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QUESTE COMMUNICATIONS LIMITED Interim / Quarterly Report 2016
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Interim / Quarterly Report
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HALF YEAR REPORT
31 December 2015
THIS DOCUMENT SHOULD BE READ IN CONJUNCTION WITH THE 30 JUNE 2015 ANNUAL REPORT OF THE COMPANY LODGED ON ASX ON 14 OCTOBER 2015
Queste Communications Ltd A.B.N. 58 081 688 164
T | (08) 9389 8033 F | (08) 9262 3723
Advanced Share Registry Services Western Australia – Main Office 110 Stirling Highway Nedlands, Western Australia 6009 PO Box 1156, Nedlands, Western Australia 6909
E | [email protected] W | www.advancedshare.com.au
New South Wales – Branch Office Suite 8H, 325 Pitt Street Sydney, New South Wales 2000 PO Box Q1736, Queen Victoria Building New South Wales 1230
T | (02) 8096 3502
| T (03) 9018 7102 | Victoria |
|---|---|
| T (07) 3103 3838 | Queensland |
REGISTERED OFFICE: SHARE REGISTRY:
Level 2 23 Ventnor Avenue West Perth, Western Australia 6005
T | (08) 9214 9777 F | (08) 9214 9701 E | [email protected] W | www.queste.com.au
CONTENTS CORPORATE DIRECTORY
| ASX Appendix 4D Half Year Report | 2 | BOARD | |
|---|---|---|---|
| Directors' Report | 4 | Farooq KhanVictor Ho | (Chairman and Managing Director)(Executive Director) |
| Auditor's Independence Declaration | 12 | Yaqoob Khan | (Non-Executive Director) |
| Consolidated Statement ofProfit or Loss and otherComprehensive Income | 13 | COMPANY SECRETARYVictor Ho | |
| Consolidated Statement ofFinancial Position | 14 | Level 2, 23 Ventnor Avenue | PRINCIPAL & REGISTERED OFFICEWest Perth, Western Australia 6005 |
| Consolidated Statement of | 15 | ||
| Changes in Equity | Telephone: | (08) 9214 9777 | |
| Facsimile: | (08) 9214 9701 | ||
| Consolidated Statement of Cash Flows | 16 | Email: | [email protected] |
| Notes to the ConsolidatedFinancial Statements | 17 | Website: | www.queste.com.au |
| AUDITORS | |||
| Directors' Declaration | 25 | Rothsay Auditing | |
| Chartered Accountants | |||
| Auditor's Independent Review Report | 26 | Level 1, Lincoln House | |
| 4 Ventnor Avenue | |||
| Securities Information | 27 | West Perth, Western Australia 6005 |
Visit www.queste.com.au for: SHARE REGISTRY
- Market Announcements Main Office
- Corporate Governance 110 Stirling Highway
Yaqoob Khan (Non-Executive Director) West Perth, Western Australia 6005
| Changes in Equity | Telephone: | (08) 9214 9777 | |
|---|---|---|---|
| Facsimile: | (08) 9214 9701 | ||
| Consolidated Statement of Cash Flows | 16 | Email: | [email protected] |
| Website: | www.queste.com.au | ||
AUDITORS
| Chartered Accountants | |
|---|---|
| 4 Ventnor Avenue | |
| Telephone: | (08) 9486 7094 |
| Website: | www.rothsayresources.com.au |
STOCK EXCHANGE
Australian Securities Exchange Perth, Western Australia
ASX CODE
QUE
| • | Market Announcements | Main Office | ||||
|---|---|---|---|---|---|---|
| • | Financial Reports | Advanced Share Registry Services | ||||
| • | Corporate Governance | 110 Stirling Highway | ||||
| • | Forms | Nedlands, Western Australia 6009 | ||||
| • | Email subscription | Telephone: | (08) 9389 8033 | |||
| Facsimile: | (08) 9262 3723 | |||||
| Email: | [email protected] | |||||
| Investor Web: | www.advancedshare.com.au | |||||
| Sydney Office | ||
|---|---|---|
| Suite 8H, 325 Pitt Street | ||
| Sydney, New South Wales 2000 | ||
| Telephone: | (02) 8096 3502 | |
| Victoria: | Telephone: | (03) 9018 7102 |
| Queensland: | Telephone: | (07) 3103 3838 |
APPENDIX 4D HALF YEAR REPORT
This Half Year Report is provided to the Australian Securities Exchange (ASX) under ASX Listing Rule 4.2A.3.
| Current Reporting Period: | 1 July 2015 to 31 December 2015 |
|---|---|
| Previous Corresponding Period: | 1 July 2014 to 31 December 2014 |
| Balance Date: | 31 December 2015 |
| Company: | Queste Communications Ltd (QUE) |
| Consolidated Entity: | The Company and controlled entities, being ASX-listed Orion Equities Limited(A.C.N. 000 742 843) (Orion or OEQ) and controlled entities of Orion(Queste). |
RESULTS FOR ANNOUNCEMENT TO THE MARKET
| Dec 2015 | Dec 2014 | Change | Up/ | |
|---|---|---|---|---|
| Consolidated Entity | $ | $ | % | Down |
| Total revenues | 903,949 | 266,817 | 239% | Up |
| Total expenses | (564,221) | (684,659) | 18% | Down |
| Profit/(Loss) before tax | 339,728 | (417,842) | 181% | Up |
| Income tax expense | - | - | N/A | N/A |
| Profit/(Loss) for the half year | 339,728 | (417,842) | 181% | Up |
| Net loss attributable to non-controlling interest | (200,511) | (88,460) | 327% | Up |
| Profit/(Loss)s after tax attributable to owners of theCompany | 139,217 | (329,382) | 142% | Up |
| Basic and diluted earnings/(loss) per share (cents) | 0.47 | (1.12) | 142% | EarningsUp |
| Consolidated Entity | Dec 2015 | Jun 2015 | Change% | Up/Down |
| Diluted NTA backing per share (cents) | 19.2 | 18.7 | 3% | Up |
BRIEF EXPLANATION OF RESULTS
The Consolidated Entity's results incorporate the results of controlled entity, ASX-listed investment company, Orion Equities Limited (OEQ) and controlled entities of OEQ (Orion).
At the Consolidated Entity level:
Revenues were up 239% from the previous financial half year.
Expenses were down 18% from the previous financial half year.
Queste has generated a net profit of $339,728 for the financial half year, principally as a consequence of its share investment and trading activities.
Please refer to the attached Directors' Report and Financial Report for further information on a review of the Queste's operations and the financial position and performance of the Queste for the financial half year ended 31 December 2015.
DIVIDENDS
The Directors have not declared a dividend in respect of the financial half year ended 31 December 2015.
APPENDIX 4D HALF YEAR REPORT
ASSOCIATE ENTITY
Orion has accounted for the following share investment at the Balance Date as an investment in an Associate entity (on an equity accounting basis):
(1) 27.32% interest (20,513,783 shares) in Bentley Capital Limited (ASX:BEL) (30 June 2015: 27.42%; 20,513,783 shares).
The Company also has a 2.32% (1,740,625 shares) direct interest in BEL (30 June 2015: 2.32%; 1,740,625 shares).
Accordingly, the Consolidated Entity has equity accounted for a 29.64% total interest in BEL (30 June 2015: 29.75%).
CONTROLLED ENTITIES
The Consolidated Entity did not gain or cease control of any entities during the Current Reporting Period.
For and on behalf of the Directors,
Date: 25 February 2016
Victor Ho Executive Director and Company Secretary Telephone: (08) 9214 9777 Email: [email protected] Victor Ho Company Secretary
The Directors present their report on Queste Communications Ltd (Company or QUE) and its controlled entities (the Consolidated Entity or Queste) for the financial half year ended 31 December 2015 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 (ASX Code: QUE).
The Consolidated Entity's results incorporates the results of controlled entity, ASX listed investment company, Orion Equities Limited (Orion or OEQ). The Company holds 9,367,653 shares (59.86%) in Orion (30 June 2015: 9,367,653 shares (59.06%)).
FINANCIAL POSITION
| 31 Dec 2015 | 30 Jun 2015 | |
|---|---|---|
| Consolidated Entity | $ | $ |
| Cash | 479,343 | 269,805 |
| Current investments - equities | 1,167,781 | 1,523,346 |
| Investments in Associate entity | 4,341,454 | 3,705,212 |
| Property held for development or resale | 1,350,000 | 1,350,000 |
| Receivables | 72,500 | 70,291 |
| Deferred tax assets | 210,916 | 216,374 |
| Other assets | 2,073,163 | 2,084,669 |
| Total Assets | 9,695,157 | 9,219,697 |
| Tax liabilities (current and deferred) | (210,916) | (216,374) |
| Other payables and liabilities | (300,546) | (278,967) |
| Net Assets | 9,183,695 | 8,724,356 |
| Issued capital | 6,434,743 | 6,268,445 |
| Reserves | 3,256,983 | 3,200,408 |
| Non-controlling interest | 3,410,348 | 3,298,709 |
| Accumulated losses | (3,918,379) | (4,403,206) |
| Total Equity | 9,183,695 | 8,724,356 |
OPERATING RESULTS
| Dec 2015 | Dec 2014 | |
|---|---|---|
| Consolidated Entity | $ | $ |
| Total revenues | 903,949 | 266,817 |
| Total expenses | (564,221) | (684,659) |
| Profit/(Loss) before tax | 339,728 | (417,842) |
| Income tax expense | - | - |
| Profit/(Loss) for the half year | 339,728 | (417,842) |
| Net loss attributable to non-controlling interest | (200,511) | (88,460) |
| Profit/(Loss) after tax attributable to owners of the Company | 139,217 | (329,382) |
Queste has generated a net profit of $339,728 for the financial half year, principally as a consequence of its share investment and trading activities.
EARNINGS PER SHARE
| Dec 2014 | |
|---|---|
| 0.47 | (1.12) |
| Dec 201529,722,55029,502,441 |
The Company's 8,100,000 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/(loss) per share.
DIVIDENDS
The Directors have not declared a dividend in respect of the financial half year ended 31 December 2015.
CAPITAL MANAGEMENT
Securities in The Company
At the Balance Date and the date of this report, the Company has the following securities on issue:
- (a) 29,717,316 listed fully paid ordinary shares (30 June 2015: 28,817,316 fully paid ordinary shares); and
- (b) 8,100,000 unlisted partly paid ordinary shares1 ; each paid to 1.5225 cents with 18.4775 cents per partly paid ordinary share outstanding (representing the equivalent of 616,613 voting shares2 ) (30 June 2015: 9,000,000 unlisted partly paid ordinary shares).
making a total of 30,333,929 voting shares on issue (30 June 2015: 29,502,441 voting shares)
Save for the conversion of party paid shares (as outlined below), there have been no securities issued or granted by the Company during or since the Current Reporting Period.
Call and Conversion of Partly Paid Shares
On 3 December 2015, there was a conversion of 900,000 partly paid shares into fully paid shares upon payment of a call made by the Company in relation to 100% of the outstanding balance (being $0.184775 each or $166,298 in total) due and payable in respect of these 900,000 partly paid shares.3
1 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 and also more recently, in the Company's Information Memorandum for a General Meeting dated 27 January 2016 and released on ASX on 12 February 2016.
2 Each partly paid share is treated for voting purposes as being a proportion of a fully paid share, equal to the proportion to which it has been paid up - 1.5225 cents per share, representing 7.61% of the $0.20 issue price
3 Refer Queste's ASX Appendix 3B – Application for Quotation of Additional Securities dated 11 December 2015
Equal Access Share Buy-Back
Queste has convened a General Meeting for 17 March 2016 to seek shareholder approval for the Company to undertake an equal access scheme off-market share buy-back, which is proposed to operate in the following manner (Buy-Back):
- (a) Subject to a maximum Buy-Back consideration of $300,000 (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 9 cents per share; 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 0.45 cent per share; and
- (b) If the value of Buy-Back acceptances were to exceed the Buy-Back Cap ($300,000) 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).
Queste completed a similar equal access scheme off-market share buy-back4 in 20145 and noted at that time that the Company may consider undertaking further/annual equal access scheme share buy-backs depending on the Company's financial position and the liquidity of trading in Queste shares on ASX shares at the relevant time.
Queste has reviewed the Company's financial position and the lack of liquidity in trading of Queste shares and 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 proposed Buy-Back will be open to all shareholders on an equal basis and participation by shareholders is entirely voluntary. It is also a cost-effective way for shareholders to dispose of their interests as there are no brokerage costs associated with the Buy-Back.
The Company refers to its Information Memorandum for a General Meeting (which includes the Notice of General Meeting, Explanatory Statement and Independent Expert's Report) dated 27 January 2016 (and released on ASX on 12 February 2016) for further details in relation to the proposed Buy-Back.
REVIEW OF OPERATIONS
1. Orion Equities Limited (ASX:OEQ)
1.1. Current Status of Investment in Orion
Orion is a listed investment company.
The Company holds 9,367,653 shares in Orion, being 59.86% of its issued ordinary share capital (30 June 2015: 9,367,653 shares (59.06%)). Orion has been recognised as a controlled entity and included as part of the Queste Consolidated Entity's results since 1 July 2002.
Queste shareholders are advised to refer to the 31 December 2015 Half Year Report, 2015 Annual Report and monthly NTA disclosures lodged by Orion for further information about the status and affairs of such company.
Information concerning Orion may be viewed from its website: www.orionequities.com.au
Orion's market announcements may also be viewed from the ASX website (www.asx.com.au) under ASX code "OEQ".
Sections 1.2 to 1.4 below contain information extracted from Orion's public statements.
4 Refer Share Buy-Back Offer Booklet dated 11 December 2013 and released on ASX on 17 December 2013
5 Refer Queste's ASX Announcement: Results of Equal Access Buy-Back and ASX Appendix 3F (Final Share Buy-Back Notice) dated 22 January 2014
1.2. Orion's Portfolio Details as at 31 December 2015
Asset Weighting
| % of Net Assets | |||
|---|---|---|---|
| Dec 2015 | Jun 2015 | Dec 2014 | |
| Australian equities | 58% | 58% | 59% |
| Agribusiness6 | 24% | 25% | 20% |
| Property held for development and resale | 16% | 17% | 18% |
| Net tax liabilities (current year and deferred tax assets/liabilities) | - | - | - |
| Net cash/other assets and provisions | 2% | <1% | 3% |
| Total | 100% | 100% | 100% |
| Equities | Fair Value$'million | % ofNet Assets | ASXCode | Industry SectorExposures |
|---|---|---|---|---|
| Bentley Capital Limited | 2.87 | 33.80% | BEL | Diversified Financials |
| Strike Resources Limited | 0.52 | 6.12% | SRK | Materials |
| CBG Australian Equities Fund (Wholesale) (CBG Fund) | 0.29 | 3.37% | N/A | Diversified |
| Other ASX listed securities | 0.07 | 0.80% | Various | Various |
| Total | 3.75 | 44.09% |
1.3. Orion's On-Market Share Buy-Backs
During the financial half year, Orion bought back 211,300 shares on-market at a total cost of $46,686 and at an average buy-back cost (including brokerage) of $0.22 per share, pursuant to on-market share buyback announced on 5 June 2015. 7
1.4. Orion's Assets
(a) Bentley Capital Limited (ASX:BEL)
Bentley is a listed investment company.
Queste holds 2.32% (1,740,625 shares) of Bentley's issued ordinary share capital with Orion holding 27.32% (20,513,783 shares) of Bentley's issued ordinary share capital (30 June 2015: Queste held 1,740,625 shares (2.33%) and Orion held 20,513,783 shares (27.42%)).
Bentley's asset weighting as at 31 December 2015 was 61.8% Australian equities (30 June 2015: 94.2%), 3.7% intangible assets (30 June 2015: 3.9%) and 34.5% net cash/other assets (30 June 2015: 0.9%).
Bentley had net assets of $18.60 million as at 31 December 2015 (30 June 2015: $16.43 million) and generated an after tax net profit of $2.51 million for the financial half year (31 December 2014: $0.79 million net profit).
Bentley paid a 0.50 cent fully franked dividend distributed in September 2015 at a total cost of $0.374 million (December 2015: 0.95 cent fully franked dividend totalling $0.70 million).
Queste and Orion received a total of $8,703 and $102,569 respectively from this dividend during the financial half year (6 months to 30 June 2015: $9,573 and $112,826 dividends respectively).
Bentley has announced its intention to pay a further fully-franked dividend of 0.5 cent per share in March 2016. Queste and Orion's entitlement to such dividend would be $8,703 and $0.103 million respectively.
6 Agribusiness net assets include olive grove land, olive trees, buildings, plant and equipment and inventory (bulk and packaged oils)
7 Refer Orion's ASX Appendix 3C – Announcement of Buy-Back dated 5 June 2015
| Rate per share | Nature | Queste's Entitlement | Orion's Entitlement | Payment Date |
|---|---|---|---|---|
| 0.50 cent | Dividend | $8,703 | $102,569 | 25 September 2015 |
| 0.55 cent | Dividend | $9,573 | $112,826 | 20 March 2015 |
| 0.95 cent | Dividend | $16,535 | $194,881 | 26 September 2014 |
| One cent | Dividend | $17,406 | $205,138 | 21 March 2014 |
| One cent | Return of capital | $17,406 | $205,138 | 12 December 2013 |
| One cent | Return of capital | $17,406 | $205,138 | 18 April 2013 |
| Return of capital | $17,406 | |||
| Return of capital | $17,406 | |||
| Return of capital | $87,031 | |||
| Dividend (Special) | $41,775 | |||
| Dividend | $17,406 | |||
| Dividend | $17,406 | |||
| One cent | Dividend | $17,406 | $205,138 | 30 September 2010 |
| One cent | Dividend | $17,406 | $205,138 | 15 March 2010 |
| One centOne cent5.0 cents2.4 centsOne centOne cent | $205,138$205,138$1,025,689$492,331$205,138$205,138 | 30 November 201219 April 201214 October 201126 September 201126 September 201117 March 2011 |
Bentley has a long distribution track record, as illustrated below8 :
Shareholders are advised to refer to the 31 December 2015 Half Year Report, 30 June 2015 Annual Report and monthly NTA disclosures lodged by Bentley for further information about the status and affairs of the company.
Information concerning Bentley may be viewed from its website: www.bel.com.au
Bentley's market announcements may also be viewed from the ASX website (www.asx.com.au) under ASX code "BEL".
(b) Strike Resources Limited (ASX:SRK)
Strike is a resources company with iron ore exploration and development projects in Peru. Strike has announced that it has examined a range of new strategies for the company in light of the poor outlook for the iron ore sector and the resources sector in general and in particular, that it has been investigating a number of technology related ventures which could form the foundation for a new strategy for the company (which will be subject to Strike shareholder approval and compliance with the ASX Listing Rules and Corporations Act).9
On 2 September 2015, Bentley successfully closed its off-market 5.5 cent per share cash takeover bid10 for Strike with acceptances received totalling 52,553,493 Strike shares (36.16%), making Bentley the largest shareholder in Strike.
Orion accepted into the Strike bid in respect of 6,690,802 Strike shares and received the bid consideration of $367,994 on 14 September 2015.
Orion retains 10,000,00011 shares (6.88%) (30 June 2015: 16,690,802 shares (11.48%)).
Information concerning Strike may be viewed from its website: www.strikeresources.com.au
Strike's market announcements may also be viewed from the ASX website (www.asx.com.au) under ASX code "SRK".
8 Bentley has advised that it has paid a distribution to shareholders every year (save on 4 occasions) since its admission to ASX in 1986. Please also refer to Bentley's website for its full distribution history.
9 Refer SRK's 31 December 2015 Half Year Report released on ASX on 22 February 2016
10 Refer Bentley's ASX Announcement: Despatch of Bidders Statement to Holders of Strike Resources Limited dated 31 July 2015
11 Refer Orion's ASX announcement: Change of Substantial Holding Notice dated 4 September 2015
(c) Other Assets
Orion also owns:
- a 143 hectare commercial olive grove operation (with approximately 64,500, 16 year old olive tree plantings) located in Gingin, Western Australian; and
- a property held for redevelopment or sale but currently rented out located in Mandurah, Western Australia.
2. Queste's Other Assets
In addition to the investment in controlled entity, Orion, Queste has:
- (a) a direct share investment in Associate entity, Bentley, being 1,740,625 shares (or 2.32% of Bentley's issued ordinary share capital) (June 2015: 1,740,625 shares and 2.33%);
- (b) other investments of $293,352 (30 June 2015: $361,227); and
- (c) a cash holding of $237,212 (30 June 2015:$128,998).
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.
The Company notes that it lodges Monthly and Quarterly Cash Flow Reports on ASX, which may be may be viewed and downloaded from the Company's website: www.queste.com.au or the ASX website (www.asx.com.au) under ASX Code: QUE.
DIRECTORS
Information concerning Directors in office during or since the half 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 executivemanagement of ASX-listed companies. In particular, Mr Khan has guided the establishment andgrowth of a number of public listed companies in the investment, mining and financial servicessectors. He has considerable experience in the fields of capital raisings, mergers and acquisitionsand investments. | ||
| Relevant interest inshares | 5,899,944 shares12 | ||
| Other current | (1) | Executive Chairman of Bentley Capital Limited (ASX:BEL) (since 2 December 2003) | |
| directorships in listed | (2) | Executive Chairman of Orion Equities Limited (ASX:OEQ) (since 23 October 2006) | |
| entities | (3) | Chairman (appointed 18 December 2015) of Strike Resources Limited (ASX:SRK) (Directorsince 1 October 2015) | |
| Former directorships inother listed entities inpast 3 years | None |
12 Refer Farooq Khan's Change of Director's Interest Notice dated 20 November 2014
| 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), CTA | ||
| Experience | Mr Ho has been in Executive roles with a number of ASX listed companies across the investments,resources and technology sectors over the past 15+ years. Mr Ho is a Chartered Tax Adviser (CTA)and previously had 9 years' experience in the taxation profession with the Australian Tax Office(ATO) and in a specialist tax law firm. Mr Ho has been actively involved in the structuring andexecution of a number of corporate, M&A and international joint venture (in South America,Indonesia and the Middle East) transactions, capital raisings and capital management initiativesand has extensive experience in public company administration, corporations' law and stockexchange compliance and investor/shareholder relations. | ||
| Relevant interest in shares | 17,500 shares | ||
| Other current positionsheld in listed entities | (1) | Executive Director and Company Secretary of Orion Equities Limited (ASX:OEQ) (Secretarysince 2 August 2000 and Director since 4 July 2003) | |
| (2) | Strike Resources Limited (ASX:SRK) (Director since 24 January 2014 and CompanySecretary since 1 October 2015) | ||
| (3) | Company Secretary of Bentley Capital Limited (ASX:BEL) (since 5 February 2004) | ||
| Former positions inother listed entities inpast 3 years | 2015) | Company Secretary of Alara Resources Limited (ASX:AUQ) (4 April 2007 to 31 August |
| 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 hispostgraduate Masters degree and commenced work as a senior executive responsible for productmarketing, costing systems and production management. Mr Khan has been an integral memberof the team responsible for the pre-IPO structuring and IPO promotion of a number of ASX floatsand has been involved in the management of such companies.Mr Khan brings considerableinternational experience in key aspects of corporate finance and the strategic analysis of listedinvestments. |
| Relevant interest inshares | 68,345 shares |
| Other currentdirectorships in listedentities | Non-Executive Director of Orion Equities Limited (ASX:OEQ) (since 5 November 1999). |
| Former directorships inother listed entities inpast 3 years | None |
At the Balance Date, Yaqoob Khan is a resident overseas.
CHANGE OF AUDITORS
On 12 February 2016, Queste announced that it had changed Auditors from BDO to Rothsay Auditing (a firm of Chartered Accountants with offices in Perth and Sydney), with effect on 12 February 2016.13 The transition of Auditor occurred as part of a review of the Company's corporate administration costs – Rothsay was selected after considering proposals received from BDO and a number of other audit firms. Rothsay will hold office as Auditor until the next annual general meeting of the Company, at which time shareholder approval will be sought for their re-appointment and continuation as Auditor.
13 Refer Queste's ASX announcement: Change of Auditors dated 12 February 2016
AUDITORS' INDEPENDENCE DECLARATION
A copy of the Auditor's Independence Declaration as required under section 307C of the Corporations Act 2001 forms part of this Directors Report and is set out on page 12. This relates to the Auditor's Independent Review Report, where the Auditors state that they have issued an independence declaration.
Signed for and on behalf of the Directors in accordance with a resolution of the Board.
Farooq Khan Victor Ho
25 February 2016
Chairman Executive Director Victor Ho Company Secretary
OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT For the period ended 31 December 2015 OF PROFIT OR LOSS AND
| Note | 31 Dec 15 | 31 Dec 14 | |
|---|---|---|---|
| Revenue | 3 | $28,065 | $31,959 |
| Other | |||
| Share of net profit of associate | 747,514 | 234,259 | |
| Net gain on financial assets at fair value through profit or loss | 128,237 | - | |
| Other revenue | 133 | 599 | |
| Total revenue | 903,949 | 266,817 | |
| Expenses | 3 | ||
| Net loss on financial assets at fair value through profit or loss | - | (750) | |
| Olive grove operation expenses | (30,048) | (38,533) | |
| Land operation expenses | (8,437) | (11,065) | |
| Personnel expenses | (339,430) | (375,365) | |
| Occupancy expenses | (38,497) | (73,929) | |
| Corporate expenses | (42,375) | (42,620) | |
| Finance expenses | (2,240) | (5,036) | |
| Administration expensesProfit/(Loss) before income tax | (103,194)339,728 | (137,361)(417,842) | |
| Income tax expense | - | - | |
| Profit/(Loss) for the half year | 339,728 | (417,842) | |
| Other comprehensive income | |||
| Revaluation of assets, net of tax | - | - | |
| Total comprehensive loss for the half year | 339,728 | (417,842) | |
| Profit/(Loss) attributable to: | |||
| Owners of Queste Communications Ltd | 139,217 | (329,382) | |
| Non-controlling interest | 200,511 | (88,460) | |
| 339,728 | (417,842) | ||
| Total comprehensive income for the half year is attributable to: | |||
| Owners of Queste Communications Ltd | 139,217 | (329,382) | |
| Non-controlling interest | 200,511 | (88,460) | |
| 339,728 | (417,842) | ||
| Basic and diluted earnings/(loss) per share (cents) attributable tothe ordinary equity holders of the Company | 4 | 0.47 | (1.12) |
As at 31 December 2015 OF FINANCIAL POSITION CONSOLIDATED STATEMENT
| Note | 31 Dec 15 | 30 Jun 15 | |
|---|---|---|---|
| Current assets | $ | $ | |
| Cash and cash equivalents | 479,343 | 269,805 | |
| Financial assets at fair value through profit or loss | 5 | 1,167,781 | 1,523,346 |
| Trade and other receivables | 15,380 | 13,171 | |
| Other current assets | 21,001 | 8,417 | |
| Total current assets | 1,683,505 | 1,814,739 | |
| Non current assets | |||
| Trade and other receivables | 57,120 | 57,120 | |
| Property held for development or resale | 1,350,000 | 1,350,000 | |
| Investment in Associate entity | 6 | 4,341,454 | 3,705,212 |
| Property, plant and equipment | 1,986,662 | 2,010,752 | |
| Olive trees | 65,500 | 65,500 | |
| Deferred tax asset | 210,916 | 216,374 | |
| Total Non current assets | 8,011,652 | 7,404,958 | |
| Total assets | 9,695,157 | 9,219,697 | |
| Current liabilities | |||
| Trade and other payables | 188,687 | 161,957 | |
| Provisions | 111,859 | 117,010 | |
| Total current liabilities | 300,546 | 278,967 | |
| Non current liabilities | |||
| Deferred tax liability | 210,916 | 216,374 | |
| Total non current liabilities | 210,916 | 216,374 | |
| Total liabilities | 511,462 | 495,341 | |
| Net assets | 9,183,695 | 8,724,356 | |
| Equity | |||
| Issued capital | 7 | 6,434,743 | 6,268,445 |
| Reserves | 8 | 3,256,983 | 3,200,408 |
| Accumulated losses | (3,918,379) | (4,057,596) | |
| Parent interest | 5,773,347 | 5,411,257 | |
| Non-controlling interest | 3,410,348 | 3,313,099 | |
| Total equity | 9,183,695 | 8,724,356 |
For the period ended 31 December 2015 OF CHANGES IN EQUITY CONSOLIDATED STATEMENT
| Issued capital$ | Reserves$ | Accumulatedlosses$ | Noncontrollinginterest$ | Total$ | |
|---|---|---|---|---|---|
| Balance at 1 July 2014 | 6,268,445 | 3,106,232 | (3,313,407) | 3,520,654 | 9,581,924 |
| Loss for the half yearOther comprehensive income | -- | -- | (329,382)- | (88,460)- | (417,842)- |
| Total comprehensiveloss for the period | - | - | (329,382) | (88,460) | (417,842) |
| Transactions with owners intheir capacity as owners:Transactions with | |||||
| non-controlling interest | - | 1,526 | - | (4,257) | (2,731) |
| Balance at 31 December 2014 | 6,268,445 | 3,107,758 | (3,642,789) | 3,427,937 | 9,161,351 |
| Balance at 1 July 2015 | 6,268,445 | 3,200,408 | (4,057,596) | 3,313,099 | 8,724,356 |
| Profit for the half yearOther comprehensive income | -- | -- | 139,217- | 200,511- | 339,728- |
| Total comprehensiveincome for the period | - | - | 139,217 | 200,511 | 339,728 |
| Transactions with owners intheir capacity as owners: | |||||
| Partly paid shares | 166,298 | - | - | - | 166,298 |
| Transactions withnon-controlling interest | - | 56,575 | - | (103,262) | (46,687) |
| Balance at 31 December 2015 | 6,434,743 | 3,256,983 | (3,918,379) | 3,410,348 | 9,183,695 |
For the period ended 31 December 2015 OF CASH FLOWS CONSOLIDATED STATEMENT
| Note | 31 Dec 15$ | 31 Dec 14$ | |
|---|---|---|---|
| Cash flows from operating activities | |||
| Receipts from customers | 22,234 | 22,100 | |
| Dividends received | 115,158 | 214,346 | |
| Interest received | 2,079 | 6,929 | |
| Payments to suppliers and employees | (533,309) | (702,767) | |
| Interest paid | (36) | (98) | |
| Sale of financial assets at fair value through profit or loss | 603,086 | 178,077 | |
| Purchase of financial assets at fair value through profit or loss | (119,286) | (459,237) | |
| Net cash provided by/(used in) continuing operations | 89,926 | (740,650) | |
| Net cash provided by/(used in) discontinued operations | - | 8,319 | |
| Net cash provided by/(used in) operating activities | 89,926 | (732,331) | |
| Cash flows from investing activitiesProceeds from sale of olive oil operations | - | 101,993 | |
| Net cash provided by investing activities | - | 101,993 | |
| Cash flows from financing activities | |||
| Proceeds from calls on partly paid shares | 7 | 166,298 | - |
| Orion on-market share buy back | 8 | (46,686) | (2,730) |
| Net cash provided by/(used in) financing activities | 119,612 | (2,730) | |
| Net increase /(decrease) in cash held | 209,538 | (633,068) | |
| Cash and cash equivalents at beginning of financial year | 269,805 | 1,169,619 | |
| Cash and cash equivalents at end of financial half year | 479,343 | 536,551 |
1. SIGNIFICANT ACCOUNTING POLICIES
Statement of Compliance
The half year financial statements are a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 'Interim Financial Reporting'. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 134 'Interim Financial Reporting'. These half year financial statements do not include notes of the type normally included in the annual financial statements and should be read in conjunction with the most recent annual financial statements and the Company's ASX announcements released from 1 July 2015 to the date of this report.
Basis of Preparation
The financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.
The accounting policies and methods of computation adopted in the preparation of the half year financial statements are consistent with those adopted and disclosed in the Consolidated Entity's financial statements for the financial year ended 30 June 2015.
2. RELATED PARTY DISCLOSURES
The Company has control of Orion Equities Limited (ASX:OEQ) (Orion) as it holds 59.86% (9,367,653 shares) of Orion's issued capital (30 June 2015: 59.06% and 9,367,653 shares). During the financial half year there were transactions between the Company, Orion and Associate Entity, Bentley Capital Limited (ASX:BEL) (Bentley), pursuant to shared office and administration expense arrangements. There were no outstanding amounts at the reporting date.
| 31 Dec 15 | 31 Dec 14 | |
|---|---|---|
| Bentley Capital Limited | $ | $ |
| Dividends Received | 111,272 | 211,416 |
3. PROFIT/(LOSS) FOR THE HALF YEAR
The Consolidated Entity's operating profit/(loss) before income tax includes the following items of revenue and expense:
| 31 Dec 15 | 31 Dec 14 | |
|---|---|---|
| (a) Revenue | $ | $ |
| Rental revenue | 22,100 | 22,100 |
| Dividend revenue | 3,886 | 2,930 |
| Interest revenue | 2,079 | 6,929 |
| 28,065 | 31,959 | |
| Other | ||
| Share of net profit of Associate | 747,514 | 234,259 |
| Net gain on financial assets at fair value through profit or loss | 128,237 | - |
| Other revenue | 133 | 599 |
| 903,949 | 266,817 |
3. PROFIT/(LOSS) FOR THE HALF YEAR (continued)
| 31 Dec 15 | 31 Dec 14 | |
|---|---|---|
| (b) Expenses | $ | $ |
| Net loss on financial assets at fair value through profit or loss | - | 750 |
| Olive grove operations | ||
| Depreciation of olive grove assets | 20,535 | 25,539 |
| Other expenses | 9,513 | 12,994 |
| Land operations | ||
| Other expenses | 8,437 | 11,065 |
| Salaries, fees and employee benefits | 339,430 | 375,365 |
| Occupancy expenses | 38,497 | 73,929 |
| Finance expenses | 2,240 | 5,036 |
| Corporate expenses | ||
| ASX fees | 32,546 | 34,283 |
| Share registry | 7,440 | 7,480 |
| Other corporate expenses | 2,389 | 857 |
| Administration expenses | ||
| Professional fees | 11,459 | 8,812 |
| Audit fees | 21,500 | 48,560 |
| Legal fees | 18,487 | 21,840 |
| Depreciation | 3,554 | 4,849 |
| Other administration expenses | 48,194 | 53,300 |
| 564,221 | 684,659 | |
4. EARNINGS/(LOSS) PER SHARE
| 31 Dec 15cents | 31 Dec 14cents | |
|---|---|---|
| Basic and diluted earnings/(loss) per share | 0.47 | (1.12) |
| The following represents the profit/(loss) and weighted average number ofshares used in the earnings/(loss) per share calculations: | ||
| Profit/(loss) after income tax | 139,217 | (329,382) |
| Number of shares | ||
| Weighted average number of ordinary shares | 29,722,550 | 29,502,441 |
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 earnings/(loss) per share. Diluted loss per share is not calculated as it does not increase the earnings/(loss) per share.
| 5. | FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS | 31 Dec 15 | 30 Jun 15 |
|---|---|---|---|
| $ | $ | ||
| Current | |||
| Listed securities at fair value | 594,802 | 1,001,185 | |
| Unlisted managed fund at fair value | 572,979 | 522,161 | |
| 1,167,781 | 1,523,346 |
| 6. | INVESTMENT IN ASSOCIATE ENTITY | Carrying Amount | |||
|---|---|---|---|---|---|
| Ownership InterestDec 2015 | Jun 2015 | 31 Dec 15$ | 30 Jun 15$ | ||
| Bentley Capital Limited | 29.64% | 29.75% | 4,341,454 | 3,705,212 | |
| Movements in carrying amounts | |||||
| Opening balance | 3,705,212 | 4,119,071 | |||
| Share of net profit/(loss) after tax | 747,514 | (80,044) | |||
| Dividends received | (111,272) | (333,815) | |||
| Closing balance | 4,341,454 | 3,705,212 | |||
| Fair value of listed investment in Associate | 3,115,617 | 2,893,073 | |||
| Net asset value of investment | 5,514,720 | 4,887,071 | |||
| Summarised statement of profit or loss and other comprehensive income | |||||
| Revenue | 4,224,528 | 2,398,085 | |||
| Expenses | (1,712,401) | (2,665,385) | |||
| Profit/(Loss) before income tax | 2,512,127 | (267,300) | |||
| Income tax expense | - | - | |||
| Profit/(Loss) after income tax | 2,512,127 | (267,300) | |||
| Other comprehensive income | - | - | |||
| Total comprehensive income | 2,512,127 | (267,300) | |||
| Summarised statement of financial position | |||||
| Current assets | 15,755,741 | 6,565,383 | |||
| Non-current assets | 3,618,460 | 10,524,117 | |||
| Total assets | 19,374,201 | 17,089,500 | |||
| Current liabilitiesNon-current liabilities | 661,552107,950 | 304,394358,969 | |||
| Total liabilities | 769,502 | 663,363 | |||
| Net assets | 18,604,699 | 16,426,137 | |||
| Lease commitments | |||||
| Not longer than one year | 55,000 | 56,035 | |||
| Longer than one year but not longer than five years | 4,583 | 32,083 | |||
| 59,583 | 88,118 | ||||
| 7. | ISSUED CAPITAL | 31 Dec 15 | 30 Jun 15 | 31 Dec 15 | 30 Jun 15 |
| Number | Number | $ | $ | ||
| Fully paid ordinary shares | 29,717,316 | 28,817,316 | 6,209,170 | 6,029,170 | |
| Partly paid ordinary shares | 8,100,000 | 9,000,000 | 225,573 | 239,275 | |
| 6,434,743 | 6,268,445 | ||||
| Date of issue | Number | Issue price | |||
| Movement in fully paid ordinary shares | of shares | $ | $ | ||
| At 1 July 2014 | 28,817,316 | 6,029,170 | |||
| At 30 June 2015 | 28,817,316 | 6,029,170 | |||
| At 1 July 2015 | 28,817,316 | 6,029,170 | |||
| Issue of shares | 03-Dec-15 | 900,000 | 0.20 | 180,000 | |
| At 31 December 2015 | 29,717,316 | 6,209,170 |
7. ISSUED CAPITAL (continued)
| Movement in partly paid ordinary sharesAt 1 July 2014 | Numberof shares9,000,000 | Issue price$ | $239,275 |
|---|---|---|---|
| At 30 June 2015 | 9,000,000 | 239,275 | |
| At 1 July 2015Call on partly paid shares - refer (c)Partly paid shares cancelled | 9,000,000-(900,000) | 239,275166,298(180,000) | |
| At 31 December 2015 | 8,100,000 | 225,573 |
(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.
(c) Call on partly paid ordinary shares
On 3 December 2015, there was a conversion of 900,000 partly paid shares into fully paid shares upon payment of a call made by the Company in relation to 100% of the outstanding balance (being $0.184775 each or $166,298 in total) due and payable in respect of these 900,000 partly paid shares.
(d) 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.
| 8. | RESERVES | 31 Dec 15 | 30 Jun 15 |
|---|---|---|---|
| Option premium reserve | $2,138,012 | $2,138,012 | |
| Asset revaluation reserve | |||
| Revaluations of freehold land | 623,775 | 623,775 | |
| Deferred tax on revaluations | (187,132) | (187,132) | |
| Non-controlling interest | (175,267) | (178,749) | |
| 261,376 | 257,894 | ||
| Other reserve | |||
| Dilution movement | 1,071,663 | 949,247 | |
| Non-controlling Interest | (214,068) | (144,745) | |
| 857,595 | 804,502 | ||
| 3,256,983 | 3,200,408 |
The movement in the Asset Revaluation Reserve relates to the revaluation of the olive grove land from $1,342,030 to $1,741,664, as assessed by an independent qualified valuer (a Certified Practising Valuer and Associate Member of the Australian Property Institute) as at 30 June 2015.
The "Other reserve" relates to the gain the Company generated from increasing its shareholding interest in OEQ by 7.28% (30 June 2015: 6.48%) as a consequence of OEQ cancelling a total of 2,165,161 (30 June 2015: 1,953,861) shares bought-back pursuant to an on-market share buy-back at a cost of $565,978 (30 June 2015: $519,293). This reserve is also used to record the differences which may arise as a result of transactions with non-controlling interests that do not result in a loss of control.
9. SEGMENT INFORMATION
The operating segments are reported in a manner consistent with the internal reporting provided to the "Chief Operating Decision Maker". The "Chief Operating Decision Maker", who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors.
The Board has considered the business and geographical perspectives of the operating results and determined that the Consolidated Entity operates only within Australia, with the main segments being Investments and Olive Grove. Corporate items are mainly comprised of corporate assets, office expenses and income tax assets and liabilities.
| 31 Dec 15Segment revenues | Investments$ | Olive grove$ | Corporate$ | Total$ |
|---|---|---|---|---|
| Revenue | 28,065 | - | - | 28,065 |
| Other | 875,751 | - | 133 | 875,884 |
| Total segment revenues | 903,816 | - | 133 | 903,949 |
| Personnel expenses | - | - | 339,430 | 339,430 |
| Finance expenses | - | 132 | 2,683 | 2,815 |
| Administration expenses | - | (525) | 79,642 | 79,117 |
| Depreciation expenses | - | 20,535 | 3,554 | 24,089 |
| Other expenses | 11,130 | 9,906 | 97,734 | 118,770 |
| Total segment profit/(loss) | 892,686 | (30,048) | (522,910) | 339,728 |
9. SEGMENT INFORMATION (continued)
| Investments | Olive grove | Corporate | Total | |
|---|---|---|---|---|
| Segment assets | $ | $ | $ | $ |
| Cash | - | - | 479,343 | 479,343 |
| Financial assets | 1,167,781 | - | - | 1,167,781 |
| Property held for development | ||||
| or resale | 1,350,000 | - | - | 1,350,000 |
| Investment in associate | 4,341,454 | - | - | 4,341,454 |
| Property, plant and equipment | - | 1,961,894 | 24,768 | 1,986,662 |
| Other assets | - | 66,182 | 303,735 | 369,917 |
| Total segment assets | 6,859,235 | 2,028,076 | 807,846 | 9,695,157 |
| Segment liabilities | - | 26,470 | 484,992 | 511,462 |
| 31 Dec 14 | ||||
| Segment revenues | ||||
| Revenue | 25,629 | - | 6,929 | 32,558 |
| Other | 234,259 | - | - | 234,259 |
| Total segment revenues | 259,888 | - | 6,929 | 266,817 |
| Personnel expenses | - | 2,811 | 375,365 | 378,176 |
| Finance expenses | - | 251 | 5,166 | 5,417 |
| Administration expenses | - | 1,156 | 103,683 | 104,839 |
| Depreciation expenses | - | 25,539 | 4,849 | 30,388 |
| Other expenses | 10,133 | 8,776 | 146,930 | 165,839 |
| Total segment profit/(loss) | 249,755 | (38,533) | (629,064) | (417,842) |
| 30 Jun 15 | ||||
| Segment assets | ||||
| Cash | - | 5,632 | 264,173 | 269,805 |
| Financial assets | 1,523,346 | - | - | 1,523,346 |
| Property held for development | ||||
| or resale | 1,350,000 | - | - | 1,350,000 |
| Investment in associate | 3,705,212 | - | - | 3,705,212 |
| Property, plant and equipment | - | 1,982,430 | 28,321 | 2,010,751 |
| Other assets | - | 67,785 | 292,798 | 360,583 |
| Total segment assets | 6,578,558 | 2,055,847 | 585,292 | 9,219,697 |
| Segment liabilities | - | 27,033 | 468,308 | 495,341 |
10. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
(a) Fair value hierarchy
AASB 13 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:
- (i) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
- (ii) Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and
- (iii) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
10. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (continued)
| 31 Dec 15Financial assets at fair value throughprofit or loss: | Level 1$ | Level 2$ | Level 3$ | Total$ |
|---|---|---|---|---|
| Listed securities at fair value | 594,802 | - | - | 594,802 |
| Unlisted managed fund at fair value | 572,979 | - | 572,979 | |
| Land at independent valuation | - | - | 1,741,664 | 1,741,664 |
| Olive trees | - | - | 65,500 | 65,500 |
| Total | 594,802 | 572,979 | 1,807,164 | 2,974,945 |
| 30 Jun 15Financial assets at fair value throughprofit or loss: | ||||
| Listed securities at fair value | 1,001,185 | - | - | 1,001,185 |
| Unlisted managed fund at fair value | 522,161 | - | 522,161 | |
| Land at independent valuation | - | - | 1,741,664 | 1,741,664 |
| Olive trees | - | - | 65,500 | 65,500 |
| Total | 1,001,185 | 522,161 | 1,807,164 | 3,330,510 |
There have been no transfers between the levels of the fair value hierarchy during the financial half year.
(b) Valuation techniques
The fair value of the listed securities traded in active markets is based on closing bid prices at the end of the reporting period. These investments are included in Level 1.
The fair value of any assets that are not traded in an active market are determined using certain valuation techniques. The valuation techniques maximise the use of observable market data where it is available, or independent valuation and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
The fair value of the unlisted managed fund investment is valued at the audited unit price published by the investment manager and as such this financial instrument is included in Level 2.
At Level 3, the land was valued by an independent qualified valuer (a Certified Practising Valuer and Associate Member of the Australian Property Institute) as at 30 June 2015. These assets have been valued based on similar assets, location and market conditions or Direct Comparison or Comparative Sales Approach. The land value per hectare based on rural land sold in the general location provided a rate which included ground water licence. A 4% change would increase or decrease the land's fair value change by $69,500 respectively. There has been no unusual circumstances that may affect the value of the trees.
At Level 3 the olive trees' value was assessed as at 30 June 2015 by the Directors. 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. The significant unobservable input is the replacement cost of 17 year old fruiting trees. There are no age limits to the commercial viability of an olive grove. A 1% change in the minimum replacement cost would result in an increase or decrease by $3,500. There has been no unusual circumstances that may affect the value of the property.
There has been no change in the value of Level 3 assets during the year.
| (c)Level 3 assets | Land | Olive trees | Total |
|---|---|---|---|
| $ | $ | $ | |
| At 1 July 2014 | 1,342,030 | 65,500 | 1,407,530 |
| Revaluation | 399,634 | - | 399,634 |
| At 30 June 2015 | 1,741,664 | 65,500 | 1,807,164 |
| Revaluation | - | - | - |
| At 31 December 2015 | 1,741,664 | 65,500 | 1,807,164 |
10. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (continued)
(d) Fair values of other financial instruments
| 31 Dec 15 | 30 Jun 15 | |
|---|---|---|
| Financial assets | $ | $ |
| Cash and cash equivalents | 479,343 | 269,805 |
| Trade and other receivables | 15,380 | 13,171 |
| 494,723 | 282,976 | |
| Financial liabilities | ||
| Trade and other payables | (188,687) | (161,957) |
Due to their short-term nature, the carrying amounts of cash, current receivables and current payables is assumed to approximate their fair value.
| 11. | COMMITMENTS | 31 Dec 15$ | 30 Jun 15$ |
|---|---|---|---|
| Not longer than one year | 110,000 | 106,976 | |
| Longer than one year but not longer than five years | 9,167 | 61,250 | |
| 119,167 | 168,226 |
On or about 19 May 2015, the Consolidated Entity renewed its non-cancellable operating lease agreement for shared office accommodation. The lease commitment is the Consolidated Entity's share of the lease costs and includes all outgoings (inclusive of GST). The lease is for a further 18 month term expiring on or about 30 January 2017.
12. 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 the Paulsens East (Iron Ore) Project tenements (EL47/1328 and PL47/1170) in Western Australia currently held by Strike Resources Limited (ASX:SRK).
13. EVENTS OCCURRING AFTER THE REPORTING PERIOD
(a) Associate entity, Bentley Capital Limited (ASX:BEL), has announced its intention to pay a fully-franked dividend of 0.5 cent per share in March 2016. The Company's and Orion's entitlement to such dividend would be $8,703 and $102,569 respectively.
No other matter or circumstance has arisen since the end of the financial half 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 periods.
DIRECTORS' DECLARATION
In accordance with a resolution of the directors of Queste Communications Ltd made pursuant to sub-section 303(5) of the Corporations Act 2001, we state that:
In the opinion of the Directors:
- (1) The financial statements and notes of the Consolidated Entity are in accordance with the Corporations Act 2001, including:
- (a) giving a true and fair view of the Consolidated Entity's financial position as at 31 December 2015 and of its performance for the financial half year ended on that date; and
- (b) complying with Accounting Standards AASB 134 "Interim Financial Reporting", Corporations Regulations 2001 and other mandatory professional reporting requirements; and
- (2) There are reasonable grounds to believe that the Consolidated Entity will be able to pay its debts as and when they become due and payable.
On behalf of the Board,
Farooq Khan Victor Ho
25 February 2016
Chairman Executive Director Victor Ho
SECURITIES INFORMATION as at 31 December 2015
DISTRIBUTION OF LISTED ORDINARY FULLY PAID SHARES
| Spread | of | Holdings | Number of Holders | Number of Units | % of Total Issue Capital |
|---|---|---|---|---|---|
| 1 | - | 1,000 | 11 | 7,227 | 0.024% |
| 1,001 | - | 5,000 | 48 | 137,053 | 0.461% |
| 5,001 | - | 10,000 | 59 | 550,425 | 1.852% |
| 10,001 | - | 100,000 | 100 | 2,839,840 | 9.556% |
| 100,001 | - | and over | 24 | 26,182,771 | 88.106% |
| Total | 242 | 29,717,316 | 100.00% |
DISTRIBUTION OF UNLISTED PARTLY PAID ORDINARY SHARES
| Name | No. of Partly Paid Shares | % Voting Power * |
|---|---|---|
| Chi Tung Investments Ltd | 8,100,000 | 2.03% |
These 8,100,000 ordinary shares were issued at a price of 20 cents per share and have been partly paid to 1.5225 cent each and have an outstanding amount payable of 18.4775 cents per share. These shares carry *voting rights proportional to the amount paid up per share. This is equivalent to 616,613 total voting shares.
SUBSTANTIAL SHAREHOLDERS
| Substantial Shareholders | Registered Shareholder | Shares/Voting Shares Held asat 31 Dec 2015 | %VotingPower6 |
|---|---|---|---|
| Bell IXL Investments Limitedand associates | CLEOD PTY LTDBELL IXL INVESTMENTS LIMITEDCELLANTE SECURITIES PTY LIMITED | 2,748,4902,599,7472,053,282 | 24.40%1 |
| Azhar Chaudhri, RenmuirHoldings Limited and ChiTung Investments Ltd | RENMUIR HOLDINGS LTDCHI TUNG INVESTMENTS LTD3MR AZHAR CHAUDHRICHI TUNG INVESTMENTS LTD | 3,277,7802,950,0001,436,001616,613 | 27.30%2 |
| Farooq Khan and associates | ISLAND AUSTRALIA PTY LTDFAROOQ KHAN | 3,668,5772,231,367 | 19.45%4 |
| Manar Nominees Pty Ltd andZelwar Superannuation PtyLtd | MANAR NOMINEES PTY LTDZELWER SUPERANNUATION PTY LTD | 1,825,663180,500 | 6.61%5 |
Notes:
(1) Based on the substantial shareholding notice filed by Bell IXL Investments Limited dated 28 January 2014
(2) Based on the substantial shareholding notice filed by Azhar Chaudhri and associates dated 15 December 2015
(3) Voting shares attributable to 8,100,000 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 Change of Interests of Substantial Holder notice filed by Farooq Khan and associates dated 20 November 2014
(5) Based on the substantial shareholding notice filed by Manar Nominees Pty Ltd dated 29 December 2003 (updated to reflect current percentage voting power)
(6) Total Voting Power is equivalent to the total number of fully paid ordinary shares on issue (29,717,316) plus the equivalent voting shares associated with the partly paid shares on issue based on the amount paid up per partly paid share (616,613).
(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.
SECURITIES INFORMATION as at 31 December 2015
TOP 20 ORDINARY FULLY PAID SHAREHOLDERS
| Rank | Shareholder | Shares Held | TotalShares | % IssuedCapital | % VotingPower* |
|---|---|---|---|---|---|
| 1 | RENMUIR HOLDINGS LTD | 3,277,780 | 0 | ||
| CHI TUNG INVESTMENTS LTD | 2,950,000 | 0 | |||
| MR AZHAR CHAUDHRI | 1,436,001 | 0 | |||
| Sub-total | 7,663,781 | 25.789% | 25.265% | ||
| 2 | CLEOD PTY LTD | 2,748,490 | |||
| BELL IXL INVESTMENTS LIMITED | 2,599,747 | ||||
| CELLANTE SECURITIES PTY LIMITED | 2,053,282 | ||||
| Sub-total | 7,401,519 | 24.906% | 24.400% | ||
| 3 | ISLAND AUSTRALIA PTY LTDFAROOQ KHAN | 3,668,5772,231,367 | |||
| Sub-total | 5,899,944 | 19.854% | 19.450% | ||
| 4 | MANAR NOMINEES PTY LTD | 1,825,663 | |||
| ZELWER SUPERANNUATION PTY LTD | 180,500 | ||||
| Sub-total | 2,006,163 | 6.751% | 6.614% | ||
| 5 | COWOSO CAPITAL PTY LTD | 1,150,000 | 3.87% | 3.791% | |
| 6 | DONALD GORDON MACKENZIE & GWENNETH EDNAMACKENZIE | 346,003 | 1.164% | 1.141% | |
| 7 | MS ROSANNA DE CAMPO | 268,100 | 0.902% | 0.884% | |
| 8 | GLENVIEW SERVICES PTY LTD | 250,000 | 0.841% | 0.824% | |
| 9 | GIBSON KILLER PTY LTD | 220,000 | 0.740% | 0.725% | |
| 10 | MR AYUB KHAN | 215,000 | 0.723% | 0.709% | |
| 11 | MRS AFIA KHAN | 215,000 | 0.723% | 0.709% | |
| 12 | MR SIMON KENNETH CATO | 118,000 | |||
| ROSEMONT ASSET PTY LTD | 75,000 | ||||
| Sub-total | 193,000 | 0.649% | 0.636% | ||
| 13 | TOMATO 2 PTY LTD | 185,019 | 0.623% | 0.610% | |
| 14 | MR JOHN CHENG-HSIANG YANG & MS PEGA PING PING MOK | 136,125 | 0.458% | 0.449% | |
| 15 | MR ANTHONY NEALE KILLER & MRS SANDRA MARIE KILLER | 130,000 | 0.437% | 0.429% | |
| 16 | MR EUGENE RODRIGUEZ | 110,000 | 0.37% | 0.363% | |
| 17 | MRS MARY THERESE CAMILLERI | 100,000 | 0.337% | 0.330% | |
| 18 | MR KEITH FRANCIS OATES & MRS LINDA ANN OATES | 100,000 | 0.337% | 0.330% | |
| 19 | DR SIEW NAM UN | 87,500 | 0.294% | 0.288% | |
| 20 | CITICORP NOMINEES PTY LIMITED | 85,296 | 0.294% | 0.281% | |
| Total | 26,762,450 | 90.06% | 88.226% |
* Total Voting Power is equivalent to the total number of fully paid ordinary shares on issue (29,717,316) plus the equivalent voting shares associated with the 8,100,000 partly paid shares on issue based on the amount paid up per partly paid share (616,613).
UNMARKETABLE PARCELS
| Spread | of | Holdings | Number of Holders | Number of Shares | % of Total Issued Capital |
|---|---|---|---|---|---|
| 1 | - | 7,141 | 67 | 193,605 | 0.651% |
| 7,142 | - | over | 175 | 29,523,711 | 99.349% |
| TOTAL | 242 | 29,717,316 | 100.00% |
An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of 7,141 shares or less, being a value of $500 or less in total, based upon the Company's last sale price on ASX as at 31 December 2015 of $0.05 per share.