QUESTE COMMUNICATIONS LIMITED — Capital/Financing Update 2013

Sep 24, 2013

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Wednesday, 25 September 2013

MARKET ANNOUNCEMENT

Corporate Update

Furthe r to the Corporate Upda t e market a n nouncemen t on 3 April 2013 in rel a tion to a review of Quest e 's capital management initiatives and c orporate an d Board over h eads, the C o mpany is pl e ased to provid e the followi n g update.

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

As pr e viously note d , Queste h a d, as part o f a capital management programm e for the benefit of shareholders, initiated an on- m arket share buy-back i n 2012/2013. This initi a tive met with little succes s and no sh a res were b o ught back, p rimarily du e to the lack of liquidity in trading of Queste shares , based upo n the applica t ion of ASX Listing Rule 7.29 (which p r escribes tha t an on-mar k et buyback m ay occur onl y if transacti o ns in the co m pany’s shares were recorded on ASX on at least 5 days in the pr e vious 3 mon t hs).

Quest e has review e d the on-m a rket share b u y-back initi a tive and the liquidity iss u e and has i d entified an Eq u al Access Buy-Back Sche m e as an alt e rnative to the same, allo w ing shareh o lders an opportunity to real i se their inve s tment in the Company in an otherwis e relatively illiquid market for Queste s h ares.

The C o mpany accordingly prop o ses to cond u ct an Equal Access Buy- B ack Schem e and anticip a tes the proposed scheme w ill operate in the followin g manner:

• (a) Subject to a fixed maximum buy-bac k considerati o n, Queste w ill offer to b u y-back 100 % of its ordinary sha r es in the co m pany at a fi x ed price per fully paid and partly paid share; and

• (b) If the numb e r of accepta n ces were to exceed the m aximum buy-back consi d eration, Qu e ste will scale back t h e number of shares to be bought bac k on a pro-rata basis.

An Eq u al Access B u y-Back Sch e me is open t o all shareh o lders on an equal basis and particip a tion by shareholders is entirely volunta r y. It is als o a cost effe c tive way for shareholder s to dispose of their interests as there a r e no broker a ge costs ass o ciated with a n off-marke t Equal Acce s s Buy-Back.

If the buy-back pr i ce is set below the net tangible asset (NTA) ba c king of the Company ( w hich is anticip a ted to be t h e case), the NTA backin g will increas e post buy-back, which w ill benefit re m aining shareholders.

Sectio n 257C(1) of the Corporations Act pro v ides that an equal acces s share buy- b ack which w i ll result in more than 10% of a compa n y’s shares b e ing bought back in a 12 month peri o d (which will occur under the propose d Equal Acc e ss Buy-Bac k Scheme) m ust be app r oved by a ( ordinary) resolution passe d at a general meeting of t he company .

The C o mpany is c u rrently see k ing clarifica t ion from ASX on the a p plication of t he Listing R ules in relatio n to the pro p osed Equal Access Buy - Back. The Company has also enga g ed an Inde p endent Expert to prepare a n independent expert re p ort (IER) wi t h respect to the propose d Equal Acc e ss BuyBack i n cluding (inter alia) to opi n e on wheth e r it is fair an d reasonable to sharehold e rs.

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www.que s te.com.au Q UESTE COMM U NICATIONS L T D

A.B.N. 58 081 688 164

Suite 1, 346 B arker Road, Subiaco, Western Australia 6008 T | (08) 9214 9 777 F | ( 0 8) 9322 1515

E | info@q u este.com.au

20130925 QUE ASX Corporate Update.docx

Queste proposes to seek shareholder approval to undertake the Equal Access Buy-Back at the upcoming 2013 annual general meeting (subject to ASX’s clarification and completion of the IER referred to above). Further details of the terms of the proposed Equal Access Buy-Back will be outlined in the Notice of Meeting documents seeking shareholder approval for the same.

It is proposed that the Equal Access Buy-Back will be funded from existing net cash reserves (approximately $0.95 million as at 31 August 2013).

The Company notes that the Board may consider undertaking annual Equal Access Buy-Back Schemes depending on the evaluation of the success of the proposed Equal Access Buy-Back initiative.

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, has voluntarily agreed to reduce his salary by 50%, saving the Company $68,000 per annum; and

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

Aggregate Board salaries/fees (including the Company Secretary’s salary) now totals a modest (by ASX company standards) $122,500 per annum.

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.

Return on Investments

In addition to the investment in 52.58% controlled entity, Orion Equities Limited (ASX Code : OEQ), Queste's principal assets comprise:

• a direct 2.37% (1,740,625) share investment in Bentley Capital Limited (ASX Code : BEL) valued at $0.46 million (at BEL’s NTA backing of $0.264 per share as at 31 August 2013); and

• a cash position (net of trade creditors) of $0.95 million (as at 31 August 2013).

The Company has no debt other than normal trade creditors.

During the 2012/13 financial year, Queste’s investments in ASX-listed securities have performed as follows:

• $17,763 net unrealised gain.

Queste has also been the recipient of regular distributions (recently one cent per share, twice a year via returns of capital) from Bentley Capital Limited. Bentley also has significant franking credits ($1.85 million as at 30 June 2013).

On 30 August 2013, Bentley announced its intention to seek shareholder approval (at the upcoming 2013 AGM) to undertake a further one cent per share return of capital.

For Further Information:

Victor Ho Executive Director T | (08) 9214 9777 and Company Secretary E | vho@queste.com.au

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