22001111
AANNNNUUAALL RREEPPOORRTT
A.B.N 58 081 688 164
30 JUNE 2011
CCOONNTTEENNTTSS
Overview of Results
The Board’s Report
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial
Statements
Directors’ Declaration
Independent Auditor’s Report
Corporate Governance
Additional ASX Information
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QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CCOORRPPOORRAATTEE DDIIRREECCTTOORRYY
BOARD
Farooq Khan
Simon Cato
Azhar Chaudhri
Yaqoob Khan
(Chairman & Managing Director)
(Director)
(Director)
(Director)
COMPANY SECRETARY
Victor Ho
2
3
6
18
19
PRINCIPAL & REGISTERED OFFICE
20
Level 14, The Forrest Centre
221 St Georges Terrace
Perth Western Australia 6000
21
22
23
46
47
49
59
Telephone:
Facsimile:
Email:
Website:
(08) 9214 9777
(08) 9322 1515
info@queste.com.au
www.queste.com.au
SHARE REGISTRY
Advanced Share Registry Services
Suite 2, 150 Stirling Highway
Nedlands Western Australia 6009
Telephone:
Facsimile:
(08) 9389 8033
(08) 9389 7871
Level 6, 225 Clarence Street
Sydney New South Wales 2000
Telephone:
(02) 8096 3502
Email:
Website:
admin@advancedshare.com.au
www.advancedshare.com.au
STOCK EXCHANGE
Australian Securities Exchange
Perth, Western Australia
ASX CODE
QUE
AUDITORS
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco, Western Australia 6008
Telephone:
Facsimile:
(08) 6382 4600
(08) 6382 4601
www.bdo.com.au
ANNUAL REPORT | 1
info@queste.com.au
Website:
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
OOVVEERRVVIIEEWW OOFF RREESSUULLTTSS
Queste Communication Ltd is listed on the Australian Securities Exchange (ASX) (under ASX Code: QUE). Queste
has a controlling (51%) interest in Orion Equities Limited, an investment company (LIC) listed on ASX (ASX
Code: OEQ).
CONSOLIDATED
Total revenues
Total expenses
Profit/(Loss) before tax
Income tax benefit/(expense)
Profit/(Loss) from continuing operations
Net profit/(loss) attributable to non controlling interest
2011
$
1,226,091
(4,183,538)
(2,957,447)
(82,211)
(3,039,658)
(1,386,384)
Profit/(Loss) after tax attributable to owners of the Company
(1,653,274)
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
Undiluted NTA backing per share (cents)
Diluted NTA Backing per share (cents)
(5.5)
(3.4)
36
30
2010
$
4,798,785
(4,743,171)
55,614
694,440
750,054
578,521
171,533
0.6
0.4
40
32
The Consolidated Entity’s results incorporates the results of controlled entity, Orion Equities Limited (Orion or
OEQ).
At the Consolidated Entity level:
Revenues include:
(1)
(2)
(3)
$500,186 net gain on sale of investments (2010: $873,554 loss)
$450,027 income from sale of olive oils (2010: $1,200,987);
$181,205 share of Associate entity’s profit (net of dividends received from Associate of $445,089) (2010:
$874,850 net of dividends received from Associate of $445,089); and
(4)
$15,332 dividend income (2010: $14,060).
Expenses include:
(1)
(2)
(3)
$1,997,098 net loss in fair value in investments (2010: $2,572,398 gain);
$846,501 personnel expenses (2010: $932,525);
$601,024 olive grove and oils operations (which does not include revaluation and depreciation expenses)
(June 2010: $1,023,130); and
(4)
$201,041 olive grove and oils operation’s revaluation and depreciation expenses (June 2010: $450,883).
The principal components of the $1,997,098 net loss in fair value in securities are:
(a)
(b)
(c)
$2.51 million unrealised loss on Orion’s investment in ASX listed Strike Resources Limited (SRK), which
declined in value from 50 cents to 24.5 cents during the financial year;
$1.5 million unrealised gain on Orion’s investment in ASX listed Alara Resources Limited (AUQ), which
increased in value from 8.7 cents to 36.5 cents during the financial year; and
$1 million reversal of net unrealised gain on Orion’s share investments sold (and unlisted options in SRK
exercised) during the financial year.
Please refer to the Directors’ Report and Financial Report for further information on a review of the Consolidated
Entity’s operations and the financial position and performance of the Consolidated Entity and Company for the
year ended 30 June 2011.
ANNUAL REPORT | 2
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
TTHHEE BBOOAARRDD’’SS RREEPPOORRTT
The Board reports a consolidated after tax net loss of $1.65 million for the financial year ended 30 June 2011.
Queste’s consolidated results incorporates the results of controlled entity, ASX listed investment company, Orion
Equities Limited (Orion). Queste has a 51% shareholding interest in Orion (30 June 2010: 48%).
Whilst no dividend has been declared for the 2011 financial year, the Board looks forward to a return to sustained
profitability by the Company and the resumption of regular dividend payments. The payment of future dividends
cannot be guaranteed and will be driven by the performance of the underlying assets of the Queste group.
Queste’s Assets
In addition to the investment in controlled entity, Orion, which is valued at $2,718,946 (30 June 2010:
$3,252,088) and Associate entity, Bentley Capital Limited (Bentley or BEL), which is valued at $382,938 (30
June 2010: $391,641), Queste holds cash of $1,395,504 (30 June 2010: $2,188,451), a loan owing from Orion of
$516,712 (30 June 2010: Nil) and investments in other listed securities of $5,854 (30 June 2010: $110,770).
During the year, Queste’s investments in ASX listed securities have generated:
(a)
(b)
$3,506 net realised losses (30 June 2010: Nil realises gains/losses); and
$7,836 net unrealised gain (30 June 2010: $173,016 net unrealised loss).
Queste will continue to look at undertaking investments in listed securities where appropriate to endeavour to
achieve a return on investments beyond that afforded by the interest rates applicable on term deposits.
Orion’s Assets
An outline of the major assets of Orion is described below:
Strike Resources Limited (ASX Code: SRK)
During the year, Strike suffered a significant decline in its share price, from $0.50 as at 30 June 2010 to
$0.245 on 30 June 2011. This resulted in Orion booking an unrealised loss on its Strike investment
(16,690,802 shares) of $2.51 million (2010: $1,167,447 unrealised gain). The Company notes that Strike’s
closing share price as at 5 October 2011 was $0.26.
The investment in Strike was predominantly earned through the sale of various mining assets to Strike.
These assets were acquired and funded to the point of sale to Strike at a cost of approximately $1.25
million. They were subsequently on-sold to Strike in tranches in consideration of 11,166,667 Strike shares
and 3.5 million unlisted Strike options (with exercise prices of $0.25 and $0.35 per option, which were
exercised during the course of the year).
Orion Executive Director, William Johnson, is on the board of Strike.
Alara Resources Limited (ASX Code: AUQ)
During the year, Alara’s share price increased significantly, from $0.087 as at 30 June 2010 to $0.365 on
30 June 2011. Orion generated a realised gain of $0.299 million from the sale of 3 million Alara shares
together with an unrealised gain of $1.5 million on the remainder of its holding (6,332,744 shares), during
the year.
The shareholding in Alara occurred through the sale of Orion’s 25% interests in various mining tenements
to Alara in conjunction with Strike Resources Limited (who held the balance of 75% interest in the same).
These assets were acquired and funded to the point of sale to Strike previously at a cost of approximately
$0.05 million. Orion’s residual 25% interest was free-carried by Strike thereafter.
Orion’s interests in these mining tenements were subsequently on-sold to Alara for vendor shares in the
initial public offering (IPO) of Alara for a consideration of $1,562,500 comprising 6,250,000 Alara shares.
ANNUAL REPORT | 3
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
TTHHEE BBOOAARRDD’’SS RREEPPOORRTT
Orion also acquired 3,082,744 additional Alara shares via the Alara IPO, on-market purchases and via an
in-specie distribution from Strike.
The value of Orion’s current holding of Alara shares of $2.311 million (based on an Alara share price of
$0.365 as at 30 June 2011) together with the $1.055 million proceeds from the sale of 3 million Alara
shares during the year, constitutes a significant value gain for the Queste group.
Orion Executive Chairman, Farooq Khan and Executive Director, William Johnson, are both on the board of
Alara.
Bentley Capital Limited (ASX Code: BEL)
Bentley is an investment company listed on the ASX. Orion holds 20,513,783 shares (28.3%) and Queste
holds 1,740,625 shares (2.4%), being a total of 30.7% of the issued capital of Bentley as at 30 June 2011
(2010: total of 30.9%).
Bentley has net assets of $28.806 million (as at 30 June 2011) and returned an after tax net profit of
$0.574 million for the financial year. Bentley’s asset weighting as at 30 June 2011 was 98.8% Australian
equities and 1.2% net cash/ other assets.
Queste and Orion have been in receipt of significant dividend payments from Bentley, having received
three fully franked dividends totalling 4.4 cents in the past 12 months (October 2010 to September 2011).
Furthermore, on 4 October 2001, Bentley shareholders approved a 5 cents per share return of capital,
which will deliver an additional $1,025,689 to Orion and $87,031 to Queste, being a total of $1,112,720 to
the Queste group.
Queste and Orion Chairman, Farooq Khan and Orion Director, William Johnson, are on the board of
Bentley.
Agribusiness Assets
Orion owns a 143 hectare commercial olive grove operation located in Gingin, Western Australia together
with the Dandaragan Estate Ultra Premium Olive Oil brand. The Dandaragan Estate Ultra premium brand
facilitates the transition of oil production from the grove from the wholesale market to the higher value
retail market. During the year, total income from the sale of bulk and premium olive oils was $450,027
(2010: $1,200,987) with total olive grove and oils operations costs (excluding revaluation and depreciation
expenses) of $601,024 (2010: $1,023,130). It is noted that due to the timing of the annual harvest in
approximately March - April of each year, there is some carry-over of costs (and oil inventories) from one
financial year to the next.
Other Property Assets
Orion owns a property located in Mandurah, Western Australia, which was originally acquired as a multi-
unit development site. In 2009/2010, Orion sought development approval for the subdivision of the
property into 4 survey-strata title lots. This application was rejected by the Western Australian Planning
Commission. Subsequently Orion undertook a sale process of the property by way of public auction, with
such auction failing to attract any bids. Orion then determined to renovate the dwelling on the property
such that it can generate a rental return until market conditions for a sale improve. Based on an
independent valuation of the property, the asset was re-valued upwards to $1,800,000 (2010:
$1,500,000).
ANNUAL REPORT | 4
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
TTHHEE BBOOAARRDD’’SS RREEPPOORRTT
Financial Performance
The Board has elected to report only consolidated financial statements as permitted under the Corporations Act.
This has streamlined Queste’s reporting obligations. An abridged set of financial data at the Company level is
disclosed in Note 2 to the financial statements (at page 29 of this Annual Report).
The major consolidated revenue and expense items are as follows:
Item
Revenues
Comments
$500,186 gain on sale of investments (2010:
$873,554 loss)
This relates predominantly to Orion’s share
investment
portfolio – 3 million shares in Alara Resources Limited were
sold during the year, realising gross proceeds of $1.06 million
and a $299,198 net gain on disposal; other listed securities
were sold realising a net gain of $197,482.
$450,027 income from sale of olive oils (2010:
$1,200,987)
This relates to Orion’s bulk extra virgin olive oil sales and sales
under the Dandaragan Estate Ultra Premium Olive Oil label.
$181,205 share of Associate entity’s profit
(2010: $874,850 profit)
This relates to Queste’s 2.40% and Orion’s 28.26% share of
the net profit attributable to Associate entity, Bentley Capital
Limited, net of dividends received of $445,089. Bentley
returned an after tax net profit of $0.574 million and paid 2
cents of fully franked dividends during the year.
Expenses
$1,997,098 net
investments (2010: $2,572,398 gain)
loss
in
fair value
in
This relates predominantly to movements in Orion’s share
investment portfolio (comprising unrealised gains/losses and
reversals of previous years’ provisions for diminution in value
of investments sold during the year).
The major movements were in relation to Strike Resources
Limited (which depreciated in value by $2,506,155 from 50
cents to 24.5 cents) and Alara Resources Limited (which
appreciated in value by $1,499,503 from 8.7 cents to 36.5
cents) and $1,004,433 reversal of previous years’ net
unrealised gains on share investments sold (being $569,000
attributable to 3 million Alara Resources Limited shares sold,
$374,333 attributable to 3.5 million options in Strike Resources
Limited exercised during the year and $61,100 attributable to
other listed shares sold). Orion’s share investment portfolio
are held as current assets.
This relates to Orion’s commercial olive grove operations
located in Gingin, Western Australia, and the Dandaragan
Estate Olive Oil business.
This relates to Orion’s property located in Mandurah, south of
Perth, Western Australia, held for redevelopment and sale,
which is recognised as Inventory. Orion has renovated the
property for the rental market. An independent qualified
valuer has determined the value of the property as $1,800,000
(2010: $1,500,000).
$601,024 olive grove and oils operations
(June 2010: $1,023,130), which does not
include $201,041 revaluation and depreciation
expenses (2010: $450,883)
$(300,000)
reversal of previous years’
impairment of property held for development
and resale (2010: $950,000 impairment loss)
$846,501
$932,525)
personnel
expenses
(2010:
This includes aggregate personnel expenses associated with
both Queste and Orion.
ANNUAL REPORT | 5
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
The Directors present their report on Queste Communications Ltd (Company or Queste) and its controlled
entities (the Consolidated Entity) for the financial year ended 30 June 2011 (Balance Date).
Queste is a public company limited by shares that is incorporated and domiciled in Western Australia and has
been listed on the Australian Securities Exchange (ASX) since November 1998.
The Consolidated Entity’s results incorporates the results of controlled entity, ASX listed investment company,
Orion Equities Limited (Orion or OEQ). The Company has a 51% shareholding interest in Orion (30 June 2010:
48%).
PRINCIPAL ACTIVITIES
The principal activity of the Company during the financial year was the management of its assets.
The principal activities of controlled entity, Orion, during the financial year were the management of its
investments, including investments in listed and unlisted securities, real estate held for development and resale,
an olive grove and the ultra premium ‘Dandaragan Estate’ Olive Oil operation.
OPERATING RESULTS
CONSOLIDATED ENTITY
Total revenues
Total expenses
Profit/(Loss) before tax
Income tax benefit/(expense)
Profit/(Loss) for the year
Net profit/(loss) attributable to non controlling interest
2011
$
1,226,091
(4,183,538)
(2,957,447)
(82,211)
(3,039,658)
1,386,384
Profit/(Loss) after tax attributable to owners of the Company
(1,653,274)
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
At the Consolidated Entity level:
Revenues include:
(5.5)
(3.4)
2010
$
4,798,785
(4,743,171)
55,614
694,440
750,054
578,521
171,533
0.6
0.4
(1)
(2)
(1)
$500,186 net gain on sale of investments (2010: $873,554 loss)
$450,027 income from sale of olive oils (2010: $1,200,987);
$181,205 share of Associate entity’s profit (net of dividends received from Associate of $445,089) (2010:
$874,850 net of dividends received from Associate of $445,089); and
(3)
$15,332 dividend income (2010: $14,060).
Expenses include:
(1)
(2)
(3)
$1,997,098 net loss in fair value in investments (2010: $2,572,398 gain);
$846,501 personnel expenses (2010: $932,525);
$601,024 olive grove and oils operations (which does not include revaluation and depreciation expenses)
(June 2010: $1,023,130); and
(4)
$201,041 olive grove and oils operation’s revaluation and depreciation expenses (June 2010: $450,883).
ANNUAL REPORT | 6
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
The principal components of the $1,997,098 net loss in fair value in securities are:
(a)
(b)
(c)
$2.51 million unrealised loss on Orion’s investment in ASX listed Strike Resources Limited (SRK), which
declined in value from 50 cents to 24.5 cents during the financial year;
$1.5 million unrealised gain on Orion’s investment in ASX listed Alara Resources Limited (AUQ), which
increased in value from 8.7 cents to 36.5 cents during the financial year; and
$1 million reversal of net unrealised gain on Orion’s share investments sold (and unlisted options in SRK
exercised) during the financial year.
EARNINGS/(LOSS) PER SHARE
CONSOLIDATED ENTITY
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
Weighted average number of fully paid ordinary shares in the
Company outstanding during the year used in the calculation
of basic earnings per share
Weighted average number of fully paid ordinary shares in the
Company outstanding during the year used in the calculation
of diluted earnings per share
2011
(5.52)
(3.42)
2010
0.57
0.35
29,927,379
29,927,379
48,404,879
48,404,879
The Company’s 20,000,000 partly paid ordinary shares, to the extent that they have been paid (1.5225 cent per
share), have been included in the determination of the basic earnings per share.
DIVIDENDS
The Directors have not declared a dividend in respect of the financial year ended 30 June 2011.
FINANCIAL POSITION
CONSOLIDATED ENTITY
Cash
Current investments - equities
Investments - listed Associate entities
Inventory
Receivables
Intangibles
Deferred tax assets
Other assets
Total Assets
Tax liabilities (current and deferred)
Other payables and liabilities
Net Assets
Issued capital
Reserves
Non- controlling interests
Retained earnings
Total Equity
2011
$
1,684,644
6,475,856
7,571,638
2,799,430
94,025
782,058
1,165,888
1,811,166
22,384,705
(1,165,888)
(819,716)
20,399,101
6,192,427
2,351,465
8,913,462
2,941,747
20,399,101
2010
$
2,585,981
8,629,841
7,835,522
2,119,400
211,577
884,683
2,102,191
2,169,180
26,538,375
(2,102,191)
(585,917)
23,850,267
6,192,427
2,431,707
10,961,550
4,264,583
23,850,267
ANNUAL REPORT | 7
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
SECURITIES IN THE COMPANY
At Balance Date and the date of this report, the Company has the following securities on issue:
(i)
(ii)
28,404,879 listed fully paid ordinary shares; and
20,000,000 unlisted partly paid ordinary shares, each paid to 1.5225 cent with 18.4775 cents per partly
paid ordinary share outstanding (or $3,695,000 in total).
There were no securities issued or granted by the Company during or since the financial year.
The terms of issue of the partly paid shares are disclosed in the Prospectus for the initial public offering of shares
in the Company dated 6 August 1998.
REVIEW OF OPERATIONS
1.
Orion Equities Limited (OEQ)
1.1. Current Status of Investment in Orion
Orion Equities Limited is an ASX listed investment entity (ASX Code: OEQ).
The Company holds 9,063,153 shares in Orion, being 50.875% of its issued ordinary share capital (30 June
2010: 8,558,127 shares or 48.041%). Orion has been recognised as a controlled entity and included as
part of the Queste Consolidated Entity’s results since 1 July 2002.
Queste shareholders are advised to refer to the 30 June 2011 Directors’ Report and financial statements
and monthly NTA disclosures lodged by Orion for further information about the status and affairs of this
company.
Information concerning Orion may be viewed from its website: www.orionequities.com.au
Orion’s market announcements may also be viewed from the ASX website (www.asx.com.au) under ASX
code “OEQ”.
Sections 1.2 to 1.4 below contain information extracted from Orion’s public statements.
1.2. Orion’s Operating Results for year ended 30 June 2011
ORION EQUITIES LIMITED
Consolidated Entity
Total revenues
Total expenses
Profit/(loss) before tax
Income tax benefit/(expense)
Profit/(Loss) attributable to members of Orion
2011
$
2010
$
1,124,813
4,692,025
(3,800,821)
(4,273,059)
(2,676,008)
(82,211)
418,966
694,440
(2,758,219)
1,113,406
Basic and diluted earnings/(loss)cents per share
(15.48)
6.25
ANNUAL REPORT | 8
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
ORION EQUITIES LIMITED
Consolidated Entity
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
2011
$
2010
$
17,364,240
20,211,658
0.975
1.135
-
-
17,364,240
20,211,658
0.975
1.135
Based on total issued share capital
17,814,389
17,814,389
Orion’s revenues include:
(1)
(2)
(3)
$496,680 gain on sale of securities (June 2010: $887,317 loss);
$450,027 income from olive grove operations (June 2010: $1,200,987); and
$167,032 share of Associate entity’s profit (net of dividends received from Associate of $410,276) (June
2010: $890,284 net of dividends received from Associate of $410,276).
Orion’s expenses include:
(1)
(2)
(3)
(4)
$2,013,636 net loss in fair value in securities (June 2010: $2,583,275 net gain);
$601,024 olive grove and oils operations (which does not include revaluation and depreciation expenses)
(June 2010: $1,023,130);
$201,041 olive grove impairment and depreciation expenses (June 2010: $123,303); and
$617,837 personnel costs (including Directors’ fees) (June 2010: $539,042).
The principal components of Orion’s $2,013,636 net loss in fair value in securities are:
(a)
(b)
(c)
$2.51 million unrealised loss on a share investment in ASX listed Strike Resources Limited (SRK), which
declined in value from 50 cents to 24.5 cents per share during the financial year;
$1.5 million unrealised gain on a share investment in ASX listed Alara Resources Limited (AUQ), which
increased in value from 8.7 cents to 36.5 cents per share during the financial year; and
$1 million reversal of net unrealised gain on share investments sold (and unlisted options in SRK
exercised) during the financial year.
1.3. Orion’s Dividends
Orion has not declared a dividend in respect of the financial year ended 30 June 2011.
1.4. Orion’s Portfolio Details as at 30 June 2011
Asset Weighting
Australian equities
Agribusiness1
Property held for development and resale
Net tax liabilities (current year and deferred tax assets/liabilities)
Net cash/other assets and provisions
TOTAL
1
% of Net Assets
2011
75%
14%
10%
-
1%
2010
75%
16%
10%
-%
(1%)
100%
100%
Agribusiness net assets include olive grove land, olive trees, water licence, buildings, plant and equipment and inventory (bulk and
packaged oils)
ANNUAL REPORT | 9
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
Major Holdings in Securities Portfolio
Equities
1.
2.
3.
Bentley Capital Limited
Strike Resources Limited
Alara Resources Limited
TOTAL
Fair
Value
$’million
% of
Net Assets
ASX
Code
4.51
4.09
2.31
24.87%
22.53%
12.74%
BEL
SRK
AUQ
10.91
60.14%
Industry Sector Exposures
Diversified Financials
Materials
Materials
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Consolidated Entity that occurred during the
financial year not otherwise disclosed in this Directors’ Report or the Consolidated Financial Statements.
FUTURE DEVELOPMENTS
In the opinion of the Directors, it may prejudice the interests of the Consolidated Entity to provide additional
information (beyond that reported in this Directors’ Report) in relation to future developments and the business
strategies and operations of the Consolidated Entity and the expected results of those operations in subsequent
financial years.
Orion has advised that it intends to continue its investment activities in future years. The results of these
investment activities depend upon the performance of the underlying companies and securities in which the
company invests. The investments’ performance depends on many economic factors and also industry and
company specific issues. In the opinion of the Orion Directors, it is not possible or appropriate to make a
prediction on the future course of markets, the performance of the company’s investments or the forecast of the
likely results of the company’s activities.
ENVIRONMENTAL REGULATION
The Consolidated Entity notes the reporting requirements of both the Energy Efficiency Opportunities Act 2006
(EEOA) and the National Greenhouse and Energy Reporting Act 2007 (NGERA). The Energy Efficiency
Opportunities Act 2006 requires affected companies to assess its energy usage, including the identification,
investigation and evaluation of energy saving opportunities, and to report publicly on the assessments
undertaken, including what action the company intends to take as a result. The National Greenhouse and Energy
Reporting Act 2007 requires affected companies to report its annual greenhouse gas emissions and energy use.
The Consolidated Entity has determined that it does not operate a recognised facility requiring registration and
reporting under the NGERA and in any event, it would fall under the threshold of greenhouse gas emissions
required for registration and reporting. Similarly, the Consolidated Entity’s energy consumption would fall under
the threshold required for registration and reporting under the EEOA.
The Consolidated Entity is not otherwise subject to any particular or significant environmental regulation under
either Commonwealth or State legislation. To the extent that any environmental regulations may have an
incidental impact on the Consolidated Entity's operations, the Directors are not aware of any breach by the
Consolidated Entity of those regulations.
ANNUAL REPORT | 10
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
DIRECTORS
Information concerning Directors in office during or since the financial year are:
Farooq Khan
Executive Chairman and Managing Director
Appointed 10 March 1998
Qualifications BJuris , LLB. (Western Australia)
Experience Mr Khan is a qualified lawyer having previously practised principally in the field of corporate law.
Mr Khan has extensive experience in the securities industry, capital markets and the executive
management of ASX listed companies. In particular, Mr Khan has guided the establishment and
growth of a number of public listed companies in the investment, mining and financial services
sector. He has considerable experience in the fields of capital raisings, mergers and acquisitions
and investments.
Relevant interest in
shares
6,129,944 shares
Other current
directorships in listed
entities
Executive Chairman of:
(1)
(2)
Bentley Capital Limited (since 2 December 2003)
Orion Equities Limited (since 23 October 2006)
Non-Executive Director of:
(3)
Alara Resources Limited (director since 18 May 2007)
Former directorships
in other listed entities
in past 3 years
(1)
(2)
(3)
Yellow Brick Road Holdings Limited (formerly ITS Capital Investments Ltd) (27 April 2006 to
18 March 2011)
Strike Resources Limited (3 September 1999 to 3 February 2011)
Scarborough Equities Limited (merged with Bentley on 13 March 2009 and delisted)
Azhar Chaudhri
Non-Executive Director
Appointed 4 August 1998
Qualifications Bachelor of Science degree in Maths and Physics and a Masters degree in Economics and
postgraduate computer studies
Experience Mr Chaudhri has considerable expertise in computer systems, analysis and design and advanced
programming experience, particularly with respect to business and information technology
systems and Data Base computing. In particular Mr Chaudhri has formed and led software
development teams creating integrated database and management information systems for
utilities, local government land tax departments, hospitals, libraries and oil terminals.
Relevant interest in
shares
4,337,780 shares
20,000,000 partly paid shares
Other current
directorships in listed
entities
Former directorships
in other listed entities
in past 3 years
None
None
ANNUAL REPORT | 11
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
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 in listed
entities
Former directorships
in other listed entities
in past 3 years
Non-Executive Directors of Orion Equities Limited (since 5 November 1999).
None
Simon K. Cato
Non-Executive Director
Appointed 6 February 2008
Qualifications B.A. (USYD)
Experience Mr Simon Cato has had over 25 years capital markets experience in broking, regulatory roles and
as director of listed companies. He initially was employed by the ASX in Sydney and in Perth.
Over the last 17 years he has been an executive director and/or responsible executive of three
stockbroking firms and in those roles he has been involved in many aspects of broking including
management issues such as credit control and reporting to regulatory bodies in the securities
industry. As a broker he has also been involved in the underwriting of a number of IPO’s and has
been through the process of IPO listing in the dual role of broker and director. Currently he holds
a number of executive and non executive roles with listed companies in Australia.
Relevant interest in
shares
193,000 shares
Other current
directorships in listed
entities
Chairman of:
(1)
(2)
Convergent Minerals Limited (since 25 July 2006)
Advanced Share Registry Limited (since 22 August 2007)
Non-Executive Director of:
(3)
(4)
Transactions Solutions International Limited (since 24 February 2010)
Greenland Minerals and Energy Ltd (since 21 February 2006)
Former directorships
in other listed entities
in past 3 years
(1)
(2)
Bentley Capital Limited (5 February 2004 to 29 April 2010)
Scarborough Equities Limited (merged with Bentley on 13 March 2009 and delisted)
At the Balance Date, Messrs Azhar Chaudhri and Yaqoob Khan were resident overseas.
ANNUAL REPORT | 12
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
COMPANY SECRETARY
Information concerning the Company Secretary in office during or since the financial year are:
Victor P. H. Ho
Company Secretary
Appointed 30 August 2000
Qualifications BCom, LLB (Western Australia)
Experience Mr Ho has been in executive and company secretarial roles with a number of public
listed companies since early 2000. Previously, Mr Ho had 9 years experience in the
taxation profession with the Australian Tax Office and in a specialist tax law firm. Mr Ho
has been actively involved in the structuring and execution of a number of corporate
transactions, capital raisings and capital management matters and has extensive
experience in public company administration, corporations law, stock exchange
compliance and shareholder relations.
Relevant interest in shares 17,500 shares
Other current positions
held in listed entities
Executive Director and Company Secretary of:
(1)
Orion Equities Limited (Secretary since 2 August 2000 and Director since 4 July
2003)
Company Secretary of:
(2)
(3)
Bentley Capital Limited (since 5 February 2004)
Alara Resources Limited (since 4 April 2007)
Former positions in other
listed entities in past 3
years
(1)
(2)
Strike Resources Limited (secretary between 9 March 2000 and 30 April 2010
and director between 12 October 2000 and 25 September 2009)
Scarborough Equities Limited (secretary between 29 November 2004 and 13
March 2009)
DIRECTORS' MEETINGS
The following table sets out the numbers of meetings of the Company's Directors held during the financial year
(including Directors’ circulatory resolutions), and the numbers of meetings attended by each Director of the
Company:
Name of Director
Meetings Attended
Maximum Possible Meetings
Farooq Khan
Simon Cato
Yaqoob Khan
Azhar Chaudhri
5
8
5
8
There were no meetings of committees of the Board of the Company.
Board Committees
5
8
5
8
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.
ANNUAL REPORT | 13
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
REMUNERATION REPORT
This report details the nature and amount of remuneration for each Director and Company Executive (being a
company secretary or senior manager) (Key Management Personnel) of the Consolidated Entity.
The information provided under headings (1) to (3) below has been audited as required under section 308(3)(C)
of the Corporations Act 2001.
(1) Remuneration Policy
The Board determines the remuneration structure of all Key Management Personnel having regard to the
Consolidated Entity’s nature, scale and scope of operations and other relevant factors, including the
frequency of Board meetings, length of service, particular experience and qualifications, market practice
(including available data concerning remuneration paid by other listed companies in particular companies
of comparable size and nature), the duties and accountability of Key Management Personnel and the
objective of maintaining a balanced Board which has appropriate expertise and experience, at a
reasonable cost to the Company.
Fixed Cash Short Term Employment Benefits: The Key Management Personnel of the Company are
paid a fixed amount per annum plus applicable employer superannuation contributions. The Non-
Executive Directors of the Company are paid a maximum aggregate base remuneration of $55,000 per
annum inclusive of minimum employer superannuation contributions where applicable, to be divided as
the Board determines appropriate.
The Board has determined current Company Key Management Personnel remuneration as follows:
(a)
(b)
(c)
(d)
(e)
Mr Farooq Khan (Executive Chairman and Managing Director) – a base salary of $125,000 per
annum plus employer superannuation contributions (currently 9%);
Mr Azhar Chaudhri (Non-Executive Director) – a base fee of $15,000 per annum;
Mr Simon Cato (Non-Executive Director) – a base fee of $15,000 per annum plus employer
superannuation contributions (currently 9%);
Mr Yaqoob Khan (Non-Executive Director) – a base fee of $15,000 per annum; and
Mr Victor Ho (Company Secretary) – a base salary of $45,000 per annum plus employer
superannuation contributions (currently 9%).
Key Management Personnel can also opt to “salary sacrifice” their cash fees/salary and have them paid
wholly or partly as further employer superannuation contributions or benefits exempt from fringe benefits
tax.
Special Exertions and Reimbursements: Pursuant to the Company’s Constitution, each Director is
entitled to receive:
(a)
(b)
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.
Payment for reimbursement of all reasonable expenses (including traveling and accommodation
expenses) incurred by a Director for the purpose of attending meetings of the Company or the
Board, on the business of the Company, or in carrying out duties as a Director.
Long Term Benefits: Key Management Personnel have no right to termination payments save for
payment of accrued annual leave and long service leave (other than Non-Executive Directors).
Equity Based Benefits: The Company does not presently have any equity (shares or options) based
remuneration arrangements for any personnel pursuant to any executive or employee share or option plan
or otherwise.
Post Employment Benefits: The Company does not presently provide retirement benefits to Key
Management Personnel.
ANNUAL REPORT | 14
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
Performance Related Benefits/Variable Remuneration: The Company does not presently provide
short or long incentive/performance based benefits related to the Company’s performance to Key
Management Personnel, including payment of cash bonuses. The current remuneration of Key
Management Personnel is fixed, is not dependent on the satisfaction of a performance condition and is
unrelated to the Company’s performance.
Service Agreements: The Company does not presently have formal service agreements or employment
contracts with any Key Management Personnel.
Financial Performance of Company: There is no relationship between the Company’s current
remuneration policy and the Company’s performance.
The Board does not believe that it is appropriate at this time to implement an equity based benefit scheme
or a performance related/variable component to Key Management Personnel remuneration or
remuneration generally linked to the Company’s performance but reserves the right to implement these
remunerative measures if appropriate in the future (subject to prior shareholder approval where
applicable).
(2) Details of Remuneration of Key Management Personnel
Details of the nature and amount of each element of remuneration of each Key Management Personnel of the
Company paid or payable by the Consolidated Entity during the financial year are as follows:
Paid by the Company (Queste) to its Key Management Personnel
2011
Key
Management
Person
Performance
related
Short-term Benefits
%
Cash, salary
and
commissions
$
Executive Director:
Farooq Khan
-
123,798
Non-Executive Directors:
Yaqoob Khan
Azhar Chaudhri
Simon Cato
Company Secretary:
Victor Ho
-
-
-
-
15,000
15,000
15,577
46,731
Post
Employment
Benefits
Superannuation
$
11,142
-
-
1,402
4,206
Other
Long-term
Benefits
Long
service
leave
Equity
Based
Shares &
Options
$
-
-
-
-
-
$
-
-
-
-
-
Total
$
134,940
15,000
15,000
16,979
50,937
Non-cash
benefit
$
-
-
-
-
-
Performance
related
Short-term Benefits
Post
Employment
Benefits
2010
Key
Management
Person
%
Cash, salary
and
commissions
$
Executive Director:
Farooq Khan
-
125,000
Non-Executive Directors:
Yaqoob Khan
Azhar Chaudhri
Simon Cato
Company Secretary:
Victor Ho
-
-
-
-
15,000
15,000
1,731
31,998
Non-cash
benefit
Superannuation
$
-
-
-
-
-
$
11,250
-
-
14,619
2,960
Other
Long-term
Benefits
Long
service
leave
$
-
-
-
-
-
Equity
Based
Shares &
Options
Total
$
$
- 136,250
-
-
-
15,000
15,000
16,350
-
34,958
ANNUAL REPORT | 15
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
Paid by Orion to Key Management Personnel (who are also Key Management Personnel of Queste)
2011
Key
Management
Personnel
Short-term Benefits
Performance
related
%
Cash, salary
and
commissions
$
Executive Directors:
Farooq Khan
William Johnson
Victor Ho
Non-Executive Director:
Yaqoob Khan
-
-
-
-
230,769
77,885
77,885
25,000
2010
Key
Management
Personnel
Short-term Benefits
Performance
related
%
Cash, salary
and
commissions
$
Executive Directors:
Farooq Khan
William Johnson
Victor Ho
Non-Executive Director:
Yaqoob Khan
-
-
-
-
250,000
100,962
62,018
25,000
Post
Employment
Benefits
Superannuation
$
20,769
7,010
7,010
-
Post
Employment
Benefits
Superannuation
$
22,500
12,087
5,582
-
Other
Long-term
Benefits
Long
service
leave
Equity
Based
Shares &
Options
$
-
-
-
-
$
-
-
-
-
Total
$
251,538
84,895
84,895
25,000
Other
Long-term
Benefits
Long
service
leave
$
-
-
-
-
Equity
Based
Shares &
Options
$
Total
$
- 272,500
- 113,049
-
67,600
-
25,000
Non-cash
benefit
$
-
-
-
-
Non-cash
benefit
$
-
-
-
-
(3) Other Benefits Provided to Key Management Personnel
No Key Management Personnel has during or since the end of the financial year, received or become
entitled to receive a benefit, other than a remuneration benefit as disclosed above, by reason of a contract
made by the Company or a related entity with the Director or with a firm of which he is a member, or with
a Company in which he has a substantial interest.
This concludes the audited remuneration report.
DIRECTORS’ AND OFFICERS’ INSURANCE
The Company does not have any directors’ and officers insurance policy. Orion has a directors’ and officers
insurance policy; the nature of the liabilities covered or the amount of premiums paid in respect of this policy has
not been disclosed as such disclosure is prohibited under the terms of the policy.
DIRECTORS DEEDS
In addition to the rights of indemnity provided under the Company’s Constitution (to the extent permitted by the
Corporations Act), the Company has also entered into a deed with each of the Directors and the Company
Secretary (Officer) to regulate certain matters between the Company and each Officer, both during the time the
Officer holds office and after the Officer ceases to be an officer of the Company, including the following matters:
(i)
(ii)
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
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.
ANNUAL REPORT | 16
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DDIIRREECCTTOORRSS’’ RREEPPOORRTT
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:
Audit & Review
Fees
$
Consolidated Entity
Non-Audit
Services
$
64,042
6,850
Total
$
70,892
Audit & Review
Fees
$
Company
Non-Audit
Services
$
27,233
3,000
Total
$
30,233
The Board is satisfied that the provision of non-audit services by the auditor during the year is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001. The Board is satisfied
that the nature of the non-audit services disclosed above did not compromise the general principles relating to
auditor independence as set out in APES 110 Code of Ethics for Professional Accountants: Professional
Independence, including reviewing or auditing the auditor’s own work, acting in a management or decision
making capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and
rewards.
BDO Audit (WA) Pty Ltd continues in office in accordance with section 327B of the Corporations Act 2001.
AUDITORS’ INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001
forms part of this Directors Report and is set out on page 18. This relates to the Audit Report, where the
Auditors state that they have issued an independence declaration.
EVENTS SUBSEQUENT TO BALANCE DATE
The Directors are not aware of any matters or circumstances at the date of this Directors’ Report, other than
those referred to in this Directors’ Report (in particular, in Review of Operations) or the financial statements or
notes thereto (in particular Subsequent Events Note 26), that have significantly affected or may significantly
affect the operations, the results of operations or the state of affairs of the Company in subsequent financial
years.
Signed for and on behalf of the Directors in accordance with a resolution of the Board.
Farooq Khan
Chairman
31 August 2011
Simon Cato
Director
ANNUAL REPORT | 17
Tel: +8 6382 4600
Fax: +8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
31 August 2011
The Board of Directors
Queste Communications Ltd
Level 14, The Forrest Centre
221 St Georges Terrace
Perth, Western Australia, 6000
Dear Sirs
DECLARATION OF INDEPENDENCE BY CHRIS BURTON TO THE DIRECTORS OF
QUESTE COMMUNICATIONS LTD
As lead auditor of Queste Communications Ltd for the year ended 30 June 2011, I declare that, to
the best of my knowledge and belief, there have been no contraventions of:
•
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit
any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Queste Communications Ltd and the entities it controlled during the
period.
Chris Burton
Director
BDO Audit (WA) Pty Ltd
Perth, Western Australia
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
for the year ended 30 June 2011
Revenue from continuing operations
Other income
- Net gain on sale of financial assets held at fair value
- Net change on financial assets held at fair value through profit or loss
- Share of Associate entity's net profits
- Other
Expenses
Net change on financial assets held at fair value through profit or loss
Net loss on sale of financial assets held at fair value
Costs of goods sold in relation to olive oils operations
Impairment of property held for development and resale
Other costs in relation to land operations
Occupancy
Personnel
Financing
Borrowing cost
Corporate
Other administration expenses
– depreciation
– other
Profit/(Loss) before income tax
Income tax benefit/(expense)
Profit/(Loss) after income tax
Other comprehensive income
Changes in asset revaluation reserve, net of tax
Total comprehensive income/(loss), net of tax
Profit attributable to:
Owners of Queste Communications Ltd
Non-controlling interest
Total comprehensive income/(loss) for the year attributable to
Owners of Queste Communications Ltd
Non-controlling interest
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Note
3 a
13
3 b
2011
$
544,690
500,186
-
181,205
10
1,226,091
(1,997,098)
-
(802,065)
300,000
(367,300)
(112,624)
(846,501)
(5,447)
(424)
(133,509)
2010
$
1,351,129
2,572,398
874,850
408
4,798,785
-
(873,554)
(1,474,013)
(950,000)
(130,080)
(67,167)
(932,525)
(6,046)
(2,729)
(189,579)
(6,403)
(212,167)
(6,656)
(110,822)
(2,957,447)
(82,211)
4
55,614
694,440
(3,039,658)
750,054
(80,242)
(3,119,900)
(13,938)
736,116
(1,653,274)
(1,386,384)
(3,039,658)
(1,733,516)
(1,386,384)
(3,119,900)
7
7
(5.5)
(3.4)
171,533
578,521
750,054
157,595
578,521
736,116
0.6
0.4
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 19
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
as at 30 June 2011
CURRENT ASSETS
Cash and cash equivalents
Financial assets held at fair value through profit and loss
Trade and other receivables
Inventories - Olive Oils
Other current assets
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Trade and other receivables
Inventories - Land
Investments in Associate entity
Property, plant and equipment
Olive trees
Intangible assets
Deferred tax assets
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
NON CURRENT LIABILITIES
Provisions
Deferred tax liabilities
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
Parent interest
Non-controlling interest
TOTAL EQUITY
Note
2011
$
2010
$
8
9
10
11
12
10
11
13
14
15
16
19
1,684,644
6,475,856
61,202
999,430
5,057
2,585,981
8,629,841
178,754
619,400
-
9,226,189
12,013,976
32,823
1,800,000
7,571,638
1,740,609
65,500
782,058
1,165,888
32,823
1,500,000
7,835,522
2,103,680
65,500
884,683
2,102,191
13,158,516
14,524,399
22,384,705
26,538,375
17
622,237
432,415
622,237
432,415
18
19
197,479
1,165,888
153,502
2,102,191
1,363,367
2,255,693
1,985,604
2,688,108
20,399,101
23,850,267
20
21
6,192,427
2,351,465
2,941,747
11,485,639
8,913,462
6,192,427
2,431,707
4,264,583
12,888,717
10,961,550
20,399,101
23,850,267
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 20
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
for the year ended 30 June 2011
Note
Issued
Capital
$
Option
Premium
Reserves
$
Asset
Revaluation
Reserves
$
Retained
earnings
$
Non-
controlling
Interest
$
Total
$
Balance as at 1 July 2009
6,192,427
2,138,012
307,633
4,093,050
10,398,104
23,129,226
Profit for the year
Changes in asset revaluation reserve
-
-
-
-
-
(13,938)
171,533
-
578,521
-
750,054
(13,938)
Total comprehensive income for the year
-
-
(13,938)
171,533
578,521
736,116
Transactions with owners in
their capacity as owners:
Transactions with non-controlling interest
-
-
-
-
(15,075)
(15,075)
Balance as at 30 June 2010
6,192,427
2,138,012
293,695
4,264,583
10,961,550
23,850,267
Balance as at 1 July 2010
6,192,427
2,138,012
293,695
4,264,583
10,961,550
23,850,267
Loss for the year
Changes in asset revaluation reserve
-
-
-
-
-
(80,242)
(1,653,274)
-
(1,386,384)
-
(3,039,658)
(80,242)
Total comprehensive loss for the year
-
-
(80,242)
(1,653,274)
(1,386,384)
(3,119,900)
Transactions with owners in
their capacity as owners:
Transactions with non-controlling interest
-
-
-
330,438
(661,704)
(331,266)
Balance as at 30 June 2011
6,192,427
2,138,012
213,453
2,941,747
8,913,462
20,399,101
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 21
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF CASH FLOWS
for the year ended 30 June 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Sale proceeds from trading portfolio
Payments for trading portfolio
Payments to suppliers and employees
Interest received
Interest paid
Income tax paid
Dividends received
Note
2011
$
450,037
1,321,780
(957,857)
(2,348,434)
117,664
(424)
-
460,421
2010
$
1,149,196
1,059,608
-
(2,998,989)
118,914
(2,729)
-
459,149
NET CASH OUTFLOW FROM OPERATING ACTIVITIES
8
b
(956,813)
(214,851)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Proceeds from disposal of plant and equipment
Payments for investment securities
Proceeds from sale of investment securities
NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES
NET DECREASE IN CASH AND CASH EQUIVALENTS HELD
Cash and cash equivalents at beginning of the financial year
(17,987)
-
293,150
(219,687)
(21,302)
2,593
(1,046,752)
426,205
55,476
(639,256)
(901,337)
(854,107)
2,585,981
3,440,088
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR
8
1,684,644
2,585,981
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 22
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NNOOTTEESS TTOO TTHHEE CCOONNSSOOLLIIDDAATTEEDD
FFIINNAANNCCIIAALL SSTTAATTEEMMEENNTTSS
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1.
SUMMARY OF ACCOUNTING POLICIES
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of
these financial statements are set out below. These policies
have been consistently applied to all the years presented,
unless otherwise stated.
The financial statement includes the financial statements for the
Consolidated Entity consisting of Queste Communications Ltd
and its subsidiary. Queste Communications Ltd is a company
limited by shares, incorporated in Western Australia, Australia
and whose shares are publicly traded on the Australian
Securities Exchange (ASX).
1.1.
Basis of preparation
These general purpose
financial statements have been
prepared in accordance with Australian Accounting Standards,
the Australian
other authoritative pronouncements of
Accounting
Issues Group
Board, Urgent
Interpretations and the Corporations Act 2001.
Standards
Compliance with IFRS
The consolidated financial statements of the Consolidated
Entity, Queste Communications Ltd, also comply with
International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB).
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and
is based on historical costs modified by the revaluation of
selected non-current assets, and financial assets and financial
liabilities for which the fair value basis of accounting has been
applied.
1.2.
Principles of Consolidation
The consolidated financial statements incorporate the assets
and liabilities of the subsidiaries of Queste Communications Ltd
as at 30 June 2011 and the results of its subsidiaries for the
year then ended. Queste Communications Ltd and its subsidiary
are referred to in this financial statement as the Consolidated
Entity.
Subsidiaries are all entities over which the Consolidated Entity
has the power to govern the financial and operating policies,
generally accompanying a shareholding of more than one-half
of the voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are
considered when assessing whether the Consolidated Entity
controls another entity. Information on the controlled entity is
contained in Note 2 to the financial statements. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Consolidated Entity. They are de-consolidated
from the date that control ceases.
All controlled entities have a June financial year-end. All inter-
company balances and transactions between entities in the
consolidated entity, including any unrealised profits or losses,
have been eliminated on consolidation.
1.3.
Investments in Associates
50% of the voting rights. Investments in associates in the
consolidated financial statements are accounted for using the
equity method of accounting, after initially being recognised at
cost. Under this method, the Consolidated Entity’s share of the
post-acquisition profits or losses of associates are recognised in
the consolidated Statement of Comprehensive Income, and its
share of post-acquisition movements in reserves is recognised
in other comprehensive income. The cumulative post-
acquisition movements are adjusted against the carrying
amount of the investment (refer to Note 13).
Dividends receivable from associates are recognised in the
Company’s Statement of Comprehensive Income, while in the
consolidated financial statements they reduce the carrying
amount of the investment. When the Consolidated Entity’s
share of losses in an associate equals or exceeds its interest in
the associate,
long-term
receivables, the Consolidated Entity does not recognise further
losses, unless it has incurred obligations or made payments on
behalf of the associate.
including any other unsecured
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
Consolidated Entity. All associated entities have a June financial
year-end.
the policies adopted by
1.4. Operating Segment
The Consolidated Entity has applied AASB 8: Operating
Segments which
information be
presented on the same basis as that used for internal reporting
purposes.
that segment
requires
In this financial year, the operating segments have been
determined by the Board, to be investments comprising of
investments in shares, land and Associate entity and the olive
is
The Consolidated Entity’s segment reporting
grove.
contained in Note 22 of the notes to the financial statements.
1.5. Revenue Recognition
Revenue is measured at the fair value of the consideration
received or receivable. Revenue is recognised to the extent that
it is probable that the economic benefits will flow to the
Consolidated Entity and the revenue can be reliably measured.
All revenue is stated net of the amount of goods and services
tax (“GST”) except where the amount of GST incurred is not
recoverable from the Australian Tax Office. The following
specific recognition criteria must also be met before revenue is
recognised:
Sale of Goods and Disposal of Assets - Revenue from the
sale of goods and disposal of other assets is recognised when
the Consolidated Entity has passed control of the goods or
other assets to the buyer.
Contributions of Assets - Revenue arising
from the
contribution of assets is recognised when the Consolidated
Entity gains control of the asset or the right to receive the
contribution.
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
Interest Revenue - Interest revenue is recognised on a
proportional basis taking into account the interest rates
applicable to the financial assets.
ANNUAL REPORT | 23
30 JUNE 2011
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A.B.N. 58 081 688 164
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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.
acquisition of the asset or as part of an item of the expense.
Receivables and payables in the Statement of Financial Position
are shown inclusive of GST. Cash flows are presented in the cash
flow statement on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating
cash flows.
Other Revenues - Other revenues are recognised on a receipts
basis.
1.8.
Employee Benefits
1.6.
Income Tax
The income tax expense or revenue for the period is the tax
payable on the current period’s taxable income based on the
notional income tax rate for each taxing jurisdiction adjusted by
changes in deferred tax assets and liabilities attributable to
temporary differences between the tax bases of assets and
liabilities and their carrying amounts in the financial statements,
and to unused tax losses (if applicable).
Deferred tax assets and liabilities are recognised for temporary
differences at the tax rates expected to apply when the assets are
recovered or liabilities are settled, based on those tax rates which
are enacted or substantively enacted for each taxing jurisdiction.
The relevant tax rates are applied to the cumulative amounts of
deductible and taxable temporary differences to measure the
deferred tax asset or liability. An exception is made for certain
temporary differences arising from the initial recognition of an
asset or a liability. No deferred tax asset or liability is recognised
in relation to these temporary differences if they arose in a
transaction, other than a business combination, that at the time
of the transaction did not affect either accounting profit or taxable
profit or loss.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary
differences and losses. The amount of deferred tax assets
benefits brought to account or which may be realised in the
future, is based on the assumption that no adverse change will
occur in income taxation legislation and the anticipation that the
consolidated entity will derive sufficient future assessable income
to enable the benefit to be realised and comply with the
conditions of deductibility imposed by the law.
Deferred tax liabilities and assets are not recognised for
temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent entity
is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse
in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle
the liability simultaneously.
Current and deferred tax balances attributable to amounts
recognised directly in other comprehensive income or equity are
also recognised directly in other comprehensive income or equity.
1.7. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount
of GST, except where the amount of GST incurred is not
recoverable
these
circumstances the GST is recognised as part of the cost of
the Australian Tax Office.
from
In
Short term obligations - Provision is made for the Consolidated
Entity’s liability for employee benefits arising from services
rendered by employees to balance date. Employee benefits that
are expected to be settled within one year have been measured
at the amounts expected to be paid when the liability is settled,
plus related on-costs. Employee benefits payable later than one
year have been measured at the present value of the estimated
future cash outflows to be made for those benefits. Employer
superannuation contributions are made by the Consolidated Entity
in accordance with statutory obligations and are charged as an
expense when incurred.
Other long term employee benefit obligations - The liability
for long service leave is recognised in the provision for employee
benefits and measured as the present value of expected future
payments to be made in respect of services provided by
employees up to the reporting date. Consideration is given to
expected future wage and salary levels, experience of employee
departures and periods of service.
1.9.
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held
at call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts.
Bank overdrafts (if any) are shown within short-term borrowings
in current liabilities on the Statement of Financial Position.
1.10. Receivables
Trade and other receivables are recorded at amounts due less
any provision for doubtful debts. An estimate for doubtful debts
is made when collection of the full amount is no longer probable.
Bad debts are written off when considered non-recoverable.
1.11. Dividends Policy
Provision is made for the amount of any dividend declared, being
appropriately authorised and no longer at the discretion of the
entity, on or before the end of the financial year but not
distributed at balance date.
1.12. Investments and Other Financial Assets and
Liabilities
Financial instruments are initially measured at cost on trade date,
which includes transaction costs, when the related contractual
rights or obligations exist. Subsequent to initial recognition these
instruments are measured as set out below.
Financial assets at fair value through profit and loss - A
financial asset is classified in this category if acquired principally
for the purpose of selling in the short term or if so designated by
management and within the requirements of AASB 139:
Recognition and Measurement of Financial Instruments. Realised
and unrealised gains and losses arising from changes in the fair
value of these assets are included in the Statement of
Comprehensive Income in the period in which they arise.
ANNUAL REPORT | 24
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
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Available for sale financial assets- Available for sale financial
assets, comprising principally marketable equity securities, are
non-derivatives that are either designated in this category or not
classified in any other categories. Realised and unrealised gains
and losses arising from changes in the fair value of these assets
are recognised in equity in the period in which they arise.
Loans and receivables - Loans and receivables are 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
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.
transactions, reference
length
The nominal value less estimated credit adjustments of trade
receivables and payables are assumed to approximate their fair
values. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future contractual cash
flows at the current market interest rate that is available to the
Consolidated Entity for similar financial instruments.
The Consolidated Entity’s investment portfolio (comprising listed
and unlisted securities) is accounted for as a “financial assets at
fair value through profit and loss” and is carried at fair value
based on the quoted last bid prices at reporting date (refer to
Note 9).
1.14. Property held for Resale
Property held for development and sale is valued at lower of cost
and net realisable value. Cost includes the cost of acquisition,
development, borrowing costs and holding costs until completion
of development. Finance costs and holding charges incurred after
development are expensed. Profits are brought to account on the
signing of an unconditional contract of sale.
1.15. Property, Plant and Equipment
All plant and equipment are stated at historical cost less
accumulated depreciation and impairment losses. Historical cost
includes expenditure that is directly attributable to the acquisition
of the items.
Freehold Land is not depreciated. Increases in the carrying
amounts arising on revaluation of land and buildings are
recognised, net of tax, in other comprehensive income and
accumulated in reserves in equity. To the extent that the increase
reverses a decrease previously recognised in profit or loss, the
increase is first recognised in profit or loss. Decreases that
reverse previous increases of the same asset are first recognised
in other comprehensive income to the extent of the remaining
surplus attributable to the asset; all other decreases are charged
to profit or loss. It is shown at fair value, based on periodic
valuations by external independent valuers.
The carrying amount of plant and equipment is reviewed annually
by directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed
on the basis of the expected net cash flows that will be received
from the assets’ employment and subsequent disposal. The
expected net cash flows have been discounted to their present
value in determining recoverable amount.
Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the consolidated entity and the cost of the item can be
measured reliably. All other repairs and maintenance are charged
to the Statement of Comprehensive Income during the financial
period in which they are incurred.
The depreciation rates used for each class of depreciable assets
are:
Class of Fixed Asset Depreciation
Depreciation Method
Plant and Equipment
Rate
15-33.3%
Furniture and Equipment
15-20%
Leasehold Improvements
15%
Diminishing Value
Diminishing Value
Diminishing Value
The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance date. An asset’s carrying
amount is written down immediately to its recoverable amount if
the asset’s carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in the profit
and loss. When revalued assets are sold, amounts included in the
revaluation reserve relating to that asset are transferred to
retained earnings.
1.16. Impairment of Assets
At each reporting date, the consolidated entity reviews the
carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been
impaired. If such an indication exists, the recoverable amount of
the asset, being the higher of the asset’s fair value less costs to
sell and value in use, is compared to the asset’s carrying value.
Any excess of the asset’s carrying value over its recoverable
ANNUAL REPORT | 25
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A.B.N. 58 081 688 164
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amount is expensed to the profit or loss. Impairment testing is
performed annually for goodwill and intangible assets with
indefinite lives. Where it is not possible to estimate the
recoverable amount of an individual asset, the consolidated entity
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
1.17. Payables
These amounts represent liabilities for goods and services
provided to the consolidated entity prior to the end of financial
year which are unpaid. The amounts are unsecured and are
usually paid within 30 days of recognition.
1.18. Provisions
Provisions for legal claims, service warranties and make good
obligations has a present legal or constructive obligation as a
result of past events, it is probable that an outflow of resources
will be required to settle the obligation and the amount has been
reliably estimated. Provisions are not recognised for future
operating losses.
1.19. Issued Capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
Incremental costs directly attributable to the issue of new shares
or options, or for the acquisition of a business, are included in the
cost of the acquisition as part of the purchase consideration.
1.20. Earnings Per Share
Basic Earnings per share is determined by dividing the
operating result after income tax by the weighted average
number of ordinary shares on issue during the financial period.
Diluted Earnings per share adjusts the figures used in the
determination of basic earnings per share by taking into account
amounts unpaid on ordinary shares and any reduction in earnings
per share that will probably arise from the exercise of options
outstanding during the financial period.
1.21. Inventories
(i)
Raw materials and stores, work in progress and
finished goods
Raw materials and stores, work in progress and finished goods
are stated at the lower of cost and net realisable value. Cost
comprises direct materials, direct labour and an appropriate
proportion of variable and fixed overhead expenditure, the latter
being allocated on the basis of normal operating capacity. They
include the transfer from equity of any gains or losses on
qualifying cash flow hedges relating to purchases of raw material.
Costs are assigned to individual items of inventory on basis of
weighted average costs. Costs of purchased inventory are
determined after deducting rebates and discounts. Net realisable
value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and the estimated
costs necessary to make the sale.
(ii)
Land held for resale/capitalisation of borrowing
costs
Land held for resale is stated at the lower of cost and net
realisable value. Cost is assigned by specific identification and
includes the cost of acquisition, and development and borrowing
costs during development. When development is completed
borrowing costs and other holding charges are expensed as
incurred.
Borrowing costs included in the cost of land held for resale are
those costs that would have been avoided if the expenditure on
the acquisition and development of the land had not been made.
Borrowing costs incurred while active development is interrupted
for extended periods are recognised as expenses.
1.22. Leases
Leases in which a significant portion of the risks and rewards of
ownership are not transferred to the Consolidated Entity as lessee
are classified as operating leases. Payments made under
operating leases (net of any incentives received from the lessor)
are charged to the profit or loss on a straight-line basis over the
period of the lease.
1.23. Intangible Assets
The intangible assets acquired in a business combination are
initially measured at its purchase price as its fair value at the
acquisition date. The revaluation method states that after the
initial recognition, an intangible asset shall be carried at a
revalued amount, being its fair value at the date of the
revaluation less any subsequent accumulated amortisation and
any subsequent accumulated impairment losses. For the purpose
of revaluations under AASB 138: Intangible Assets, fair value shall
be determined by reference to an active market. Revaluations
shall be made with such regularity that at the end of the reporting
period the carrying amount of the asset does not differ materially
from its fair value.
1.24. Biological Assets
Biological assets are initially, and subsequent to initial recognition,
measured at their fair value less any estimated point-of-sale
costs. Gains or losses arising on initial or subsequent recognition
are accounted for via the profit or loss for the period in which the
gain or loss arises. Agricultural produce harvested from the
biological assets shall be measured at its fair value less estimated
point-of-sale costs at the point of harvest.
1.25. Comparative Figures
Certain comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
1.26. Critical accounting judgements and estimates
to make
judgements and estimates and
The preparation of the Consolidated Financial Statements requires
Directors
form
assumptions that affect how certain assets, liabilities, revenue,
expenses and equity are reported. At each reporting period, the
Directors evaluate their judgements and estimates based on
historical experience and on other various factors they believe to
be reasonable under the circumstances, the results of which form
the basis of the carrying values of assets and liabilities (that are
not readily apparent from other sources, such as independent
valuations). Actual results may differ from these estimates under
different assumptions and conditions.
The Consolidated Entity carries its freehold land and intangible
assets (water licence) at fair value with changes in the fair values
recognised in equity. It also carries inventory (land held for
development and resale) and olive trees at fair value with
changes in the fair value recognised in the Statement of
Comprehensive Income. Independent valuations are obtained for
these non-current assets at least annually.
ANNUAL REPORT | 26
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1.27. Summary Of Accounting Standards Issued Not Yet Effective
The following new Accounting Standards and Interpretations (which have been released but not yet adopted) have no material impact
on the Consolidated Entity’s financial statements or the associated notes therein.
AASB
reference
Title and Affected
Standard(s):
Nature of Change
Application date:
AASB 9 (issued
December
2009 and
amended
December
2010)
Financial Instruments
Amends the requirements for classification and measurement
of financial assets.
Periods beginning
on or after 1
January 2013
Requirements have generally been carried forward unchanged
from AASB 139 Financial Instruments: Recognition and
Measurement into AASB 9. These include the requirements
relating to:
(a)
Classification and measurement of financial liabilities;
and
Derecognition requirements for financial assets and
liabilities.
(b)
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.
Not urgent but necessary changes to IFRSs as a result of
IASB’s 2009 annual improvements project.
For investment property measured using the fair value model,
deferred tax assets and liabilities will be calculated on the
basis of a rebuttable presumption that the carrying amount of
the investment property will be recovered through sale. This
presumption is rebutted if the investment property is
depreciable and is held within a business model whose
objective is to consume substantially all of the economic
benefits embodied in the investment property over time,
rather than through sale. However, this presumption cannot
be rebutted for the land portion of investment property which
is not depreciable.
A first-time adopter of Australian Accounting Standards must
apply the derecognition requirements in AASB 139 Financial
Instruments: Recognition and Measurement prospectively for
transactions occurring on or after the date of transition to
Australian Accounting Standards, rather than 1 January 2004.
Simplifies disclosure requirements for government-related
entities and clarifies the definition of a related party.
AASB 2010-4
(issued June
2010)
AASB 2010-8
(issued
December
2010)
Further Amendments to
Australian Accounting
Standards arising from the
Annual Improvements
Project [AASB 1, AASB 7,
AASB 101 & AASB 134 and
Interpretation 13]
Amendments to Australian
Accounting Standards –
Deferred Tax: Recovery of
Underlying Assets [AASB
112]
Amendments to Australian
Accounting Standards –
Severe Hyperinflation and
Removal of Fixed Dates for
First-Time Adopters [AASB
1]
Related Party Disclosures
AASB 2010-9
(issued
December
2010)
AASB 124
(issued
December
2009)
AASB 2010-6
(issued
November
2010)
Amendments to Australian
Accounting Standards –
Disclosures on Transfers of
Financial Assets
Additional disclosures required for entities that transfer
financial assets, including information about the nature of
financial assets involved and the risks associated with them.
Periods
commencing on or
after 1 January
2011.
Periods
commencing on or
after 1 January
2012
Periods
commencing on or
after 1 July 2011
(i.e. date of
transition would be
1 July 2010)
Annual reporting
periods
commencing on or
after 1 January
2011.
Annual reporting
periods
commencing on or
after 1 July 2011
ANNUAL REPORT | 27
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A.B.N. 58 081 688 164
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1.27
Summary Of Accounting Standards Issued Not Yet Effective (continued)
AASB
reference
Title and
Affected
Standard(s):
IFRS 10
(issued May
2011)
Consolidated
Financial
Statements
Nature of Change
Application date:
Introduces a single ‘control model’ for all entities, including special
purpose entities (SPEs), whereby all of the following conditions must be
present:
(a)
(b)
(c)
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.
Annual reporting
periods commencing
on or after 1 January
2013
Introduces the concept of ‘de facto’ control for entities with less than a
50% ownership interest in an entity, but which have a large
shareholding compared to other shareholders. This could result in more
instances of control and more entities being consolidated.
Potential voting rights are only considered when determining of there is
control when they are substantive (holder has practical ability to
exercise) and the rights are currently exercisable. This may result in
possibly fewer instances of control.
Additional guidance included to determine when decision making
authority over an entity has been delegated by a principal to an agent.
Factors to consider include:
(a)
(b)
(c)
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
interests held in the investee.
(d)
IFRS 13
(issued May
2011)
Fair Value
Measurement
Currently, fair value measurement requirements are included in several
Accounting Standards. IFRS 13 establishes a single framework for
measuring fair value of financial and non-financial items recognised at
fair value in the statement of financial position or disclosed in the notes
in the financial statements.
Annual reporting
periods commencing
on or after 1 January
2013
ANNUAL REPORT | 28
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
2.
PARENT ENTITY INFORMATION
The following information provided relates to the Company, Queste Communications Ltd as at 30 June
2011. The information presented here has been prepared using accounting policies outlined in Note 1.
Statement of Financial Position
Current assets
Non current assets
Total assets
Current liabilities
Non current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Total equity
Total comprehensive loss for the year
(a) Current assets
(i) Cash and cash equivalents
Cash at bank
Term deposit
Total cash and cash equivalents
(ii) Other current assets
Total current assets
(b) Non current assets
(i) Available for sale financial asset
Shares in controlled entity - at cost
Net change in fair value
Market value of listed securities
(ii) Other non current assets
Total non current assets
Company
2011
$
1,905,541
3,343,942
5,249,483
151,841
-
151,841
2010
$
2,770,250
3,399,173
6,169,423
143,106
132,196
275,302
5,097,642
5,894,121
6,192,427
1,892,657
6,192,427
2,419,637
(2,987,442)
5,097,642
(2,717,943)
5,894,121
(269,500)
(475,244)
1,363,415
32,089
1,395,504
510,037
1,905,541
3,069,452
(350,506)
2,718,946
624,996
3,343,942
543,179
1,645,272
2,188,451
581,799
2,770,250
2,849,766
402,322
3,252,088
147,085
3,399,173
Details of the percentage of ordinary shares held in controlled entity:
Investment in Controlled Entities:
Orion Equities Limited (A.C.N. 000 742 843) (OEQ) Incorporated in Australia
Ownership interest
2011
50.88%
2010
48.04%
(c) Transactions with related parties
The Company is deemed to control Orion Equities Limited (OEQ). During the financial year, there were transactions between the
Company, OEQ and Associate entity of OEQ, Bentley Capital Limited (BEL), pursuant to shared office and administration expense
arrangements. Interest is not charged on such outstanding amounts and amounts were fully received/(paid) by balance date. The
following transactions also occurred with related parties:
Dividends received from:
Bentley Capital Limited
Administration expenses receivable/(payable)
Bentley Capital Limited
Orion Equities Limited
2011
$
2010
$
34,813
410,276
-
-
560
(2,077)
ANNUAL REPORT | 29
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
2.
PARENT ENTITY INFORMATION (continued)
(c) Transactions with related parties (continued)
The Company advanced to OEQ $500,000. The loan facility is unsecured and attracts 10% interest
per annum.
Loan advance to Orion Equities Limited
Interest owed on loan advance
Interest revenue on loan advance
3.
CONSOLIDATED PROFIT/(LOSS) FOR THE YEAR
Profit/(Loss) for the year includes the following items of revenue and expenses below.
(a) Revenue from continuing operations
Income from sale of olive oils
Dividends received
Interest received - other
Other income
Share of Associate entity's profit
Net gain on sale of financial assets held at fair value
Net change on financial assets held at fair value through profit or loss
Other income
(b) Expenses from continuing operations
Net change on financial assets held at fair value through profit or loss
Net loss on sale of financial assets held at fair value
Costs in relation to olive oil operations
- Cost of goods sold
- Depreciation expenses
- Other expenses
- Revaluation of trees
Costs in relation to land operations
- Impairment/(reversal) of property held for development and resale
- Other expenses
Personnel
- remuneration and other
- employee entitlements
Occupancy expenses
Corporate expenses
- Consultancy
- Other corporate expenses
Finance expenses
Borrowing cost
Administration expenses
- Professional fees
- Communications
- Realisation cost of share portfolio written back
- Brokerage fees
- Depreciation expenses - other assets
- Write off fixed assets
- Write off lapsed options
- Other expenses
2011
$
2010
$
500,000
16,712
17,945
-
-
-
450,027
15,332
79,331
544,690
181,205
500,186
-
10
681,401
1,226,091
1,200,987
14,060
136,082
1,351,129
874,850
-
2,572,398
408
3,447,656
4,798,785
1,997,098
-
-
873,554
582,608
201,041
18,416
-
(300,000)
367,300
881,715
(35,214)
112,624
79,082
54,427
5,447
424
78,002
37,212
(12,043)
8,735
6,403
2,202
-
910,006
123,303
113,124
327,580
950,000
130,080
952,452
(19,927)
67,167
92,089
97,490
6,046
2,729
3,014
12,700
(1,072)
11,830
6,656
2,986
1,200
98,059
4,183,538
80,164
4,743,171
ANNUAL REPORT | 30
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
4.
INCOME TAX EXPENSE
(a)
Income tax expense
Current tax
Under/(over) provision in prior years
Deferred tax
Current year deferred tax expense/(benefit)
Total income tax expense/(benefit) per income statement
2011
$
2010
$
-
-
82,211
82,211
(694,440)
(694,440)
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit/(loss) before income tax
(2,957,447)
55,614
Tax at the Australian tax rate of 30% (2010: 30%)
(887,233)
16,684
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Other assessable income
Other non-deductible items
Share of Associate's (profits)/loss
Current year revenue losses not brought to account
Derecognition of prior year revenue loss
Derecognition of prior year capital loss
Derecognition of deferred taxes on investment in associate
Utilisation of previously unrecognised capital loss
Movement in unrecognised temporary differences
Excess current year franking credits converted to recognised tax losses
Income tax expense attributable to operating loss
Deferred tax assets not previously brought to account
Income tax expense (benefit)
(c) Deferred tax recognised directly in equity
Revaluations of land and intangibles
(d) Deferred tax assets not brought to account at 30%:
Revenue losses
Capital losses
Temporary differences
192,046
1,793
57,593
4,023
(54,362)
(262,455)
195,555
680,789
264,268
48,642
(316,500)
(42,787)
94,524
-
69,001
-
(1,200)
44,057
-
(177,011)
82,211
-
82,211
(154,784)
(539,656)
(694,440)
(82,211)
262,006
1,589,972
246,719
48,155
1,884,846
518,075
295,802
90,942
904,819
The Deferred Tax Asset not brought to account for the period will only be obtained if:
i)
the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit to be realised;
ii) the Company continues to comply with the conditions for deductibility imposed by tax legislation; and
iii) the Company is able to meet the continuity of ownership and/or continuity of business tests under tax legislation.
ANNUAL REPORT | 31
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
5.
KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Key management personnel compensation
Directors
Short-term employee benefits - cash fees
Post-employment benefits - superannuation
Other key management personnel
Short-term employee benefits - cash fees
Post-employment benefits - superannuation
2011
$
2010
$
580,914
47,333
628,247
46,731
4,206
50,937
532,693
60,456
593,149
94,016
8,542
102,558
Detailed remuneration disclosures are provided in the Remuneration Report section of the Directors' Report.
(b) Compensation of other key management personnel
The Consolidated Entity do not have any key executives (other than executive directors).
(c) Options, rights and equity instruments provided as remuneration
There were no options, rights and equity instruments provided as remuneration to key management personnel and no shares issued
on the exercise of any such instruments, during the financial year.
(d) Shareholdings of key management personnel
Balance at
Net Changes
Balance at
2011
Directors
Farooq Khan
Simon Cato
Azhar Chaudhri
Yaqoob Khan
Other key management personnel
Victor Ho (Company Secretary)
2010
Directors
Farooq Khan
Simon Cato
Azhar Chaudhri
Yaqoob Khan
Other key management personnel
Victor Ho (Company Secretary)
start of the year
during the year
end of the year
6,398,044
193,000
4,724,280
68,345
17,500
6,398,044
193,000
4,724,280
68,345
17,500
-
-
826,950
-
-
-
-
-
-
-
6,398,044
193,000
5,551,230
68,345
17,500
6,398,044
193,000
4,724,280
68,345
17,500
(e) Partly paid shareholding of key management personnel
Balance at
Net Changes
Balance at
2011
Directors
Farooq Khan
Azhar Chaudhri
Yaqoob Khan
2010
Directors
Farooq Khan
Azhar Chaudhri
Yaqoob Khan
start of the year
during the year
end of the year
-
20,000,000
-
-
20,000,000
-
-
-
-
-
-
-
-
20,000,000
-
-
20,000,000
-
The disclosures of equity holdings above are in accordance with the accounting standards which requires a disclosure of shares held
directly, indirectly or beneficially by each key management person, a close member of the family of that person, or an entity over
which either of these persons have, directly or indirectly, control, joint control or significant influence (as defined under Accounting
Standard AASB 124 Related Party Disclosures). The 2010 comparatives have been restated to reflect the above definition as they
were previously incorrectly disclosed based on a previous wider definition under the standard and to correct an incorrect attribution
of certain shareholdings.
ANNUAL REPORT | 32
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
5.
KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)
(f) Option holdings of key management personnel
The Consolidated Entity does not have any options on issue.
(g) Loans to key management personnel
There were no loans to key management personnel (or their personally related entities) during the financial year.
(h) Other transactions with key management personnel
Director, Mr Simon Cato, is a director of Advanced Share Registry Limited, which provides share registry services to the Consolidated
Entity.
Amounts recognised as expense
Share registry fees
2011
$
2010
$
7,475
8,179
There were no other transactions with key management personnel (or their personally related entities) during the financial year.
6.
AUDITORS' REMUNERATION
During the year the following fees were paid or payable for services provided by the auditor of the parent entity and its related practices:
BDO Audit (WA) Pty Ltd
Audit and review of financial reports
Taxation services
Other services
7.
EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
2011
$
2010
$
64,042
6,850
-
70,892
53,874
2,100
1,050
57,024
2011
2010
(5.5)
(3.4)
0.6
0.4
Profit/(loss) used to calculate earnings per share ($)
(1,653,274)
171,533
(a) Basic earnings/(loss) per share
The earnings/(loss) and weighted average number of ordinary shares used in the calculation of basic
earnings per share are as follows:
Net Profit/(loss) ($)
Weighted average number of ordinary shares (i)
(1,653,274)
171,533
29,927,379
29,927,379
(i)
The Consolidated Entity's partly paid shares, to the extent that they have been paid (1.5225 cent per share), have been
included in the determination of the basic earnings per share.
The Consolidated Entity's partly paid shares, to the extent of the balance of the call (18.4775 cents per share), have not been
included in the determination of basic earnings per share. These securities are included in the determination of diluted
earnings per share on the basis that each partly paid share will become fully paid.
(b) Diluted earnings/(loss) per share
The earnings/(loss) and weighted average number of ordinary and potential ordinary shares used in
the calculation of diluted earnings per share are as follows:
2011
2010
Net Profit/(loss) ($)
Weighted average number of ordinary shares (i)
Weighted average number of shares used as the denominator
(1,653,274)
171,533
48,404,879
48,404,879
The weighted average number of ordinary shares used as the denominator in calculating basic
earnings) per share
29,927,379
29,927,379
Adjustments for calculation of diluted earnings per share
Portion of partly-paid ordinary shares that remain unpaid
18,477,500
48,404,879
18,477,500
48,404,879
ANNUAL REPORT | 33
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
8.
CASH AND CASH EQUIVALENTS
Cash at bank
Term deposit
(a) Risk exposure
2011
$
1,652,555
32,089
1,684,644
2010
$
940,709
1,645,272
2,585,981
The Consolidated Entity’s exposure to interest rate risk is discussed in Note 23. The maximum exposure to credit risk at the end of
the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above.
(b) Reconciliation of Net Profit/(Loss) after Tax to Net Cash Flow from Operations
Profit/(Loss) after income tax
Net change in fair value in trading portfolio
Net loss/(gain) on sale of financial assets held at fair value
Impairment/(reversal) of property held for development and resale
Depreciation - olive oil and other assets
Share of Associate entity's profit
Write off fixed assets
Revaluation of trees
Write off lapsed options
Gain on sale of fixed assets
(Increase)/Decrease in Assets:
Financial assets held at fair value through profit or loss
Trade and other receivables
Inventories - Olive Oils
Investments in Associate entity
Other current assets
Increase/(Decrease) in Liabilities:
Trade and other payables
Provisions
Tax liabilities
Net cash outflow from operating activities
9.
FINANCIAL ASSETS HELD AT FAIR VALUE THROUGH PROFIT AND LOSS
Current
Listed securities at fair value
Unlisted options in listed corporations at cost
Add: net change in fair value
Risk Exposure
Information about the Consolidated Entity's exposure to market and price risk is provided in Note 23.
2011
$
2010
$
(3,039,658)
750,054
1,997,098
(2,572,398)
(500,186)
(300,000)
207,444
873,554
950,000
129,959
(181,205)
(874,850)
2,202
-
-
-
2,986
327,580
1,200
(408)
363,923
117,552
(380,030)
445,089
(5,057)
189,827
43,977
82,211
(956,813)
1,059,608
(85,574)
222,748
445,089
5,294
(836,988)
81,735
(694,440)
(214,851)
6,475,856
7,669,346
-
-
-
10,000
950,495
960,495
6,475,856
8,629,841
ANNUAL REPORT | 34
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
10. TRADE AND OTHER RECEIVABLES
Current
Trade debtors
GST receivable
Other receivables
Amount receivable from related parties
Deposit
Non Current
Bonds and guarantees
(a) Risk exposure
2011
$
2010
$
34,787
19,515
4,766
1,199
935
61,202
32,823
32,823
51,791
13,333
111,492
1,203
935
178,754
32,823
32,823
Information about the Consolidated Entity's exposure to credit risk, foreign exchange risk and interest rate risk is in Note 23.
(b)
Impaired receivables and receivables
None of the receivables are impaired or past due.
11.
INVENTORIES
Current - Olive Oil Inventory
Bulk oils - at cost
Packaged oils - at cost
Non Current - Land Development
Property held for development and resale - at cost
Revaluation of property
2011
$
2010
$
890,093
109,337
999,430
515,525
103,875
619,400
3,797,339
3,797,339
(1,997,339)
1,800,000
(2,297,339)
1,500,000
Property held for development and resale was valued by an independent qualified valuer (an Associate member of the Australian Property
Institute) on 6 June 2011 and the upwards revaluation has been recognised as an impairment reversal through profit or loss.
12. OTHER CURRENT ASSETS
Prepayments - Director's & Officers' insurance
2011
$
2010
$
5,057
-
ANNUAL REPORT | 35
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
13.
INVESTMENTS IN ASSOCIATE ENTITY
Name of Associate
Principal Activity
Bentley Capital Limited (BEL)
Investments
Ownership Interest
2011
30.65%
2010
30.90%
Movement in Investments in Associate
Shares in listed Associate entity brought forward
Share of profit before income tax expense
Dividend from Associate entity
Acquisition of BEL shares
Share of income tax expense
Carrying amount at the end of the financial period
Fair value of listed investments in Associate
Net tangible asset value of listed investments in Associate
Share of Associate's profits
Profit before income tax
Share of income tax expense
Profit after income tax
Group share of:
Summarised Financial Position of Associate
Current assets
Non current assets
Total assets
Current liabilities
Non current liabilities
Total liabilities
Net assets
Revenues
Profit after income tax of Associate
Carrying Amount
2011
$
2010
$
7,571,638
7,571,638
7,835,522
7,835,522
7,835,522
6,851,981
181,205
874,850
(445,089)
(445,089)
-
-
553,780
-
7,571,638
7,835,522
4,895,970
5,007,242
8,830,325
9,124,307
181,205
874,850
-
-
181,205
874,850
8,830,096
9,169,156
23,411
42,624
8,853,507
9,211,780
(18,028)
(5,154)
(23,182)
(39,368)
(44,567)
(83,935)
8,830,325
9,127,845
573,751
181,205
1,282,312
874,850
Bentley Capital Limited - Lease Commitments
BEL and its subsidiary, Scarborough Equities Pty Ltd , have the same lease commitments as disclosed in Note 24.
ANNUAL REPORT | 36
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
14. PROPERTY, PLANT AND EQUIPMENT
Freehold
Buildings on
Plant &
Leasehold
Land
Freehold Land Equipment
Improvement
Total
At 1 July 2009
At cost
Revaluation Reserve/(Accumulated depreciation)
Net carrying amount
Year ended 30 June 2010
Carrying amount at beginning
Asset revaluation (Note 21)
Additions
Depreciation expense
Disposals
Write off obsolete assets
Carrying amount at balance date
$
861,214
367,236
1,228,450
1,228,450
(28,569)
-
-
-
-
1,199,881
$
112,432
(18,551)
93,881
$
1,368,318
(454,758)
913,560
$
44,305
(34,119)
10,186
$
2,386,269
(140,192)
2,246,077
93,881
913,560
10,186
2,246,077
-
-
-
21,302
-
-
(28,569)
21,302
(7,041)
(121,434)
(1,484)
(129,959)
-
-
86,840
(2,185)
(2,986)
808,257
-
-
8,702
(2,185)
(2,986)
2,103,680
At 30 June 2010
At cost
Revaluation Reserve/(Accumulated depreciation)
Net carrying amount
861,214
338,667
1,199,881
112,432
(25,592)
86,840
1,368,846
(560,589)
808,257
44,305
(35,603)
8,702
2,386,797
(283,117)
2,103,680
Year ended 30 June 2011
Carrying amount at beginning
Asset revaluation (Note 21)
Additions
Depreciation expense
Disposals
Carrying amount at balance date
1,199,881
(171,411)
-
-
-
1,028,470
86,840
-
5,444
(6,788)
-
85,496
808,257
-
12,543
8,702
-
-
(199,393)
(1,264)
(2,202)
619,205
-
7,438
2,103,680
(171,411)
17,987
(207,445)
(2,202)
1,740,609
At 30 June 2011
At cost
Revaluation Reserve/(Accumulated depreciation)
Net carrying amount
861,214
167,256
1,028,470
117,876
(32,380)
85,496
1,379,187
(759,982)
619,205
44,305
(36,867)
7,438
2,402,582
(661,973)
1,740,609
15. OLIVE TREES
Olive trees - at cost
Revaluation of trees
2011
$
300,000
(234,500)
65,500
2010
$
300,000
(234,500)
65,500
Nature of asset
The olive trees are on the Olive Grove property (approximately 64,500, 12 year old trees planted over 143 hectares). The fair value is at
the Directors' valuation having regard to, amongst other matters, the replacement cost of the trees and the trees being in commercial
production.
ANNUAL REPORT | 37
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
16.
INTANGIBLE ASSETS
Year ended 30 June 2010
Opening net book amount
Asset revaluation
Closing net book amount
At 30 June 2010
Cost
Asset revaluation (Note 21)
Net book amount
Year ended 30 June 2011
Opening net book amount
Asset revaluation
Closing net book amount
At 30 June 2011
Cost
Asset revaluation (Note 21)
Net book amount
Water
Licence
Brand name
Total
$
523,125
261,562
784,687
250,000
534,687
784,687
$
99,996
-
99,996
$
623,121
261,562
884,683
99,996
-
99,996
349,996
534,687
884,683
784,687
(102,625)
682,062
99,996
-
99,996
884,683
(102,625)
782,058
250,000
432,062
682,062
99,996
-
99,996
349,996
432,062
782,058
Nature of asset
The Water Licence pertains to the Consolidated Entity's Olive Grove property in Gingin, Western Australia. As at 30 June 2011, an
independent qualified valuer (a Certified Practising Valuer and Associate member of the Australian Property Institute) revalued the water
licence downwards by $102,625 from the previous balance date. The Brand name pertains to the ultra premium Dandaragan Estate Olive
Oil Brand.
17. TRADE AND OTHER PAYABLES
Trade payables
Other creditors and accruals
Dividend payable
2011
$
2010
$
260,095
333,840
28,302
622,237
57,317
346,789
28,309
432,415
(a) Amounts not expected to be settled within the next 12 months
Other creditors and accruals include accruals for annual leave. The entire obligation is presented as current since the Consolidated
Entity does not have an unconditional right to defer settlement. However based on past experience, the Consolidated Entity does not
expect all employees to take the full amount of their accrued leave within the next 12 months. The following amount reflects leave
that is not expected to be taken within the next 12 months.
Annual leave obligation expected to be settled after 12 months
(b) Risk exposure
Details of the Consolidated Entity's exposure to risks arising from current payables are set out in Note 23.
18. PROVISIONS
Employee benefits - long service leave
2011
$
2010
$
18,488
71,465
2011
2010
$
197,479
$
153,502
The current provision for long service leave includes all unconditional entitlements where employees have completed the required period of
service and accrued long service leave benefits. The entire obligation is presented as current since the Consolidated Entity does not have
an unconditional right to defer settlement. However based on past experience, the Consolidated Entity does not expect all employees to
take their full amount of the accrued long service leave or require payment within the next 12 months. The amounts above reflect leave
that is not expected to be taken or paid within the next 12 months.
ANNUAL REPORT | 38
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
19. DEFERRED TAX ASSETS AND LIABILITIES
(a) Assets - Non Current
Deferred tax asset comprises:
Provisions & accruals
Revenue tax losses
Other
(b) Liabilities - Non Current
Deferred tax liability comprises:
Fair Value Gain Adjustments
Other
(c) Reconciliations
(i) Gross movements
The overall movement in the deferred tax account is as follows:
Opening balance
Charged to equity
(Charged)/credited to profit or loss
Closing balance
(ii) Deferred tax asset:
The movement in deferred tax asset for each temporary difference during the year is as follows:
Provisions & accruals
Opening balance
Charged to profit or loss
Closing balance
Revenue tax losses
Opening balance
Charged to profit or loss
Closing balance
Other
Opening balance
Charged to profit or loss
Closing balance
Total
(iii) Deferred tax liability:
The overall movement in recognised deferred tax liabilities for each temporary difference is as follows
Fair Value Gain Adjustments
Opening balance
Charged to profit or loss
Closing balance
Other
Opening balance
Charged to equity
Charged to profit or loss
Closing balance
Total
2011
$
2010
$
99,568
321,292
745,028
1,165,888
108,577
1,008,506
985,108
2,102,191
1,057,472
108,416
1,165,888
1,899,035
203,156
2,102,191
-
82,211
(82,211)
-
(432,432)
(262,006)
694,438
-
108,577
(9,009)
99,568
1,008,506
(687,214)
321,292
985,108
(240,080)
745,028
130,640
(22,063)
108,577
760,155
248,351
1,008,506
404,278
580,830
985,108
1,165,888
2,102,191
1,899,035
(841,563)
1,057,472
203,156
(82,211)
(12,529)
108,416
1,455,846
443,189
1,899,035
271,659
262,006
(330,509)
203,156
1,165,888
2,102,191
ANNUAL REPORT | 39
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
20.
ISSUED CAPITAL
Fully paid ordinary shares
Partly paid ordinary shares
30 June 2010
At 1 July 2009
At 30 June 2010
30 June 2011
At 1 July 2010
At 30 June 2011
(a) Ordinary shares
2011
shares
2010
shares
2011
$
28,404,879
28,404,879
5,887,927
20,000,000
20,000,000
304,500
6,192,427
2010
$
5,887,927
304,500
6,192,427
Date of
Number of
issue
shares
$
28,404,879
-
28,404,879
28,404,879
-
28,404,879
5,887,927
-
5,887,927
5,887,927
-
5,887,927
Fully paid ordinary shares carry one vote per share and carry the right to dividends. There were no movements during the year for
fully paid ordinary shares.
(b) Partly paid ordinary shares
There were no movements during the year for partly paid ordinary shares.
At any meeting, each shareholder present in person or by proxy, attorney or representative has one vote for each ordinary fully paid
share held either upon a show of hands or by a poll. Holders of partly paid shares have a fraction of a vote for each partly paid
share held with the fractional vote of each share being equivalent to the proportion which the amount actually paid (not credited) for
that share is of the total amounts paid and payable (excluding amounts credited) for that share. Amounts paid in advance of a call
are ignored when calculating proportions. The holder of a partly paid share is not entitled to vote at a meeting in respect of those
shares on which calls are outstanding. No voting rights are attached to the Consolidated Entity's options on issue.
The profits of the Consolidated Entity, which the Directors may from time to time determine to distribute to shareholders by way of
dividends, will be divisible amongst the shareholders in proportion to the amounts paid on the shares held by them. An amount paid
in advance of a call is not to be included as an amount paid on a share for the purposes of calculating entitlement to dividends for
such share.
(c) Capital risk management
The Consolidated Entity's objectives when managing its capital are to safeguard their ability to continue as a going concern, so that
it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain a capital structure balancing
the interests of all shareholders.
The Board will consider capital management initiatives as is appropriate and in the best interests of the Consolidated Entity and
shareholders from time to time, including undertaking capital raisings, share buy backs, capital reductions and the payment of
dividends.
The Consolidated Entity has no borrowings. The Consolidated Entity's non-cash investments can be realised to meet accounts
payable arising in the normal course of business.
21. RESERVES
Option Premium Reserve
Property, plant and equipment
Intangibles
Deferred tax liability movement
Asset revaluation reserve
Total reserves
2011
$
2010
$
2,138,012
2,138,012
85,100
219,833
304,933
(91,480)
213,453
162,697
256,867
419,564
(125,869)
293,695
2,351,465
2,431,707
ANNUAL REPORT | 40
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
21. RESERVES (continued)
Movement of asset revaluation reserve
Opening balance
Asset revaluation reserve brought to account
Deferred tax liability movement
Closing balance
2011
$
293,695
(114,631)
34,389
213,453
2010
$
307,633
111,931
(125,869)
293,695
The Option Premium Reserve comprised consideration received on the issue of options in prior years which have lapsed.
The Asset Revaluation Reserve is used to record increments and decrements on the revaluation of non-current assets. The Asset
Revaluation Reserve relates to the revaluation of OEQ's Olive Grove Land from cost of $1,199,881 to $1,028,470 and the Water Licence
from a cost of $784,687 to $682,062, as assessed by an independent qualified valuer (a Certified Practising Valuer and Associate member
of the Australian Property Institute). The movement in the Asset revaluation reserve relates to the Consolidated Entity's share of OEQ's
revaluation.
22. SEGMENT INFORMATION
The Consolidated Entity has considered the product and geographical perspective of the operating results and determined that the
Consolidated Entity operates only in Australia with segments in Investments and Olive Oil production. Unallocated items comprise
predominantly of corporate assets, office expenses and income tax assets and liabilities.
2011
Total segment revenue
Adjusted EBITDA
Total segment asset
Total segment liabilities
2010
Total segment revenue
Adjusted EBITDA
Total segment asset
Total segment liabilities
Investments
$
Olive Oil
$
Unallocated
$
Total
$
696,723
318,904
450,027
79,341
1,226,091
(197,775)
(1,257,335)
(1,136,206)
15,847,492
3,580,510
2,956,703
22,384,705
-
(398,116)
(1,587,488)
(1,985,604)
3,461,308
1,200,987
136,490
2,442,830
177,857
(1,283,335)
4,798,785
1,337,352
17,965,361
3,725,056
4,847,958
26,538,375
(116,455)
(147,245)
(2,424,408)
(2,688,108)
(a) Other segment information
(i)
Segment revenues
Any sales between segments are carried out at arm's length and are eliminated on consolidation.
Total segment revenue
Unallocated:
Interest received - other
Other income
Gain on sale of assets
Total revenue from continuing operations (Note 3)
(ii) Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
The adjusted EBITDA excludes net change in fair value in investments and impairment of assets.
Adjusted EBITDA
Net change on financial assets held at fair value through profit or loss
Impairment/(reversal) of property held for development and resale
Depreciation
Interest revenue
Realisation cost of share portfolio written back
Finance cost
Fixed assets written off
Revaluation of trees
Gain on sale of assets
Profit/(loss) before income tax
2011
$
2010
$
1,146,750
4,662,295
79,331
136,082
10
-
1,226,091
-
408
4,798,785
(1,136,206)
1,337,352
(1,997,098)
300,000
(207,444)
79,331
12,043
(5,871)
(2,202)
-
(950,000)
(129,959)
136,082
1,072
(8,775)
(2,986)
-
(327,580)
-
(2,957,447)
408
55,614
ANNUAL REPORT | 41
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
22. SEGMENT INFORMATION (continued)
(iii) Segment assets
Unallocated:
Cash and cash equivalents
Trade and other receivables
Other current assets
Property, plant and equipment
Deferred tax asset
Total assets as per the Statement of Financial Position
(iv) Segment liabilities
Unallocated:
Trade and other payables
Provisions
Deferred tax liability
Total liabilities as per the Statement of Financial Position
23. FINANCIAL RISK MANAGEMENT
2011
$
2010
$
19,428,002
21,690,417
1,684,644
2,585,981
21,018
5,057
80,096
159,786
-
-
1,165,888
22,384,705
2,102,191
26,538,375
(398,116)
(263,700)
(224,121)
(197,479)
(168,715)
(153,502)
(1,165,888)
(1,985,604)
(2,102,191)
(2,688,108)
The Consolidated Entity's financial instruments comprise of deposits with banks, accounts receivable and payable and investments in listed
securities. The principal activity of the Consolidated Entity is the management of these investments - "financial assets held at fair value"
(refer to Note 9). The Consolidated Entity's investments are subject to price risk (which includes interest rate and market risk), credit risk
and liquidity risks.
The Board of Directors is responsible for the overall internal control framework (which includes risk management) but no cost-effective
internal control system will preclude all errors and irregularities. The system is based, in part, on the appointment of suitably qualified
management personnel. The effectiveness of the system is continually reviewed by management and at least annually by the Board.
The financial receivables and payables of the Consolidated Entity in the table below are due or payable within 30 days. The financial
investments are held for trading and are realised at the discretion of the Board of Directors.
The Consolidated Entity held the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit or loss
Financial liabilities
Trade and other payables
Net Financial Assets
2011
$
2010
$
1,684,644
2,585,981
61,202
178,754
6,475,856
8,221,702
8,629,841
11,394,576
(622,237)
(622,237)
(432,415)
(432,415)
7,599,465
10,962,161
ANNUAL REPORT | 42
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
23. FINANCIAL RISK MANAGEMENT (continued)
(a) Market Risk
(i)
Price risk
The Consolidated Entity is exposed to equity securities price risk. This arises from investments held by the Consolidated Entity and
classified in the Statement of Financial Position at fair value through profit or loss. The Consolidated Entity are not exposed to
commodity price risk, save where this has an indirect impact via market risk and equity securities price risk.
The value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by
factors specific to the individual instrument or its issuer or factors affecting all instruments in the market. The Consolidated Entity
will be subject to market risk as it invests its capital in securities that are not risk free - the market price of these securities can and
will fluctuate. The Consolidated Entity does not manage this risk through entering into derivative contracts, futures, options or
swaps.
Equity price risk is minimised through ensuring that investment activities are undertaken in accordance with Board established
mandate limits and investment strategies.
The Consolidated Entity has performed a sensitivity analysis on its exposure to market price risk at balance date. The analysis
demonstrates the effect on the current year results and equity which could result from a change in these risks. The ASX All
Ordinaries Share Index was utilised as the benchmark for the listed share investments which are available for sale assets or at fair
value through profit or loss.
(i)
Equity Price risk - listed investments
Change in profit
Increase by 15%
Decrease by 15%
Change in equity
Increase by 15%
Decrease by 15%
2011
$
2010
$
445,767
1,111,102
(445,767)
(1,111,102)
445,767
1,111,102
(445,767)
(1,111,102)
(ii)
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The
Consolidated Entity's exposure to market risk for changes in interest rates relate primarily to investments held in interest bearing
instruments. The average interest rate of the term deposits for the year for the table below is 4.64% (2010: 5.93%).
Cash at bank
Term deposit
2011
$
1,652,555
32,089
1,684,644
2010
$
940,709
1,645,272
2,585,981
The Consolidated Entity has no borrowings and no material exposure to interest rate risk.
(iii) Foreign exchange risk
The Consolidated Entity is not exposed to foreign exchange risk as at Balance Date. The Consolidated Entity's current policy is not to
hedge any overseas currency exposure.
The Consolidated Entity has no foreign exchange funds or investments, therefore no asset or liability exposure to foreign exchange
risk. There is no revenue or expense exposure in terms of the possible impact on profit or loss or total equity.
ANNUAL REPORT | 43
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
23. FINANCIAL RISK MANAGEMENT (continued)
(b) Credit risk
Credit risk refers to the risk that a counterparty under a financial instrument will default (in whole or in part) on its contractual
obligations resulting in financial loss to the Consolidated Entity. Credit risk arises from cash and cash equivalents and deposits with
banks and financial
institutions, including outstanding receivables and committed transactions. Concentrations of credit risk are
minimised primarily by undertaking appropriate due diligence on potential investments, carrying out all market transactions through
approved brokers, settling non-market transactions with the involvement of suitably qualified legal and accounting personnel (both
internal and external), and obtaining sufficient collateral or other security (where appropriate) as a means of mitigating the risk of
loss from defaults. The Consolidated Entity's business activities do not necessitate the requirement for collateral as a
financial
means of mitigating the risk of financial loss from defaults.
The credit quality of the financial assets are neither past due nor impaired and can be assessed by reference to external credit
ratings (if available with Standard & Poor's) or to historical information about counterparty default rates. The maximum exposure to
credit risk at reporting date is the carrying amount of the financial assets as summarised below:
Cash and cash equivalents
AA
BBB+
Trade and other receivables (due within 30 days)
No external credit rating available
2011
$
1,683,781
863
1,684,644
2010
$
1,568,285
1,017,696
2,585,981
61,202
178,754
The Consolidated Entity measures credit risk on a fair value basis. The carrying amount of financial assets recorded in the financial
statements, net of any provision for losses, represents the Consolidated Entity’s maximum exposure to credit risk.
(c)
Liquidity risk
Liquidity risk is the risk that the Consolidated Entity will encounter difficulty in meeting obligations associated with financial liabilities.
The Consolidated Entity has no borrowings. The Consolidated Entity's non-cash investments can be realised to meet trade and other
payables arising in the normal course of business. The financial liabilities disclosed in the above table have a maturity obligation of
not more than 30 days.
(d) Fair value measurements
The fair value of financial assets and financial
purposes.
liabilities must be estimated for recognition and measurement or for disclosure
The Consolidated Entity has adopted the amendment to AASB7FinancialInstruments:Disclosures which requires disclosure of fair
value measurements by level of the following fair value measurement hierarchy :
(i) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
(ii)
Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices), and
(iii) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The following table presents the Consolidated Entity’s assets and liabilities measured and recognised at fair value at 30 June 2011.
Consolidated - 2011
Financial assets held at fair value through profit or loss
- Listed investments at fair value
- Unlisted options in listed corporations at cost
Consolidated - 2010
Financial assets held at fair value through profit or loss
- Listed investments at fair value
- Unlisted options in listed corporations at cost
Level 1
Level 2
Level 3
$
$
$
Total
$
6,475,856
-
-
-
7,669,346
-
-
960,495
-
-
-
-
6,475,856
-
7,669,346
960,495
ANNUAL REPORT | 44
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2011
24. COMMITMENTS
Not longer than one year
Between 12 months and 5 years
2011
$
104,929
110,176
215,105
2010
$
82,633
170,384
253,017
The non-cancellable operating lease commitment is the Consolidated Entity's share of the office premises at Level 14, The Forrest Centre,
221 St Georges Terrace, Perth, Western Australia, and includes all outgoings (exclusive of GST). The lease is for a 7 year term expiring 30
June 2013 and contains a rent review increase each year alternating between 5% and the greater of market rate or CPI + 1%.
25. CONTINGENT ASSETS AND LIABILITIES
(a)
Directors' Deeds
The Company and OEQ have entered into deeds of indemnity with each of their Directors indemnifying them against liability incurred
in discharging their duties as directors/officers of the Company. At the end of the financial period, no claims have been made under
any such indemnities and accordingly, it is not possible to quantify the potential financial obligation of the Consolidated Entity under
these indemnities.
(b)
Royalty on Tenements
The Consolidated Entity is entitled to receive a royalty of 2% of gross revenues (exclusive of GST) from any commercial exploitation
of any minerals from various Australian tenements - EL 47/1328 and PL 47/1170 (the Paulsens East Project tenements currently
held by Strike Resources Limited), EL 24879, 24928 and 24929 and ELA 24927 (the Bigryli South Project tenements in the Northern
Territory, currently held by Alara Resources Limited (Alara)) and EL 46/629 and a right to earn and acquire a 85% interest in ELA
46/585 (excluding all manganese mineral rights) (the Canning Well Project tenements in Western Australia, currently held by Alara).
26. EVENTS AFTER BALANCE DATE
(a)
On 25 August 2011, Associate entity, Bentley Capital Limited, announced the declaration of a one cent final dividend and a 2.4 cent
special dividend per share (totalling 3.4 cents fully franked), to be paid on or about 26 September 2011. Orion's share of this
dividend will be $697,469 and the Company's share of this dividend will be $59,181 (being a total of $756,650). Orion and the
Company have not elected to participate under Bentley's Dividend Reinvestment Plan and will therefore be receiving cash dividends.
(b) On 25 August 2011, Bentley Capital Limited, announced its intention to seek shareholder approval to undertake a 5 cent per share
return of capital (Return of Capital). The Return of Capital is to be effected by Bentley seeking shareholder approval for a reduction
in the share capital of the company by returning 5 cents per share to shareholders – this equates to an aggregate reduction of share
capital by approximately $3.63 million based upon the company’s 72,598,802 shares currently on issue. No shares will be cancelled
as a result of the Return of Capital. Accordingly, the number of shares held by each shareholder will not change as a consequence
of the Return of Capital. The Return of Capital is subject to shareholder approval which will be sought at a general meeting of
shareholders anticipated to be held in late September /early October 2011. If Bentley shareholders approve this Return of Capital,
Orion's share will be $1,025,676 and the Company's share will be $87,031 (being a total of $1,112,720).
No other matter or circumstance has arisen since the end of the financial period that significantly affected, or may significantly affect, the
operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity in future financial
periods.
ANNUAL REPORT | 45
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
The financial statements, comprising the Statement of Comprehensive Income, Statement of
Financial Position, Statement of Changes in Equity and Statement of Cash Flow and
accompanying notes as set out on pages 19 to 45 are in accordance with the Corporations Act
2001 and:
(a)
(b)
comply with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting; and
give a true and fair view of the Company’s and Consolidated Entity’s financial position as
at 30 June 2011 and of its performance for the year ended on that date;
2.
3.
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able
to pay its debts as and when they become due and payable;
The Directors have been given the declarations required by section 295A of the Corporations
Act 2001 by the Executive Chairman and Managing Director (the person who performs the chief
executive function) and the Company Secretary (the person who, in the opinion of the
Directors, performs the chief financial officer function); and
4.
The Company has included in the notes to the Financial Statements an explicit and unreserved
statement of compliance with the International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Directors made pursuant to section
295(5) of the Corporations Act 2001.
Farooq Khan
Chairman
31 August 2011
Simon Cato
Director
ANNUAL REPORT | 46
Tel: +8 6382 4600
Fax: +8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF QUESTE COMMUNICATIONS LTD.
Report on the Financial Report
We have audited the accompanying financial report of Queste Communications Ltd, which comprises
the consolidated statement of financial position as at 30 June 2011, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that is free from material misstatement, whether due to fraud or error. In
Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial statements comply with International Financial Reporting
Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
entity’s preparation of the financial report that gives a true and fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made
by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of Queste Communications Ltd, would be in the same terms if
given to the directors as at the time of this auditor’s report.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
Opinion
In our opinion:
(a) the financial report of Queste Communications Ltd is in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June
2011 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b) the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2011. The directors of the company are responsible for the preparation and presentation of
the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Queste Communications Ltd for the year ended 30 June
2011 complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Chris Burton
Director
Perth, Western Australia
Dated this 31th day of August 2011
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE
Compliance with Corporate Governance Council’s
Principles
The extent to which the Company has followed the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations with 2011 Amendments (2nd Edition, August 2007) is as follows:
Principle
Compliance
CGS References /
Comments
Principle 1: Lay solid foundations for management and oversight
Companies should establish and disclose the respective roles and responsibilities of board and management
1.1 Companies should establish the functions reserved to the board and those delegated
to senior executives and disclose those functions.
1.2 Companies should disclose the process for evaluating the performance of senior
executives.
1.3 Companies should provide the information indicated in the Guide to Reporting on
Principle 1.
Yes
Yes
Yes
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.
Principle 2: Structure the board to add value
2, 3.3, 4.1, 4.2
3.11
Annual Reports
Website
CGS
Companies should have a board of an effective composition size and commitment to adequately discharge its responsibilities and duties
2.1 A majority of the board should be independent directors.
2.2 The chair should be an independent director.
2.3 The roles of chair and chief executive officer should not be exercised by the same
individual.
2.4 The board should establish a nomination committee.
2.5 Companies should disclose the process for evaluating the performance of the board,
its committees and individual directors.
2.6 Companies should provide the information indicated in the Guide to Reporting on
Principle 2.
No
No
No
No
Yes
Yes
3.5
3.2, 3.5
3.2
4.2
3.11
Annual Reports
The following material should be included in the corporate governance statement in the
annual report:
(as applicable)
Website
CGS
the skills, experience and expertise relevant to the position of director held by each
director in office at the date of the annual report;
the names of the directors considered by the board to constitute independent
directors and the company’s materiality thresholds;
the existence of any of the relationships listed in Box 2.1 and an explanation of why
the board considers a director to be independent, notwithstanding the existence of
these relationships;
a statement as to whether there is a procedure agreed by the board for directors to
take independent professional advice at the expense of the company;
the period of office held by each director in office at the date of the annual report;
the names of members of the nomination committee and their attendance at
meetings of the committee, or where a company does not have a nomination
committee, how the functions of a nomination committee are carried out;
whether a performance evaluation for the board, its committees and directors has
taken place in the reporting period and whether it was in accordance with the
process disclosed; and
ANNUAL REPORT | 49
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A.B.N. 58 081 688 164
CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE
Compliance
CGS References /
Comments
Principle
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
3.1.1 the practices necessary to maintain confidence in the company’s integrity;
3.1.2 the practices necessary to take into account their legal obligations and the
reasonable expectations of their stakeholders;
3.1.3 the responsibility and accountability of individuals for reporting and investigating
reports of unethical practices;
3.2 Companies should establish a policy concerning trading in company securities by
directors, officers and employees and disclose the policy or a summary of that policy.
Yes
3.3 Companies should disclose in each annual report the measurable objectives for
achieving gender diversity set by the board in accordance with the diversity policy and
progress towards achieving them.
No
6
Code of Conduct
Website
3.8
Share Trading Policy
Website
3.16
3.4 Companies should disclose in each annual report the proportion of women employees
in the whole organisation, women in senior executive positions and women on the board.
3.5 Companies should provide the information indicated in the Guide to Reporting on
Principle 3.
Yes
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.
Principle 4: Safeguard integrity in financial reporting
Yes
3.16
Annual Reports
Annual Reports
Website
CGS
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.
4.2 Structure the audit committee so that it:
No
4.2
Not applicable
4.2
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.
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.
Yes
Annual Reports
(as applicable)
Website
The following material should be included in the corporate governance statement in the
annual report:
CGS
details of the names and qualifications of those appointed to the audit committee
ANNUAL REPORT | 50
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QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE
Compliance
CGS References /
Comments
Principle
and their attendance at meetings of the committee or, where a company does not
have an audit committee, how the functions of an audit committee are carried out;
the number of meetings of the audit committee and the names of the attendees;
and
explanation of any departures from Recommendations 4.1, 4.2, 4.3 or 4.4.
The following material should be made publicly available, ideally by posting it to the
company’s website in a clearly marked corporate governance section:
the audit committee charter; and
information on procedures for the selection and appointment of the external auditor
and for the rotation of external audit engagement partners.
Principle 5: Make timely and balanced disclosure
Companies should promote timely and balanced disclosure of all material matters
concerning the company
5.1 Companies should establish written policies designed to ensure compliance with ASX
Listing Rule disclosure requirements and to ensure accountability at a senior executive
level for that compliance and disclose those policies or a summary of those policies.
Yes
8.2
5.2 Companies should provide the information indicated in the Guide to Reporting on
Principle 5.
Yes
An explanation of any departures from Recommendations 5.1 or 5.2 should be included in
the corporate governance statement in the annual report.
Annual Reports
Website
CGS
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.
Principle 6: Respect the rights of shareholders
Companies should respect the rights of shareholders and facilitate the effective exercise of those rights
6.1 Companies should design and disclose a communications policy for promoting
effective communication with shareholders and encouraging their participation at general
meetings and disclose their policy or a summary of that policy.
Yes
8.1
6.2 Companies should provide the information indicated in Guide to Reporting on
Principle 6.
Yes
An explanation of any departures from best practice Recommendations 6.1 or 6.2 should
be included in the corporate governance statement in the annual report.
The company should describe how it will communicate with its shareholders publicly,
ideally by posting the information on the company’s website in a clearly marked corporate
governance section.
Principle 7: Recognise and manage risk
Companies should establish a sound system of risk oversight and management and internal control
Annual Reports
Website
CGS
7.1 Companies should establish policies for oversight and management of material
business risks and disclose a summary of those policies.
7.2 The board should require management to design and implement the risk management
and internal control system to manage the company's material business risks and report to
it on whether those risks are being managed effectively. The board should disclose that
management has reported to it as to the effectiveness of the company's management of
its material business risks.
7.3 The board should disclose whether it has received assurance from the chief executive
officer (or equivalent) and the chief financial officer (or equivalent) that the declaration
provided in accordance with section 295A of the Corporations Act is founded on a sound
system of risk management and internal control and that the system is operating
effectively in all material respects in relation to financial reporting risks.
Yes
Yes
7.1
7.1
Yes
7.1
7.4 Companies should provide the information indicated in the Guide to Reporting on
Principle 7.
Yes
The following material should be included in the corporate governance section of the
annual report:
an explanation of any departures from best practice recommendations 7.1, 7.2, 7.3
or 7.4;
Annual Reports
Website
CGS
ANNUAL REPORT | 51
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A.B.N. 58 081 688 164
CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE
Compliance
CGS References /
Comments
Principle
whether
Recommendation 7.2; and
the board has
received
the
report
from management under
whether the board has received assurances from the chief executive officer (or
equivalent) and the chief financial officer (or equivalent) under Recommendation 7.3.
The following material should be made publicly available, ideally by posting it to the
company’s website in a clearly marked corporate governance section:
a summary of the company’s policies on risk oversight and management of material
business risks.
Principle 8: Remunerate fairly and responsibly
Companies should ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to
performance is clear
8.1 The board should establish a remuneration committee.
8.2 Companies should clearly distinguish the structure of non-executive directors’
remuneration from that of executive directors and senior executives.
No
Yes
4.2
Remuneration Report in
the Directors’ Report
(within Annual Reports)
8.3 Companies should provide the information indicated in the Guide to Reporting on
Principle 8.
Yes
Annual Reports
(as applicable)
Website
The following material or a clear cross-reference to the location of the material should be
included in the corporate governance statement in the annual report:
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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CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE
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
ensure
transparency, fair dealing and protection of the interests of
stakeholders.
Company’s
activities
and
the
The Board of Directors supports the Corporate Governance
Principles and Recommendations developed by the ASX
Corporate Governance Council (“Council”).
The Company’s practices are largely consistent with the
Council’s guidelines - the Board considers that the
implementation of some
recommendations are not
appropriate having regard to the nature and scale of the
Company’s activities and size of the Board.
The Board uses its best endeavours to ensure exceptions
to the Council’s guidelines do not have a negative impact
on the Company and the best interests of shareholders as
a whole.
Details of the Council’s recommendations can be found on
the ASX website at:
http://www.asx.com.au/governance/corporate-
governance.htm
2.
Board of Directors - Role and
Responsibilities
In general the Board is responsible for, and has the
authority to determine, all matters relating to the policies,
practices, management and operations of the Company.
The Board is also responsible for the overall corporate
governance of the Company, and recognises the need for
the highest standards of behaviour and accountability in
acting in the best interests of the Company as a whole.
The Board also ensures that the Company complies with
all of its contractual, statutory and any other legal or
final
regulatory obligations.
the
responsibility
Company.
the
The Board has
the successful operations of
for
(3)
(4)
(5)
(6)
(7)
(8)
(9)
the resourcing, review and monitoring of executive
management;
ensuring that adequate internal control systems
and procedures exist and that compliance with
these systems and procedures is maintained;
the identification of significant business risks and
ensuring that such risks are adequately managed;
the timeliness, accuracy and effectiveness of
communications and reporting to shareholders and
the market;
the establishment and maintenance of appropriate
ethical standards;
responsibilities typically assumed by an audit
committee including:
(a)
(b)
the audited
reviewing and approving
annual and reviewed half-yearly financial
reports; and
reviewing the appointment of the external
auditor, their independence, the audit fee,
and any questions of resignation or
dismissal;
responsibilities
remuneration committee including:
typically
assumed
by
a
(a)
(b)
(c)
reviewing
performance of Directors;
the
remuneration
and
for
the
policies
Executives'
setting
remuneration, setting
terms and
conditions of employment for Executives,
undertaking
Executives’
performance, including setting goals and
reviewing progress in achieving those
goals; and
reviews
of
reviewing the Company’s Executive and
employee incentive schemes and making
recommendations
proposed
on
changes; and
any
(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
for
identifying
nomination as Directors; and
individuals
specific
Where the Board considers that particular expertise or
information is required, which is not available from within
their number, appropriate external advice may be taken
and reviewed prior to a final decision being made by the
Board.
Without intending to limit the general role of the Board,
the principal functions and responsibilities of the Board
include the matters set out below, subject to delegation as
specified elsewhere in this Statement or as otherwise
appropriate:
(1)
(2)
formulation and approval of the strategic direction,
objectives and goals of the Company;
the prudential control of the Company’s finances
and operations and monitoring the
financial
performance of the Company;
(b)
oversight
succession plans.
of Board
and Executive
3.
Board of Directors – Composition, Structure
and Process
size and commitment
The Board has been formed so that it has effective
composition,
to adequately
discharge its responsibilities and duties given the current
size and the scale and nature of the Company’s activities.
The names of the Directors currently in office and their
qualifications and experience are stated in the Directors’
Report for the financial year ended 30 June 2011.
3.1.
Skills, Knowledge and Experience
Directors are appointed based on the specific corporate
and governance skills and experience required by the
Company.
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CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE
The Board recognises its need to contain Directors with a
relevant blend of personal experience in accounting and
finance, law, financial and investment markets, financial
management and public company administration and
Director-level business or corporate experience, having
regard to the scale and nature of the Company’s activities.
A Director is initially appointed by the Board and retires
(and may stand for re-election) at the next Annual General
Meeting after their appointment.
3.2.
Executive Chairman and Managing Director
The Executive Chairman/Managing Director leads the
Board and has responsibility for ensuring that the Board
receives accurate, timely and clear information to enable
Directors to perform their duties as a Board. The
Executive Chairman and Managing Director of
the
Company is Mr Farooq Khan, whose qualifications and
experience are stated in the Directors’ Report for the
financial year ended 30 June 2011.
3.3. Non-Executive Directors
The Company recognises the importance of Non-Executive
Directors and the external perspective and advice that
Non-Executive Directors can offer. Three of the current
Board’s four Directors are Non-Executive Directors – Mr
Yaqoob Khan, Mr Azhar Chaudhri and Mr Simon Cato.
Their qualifications and experience are stated in the
Directors’ Report for the financial year ended 30 June
2011.
3.4.
Company Secretary
The Company Secretary is appointed by the Board and is
responsible for developing and maintaining the information
systems and processes that are appropriate for the Board
to fulfil its role and is responsible to the Board for ensuring
compliance with Board procedures and governance
matters. The Company Secretary is also responsible for
overseeing and coordinating disclosure of information to
the ASX as well as communicating with the ASX. The
Company Secretary is Mr Victor Ho, whose qualifications
and experience are stated in the Directors’ Report for the
financial year ended 30 June 2011.
(6)
is free from any interest and any business or other
relationship which could, or could reasonably be
the
perceived
Director’s ability to act in the best interests of the
Company.
interfere with
to, materially
Mr Farooq Khan (Executive Chairman and Managing
Director) is not regarded as an independent Director,
being an Executive Director of the Company and being a
substantial shareholder of the Company.
Mr Azhar Chaudhri is not regarded as an independent
Director as he does not meet the above criteria for
independence adopted by
the Company, being a
substantial shareholder of the Company.
Mr Yaqoob Khan is regarded as an independent Director
under the criteria referred to above.
Mr Simon Cato is regarded as an independent Director
under the criteria referred to above.
3.6.
Conflicts of Interest
To ensure that Directors are at all times acting in the
interests of the Company, Directors must:
(1)
(2)
disclose to the Board actual or potential conflicts
of interest that may or might reasonably be
thought to exist between the interests of the
Director or his duties to any other parties and the
interests of the Company in carrying out the
activities of the Company; and
if requested by the Board, within 7 days or such
further period as may be permitted, take such
necessary and reasonable steps to remove any
conflict of interest.
If a Director cannot or is unwilling to remove a conflict of
interest then the Director must, as per the Corporations
Act, absent himself from the room when Board discussion
and/or voting occurs on matters to which the conflict
relates (save with the approval of the remaining Directors
and subject to the Corporations Act).
3.5.
Independence
3.7. Related-Party Transactions
An independent Director, in the view of the Company, is a
Non-Executive Director who:
(1)
(2)
(3)
(4)
(5)
is not a substantial shareholder of the Company or
an officer of, or otherwise associated directly with,
a substantial shareholder of the Company;
within the last 3 years has not been employed in
an Executive capacity by the Company;
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;
is not a material supplier or customer of the
Company, or an officer of or otherwise associated
directly or indirectly with a material supplier or
customer;
has no material contractual relationship with the
Company other
the
Company; and
than as a Director of
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
the
transaction. The Company also discloses related party
transactions in its financial report as required under
relevant Accounting Standards.
the Board cannot approve
transaction,
3.8.
Share Dealings and Disclosures
The Company has adopted a Share Trading Policy (dated
31 December 2010), a copy of which is available for
viewing and downloading from the Company’s website.
ANNUAL REPORT | 54
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CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE
3.9.
Board Nominations
The Board will consider nominations for appointment or
election of Directors that may arise from time to time
having regard to the corporate and governance skills
required by the Company and procedures outlined in the
Constitution and the Corporations Act.
3.10. Terms of Appointment as a Director
The current Directors of the Company have not been
appointed for fixed terms. The constitution of the
Company provides that a Director (other than a Managing
Director) may not retain office for more than three
calendar years or beyond the third Annual General Meeting
following their election, whichever is longer, without
submitting himself or herself for re-election. One third of
the Directors (save for a Managing Director) must retire
each year and are eligible for re-election. The Directors
who retire by rotation at each Annual General Meeting are
those with the longest length of time in office since their
appointment or last election.
The initial appointment and last re-election dates of each
Director are listed below.
Director
Farooq Khan
Appointed
10 March 1998
Yaqoob Khan
Azhar Chaudhri
10 March 1998
4 August 1998
Simon Cato
11 February
2008
AGM Last Re-elected
N/A – being the
Managing Director
18 November 2009
20 November 2008
(standing for re-
election at 2011 AGM)
10 November 2010
3.11. Performance Review and Evaluation
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.
its Board,
Although the Company is not of a size to warrant the
development of formal processes for evaluating the
performance of
individual Directors and
Executives, there is on-going monitoring by the Chairman
The Non-Executive Directors are
and the Board.
reviewing
responsible
and
for
the Executive Chairman/Managing
remuneration of
Director.
to Directors
individually regarding their role and performance as a
Director.
The Chairman also speaks
the performance
3.12. Meetings of the Board
The Board holds meetings whenever necessary to deal
with specific matters requiring attention. Directors’
Circulatory Resolutions are also utilised where appropriate
either in place of or in addition to formal Board meetings.
Each member of the Board is committed to spending
sufficient time to enable them to carry out their duties as a
Director of the Company.
It is recognised and accepted that Board members may
also concurrently serve on other boards, either in an
executive or non-executive capacity.
3.13. Independent Professional Advice
Subject approval by the Chairman, each Director has the
right to seek independent legal and other professional
advice at the Company’s expense concerning any aspect of
the Company’s operations or undertakings in order to fulfil
their duties and responsibilities as Directors.
3.14. Company Information and Confidentiality
to Company Executives.
All Directors have the right of access to all relevant
Company books and
In
accordance with legal requirements and agreed ethical
standards, Directors and Executives of the Company have
agreed to keep confidential all information received in the
course of the exercise of their duties and will not disclose
non-public
is
authorised or legally mandated.
information except where disclosure
3.15. Directors’ and Officers’ Deeds
The Company has also entered into a deed with each of
the current Directors and the Company Secretary to
regulate certain matters between the Company and each
officer, both during the time the officer holds office and
after the officer ceases to be an officer of the Company (or
of any of its wholly-owned subsidiaries). A summary of
the terms of such deeds
is contained within the
Remuneration Report in the Director’s Report for the
financial year ended 30 June 2011 and in the 2005 Notice
of AGM dated 18 October 2005.
3.16 Board Diversity
The Board, senior management and workforce of the
that are
Company currently comprises
multiculturally diverse together with an appropriate blend
of qualifications and skills.
individuals
The Company recognises the positive advantages of a
diverse workplace and is committed to:
(1)
(2)
creating a working environment conducive to the
appointment of well qualified employees senior
management and Board candidates; and
identifying ways to promote a corporate culture
which embraces diversity.
The Board has delegated the responsibility of monitoring
and ensuring workplace diversity
the Executive
Chairman/Managing Director.
to
Given the relatively small size of the Company workforce
and the current nature and scale of the Company’s
activities at this time, the Board has determined that it is
not practicable to set measurable objectives for achieving
gender diversity.
The Board will monitor the progress and assess the
effectiveness of diversity within the Company on an
ongoing basis. The Board will further consider the
establishment of objectives for achieving gender diversity
as the Company develops and its circumstances change.
ANNUAL REPORT | 55
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CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE
The Company does not currently have any women in
senior executive roles or on the Board. 50% of the
Company’s current employees are female.
4.
Management
4.1.
Executives
for
the Company’s management.
The Managing Director is responsible and accountable to
the Board
The
Company’s Executive Chairman and Managing Director
roles are fulfilled by one person – Mr Farooq Khan. The
Company presently has one other Executive Officer being
the Company Secretary. The Board considers that the
Company is not currently of a size, nor are its affairs of
such complexity, to justify the expense of the appointment
of an independent Non-Executive Chairman.
The Board is of the opinion that all Directors exercise and
bring to bear an unfettered and independent judgement
towards their duties and the Board is satisfied that Mr
Farooq Khan as both Chairman and as Managing Director
plays an important role in the continued success and
performance of the Company and is able to and does bring
quality and independent judgment to all relevant issues
falling within the scope of the role of a Chairman and does
not consider that his dual role in any way diminishes the
efficient organisation and conduct of the Board’s overall
function.
The Company does not have a Chief Financial Officer.
that
The Board has determined
the Executive
Chairman/Managing Director is the appropriate person to
make the Chief Executive Officer equivalent declaration
and the Company Secretary is the appropriate person to
make the Chief Financial Officer equivalent declaration in
respect of the financial year ended 30 June 2011, as
required under section 295A of the Corporations Act and
recommended by the Council.
4.2.
Board and Management Committees
In view of the current composition of the Board (which
three Non-Executive Directors and one
comprises
Executive Chairman/Managing Director) and the nature
and scale of the Company’s activities, the Board has
formally-constituted
considered
establishing
committees
and
nominations
remuneration is not necessary or required.
that
for
board
audit,
Accordingly audit matters, the nomination of new Directors
and the setting, or review, of remuneration levels of
Directors and Executives are reviewed by the Board as a
whole and approved by resolution of the Board (with
abstentions from relevant Directors where there is a
conflict of interest). That is, matters typically dealt with
by audit, nominations and remuneration committees are
dealt with by the full Board.
5.
Remuneration Policy
Please refer to the Remuneration Report in the Director’s
Report for the financial year ended 30 June 2011.
Directors do not currently have any equity-based
remuneration.
6.
Code of Conduct and Ethical Standards
The Company has developed a formal Code of Conduct,
which may be viewed and downloaded
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.
from
The Company seeks to encourage and develop a culture
which will maintain and enhance its reputation as a valued
corporate citizen of the countries where it operates and an
employer which personnel enjoy working for. The Code
sets out policies in relation to various corporate and
personal behaviour
including safety, discrimination,
respecting the law, anti-corruption, interpersonal conduct,
conflicts of interest and alcohol and drugs.
7.
Internal Control, Risk Management and
Audit
7.1.
Internal Control and Risk Management
control
framework
The Board of Directors is responsible for the overall
risk
internal
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.
includes
(which
The Board recognises that no cost-effective internal
control system will preclude all errors and irregularities.
The system is based, in part, on the appointment of
suitably- qualified and experienced service providers and
suitably-qualified and experienced management personnel.
The effectiveness of the system is monitored and reviewed
by management on an on-going basis and at least
annually by the Board.
On a day-to-day basis, managing the various risks inherent
in the Company’s operations is the responsibility of the
Executive Directors and the Company Secretary.
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, decision-
making, exercise of judgment, people or systems or
external events. The Executive Chairman/Managing
Director and the Company Secretary have delegated
responsibility
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.
the Board
from
for
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,
The
Company’s compliance risk management strategy ensures
compliance with key legislation affecting the Company’s
activities.
financial condition.
reputation and
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
ANNUAL REPORT | 56
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE
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.
to
risks
risk encompasses
Market
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;
to
in operations and changing market
developments
conditions.
it evolves
constantly
response
in
Further details are also in Note 23 (Financial Instruments)
to the financial statements for the financial year ended 30
June 2011.
that
The Board has determined
the Executive
Chairman/Managing Director is the appropriate person to
make the Chief Executive Officer equivalent declaration
and the Company Secretary is the appropriate person to
make the Chief Financial Officer equivalent declaration in
respect of the financial year ended 30 June 2011, on the
risk management and internal compliance and control
systems recommended by the Council.
Management has reported to the Board as to the
effectiveness of the Company's management of
its
material business risks.
7.2.
Audit
The Company's external auditor (Auditor) is selected for
its professional competence, reputation and the provision
of value for professional fees. Within the audit firm, the
partner responsible for the conduct of the Company’s
audits is rotated every three years.
The Auditor is invited to attend the Company’s annual
general meetings to answer shareholder questions about
the conduct of the audit and the preparation and content
of the Auditor’s report.
8.
Communications
8.1. Market and Shareholder Communications
is
The Company is owned by shareholders. Increasing
shareholder value
the Company’s key mission.
Shareholders require an understanding of the Company’s
operations and performance to enable them to see how
that mission is being fulfilled. The Directors are the
shareholders’ representatives. In order to properly
perform their role, the Directors need to be able to
ascertain the shareholders’ views on matters affecting the
Company.
The Board therefore considers it paramount to ensure that
shareholders are informed of all major developments
affecting the Company and have the opportunity to
communicate their views on the Company to the Board.
Information is communicated to shareholders and the
market through various means including:
(1)
(2)
(3)
(4)
(5)
monthly NTA Backing announcements released to
ASX, which are posted on the Company’s website;
is distributed
the Annual Report which
to
shareholders if they have elected to receive a
printed version and is otherwise available for
viewing and downloading from the Company’s
website;
the Annual General Meeting (AGM) and other
general meetings called in accordance with the
to obtain shareholder
Corporations Act and
approvals as appropriate.
The Executive
Chairman/Managing Director gives an address at
the AGM updating shareholders on the Company's
investment activities;
Half-Yearly Directors’ and Financial Reports which
are posted on the Company’s website; and
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)
(2)
(3)
(4)
having the opportunity to ask questions of
Directors at all general meetings;
the presence of the external auditor at Annual
General Meetings to take shareholder questions on
any issue relevant to their capacity as auditor;
the Company’s policy of expecting Directors to be
available to meet shareholders at Annual General
Meetings; and
the Company making Directors and selected senior
employees available
to answer shareholder
questions submitted by telephone, email and other
means.
The Company actively promotes communication with
shareholders through a variety of measures, including the
use of the Company’s website and email. The Company’s
reports and ASX announcements may be viewed and
downloaded from its website: www.queste.com.au or the
ASX website: www.asx.com.au under ASX code “QUE”.
The Company also maintains an email list for the
distribution of the Company’s announcements via email in
a timely manner.
8.2.
Continuous Disclosure to ASX
The Board has designated the Company Secretary as the
person responsible
for overseeing and coordinating
disclosure of information to ASX as well as communicating
with ASX.
In accordance with the Corporations Act and ASX Listing
Rule 3.1 the Company immediately notifies ASX of
information concerning the Company that a reasonable
person would expect to have a material effect on the price
ANNUAL REPORT | 57
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE
or value of the Company’s securities, subject to exceptions
permitted by that rule. A reasonable person is taken to
expect information to have a material effect on the price
or value of the Company’s securities if the information
would, or would be likely to, influence persons who
commonly invest in securities in deciding whether to
acquire or dispose of the Company’s securities.
All staff are required to inform their reporting manager of
any potentially price-sensitive information concerning the
Company as soon as they become aware of it. Reporting
managers are in turn required to inform the Executive
Director to whom they report or, in their absence, another
Executive Director of any potentially price-sensitive
information.
In general, the Company will not respond to market
speculation or rumours unless required to do so by law or
by the ASX Listing Rules.
Only the Executive Chairman has general responsibility to
speak to the media, investors and analysts on the
Company’s behalf. Other Directors or senior Executives
may be given a brief to do so on particular occasions.
The Company will keep a summary record for internal use
of the issues discussed at group or one-on-one briefings
with investors and analysts, including a record of those
present and the time and place of the meeting.
The Company may request a trading halt from ASX to
prevent trading in its securities if the market appears to be
uninformed. The Executive Directors are authorised to
determine whether to seek a trading halt.
10 October 2011
ANNUAL REPORT | 58
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
AADDDDIITTIIOONNAALL AASSXX IINNFFOORRMMAATTIIOONN
aass aatt 3300 SSeepptteemmbbeerr 22001111
DISTRIBUTION OF LISTED ORDINARY FULLY PAID SHARES
Spread of Holdings
Number of Holders
Number of Units % of Total Issue
Capital
-
-
-
-
-
1
1,001
5,001
10,001
100,001
Total
1,000
5,000
10,000
100,000
and over
Unmarketable Parcels
12
62
75
117
27
293
8,251
183,548
705,165
3,233,792
24,274,123
0.029%
0.646%
2.483%
11.385%
85.458%
28,404,879
100.00%
Spread
of
Holdings
Number of Holders Number of Units
% of Total Issue
Capital
1
4,348
Total
-
-
4,347
over
61
232
293
128,499
28,276,380
28,404,879
0.452%
99.548%
100.00%
An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of
3,846 shares or less, being a value of $500 or less in total, based upon the Company’s closing
share price on 30 September 2011 of 11.5 cents per share.
DISTRIBUTION OF UNLISTED PARTLY PAID ORDINARY SHARES
Name
No. of Partly Paid
Shares
Chi Tung Investments Ltd
20,000,000
These 20,000,000 ordinary shares were issued at a price of 20 cents per share and have been partly paid
to 1.5225 cents each and have an outstanding amount payable of 18.4775 cents per share.
VOTING RIGHTS
Subject to any rights or restrictions for the time being attached to any class or classes of shares (at present there
are none), at meetings of shareholders of the Company:
(1)
(2)
(3)
(4)
each shareholder entitled to vote may vote in person or by proxy, attorney or representative;
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;
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;
The Company’s partly paid shares have a proportional voting entitlement in accordance with the amount
paid up for that share.
ANNUAL REPORT | 59
30 JUNE 2011
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
ADDITIONAL ASX INFORMATION
as at 30 September 2011
TOP 20 ORDINARY FULLY PAID SHAREHOLDERS
Rank
Shareholder
Shares
Held
Total
Shares
% Issued
Capital
1
* BELL IXL INVESTMENTS LIMITED
CELLANTE SECURITIES
CLEOD PTY LTD
3,799,747
2,053,282
867,644
2
* MR FAROOQ KHAN
ISLAND AUSTRALIA PTY LTD
3
* MR AZHAR CHAUDHRI
CHI TUNG INVESTMENTS LTD
RENMUIR HOLDINGS LTD
Sub-total
6,720,673
23.660
2,461,367
3,668,577
Sub-total
6,129,944
21.581
10,000
1,050,000
3,277,780
Sub-total
4,337,780
15.271
4
* MANAR NOMINEES PTY LTD
MANAR NOMINEES PTY LTD
1,725,663
180,500
Sub-total
1,906,163
6.711
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
MRS AMBREEN CHAUDHRI
DATABASE SYSTEMS LTD
COWOSCO CAPITAL PTY LTD
MR DONALD GORDON MACKENZIE
& MRS GWENNETH EDNA MACKENZIE
MS ROSANNA DE CAMPO
MR AYUB KHAN
MRS AFIA KHAN
GIBSON KILLER PTY LTD
ROSEMONT ASSET PTY LTD
MR SIMON KENNETH CATO
TOMATO 2 PTY LTD
SAMDY NOMINEES PTY LTD
GLENVIEW SERVICES PTY LTD
MR JOHN CHENG-HSIANG
MR ANTHONY NEALE KILLER & MRS SANDRA MARIE KILLER
MR GREGORY JOHN MATHESON
MR EUGENE RODRIGUEZ
MR NICHOLAS PASTERNATSKY
386,500
826,950
0
0
Sub-total
1,213,450
1,150,000
761,260
268,100
215,000
215,000
200,000
75,000
118,000
Sub-total
193,000
185,019
150,000
145,000
136,125
130,000
110,742
110,000
103,750
0
0
4.272
4.049
2.680
0.944
0.757
0.757
0.704
0.679
0.651
0.528
0.510
0.479
0.458
0.390
0.387
0.365
Total
*
A substantial shareholder of the Company
24,381,006 85.833%
ANNUAL REPORT | 60
ASX Code: QUE
Queste Communications Ltd
A.B.N. 58 081 688 164
PRINCIPAL & REGISTERED OFFICE:
SHARE REGISTRY:
Level 14, The Forrest Centre
221 St Georges Terrace
Perth, Western Australia 6000
Local T | 1300 762 678
T | (08) 9214 9777
F | (08) 9322 1515
E | info@queste.com.au
W | www.queste.com.au
Advanced Share Registry Limited
Suite 2, 150 Stirling Highway
Nedlands, Western Australia 6009
Level 6, 225 Clarence Street
Sydney, New South Wales 2000
PO Box 1156, Nedlands, WA 6909
PO Box Q1736,
Queen Victoria Building, NSW 1230
T | (08) 9389 8033
F | (08) 9389 7871
E | admin@advancedshare.com.au
W | www.advancedshare.com.au
T | (02) 8096 3502