ho	-		-	-
30 June 2011
Directors
Farooq Khan	-		-	-
Simon Cato	-		-	-
Azhar Chaudhri	20,000,000		-	20,000,000
Yaqoob Khan	-		-	-
Other KMP
Victor Ho	-		-	-

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).

Other KMP Transactions

Director, Simon Cato, is a director of ASX listed Advanced Share Registry Limited (ASW), which provides share registry services to the Consolidated Entity.

Amounts recognised as expense Share Registry Fees	2012 2011 $ $ 11,054 7,475

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

6. AUDITORS' REMUNERATION

During the year the following fees were paid for services provided by the auditor of the parent entity, its related practices and other non-related audit firms:

Audit and Review of Financial Statements BDO Audit (WA) Pty Ltd Taxation Services	2012 2011 $ $ 70,707 64,042 5,755 6,850
	76,462 70,892

The Consolidated Entity may engage BDO on assignments additional to their statutory audit duties where their expertise and experience with the Consolidated Entity are important. These assignments principally relate to taxation advice in relation to the tax notes to the financial statements.

ANNUAL REPORT | 34

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

7. LOSS PER SHARE

LOSS PER SHARE	2012	2011
	cents	cents
Basic and Diluted Loss per Share	(9.85)	(5.50)

The following represents the loss and weighted average number of shares used in the loss per share calculations:

calculations:
	2012	2011
	$	$
Net Loss after Income Tax	(2,948,509)	(1,653,274)
	Number of	Number of
Weighted Average Number of Ordinary Shares	29,927,379	29,927,379

Under AASB 133 Earnings per Share, potential ordinary shares such as partly paid shares will only be treated as dilutive when their conversion to ordinary shares would increase the loss per share. Diluted Loss per Share is not calculated as it does not increase the loss per share.

8. CASH AND CASH EQUIVALENTS

(a) Reconciliation of Cash

Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:

	related items in the Statement of Financial Position as follows:
		2012	2011
		$	$
	Cash at Bank and in hand	888,853	1,652,555
	Short-Term Deposits	1,120,000	32,089
		2,008,853	1,684,644
(b)	Reconciliation of Operating Profit after Income Tax to Net
	Cash used in Operating Activities
	Loss after Income Tax	(5,391,726)	(3,039,658)
	Add Non-Cash Items:
	Depreciation	86,214	207,444
	Net Loss on Financial Assets at Fair Value through Profit or Loss	2,648,701	1,496,912
	(Gain)/Loss on Land held for Development or Resale	160,000	(300,000)
	Share of Net (Profit)/Loss of Associate	625,086	(181,205)
	Write-Off of Fixed Assets	-	2,202
	Changes in Assets and Liabilities
	Financial Assets at Fair Value through Profit or Loss	-	363,923
	Trade and Other Receivables	(269,641)	117,552
	Inventories	721,835	(380,030)
	Other Current Assets	(838)	(5,057)
	Investments accounted for using the Equity Method	756,649	445,089
	Trade and Other Payables	(365,594)	189,827
	Provisions	5,251	43,977
	Deferred Tax	24,864	82,211
		(999,199)	(956,813)

(c) 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.

ANNUAL REPORT | 35

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

9. (a) 10. Current GST Receivable Non Current The Consolidated Entity’s exposure to price risk is discussed in Note 23. Risk Exposure TRADE AND OTHER RECEIVABLES Current Trade Receivables FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Unlisted Investments at Fair Value Listed Investments at Fair Value Bonds and Guarantees Interest Receivable Receivable from Related Parties Other Receivables	2012 2011 $ $ 3,781,585 6,475,856 45,570 -
	3,827,155 6,475,856
	2012 2011 $ $ 243,656 34,787 20,552 - 15,529 19,515 995 1,199 50,111 5,701
	330,843 61,202
	32,823 32,823

(a) Risk Exposure

The Consolidated Entity’s exposure to credit and interest rate risks is discussed in Note 23.

(b) Impaired Trade Receivables

None of the Consolidated Entity's receivables are impaired or past due.

11. INVENTORIES

Packaged Oils - at cost Non Current Current Land held for Development or Resale Revaluation of Land Bulk Oils - at cost INVENTORIES	2012 2011 $ $ 206,320 890,093 71,275 109,337
	277,595 999,430
	3,797,339 3,797,339 (2,157,339) (1,997,339)
	1,640,000 1,800,000

Land held for development or resale was valued by an independent qualified valuer (an Associate Member of the Australian Property Institute) on 30 June 2012. The movement in the land value has been recognised in the Statement of Comprehensive Income.

12. OTHER CURRENT ASSETS

OTHER CURRENT ASSETS Prepayments	2012 2011 $ $ 5,895 5,057

ANNUAL REPORT | 36

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

13. INVESTMENT IN ASSOCIATE ENTITY

		Ownership	Interest	Carrying	Amount
		2012	2011	2012	2011
		%	%	$	$
	Bentley Capital Limited	30.34	30.65	4,854,638	7,571,638
	Movement in Investment
	Opening Balance			7,571,638	7,835,522
	Share of Net Profit/(Loss) after tax			(625,086)	181,205
	Dividend Received			(756,649)	(445,089)
	Returns of Capital Received			(1,335,265)	-
	Closing Balance			4,854,638	7,571,638
	Fair Value of Listed Investment in Associate			3,077,067	4,895,970
	Net Asset Value of Investment			6,089,773	8,830,325
		Assets	Liabilities	Revenues	Net
	Summarised Position of Associate	$	$	$	$
	2012
	Bentley Capital Limited	6,197,893	108,120	173,959	(625,086)
	2011
	Bentley Capital Limited	8,853,507	23,182	573,751	181,205
14.	PROPERTY, PLANT AND EQUIPMENT			2012	2011
				$	$
	Land
	At Cost			861,214	861,214
	Revaluation			138,687	167,256
				999,901	1,028,470
	Buildings
	At Cost			117,876	117,876
	Accumulated Depreciation			(38,792)	(32,380)
				79,084	85,496
	Plant & Equipment
	At Cost			1,452,478	1,379,187
	Accumulated Depreciation			(900,139)	(759,982)
				552,339	619,205
	Leasehold Improvements
	At Cost			44,264	44,264
	Accumulated Depreciation			(37,905)	(36,826)
				6,359	7,438
				1,637,683	1,740,609

ANNUAL REPORT | 37

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

14. PROPERTY, PLANT AND EQUIPMENT (continued)

Movements in Carrying Amounts

Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.

AT 30 JUNE 2012 Depreciation expense Additions AT 1 JULY 2011 Disposals AT 30 JUNE 2011 Depreciation expense Disposals Additions AT 1 JULY 2010 Revaluation Revaluation	Buildings Plant & Equipment Leasehold Improve- ments Total $ $ $ $ 86,840 808,257 8,702 2,103,680 - - - (171,411) 5,444 12,543 - 17,987 - (2,202) - (2,202) (6,788) (199,393) (1,264) (207,445) (171,411) - - - 1,199,881 Freehold Land $
	85,496 619,205 7,438 1,740,609 1,028,470
	85,496 619,205 7,438 1,740,609 - - - (28,569) - 11,857 - 11,857 - - - - (6,412) (78,723) (1,079) (86,214) - 1,028,470 (28,569) - -
	79,084 552,339 6,359 1,637,683 999,901

Land was valued by an independent qualified valuer (an Associate Member of the Australian Property Institute) on 30 June 2012. The movement in the land value has been recognised in the Asset Revaluation Reserve (Note 21).

15. OLIVE TREES

Olive Trees - at cost Revaluation OLIVE TREES	2012 2011 $ $ 300,000 300,000 (234,500) (234,500)
	65,500 65,500

Approximately 64,500 13 year old olive trees have been planted over Orion's 143 hectare Olive Grove located in Gingin, Western Australia. The fair value of the trees is at the Directors' Valuation having regard to, amongst other matters, replacement cost and value of commercial production of the trees.

16. INTANGIBLE ASSETS

Brand Name At Cost At Cost Water Licence Revaluation INTANGIBLE ASSETS	2012 2011 $ $ 250,000 250,000 377,750 432,062
	627,750 682,062
	99,996 99,996
	727,746 782,058

ANNUAL REPORT | 38

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

Revaluation INTANGIBLE ASSETS (continued) Revaluation AT 1 JULY 2010 AT 30 JUNE 2012 AT 1 JULY 2011 AT 30 JUNE 2011	Water Licence Brand Name Total $ $ $ 784,687 99,996 884,683 (102,625) - (102,625)
	682,062 99,996 782,058
	682,062 99,996 782,058 (54,312) - (54,312)
	627,750 99,996 727,746

16. INTANGIBLE ASSETS (continued)

The Water Licence pertains to Orion's Olive Grove property in Gingin, Western Australia. As at 30 June 2012, an independent qualified valuer (a Certified Practising Valuer and Associate Member of the Australian Property Institute) revalued the water licence downwards by $54,312 from the previous reporting date. The Brand Name pertains to the ultra premium Dandaragan Estate Olive Oil brand

17. TRADE AND OTHER PAYABLES

Other Payables and Accrued Expenses Trade Payables Current TRADE AND OTHER PAYABLES GST Payable Prepaid Rental Income Dividend Payable	2012 2011 $ $ 19,975 260,095 28,302 28,302 44,236 - 26,951 - 137,178 333,840
	256,642 622,237

(a) Risk Exposure

The Consolidated Entity’s exposure to risks arising from current payables is set out in Note 23.

18. PROVISIONS

Non Current Employee Benefits - Long Service Leave PROVISIONS Current Employee Benefits - Annual Leave Employee Benefits - Long Service Leave	2012 2011 $ $ 33,624 - 169,106 -
	202,730 -
	- 197,479

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

The provision for annual leave and long service leave is presented as current since the Consolidated Entity does not have an unconditional right to defer settlement for any of these employee benefits. Long service leave covers all unconditional entitlements where employees have completed the required period of service and also where employees are entitled to pro-rata payments in certain circumstances

Based on past experience, the employees have never taken the full amount of long service leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next 12 months:

Leave obligations expected to be settled after 12 months	2012 2011 $ $ 169,106 -

ANNUAL REPORT | 39

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

19. 2012 2011 $ $ 86,911 99,568 - 321,292 271,340 745,028 358,251 1,165,888 267,504 1,057,472 90,747 108,416 358,251 1,165,888 (a) Employee Benefits Tax Losses Other Total $ $ $ $ 108,577 1,008,506 985,108 2,102,191 (9,009) (687,214) (240,080) (936,303) 99,568 321,292 745,028 1,165,888 99,568 321,292 745,028 1,165,888 (12,657) (321,292) (473,688) (807,637) 86,911 - 271,340 358,251 (b) Fair Value Gains Other Total $ $ $ 1,899,035 203,156 2,102,191 (841,563) (12,529) (854,092) - (82,211) (82,211) 1,057,472 108,416 1,165,888 1,057,472 108,416 1,165,888 (789,968) 7,195 (782,773) - (24,864) (24,864) 267,504 90,747 358,251 Other Tax Losses Employee Benefits & Accruals Deferred Tax Assets - Non Current Charged/(Credited) to the profit and loss AT 1 JULY 2011 Fair Value Gains Movements - Deferred Tax Assets Movements - Deferred Tax Liabilities AT 30 JUNE 2012 Deferred Tax Liabilities - Non Current AT 30 JUNE 2012 Credited/(charged) to the profit and loss AT 1 JULY 2011 AT 30 JUNE 2011 Credited/(charged) to the profit and loss AT 1 JULY 2010 Charged/(Credited) to the profit and loss Charged to Equity Charged to Equity AT 30 JUNE 2011 AT 1 JULY 2010 DEFERRED TAX Other	2012 2011 $ $ 86,911 99,568 - 321,292 271,340 745,028 358,251 1,165,888 267,504 1,057,472 90,747 108,416 358,251 1,165,888 Employee Benefits Tax Losses Other Total $ $ $ $ 108,577 1,008,506 985,108 2,102,191 (9,009) (687,214) (240,080) (936,303)	2012 2011 $ $ 86,911 99,568 - 321,292 271,340 745,028 358,251 1,165,888 267,504 1,057,472 90,747 108,416 358,251 1,165,888 Employee Benefits Tax Losses Other Total $ $ $ $ 108,577 1,008,506 985,108 2,102,191 (9,009) (687,214) (240,080) (936,303)	2012 2011 $ $ 86,911 99,568 - 321,292 271,340 745,028
			358,251 1,165,888
			267,504 1,057,472 90,747 108,416
			358,251 1,165,888
	99,568 321,292 745,028 1,165,888
	99,568 321,292 745,028 1,165,888 (12,657) (321,292) (473,688) (807,637)
	86,911	- 271,340 358,251
		Fair Value Gains Other Total $ $ $ 1,899,035 203,156 2,102,191 (841,563) (12,529) (854,092) - (82,211) (82,211)
		1,057,472 108,416 1,165,888
		1,057,472 108,416 1,165,888 (789,968) 7,195 (782,773) - (24,864) (24,864)
		267,504 90,747 358,251

ANNUAL REPORT | 40

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

20.	ISSUED CAPITAL	2012	2011	2012	2011
		Number	Number	$	$
	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

(a) Ordinary Shares

At any meeting, each shareholder present in person or by proxy, attorney, or representative has one vote for each fully paid ordinary share held either upon a show of hands or by a poll. Holders of partly paid ordinary 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 of the total amount paid and payable (excluding amounts credited) that has actually been paid (not credited) for each share. Amounts paid in advance of a call are ignored when calculating proportions. The holder of a partly paid ordinary share is not entitled to vote at a meeting in respect of those shares on which calls are outstanding.

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. 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 an entitlement to dividends.

There were no movements in fully paid and partly paid ordinary shares during the year.

(c) Share Buy-Back

On 17 April 2012, the Company announced its intention to conduct an on-market share buy-back of up to 2,700,000 shares (Buy-Back). This represents ~9.1% of the pre Buy-Back and 10% of the post BuyBack total voting shares of the Company (having regard to the amount paid up on the partly paid shares). In accordance with ASX Listing Rule 7.33, the Company will not pay any more than 5% above the average of the market price for the Company's shares over the last 5 days on which sales in the shares were recorded prior to the Buy-Back occurring. The Buy-Back will continue until the earlier of the acquisition of the 2.7 million Buy-Back shares and 30 April 2013, subject to the Company exercising its right to suspend or terminate the Buy-Back, or amend its terms, at any time.

No shares have been bought-back by the Company under the Buy-Back during the financial year.

(d) Capital Risk Management

The Company'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 Company and shareholders from time to time, including undertaking capital raisings, share Buy-backs, capital reductions and the payment of dividends.

ANNUAL REPORT | 41

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

21. RESERVES Asset Revaluation Reserve Revaluations of Freehold Land Revaluations of Intangible Assets Less: Deferred Tax on Revaluations Option Premium Reserve	2012 2011 $ $ 2,138,012 2,138,012
	70,564 85,100 192,199 219,833 (78,829) (91,480)
	183,934 213,453
	2,321,946 2,351,465

The movement in the Asset Revaluation Reserve relates to the revaluation of Orion's Olive Grove land from $1,028,470 to $999,901 and Orion's Water Licence from $682,062 to $627,750, as assessed by an independent qualified valuer (a Certified Practising Valuer and Associate Member of the Australian Property Institute).

22. SEGMENT INFORMATION

The operating segments are reported in a manner consistent with the internal reporting provided to the "Chief Operating Decision Maker". The "Chief Operating Decision Maker", who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors.

The Board has considered the business and geographical perspectives of the operating results and determined that the Consolidated Entity operates only within Australia, with the main segments being Investments and Olive Oil Production. Unallocated items are mainly comprised of corporate assets, office expenses and income tax assets and liabilities.

	Olive Oil	Investments	Unallocated	Total
	$	$	$	$
2012
Segment Revenues	767,427	52,531	104,214	924,172
Segment Loss before tax	(585,648)	(3,525,108)	(1,256,106)	(5,366,862)
Segment Assets	2,934,315	10,650,611	2,182,056	15,766,982
Segment Liabilities	185,698	86,366	545,559	817,623
2011
Segment Revenues	450,027	696,723	79,341	1,226,091
Segment Loss before tax	(400,646)	(1,666,151)	(890,650)	(2,957,447)
Segment Assets	3,580,510	15,847,492	2,956,703	22,384,705
Segment Liabilities	(398,116)	-	(1,587,488)	(1,985,604)

23. FINANCIAL RISK MANAGEMENT

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

ANNUAL REPORT | 42

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

23. FINANCIAL RISK MANAGEMENT (continued)

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 holds the following financial instruments:

Note 8 9 10 17 Trade and Other Receivables Trade and Other Payables Financial Liabilities Cash and Cash Equivalents Financial Assets Financial Assets at Fair Value through Profit or Loss NET FINANCIAL ASSETS	2012 2011 $ $ 2,008,853 1,684,644 3,827,155 6,475,856 330,843 61,202
	6,166,851 8,221,702
	(256,642) (622,237)
	(256,642) (622,237)
	5,910,209 7,599,465

(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 is 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. By its nature as an investment company, the Consolidated Entity will always 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 Accumulation Index was utilised as the benchmark for the unlisted and listed share investments which are financial assets availablefor-sale or at fair value through profit or loss.

	Impact on Post-Tax Profit	Impact on Post-Tax Profit	Impact on	Other
	2012	2011	2012	2011
	$	$	$	$
ASX All Ordinaries	Accumulation Index
Increase 15%	2,201,273	445,767	2,201,273	445,767
Decrease 15%	(2,201,273)	(445,767)	(2,201,273)	(445,767)

ANNUAL REPORT | 43

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2012

23. FINANCIAL RISK MANAGEMENT (continued)

(a) Market Risk (continued)

(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 for the year for the table below is 4.79% (2011: 4.64%). The revenue exposure is immaterial in terms of the possible impact on profit or loss or total equity.

Cash at Bank and in hand Short-Term Deposits	2012 2011 $ $ 888,853 1,652,555 1,120,000 32,089
	2,008,853 1,684,644

(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:

AA- AA No external credit rating available BBB+ A- Trade Receivables (due within 30 days) Cash and Cash Equivalents	2012 2011 $ $ - 1,683,781 2,007,643 - 1,728 - - 863
	2,009,371 1,684,644
	330,843 61,202

The Consolidated Entity measures credit risk on a fair value basis. The carrying amount of financial assets recorded in the financial statements, net 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.

ANNUAL REPORT | 44

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 30 June 2012

23. FINANCIAL RISK MANAGEMENT (continued)

(d) Fair Value Measurements

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

As at 1 July 2009, the Consolidated Entity has adopted the amendment to AASB 7 Financial Instruments: 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 tables present the Consolidated Entity’s financial assets and liabilities measured and recognised at fair value at 30 June 2012.

	Level	1	Level	2	Level	3	Total
2012		$		$		$	$
Financial Assets at Fair Value through
Profit or Loss:
Listed Investments at Fair Value	3,781,585		-		-		3,781,585
Unlisted Investments at Fair Value	-		-		45,570		45,570
2011
Financial Assets at Fair Value through
Profit or Loss:
Listed Investments at Fair Value	6,475,856		-		-		6,475,856
Unlisted Investments at Fair Value	-		-		-		-

The fair value of investments in unlisted shares are considered a level 3 investment as their fair value is unable to be derived from market data.

24. Not longer than one year COMMITMENTS Later than one year but not later than five years	2012 2011 $ $ 78,630 104,929 - 110,176
	78,630 215,105

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%.

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

30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 30 June 2012

25. CONTINGENCIES

(a) Directors' Deeds

• The Company has entered into Deeds of Indemnity with each of its Directors indemnifying them against liability incurred in discharging their duties as Directors/Officers of the Consolidated Entity. At the end of the financial 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) Tenement Royalties

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 - EL47/1328 and PL47/1170 (the Paulsens East Project tenements currently held by Strike Resources Limited (Strike)), EL 24879, 24928 and 24929 and ELA 24927 )the Bigryli South Project tenements in the Northern Territory, current held by Alara Resources Limited (Alara)) and a right to earn and acquire an 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 OCCURRING AFTER THE REPORTING PERIOD

• (a) On 31 August 2012, Bentley Capital Limited, announced its intention to seek shareholder approval to undertake a one 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 one cent per share to shareholders – this equates to an aggregate reduction of share capital by approximately $0.733 million based upon the company’s 73,350,541 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 Bentley shareholder approval which will be sought at the upcoming 2012 annual general meeting in November 2012. If Bentley shareholders approve this Return of Capital, the Company's entitlement under the Return of Capital is expected to be $17,406 and Orion's entitlement under the same is expected to be $205,138.

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

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30 JUNE 2012

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 20 to 46 are in accordance with the Corporations Act 2001 and:

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

• (b) give a true and fair view of the Company’s and Consolidated Entity’s financial position as at 30 June 2012 and of its performance for the year ended on that date;

• (2) 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;

• (3) The Remuneration Report disclosures set out (within the Directors’ Report) on pages 14 to 16 (as the audited Remuneration Report) comply with section 300A of the Corporate Act 2001;

• (4) 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

• (5) 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 2012

Simon Cato Director

ANNUAL REPORT | 47

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 2012, 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 gives a true and fair view and 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 company’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 company’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 2012 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 2012. 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 2012 complies with section 300A of the Corporations Act 2001 .

BDO Audit (WA) Pty Ltd

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Chris Burton Directors

Perth, Western Australia Dated this 31[st] day of August 2012

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.

30 JUNE 2012

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 2010 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 2012.

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CORPORATE GOVERNANCE

3.1. Skills, Knowledge and Experience

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

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.

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 2012.

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 2012.

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 2012.

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;

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

• (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.

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

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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 (standing for re- election at 2012 AGM)
Azhar Chaudhri	4 August 1998	4 November 2011
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 Directors’ Report for the financial year ended 30 June 2012 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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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 2012, 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 Directors’ Report for the financial year ended 30 June 2012. 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.

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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 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 Risk Management) to the financial statements for the financial year ended 30 June 2012.

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 2012, 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 (in person or by teleconference) to answer shareholder questions about the conduct of the audit and the preparation and content of the Auditor’s report.

8. Communications

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 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: http://www.queste.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.

8.1. 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

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CORPORATE GOVERNANCE

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 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.

22 October 2012

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ADDITIONAL ASX INFORMATION as at 30 September 2012

DISTRIBUTION OF LISTED ORDINARY FULLY PAID SHARES

					% of Total Issue
Spread	of	Holdings	Number of Holders	Number of Units	Capital
1	-	1,000	14	8,255	0.029%
1,001	-	5,000	61	179,148	0.631%
5,001	-	10,000	74	695,165	2.447%
10,001	-	100,000	114	3,060,720	10.775%
100,001	-	and over	26	24,461,591	86.118%
Total			289	28,404,879	100%

Unmarketable Parcels

					%	of Total Issue
Spread	of	Holdings	Number of Holders	Number of Units		Capital
1	-	5,555	75	187,403		0.660%

An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of 5,555 shares or less, being a value of $500 or less in total, based upon the Company’s closing share price on 30 September 2012 of 9 cents per share.

DISTRIBUTION OF UNLISTED PARTLY PAID ORDINARY SHARES

	No. of Partly Paid
Name	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 2012

TOP 20 ORDINARY FULLY PAID SHAREHOLDERS

	% %
	Shares Total Issued Voting
Rank Shareholder	Held Shares Capital Power
1 BELL IXL INVESTMENTS LIMITED CELLANTE SECURITIES PTY LIMITED 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	2,999,747 2,053,282 2,326,112 Sub-total 7,379,141 25.978% 24.657% 2,286,367 3,668,577 Sub-total 5,954,944 20.965% 19.898% 907,450 1,050,000 3,277,780 Sub-total 5,235,230 18.431% 17.493% 1,725,663 180,500 Sub-total 1,906,163 6.711% 6.369%
5 COWOSCO CAPITAL PTY LTD 1,150,000 4.049% 3.843% 6 MR DONALD GORDON MACKENZIE & MRS GWENNETH EDNA MACKENZIE 761,260 2.680% 2.544% 7 MS ROSANNA DE CAMPO 268,100 0.944% 0.896% 8 GIBSON KILLER PTY LTD 220,000 0.775% 0.735% 9 MR AYUB KHAN 215,000 0.757% 0.718% 10 MRS AFIA KHAN 215,000 0.757% 0.718%
11 MR SIMON KENNETH CATO & MRS KAYE LOUISE HOPKINS ROSEMONT ASSET PTY LTD 12 TOMATO 2 PTY LTD 13 VANTEL (AUSTRALIA) PTY LTD 14 GLENVIEW SERVICES PTY LTD 15 MR JOHN CHENG-HSIANG	118,000 75,000 Sub-total 193,000 0.679% 0.645% 185,019 0.651% 0.618% 150,000 0.528% 0.501% 145,000 0.510% 0.485% 136,125 0.479% 0.455%
16 MR ANTHONY NEALE KILLER & MRS SANDRA MARIE KILLER 17 MR GREGORY JOHN MATHESON 18 MR EUGENE RODRIGUEZ 19 MR NICHOLAS PASTERNATSKY 20 MR KEITH FRANCIS OATES & MRS LINDA ANN OATES	130,000 0.458% 0.434% 110,742 0.390% 0.370% 110,000 0.387% 0.368% 103,750 0.365% 0.347% 100,000 0.352% 0.334%
Total	24,668,474 86.85% 82.43%

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ADDITIONAL ASX INFORMATION as at 30 September 2012

		Shares/Voting
Substantial Shareholders	Registered Shareholder	Shares Held	Voting Power
Bell IXL Investments Limited and	BELL IXL INVESTMENTS LIMITED	2,999,747
associates	CELLANTE SECURITIES PTY LIMITED	2,053,282	24.657%1
	CLEOD PTY LTD	2,326,112
Azhar Chaudhri, Renmuir Holdings	MR AZHAR CHAUDHRI	907,450
Limited and Chi Tung Investments Ltd	CHI TUNG INVESTMENTS LTD	1,050,000	22.58%2
	RENMUIR HOLDINGS LTD	3,277,780
	CHI TUNG INVESTMENTS LTD	1,522,5003
Farooq Khan and associates	FAROOQ KHAN	2,286,367	19.89%4
	ISLAND AUSTRALIA PTY LTD	3,668,577
Manar Nominees Pty Ltd and Zelwar	MANAR NOMINEES PTY LTD	1,725,663	6.34%5
Superannuation PtyLtd	ZELWER SUPERANNUATION PTY LTD	180,500

Notes:

(1) Based on the substantial shareholding notice filed by Bell IXL Investments Limited dated 5 May 2012 (updated to reflect current shareholdings)

(2) Based on the substantial shareholding notice filed by Azhar Chaudhri and associates dated 1 May 2012

(3) Voting shares attributable to 20,000,000 partly paid ordinary shares (issued at a price of 20 cents per share) which have been partly paid to 1.5225 cent each

(4) Based on the substantial shareholding notice filed by Farooq Khan and associate dated 30 April 2012

(5) Based on the substantial shareholding notice filed by Manar Nominees Pty Ltd dated 29 December 2003

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ASX Code: QUE

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

PRINCIPAL & REGISTERED OFFICE:

SHARE REGISTRY:

Advanced Share Registry Limited

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

Suite 2, 150 Stirling Highway Nedlands, Western Australia 6009 PO Box 1156, Nedlands Western Australia 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 New South Wales 1230

T | (02) 8096 3502