QUESTE COMMUNICATIONS LIMITED — Annual Report 2013

Oct 29, 2013

2013

ANNUAL REPORT

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A.B.N 58 081 688 164

(Change of name to CORVUS CAPITAL LIMITED subject to shareholder approval at 2013 Annual General Meeting)

CONTENTS

Corporate Update 1 Overview of Results 4 Directors’ Report 5 Remuneration Report 16 Auditor’s Independence Declaration 22 Consolidated Statement of 23 Profit or Loss and Comprehensive Income Consolidated Statement of 24 Financial Position Consolidated Statement of 25 Changes in Equity Consolidated Statement of Cash Flows 26 Notes to the Consolidated Financial 27 Statements Directors’ Declaration 52 Independent Auditor’s Report 53 Corporate Governance 55 Additional ASX Information 65

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CORPORATE DIRECTORY

BOARD

Farooq Khan (Chairman and Managing Director) Victor Ho (Executive Director) Yaqoob Khan (Non-Executive Director)

COMPANY SECRETARY

Victor Ho

PRINCIPAL & REGISTERED OFFICE

Suite 1, 346 Barker Road Subiaco, Western Australia 6008

Telephone: (08) 9214 9777 Facsimile: (08) 9214 9701 Email: info@queste.com.au Website: www.queste.com.au

STOCK EXCHANGE

Australian Securities Exchange

Perth, Western Australia

ASX CODE

QUE

SHARE REGISTRY

Advanced Share Registry Services Suite 2, 150 Stirling Highway Nedlands, Western Australia 6009 Telephone: (08) 9389 8033 Facsimile: (08) 9389 7871

Level 6, 225 Clarence Street Sydney, New South Wales 2000 Telephone: (02) 8096 3502 Email: admin@advancedshare.com.au Website: www.advancedshare.com.au

AUDITORS

Register your email with us to receive latest Company announcements and releases

EMAIL US AT: info@queste.com.au

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

CORPORATE UPDATE

Queste provides the following Corporate Update on developments since the end of the 30 June 2013 financial year (and also subsequent to the release of the Company’s 2013 Full Year Report on 2 September 2013), including a number of matters being put to shareholders for approval at the upcoming 2013 Annual General Meeting.

Reduction in Corporate Overheads

As announced on 3 April 2013, to assist the Company in reducing its corporate overheads:

• Chairman and Managing Director, Mr Farooq Khan, voluntarily agreed to reduce his salary by 50%, saving the Company $62,500 per annum; and

• Company Secretary, Mr Victor Ho, agreed to join the Board as an Executive Director at no further cost to the Company beyond his executive remuneration.

Aggregate Board salaries/fees (including the Company Secretary’s salary) now total $122,500 per annum, which is modest by ASX-listed company standards.

The Company has also implemented a series of changes to reduce its ongoing corporate overhead expenses, including:

• securing alternate office accommodation at a significant reduced rental upon the expiry of its previous lease on 30 June 2013;

• a consolidation of office administration personnel; and

• instituting a general pay freeze for office personnel for the 2013 calendar year.

The Company continues to review a number of overheads associated with its ongoing operations as an ASX-listed company, including share registry and audit costs, the use of external advisers and office and administration expenses.

Proposed Change of Name

At the 2013 AGM, the Company will be seeking shareholders’ approval for a change of name to “CORVUS CAPITAL LIMITED”.

The Company’s original name of "Queste Communications Ltd" no longer reflects the Company’s current activities. The Directors have therefore decided to propose a change of name for shareholders’ consideration.

A range of potential new names were considered. After considering various alternatives, the Board decided upon “Corvus Capital Limited”. “Corvus” is

a constellation; which bears appropriate symbolism for the Company and is reflective of its controlled entity, Orion Equities Limited. The word “Capital” was chosen to reflect the fact that the Company's principal assets comprise investments in other entities.

The Company's name is specified in its Constitution. As a result, a constitutional amendment is also required to reflect the change of name.

The proposed change of name and modification to the Company’s Constitution is a special resolution, which requires a “For” vote by 75% of shareholders present in person or by proxy who vote on that resolution at the 2013 AGM.

Capital Management – Proposed Equal Access Off-Market Share Buy-Back

In an ongoing review of Queste's capital management initiatives, the Company announced a proposed equal-access off-market share buy-back (the Buy-Back ) on 25 September 2013[1] .

The proposed Buy-Back is an “Equal-Access Scheme” share buy-back under which a company seeks to buy back shares, with shareholders having an equal opportunity to participate in proportion to their holdings.

Queste had, as part of a capital management programme for the benefit of shareholders, initiated an on-market share buy-back in 2012/2013[2] . This initiative met with little success and no shares were bought-back, primarily due to the lack of liquidity in trading of Queste shares, based upon the application of ASX Listing Rule 7.29 (which prescribes that an on-market buy-back may occur only if transactions in a company’s shares were recorded on ASX on at least 5 days in the previous 3 months).

Queste reviewed the on-market share buy-back initiative and the liquidity issue and identified the Buy-Back as an alternative to the same, allowing shareholders an opportunity to realise their investment in the Company, given the relatively illiquid market for Queste shares.

Accordingly, Queste proposes to conduct the BuyBack, subject to receiving shareholders’ approval at the 2013 AGM.

1 Refer ASX market announcement entitled Corporate Update dated 25 September 2013

• 2 Refer Appendix 3C - Announcement of Buy-Back Notice dated 17 April 2012 and Appendix 3F Final Share BuyBack Notice dated 1 May 2013

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CORPORATE UPDATE

Shareholders are referred to the Company’s 2013 AGM Information Memorandum for further details of the terms of the proposed Buy-Back and the advantages and disadvantages of voting for the scheme and of participating in it if it is approved.

The proposed Buy-Back will operate in the following manner:

• (a) Subject to a maximum Buy-Back consideration of $330,000 ( Buy-Back Cap ):

• (i) Queste will offer to buy back 100% of the fully paid, ordinary shares in the Company of each shareholder at a price of 10 cents per share ( FPO Price ); and

• (ii) Queste will offer to buy back 100% of the partly paid ordinary shares in the Company of the holder thereof at a price of 0.5 cent per share ( PPO Price ); and

• (b) If the value of Buy-Back acceptances were to exceed the Buy-Back Cap ($330,000) Queste will scale back the number of shares to be bought back on a pro-rata basis (determined by reference to the value of the Buy-Back consideration in respect of acceptances received for fully paid and partly paid ordinary shares) (the Scale-Back ).

It is proposed that the Buy-Back will be funded from existing net cash reserves (approximately $0.823 million as at 30 September 2013).

The Board believes that it is in the best interests of shareholders for the proposed Buy-Back to be put to shareholders for approval and that it is appropriate to allow shareholders an opportunity to realise their investment in the Company in an otherwise relatively illiquid market for Queste shares at a price (in respect of the fully paid ordinary shares) at a premium to the current and recent Queste share price on ASX.

The Buy-Back price for the fully paid shares of $0.10 per share (FPO Price) represents a premium (as at 18 October 2013) of:

• 5.3% on the last sale price of 9.5 cent on 1 October 2013;

• 10% on the VWAP between 1 October 2012 and 18 October 2013 of 9.0923 cents;

• 9.3% on the last 3 month VWAP of 9.1462 cents;

• 9.4% on the last 6 month VWAP of 9.1395 cents; and

• 9.9% on the 12 month VWAP of 9.1021 cents.

The Buy-Back will be open to all shareholders on an equal basis. Participation by shareholders is entirely voluntary. It is a cost-effective way for shareholders to dispose of their interests, as there are no brokerage costs associated with an offmarket buy-back.

The Buy-Back price is below the Company’s net tangible asset ( NTA ) backing per share. As a consequence, the Company's NTA backing per share will increase whilst the absolute NTA will reduce on completion of the Buy-Back by the amount of the Buy-Back Cap.

This increase in the NTA backing per share post completion of the Buy-Back will benefit remaining shareholders or those shareholders that only determine to tender into the Buy-Back for a portion of their Queste shares. An illustration of the effects on the Company's NTA per share under various Buy-Back acceptance scenarios are contained in the 2013 AGM Information Memorandum.

The Directors have commissioned BDO Corporate Finance (WA) Pty Ltd ( BDO or the Independent Expert ) to prepare an IER on the Buy-Back, which is included in the 2013 AGM Information Memorandum.

The conclusions in the IER are that:

• The Buy-Back is fair and reasonable to the shareholders of Queste who do not participate in the Buy-Back;

• The Buy-Back is not fair but reasonable to the shareholders of Queste who participate in the Buy-Back;

• The value of the Company’s fully paid ordinary shares is within the range of $0.1801 to $0.1947 per share with, a preferred valuation of $0.1874 per share;

• The value of the Company’s partly paid ordinary shares is within the range of $0.0381 to $0.0392 per share, with a preferred valuation of $0.0387 per share;

• The Buy-Back is fair for fully paid ordinary shareholders who do not participate and conversely is not fair for fully paid ordinary shareholders who participate, under the BuyBack;

• The Buy-Back is fair for the partly paid shareholder if it does not participate and conversely is not fair for the partly paid shareholder if it does participate, under the Buy-Back; and

• The position of shareholders if the Buy-Back is approved is more advantageous than the position if the Buy-Back is not approved and accordingly, the Buy-Back is reasonable to

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CORPORATE UPDATE

shareholders (in the absence of a superior buy-back proposal).

In assessing whether or not the Buy-Back is “reasonable” for shareholders, BDO has considered the impact of the Buy-Back on participating and non-participating shareholders separately. The respective advantages and disadvantages for participating and non-participating shareholders considered by BDO are summarised in the IER.

Subject to receipt of shareholder approval at the 2013 AGM scheduled for 28 November 2013, a separate Buy-Back Offer and Buy-Back Acceptance Form (the Offer Document ) will be sent to all shareholders, which will contain further details on how to accept the Buy-Back Offer. Please refer to 2013 AGM Information Memorandum for an indicative Timetable.

Queste may also consider undertaking similar offmarket buy-backs on an annual basis, depending on the evaluation of the success of this proposed BuyBack, Queste’s financial position and the liquidity of trading in Queste shares on ASX shares at the relevant time.

Proposal to include a "Performance-based Wind-up Vote Trigger" in the Company’s Constitution

At the 2013 AGM, shareholders will be asked to vote on a proposal to introduce a new "performancebased wind-up vote trigger" clause into the Company’s constitution. The proposed new clause is intended to provide a mechanism to give shareholders the opportunity to realise the value in the Company in the event that performance is more than 15% below a benchmark index for two consecutive financial years.

In summary if, in each of two consecutive financial years, the percentage change in the Queste consolidated group’s adjusted net assets for a financial year is more than 15% lower (in absolute terms) than the percentage change in the ASX All Ordinaries Accumulation Index ( Index ) over that financial year, the Directors would be required put a special resolution to the next AGM for shareholders to vote on whether the Company should be wound up. That is, if the Queste group’s performance is more than 15% below the performance of the Index for two consecutive financial years, shareholders will be able to vote on whether to wind up the Company.

Under the Constitution, if the Company were wound up its assets would be sold and its liabilities discharged, with surplus funds being distributed to shareholders in proportion to their holdings. To pass, any wind-up resolution would require a “For”

vote by 75% of the Company’s shareholders present in person or by proxy who vote on the resolution.

In summary, “Adjusted Net Assets” means the Queste consolidated group’s assets net of liabilities (reflecting the parent entity interest excluding minority or non-controlling interests), adjusted by adding back any dividends or capital paid, returned or distributed to shareholders during the financial year (including the cost of share buy-backs, whether on-market or off-market) and deducting the proceeds of any capital raisings (where applicable). If money is paid to shareholders as a dividend, a return on capital or under a share buyback then, as investors have had the benefit of that money, it would be disregarded in determining whether net assets have declined. Conversely, additions to net assets through capital raisings do not represent performance and would not be taken into account when determining whether net assets have risen. Other unusual items such as gains or losses on the consolidation of the Company's accounts with those of another entity are also disregarded (if Directors consider it appropriate to do so).

A number of companies that hold significant investments in other entities have clauses of this kind in their constitutions, although the specific content of the performance triggers varies.

The percentage change in the Queste group’s adjusted net assets during 2012/2013 was more than 15% below (in absolute terms) the percentage change in the performance of the Index over the same period.

Given the foregoing, the Board has determined that the 2013/2014 financial year will be the second financial year for the purposes of determining whether the “wind up vote trigger” condition has been met.

Therefore, if the percentage change in the Queste group’s adjusted net assets during 2013/2014 is more than 15% lower (in absolute terms) than the percentage change in the performance of the Index over the same period, the Directors will propose a voluntary winding up (special) resolution at the 2014 AGM.

Approval of this new clause in the Company’s Constitution does not necessarily mean that the Company will ever be wound up. The new clause merely gives shareholders the opportunity, if the “performance-based trigger” test is failed in two consecutive financial years, to decide whether winding up the Company is in their best interests.

25 October 2013

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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 (52.58% as at 30 June 2013) (30 June 2012: 51%) interest in Orion Equities Limited, an investment company ( LIC ) listed on ASX (ASX Code: OEQ).

CONSOLIDATED	2013 2012
	$ $
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 and diluted loss per share (cents) Undiluted NTA backing per share (cents) Diluted NTA backing per share (cents)	439,066 924,173 (3,892,502) (6,291,035)
	(3,453,436) (5,366,862) (57,300) (24,864)
	(3,510,736) (5,391,726) (1,496,136) (2,443,217)
	(2,014,600) (2,948,509)
	(6.73) (9.85) 20 26 20 38

At the Queste Company level, the Net Loss for the financial year was $364,201 (2012: Net Loss of $443,726).

The Queste consolidated results incorporate the results of controlled entity, ASX-listed investment company, Orion Equities Limited ( Orion or OEQ ).

At the Queste Consolidated level:

Revenues include:

• (1) $270,967 revenue from sale of olive oils (2012: $767,427);

• (2) $120,551 interest revenue (2012: $103,917); and

• (3) $44,438 rental revenue (2012: $52,531).

Expenses include:

• (1) $1,469,595 net loss on financial assets held at fair value through profit or loss (2012: $2,648,702 loss);

• (2) $933,496 personnel expenses (2012: $904,117);

• (3) $521,107 olive grove and oils operations (which does not include revaluation, depreciation and impairment expenses) (2012: $1,274,715);

• (4) $361,685 olive grove and oils operations’ revaluation, depreciation and impairment expenses (2012: $78,361); and

• (5) $102,158 share of ASX-listed Bentley Capital Limited’s ( BEL ) (Associate entity’s) net loss (2012: $625,086 share of BEL’s net loss, net of dividends received from BEL of $756,649).

The principal components of the $1,469,595 net loss on financial assets held at fair value through profit or loss are:

• (a) $1,118,284 unrealised loss on a share investment in ASX-listed Strike Resources Limited ( SRK ), which declined in value from $0.110 to $0.043 per share during the financial year;

• (b) $98,717 realised gain on the sale of Orion’s 6,332,744 shares in ASX-listed Alara Resources Limited ( AUQ ) (from cost) at an average price of $0.25 per share (excluding brokerage); the Company notes that historically, Orion has realised a total of $2.64 million gross proceeds from the sale of 9,332,744 AUQ shares with a cash cost base of $0.67 million; and

• (c) $447,018 reversal of previous years’ unrealised gains on Orion’s investment in AUQ on disposal of the same during the current year.

Please refer to the Directors’ Report and Financial Report for further information on a review of the Queste consolidated operations and the financial position and performance of the Queste group for the year ended 30 June 2013.

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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 2013 ( 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 incorporate the results of controlled entity, ASX-listed investment company, Orion Equities Limited ( Orion or OEQ ). The Company has a 52.58% shareholding interest in Orion (30 June 2012: 50.88%).

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	2013 2012
	$ $
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 and diluted loss per share (cents)	439,066 924,173 (3,892,502) (6,291,035)
	(3,453,436) (5,366,862) (57,300) (24,864)
	(3,510,736) (5,391,726)
	(1,496,136) (2,443,217)
	(2,014,600) (2,948,509)
	(6.73) (9.85)

At the Consolidated Entity level:

Revenues include:

• (1) $270,967 revenue from sale of olive oils (2012: $767,427);

• (2) $120,551 interest revenue (2012: $103,917); and

• (3) $44,438 rental revenue (2012: $52,531).

Expenses include:

• (1) $1,469,595 net loss on financial assets held at fair value through profit or loss (2012: $2,648,702 loss);

• (2) $933,496 personnel expenses (2012: $904,117);

• (3) $521,107 olive grove and oils operations (which does not include revaluation, depreciation and impairment expenses) (2012: $1,274,715);

• (4) $361,685 olive grove and oils operation’s revaluation, depreciation and impairment expenses (2012: $78,361); and

• (5) $102,158 share of ASX-listed Bentley Capital Limited’s ( BEL ) (Associate entity’s) net loss (2012: $625,086 share of BEL’s net loss, net of dividends received from BEL of $756,649).

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DIRECTORS’ REPORT

The principal components of the $1,469,595 net loss on financial assets held at fair value through profit or loss are:

• (a) $1,118,284 unrealised loss on a share investment in ASX-listed Strike Resources Limited ( SRK ), which declined in value from $0.110 to $0.043 per share during the financial year;

• (b) $98,717 realised gain on the sale of Orion’s 6,332,744 shares in ASX-listed Alara Resources Limited ( AUQ ) (from cost) at an average price of $0.25 per share (excluding brokerage); the Company notes that historically, Orion has realised a total of $2.64 million gross proceeds from the sale of 9,332,744 AUQ shares with a cash cost base of $0.67 million; and

• (c) $447,018 reversal of previous years’ unrealised gains on Orion’s investment in AUQ on disposal of the same during the current year.

LOSS PER SHARE

CONSOLIDATED ENTITY	2013 2012
Basic and 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	(6.73) (9.85) 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 2013.

FINANCIAL POSITION

CONSOLIDATED ENTITY	2013 $ 2012 $
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 Accumulated losses Total Equity	2,747,596 2,008,853 723,873 3,827,155 4,307,391 4,854,638 1,630,622 1,917,595 262,685 363,666 650,433 727,746 95,009 358,251 1,226,155 1,709,078
	11,643,764 15,766,982 (95,009) (358,251) (324,970) (459,372)
	11,223,785 14,949,359
	6,192,427 6,192,427 2,257,792 2,321,946 4,546,707 6,441,748 (1,773,141) (6,762)
	11,223,785 14,949,359

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DIRECTORS’ REPORT

CAPITAL MANAGEMENT

Securities on Issue

At the 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 cents 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

The Company’s on-market share buy-back initiative announced on 17 April 2012 ( Buy-Back )[1] expired on 30 April 2012 after 12 months.

The Company was not able to buy back any shares during the financial year due to the lack of liquidity (2012: no shares were bought-back).

The Company has reviewed the Buy-Back initiative and the liquidity issue and identified possible alternatives to the same. The Company will make an announcement on any future capital management initiative best determined for the Company. The Company has examined various alternatives, some of which may require shareholder approval, which will also be outlined at the time of any announcement in relation to the same.

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 9,367,653 shares in Orion, being 52.58% of its issued ordinary share capital (30 June 2012: 9,063,153 shares or 50.88%). Orion has been recognised as a controlled entity and included as part of the Queste Consolidated Entity’s results since 1 July 2002.

On 5 April 2013, the Company acquired 304,500 Orion shares on-market at a total cost of $81,136.

Queste shareholders are advised to refer to the 30 June 2013 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 2013

ORION EQUITIES LIMITED Consolidated Entity	2013 2012
	$ $
Total revenues Total expenses Loss before tax Income tax expense Loss attributable to members of Orion Basic and diluted loss per share (cents)	385,032 849,382 (3,440,167) (5,802,549)
	(3,055,135) (4,953,167) (57,300) (24,864)
	(3,112,435) (4,978,031)
	(17.47) (27.94)

Orion’s revenues include:

• (1) $270,967 revenue from olive grove operations (June 2012: $767,427); and

• (2) $44,438 rental revenue (June 2012: $52,531).

Orion’s expenses include:

• (1) $1,477,167 net loss on financial assets held at fair value through profit or loss (June 2012: $2,648,619 loss);

• (2) $630,290 personnel costs (including Directors’ fees) (June 2012: $610,270);

• (3) $521,107 olive grove and oils operations (which does not include revaluation, depreciation and impairment expenses) (June 2012: $1,274,715);

• (4) $361,685 olive grove revaluation, depreciation and impairment expenses (June 2012: $78,361); and

• (5) $94,167 share of ASX-listed Bentley Capital Limited’s ( BEL ) (Associate entity) net loss (June 2012: $576,195 share of Bentley’s loss, net of dividends received from Bentley of $697,469);

• The principal components of Orion’s $1,477,167 net loss on financial assets held at fair value through profit or loss are:

• (a) $1,118,284 unrealised loss on Orion’s share investment in ASX-listed Strike Resources Limited ( SRK ) which decreased in value from $0.110 to $0.043 per share during the year;

• (b) $98,717 realised gain on the sale of Orion’s 6,332,744 shares in ASX-listed Alara Resources Limited ( AUQ ) (from cost) at an average price of $0.25 per share (excluding brokerage); Orion notes that historically, it has realised a total of $2.64 million gross proceeds from the sale of 9,332,744 AUQ shares with a cash cost base of $0.67 million; and

• (c) $447,018 reversal of previous periods’ unrealised gain on Orion’s investment in AUQ on disposal of the same during the current period.

1.3. Orion’s Dividends

Orion has not declared a dividend in respect of the financial year ended 30 June 2013.

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DIRECTORS’ REPORT

1.4. Orion’s Financial Position as at 30 June 2013

ORION EQUITIES LIMITED Consolidated Entity		2013 2012
		$ $
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		9,213,682 12,382,503 0.517 0.695
		- - 9,213,682 12,382,503 0.517 0.695
		17,814,389 17,814,389
ORION EQUITIES LIMITED		2013 2012
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 Reserves Accumulated Losses Total Equity		1,695,628 365,031 720,085 3,821,383 4,079,810 4,584,254 1,630,622 1,917,595 73,414 292,915 650,433 727,746 1,211,055 1,686,035 94,688 352,085
		10,155,735 13,747,044 (196,932) (284,710) (94,688) (352,085)
		9,864,115 13,110,249
		19,374,007 19,374,007 227,806 361,505 (9,737,698) (6,625,263)
		9,864,115 13,110,249

1.5. Orion’s Portfolio Details as at 30 June 2013

Asset Weighting

	% of Net Assets
	2013 2012
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	49% 64% 19% 20% 15% 13% - - 17% 3%
	100% 100%

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

Major Holdings in Securities Portfolio

	Fair Value % of ASX
Equities	$’million Net Assets Code Industry Sector Exposures
(1) Bentley Capital Limited (2) Strike Resources Limited TOTAL	2.97 30.15% BEL Diversified Financials 0.72 7.28% SRK Materials 3.69 37.43%

1.6. Orion’s Assets

(a) Bentley Capital Limited (ASX Code: BEL)

Bentley Capital Limited ( Bentley ) is a listed investment company with a current exposure to Australian equities. Orion Executive Chairman, Farooq Khan (also Queste’s Executive Chairman and Managing Director) is the Chairman of the Board of Bentley. Former Orion Director, William Johnson, is also a Director of Bentley.

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 2012: Orion held 20,513,783 shares (27.97%) and Queste held 1,740,625 shares (2.37%)).

Bentley’s asset weighting as at 30 June 2013 was 71.50% Australian equities (30 June 2012: 75.59%), 1.72% intangible assets and resource projects (30 June 2012: 0.30%) and 26.78% net cash/other assets (30 June 2012: 24.12%).

Bentley had net assets of $18.27 million as at 30 June 2013 (30 June 2012: $20.07 million) and incurred an after-tax net loss of $0.34 million for the financial year (30 June 2012: $2.03 million net loss).

Bentley has also returned $1.467 million (via two capital returns of one cent per share each) during the financial year (2012: $2.468 million via fully franked dividends totalling 3.4 cents per share and $4.406 million via capital returns totalling 6 cents per share).

Orion received a total of $0.410 million from these capital distributions during the financial year (June 2012: $0.492 million fully franked dividend and $1.231 million capital returns).

Queste received a total of $0.035 million from these capital distributions during the financial year (June 2012: $0.042 million fully franked dividend and $0.104 million capital returns).

On 30 August 2013, Bentley announced its intention to seek shareholder approval (at the upcoming 2013 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 approximately $205,138 and $17,406 respectively.

The Company notes that capital distributions from Bentley are not regarded as revenues/income; the carrying value of the Company’s and Orion’s investment in Bentley is reduced by the value of the capital returned by Bentley.

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

Strike Resources Limited ( Strike ) is a resources company with iron ore exploration and development projects in Peru.

Former Orion Director, William Johnson was appointed Managing Director of Strike on 25 March 2013.

Orion holds 16,690,802 shares, being 11.48% of Strike’s issued ordinary share capital (30 June 2012: 16,690,802 shares and 11.71%).

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The value of Orion’s holdings in Strike declined by $1.12 million during the course of the financial year, from $1.84 million (at $0.110 per share as at 30 June 2012) to $0.72 million (at $0.043 per share on 30 June 2013).

The Strike share price has appreciated to $0.070 (based on closing bid price as at 29 August 2013), generating an unrealised gain of $0.451 million subsequent to the 30 June 2013 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.

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

Alara Resources Limited ( Alara ) is a minerals exploration and development company with precious and base metals projects currently in Saudi Arabia and Oman. Orion Chairman, Farooq Khan, resigned as an Alara Director on 31 August 2012. Former Orion Director, William Johnson is a director of Alara (who has announced his intention to retire at the end of September 2013).

In September 2012, Orion sold its 6,332,744 shareholding in Alara at an average price of $0.25 per share (excluding brokerage), realising gross proceeds of $1.58 million.

Historically, the shareholding in Alara was acquired 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 non-cash 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 at a total cash cost of $0.67 million.

(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, 14 year old olive tree plantings.

A summary of olive grove operations during the 2013 financial year are as follows:

• (i) Gross revenues were $270,967 (2012: $767,427);

• (ii) Olive grove operation expenses were $521,107 (which does not include revaluation, depreciation and impairment expenses) (2012: $1,274,715);

• (iii) Net revaluation, depreciation and impairment expense were $361,685 (2012: $78,361); and

• (iv) Inventory - Bulk Oils of $57,717 reflects the cost of harvesting and processing during the 2012 season (June 2012: $206,320).

The carrying values of the olive grove property ($759,918) (2012: $999,901) and water licence ($575,437) (2012: $627,750) are based on an independent valuation of the assets undertaken for the 30 June 2013 accounts. The carrying value of the olive trees ($65,500 representing approximately one dollar per tree) (2012: $65,500) is based on the Orion Directors’ assessment of their value for the 30 June 2013 accounts.

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(e) Other Property Assets

Orion owns a property located in Mandurah, Western Australia, which was originally acquired as a multiunit development site. In 2009/2010 Orion sought development approval for the subdivision of the property into 4 survey-strata title lots. This application was rejected by the Western Australian Planning Commission. Subsequently Orion undertook a sale process of the property by way of public auction, with such auction failing to attract any bids. Orion has since renovated and rented out the 3 bedroom, 2.5 bathroom single level house.

The carrying value of $1,490,000 (2012: $1,640,000) is based on an independent valuation of the property undertaken for the 30 June 2013 accounts.

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 2012: 1,740,625 shares and 2.37%);

• (ii) a cash holding of $1,051,968 (30 June 2012: $1,643,821); and

• (iii) investments in other listed securities of $3,788 (30 June 2012: $5,772).

During the year, Queste’s investments in ASX-listed securities have performed as follows:

• (i) $17,763 net unrealised gain (30 June 2012: $17,489 net loss).

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

3. Review of Corporate Overheads

As announced on 3 April 2013[3] , the Company has conducted a review of various overheads associated with its ongoing operations as an ASX listed company with particular reference to its office and administration expenses.

The Company has undertaken a series of changes to reduce its ongoing corporate overhead expenses including securing alternate office accommodation at a significant reduced rental upon the expiry of its previous lease on 30 June 2013, a consolidation of office administration personnel and a general pay freeze for office personnel for the 2013 calendar year.

Furthermore, to assist the Company in reducing its corporate overheads, Chairman and Managing Director, Mr Farooq Khan voluntarily agreed to reduce his base salary by 50% with effect on 1 April 2013 and Mr Victor Ho (the Company Secretary) agreed to join the Board as an Executive Director on 3 April 2013 at no further cost to the Company beyond his current executive remuneration.

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.

3 Refer QUE ASX market announcement dated 3 April 2013 and entitled “Corporate Update”

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FUTURE DEVELOPMENTS

The Consolidated Entity 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 Consolidated Entity invests. The investments’ performances depend on many economic factors and also industry and company specific issues. In the opinion of the Directors, it is not possible or appropriate to make a prediction on the future course of markets, the performance of the Consolidated Entity’s investments or the forecast of the likely results of the Consolidated Entity’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 their 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 their 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 sectors. He has considerable experience in the fields of capital raisings,
mergers and acquisitions and investments.
Relevant interest in shares	5,954,944 shares4
Other current directorships	Executive Chairman of:
in listed entities	(1) Bentley Capital Limited (BEL) (since 2 December 2003)
	(2) Orion Equities Limited (OEQ) (since 23 October 2006)
Former directorships in	(1) Alara Resources Limited (AUQ) (18 May 2007 to 31 August 2012)
other listed entities in	(2) Yellow Brick Road Holdings Limited (YBR) (27 April 2006 to 18 March 2011)
past 3 years	(3) Strike Resources Limited (SRK) (3 September 1999 to 3 February 2011)

Victor P. H. Ho	Executive Director and Company Secretary
Appointed	Executive Director since 3 April 2013; Company Secretary since 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	None
listed entities in past 3
years

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

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DIRECTORS’ REPORT

Yaqoob Khan Non-Executive Director Appointed 10 March 1998 Qualifications BCom (Western Australia), Master of Science in Industrial Administration (Carnegie Mellon) Experience After working for several years in the Australian Taxation Office, Mr Khan completed his postgraduate Masters degree and commenced work as a senior executive responsible for product marketing, costing systems and production management. Mr Khan has been an integral member of the team responsible for the pre-IPO structuring and IPO promotion of a number of ASX floats and has been involved in the management of such companies. Mr Khan brings considerable international experience in key aspects of corporate finance and the strategic analysis of listed investments.

Relevant interest in shares 68,345 shares Other current directorships Non-Executive Director of Orion Equities Limited (OEQ) (since 5 November 1999). in listed entities Former directorships in None other listed entities in past 3 years

At the Balance Date, Yaqoob Khan is a resident overseas.

Former Directors

After a review of the appropriate board numbers for a Company the size of Queste, Non-Executive Directors, Mr Simon Cato and Mr Azhar Chaudhri voluntarily agreed to step down as Directors on 3 April 2013. Messrs Chaudhri and Cato commenced as Directors on 4 August 1998 and 6 February 2008 respectively.

The Board is very grateful for this action which will further assist the Company in the reduction of its corporate overheads. The Board also offers its sincere thanks to both Mr Chaudhri and Mr Cato for their valuable service as Directors of the Company over many years.

Given the constitution of the Company requires at least three directors, Company Secretary Mr Victor Ho agreed to join the Board as an Executive Director on 3 April 2013.

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	8	8
Yaqoob Khan	8	8
Victor Ho	-	-
Simon Cato	8	8
Azhar Chaudhri	8	8

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

Board Committees

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

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REMUNERATION REPORT

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

The information provided under headings (1) to (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 (9% of base salary during the 2012/13 financial year and 9.25% for the 2013/14 financial year). Mr Khan voluntarily agreed to reduce his base salary by 50% with effect on 1 April 2013;

• (b) Mr Victor Ho (Company Secretary and Executive Director from 3 April 2013) - a base salary of $45,000 per annum plus employer superannuation contributions. Mr Ho agreed to join the Board as an Executive Director on 3 April 2013 at no further cost to the Company beyond his remuneration as Company Secretary;

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

• (d) Mr Simon Cato (Non-Executive Director who resigned as Director on 3 April 2013) - a base fee of $15,000 per annum plus employer superannuation contributions; and

• (e) Mr Azhar Chaudhri (Non-Executive Director who resigned as Director on 3 April 2013) - a base fee of $15,000 per annum.

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) 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.

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REMUNERATION REPORT

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

Performance Related Benefits/Variable Remuneration: The Company does not presently provide short- or long-term 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 remuneration measures if appropriate in the future (subject to prior shareholder approval where applicable).

In considering the Company's performance and its effects on shareholder wealth, Directors have had regard to the data set out below for the latest financial year and the previous four financial years.

	2013	2012	2011	2010	2009
Profit/(Loss) Before Income Tax ($)	(3,453,436)	(5,366,862)	(2,957,447)	55,614	(16,524,072)
Basic Earnings/(Loss) per Share (cents)	(6.73)	(9.85)	(5.52)	2.50	(41.30)
Dividends Paid ($)	-	-	-	-	121,099
Closing Bid Share Price at 30 June ($)	0.07	0.66	0.81	1.30	1.35

(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

2013				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 Directors:
Farooq Khan	-	97,356	-	9,844	12,019	-	119,219
Victor Ho+		45,000		4,050	-	-	49,050
Non-Executive Directors:
Yaqoob Khan	-	15,000	-	-	-	-	15,000
Azhar Chaudhri*	-	11,250	-	-	-	-	11,250
Simon Cato*	-	11,250	-	1,013	-	-	12,263

• Company Secretary, Mr Ho was appointed Executive Director on 3 April 2013

• Messrs Chaudhri and Cato resigned as Non-Executive Directors on 3 April 2013

Victor Ho is also Company Secretary of the Company.

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REMUNERATION REPORT

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

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

2013				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	-	256,030	-	16,470	-	-	272,500
Victor Ho	-	75,000	-	6,750	-	-	81,750
William Johnson#	-	39,400	-	3,546	41,998	-	84,944
Non-Executive Director:
Yaqoob Khan	-	25,000	-	-	-	-	25,000

Non-Executive Director: Yaqoob Khan -	Non-Executive Director: Yaqoob Khan -	25,000 - -	25,000 - -	25,000 - -	- - 25,000	- - 25,000	- - 25,000	- - 25,000
# William Johnson transitioned from		Executive Director to Non-Executive Director of OEQ on			25 March 2013 and retired as a Director of
OEQ on 3 May	2013.
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
Victor Ho	-	75,000	-	6,750		-	-	81,750
William Johnson	-	45,120	-	4,061		-	-	49,181
Non-Executive Director:
Yaqoob Khan	-	25,000	-	-		-	-	25,000

Victor Ho is also Company Secretary of Orion.

The tables above may be aggregated to arrive at the aggregate amount of each element of remuneration of each Key Management Personnel paid or payable by the Consolidated Entity during the financial year.

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REMUNERATION REPORT

(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 2012 AGM

At the Company’s most recent (2012) AGM, a resolution to adopt the prior year (2012) Remuneration Report was put to the vote and not passed by a majority of shareholders. This constituted the Company's "second strike" under the executive remuneration related provisions of the Corporations Act (the Company having received its "first strike" at the 2011 AGM).

As required by the Corporations Act, a resolution to hold fresh elections for directors at a special meeting was put to the vote at the 2012 AGM, however, this ordinary resolution was not passed.

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, for the reasons detailed in this Remuneration Report.

The Board notes that as announced by the Company on 3 April 2013[1] :

• (a) After a review of the appropriate Board numbers for a Company the size of Queste, Non-Executive Directors, Mr Simon Cato and Mr Azhar Chaudhri voluntarily agreed to step down as Directors on 3 April 2013;

• (b) Executive Chairman and Managing Director Mr Farooq Khan voluntarily agreed to reduce his base salary by 50% with effect on 1 April 2013; and

• (c) Given the constitution of the Company requires at least three directors, Company Secretary, Mr Victor Ho agreed to join the Board as an Executive Director on 3 April 2013 at no further cost to the Company beyond his remuneration as Company Secretary;

This concludes the audited Remuneration Report.

5 Refer QUE ASX market announcement dated 3 April 2013 and entitled “Corporate Update”

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DIRECTORS’ REPORT

DIRECTORS’ AND OFFICERS’ INSURANCE

The Company and Orion each insure Directors and Officers against liability they may incur in respect of any wrongful acts or omissions made by them in such capacity (to the extent permitted by the Corporations Act 2001) ( D&O Policy ). Details of the amount of the premium paid in respect of the insurance policies are not disclosed as such disclosure is prohibited under the terms of the contract.

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
$ $ $	$ $ $
65,839 13,010 78,849	27,461 5,924 33,385

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.

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DIRECTORS’ REPORT

AUDITORS’ INDEPENDENCE DECLARATION

A copy o f the Auditor’ s Independence Declaratio n as required under sectio n 307C of th e Corporation s Act 2001 forms part of this Dir e ctors Repor t and is set o ut on page 2 2. This rel a tes to the A u dit Report, w here the Auditors s tate that the y have issued an independ e nce declarati o n.

EVENTS SUBSEQUENT TO BALANCE DATE

The Dire c tors are not aware of an y other matte r s or circums t ances at the date of this D irectors’ Re p ort, other than tho s e referred to in this Direct o rs’ Report (i n particular, i n Review of O p erations) or t he financial s tatements or notes t hereto (in p a rticular Note 26, that hav e significantly a ffected or may significant l y affect the o perations, the resul t s of operatio n s or the stat e of affairs of t he Company in subsequen t financial ye a rs.

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 Victor Ho Chairman Executive Director and Company Secretary 30 August 2013

A NNUAL REP O RT | 21

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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30 August 2013

The Board of Directors Queste Communications Ltd Suite 1, 346 Barker Road, Subiaco, WA, AUSTRALIA, 6008

Dear Sirs,

DECLARATION OF INDEPENDENCE BY BRAD MCVEIGH TO THE DIRECTORS OF QUESTE COMMUNICATIONS LTD

As lead auditor of Queste Communications Ltd for the year ended 30 June 2013, 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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Brad McVeigh 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 2013

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the year ended 30 June 2013

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 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 Revenue Land Operation Expenses Olive Oil Operation Expenses LOSS PER SHARE ATTRIBUTABLE TO THE ORDINARY EQUITY HOLDERS OF THE COMPANY: LOSS FOR THE YEAR EXPENSES Personnel Expenses Loss on Property 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	2013 2012 $ $ 436,262 924,098 2,804 75
	439,066 924,173 (1,469,595) (2,648,702) (102,158) (625,086) (150,000) (160,000) (15,583) (154,608) (326,263) (1,182,799) (556,529) (170,275) (933,496) (904,117) (99,418) (155,529) (2,381) (4,919) (43,165) (50,224) (193,914) (234,776)
	(3,453,436) (5,366,862) (57,300) (24,864)
	(3,510,736) (5,391,726)
	(64,154) (29,519)
	(3,574,890) (5,421,245)
	(2,014,600) (2,948,509) (1,496,136) (2,443,217)
	(3,510,736) (5,391,726)
	(2,078,754) (2,978,028) (1,496,136) (2,443,217)
	(3,574,890) (5,421,245)
	(6.73) (9.85)

The accompanying notes form part of these consolidated financial statements

ANNUAL REPORT | 23

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

30 JUNE 2013

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2013

Note 8 9 10 11 12 10 11 13 14 15 16 19 17 18 19 20 21 Issued Capital Cash and Cash Equivalents CURRENT ASSETS Investment in Associate Entity Property 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 NET ASSETS TOTAL LIABILITIES TOTAL NON CURRENT LIABILITIES EQUITY Parent Interest TOTAL EQUITY Accumulated Losses Deferred Tax Liability Non-Controlling Interest TOTAL CURRENT ASSETS Olive Trees Inventories NON CURRENT LIABILITIES TOTAL NON CURRENT ASSETS Deferred Tax Asset Property, Plant and Equipment Trade and Other Receivables TOTAL CURRENT LIABILITIES Reserves	2013 2012 $ $ 2,747,596 2,008,853 723,873 3,827,155 209,600 330,843 140,622 277,595 5,854 5,895
	3,827,545 6,450,341
	53,085 32,823 1,490,000 1,640,000 4,307,391 4,854,638 1,154,801 1,637,683 65,500 65,500 650,433 727,746 95,009 358,251
	7,816,219 9,316,641
	11,643,764 15,766,982
	149,981 256,642 174,989 202,730
	324,970 459,372
	95,009 358,251
	95,009 358,251
	419,979 817,623
	11,223,785 14,949,359
	6,192,427 6,192,427 2,257,792 2,321,946 (1,773,141) (6,762)
	6,677,078 8,507,611 4,546,707 6,441,748
	11,223,785 14,949,359

The accompanying notes form part of these consolidated financial statements

ANNUAL REPORT | 24

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

30 JUNE 2013

CONSOLIDATED STATEMENT

OF CHANGES IN EQUITY for the year ended 30 June 2013

				Non-
	Issued		Accumulated	Controlling
Note	Capital	Reserves	Losses	Interest	Total
	$	$	$	$	$
BALANCE AT 1 JULY 2011	6,192,427	2,351,465	2,941,747	8,913,462	20,399,101
Loss for the Year	-	-	(2,948,509)	(2,443,217)	(5,391,726)
Other Comprehensive Income	-	(29,519)	-	-	(29,519)
Total Comprehensive Loss	-	(29,519)	(2,948,509)	(2,443,217)	(5,421,245)
for the Year
Transactions with Owners
in their capacity as
Transactions with Non-
Controlling Interest	-	-	-	(28,497)	(28,497)
BALANCE AT 30 JUNE 2012	6,192,427	2,321,946	(6,762)	6,441,748	14,949,359
BALANCE AT 1 JULY 2012	6,192,427	2,321,946	(6,762)	6,441,748	14,949,359
Loss for the Year	-	-	(2,014,600)	(1,496,136)	(3,510,736)
Other Comprehensive Income	-	(64,154)	-	-	(64,154)
Total Comprehensive Loss	-	(64,154)	(2,014,600)	(1,496,136)	(3,574,890)
for the Year
Transactions with Owners
in their capacity as
Transactions with Non-
Controlling Interest2(b)	-	-	248,221	(398,905)	(150,684)
BALANCE AT 30 JUNE 2013	6,192,427	2,257,792	(1,773,141)	4,546,707	11,223,785

The accompanying notes form part of these consolidated financial statements

ANNUAL REPORT | 25

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

30 JUNE 2013

CONSOLIDATED STATEMENT

OF CASH FLOWS for the year ended 30 June 2013

Note 8 14 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 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 Receipts from Customers CASH FLOWS FROM OPERATING ACTIVITIES CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR Disposal of Plant and Equipment	2013 2012 $ $ 412,545 570,944 306 756,871 124,842 83,365 (1,796,391) (2,409,511) (367) (868) 1,624,132 -
	365,067 (999,199)
	(5,343) (11,857) 5,513 - 445,089 1,335,265 19,671 - (91,254) -
	373,676 1,323,408
	738,743 324,209 2,008,853 1,684,644
	2,747,596 2,008,853

The accompanying notes form part of these consolidated financial statements

ANNUAL REPORT | 26

30 JUNE 2013

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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 subsidiaries. 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 ).

1.3. 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 Profit or Loss and Other Comprehensive Income, and its share of post-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).

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, as appropriate for for-profit entities.

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 2013 and the results of its subsidiaries for the year then ended. Queste Communications Ltd and its subsidiaries 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 deconsolidated 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.

Dividends receivable from associates are recognised in the Company’s Statement of Profit or Loss and Other 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

Operating segments are presented using the ‘management approach’, where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers (CODM). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

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.

ANNUAL REPORT | 27

30 JUNE 2013

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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 ex-dividend entitlement date.

Other Revenues

Other revenues are recognised on a receipts basis.

1.6. Income Tax

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

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

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 Statement of Cash Flows 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 the 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 oncosts. Employee benefits payable later than one year from the Balance Date have been measured at the present value of the estimated future cash outflows to be made for those benefits. Employer superannuation contributions are made by the Consolidated Entity in accordance with statutory obligations and are charged as an expense when incurred.

Other long-term employee benefit obligations

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

1.9. Cash and Cash Equivalents

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.

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 the 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.

ANNUAL REPORT | 28

30 JUNE 2013

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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 Profit or Loss and Other 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 non-derivatives that are either designated in this category or not classified in any other category. 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.

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 the reporting date (refer to Note 9).

1.14. Property held for Resale

Property held for development and sale is valued at the 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.

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”.

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

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 Profit or Loss and Other 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	Rate	Method
Buildings	7.5%	Diminishing Value
Plant and Equipment	5-75%	Diminishing Value
Leasehold Improvements	7.5-15%	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.

ANNUAL REPORT | 29

30 JUNE 2013

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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 cash-generating unit to which the asset belongs.

1.17. Payables

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

1.18. Provisions

Provisions for legal claims, service warranties and make good obligations are made where the Consolidated Entity 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, for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.

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 materials. Costs are assigned to individual items of inventory on the 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.

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.

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

1.22. Leases

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

1.23. Intangible Assets

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

1.20. Earnings Per Share

1.24. Biological Assets

Basic Earnings per share

Is determined by dividing the operating result after income tax by the weighted average number of ordinary shares on issue during the financial period.

Diluted Earnings per share

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

1.21. Inventories

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

1.25. Comparative Figures

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

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

ANNUAL REPORT | 30

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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 2013

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.

Non-current assets estimated at fair value

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 Profit or Loss and Other Comprehensive Income. Independent valuations are obtained for these non-current assets at least annually.

Estimation of useful lives of assets

The Consolidated Entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations, market, economic, legal environment or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.

Indefinite life of intangible assets

The Consolidated Entity tests annually or more frequently, if events or changes in circumstances indicate impairment and whether the indefinite life of intangible assets has suffered any impairment, in accordance with the note 1.16.

ANNUAL REPORT | 31

30 JUNE 2013

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

1.27. Summary of Accounting Standards Issued but 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 Instruments	Amends the requirements for classification and measurement of	Annual reporting
December 2009		financial assets. The available-for-sale and held-to-maturity	periods beginning on or
and amended		categories of financial assets in AASB 139 have been eliminated.	after 1 July 2015
December 2010)		Under AASB 9, there are three categories of financial assets:
		 Amortised cost
		 Fair value through profit or loss
		 Fair value through other comprehensive income.
		The following requirements have generally been carried forward
		unchanged from AASB 139 Financial Instruments: Recognition
		and Measurement into AASB 9:
		 Classification and measurement of financial liabilities; and
		 Derecognition requirements for financial assets and
		liabilities.
		However, AASB 9 requires that gains or losses on financial
		liabilities measured at fair value are recognised in profit or loss,
		except that the effects of changes in the liability’s credit risk are
		recognised in other comprehensive income.
IFRS (issued	Investment Entities -	The amendment defines an ‘investment entity’ and requires a	Annual reporting
October 2012)	Amendments to IFRS 10,	parent that is an investment entity to measure its investments in	periods beginning on or
	IFRS 12 and IAS 27	particular subsidiaries at fair value through profit or loss in its	after 1 July 2014
		consolidated and separate financial statements.
		The amendment prescribes three criteria that must be met in
		order for an entity to be defined as an investment entity, as well
		as four ‘typical characteristics’ to consider in assessing the
		criteria.
		The amendment also introduces disclosure requirements for
		investment entities into IFRS 12 Disclosure of Interests in Other
		Entities and amends IAS 27 Separate Financial Statements.
AASB 10 (issued	Consolidated Financial	Introduces a single ‘control model’ for all entities, including	Annual reporting
August 2011)	Statements	special purpose entities (SPEs), whereby all of the following	periods beginning on or
		conditions must be present:	after 1 July 2013
		 Power over investee (whether or not power used in
		practice)
		 Exposure, or rights, to variable returns from investee
		 Ability to use power over investee to affect the entity’s
		returns from investee.
		Introduces the concept of ‘de facto’ control for entities with less
		than a 50% ownership interest in an entity, but which have a
		large shareholding compared to other shareholders. This could
		result in more instances of control and more entities being
		consolidated.
		Potential voting rights are only considered when determining if
		there is control when they are substantive (holder has practical
		ability to exercise) and the rights are currently exercisable. This
		may result in possibly fewer instances of control.
		Additional guidance included to determine when decision making
		authority over an entity has been delegated by a principal to an
		agent. Factors to consider include:
		 Scope of decision making authority
		 Rights held by other parties, e.g. kick-out rights
		 Remuneration and whether commensurate with services
		provided
		 Decision maker’s exposure to variability of returns from
		other interestsheldintheinvestee.

ANNUAL REPORT | 32

30 JUNE 2013

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

1.27. Summary of Accounting Standards Issued but not yet Effective (continued)

	Title and Affected
AASB reference	Standard(s):	Nature of Change	Application date:
AASB 13 (issued	Fair Value Measurement	Currently, fair value measurement requirements are included in	Annual reporting
September 2011)		several Accounting Standards. AASB 13 establishes a single	periods beginning on or
		framework for measuring fair value of financial and non-financial	after 1 July 2013
		items recognised at fair value in the Statement of Financial
		Position or disclosed in the notes in the financial statements.
		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, e.g. land and
		buildings, investment properties etc.
AASB 119 (reissued	Employee Benefits	Main changes include:	Annual reporting
September 2011)		 Elimination of the ‘corridor’ approach for deferring gains/losses for defined benefit plans	periods beginning on or after 1 July 2013
		 Actuarial gains/losses on remeasuring the defined benefit
		plan obligation/asset to be recognised in OCI rather than in
		profit or loss, and cannot be reclassified in subsequent
		periods
		 Subtle amendments to timing for recognition of liabilities for
		termination benefits
		 Employee benefits expected to be settled (as opposed to
		due to settle under current standard) wholly within 12
		months after the end of the reporting period are short-term
		benefits, and 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 2012-5	Amendments to	Non-urgent but necessary changes to standards	Annual reporting
(issued June 2012)	Australian Accounting		periods beginning on or
	Standards arising from		after 1 July 2013
	Annual Improvements
	2009-2011 Cycle
AASB 2012-9	Amendment to AASB	Deletes Australian Interpretation 1039 Substantive Enactment of	Annual reporting
(issued December	1048 arising from the	Major Tax Bills In Australia from the list of mandatory Australian	periods beginning on or
2012)	Withdrawal of Australian	Interpretations to be applied by entities preparing financial	after 1 July 2013
	Interpretation 1039	statements under the Corporations Act 2001 or other general
		purpose financial statements.

ANNUAL REPORT | 33

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

2. PARENT ENTITY INFORMATION

The following information provided relates to the Company, Queste Communications Ltd, as at 30 June 2013. The information presented below has been prepared using accounting policies outlined in Note 1.

(a) (b) Incorporated Australia Net Change in Fair Value Shares in Controlled Entity - at cost Investments in Controlled Entity Details of percentage of Ordinary Shares held in Controlled Entity: Orion Equities Limited Investment in Controlled Entity 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 Non Current Assets Reserves Term Deposit	2013 2012 $ $ 1,217,626 1,678,568 2,476,400 2,534,794
	3,694,026 4,213,362
	118,470 130,424
	118,470 130,424
	3,575,556 4,082,938
	6,192,427 6,192,427 1,178,498 1,321,679 (3,795,369) (3,431,168)
	3,575,556 4,082,938
	(364,201) (443,726) - -
	(364,201) (443,726)
	351,968 523,821 700,000 1,120,000
	1,051,968 1,643,821
	3,150,588 3,069,452 (1,370,734) (1,166,190)
	1,779,854 1,903,262
	2013 2012 % % 52.58 50.88 Ownership Interest

On 5 April 2013, the Company acquired 1.7% of issued shares of Orion (304,500) on-market at a total cost of $81,136. The net effect on the Non-Controlling Interest due to the purchase was $150,684.

(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 arrangements. Interest is not charged on such outstanding amounts and all amounts were fully recovered/repaid by balance date. The following related party transactions also occurred with related parties:

	2013	2012
Bentley Capital Limited	$	$
Dividends Received	-	59,181
Return of Capital Received	445,089	1,335,265

ANNUAL REPORT | 34

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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) Transactions with Related Parties (continued) The Company has provided a $650,000 unsecured interest bearing (at Orion, with a term currently expiring on 31 December 2013.	10% per annum) loan facility to
Note (d) 24 24 Orion Equities Limited Interest Received on Loan Facility Longer than one year but not longer than five years Not longer than one year Lease Commitments	2013 2012 $ $ - 20,060 48,582 78,630 - -
	48,582 78,630

3. (a) (b) Depreciation Other Administration Expenses Finance Expenses The Consolidated Entity's Operating Loss before Income Tax includes the following items of revenue and expense: Rental Revenue Revenue from Sale of Olive Oils Loss on Revaluation of Land held for Development or Resale Salaries, Fees and Employee Benefits Occupancy Expenses Other Revenue Dividend Revenue Land Operations Other Expenses Realisation Cost of Investment Portfolio Written Back Brokerage Fees Impairment and Depreciation of Olive Oil Assets 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 LOSS FOR THE YEAR Professional Fees Administration Expenses Other Corporate Expenses Share Registry ASX Fees Corporate Expenses Revenue Interest Revenue	270,967 767,427 44,438 52,531 306 223 120,551 103,917
	436,262 924,098 2,804 75
	439,066 924,173
	1,469,595 2,648,702 102,158 625,086 326,263 1,182,799 361,685 78,359 194,844 91,916 150,000 160,000 15,583 154,608 933,496 610,270 99,418 94,636 2,381 21,441 26,794 32,780 12,681 11,054 4,728 4,569 21,194 6,559 3,689 - (15,355) (14,974) 7,340 7,855 176,008 575,375
	3,892,502 6,291,035

ANNUAL REPORT | 35

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

4.	INCOME TAX EXPENSE	INCOME TAX EXPENSE		2013	2012
				$	$
	(a)	The components of Tax Expense comprise:
		Current Tax		-	-
		Deferred Tax	19	57,300	24,864
				57,300	24,864
	(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%		(1,036,031)	(1,610,059)
		(2012: 30%)
		Adjust tax effect of:
		Other Assessable Income		81,258	319,664
		Non-Deductible Expenses		419,365	857,260
		Current Year Tax Losses not brought to account		562,061	270,473
		Share of Net Loss of Associate		30,647	187,526
		Income tax attributable to entity		57,300	24,864
	(c)	Deferred Tax recognised directly in Other
		Comprehensive Income
		Revaluations of Land & Intangible Assets		57,300	24,864
	(d)	Unrecognised Deferred Tax balances
		Unrecognised Deferred Tax Asset - Revenue Losses		2,740,625	2,487,319
		Unrecognised Deferred Tax Asset - Capital Losses		246,719	246,719
				2,987,344	2,734,038

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

ANNUAL REPORT | 36

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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 2013.

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

Other KMP Short-Term Employment Benefits Directors Short-Term Employment Benefits Other Long-Term Employment Benefits	2013 2012 $ $ 590,204 574,973 80,941 36,058
	671,145 611,031
	- 48,950
	- 48,950
	671,145 659,981

Mr Farooq Khan voluntarily agreed to reduce his base salary by 50% with effect on 1 April 2013 and Mr Victor Ho (the Company Secretary) agreed to join the Board as an Executive Director on 3 April 2013 at no further cost to the Company beyond his remuneration as Company Secretary.

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 2013
Directors
Farooq Khan	6,223,044		-	6,223,044
Simon Cato (resigned 3 April 2013)	193,000	193,000
Azhar Chaudhri (resigned 3 April 2013)	5,235,230	5,235,230
Yaqoob Khan	68,345		-	68,345
Victor Ho (appointed a Director 3 April 2013)	17,500		-	17,500
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 (Company Secretary)	17,500		-	17,500

ANNUAL REPORT | 37

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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 2013
Directors
Farooq Khan	-		-	-
Simon Cato(resigned 3 April 2013)	-	-
Azhar Chaudhri(resigned 3 April 2013)	20,000,000	20,000,000
Yaqoob Khan	-		-	-
Victor Ho(appointed a Director 3 April 2013)	-		-	-
30 June 2012
Directors
Farooq Khan	-		-	-
Simon Cato	-		-	-
Azhar Chaudhri	20,000,000		-	20,000,000
Yaqoob Khan	-		-	-
Other KMP
Victor Ho(Company Secretary)	-		-	-

The disclosures of equity holdings above are in accordance with the accounting standards which require 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

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

Former Director, Simon Cato, (who resigned 3 April 2013) is a director of ASX listed Advanced Share Registry Limited (ASW), which provides share registry services to the Consolidated Entity.

Share Registry Fees (to 3 April 2013) Amounts recognised as expense	2013 2012 $ $ 10,351 11,054

On 1 June 2013, Director, Farooq Khan, entered into a standard form fixed term residential tenancy agreement with Orion subsidiary Silver Sands Developments Pty Ltd ( SSD ) to rent the Property Held for Developmemnt or Resale (refer Note 11). The lease is for a term of 12 months with the monthly rental being $3,683. As at 30 June 2013, the total rent paid by Mr Khan totalled $7,367.

ANNUAL REPORT | 38

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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	2013 2012 $ $ 65,839 70,707 13,010 5,755
	78,849 76,462

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.

7. LOSS PER SHARE

LOSS PER SHARE	2013	2012
	cents	cents
Basic and Diluted Loss per Share	(6.73)	(9.85)

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

calculations:
	2013	2012
	$	$
Net Loss attributable to owners of Queste Communications Ltd	(2,014,600)	(2,948,509)
	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:

Cash at Bank and in Hand Short-Term Deposits	2013 2012 $ $ 647,596 888,853 2,100,000 1,120,000
	2,747,596 2,008,853

ANNUAL REPORT | 39

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

8. CASH AND CASH EQUIVALENTS (continued)

CAS	H AND CASH EQUIVALENTS (continued)	2013	2012
		$	$
(b)	Reconciliation of Operating Profit after Income Tax to Net
	Cash used in Operating Activities
	Loss after Income Tax	(3,510,736)	(5,391,726)
	Add Non-Cash Items:
	Depreciation	225,775	86,214
	Write Off of Fixed Assets	16,954	-
	Net Loss on Financial Assets at Fair Value through Profit or Loss	3,113,398	2,648,701
	Loss on Land held for Development or Resale	150,000	160,000
	Loss on Revaluation of Land	101,296	-
	Impairment of Brand Name	25,000	-
	Share of Net Loss of Associate	102,158	625,086
	Changes in Assets and Liabilities:
	Financial Assets at Fair Value through Profit or Loss	(19,671)	-
	Trade and Other Receivables	100,981	(269,641)
	Inventories	136,973	721,835
	Other Current Assets	41	(838)
	Investments accounted for using the Equity Method	-	756,649
	Trade and Other Payables	(106,661)	(365,594)
	Provisions	(27,741)	5,251
	Deferred Tax	57,300	24,864
		365,067	(999,199)

(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.

9.

Listed Investments at Fair Value FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Current Unlisted Investments at Fair Value	2013 2012 $ $ 723,873 3,781,585 - 45,570
	723,873 3,827,155

(a) Risk Exposure

The Consolidated Entity’s exposure to price risk is discussed in Note 23.

10. TRADE AND OTHER RECEIVABLES

Current GST Receivable Trade Receivables TRADE AND OTHER RECEIVABLES Other Receivables Interest Receivable Receivable from Related Parties	2013 2012 $ $ 18,995 243,656 16,261 20,552 - 15,529 1,487 995 172,857 50,111
	209,600 330,843

ANNUAL REPORT | 40

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

10. Non Current TRADE AND OTHER RECEIVABLES (continued) Bonds and Guarantees	2013 2012 $ $ 53,085 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

Current Packaged Oils - at cost Revaluation of Property INVENTORIES Non Current Property held for Development or Resale Bulk Oils - at cost	2013 2012 $ $ 57,716 206,320 82,906 71,275
	140,622 277,595
	3,797,339 3,797,339 (2,307,339) (2,157,339)
	1,490,000 1,640,000

Property held for development or resale was valued by an independent qualified valuer (an Associate Member of the Australian Property Institute) on 30 June 2013. The revaluation has been recognised in the Statement of Profit or Loss and Other Comprehensive Income.

12. 13. INVESTMENT IN ASSOCIATE ENTITY Prepayments OTHER CURRENT ASSETS	2013 2012 $ $ 5,854 5,895

	Ownership	Interest	Carrying	Amount
	2013	2012	2013	2012
	%	%	$	$
Bentley Capital Limited	30.34	30.34	4,307,391	4,854,638
Movement in Investment
Opening Balance			4,854,638	7,571,638
Share of Net Loss after tax			(102,158)	(625,086)
Dividend Received			-	(756,649)
Returns of Capital Received			(445,089)	(1,335,265)
Closing Balance			4,307,391	4,854,638
Fair Value of Listed Investment in Associate			3,226,889	3,338,161
Net Asset Value of Investment			5,542,510	6,089,773

ANNUAL REPORT | 41

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

13. INVESTMENT IN ASSOCIATE ENTITY (continued)

13.	INVESTMENT IN ASSOCIATE ENTITY (co	ntinued)
					Net
		Assets	Liabilities	Revenues	Profit/(Loss)
	Summarised Position of Associate	$	$	$	$
	2013
	Bentley Capital Limited	5,639,089	96,579	285,866	(102,158)
	2012
	Bentley Capital Limited	6,197,893	108,120	173,959	(625,086)
14.	PROPERTY, PLANT AND EQUIPMENT			2013	2012
				$	$
	Land
	At Cost			861,214	861,214
	Revaluation			(101,296)	138,687
				759,918	999,901
	Buildings
	At Cost			117,876	117,876
	Accumulated Depreciation			(44,723)	(38,792)
				73,153	79,084
	Plant & Equipment
	At Cost			1,435,354	1,452,478
	Accumulated Depreciation			(1,118,982)	(900,139)
				316,372	552,339
	Leasehold Improvements
	At Cost			44,264	44,264
	Accumulated Depreciation			(38,906)	(37,905)
				5,358	6,359
				1,154,801	1,637,683

ANNUAL REPORT | 42

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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.

Depreciation expense AT 30 JUNE 2012 Depreciation expense Additions AT 30 JUNE 2013 Revaluation Additions AT 1 JULY 2012 Write-Offs Disposals Revaluation AT 1 JULY 2011	Buildings Plant & Equipment Leasehold Improve- ments Total $ $ $ $ 85,496 619,205 7,438 1,740,609 - - - (28,569) - 11,857 - 11,857 (6,412) (78,723) (1,079) (86,214) (28,569) Freehold Land - - 1,028,470 $
	79,084 552,339 6,359 1,637,683 999,901
	79,084 552,339 6,359 1,637,683 - - - (239,983) - 5,343 - 5,343 - (5,513) - (5,513) - - (16,954) - (16,954) (5,931) (218,843) (1,001) (225,775) 999,901 (239,983) - - -
	73,153 316,372 5,358 1,154,801 759,918

Land was valued by an independent qualified valuer (an Associate Member of the Australian Property Institute) on 30 June 2013. The revaluation of $239,983 has been recognised in the Asset Revaluation Reserve ($138,687; refer Note 21) and the Statement of Profit or Loss and Other Comprehensive Income

15. OLIVE TREES

OLIVE TREES Olive Trees - at cost Revaluation	2013 2012 $ $ 300,000 300,000 (234,500) (234,500)
	65,500 65,500

There are approximately 64,500 14 year old olive trees on 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 the trees commercial production qualities.

16. INTANGIBLE ASSETS

Revaluation Water Licence At Cost INTANGIBLE ASSETS Brand Name At Cost	2013 2012 $ $ 250,000 250,000 325,437 377,750
	575,437 627,750
	74,996 99,996
	650,433 727,746

ANNUAL REPORT | 43

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

16. INTANGIBLE ASSETS (continued)

AT 1 JULY 2011 Impairment Revaluation Revaluation AT 1 JULY 2012 AT 30 JUNE 2012 AT 30 JUNE 2013	Water Licence Brand Name Total $ $ $ 682,062 99,996 782,058 (54,312) - (54,312)
	627,750 99,996 727,746
	627,750 99,996 727,746 (52,313) - (52,313) - (25,000) (25,000)
	575,437 74,996 650,433

The Water Licence pertains to the Olive Grove property in Gingin, Western Australia. As at 30 June 2013, an independent qualified valuer (a Certified Practising Valuer and Associate Member of the Australian Property Institute) revalued the water licence downwards by $52,313 from the previous reporting date.

The Brand Name pertains to the ultra premium Dandaragan Estate Olive Oil brand. At 30 June 2013, the Directors assessed the value of the Brand Name and recognised an impairment expense of $25,000 in the Statement of Profit or Loss and Other Comprehensive Income.

17. Other Payables and Accrued Expenses Trade Payables Current TRADE AND OTHER PAYABLES GST Payable Prepaid Rental Revenue Dividend Payable	2013 2012 $ $ 26,687 19,975 28,302 28,302 9,565 44,236 - 26,951 85,427 137,178
	149,981 256,642

(a) Risk Exposure

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

18. PROVISIONS

Employee Benefits - Annual Leave PROVISIONS Current Employee Benefits - Long Service Leave	2013 2012 $ $ 41,997 33,624 132,992 169,106
	174,989 202,730

ANNUAL REPORT | 44

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

18. PROVISIONS (continued)

(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:

2013 2012 $ $ 132,992 169,106 19. 73,073 86,911 21,936 271,340 95,009 358,251 90,131 267,504 4,878 90,747 95,009 358,251 (a) Employee Benefits Fair Value Losses Tax Losses Total $ $ $ $ 99,568 745,028 321,292 1,165,888 (12,657) (473,688) (321,292) (807,637) 86,911 271,340 - 358,251 86,911 271,340 - 358,251 (13,838) (249,404) - (263,242) 73,073 21,936 - 95,009 (b) Fair Value Gains Other Total $ $ $ 1,057,472 108,416 1,165,888 (789,968) 7,195 (782,773) - (24,864) (24,864) 267,504 90,747 358,251 267,504 90,747 358,251 (177,373) (28,569) (205,942) - (57,300) (57,300) 90,131 4,878 95,009 AT 30 JUNE 2013 Charged/(Credited) to the profit and loss Deferred Tax Liabilities - Non Current Fair Value Losses Employee Benefits & Accruals Deferred Tax Assets - Non Current Charged/(Credited) to the profit and loss AT 1 JULY 2012 Fair Value Gains Movements - Deferred Tax Assets Movements - Deferred Tax Liabilities AT 30 JUNE 2013 Credited/(charged) to the profit and loss AT 1 JULY 2012 Leave obligations expected to be settled after 12 months Charged to Equity Other Charged to Equity AT 30 JUNE 2012 AT 1 JULY 2011 AT 30 JUNE 2012 Credited/(charged) to the profit and loss AT 1 JULY 2011 DEFERRED TAX	2013 2012 $ $ 132,992 169,106 19. 73,073 86,911 21,936 271,340 95,009 358,251 90,131 267,504 4,878 90,747 95,009 358,251 (a) Employee Benefits Fair Value Losses Tax Losses Total $ $ $ $ 99,568 745,028 321,292 1,165,888 (12,657) (473,688) (321,292) (807,637) 86,911 271,340 - 358,251 86,911 271,340 - 358,251 (13,838) (249,404) - (263,242) 73,073 21,936 - 95,009 (b) Fair Value Gains Other Total $ $ $ 1,057,472 108,416 1,165,888 (789,968) 7,195 (782,773) - (24,864) (24,864) 267,504 90,747 358,251 267,504 90,747 358,251 (177,373) (28,569) (205,942) - (57,300) (57,300) 90,131 4,878 95,009 AT 30 JUNE 2013 Charged/(Credited) to the profit and loss Deferred Tax Liabilities - Non Current Fair Value Losses Employee Benefits & Accruals Deferred Tax Assets - Non Current Charged/(Credited) to the profit and loss AT 1 JULY 2012 Fair Value Gains Movements - Deferred Tax Assets Movements - Deferred Tax Liabilities AT 30 JUNE 2013 Credited/(charged) to the profit and loss AT 1 JULY 2012 Leave obligations expected to be settled after 12 months Charged to Equity Other Charged to Equity AT 30 JUNE 2012 AT 1 JULY 2011 AT 30 JUNE 2012 Credited/(charged) to the profit and loss AT 1 JULY 2011 DEFERRED TAX	2013 2012 $ $ 132,992 169,106 19. 73,073 86,911 21,936 271,340 95,009 358,251 90,131 267,504 4,878 90,747 95,009 358,251 (a) Employee Benefits Fair Value Losses Tax Losses Total $ $ $ $ 99,568 745,028 321,292 1,165,888 (12,657) (473,688) (321,292) (807,637) 86,911 271,340 - 358,251 86,911 271,340 - 358,251 (13,838) (249,404) - (263,242) 73,073 21,936 - 95,009 (b) Fair Value Gains Other Total $ $ $ 1,057,472 108,416 1,165,888 (789,968) 7,195 (782,773) - (24,864) (24,864) 267,504 90,747 358,251 267,504 90,747 358,251 (177,373) (28,569) (205,942) - (57,300) (57,300) 90,131 4,878 95,009 AT 30 JUNE 2013 Charged/(Credited) to the profit and loss Deferred Tax Liabilities - Non Current Fair Value Losses Employee Benefits & Accruals Deferred Tax Assets - Non Current Charged/(Credited) to the profit and loss AT 1 JULY 2012 Fair Value Gains Movements - Deferred Tax Assets Movements - Deferred Tax Liabilities AT 30 JUNE 2013 Credited/(charged) to the profit and loss AT 1 JULY 2012 Leave obligations expected to be settled after 12 months Charged to Equity Other Charged to Equity AT 30 JUNE 2012 AT 1 JULY 2011 AT 30 JUNE 2012 Credited/(charged) to the profit and loss AT 1 JULY 2011 DEFERRED TAX	2013 2012 $ $ 132,992 169,106
			73,073 86,911 21,936 271,340
			95,009 358,251
			90,131 267,504 4,878 90,747
			95,009 358,251
	86,911 271,340 - 358,251
	86,911 271,340 - 358,251 (13,838) (249,404) - (263,242)
	73,073	21,936 - 95,009
		Fair Value Gains Other Total $ $ $ 1,057,472 108,416 1,165,888 (789,968) 7,195 (782,773) - (24,864) (24,864)
		267,504 90,747 358,251
		267,504 90,747 358,251 (177,373) (28,569) (205,942) - (57,300) (57,300)
		90,131 4,878 95,009

ANNUAL REPORT | 45

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

20. 2013 2012 Number Number 28,404,879 28,404,879 20,000,000 20,000,000 Partly paid ordinary shares Fully paid ordinary shares ISSUED CAPITAL	2013 2012 $ $ 5,887,927 5,887,927 304,500 304,500
	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.

(b) Capital Risk Management

The Company's objectives when managing its capital are to safeguard its 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.

21. RESERVES

Revaluations of Intangible Assets Less: Deferred Tax on Revaluations RESERVES Less: Non-Controlling Interest Asset Revaluation Reserve Revaluations of Freehold Land Option Premium Reserve	2013 2012 $ $ 2,138,012 2,138,012
	- 138,687 325,437 377,750 (97,631) (154,931) (108,026) (177,572)
	119,780 183,934
	2,257,792 2,321,946

The movement in the Asset Revaluation Reserve relates to the revaluation of Orion's Olive Grove land from $999,901 to $759,918 (Note 14) and Orion's Water Licence from $627,750 to $575,437 (Note 16), as assessed by an independent qualified valuer (a Certified Practising Valuer and Associate Member of the Australian Property Institute).

ANNUAL REPORT | 46

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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. Unallocated items are mainly comprised of corporate assets, office expenses and income tax assets and liabilities.

	Olive Oil	Investments	Unallocated	Total
	$	$	$	$
2013
Segment Revenues	270,967	44,451	123,648	439,066
Segment Loss before tax	(611,826)	(1,679,101)	(1,162,509)	(3,453,436)
Segment Assets	2,008,255	7,120,466	2,515,043	11,643,764
Segment Liabilities	121,504	24,587	273,888	419,979
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

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.

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.

ANNUAL REPORT | 47

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

23. FINANCIAL RISK MANAGEMENT (continued)

The Consolidated Entity holds the following financial instruments:

Note 8 9 10 17 Trade and Other Payables Financial Liabilities Cash and Cash Equivalents Financial Assets Financial Assets at Fair Value through Profit or Loss Trade and Other Receivables NET FINANCIAL ASSETS	2013 2012 $ $ 2,747,596 2,008,853 723,873 3,827,155 209,600 330,843
	3,681,069 6,166,851
	(149,981) (256,642)
	(149,981) (256,642)
	3,531,088 5,910,209

(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
	2013	2012	2013	2012
	$	$	$	$
ASX All Ordinaries	Accumulation Index
Increase 15%	1,971,125	2,201,273	1,971,125	2,201,273
Decrease 15%	(1,971,125)	(2,201,273)	(1,971,125)	(2,201,273)

ANNUAL REPORT | 48

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

23. FINANCIAL RISK MANAGEMENT (continued) (a) Market Risk

(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 4.35% (2012: 4.79%). 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	2013 2012 $ $ 647,596 888,853 2,100,000 1,120,000
	2,747,596 2,008,853

(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- A- Trade Receivables (due within 30 days) No external credit rating available Cash and Cash Equivalents	2013 2012 $ $ 2,743,705 2,007,643 1,665 1,728
	2,745,370 2,009,371
	209,600 330,843

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 | 49

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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.

The following tables present the Consolidated Entity’s financial assets and liabilities measured and recognised at fair value at 30 June 2013 categorised by the following levels:

• (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).

	Level	1	Level	2	Level	3	Total
2013		$		$		$	$
Financial Assets at Fair Value through
Profit or Loss:
Listed Investments at Fair Value	723,873		-		-		723,873
Unlisted Investments at Fair Value	-		-		-		-
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

The fair value of investments in unlisted shares are considered level 3 investments as their fair value is unable to be derived from market data. The Directors assess fair value based on information obtained from the companies directly.

24. Not longer than one year COMMITMENTS Longer than one year but not longer than five years	2013 2012 $ $ 97,163 78,630 - -
	97,163 78,630

The non-cancellable operating lease commitment is the Consolidated Entity's share of the office premises at Suite 1, 346 Barker Road, Subiaco, Western Australia, and includes all outgoings (exclusive of GST). The lease is for a one year term expiring 30 June 2014.

ANNUAL REPORT | 50

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

30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2013

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)).

26. EVENTS OCCURRING AFTER THE REPORTING PERIOD

• (a) On 5 August 2013, Orion Equities Limited announced its intention to conduct an on-market share buyback of up to 1,600,000 shares (Buy-Back). This represents ~9% of the pre Buy-Back and ~10% of the post Buy-Back total voting shares of the Company. 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 Comapny'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 expire on 31 July 2014.

• (b) On 30 August 2013, 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 2013 annual general meeting in November 2013. 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.

ANNUAL REPORT | 51

30 JUNE 2 013

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

DIRECTORS’ DECLARATION

The Dire c tors of the C o mpany decla r e that:

• (1) T h e financial s t atements, co m prising the S tatement of Profit or Los s and Other C omprehensive Income, Statement of F inancial Position, Statem e nt of Chan g es in Equity and Statem e nt of Cash Flow and a c companying n otes as set o u t on pages 2 3 to 51 are in accordance w ith the Corp o rations Act 2 0 01 and:

• (a) comply with Accoun t ing Standar d s, the Corp o rations Reg u lations 2001 and other m andatory professi o nal reporting ; and

• (b) give a tr u e and fair vi e w of the Co m pany’s and Consolidated E n tity’s financi a l position as a t 30 June 2013 an d of its perfor m ance for th e year ended o n that date;

• (2) In the Director s ’ opinion the r e are reason a ble grounds t o believe tha t the Compa n y will be able to pay its d e bts as and w h en they bec o me due and p ayable;

• (3) T h e Remunera t ion Report d i sclosures set out (within t he Directors’ Report) on p ages 16 to 1 9 (as the a u dited Remun e ration Repor t ) comply wit h section 300 A of the Corp o rate Act 200 1;

• (4) T h e Directors have been giv e n the declar a tions require d by section 2 95A of the C o rporations A c t 2001 by the Executive C hairman an d Managing D irector (the p erson who p erforms the Chief Executive Officer function) and t h e Company S ecretary (the person who, in the opinio n of the Direc t ors, perform s the Chief Fi n ancial Office r function); a n d

• (5) T h e Company h as included i n the notes t o the Financial Statements a n explicit an d unreserved statement of compliance w ith the Inter n ational Finan c ial Reporting Standards.

This decl a ration is ma d e in accorda n ce with a re s olution of th e Directors m a de pursuant t o section 29 5 (5) of the Corporat io ns Act 2001.

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Farooq Khan Chairman 30 August 2013

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Victor Ho Executive Director and Company Secretary

A NNUAL REP O RT | 52

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 2013, the consolidated statement of profit or loss and other 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 2013 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 in the directors’ report for the year ended 30 June 2013. 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 2013 complies with section 300A of the Corporations Act 2001 .

BDO Audit (WA) Pty Ltd

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Brad McVeigh Director

Perth, Western Australia Dated this 30[th] day of August 2013

30 JUNE 2013

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

CORPORATE GOVERNANCE

Compliance with Corporate Governance Council’s Principles & Recommendations

The extent to which the Company has followed the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (with 2010 Amendments) 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, 3.5, 4.1, 4.2
1.2 Companies should disclose the process for evaluating the performance of senior executives.	Yes	3.12
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 majorityof the board should be independent directors.	No	3.5
2.2 The chair should be an independent director.	No	3.2,3.6
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	3.12
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;  a statement as to the mix of skills and diversity for which the board of directors is looking to achieve in membership of the board.  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;	Yes (as applicable)	Annual Report Website CGS

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Principle	Compliance	CGS References / Comments
 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  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 thepractices necessaryto 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 unethicalpractices;
3.2 Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the board to establish measurable objectives for achieving gender diversity and for the board to assess annually both the objectives and theprogress towards achievingthem.	Yes (in part)	3.16
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	3.9 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 achievingthem.	No	3.16
3.4 Companies should disclose in each annual report the proportion of women employees in the whole organisation,women in senior executivepositions 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

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Principle 4: Safeguard integrity in financial reporting Companies should have a structure to independently verify and safeguard the integrity of their financial reporting	Principle 4: Safeguard integrity in financial reporting Companies should have a structure to independently verify and safeguard the integrity of their financial reporting	Principle 4: Safeguard integrity in financial reporting Companies should have a structure to independently verify and safeguard the integrity of their financial reporting	Principle 4: Safeguard integrity in financial reporting Companies should have a structure to independently verify and safeguard the integrity of their financial reporting	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:  the names and qualifications of those appointed to the audit committee 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  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.		Yes (as applicable)		Annual Reports Website CGS
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 thosepolicies or a summaryof thosepolicies.		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 theirpolicyor a summaryof thatpolicy.		Yes		8.1
6.2 Companies should provide the information indicated in Guide to Reporting on Principle 6. An explanation of any departures from 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

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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		Yes	7.1
disclose a summary of those policies.
7.2 The board should require management to design and implement the risk management and internal		Yes	7.1
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.
7.3 The board should disclose whether it has received assurance from the chief executive officer (or		Yes	7.1
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 reportingrisks.
7.4 Companies should provide the information indicated in the Guide to Reporting on Principle 7.		Yes	Annual Reports
The following material should be included in the corporate governance section of the annual report:			Website
 an explanation of any departures from best practice recommendations 7.1, 7.2, 7.3 or 7.4;			CGS
 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

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 The remuneration committee should be structured so that it:		No	4.2
 consists of a majority of independent directors
 is chaired by an independent chair
 has at least three members
8.3 Companies should clearly distinguish the structure of non-executive directors’ remuneration from		Yes	Remuneration
that of executive directors and senior executives.			Report in the
			Directors’ Report
			(within Annual
			Reports)
8.4 Companies should provide the information indicated in the Guide to Reporting on Principle 8.		Yes	Annual Reports
The following material or a clear cross-reference to the location of the material should be included in		(as applicable)	Website
the corporate governance statement in the annual report:			CGS
 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.

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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 (“ Recommendations ”) developed by the ASX Corporate Governance Council.

The Company’s practices are largely consistent with the Recommendations - the Board considers that the implementation of a small number of the Recommendations is not appropriate, for the reasons set out below in relation to the relevant items.

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

Details of the Recommendations can be found on the ASX website at: - - http://www.asxgroup.com.au/corporate governance council.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 and 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 its members, appropriate external advice may be taken and reviewed prior to a final decision being made.

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;

• (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 an effective composition, size and commitment to adequately discharge its responsibilities and duties, given the current size of the Company and the scale and nature of its activities. The names of the Directors currently in office and their qualifications and experience are stated in the Directors’ Report for the Company’s latest financial year.

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

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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 the need for Directors to have a relevant blend of personal experience in accounting and finance, law, financial and investment markets, financial management, public company administration and Directorlevel business or corporate experience, having regard to the scale and nature of the Company’s activities.

The diverse skills and corporate backgrounds of the directors, disclosed in the Directors’ Report for the Company’s latest financial year, reflect the mix that the Board considers appropriate.

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 Company’s latest financial year.

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. One of the current Board’s three Directors is a Non-Executive Director – Mr Yaqoob Khan. His qualifications and experience are stated in the Directors’ Report for the Company’s latest financial year.

Messrs Azhar Chaudhri and Simon Cato served as NonExecutive Directors until their retirement from the Board on 3 April 2013.

3.4. Executive Directors

Mr Victor Ho was appointed as an Executive Director on 3 April 2013. His qualifications and experience are stated in the Directors’ Report for the Company’s latest financial year.

3.5. 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 Company’s latest financial year.

3.6. 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;

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

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

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

Mr Victor Ho is not regarded as an independent Director, being an Executive Director of the Company.

Mr Simon Cato (who served as a Non-Executive Director until 3 April 2013) was regarded as an independent Director under the criteria referred to above.

Mr Azhar Chaudhri (who served as a Non-Executive Director until 3 April 2013) was not regarded as an independent Director as he did not meet the above criteria for independence adopted by the Company, being a substantial shareholder of the Company.

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 a majority of independent Non-Executive Directors. The Board believes that the individuals on the Board can make, and do make, quality and independent judgments in the best interests of the Company on all relevant issues.

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3.7. 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 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).

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 2012 - due to retire, and eligible for re-election, at the 2013 AGM
Victor Ho	3 April 2013	N/A - appointed by the Board during the year, and standing for election at the 2013 AGM
Azhar Chaudhri	4 August 1998	4 November 2011 - retired as a Director on 3 April 2013
Simon Cato	11 February 2008	10 November 2010 - retired as a Director on 3 April 2013

3.12. Performance Review and Evaluation

3.8. 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.

3.9. 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.

3.10. 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.

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.

The Board as a whole is responsible for the review of the performance of the Executive Chairman/Managing Director. The Board as a whole has responsibility to review its own performance and the performance of individual Directors through a formal self-evaluation process. The Board conducted a review of this kind during the Company’s latest financial year. The Chairman also speaks to Directors individually regarding their role and performance as a Director.

The Company has no senior executives other than Executive Directors.

3.13. Meetings of the Board

3.11. 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 the 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 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.

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

3.14. 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 a Director.

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3.15. 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 employees 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.

3.16. 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 Company’s latest financial year and in the 2005 Notice of AGM dated 18 October 2005.

3.16 Diversity

The Board, senior management and workforce of the Company currently comprises individuals that are multiculturally diverse, together with possessing 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.

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, being Executive Director and Company Secretary, Victor Ho.

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 NonExecutive Chairman.

The Board is of the opinion that all Directors exercise and bring to bear an unfettered and independent judgement towards their duties. 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. The Board 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 for the Company’s latest financial year, as required under section 295A of the Corporations Act and in accordance with the Recommendations.

4.2. Board and Management Committees

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

The small size of, and low turnover within, the Company’s workforce are such that it cannot realistically be expected to reflect the degree of diversity of the general population. Given those circumstances, and the current nature and scale of the Company’s activities, the Board has determined that it is not practicable to set measurable objectives for achieving gender diversity.

The Board will monitor the extent to which the level of diversity within the Company is appropriate on an ongoing basis and, where required, consider measures to improve it. The Board will further consider the establishment of objectives for achieving gender diversity as the Company develops and its circumstances change.

The Company does not currently have any women in on the Board (and has no senior executives other than Executive Directors). 50% of the Company’s current employees are female.

In view of the current composition of the Board (which comprises the Executive Chairman/Managing Director, an Executive Director and a Non-Executive 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 would not add value for shareholders, and is therefore not 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 Company’s latest financial year. Directors do not currently have any equity-based remuneration.

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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 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, conflict 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.

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 Directors have delegated responsibility from the Board for identification of operations risks generally, for putting processes in place to mitigate them and monitoring compliance with those processes. The Company has clear accounting and internal control systems to manage risks to the accuracy of financial information and other financial risks.

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

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

The Board has determined that the Executive Chairman/Managing Director is the appropriate person to make the Chief Executive Officer equivalent declaration and the Executive Director/Company Secretary is the appropriate person to make the Chief Financial Officer equivalent declaration in respect of for the Company’s latest financial year, on the risk management and internal compliance and control systems in the Recommendations.

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 five 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.

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8. Communications

8.1. Market and Shareholder Communications

The Company is owned by shareholders. Increasing shareholder value is the Company’s key mission. Shareholders require an understanding of the Company’s operations and performance to enable them to be aware of how that mission is being fulfilled. The Directors are the shareholders’ representatives. In order to properly perform their role, the Directors must 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 and quarterly cash flow reports 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

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

Continuous Disclosure to ASX

The Board has designated the Executive Director/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, the other 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/Managing Director has general responsibility to speak to the media, investors and analysts on the Company’s behalf. Other Directors 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.

25 October 2013

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

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30 JUNE 2013

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

ADDITIONAL ASX INFORMATION as at 24 October 2013

DISTRIBUTION OF LISTED ORDINARY FULLY PAID SHARES

						% of Total Issue
	Spread	of	Holdings	Number of Holders	Number of Units	Capital
	1	-	1,000	12	7,254	0.026%
	1,001	-	5,000	56	160,948	0.567%
	5,001	-	10,000	71	665,365	2.342%
	10,001	-	100,000	114	3,232,343	11.380%
	100,001	-	and over	25	24,338,969	85.686%
	Total			278	28,404,879	100.00%
	Unmarketable Parcels*
						% of Total Issue
	Spread	of	Holdings	Number of Holders	Number of Units	Capital
	1	-	4,999	60	128,202	0.451%

*An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of 4,999 shares or less, being a parcel with a value of $500 or less in total, based upon the Company’s closing share price on 24 October 2013 of 10 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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30 JUNE 2013

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

ADDITIONAL ASX INFORMATION as at 24 October 2013

TOP 20 ORDINARY FULLY PAID SHAREHOLDERS

Rank Shareholder	Shares Held Total % %	Shares Held Total % %
	Shares Issued Capital Voting Power*
1 BELL IXL INVESTMENTS LIMITED CELLANTE SECURITIES CLEOD PTY LTD 2 FAROOQ KHAN ISLAND AUSTRALIA PTY LTD 3 MR AZHAR CHAUDHRI CHI TUNG INVESTMENTS LTD RENMUIR HOLDINGS LTD 4 MANAR NOMINEES PTY LTD ZELWER SUPERANNUATION PTY LTD 5 COWOSCO CAPITAL PTY LTD	2,599,747 2,053,282 2,748,490 Sub-total 7,401,519 26.057% 24.732% 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% 1,825,663 180,500 Sub-total 2,006,163 7.063% 6.703% 1,150,000 4.049% 3.843% 676,260 2.381% 2.260% 268,100 0.944% 0.896% 235,000 0.827% 0.785% 220,000 0.775% 0.735% 215,000 0.757% 0.718% 215,000 0.757% 0.718% 118,000 75,000 Sub-total 193,000 0.679% 0.645% 185,019 0.651% 0.618% 136,125 0.479% 0.455% 130,000 0.458% 0.434%
6 MR DONALD GORDON MACKENZIE & MRS GWENNETH EDNA MACKENZIE 7 MS ROSANNA DE CAMPO 8 GLENVIEW SERVICES PTY LTD 9 GIBSON KILLER PTY LTD 10 MR AYUB KHAN
11 MRS AFIA KHAN 12 MR SIMON KENNETH CATO ROSEMONT ASSET PTY LTD 13 TOMATO 2 PTY LTD 14 MR JOHN CHENG-HSIANG YANG & MS PEGA PING PING MOK 15 MR ANTHONY NEALE KILLER & MRS SANDRA MARIE KILLER
16 MR GREGORY JOHN MATHESON 17 MR EUGENE RODRIGUEZ 18 NICHOLAS PASTERNATSKY 19 MS JANET BACKHOUSE 20 MR KEITH FRANCIS OATES & MRS LINDA ANN OATES Total		110,742 0.390% 0.370% 110,000 0.387% 0.368% 103,750 0.365% 0.347% 100,000 0.352% 0.334% 100,000 0.352% 0.334%
		24,745,852 87.119% 82.686%

• % Voting Power is equivalent to the total number of fully paid ordinary shares on issue (28,404,879) plus the equivalent voting shares associated with the partly paid shares on issue based on the amount paid up per partly paid share (1,522,500).

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30 JUNE 2013

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

ADDITIONAL ASX INFORMATION as at 24 October 2013

SUBSTANTIAL SHAREHOLDERS

Substantial Shareholders	Registered Shareholder	Shares/Voting	%Voting
		Shares Held	Power6
Bell IXL Investments Limited and associates1	BELL IXL INVESTMENTS LIMITED CELLANTE SECURITIES	2,599,747 2,053,282	24.73%
	CLEOD PTY LTD	2,748,490
Azhar Chaudhri, Renmuir	MR AZHAR CHAUDHRI	907,450
Holdings Limited and Chi Tung Investments Ltd2	CHI TUNG INVESTMENTS LTD RENMUIR HOLDINGS LTD	1,050,000 3,277,780	22.58%
	CHI TUNG INVESTMENTS LTD	1,522,5003
Farooq Khan and associates4	FAROOQ KHAN	2,286,367	19.89%
	ISLAND AUSTRALIA PTY LTD	3,668,577
Manar Nominees Pty Ltd and Zelwar Superannuation PtyLtd5	MANAR NOMINEES PTY LTD ZELWER SUPERANNUATION PTY LTD	1,825,663 180,500	6.70%

Notes:

(1) Based on the substantial shareholding notice filed by Bell IXL Investments Limited dated 19 September 2012

• (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

(6) Total Voting Power is equivalent to the total number of fully paid ordinary shares on issue (28,404,879) plus the equivalent voting shares associated with the partly paid shares on issue based on the amount paid up per partly paid share (1,522,500).

(7) Movements of less than 1% in voting power are not required to be disclosed to ASX via an update substantial shareholding notice and accordingly, there may be variances between the shareholdings recorded in the table above and the most recent substantial shareholding notices lodged on ASX.

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ASX Code: QUE

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

PRINCIPAL & REGISTERED OFFICE:

Suite 1, 346 Barker Road Subiaco, Western Australia 6008

T | (08) 9214 9777 F | (08) 9214 9701 E | info@queste.com.au W | www.queste.com.au

SHARE REGISTRY:

Advanced Share Registry Limited Suite 2, 150 Stirling Highway Nedlands, Western Australia 6009 PO Box 1156, Nedlands 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