A.B.N 58
081 688 164
20
2
01
2
ANNUA
A
AL
REP
POR
RT
30 JUNE 2012
CONTENTS
Overview of Results
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
www.queste.com.au
Visit our website for:
(cid:120)
(cid:120)
(cid:120)
Latest News
Market Announcements
Financial Reports
Register your email with us to
receive latest Company
announcements and releases
EMAIL US AT:
2
3
19
20
21
22
23
24
47
48
50
60
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CORPORATE DIRECTORY
BOARD
Farooq Khan
Simon Cato
Azhar Chaudhri
Yaqoob Khan
(Chairman & Managing Director)
(Director)
(Director)
(Director)
COMPANY SECRETARY
Victor Ho
PRINCIPAL & REGISTERED OFFICE
Level 14, The Forrest Centre
221 St Georges Terrace
Perth Western Australia 6000
Local Call:
Telephone:
Facsimile:
Email:
Website:
1300 762 678
(08) 9214 9777
(08) 9322 1515
info@queste.com.au
www.queste.com.au
SHARE REGISTRY
Advanced Share Registry Limited
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 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
OVERVIEW OF RESULTS
Queste Communication Ltd is listed on the Australian Securities Exchange (ASX) (under ASX Code: QUE). Queste
has a controlling (51%) interest in Orion Equities Limited, an investment company (LIC) listed on ASX (ASX
Code: OEQ).
CONSOLIDATED
Total revenues
Total expenses
Loss before tax
Income tax expense
Loss from continuing operations
Net loss attributable to non controlling interest
2012
$
2011
$
924,173
(6,291,035)
725,905
(3,683,352)
(5,366,862)
(2,957,447)
(24,864)
(82,211)
(5,391,726)
(3,039,658)
(2,443,217)
(1,386,384)
Loss after tax attributable to owners of the Company
(2,948,509)
(1,653,274)
Basic loss per share (cents)
Diluted loss per share (cents)
Undiluted NTA backing per share (cents)
Diluted NTA backing per share (cents)
(9.9)
(9.9)
26
38
(5.5)
(5.5)
36
30
The Consolidated Entity’s results incorporate the results of controlled entity, Orion Equities Limited (Orion or
OEQ).
At the Consolidated Entity level:
Revenues include:
(1)
(2)
(3)
(4)
$767,427 income from sale of olive oils (2011: $450,027);
$625,086 share of ASX listed Bentley Capital Limited’s (BEL) (Associate entity’s) loss (net of dividends
received from Bentley of $756,649) (2011: $181,205 share of Bentley’s profit, net of dividends received
from Bentley of $445,089);
$103,917 interest income (2011: $79,331); and
$52,531 rental income (2011: nil).
Expenses include:
(1)
(2)
(3)
(4)
$2,648,702 net loss on financial assets held at fair value through profit or loss (2011: $1,496,912 loss);
$1,274,715 olive grove and oils operations (which does not include revaluation and depreciation expenses)
(2011: $601,024);
$78,361 olive grove and oils operation’s revaluation and depreciation expenses (2011: $201,041); and
$610,270 personnel expenses (2011: $846,501).
The principal components of the $2,648,702 net loss on financial assets held at fair value through profit or loss
are:
(a)
(b)
$2.25 million unrealised loss on a share investment in ASX listed Strike Resources Limited (SRK), which
declined in value from $0.245 to $0.11 per share during the financial year; and
$0.38 million unrealised loss on a share investment in ASX listed Alara Resources Limited (AUQ), which
declined in value from $0.365 to $0.305 per share during the financial year.
Please refer to the Directors’ Report and Financial Report for further information on a review of the Consolidated
Entity’s operations and the financial position and performance of the Consolidated Entity and Company for the
year ended 30 June 2012.
ANNUAL REPORT | 2
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
The Directors present their report on Queste Communications Ltd (Company or Queste) and its controlled
entities (the Consolidated Entity) for the financial year ended 30 June 2012 (Balance Date).
Queste is a public company limited by shares that is incorporated and domiciled in Western Australia and has
been listed on the Australian Securities Exchange (ASX) since November 1998.
The Consolidated Entity’s results incorporates the results of controlled entity, ASX listed investment company,
Orion Equities Limited (Orion or OEQ). The Company has a 51% shareholding interest in Orion (30 June 2011:
51%).
PRINCIPAL ACTIVITIES
The principal activity of the Company during the financial year was the management of its assets.
The principal activities of controlled entity, Orion, during the financial year were the management of its
investments, including investments in listed and unlisted securities, real estate held for development and resale,
an olive grove and the ultra premium ‘Dandaragan Estate’ Olive Oil operation.
OPERATING RESULTS
CONSOLIDATED ENTITY
Total revenues
Total expenses
Loss before tax
Income tax expense
Loss for the year
2012
$
924,173
2011
$
725,905
(6,291,035)
(3,683,352)
(5,366,862)
(2,957,447)
(24,864)
(82,211)
(5,391,726)
(3,039,658)
Net loss attributable to non controlling interest
(2,443,217)
(1,386,384)
Loss after tax attributable to owners of the Company
(2,948,509)
(1,653,274)
Basic loss per share (cents)
Diluted loss per share (cents)
At the Consolidated Entity level:
Revenues include:
(9.9)
(9.9)
(5.5)
(5.5)
(1)
(2)
(3)
(4)
$767,427 income from sale of olive oils (2011: $450,027);
$625,086 share of ASX listed Bentley Capital Limited’s (BEL) (Associate entity’s) loss (net of dividends
received from Bentley of $756,649) (2011: $181,205 share of Bentley’s profit, net of dividends received
from Bentley of $445,089);
$103,917 interest income (2011: $79,331); and
$52,531 rental income (2011: nil).
Expenses include:
(1)
(2)
(3)
(4)
$2,648,702 net loss on financial assets held at fair value through profit or loss (2011: $1,496,912 loss);
$1,274,715 olive grove and oils operations (which does not include revaluation and depreciation expenses)
(2011: $601,024);
$78,361 olive grove and oils operation’s revaluation and depreciation expenses (2011: $201,041); and
$610,270 personnel expenses (2011: $846,501).
ANNUAL REPORT | 3
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
The principal components of the $2,648,702 net loss on financial assets held at fair value through profit or loss
are:
(a)
(b)
$2.25 million unrealised loss on a share investment in ASX listed Strike Resources Limited (SRK), which
declined in value from $0.245 to $0.11 per share during the financial year; and
$0.38 million unrealised loss on a share investment in ASX listed Alara Resources Limited (AUQ), which
declined in value from $0.365 to $0.305 per share during the financial year.
LOSS PER SHARE
CONSOLIDATED ENTITY
Basic loss per share (cents)
Diluted loss per share (cents)
Weighted average number of fully paid ordinary shares in the
Company outstanding during the year used in the calculation of
basic and diluted earnings per share
2012
(9.85)
(9.85)
2011
(5.52)
(5.52)
29,927,379
29,927,379
The Company’s 20,000,000 partly paid ordinary shares, to the extent that they have been paid (1.5225 cent per
share); have been included in the determination of the basic earnings per share.
DIVIDENDS
The Directors have not declared a dividend in respect of the financial year ended 30 June 2012.
FINANCIAL POSITION
CONSOLIDATED ENTITY
Cash
Current investments - equities
Investments in Associate entity
Inventory
Receivables
Intangibles
Deferred tax assets
Other assets
Total Assets
Tax liabilities (current and deferred)
Other payables and liabilities
Net Assets
Issued capital
Reserves
Non-controlling interest
Retained earnings/(Accumulated losses)
Total Equity
2012
$
2,008,853
3,827,155
4,854,638
1,917,595
363,666
727,746
358,251
1,709,078
15,766,982
(358,251)
(459,372)
14,949,359
6,192,427
2,321,946
6,441,748
(6,762)
14,949,359
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
ANNUAL REPORT | 4
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
SECURITIES IN THE COMPANY
At Balance Date and the date of this report, the Company has the following securities on issue:
(a)
(b)
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.
On-Market Share Buy-Back Back
On 17 April 2012, the Company announced its intention to conduct an on-market share buy-back of up to
2,700,000 shares (Buy-Back)1.
This represents ~9.1% of the pre Buy-Back and 10% of the post Buy-Back total voting shares of the
Company (having regard to the amount paid up on the partly paid shares).
In accordance with ASX Listing Rule 7.33, the Company will not pay any more than 5% above the average
of the market price for the Company's shares over the last 5 days on which sales in the shares were
recorded prior to the Buy-Back occurring.
The Buy-Back will continue until the earlier of the acquisition of the 2.7 million Buy-Back shares and 30
April 2013, subject to the Company exercising its right to suspend or terminate the Buy-Back, or amend its
terms, at any time.
The Company has not bought back any shares pursuant to the Buy-Back, to date.
REVIEW OF OPERATIONS
1.
Orion Equities Limited (OEQ)
1.1. Current Status of Investment in Orion
Orion Equities Limited is an ASX listed investment entity (ASX Code: OEQ).
The Company holds 9,063,153 shares in Orion, being 50.875% of its issued ordinary share capital (30 June
2011: 9,063,153 shares or 50.875%). Orion has been recognised as a controlled entity and included as
part of the Queste Consolidated Entity’s results since 1 July 2002.
Queste shareholders are advised to refer to the 30 June 2012 Directors’ Report and financial statements
and monthly NTA disclosures lodged by Orion for further information about the status and affairs of this
company.
Information concerning Orion may be viewed from its website: www.orionequities.com.au
Orion’s market announcements may also be viewed from the ASX website (www.asx.com.au) under ASX
code “OEQ”.
Sections 1.2 to 1.6 below contain information extracted from Orion’s public statements.
1
Refer Appendix 3C - Announcement of Buy-Back dated 17 April 2012
ANNUAL REPORT | 5
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
1.2. Orion’s Operating Results for year ended 30 June 2012
ORION EQUITIES LIMITED
Consolidated Entity
Total revenues
Total expenses
Loss before tax
Income tax expense
Loss attributable to members of Orion
2012
$
2011
$
849,382
628,133
(5,802,549)
(3,304,141)
(4,953,167)
(2,676,008)
(24,864)
(82,211)
(4,978,031)
(2,758,219)
Basic and diluted loss per share (cents)
(27.94)
(15.48)
Orion’s revenues include:
(1)
(2)
$767,427 income from olive grove operations (June 2011: $450,027); and
$52,531 rental income (June 2011: nil).
Orion’s expenses include:
(1)
(2)
(3)
(4)
(5)
$2,648,619 net loss on financial assets held at fair value through profit or loss (June 2011: $1516,956);
$576,195 share of ASX listed Bentley Capital Limited’s (BEL) (Associate entity’s) loss (net of dividends
received from Bentley of $697,469) (June 2011: $167,032 share of Bentley’s profit, net of dividends
received from Bentley of $410,276);
$1,274,715 olive grove and oils operations (which does not include revaluation and depreciation expenses)
(June 2011: $601,024);
$78,361 olive grove impairment and depreciation expenses (June 2011: $201,041); and
$610,270 personnel costs (including Directors’ fees) (June 2011: $617,837).
The principal components of Orion’s $2,648,619 net loss on financial assets held at fair value through profit or
loss are:
(a)
(b)
$2.25 million unrealised loss on Orion’s share investment in ASX listed Strike Resources Limited (SRK),
which declined in value from $0.245 to $0.11 per share during the financial year; and
$0.38 million unrealised loss on Orion’s share investment in ASX listed Alara Resources Limited (AUQ),
which declined in value from $0.365 to $0.305 per share during the financial year.
1.3. Orion’s Dividends
Orion has not declared a dividend in respect of the financial year ended 30 June 2012.
1.4. Orion’s Financial Position as at 30 June 2012
ORION EQUITIES LIMITED
Consolidated Entity
Net tangible assets (before tax)
Pre-Tax NTA Backing per share
Less deferred tax assets and tax liabilities
Net tangible assets (after tax)
Pre-Tax NTA Backing per share
Based on total issued share capital
2012
$
2011
$
12,382,503
17,364,240
0.695
-
0.975
-
12,382,503
17,364,240
0.695
0.975
17,814,389
17,814,389
ANNUAL REPORT | 6
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
ORION EQUITIES LIMITED
Consolidated Entity
Cash
Financial assets at fair value through profit and loss
Investments in listed Associate entity
Inventory
Receivables
Intangibles
Other assets
Deferred tax asset
Total Assets
Other payables and liabilities
Deferred tax liability
Net Assets
Issued capital
Accumulated Losses
Reserves
Total Equity
1.5. Orion’s Portfolio Details as at 30 June 2012
Asset Weighting
Australian equities
Agribusiness2
Property held for development and resale
Net tax liabilities (current year and deferred tax assets/liabilities)
Net cash/other assets and provisions
TOTAL
Major Holdings in Securities Portfolio
2012
$
365,031
3,821,383
4,584,254
1,917,595
292,915
727,746
1,686,035
352,085
13,747,044
(284,710)
(352,085)
13,110,249
19,374,007
(6,625,263)
361,505
13,110,249
2011
$
289,140
6,470,003
7,088,745
2,799,430
106,554
782,058
1,794,954
1,165,887
20,496,771
(1,184,586)
(1,165,887)
18,146,298
19,374,007
(1,647,232)
419,523
18,146,298
% of Net Assets
2012
2011
64%
15%
12%
-
9%
75%
14%
10%
-
1%
100%
100%
Equities
(1)
(2)
(3)
Bentley Capital Limited
Alara Resources Limited
Strike Resources Limited
TOTAL
1.6. Orion’s Assets
Fair Value
$’million
% of
Net Assets
ASX
Code
3.08
1.93
1.84
23.47%
14.73%
14.00%
BEL
AUQ
SRK
6.85
52.20%
Industry Sector Exposures
Diversified Financials
Materials
Materials
(a)
Strike Resources Limited (ASX Code: SRK)
Strike Resources Limited (Strike) is a resources company with iron ore exploration and development
projects in Peru. Orion Director, William Johnson, is on the Board of Strike as a Non-Executive Director.
Orion holds 16,690,802 shares, being 11.71% of Strike’s issued ordinary share capital (30 June 2011:
16,690,802 shares and 11.71%).
2
Agribusiness net assets include olive grove land, olive trees, water licence, buildings, plant and equipment and inventory (bulk and
packaged oils)
ANNUAL REPORT | 7
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
The value of Orion’s holdings in Strike declined by $2.25 million during the course of the financial year,
from $4.09 million (at $0.245 per share as at 30 June 2011) to $1.84 million (at $0.110 per share on 30
June 2012).
The Strike share price has appreciated to $0.125 as at 30 August 2012, generating an unrealised gain of
$0.25 million subsequent to the 30 June 2012 balance date.
Historically, the shareholding in Strike has predominantly been earned through the sale of various mining
assets to Strike. These assets were acquired and funded by Orion to the point of sale to Strike at a cost
of approximately $1.25 million. They were subsequently on sold to Strike in tranches for a total
consideration of $19 million comprising 11,166,667 Strike shares and 3.5 million unlisted Strike options
(with exercise prices of $0.178 and $0.278 per option, which Orion converted into shares in February 2011
at a cost of $0.79 million). Orion has also acquired 2,024,135 additional Strike shares on-market and via
the conversion of listed options at $0.20 each.
(b) Alara Resources Limited (ASX Code: AUQ)
Alara Resources Limited (Alara) is a minerals exploration and development company with precious and
base metals projects in Saudi Arabia, Oman and Chile. Orion Directors, Farooq Khan (also a Queste
Director) and William Johnson are both on the Board of Alara as Non-Executive Directors; Alara has
announced that Farooq Khan resigned as a Director on 31 August 2012. Orion Director and Company
Secretary, Victor Ho (also Company Secretary of Queste), is also Company Secretary of Alara.
Orion holds 6,332,744 shares, being 3% of Alara’s issued ordinary share capital (30 June 2011: 6,332,744
shares and 3%), in Alara.
The value of Orion’s holdings in Alara declined by $0.38 million during the course of the financial year,
from $2.31 million (at $0.365 per share as at 30 June 2011) to $1.93 million (at $0.305 per share on 30
June 2012).
The Alara share price has declined to $0.28 as at 30 August 2012, generating an unrealised loss of $0.158
million subsequent to the 30 June 2012 balance date.
Historically, the shareholding in Alara occurred through the sale of Orion’s 25% interest in various uranium
tenements to Alara in conjunction with Strike Resources Limited (who held the balance of 75% interest in
the same). These assets were acquired and funded by Orion to the point of sale to Strike previously at a
cost of approximately $0.05 million. Orion’s residual 25% interest was free-carried by Strike thereafter.
Orion’s interests in these mining tenements were subsequently on-sold to Alara for vendor shares in the
initial public offering (IPO) of Alara for a consideration of $1,562,500 comprising 6,250,000 Alara shares.
Orion also acquired 3,082,744 additional Alara shares via the Alara IPO, on-market purchases and via an
in-specie distribution from Strike.
(c)
Bentley Capital Limited (ASX Code: BEL)
Bentley Capital Limited (Bentley) is a listed investment company with a current exposure to Australian
equities. Orion Directors, Farooq Khan and William Johnson, are on the board of Bentley as Chairman and
Executive Director respectively.
Orion holds 27.97% (20,513,783 shares) of Bentley’s issued ordinary share capital with Queste holding
2.37% (1,740,625 shares) of Bentley’s issued ordinary share capital (30 June 2011: Orion held 20,513,783
shares (28.26%) and Queste held 1,740,625 shares (2.4%)).
Bentley had net assets of $20.07 million as at 30 June 2012 (30 June 2011: $28.81 million) and incurred
an after tax net loss of $2.03 million for the financial year (30 June 2011: $0.574 million net profit).
Bentley has also returned (via fully franked dividends and capital returns net of the cost of on market
share buy-backs) $7.02 million during the financial year (2011: $1.44 million, via fully franked dividends).
Bentley’s asset weighting as at 30 June 2012 was 75.6% Australian equities (30 June 2011: 98.9%) and
4.90% net cash/ other assets (30 June 2011: $1.1%).
ANNUAL REPORT | 8
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
Queste and Orion have been in receipt of significant dividend and return of capital payments from Bentley,
with distributions received in the past year totalling $1.9 million, as follows:
(i)
(ii)
Bentley paid a one cent final and a 2.4 cent special (both fully franked) dividend in September
2011, with Orion’s share being $492,331 and Queste’s share being $41,775 (2011: Bentley paid 2
cents of fully franked dividends with Orion’s share being $410,276 and Queste’s share being
$34,813); and
Bentley returned 5 cents and one cent per share to shareholders in October 2011 and April 2012
respectively (with Orion’s share totalling $1,230,827 and Queste’s share totalling $104,438) under a
return of capital approved by Bentley shareholders on 4 October 2011 and 4 April 2012
respectively.
On 31 August 2012, Bentley announced its intention to seek shareholder approval (at the upcoming 2012
AGM) to undertake a one cent per share return of capital. Subject to receipt of Bentley shareholder
approval, Orion’s and Queste’s entitlement under the return of capital is expected to be $205,138 and
$17,406 respectively.
(d) Agribusiness Assets
Orion owns the ultra premium “Dandaragan Estate” Extra Virgin Olive Oil business and a 143 hectare
commercial olive grove operation located in Gingin, Western Australian (approximately 100 kilometres
North of Perth) producing olive oil from approximately 64,500, 13 year old olive tree plantings.
A summary of olive grove operations during the 2012 financial year are as follows:
(i)
(ii)
The 2012 harvesting season yielded ~170 tonnes of fruit from which ~34,079 litres of oils were
extracted (2011: ~1,200 tonnes of fruit and ~200,000 litres of oils);
The decrease in tonnes processed reflects the biennial cycle of growth and production from olive
trees whereby trees exhibit alternating years of high and low bearing fruit. Furthermore the 2012
harvest was intentionally reduced to save costs. The oils harvested is sufficient for the ultra
premium ‘Dandaragan Estate’ Extra Virgin Olive Oil business;
(iii)
Gross revenues were $767,427) (2011: $450,027);
(iv) Olive grove operation expenses were $1,274,715 (which does not include revaluation and
depreciation expenses) (June 2011: $601,024);
(v)
(vi)
Net revaluation and depreciation expense were $78,361 (2011: $201,041); and
Inventory - Bulk Oils of $206,320 reflects the cost of harvesting and processing during the 2012
season incurred up to balance date (June 2011: $890,093).
The carrying values of the olive grove property ($999,901), trees ($65,500) and water licence ($627,750)
are based on an independent valuation of the assets undertaken for the 30 June 2012 accounts.
(e) Other Property Assets
This relates to property located in Mandurah, Western Australia, which was originally acquired as a 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 has since renovated and rented out the property.
The carrying value of $1,640,000 is based on an independent valuation of the property undertaken for the
30 June 2012 accounts.
ANNUAL REPORT | 9
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
2.
Queste’s Other Assets
In addition to the investment in controlled entity, Orion, Queste has:
(i)
a direct share investment in Associate entity, Bentley, being 1,740,625 shares (or 2.37% of
Bentley’s issued ordinary share capital) (June 2011: 1,740,625 shares and 2.40%);
(ii)
a cash holding of $1,643,821 (30 June 2011: $1,395,504); and
(iii)
investments in other listed securities of $5,772 (30 June 2011: $5,854).
During the year, Queste’s investments in ASX listed securities have incurred:
(i)
$17,489 net unrealised losses (30 June 2011: $7,836).
Queste will continue to look at undertaking investments in listed securities where appropriate to
endeavour to achieve a return on investments beyond that afforded by the interest rates applicable on
term deposits.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Consolidated Entity that occurred during the
financial year not otherwise disclosed in this Directors’ Report or the Consolidated Financial Statements.
FUTURE DEVELOPMENTS
In the opinion of the Directors, it may prejudice the interests of the Consolidated Entity to provide additional
information (beyond that reported in this Directors’ Report) in relation to future developments and the business
strategies and operations of the Consolidated Entity and the expected results of those operations in subsequent
financial years.
Orion has advised that it intends to continue its investment activities in future years. The results of these
investment activities depend upon the performance of the underlying companies and securities in which the
company invests. The investments’ performance depends on many economic factors and also industry and
company specific issues. In the opinion of the Orion Directors, it is not possible or appropriate to make a
prediction on the future course of markets, the performance of the company’s investments or the forecast of the
likely results of the company’s activities.
ENVIRONMENTAL REGULATION
The Consolidated Entity notes the reporting requirements of both the Energy Efficiency Opportunities Act 2006
(EEOA) and the National Greenhouse and Energy Reporting Act 2007 (NGERA). The Energy Efficiency
Opportunities Act 2006 requires affected companies to assess its energy usage, including the identification,
investigation and evaluation of energy saving opportunities, and to report publicly on the assessments
undertaken, including what action the company intends to take as a result. The National Greenhouse and Energy
Reporting Act 2007 requires affected companies to report its annual greenhouse gas emissions and energy use.
The Consolidated Entity has determined that it does not operate a recognised facility requiring registration and
reporting under the NGERA and in any event, it would fall under the threshold of greenhouse gas emissions
required for registration and reporting. Similarly, the Consolidated Entity’s energy consumption would fall under
the threshold required for registration and reporting under the EEOA.
The Consolidated Entity notes that it is not directly subject to the Clean Energy Act 2011 (Cth).
The Consolidated Entity is not otherwise subject to any particular or significant environmental regulation under
either Commonwealth or State legislation. To the extent that any environmental regulations may have an
incidental impact on the Consolidated Entity's operations, the Directors are not aware of any breach by the
Consolidated Entity of those regulations.
ANNUAL REPORT | 10
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
DIRECTORS
Information concerning Directors in office during or since the financial year:
Farooq Khan
Executive Chairman and Managing Director
Appointed 10 March 1998
Qualifications BJuris, LLB (Western Australia)
Experience Mr Khan is a qualified lawyer having previously practised principally in the field of corporate law.
Mr Khan has extensive experience in the securities industry, capital markets and the executive
management of ASX listed companies. In particular, Mr Khan has guided the establishment and
growth of a number of public listed companies in the investment, mining and financial services
sector. He has considerable experience in the fields of capital raisings, mergers and acquisitions
and investments.
Relevant interest in
shares
5,954,944 shares3
Other current
directorships in listed
entities
Executive Chairman of:
(1)
(2)
Bentley Capital Limited (BEL) (since 2 December 2003)
Orion Equities Limited (OEQ) (since 23 October 2006)
Former directorships
in other listed entities
in past 3 years
(1)
(2)
(3)
Alara Resources Limited (AUQ) (18 May 2007 to 31 August 2012)
Yellow Brick Road Holdings Limited (YBR) (27 April 2006 to 18 March 2011)
Strike Resources Limited (SRK) (3 September 1999 to 3 February 2011)
Simon K. Cato
Non-Executive Director
Appointed 6 February 2008
Qualifications B.A. (USYD)
Experience Mr Simon Cato has had over 25 years capital markets experience in broking, regulatory roles and
as director of listed companies. He initially was employed by the ASX in Sydney and in Perth.
Over the last 17 years he has been an executive director and/or responsible executive of three
stockbroking firms and in those roles he has been involved in many aspects of broking including
management issues such as credit control and reporting to regulatory bodies in the securities
industry. As a broker he has also been involved in the underwriting of a number of IPO’s and has
been through the process of IPO listing in the dual role of broker and director. Currently he holds
a number of executive and non executive roles with listed companies in Australia.
Relevant interest in
shares
193,000 shares
Other current
directorships in listed
entities
Chairman of:
(1)
Advanced Share Registry Limited (ASW) (since 22 August 2007)
Non-Executive Director of:
(2)
(3)
Transaction Solutions International Limited (TSN) (since 24 February 2010)
Greenland Minerals and Energy Ltd (GGG) (since 21 February 2006)
Former directorships
in other listed entities
in past 3 years
(1)
(2)
Convergent Minerals Limited (CVG) (25 July 2006 to 19 December 2011))
Bentley Capital Limited (BEL) (5 February 2004 to 29 April 2010)
3
Refer also Farooq Khan’s Change of Director’s Interest Notice dated 30 April 2012
ANNUAL REPORT | 11
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
Azhar Chaudhri
Non-Executive Director
Appointed 4 August 1998
Qualifications Bachelor of Science degree in Maths and Physics and a Masters degree in Economics and
postgraduate computer studies
Experience Mr Chaudhri has considerable expertise in computer systems, analysis and design and advanced
programming experience, particularly with respect to business and information technology
systems and Data Base computing. In particular Mr Chaudhri has formed and led software
development teams creating integrated database and management information systems for
utilities, local government land tax departments, hospitals, libraries and oil terminals.
Relevant interest in
shares
5,235,230 shares4
20,000,000 partly paid shares
Other current
directorships in listed
entities
Former directorships
in other listed entities
in past 3 years
None
None
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 (OEQ) (since 5 November 1999).
None
At the Balance Date, Messrs Azhar Chaudhri and Yaqoob Khan were resident overseas.
4
Refer also Azhar Chaudhri’s Change of Director’s Interest Notice dated 30 April 2012
ANNUAL REPORT | 12
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
COMPANY SECRETARY
Information concerning the Company Secretary in office during or since the financial year:
Victor P. H. Ho
Company Secretary
Appointed 30 August 2000
Qualifications BCom, LLB (Western Australia)
Experience Mr Ho has been in executive and company secretarial roles with a number of public
listed companies since early 2000. Previously, Mr Ho had 9 years’ experience in the
taxation profession with the Australian Tax Office and in a specialist tax law firm. Mr Ho
has been actively involved in the structuring and execution of a number of corporate
transactions, capital raisings and capital management matters and has extensive
experience in public company administration, corporations law, stock exchange
compliance and shareholder relations.
Relevant interest in shares 17,500 shares
Other current positions
held in listed entities
Executive Director and Company Secretary of:
(1)
Orion Equities Limited (OEQ) (Secretary since 2 August 2000 and Director since
4 July 2003)
Company Secretary of:
(2)
(3)
Bentley Capital Limited (BEL) (since 5 February 2004)
Alara Resources Limited (AUQ) (since 4 April 2007)
Former positions in other
listed entities in past 3
years
Strike Resources Limited (SRK) (secretary between 9 March 2000 and 30 April 2010 and
director between 12 October 2000 and 25 September 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
Farooq Khan
Simon Cato
Yaqoob Khan
Azhar Chaudhri
Meetings Attended
Maximum Possible Meetings
10
13
13
10
10
13
13
10
There were no meetings of committees of the Board of the Company.
Board Committees
During the financial year and as at the date of this Directors’ Report, the Company did not have separate
designated Audit or Remuneration Committees. In the opinion of the Directors, in view of the size of the
Board and nature and scale of the Consolidated Entity's activities, matters typically dealt with by an Audit
or Remuneration Committee are dealt with by the full Board.
ANNUAL REPORT | 13
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
REMUNERATION REPORT (audited)
This report details the nature and amount of remuneration for each Director and Company Executive (being a
company secretary or senior manager) (Key Management Personnel) of the Consolidated Entity.
The information provided under headings (1) to (4) below has been audited as required under section 308(3)(C)
of the Corporations Act 2001.
(1) Remuneration Policy
The Board determines the remuneration structure of all Key Management Personnel having regard to the
Consolidated Entity’s nature, scale and scope of operations and other relevant factors, including the
frequency of Board meetings, length of service, particular experience and qualifications, market practice
(including available data concerning remuneration paid by other listed companies in particular companies
of comparable size and nature), the duties and accountability of Key Management Personnel and the
objective of maintaining a balanced Board which has appropriate expertise and experience, at a
reasonable cost to the Company.
Fixed Cash Short Term Employment Benefits: The Key Management Personnel of the Company are
paid a fixed amount per annum plus applicable employer superannuation contributions. The 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 during the year 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 Simon Cato (Non-Executive Director) – a base fee of $15,000 per annum plus employer
superannuation contributions (currently 9%);
Mr Azhar Chaudhri (Non-Executive Director) – a base fee of $15,000 per annum;
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 travelling and accommodation
expenses) incurred by a Director for the purpose of attending meetings of the Company or the
Board, on the business of the Company, or in carrying out duties as a Director.
Long Term Benefits: Key Management Personnel have no right to termination payments save for
payment of accrued annual leave and long service leave (other than Non-Executive Directors).
Equity Based Benefits: The Company does not presently have any equity (shares or options) based
remuneration arrangements for any personnel pursuant to any executive or employee share or option plan
or otherwise.
Post Employment Benefits: The Company does not presently provide retirement benefits to Key
Management Personnel.
ANNUAL REPORT | 14
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
Performance Related Benefits/Variable Remuneration: The Company does not presently provide
short or long incentive/performance based benefits related to the Company’s performance to Key
Management Personnel, including payment of cash bonuses. The current remuneration of Key
Management Personnel is fixed, is not dependent on the satisfaction of a performance condition and is
unrelated to the Company’s performance.
Service Agreements: The Company does not presently have formal service agreements or employment
contracts with any Key Management Personnel.
Financial Performance of Company: There is no relationship between the Company’s current
remuneration policy and the Company’s performance.
The Board does not believe that it is appropriate at this time to implement an equity based benefit scheme
or a performance related/variable component to Key Management Personnel remuneration or
remuneration generally linked to the Company’s performance but reserves the right to implement these
remunerative measures if appropriate in the future (subject to prior shareholder approval where
applicable).
(2) Details of Remuneration of Key Management Personnel
Details of the nature and amount of each element of remuneration of each Key Management Personnel of
the Company paid or payable by the Consolidated Entity during the financial year are as follows:
Paid by the Company (Queste) to its Key Management Personnel
2012
Key
Management
Person
Performance
related
Short-term Benefits
Post
Employment
Benefits
Other
Long-term
Benefits
Cash, salary
and
commissions
$
%
Non-cash
benefit Superannuation
$
$
Long
service
leave
$
Equity
Based
Shares &
Options
$
Executive Director:
Farooq Khan
-
113,942
Non-Executive Directors:
Yaqoob Khan
Azhar Chaudhri
Simon Cato
Company Secretary:
-
-
-
-
15,000
15,000
15,000
44,900
-
-
-
-
-
11,250
11,058
-
-
1,350
4,041
-
-
-
-
Victor Ho
2011
Key
Management
Person
Performance
related
Short-term Benefits
Post
Employment
Benefits
Other
Long-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
Non-cash
benefit Superannuation
Long
service
leave
$
-
-
-
-
-
$
11,142
-
-
1,402
4,206
$
-
-
-
-
-
Total
$
136,250
15,000
15,000
16,350
48,941
Total
$
134,940
15,000
15,000
16,979
50,937
-
-
-
-
-
Equity
Based
Shares &
Options
$
-
-
-
-
-
ANNUAL REPORT | 15
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
Paid by Orion to Key Management Personnel (who are also Key Management Personnel of Queste)
Short-term Benefits
Post
Employment
Benefits
Other
Long-term
Benefits
2012
Key
Management
Personnel
Performance
related
%
Cash, salary
and
commissions
$
Non-cash
benefit
$
Superannuation
$
Executive Directors:
Farooq Khan
William Johnson
Victor Ho
Non-Executive Director:
Yaqoob Khan
-
-
-
-
225,000
45,120
75,000
25,000
-
-
-
-
22,500
4,061
6,750
-
Equity
Based
Shares &
Options
$
Total
$
-
-
-
-
272,500
49,181
81,750
25,000
Long
service
leave
$
25,000
-
-
-
2011
Key
Management
Personnel
Short-term Benefits
Post
Employment
Benefits
Other
Long-term
Benefits
Performance
related
%
Cash, salary
and
commissions
$
Non-cash
benefit
$
Superannuation
$
Long
service
leave
$
Equity
Based
Shares &
Options
$
Total
$
Executive Directors:
Farooq Khan
William Johnson
Victor Ho
Non-Executive Director:
Yaqoob Khan
-
-
-
-
230,769
77,885
77,885
25,000
-
-
-
-
20,769
7,010
7,010
-
-
-
-
-
-
-
-
-
251,538
84,895
84,895
25,000
(3) Other Benefits Provided to Key Management Personnel
No Key Management Personnel has during or since the end of the financial year, received or become
entitled to receive a benefit, other than a remuneration benefit as disclosed above, by reason of a contract
made by the Company or a related entity with the Director or with a firm of which he is a member, or with
a Company in which he has a substantial interest.
(4) Voting and Comments on the Remuneration Report at the 2011 AGM
At the Company’s most recent (2011) AGM, a resolution to adopt the prior year (2011) Remuneration
Report was put to the vote and not passed by a majority of shareholders. This constitutes a “first strike”
under the new executive remuneration related provisions of the Corporations Act. The Board has
reviewed the Company’s remuneration policy and considered feedback from relevant stakeholders and
believes that the Company’s remuneration structure and practices are appropriate as detailed in this
Remuneration Report.
This concludes the audited Remuneration Report.
ANNUAL REPORT | 16
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
DIRECTORS’ AND OFFICERS’ INSURANCE
The Company does not have any directors’ and officers’ insurance policy. Orion has a directors’ and officers’
insurance policy; the nature of the liabilities covered or the amount of premiums paid in respect of this policy has
not been disclosed as such disclosure is prohibited under the terms of the policy.
DIRECTORS DEEDS
In addition to the rights of indemnity provided under the Company’s Constitution (to the extent permitted by the
Corporations Act), the Company has also entered into a deed with each of the Directors and the Company
Secretary (Officer) to regulate certain matters between the Company and each Officer, both during the time the
Officer holds office and after the Officer ceases to be an officer of the Company, including the following matters:
(a)
(b)
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.
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
$
70,707
5,755
Total
$
76,462
Audit & Review
Fees
$
Company
Non-Audit
Services
$
27,201
3,500
Total
$
30,701
The Board is satisfied that the provision of non-audit services by the auditor during the year is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001. The Board is satisfied
that the nature of the non-audit services disclosed above did not compromise the general principles relating to
auditor independence as set out in APES 110 Code of Ethics for Professional Accountants: Professional
Independence, including reviewing or auditing the auditor’s own work, acting in a management or decision
making capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and
rewards. BDO Audit (WA) Pty Ltd continues in office in accordance with section 327B of the Corporations Act
2001.
AUDITORS’ INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001
forms part of this Directors Report and is set out on page 19. This relates to the Audit Report, where the
Auditors state that they have issued an independence declaration.
ANNUAL REPORT | 17
30 JUNE 2
2012
DIR
RECT
TORS
’ REP
T
PORT
QUESTE
E COMMUNICAT
A.B.N. 58 08
TIONS LTD
81 688 164
EVENTS
S SUBSEQ
QUENT TO B
BALANCE
DATE
The Direc
those refe
notes the
affect the
years.
ctors are not
erred to in th
ereto (in part
e operations,
aware of any
his Directors’ R
icular Subseq
the results of
y matters or c
Report (in par
uent Events
f operations o
circumstances
rticular, in Rev
Note 26), tha
or the state o
s at the date
view of Opera
at have signif
of affairs of t
of this Direct
ations) or the
ficantly affecte
he Company
tors’ Report, o
financial stat
ted or may si
in subsequen
other than
ements or
gnificantly
nt financial
Signed fo
or and on beha
alf of the Direc
ctors in accord
dance with a r
resolution of t
he Board.
Farooq K
Chairma
31 Augu
Khan
an
ust 2012
Simon
Direct
n Cato
tor
ANNUAL REPO
A
ORT | 18
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 2012
The Board of Directors
Queste Communications Ltd
Level 14, The Forrest Centre
221 St Georges Terrace
PERTH WA 6000
Dear Sirs,
DECLARATION OF INDEPENDENCE BY CHRIS BURTON TO THE DIRECTORS OF
QUESTE COMMUNICATIONS LTD
As lead auditor of Queste Communications Ltd for the year ended 30 June 2012, I declare that, to
the best of my knowledge and belief, there have been no contraventions of:
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
•
any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Queste Communications Ltd and the entities it controlled during the
period.
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 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
for the year ended 30 June 2012
Revenue
Other
Share of Net Profit of Associate
Other Income
TOTAL REVENUE
EXPENSES
Net Loss on Financial Assets at Fair Value through Profit or Loss
Share of Net Loss of Associate
Gain/(Loss) on Land held for Development or Resale
Cost of Goods Sold in relation to Olive Oils Operations
Personnel Expenses
Communication Expenses
Occupancy Expenses
Finance Expenses
Corporate Expenses
Administration Expenses
Note
2012
$
2011
$
3
3
924,098
544,690
-
75
181,205
10
924,173
725,905
(2,648,702)
(625,086)
(160,000)
(1,182,799)
(904,117)
(30,983)
(155,529)
(4,919)
(50,224)
(528,676)
(1,496,912)
-
300,000
(802,065)
(846,501)
(37,212)
(112,624)
(5,871)
(133,509)
(548,658)
LOSS BEFORE INCOME TAX
(5,366,862)
(2,957,447)
Income Tax Expense
4
(24,864)
(82,211)
LOSS FOR THE YEAR
(5,391,726)
(3,039,658)
OTHER COMPREHENSIVE INCOME
Revaluation of Assets, Net of Tax
(29,519)
(80,242)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(5,421,245)
(3,119,900)
LOSS ATTRIBUTABLE TO:
Owners of Queste Communications Ltd
Non-Controlling Interest
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO:
Owners of Queste Communications Ltd
Non-Controlling Interest
(2,948,509)
(2,443,217)
(5,391,726)
(1,653,274)
(1,386,384)
(3,039,658)
(2,978,028)
(2,443,217)
(5,421,245)
(1,733,516)
(1,386,384)
(3,119,900)
LOSS PER SHARE ATTRIBUTABLE TO THE ORDINARY
EQUITY HOLDERS OF THE COMPANY:
Basic and Diluted Loss per Share (cents)
7
(9.85)
(5.52)
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 20
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
as at 30 June 2012
Note
2012
$
2011
$
CURRENT ASSETS
Cash and Cash Equivalents
Financial Assets at Fair Value through Profit or Loss
Trade and Other Receivables
Inventories
Other Current Assets
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Trade and Other Receivables
Land held for Development or Resale
Investment in Associate Entity
Property, Plant and Equipment
Olive Trees
Intangible Assets
Deferred Tax Asset
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and Other Payables
Provisions
TOTAL CURRENT LIABILITIES
NON CURRENT LIABILITIES
Provisions
Deferred Tax Liability
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Reserves
Retained Earnings/(Accumulated Losses)
Parent Interest
Non-Controlling Interest
TOTAL EQUITY
8
9
10
11
12
10
11
13
14
15
16
19
17
18
18
19
20
21
2,008,853
3,827,155
330,843
277,595
5,895
1,684,644
6,475,856
61,202
999,430
5,057
6,450,341
9,226,189
32,823
1,640,000
4,854,638
1,637,683
65,500
727,746
358,251
32,823
1,800,000
7,571,638
1,740,609
65,500
782,058
1,165,888
9,316,641
13,158,516
15,766,982
22,384,705
256,642
202,730
622,237
-
459,372
622,237
-
358,251
197,479
1,165,888
358,251
1,363,367
817,623
1,985,604
14,949,359
20,399,101
6,192,427
2,321,946
(6,762)
8,507,611
6,192,427
2,351,465
2,941,747
11,485,639
6,441,748
8,913,462
14,949,359
20,399,101
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 21
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
for the year ended 30 June 2012
Issued
Capital
$
Reserves
$
Retained
Earnings/
(Accumulated
Losses)
$
Non-
Controlling
Interest
$
Total
$
BALANCE AT 1 JULY 2010
6,192,427
2,431,707
4,264,583
10,961,550
23,850,267
Loss for the Year
Other Comprehensive Income
Total Comprehensive Loss
for the Year
Transactions with Owners
in their capacity as
Transactions with Non-
Controlling Interest
-
-
-
-
-
(80,242)
(80,242)
(1,653,274)
(1,386,384)
-
-
(1,653,274)
(1,386,384)
(3,039,658)
(80,242)
(3,119,900)
-
330,438
(661,704)
(331,266)
BALANCE AT 30 JUNE 2011
6,192,427
2,351,465
2,941,747
8,913,462
20,399,101
BALANCE AT 1 JULY 2011
6,192,427
2,351,465
2,941,747
8,913,462
20,399,101
Loss for the Year
Other Comprehensive Income
Total Comprehensive Loss
for the Year
Transactions with Owners
in their capacity as
Transactions with Non-
Controlling Interest
-
-
-
-
-
(29,519)
(29,519)
(2,948,509)
(2,443,217)
-
-
(2,948,509)
(2,443,217)
(5,391,726)
(29,519)
(5,421,245)
-
-
(28,497)
(28,497)
BALANCE AT 30 JUNE 2012
6,192,427
2,321,946
(6,762)
6,441,748
14,949,359
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 22
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF CASH FLOWS
for the year ended 30 June 2012
Note
2012
$
2011
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers
Dividends Received
Interest Received
Payments to Suppliers and Employees
Interest Paid
Sale/Redemption of Financial Assets at Fair Value through Profit or Loss
Purchase of Financial Assets at Fair Value through Profit or Loss
570,944
756,871
83,365
(2,409,511)
(868)
-
-
450,037
460,421
117,664
(2,348,434)
(424)
1,321,780
(957,857)
NET CASH USED IN OPERATING ACTIVITIES
8
(999,199)
(956,813)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Return of Capital Received
Proceeds from Sale of Investment Securities
Purchase of Investment Securities
14
13
(11,857)
1,335,265
-
-
(17,987)
-
293,150
(219,687)
NET CASH PROVIDED BY INVESTING ACTIVITIES
1,323,408
55,476
NET INCREASE/(DECREASE) IN CASH HELD
324,209
(901,337)
Cash and Cash Equivalents at Beginning of Financial Year
1,684,644
2,585,981
CASH AND CASH EQUIVALENTS AT END OF FINANCIAL
YEAR
8
2,008,853
1,684,644
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 23
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
1.
SUMMARY OF ACCOUNTING POLICIES
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise
stated.
The financial statement includes the financial statements for the
Consolidated Entity consisting of Queste Communications Ltd and its
subsidiary. Queste Communications Ltd is a company limited by
shares, incorporated in Western Australia, Australia and whose
shares are publicly traded on the Australian Securities Exchange
(ASX).
1.1.
Basis of preparation
These general purpose financial statements have been prepared in
accordance with Australian Accounting
other
Standards,
the Australian Accounting
authoritative pronouncements of
Standards Board, Urgent Issues Group Interpretations and the
Corporations Act 2001.
Compliance with IFRS
The consolidated financial statements of the Consolidated Entity,
Queste Communications Ltd, also comply with International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB).
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is
based on historical costs modified by the revaluation of selected
non-current assets, and financial assets and financial liabilities for
which the fair value basis of accounting has been applied.
1.2.
Principles of Consolidation
The consolidated financial statements incorporate the assets and
liabilities of the subsidiaries of Queste Communications Ltd as at 30
June 2012 and the results of its subsidiaries for the year then
ended. Queste Communications Ltd and its subsidiary are referred
to in this financial statement as the Consolidated Entity.
Subsidiaries are all entities over which the Consolidated Entity has
the power to govern the financial and operating policies, generally
accompanying a shareholding of more than one-half of the voting
rights. The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assessing
controls another entity.
whether
Information on the controlled entity is contained in Note 2 to the
financial statements.
the Consolidated Entity
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.
Investments in Associates
1.3.
Associates are all entities over which the Consolidated Entity has
significant influence but not control or joint control, generally
accompanying a shareholding of between 20% and 50% of the
voting rights. Investments in associates in the consolidated financial
statements are accounted
for using the equity method of
accounting, after initially being recognised at cost. Under this
method, the Consolidated Entity’s share of the post-acquisition
profits or losses of associates are recognised in the consolidated
Statement of Comprehensive Income, and its share of post-
in other
acquisition movements
comprehensive
cumulative post-acquisition
movements are adjusted against the carrying amount of the
investment (refer to Note 13).
recognised
reserves
income.
The
in
is
from associates are recognised
Dividends receivable
in the
Company’s Statement of Comprehensive Income, while in the
consolidated financial statements they reduce the carrying amount
of the investment. When the Consolidated Entity’s share of losses in
an associate equals or exceeds its interest in the associate, including
any other unsecured long-term receivables, the Consolidated Entity
does not recognise further losses, unless it has incurred obligations
or made payments on behalf of the associate.
Unrealised gains on transactions between the Consolidated Entity
and its associates are eliminated to the extent of the Consolidated
Entity’s interest in the associates. Unrealised losses are also
eliminated unless
transaction provides evidence of an
impairment of the asset transferred. Accounting policies of
associates have been changed where necessary
to ensure
consistency with the policies adopted by the Consolidated Entity. All
associated entities have a June financial year-end.
the
1.4.
Operating Segment
The Consolidated Entity has applied AASB 8: Operating Segments
which requires that segment information be presented on the same
basis as that used for internal reporting purposes.
In this financial year, the operating segments have been determined
by the Board, to be investments comprising of investments in
shares, land and Associate entity and the olive grove. The
Consolidated Entity’s segment reporting is contained in Note 22 of
the notes to the financial statements.
1.5.
Revenue Recognition
Revenue is measured at the fair value of the consideration received
or receivable. Revenue is recognised to the extent that it is
probable that the economic benefits will flow to the Consolidated
Entity and the revenue can be reliably measured. All revenue is
stated net of the amount of goods and services tax (“GST”) except
where the amount of GST incurred is not recoverable from the
Australian Tax Office. The following specific recognition criteria
must also be met before revenue is recognised:
Sale of Goods and Disposal of Assets - Revenue from the sale
of goods and disposal of other assets is recognised when the
Consolidated Entity has passed control of the goods or other assets
to the buyer.
Contributions of Assets - Revenue arising from the contribution
of assets is recognised when the Consolidated Entity gains control of
the asset or the right to receive the contribution.
Interest Revenue - Interest revenue is recognised on a
proportional basis taking into account the interest rates applicable to
the financial assets.
Dividend Revenue - Dividend revenue is recognised when the
right to receive a dividend has been established. The Consolidated
Entity brings dividend revenue to account on the applicable ex-
dividend entitlement date.
Other Revenues - Other revenues are recognised on a receipts
basis.
1.6.
Income Tax
The income tax expense or revenue for the period is the tax payable
on the current period’s taxable income based on the notional income
tax rate for each taxing jurisdiction adjusted by changes in deferred
tax assets and liabilities attributable to temporary differences
ANNUAL REPORT | 24
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, and to unused tax losses (if
applicable).
date. Consideration is given to expect future wage and salary levels,
experience of employee departures and periods of service.
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.
for deductible
tax assets are recognised
Deferred
temporary
differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences
and losses. The amount of deferred tax assets benefits brought to
account or which may be realised in the future, is based on the
assumption that no adverse change will occur in income taxation
legislation and the anticipation that the consolidated entity will derive
sufficient future assessable income to enable the benefit to be realised
and comply with the conditions of deductibility imposed by the law.
Deferred tax liabilities and assets are not recognised for temporary
differences between the carrying amount and tax bases of investments
in controlled entities where the parent entity is able to control the
timing of the reversal of the temporary differences and it is probable
that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities and when
the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a
legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised
directly in other comprehensive income or equity are also recognised
directly in other comprehensive income or equity.
1.7.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of
GST, except where the amount of GST incurred is not recoverable
from the Australian Tax Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of
an item of the expense. Receivables and payables in the Statement of
Financial Position are shown inclusive of GST. Cash flows are
presented in the cash flow statement on a gross basis, except for the
GST component of investing and financing activities, which are
disclosed as operating cash flows.
1.8.
Employee Benefits
Short term obligations - Provision is made for the Consolidated
Entity’s liability for employee benefits arising from services rendered
by employees to balance date. Employee benefits that are expected
to be settled within one year have been measured at the amounts
expected to be paid when the liability is settled, plus related on-costs.
Employee benefits payable later than one year have been measured at
the present value of the estimated future cash outflows to be made for
those benefits. Employer superannuation contributions are made by
the Consolidated Entity in accordance with statutory obligations and
are charged as an expense when incurred.
Other long term employee benefit obligations - The liability for
long service leave is recognised in the provision for employee benefits
and measured as the present value of expected future payments to be
made in respect of services provided by employees up to the reporting
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.
initial recognition these
instruments are measured as set out below.
Subsequent to
Financial assets at fair value through profit and loss - A
financial asset is classified in this category if acquired principally for
the purpose of selling in the short term or if so designated by
management and within the requirements of AASB 139: Recognition
and Measurement of Financial Instruments. Realised and unrealised
gains and losses arising from changes in the fair value of these assets
are included in the Statement of Comprehensive Income in the period
in which they arise.
Available for sale financial assets- Available for sale financial
assets, comprising principally marketable equity securities, are 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
liabilities are
- Non-derivative
recognised at amortised cost, comprising original debt less principal
payments and amortisation.
financial
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”.
ANNUAL REPORT | 25
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
1.13. Fair value Estimation
The fair value of financial assets and financial liabilities must be
estimated for recognition and measurement or for disclosure purposes.
The fair value of financial instruments traded in active markets (such
as publicly traded derivatives, and trading and available-for-sale
securities) is based on quoted market prices at the balance date. The
quoted market price used for financial assets held by the Consolidated
Entity is the current bid price; the appropriate quoted market price for
financial liabilities is the current ask price.
The fair value of financial instruments that are not traded in an active
market (for example over-the-counter derivatives) is determined using
valuation techniques, including but not limited to recent arm’s length
transactions, reference to similar instruments and option pricing
models. The Consolidated Entity may use a variety of methods and
makes assumptions that are based on market conditions existing at
each balance date. Other techniques, such as estimated discounted
cash flows, are used to determine fair value for other financial
instruments.
The nominal value less estimated credit adjustments of trade
receivables and payables are assumed to approximate their fair values.
The fair value of financial liabilities for disclosure purposes is estimated
by discounting the future contractual cash flows at the current market
interest rate that is available to the Consolidated Entity for similar
financial instruments.
The Consolidated Entity’s investment portfolio (comprising listed and
unlisted securities) is accounted for as a “financial assets at fair value
through profit and loss” and is carried at fair value based on the
quoted last bid prices at reporting date (refer to Note 9).
1.14. Property held for Resale
Property held for development and sale is valued at lower of cost and
net realisable value.
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.
Cost
1.15. Property, Plant and Equipment
All plant and equipment are stated at historical cost less accumulated
depreciation and
includes
expenditure that is directly attributable to the acquisition of the items.
Historical cost
impairment
losses.
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.
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
Plant and Equipment
Depreciation
Rate
15-33.3%
Furniture and Equipment
15-20%
Leasehold Improvements
15%
Depreciation Method
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 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.
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
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.
ANNUAL REPORT | 26
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
1.21.
Inventories
1.25. Comparative Figures
(i)
Raw materials and stores, work in progress and
finished goods
Certain comparative figures have been adjusted to conform to changes
in presentation for the current financial year.
Raw materials and stores, work in progress and finished
goods are stated at the lower of cost and net realisable value.
Cost comprises direct materials, direct labour and an
appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of normal
operating capacity. They include the transfer from equity of
any gains or losses on qualifying cash flow hedges relating to
purchases of raw material. Costs are assigned to individual
items of inventory on basis of weighted average costs. Costs
of purchased inventory are determined after deducting
rebates and discounts. Net realisable value is the estimated
selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs
necessary to make the sale.
(ii)
Land held for resale/capitalisation of borrowing costs
Land held for resale is stated at the lower of cost and net
realisable value. Cost is assigned by specific identification
and includes the cost of acquisition, and development and
borrowing costs during development. When development is
completed borrowing costs and other holding charges are
expensed as incurred.
1.26. Critical accounting judgements and estimates
The preparation of the Consolidated Financial Statements requires
Directors to make judgements and estimates and form assumptions
that affect how certain assets, liabilities, revenue, expenses and equity
are reported. At each reporting period, the Directors evaluate their
judgements and estimates based on historical experience and on other
various factors they believe to be reasonable under the circumstances,
the results of which form the basis of the carrying values of assets and
liabilities (that are not readily apparent from other sources, such as
independent valuations). Actual results may differ from these
estimates under different assumptions and conditions.
The Consolidated Entity carries its freehold land and intangible assets
(water licence) at fair value with changes in the fair values recognised
in equity. It also carries inventory (land held for development and
resale) and olive trees at fair value with changes in the fair value
recognised in the Statement of Comprehensive Income. Independent
valuations are obtained for these non-current assets at least annually.
Borrowing costs included in the cost of land held for resale
are those costs that would have been avoided if the
expenditure on the acquisition and development of the land
had not been made. Borrowing costs incurred while active
development
for extended periods are
recognised as expenses.
interrupted
is
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.
ANNUAL REPORT | 27
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
1.27. 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.
and
Title
Affected
Standard(s):
Financial
Instruments
AASB reference
AASB 9 (issued
December 2009 and
amended December
2010)
Nature of Change
Application date:
Amends the requirements for classification and measurement of
financial assets. The available-for-sale and held-to-maturity
categories of financial assets in AASB 139 have been eliminated.
Periods beginning on
or after 1 January
2015
AASB 9 requires that gains or losses on financial liabilities
measured at fair value are recognised in profit or loss, except
that the effects of changes in the liability’s credit risk are
recognised in other comprehensive income.
AASB 10 (issued
August 2011)
Consolidated
Financial
Statements
Introduces a single ‘control model’ for all entities, including
special purpose entities (SPEs), whereby all of the following
conditions must be present:
(cid:120)
(cid:120)
Power over investee (whether or not power used in
practice);
Exposure, or rights, to variable returns from investee; and
(cid:120) Ability to use power over investee to affect the Entity’s
returns from investee.
Introduces the concept of ‘defacto’ control for entities with less
than 50% ownership interest in an entity, but which have a large
shareholding compared to other shareholders. This could result
instances of control and more entities being
in more
consolidated.
Annual reporting
periods commencing
on or after 1 January
2013
AASB 12 (issued
August 2011)
Disclosure of
Interests in Other
Entities
AASB 13 (issued
September 2011)
Fair Value
Measurement
Combines existing disclosures from AASB 127 Consolidated and
Separate Financial Statements, AASB 128 Investments in
Associates and AASB 131 Interests in Joint Ventures. Introduces
new disclosure requirements for interests in associates and joint
arrangements, as well as new requirements for unconsolidated
structured entities.
Annual reporting
periods commencing
on or after 1 January
2013
AASB 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
Additional disclosures required for items measured at fair value
in the statement of financial position, as well as items merely
disclosed at fair value in the notes to the financial statements.
Extensive additional disclosure requirements for items measured
at fair value that are ‘level 3’ valuations in the fair value
hierarchy that are not financial instruments.
ANNUAL REPORT | 28
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
1.27
Summary of Accounting Standards Issued Not Yet Effective (continued)
AASB reference
and
Title
Affected
Standard(s):
Nature of Change
AASB 119 (reissued
September 2011)
Employee
Benefits
Employee benefits expected to be settled (as opposed to due to
settled under current standard) wholly within 12 months after
the end of the reporting period are short-term benefits, and
therefore not discounted when calculating leave liabilities.
Annual leave not expected to be used wholly within 12 months
of end of reporting period will in future be discounted when
calculating leave liability.
Application date:
Annual periods
commencing on or
after 1 January 2013
AASB 2010-8
(issued December
2010)
AASB 2011-4
(issued July 2011)
AASB 2011-9
(issued September
2011)
Amendments to
Australian
Accounting
Standards –
Deferred Tax:
Recovery of
Underlying Assets
(AASB 112)
Amendments to
Australian
Accounting
Standards to
Remove
Individual Key
Management
Personnel
Disclosure
Requirements
Amendments to
Australian
Accounting
Standards -
Presentation of
Items of Other
Comprehensive
Income
AASB 2012-5
(issued June 2012)
IFRS (issued
December 2011)
Annual
Improvements to
Australian
Accounting
Standards 2009-
2011 Cycle
Mandatory
Effective Date of
IFRS 9 and
Transition
Disclosures
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.
Periods commencing
on or after 1 January
2012
Amendments to remove individual key management personnel
(KMP) disclosure requirements from AASB 124 to eliminate
duplicated information required under the Corporation Act 2001.
Annual periods
commencing on or
after 1 July 2013
Amendments to align the presentation of items of other
comprehensive income (OCI) with US GAAP.
Annual periods
commencing on or
after 1 July 2012
Various name changes of statements in AASB 101 as follows:
(cid:120)
(cid:120)
1 statement of comprehensive income - to be referred to as
‘statement of profit or loss and other comprehensive
income’;
2 statements - to be referred to as ‘statement of profit or
loss’ and ‘statement of comprehensive income’; and
(cid:120) OCI items must be grouped together into two sections:
those that could subsequently be reclassified into profit or
loss and those that cannot.
Non-urgent but necessary changes to IFRSs (IAS1, IAS 16 & IAS
32).
Periods commencing
on or after 1 January
2013
Entities are no longer required to restate comparatives on first
time adoption. Instead, additional disclosures on the effects of
transition are required.
Annual reporting
periods commencing
on or after 1 January
2015
ANNUAL REPORT | 29
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
2.
PARENT ENTITY INFORMATION
The following information provided relates to the Company, Queste Communications Ltd, as at 30 June 2012.
The information presented below has been prepared using accounting policies outlined in Note 1.
Current Assets
Non Current Assets
TOTAL ASSETS
Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Issued Capital
Reserves
Accumulated Losses
EQUITY
Loss for the Year
Other Comprehensive Income
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(a)
Current Assets
Cash and Cash Equivalents
Cash at Bank
Term Deposit
(b)
Non Current Assets
(i)
Investments in Controlled Entity
Shares in Controlled Entity - at cost
Net Change in Fair Value
2012
$
1,678,568
2,534,794
4,213,362
2011
$
1,905,541
3,343,942
5,249,483
130,424
130,424
151,841
151,841
4,082,938
5,097,642
6,192,427
1,321,679
(3,431,168)
4,082,938
6,192,427
1,892,657
(2,987,442)
5,097,642
(443,726)
(269,500)
-
-
(443,726)
(269,500)
523,821
1,120,000
523,821
1,363,415
32,089
1,363,415
3,069,452
(1,166,190)
1,903,262
3,069,452
(350,506)
2,718,946
Details of percentage of Ordinary Shares
held in Controlled Entity:
Investment in Controlled Entity
Orion Equities Limited
Incorporated
Australia
Ownership Interest
2012
%
50.88
2011
%
50.88
(c)
Transactions with Related Parties
The Company is deemed to control Orion Equities Limited (OEQ). During the financial year there were
transactions between the Company, OEQ and Associate Entity Bentley Capital Limited (BEL), pursuant to
shared office and administration expense arrangements. Interest is not charged on such outstanding
amounts and all amounts were fully recovered/repaid by balance date. The following transactions also
occurred with related parties:
Bentley Capital Limited
Dividends Received
Return of Capital Received
2012
$
59,181
1,335,265
2011
$
34,813
-
ANNUAL REPORT | 30
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
2.
PARENT ENTITY INFORMATION (continued)
(c)
Transactions with Related Parties (continued)
The Company has provided a $650,000 unsecured interest bearing (at 10% per annum) loan facility to
Orion, with a term currently expiring on 31 December 2013.
Orion Equities Limited
Interest Received on Loan Facility
(d)
Lease Commitments
Not longer than one year
Later than one year but not later than five years
Note
24
24
2012
$
20,060
2011
$
17,945
78,630
-
78,630
82,633
170,384
253,017
3.
LOSS FOR THE YEAR
The Consolidated Entity's Operating Loss before Income Tax
includes the following items of expense:
(a)
Revenue
Income from Sale of Olive Oils
Rental Income
Dividend Income
Interest Income
Other
Share of Net Profit of Associate
Other Income
(b)
Expenses
Net Loss on Financial Assets at Fair Value through Profit or Loss
Share of Net Loss of Associate
Olive Oil Operations
Cost of Goods Sold
Impairment and Depreciation of Olive Oil Assets
Other Expenses
Land Operations
(Gain)/Loss on Revaluation of Land held for Development or Resale
Other Expenses
Salaries, Fees and Employee Benefits
Occupancy Expenses
Finance Expenses
Corporate Expenses
ASX Fees
Share Registry
Other Corporate Expenses
Administration Expenses
Communications
Professional Fees
Brokerage Fees
Realisation Cost of Investment Portfolio Written Back
Write-Off of Fixed Assets
Depreciation
Other Administration Expenses
767,427
52,531
223
103,917
924,098
450,027
-
15,332
79,331
544,690
-
75
924,173
181,205
10
725,905
2,648,702
625,086
1,496,912
-
1,182,799
78,359
91,916
160,000
154,608
610,270
94,636
21,441
32,780
11,054
4,569
582,608
201,041
18,416
(300,000)
367,300
846,501
112,624
5,871
35,664
7,475
90,370
9,448
6,559
-
(14,974)
-
7,855
565,927
6,291,035
37,212
78,002
8,735
(12,043)
2,202
6,403
98,059
3,683,352
ANNUAL REPORT | 31
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
4.
INCOME TAX EXPENSE
(a)
The components of Tax Expense comprise:
Current Tax
Deferred Tax
19
2012
$
2011
$
-
24,864
24,864
-
82,211
82,211
(b)
The prima facie tax on Operating Profit before Income Tax is
reconciled to the income tax as follows:
Prima facie tax payable on Operating Profit before Income Tax at 30%
(2011: 30%)
Adjust tax effect of:
(1,610,059)
(887,233)
Other Assessable Income
Non-Deductible Expenses
Current Year Tax Losses not brought to account
Share of Net (Profit)/Loss of Associate
Derecognition of Prior Year Revenue Losses
Derecognition of Prior Year Capital Losses
Utilisation of Prior Year Capital Losses
Movement in Deferred Taxes
319,664
857,260
270,473
187,526
-
-
-
-
192,046
1,793
195,555
(54,362)
680,789
264,268
(316,500)
5,855
Income tax attributable to entity
24,864
82,211
(c)
Deferred Tax recognised directly in Other
Comprehensive Income
Revaluations of Land & Intangible Assets
(d)
Unrecognised Deferred Tax balances
Unrecognised Deferred Tax Asset - Revenue Losses
Unrecognised Deferred Tax Asset - Capital Losses
Unrecognised Deferred Tax Asset - Temporary Differences
24,864
82,211
2,487,319
246,719
-
2,734,038
1,589,972
246,719
48,155
1,884,846
The above deferred tax assets have not been recognised in respect of the above items because it is not
probable that future taxable profit will be available against which the Consolidated Entity can utilise the
benefits. Revenue and capital tax losses are subject to relevant statutory tests
ANNUAL REPORT | 32
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
5.
INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP)
Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration paid or
payable to each member of the Consolidated Entity's KMP for the year ended 30 June 2012.
The total remuneration paid to KMP of the Consolidated Entity during the year is as follows:
Directors
Short-Term Employment Benefits
Other Long-Term Employment Benefits
Other KMP
Short-Term Employment Benefits
2012
$
171,542
11,058
182,600
2011
$
628,247
-
628,247
48,950
48,950
50,937
50,937
231,550
679,184
There were no options, rights or equity instruments provided as remuneration to KMP and no shares issued
on the exercise of any such instruments during the financial year.
KMP Shareholdings
Fully Paid Ordinary Shares
30 June 2012
Directors
Farooq Khan
Simon Cato
Azhar Chaudhri
Yaqoob Khan
Other KMP
Victor Ho
30 June 2011
Directors
Farooq Khan
Simon Cato
Azhar Chaudhri
Yaqoob Khan
Other KMP
Victor Ho
Balance at
Start of Year
Balance at
Appointment
/Cessation Net Change
Balance at
End of Year
6,398,044
193,000
5,551,230
68,345
17,500
6,398,044
193,000
4,724,280
68,345
17,500
(175,000)
-
(316,000)
-
-
-
-
826,950
-
-
6,223,044
193,000
5,235,230
68,345
17,500
6,398,044
193,000
5,551,230
68,345
17,500
ANNUAL REPORT | 33
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
5.
INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP) (continued)
KMP Shareholdings
Partly Paid Ordinary Shares
30 June 2012
Directors
Farooq Khan
Simon Cato
Azhar Chaudhri
Yaqoob Khan
Other KMP
Victor Ho
30 June 2011
Directors
Farooq Khan
Simon Cato
Azhar Chaudhri
Yaqoob Khan
Other KMP
Victor Ho
Balance at
Start of Year
Balance at
Appointment
/Cessation Net Change
-
-
20,000,000
-
-
-
-
20,000,000
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
End of Year
-
-
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).
Other KMP Transactions
Director, Simon Cato, is a director of ASX listed Advanced Share Registry Limited (ASW), which provides
share registry services to the Consolidated Entity.
Amounts recognised as expense
Share Registry Fees
2012
$
11,054
2011
$
7,475
There were no other transactions with KMP (or their personally related entities) during the financial year.
6.
AUDITORS' REMUNERATION
During the year the following fees were paid for services provided by the auditor of the parent entity, its
related practices and other non-related audit firms:
BDO Audit (WA) Pty Ltd
Audit and Review of Financial Statements
Taxation Services
2012
$
70,707
5,755
76,462
2011
$
64,042
6,850
70,892
The Consolidated Entity may engage BDO on assignments additional to their statutory audit duties where
their expertise and experience with the Consolidated Entity are important. These assignments principally
relate to taxation advice in relation to the tax notes to the financial statements.
ANNUAL REPORT | 34
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
7.
LOSS PER SHARE
Basic and Diluted Loss per Share
2012
cents
(9.85)
2011
cents
(5.50)
The following represents the loss and weighted average number of shares used in the loss per share
calculations:
Net Loss after Income Tax
Weighted Average Number of Ordinary Shares
2012
$
(2,948,509)
2011
$
(1,653,274)
Number of
29,927,379
Number of
29,927,379
Under AASB 133 Earnings per Share, potential ordinary shares such as partly paid shares will only be treated
as dilutive when their conversion to ordinary shares would increase the loss per share. Diluted Loss per
Share is not calculated as it does not increase the loss per share.
8.
CASH AND CASH EQUIVALENTS
(a)
Reconciliation of Cash
Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the
related items in the Statement of Financial Position as follows:
Cash at Bank and in hand
Short-Term Deposits
2012
$
888,853
1,120,000
2,008,853
2011
$
1,652,555
32,089
1,684,644
(b)
Reconciliation of Operating Profit after Income Tax to Net
Cash used in Operating Activities
Loss after Income Tax
(5,391,726)
(3,039,658)
Add Non-Cash Items:
Depreciation
Net Loss on Financial Assets at Fair Value through Profit or Loss
(Gain)/Loss on Land held for Development or Resale
Share of Net (Profit)/Loss of Associate
Write-Off of Fixed Assets
Changes in Assets and Liabilities
Financial Assets at Fair Value through Profit or Loss
Trade and Other Receivables
Inventories
Other Current Assets
Investments accounted for using the Equity Method
Trade and Other Payables
Provisions
Deferred Tax
86,214
2,648,701
160,000
625,086
-
-
(269,641)
721,835
(838)
756,649
(365,594)
5,251
24,864
(999,199)
207,444
1,496,912
(300,000)
(181,205)
2,202
363,923
117,552
(380,030)
(5,057)
445,089
189,827
43,977
82,211
(956,813)
(c)
Risk Exposure
The Consolidated Entity’s exposure to interest rate risk is discussed in Note 23. The maximum exposure
to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash
equivalents mentioned above.
ANNUAL REPORT | 35
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
9.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Current
Listed Investments at Fair Value
Unlisted Investments at Fair Value
(a)
Risk Exposure
The Consolidated Entity’s exposure to price risk is discussed in Note 23.
10.
TRADE AND OTHER RECEIVABLES
Current
Trade Receivables
Interest Receivable
GST Receivable
Receivable from Related Parties
Other Receivables
Non Current
Bonds and Guarantees
2012
$
2011
$
3,781,585
45,570
3,827,155
6,475,856
-
6,475,856
2012
$
2011
$
243,656
20,552
15,529
995
50,111
330,843
34,787
-
19,515
1,199
5,701
61,202
32,823
32,823
(a)
Risk Exposure
The Consolidated Entity’s exposure to credit and interest rate risks is discussed in Note 23.
(b)
Impaired Trade Receivables
None of the Consolidated Entity's receivables are impaired or past due.
11.
INVENTORIES
Current
Bulk Oils - at cost
Packaged Oils - at cost
Non Current
Land held for Development or Resale
Revaluation of Land
2012
$
2011
$
206,320
71,275
277,595
890,093
109,337
999,430
3,797,339
(2,157,339)
1,640,000
3,797,339
(1,997,339)
1,800,000
Land held for development or resale was valued by an independent qualified valuer (an Associate Member of
the Australian Property Institute) on 30 June 2012. The movement in the land value has been recognised in
the Statement of Comprehensive Income.
12.
OTHER CURRENT ASSETS
Prepayments
2012
$
5,895
2011
$
5,057
ANNUAL REPORT | 36
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
13.
INVESTMENT IN ASSOCIATE ENTITY
Bentley Capital Limited
Movement in Investment
Opening Balance
Share of Net Profit/(Loss) after tax
Dividend Received
Returns of Capital Received
Closing Balance
Ownership Interest
Carrying Amount
2012
%
30.34
2011
%
30.65
2012
$
4,854,638
2011
$
7,571,638
7,571,638
(625,086)
(756,649)
(1,335,265)
4,854,638
7,835,522
181,205
(445,089)
-
7,571,638
Fair Value of Listed Investment in Associate
3,077,067
4,895,970
Net Asset Value of Investment
6,089,773
8,830,325
Summarised Position of Associate
2012
Bentley Capital Limited
2011
Bentley Capital Limited
Assets
$
Liabilities
$
Revenues
$
Net
$
6,197,893
108,120
173,959
(625,086)
8,853,507
23,182
573,751
181,205
14.
PROPERTY, PLANT AND EQUIPMENT
Land
At Cost
Revaluation
Buildings
At Cost
Accumulated Depreciation
Plant & Equipment
At Cost
Accumulated Depreciation
Leasehold Improvements
At Cost
Accumulated Depreciation
2012
$
2011
$
861,214
138,687
999,901
861,214
167,256
1,028,470
117,876
(38,792)
79,084
117,876
(32,380)
85,496
1,452,478
(900,139)
552,339
1,379,187
(759,982)
619,205
44,264
(37,905)
6,359
44,264
(36,826)
7,438
1,637,683
1,740,609
ANNUAL REPORT | 37
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
14.
PROPERTY, PLANT AND EQUIPMENT (continued)
Movements in Carrying Amounts
Movements in the carrying amounts for each class of property, plant and equipment between the beginning
and the end of the current financial year.
AT 1 JULY 2010
Revaluation
Additions
Disposals
Depreciation expense
Freehold
Land
$
1,199,881
(171,411)
-
-
-
AT 30 JUNE 2011
1,028,470
AT 1 JULY 2011
Revaluation
Additions
Disposals
Depreciation expense
AT 30 JUNE 2012
1,028,470
(28,569)
-
-
-
999,901
Buildings
$
86,840
-
5,444
-
(6,788)
85,496
85,496
-
-
-
(6,412)
79,084
Plant &
Equipment
$
808,257
-
12,543
(2,202)
(199,393)
619,205
619,205
-
11,857
-
(78,723)
552,339
Leasehold
Improve-
ments
$
8,702
-
-
-
(1,264)
7,438
7,438
-
-
-
(1,079)
6,359
Total
$
2,103,680
(171,411)
17,987
(2,202)
(207,445)
1,740,609
1,740,609
(28,569)
11,857
-
(86,214)
1,637,683
Land was valued by an independent qualified valuer (an Associate Member of the Australian Property
Institute) on 30 June 2012. The movement in the land value has been recognised in the Asset Revaluation
Reserve (Note 21).
15.
OLIVE TREES
Olive Trees - at cost
Revaluation
2012
$
300,000
(234,500)
65,500
2011
$
300,000
(234,500)
65,500
Approximately 64,500 13 year old olive trees have been planted over Orion's 143 hectare Olive Grove located
in Gingin, Western Australia. The fair value of the trees is at the Directors' Valuation having regard to,
amongst other matters, replacement cost and value of commercial production of the trees.
16.
INTANGIBLE ASSETS
Water Licence
At Cost
Revaluation
Brand Name
At Cost
2012
$
2011
$
250,000
377,750
627,750
250,000
432,062
682,062
99,996
99,996
727,746
782,058
ANNUAL REPORT | 38
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
16.
INTANGIBLE ASSETS (continued)
AT 1 JULY 2010
Revaluation
AT 30 JUNE 2011
AT 1 JULY 2011
Revaluation
AT 30 JUNE 2012
Water
Licence
$
784,687
(102,625)
682,062
682,062
(54,312)
627,750
Brand
Name
$
99,996
-
99,996
99,996
-
99,996
Total
$
884,683
(102,625)
782,058
782,058
(54,312)
727,746
The Water Licence pertains to Orion's Olive Grove property in Gingin, Western Australia. As at 30 June 2012,
an independent qualified valuer (a Certified Practising Valuer and Associate Member of the Australian
Property Institute) revalued the water licence downwards by $54,312 from the previous reporting date. The
Brand Name pertains to the ultra premium Dandaragan Estate Olive Oil brand
17.
TRADE AND OTHER PAYABLES
Current
Trade Payables
Dividend Payable
GST Payable
Prepaid Rental Income
Other Payables and Accrued Expenses
2012
$
2011
$
19,975
28,302
44,236
26,951
137,178
256,642
260,095
28,302
-
-
333,840
622,237
(a)
Risk Exposure
The Consolidated Entity’s exposure to risks arising from current payables is set out in Note 23.
18.
PROVISIONS
Current
Employee Benefits - Annual Leave
Employee Benefits - Long Service Leave
Non Current
Employee Benefits - Long Service Leave
2012
$
33,624
169,106
202,730
2011
$
-
-
-
-
197,479
(a)
Amounts not expected to be settled within 12 months
The provision for annual leave and long service leave is presented as current since the Consolidated
Entity does not have an unconditional right to defer settlement for any of these employee benefits.
Long service leave covers all unconditional entitlements where employees have completed the required
period of service and also where employees are entitled to pro-rata payments in certain circumstances
Based on past experience, the employees have never taken the full amount of long service leave or
require payment within the next 12 months. The following amounts reflect leave that is not expected to
be taken or paid within the next 12 months:
Leave obligations expected to be settled after 12 months
2012
$
169,106
2011
$
-
ANNUAL REPORT | 39
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
19.
DEFERRED TAX
Deferred Tax Assets - Non Current
Employee Benefits & Accruals
Tax Losses
Other
Deferred Tax Liabilities - Non Current
Fair Value Gains
Other
2012
$
2011
$
86,911
-
271,340
358,251
99,568
321,292
745,028
1,165,888
267,504
90,747
358,251
1,057,472
108,416
1,165,888
(a)
Movements - Deferred Tax Assets
AT 1 JULY 2010
Credited/(charged) to the profit and
loss
AT 30 JUNE 2011
AT 1 JULY 2011
Credited/(charged) to the profit and
loss
AT 30 JUNE 2012
Employee
Benefits
$
108,577
Tax Losses
$
1,008,506
Other
$
985,108
Total
$
2,102,191
(9,009)
99,568
(687,214)
321,292
(240,080)
745,028
(936,303)
1,165,888
99,568
321,292
745,028
1,165,888
(12,657)
86,911
(321,292)
-
(473,688)
271,340
(807,637)
358,251
(b)
Movements - Deferred Tax Liabilities
AT 1 JULY 2010
Charged/(Credited) to the profit and
loss
Charged to Equity
AT 30 JUNE 2011
AT 1 JULY 2011
Charged/(Credited) to the profit and
loss
Charged to Equity
AT 30 JUNE 2012
Fair Value
Gains
$
1,899,035
Other
$
203,156
Total
$
2,102,191
(841,563)
-
1,057,472
(12,529)
(82,211)
108,416
(854,092)
(82,211)
1,165,888
1,057,472
108,416
1,165,888
(789,968)
-
267,504
7,195
(24,864)
90,747
(782,773)
(24,864)
358,251
ANNUAL REPORT | 40
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
20.
ISSUED CAPITAL
Fully paid ordinary shares
Partly paid ordinary shares
2012
Number
28,404,879
20,000,000
2011
Number
28,404,879
20,000,000
2012
$
5,887,927
304,500
6,192,427
2011
$
5,887,927
304,500
6,192,427
(a)
Ordinary Shares
At any meeting, each shareholder present in person or by proxy, attorney, or representative has one
vote for each fully paid ordinary share held either upon a show of hands or by a poll. Holders of partly
paid ordinary shares have a fraction of a vote for each partly paid share held, with the fractional vote of
each share being equivalent to the proportion of the total amount paid and payable (excluding amounts
credited) that has actually been paid (not credited) for each share. Amounts paid in advance of a call
are ignored when calculating proportions. The holder of a partly paid ordinary share is not entitled to
vote at a meeting in respect of those shares on which calls are outstanding.
The profits of the Consolidated Entity, which the Directors may from time to time determine to distribute
to shareholders by way of dividends, will be divisible amongst the shareholders in proportion to the
amounts paid on the shares. An amount paid in advance of a call is not to be included as an amount
paid on a share for the purposes of calculating an entitlement to dividends.
There were no movements in fully paid and partly paid ordinary shares during the year.
(c)
Share Buy-Back
On 17 April 2012, the Company announced its intention to conduct an on-market share buy-back of up
to 2,700,000 shares (Buy-Back). This represents ~9.1% of the pre Buy-Back and 10% of the post Buy-
Back total voting shares of the Company (having regard to the amount paid up on the partly paid
shares). In accordance with ASX Listing Rule 7.33, the Company will not pay any more than 5% above
the average of the market price for the Company's shares over the last 5 days on which sales in the
shares were recorded prior to the Buy-Back occurring. The Buy-Back will continue until the earlier of
the acquisition of the 2.7 million Buy-Back shares and 30 April 2013, subject to the Company exercising
its right to suspend or terminate the Buy-Back, or amend its terms, at any time.
No shares have been bought-back by the Company under the Buy-Back during the financial year.
(d)
Capital Risk Management
The Company's objectives when managing its capital are to safeguard their ability to continue as a going
concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders
and to maintain a capital structure balancing the interests of all shareholders.
The Board will consider capital management initiatives as is appropriate and in the best interests of the
Company and shareholders from time to time, including undertaking capital raisings, share Buy-backs,
capital reductions and the payment of dividends.
ANNUAL REPORT | 41
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
21.
RESERVES
Option Premium Reserve
Asset Revaluation Reserve
Revaluations of Freehold Land
Revaluations of Intangible Assets
Less: Deferred Tax on Revaluations
2012
$
2,138,012
2011
$
2,138,012
70,564
192,199
(78,829)
183,934
85,100
219,833
(91,480)
213,453
2,321,946
2,351,465
The movement in the Asset Revaluation Reserve relates to the revaluation of Orion's Olive Grove land from
$1,028,470 to $999,901 and Orion's Water Licence from $682,062 to $627,750, as assessed by an
independent qualified valuer (a Certified Practising Valuer and Associate Member of the Australian Property
Institute).
22.
SEGMENT INFORMATION
The operating segments are reported in a manner consistent with the internal reporting provided to the
"Chief Operating Decision Maker". The "Chief Operating Decision Maker", who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the Board of
Directors.
The Board has considered the business and geographical perspectives of
the operating results and
determined that the Consolidated Entity operates only within Australia, with the main segments being
Investments and Olive Oil Production. Unallocated items are mainly comprised of corporate assets, office
expenses and income tax assets and liabilities.
Olive Oil Investments Unallocated
$
$
$
Total
$
2012
Segment Revenues
Segment Loss before tax
Segment Assets
Segment Liabilities
2011
Segment Revenues
Segment Loss before tax
Segment Assets
Segment Liabilities
767,427
(585,648)
52,531
(3,525,108)
104,214
(1,256,106)
924,172
(5,366,862)
2,934,315
185,698
10,650,611
86,366
2,182,056
545,559
15,766,982
817,623
450,027
(400,646)
696,723
(1,666,151)
79,341
(890,650)
1,226,091
(2,957,447)
3,580,510
(398,116)
15,847,492
-
2,956,703
(1,587,488)
22,384,705
(1,985,604)
23. FINANCIAL RISK MANAGEMENT
investments in listed securities, and other unlisted securities. The principal activity of
instruments consist of deposits with banks, accounts receivable and
The Consolidated Entity's financial
payable,
the
Consolidated Entity is the management of these investments - "financial assets at fair value" (refer to Note
9). The Consolidated Entity's investments are subject to market (which includes interest rate and price risk),
credit and liquidity risks.
ANNUAL REPORT | 42
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
23.
FINANCIAL RISK MANAGEMENT (continued)
The Board of Directors is responsible for the overall
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
internal control
The financial receivables and payables of the Consolidated Entity in the table below are due or payable within
30 days. The financial investments are held for trading and are realised at the discretion of the Board of
Directors.
The Consolidated Entity holds the following financial instruments:
Financial Assets
Cash and Cash Equivalents
Financial Assets at Fair Value through Profit or Loss
Trade and Other Receivables
Financial Liabilities
Trade and Other Payables
NET FINANCIAL ASSETS
Note
8
9
10
17
2012
$
2,008,853
3,827,155
330,843
6,166,851
2011
$
1,684,644
6,475,856
61,202
8,221,702
(256,642)
(256,642)
(622,237)
(622,237)
5,910,209
7,599,465
(a)
Market Risk
(i)
Price Risk
The Consolidated Entity is exposed to equity securities price risk. This arises from investments held
by the Consolidated Entity and classified in the Statement of Financial Position at fair value through
profit or loss. The Consolidated Entity is not exposed to commodity price risk, save where this has
an indirect impact via market risk and equity securities price risk.
The value of a financial instrument will fluctuate as a result of changes in market prices, whether
those changes are caused by factors specific to the individual instrument or its issuer or factors
affecting all instruments in the market. By its nature as an investment company, the Consolidated
Entity will always be subject to market risk as it invests its capital in securities that are not risk free -
the market price of these securities can and will fluctuate. The Consolidated Entity does not
manage this risk through entering into derivative contracts, futures, options or swaps.
Equity price risk is minimised through ensuring that investment activities are undertaken in
accordance with Board established mandate limits and investment strategies.
The Consolidated Entity has performed a sensitivity analysis on its exposure to market price risk at
balance date. The analysis demonstrates the effect on the current year results and equity which
could result from a change in these risks. The ASX All Ordinaries Accumulation Index was utilised
as the benchmark for the unlisted and listed share investments which are financial assets available-
for-sale or at fair value through profit or loss.
Impact on Post-Tax Profit
2011
$
2012
$
Impact on Other
2012
$
2011
$
ASX All Ordinaries Accumulation Index
Increase 15%
Decrease 15%
2,201,273
(2,201,273)
445,767
(445,767)
2,201,273
(2,201,273)
445,767
(445,767)
ANNUAL REPORT | 43
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
23.
FINANCIAL RISK MANAGEMENT (continued)
(a)
Market Risk (continued)
Interest Rate Risk
(ii)
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in
market interest rates. The Consolidated Entity's exposure to market risk for changes in interest
rates relate primarily to investments held in interest bearing instruments. The average interest rate
for the year for the table below is 4.79% (2011: 4.64%). The revenue exposure is immaterial in
terms of the possible impact on profit or loss or total equity.
Cash at Bank and in hand
Short-Term Deposits
2012
$
888,853
1,120,000
2,008,853
2011
$
1,652,555
32,089
1,684,644
(b)
Credit Risk
Credit risk refers to the risk that a counterparty under a financial instrument will default (in whole or in
part) on its contractual obligations resulting in financial loss to the Consolidated Entity. Credit risk arises
from cash and cash equivalents and deposits with banks and financial institutions, including outstanding
receivables and committed transactions. Concentrations of credit risk are minimised primarily by
undertaking appropriate due diligence on potential
investments, carrying out all market transactions
through approved brokers, settling non-market transactions with the involvement of suitably qualified
legal and accounting personnel (both internal and external), and obtaining sufficient collateral or other
security (where appropriate) as a means of mitigating the risk of financial
loss from defaults. The
Consolidated Entity's business activities do not necessitate the requirement for collateral as a means of
mitigating the risk of financial loss from defaults.
The credit quality of the financial assets are neither past due nor impaired and can be assessed by
reference to external credit ratings (if available with Standard & Poor's) or to historical
information
about counterparty default rates. The maximum exposure to credit risk at reporting date is the carrying
amount of the financial assets as summarised below:
Cash and Cash Equivalents
AA
AA-
A-
BBB+
Trade Receivables (due within 30 days)
No external credit rating available
2012
$
-
2,007,643
1,728
-
2,009,371
2011
$
1,683,781
-
-
863
1,684,644
330,843
61,202
The Consolidated Entity measures credit risk on a fair value basis. The carrying amount of financial
assets recorded in the financial statements, net any provision for losses, represents the Consolidated
Entity's maximum exposure to credit risk.
(c)
Liquidity Risk
Liquidity risk is the risk that the Consolidated Entity will encounter difficulty in meeting obligations
associated with financial
liabilities. The Consolidated Entity has no borrowings. The Consolidated
Entity's non-cash investments can be realised to meet trade and other payables arising in the normal
course of business. The financial liabilities disclosed in the above table have a maturity obligation of not
more than 30 days.
ANNUAL REPORT | 44
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
23.
FINANCIAL RISK MANAGEMENT (continued)
(d)
Fair Value Measurements
The fair value of
measurement or for disclosure purposes.
financial assets and financial
liabilities must be estimated for recognition and
to AASB 7 Financial
As at 1 July 2009,
the Consolidated Entity has adopted the amendment
Instruments:Disclosures which requires disclosure of fair value measurements by level of the following
fair value measurement hierarchy:
(i)
(ii)
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
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
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
(iii)
The following tables present the Consolidated Entity’s financial assets and liabilities measured and
recognised at fair value at 30 June 2012.
2012
Financial Assets at Fair Value through
Profit or Loss:
Listed Investments at Fair Value
Unlisted Investments at Fair Value
2011
Financial Assets at Fair Value through
Profit or Loss:
Listed Investments at Fair Value
Unlisted Investments at Fair Value
Level 1
$
Level 2
$
Level 3
$
Total
$
3,781,585
-
6,475,856
-
-
-
-
-
-
45,570
3,781,585
45,570
-
-
6,475,856
-
The fair value of investments in unlisted shares are considered a level 3 investment as their fair value is
unable to be derived from market data.
24.
COMMITMENTS
Not longer than one year
Later than one year but not later than five years
2012
$
78,630
-
78,630
2011
$
104,929
110,176
215,105
The non-cancellable operating lease commitment is the Consolidated Entity's share of the office premises at
Level 14, The Forrest Centre, 221 St Georges Terrace, Perth, Western Australia, and includes all outgoings
(exclusive of GST). The lease is for a 7 year term expiring 30 June 2013 and contains a rent review increase
each year alternating between 5% and the greater of market rate or CPI + 1%.
ANNUAL REPORT | 45
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2012
25.
CONTINGENCIES
(a)
(b)
Directors' Deeds
The Company has entered into Deeds of Indemnity with each of its Directors indemnifying them against
liability incurred in discharging their duties as Directors/Officers of the Consolidated Entity. At the end
of the financial period, no claims have been made under any such indemnities and accordingly, it is not
possible to quantify the potential financial obligation of the Consolidated Entity under these indemnities.
Tenement Royalties
The Consolidated Entity is entitled to receive a royalty of 2% of gross revenues (exclusive of GST) from
any commercial exploitation of any minerals from various Australian tenements - EL47/1328 and
PL47/1170 (the Paulsens East Project tenements currently held by Strike Resources Limited (Strike)), EL
24879, 24928 and 24929 and ELA 24927 )the Bigryli South Project tenements in the Northern Territory,
current held by Alara Resources Limited (Alara)) and a right to earn and acquire an 85% interest in ELA
46/585 (excluding all manganese mineral rights) (the Canning Well Project tenements in Western
Australia, currently held by Alara).
26.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
(a)
On 31 August 2012, Bentley Capital Limited, announced its intention to seek shareholder approval to
undertake a one cent per share return of capital (Return of Capital). The Return of Capital is to be
effected by Bentley seeking shareholder approval for a reduction in the share capital of the company by
returning one cent per share to shareholders – this equates to an aggregate reduction of share capital
by approximately $0.733 million based upon the company’s 73,350,541 shares currently on issue. No
shares will be cancelled as a result of the Return of Capital. Accordingly, the number of shares held by
each shareholder will not change as a consequence of the Return of Capital. The Return of Capital is
subject to Bentley shareholder approval which will be sought at the upcoming 2012 annual general
meeting in November 2012.
If Bentley shareholders approve this Return of Capital, the Company's
entitlement under the Return of Capital is expected to be $17,406 and Orion's entitlement under the
same is expected to be $205,138.
No other matter or circumstance has arisen since the end of the financial year that significantly affected, or
may significantly affect, the operations of the Consolidated Entity, the results of those operations, or the
state of affairs of the Consolidated Entity in future financial years.
ANNUAL REPORT | 46
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
(1)
The financial statements, comprising the Statement of Comprehensive Income, Statement of Financial
Position, Statement of Changes in Equity and Statement of Cash Flow and accompanying notes as set out
on pages 20 to 46 are in accordance with the Corporations Act 2001 and:
(a)
(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
2012 and of its performance for the year ended on that date;
(2)
(3)
(4)
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 Remuneration Report disclosures set out (within the Directors’ Report) on pages 14 to 16 (as the
audited Remuneration Report) comply with section 300A of the Corporate Act 2001;
The Directors have been given the declarations required by section 295A of the Corporations Act 2001 by
the Executive Chairman and Managing Director (the person who performs the chief executive function)
and the Company Secretary (the person who, in the opinion of the Directors, performs the chief financial
officer function); and
(5)
The Company has included in the notes to the Financial Statements an explicit and unreserved statement
of compliance with the International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Directors made pursuant to section 295(5) of the
Corporations Act 2001.
Farooq Khan
Chairman
31 August 2012
Simon Cato
Director
ANNUAL REPORT | 47
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 2012, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting
Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
company’s preparation of the financial report that gives a true and fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of Queste Communications Ltd, would be in the same terms if
given to the directors as at the time of this auditor’s report.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
Opinion
In our opinion:
(a)
the financial report of Queste Communications Ltd is in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June
2012 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2012. The directors of the company are responsible for the preparation and presentation of
the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Queste Communications Ltd for the year ended 30 June
2012 complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Chris Burton
Directors
Perth, Western Australia
Dated this 31st day of August 2012
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CORPORATE GOVERNANCE
Compliance with Corporate Governance Council’s
Principles
The extent to which the Company has followed the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations with 2010 Amendments (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:
(cid:120)
(cid:120)
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
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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 | 50
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CORPORATE GOVERNANCE
Compliance
CGS References /
Comments
Principle
(cid:120)
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:
(cid:120)
(cid:120)
(cid:120)
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:
(cid:120)
(cid:120)
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
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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
(cid:120)
details of the names and qualifications of those appointed to the audit committee
ANNUAL REPORT | 51
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CORPORATE GOVERNANCE
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.
(cid:120)
(cid:120)
The following material should be made publicly available, ideally by posting it to the
company’s website in a clearly marked corporate governance section:
(cid:120)
(cid:120)
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:
(cid:120)
an explanation of any departures from best practice recommendations 7.1, 7.2, 7.3
or 7.4;
Annual Reports
Website
CGS
ANNUAL REPORT | 52
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CORPORATE GOVERNANCE
Compliance
CGS References /
Comments
Principle
(cid:120)
(cid:120)
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:
(cid:120)
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
(cid:120)
(cid:120)
(cid:120)
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:
(cid:120)
(cid:120)
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.
ANNUAL REPORT | 53
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE STATEMENT (CGS)
1.
Framework and Approach to Corporate
Governance and Responsibility
The Board is committed to maintaining high standards of
corporate governance. Good corporate governance is
about having a set of core values and behaviours that
underpin
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.
responsibility
the
Company.
the
The Board has
the successful operations of
for
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;
(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)
reviewing and approving
the audited
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
identifying
for
nomination as Directors; and
individuals
specific
(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 2012.
ANNUAL REPORT | 54
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CORPORATE GOVERNANCE
3.1.
Skills, Knowledge and Experience
Directors are appointed based on the specific corporate
and governance skills and experience required by the
Company.
The Board recognises its need to contain Directors with a
relevant blend of personal experience in accounting and
finance, law, financial and investment markets, financial
management and public company administration and
Director-level business or corporate experience, having
regard to the scale and nature of the Company’s activities.
A Director is initially appointed by the Board and retires
(and may stand for re-election) at the next Annual General
Meeting after their appointment.
3.2.
Executive Chairman and Managing Director
The Executive Chairman/Managing Director leads the
Board and has responsibility for ensuring that the Board
receives accurate, timely and clear information to enable
Directors to perform their duties as a Board. The
Executive Chairman and Managing Director of
the
Company is Mr Farooq Khan, whose qualifications and
experience are stated in the Directors’ Report for the
financial year ended 30 June 2012.
3.3. Non-Executive Directors
The Company recognises the importance of Non-Executive
Directors and the external perspective and advice that
Non-Executive Directors can offer. Three of the current
Board’s four Directors are Non-Executive Directors – Mr
Yaqoob Khan, Mr Azhar Chaudhri and Mr Simon Cato.
Their qualifications and experience are stated in the
Directors’ Report for the financial year ended 30 June
2012.
3.4.
Company Secretary
The Company Secretary is appointed by the Board and is
responsible for developing and maintaining the information
systems and processes that are appropriate for the Board
to fulfil its role and is responsible to the Board for ensuring
compliance with Board procedures and governance
matters. The Company Secretary is also responsible for
overseeing and coordinating disclosure of information to
the ASX as well as communicating with the ASX. The
Company Secretary is Mr Victor Ho, whose qualifications
and experience are stated in the Directors’ Report for the
financial year ended 30 June 2012.
3.5.
Independence
An independent Director, in the view of the Company, is a
Non-Executive Director who:
(1)
(2)
(3)
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;
(4)
is not a material supplier or customer of the
Company, or an officer of or otherwise associated
(5)
(6)
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
is free from any interest and any business or other
relationship which could, or could reasonably be
perceived
the
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).
3.7. Related-Party Transactions
Related party transactions include any financial transaction
between a Director and the Company as defined in the
Corporations Act or the ASX Listing Rules. Unless there is
an exemption under the Corporations Act from the
requirement to obtain shareholder approval for the related
party
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 | 55
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CORPORATE GOVERNANCE
3.9.
Board Nominations
The Board will consider nominations for appointment or
election of Directors that may arise from time to time
having regard to the corporate and governance skills
required by the Company and procedures outlined in the
Constitution and the Corporations Act.
3.10. Terms of Appointment as a Director
The current Directors of the Company have not been
appointed for fixed terms. The constitution of the
Company provides that a Director (other than a Managing
Director) may not retain office for more than three
calendar years or beyond the third Annual General Meeting
following their election, whichever is longer, without
submitting himself or herself for re-election. One third of
the Directors (save for a Managing Director) must retire
each year and are eligible for re-election. The Directors
who retire by rotation at each Annual General Meeting are
those with the longest length of time in office since their
appointment or last election.
The initial appointment and last re-election dates of each
Director are listed below.
Director
Farooq Khan
Appointed
10 March 1998
Yaqoob Khan
10 March 1998
Azhar Chaudhri
Simon Cato
4 August 1998
11 February
2008
AGM Last Re-elected
N/A – being the
Managing Director
18 November 2009
(standing for re-
election at 2012 AGM)
4 November 2011
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 Directors’ Report for the
financial year ended 30 June 2012 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 | 56
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CORPORATE GOVERNANCE
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 2012, 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 Directors’
Report for the financial year ended 30 June 2012.
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
ANNUAL REPORT | 57
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CORPORATE GOVERNANCE
A key principle of the Company’s compliance risk
management strategy is to foster an integrated approach
where line managers are responsible and accountable for
compliance, within their job descriptions and within overall
guidance developed by the Company Secretary assisted by
the General Counsel.
The Company’s compliance strategy is kept current with
advice from senior external professionals and the ongoing
training of Executives and other senior personnel involved
in compliance management.
The Company has policies on responsible business
practices and ethical behaviour including conflict of
interest and share trading policies to maintain confidence
in the Company’s integrity and ensure legal compliance.
to
risks
risk encompasses
the Company’s
Market
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
developments
in operations and changing market
conditions.
it evolves
constantly
response
in
Further details are also in Note 23 (Financial Risk
Management) to the financial statements for the financial
year ended 30 June 2012.
that
the Executive
The Board has determined
Chairman/Managing Director is the appropriate person to
make the Chief Executive Officer equivalent declaration
and the Company Secretary is the appropriate person to
make the Chief Financial Officer equivalent declaration in
respect of the financial year ended 30 June 2012, on the
risk management and internal compliance and control
systems recommended by the Council.
Management has reported to the Board as to the
its
effectiveness of the Company's management of
material business risks.
7.2.
Audit
The Company's external auditor (Auditor) is selected for
its professional competence, reputation and the provision
of value for professional fees. Within the audit firm, the
partner responsible for the conduct of the Company’s
audits is rotated every three years.
The Auditor is invited to attend the Company’s annual
general meetings (in person or by teleconference) to
answer shareholder questions about the conduct of the
audit and the preparation and content of the Auditor’s
report.
8.
Communications
8.1. Market and Shareholder Communications
is
The Company is owned by shareholders. Increasing
the Company’s key mission.
shareholder value
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
The Executive
approvals as appropriate.
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 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
to answer shareholder
employees available
questions submitted by telephone, email and other
means.
The Company actively promotes communication with
shareholders through a variety of measures, including the
use of the Company’s website and email. The Company’s
reports and ASX announcements may be viewed and
downloaded from its website: www.queste.com.au or the
ASX website: http://www.queste.com.au under ASX code
“QUE”. The Company also maintains an email list for the
distribution of the Company’s announcements via email in
a timely manner.
ANNUAL REPORT | 58
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CORPORATE GOVERNANCE
8.2.
Continuous Disclosure to ASX
The Board has designated the Company Secretary as the
person responsible
for overseeing and coordinating
disclosure of information to ASX as well as communicating
with ASX.
In accordance with the Corporations Act and ASX Listing
Rule 3.1 the Company immediately notifies ASX of
information concerning the Company that a reasonable
person would expect to have a material effect on the price
or value of the Company’s securities, subject to exceptions
permitted by that rule. A reasonable person is taken to
expect information to have a material effect on the price
or value of the Company’s securities if the information
would, or would be likely to, influence persons who
commonly invest in securities in deciding whether to
acquire or dispose of the Company’s securities.
All staff are required to inform their reporting manager of
any potentially price-sensitive information concerning the
Company as soon as they become aware of it. Reporting
managers are in turn required to inform the Executive
Director to whom they report or, in their absence, another
Executive Director of any potentially price-sensitive
information.
In general, the Company will not respond to market
speculation or rumours unless required to do so by law or
by the ASX Listing Rules.
Only the Executive Chairman has general responsibility to
speak to the media, investors and analysts on the
Company’s behalf. Other Directors or senior Executives
may be given a brief to do so on particular occasions.
The Company will keep a summary record for internal use
of the issues discussed at group or one-on-one briefings
with investors and analysts, including a record of those
present and the time and place of the meeting.
The Company may request a trading halt from ASX to
prevent trading in its securities if the market appears to be
uninformed. The Executive Directors are authorised to
determine whether to seek a trading halt.
22 October 2012
ANNUAL REPORT | 59
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
ADDITIONAL ASX INFORMATION
as at 30 September 2012
DISTRIBUTION OF LISTED ORDINARY FULLY PAID SHARES
Spread of Holdings
Number of Holders
Number of Units
1
1,001
5,001
10,001
100,001
Total
-
-
-
-
-
1,000
5,000
10,000
100,000
and over
Unmarketable Parcels
14
61
74
114
26
289
8,255
179,148
695,165
3,060,720
24,461,591
28,404,879
% of Total Issue
Capital
0.029%
0.631%
2.447%
10.775%
86.118%
100%
Spread
1
of
-
Holdings
Number of Holders Number of Units
% of Total Issue
Capital
5,555
75
187,403
0.660%
An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of
5,555 shares or less, being a value of $500 or less in total, based upon the Company’s closing
share price on 30 September 2012 of 9 cents per share.
DISTRIBUTION OF UNLISTED PARTLY PAID ORDINARY SHARES
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 | 60
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
ADDITIONAL ASX INFORMATION
as at 30 September 2012
TOP 20 ORDINARY FULLY PAID SHAREHOLDERS
Rank Shareholder
1 BELL IXL INVESTMENTS LIMITED
CELLANTE SECURITIES PTY LIMITED
CLEOD PTY LTD
2 MR FAROOQ KHAN
ISLAND AUSTRALIA PTY LTD
3 MR AZHAR CHAUDHRI
CHI TUNG INVESTMENTS LTD
RENMUIR HOLDINGS LTD
4 MANAR NOMINEES PTY LTD
MANAR NOMINEES PTY LTD
5 COWOSCO CAPITAL PTY LTD
6 MR DONALD GORDON MACKENZIE & MRS GWENNETH EDNA MACKENZIE
7 MS ROSANNA DE CAMPO
8 GIBSON KILLER PTY LTD
9 MR AYUB KHAN
10 MRS AFIA KHAN
Shares
Held
Total
Shares
%
Issued
Capital
%
Voting
Power
2,999,747
2,053,282
2,326,112
Sub-total
7,379,141
25.978%
24.657%
2,286,367
3,668,577
Sub-total
5,954,944
20.965%
19.898%
907,450
1,050,000
3,277,780
Sub-total
5,235,230
18.431%
17.493%
1,725,663
180,500
Sub-total
1,906,163
6.711%
6.369%
1,150,000
4.049%
761,260
2.680%
268,100
0.944%
220,000
0.775%
215,000
0.757%
215,000
0.757%
11 MR SIMON KENNETH CATO & MRS KAYE LOUISE HOPKINS
ROSEMONT ASSET PTY LTD
118,000
75,000
Sub-total
193,000
0.679%
12 TOMATO 2 PTY LTD
13 VANTEL (AUSTRALIA) PTY LTD
14 GLENVIEW SERVICES PTY LTD
15 MR JOHN CHENG-HSIANG
16 MR ANTHONY NEALE KILLER & MRS SANDRA MARIE KILLER
17 MR GREGORY JOHN MATHESON
18 MR EUGENE RODRIGUEZ
19 MR NICHOLAS PASTERNATSKY
20 MR KEITH FRANCIS OATES & MRS LINDA ANN OATES
185,019
0.651%
150,000
0.528%
145,000
0.510%
136,125
0.479%
130,000
0.458%
110,742
0.390%
110,000
0.387%
103,750
0.365%
100,000
0.352%
3.843%
2.544%
0.896%
0.735%
0.718%
0.718%
0.645%
0.618%
0.501%
0.485%
0.455%
0.434%
0.370%
0.368%
0.347%
0.334%
Total
24,668,474
86.85%
82.43%
ANNUAL REPORT | 61
30 JUNE 2012
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
ADDITIONAL ASX INFORMATION
as at 30 September 2012
Substantial Shareholders
Registered Shareholder
Bell IXL Investments Limited and
associates
BELL IXL INVESTMENTS LIMITED
CELLANTE SECURITIES PTY LIMITED
CLEOD PTY LTD
Azhar Chaudhri, Renmuir Holdings
Limited and Chi Tung Investments Ltd
Farooq Khan and associates
MR AZHAR CHAUDHRI
CHI TUNG INVESTMENTS LTD
RENMUIR HOLDINGS LTD
CHI TUNG INVESTMENTS LTD
FAROOQ KHAN
ISLAND AUSTRALIA PTY LTD
Manar Nominees Pty Ltd and Zelwar
Superannuation Pty Ltd
MANAR NOMINEES PTY LTD
ZELWER SUPERANNUATION PTY LTD
Shares/Voting
Shares Held
Voting Power
2,999,747
2,053,282
2,326,112
907,450
1,050,000
3,277,780
1,522,5003
2,286,367
3,668,577
1,725,663
180,500
24.657%1
22.58%2
19.89%4
6.34%5
Notes:
(1)
(2)
(3)
(4)
(5)
Based on the substantial shareholding notice filed by Bell IXL Investments Limited dated 5 May 2012 (updated to reflect
current shareholdings)
Based on the substantial shareholding notice filed by Azhar Chaudhri and associates dated 1 May 2012
Voting shares attributable to 20,000,000 partly paid ordinary shares (issued at a price of 20 cents per share) which
have been partly paid to 1.5225 cent each
Based on the substantial shareholding notice filed by Farooq Khan and associate dated 30 April 2012
Based on the substantial shareholding notice filed by Manar Nominees Pty Ltd dated 29 December 2003
ANNUAL REPORT | 62
ASX Code: QUE
Queste Communications Ltd
A.B.N. 58 081 688 164
PRINCIPAL & REGISTERED OFFICE:
SHARE REGISTRY:
Advanced Share Registry Limited
Level 14, The Forrest Centre
221 St Georges Terrace
Perth, Western Australia 6000
Local T | 1300 762 678
T | (08) 9214 9777
F | (08) 9322 1515
E | info@queste.com.au
W | www.queste.com.au
Suite 2, 150 Stirling Highway
Nedlands, Western Australia 6009
Level 6, 225 Clarence Street
Sydney, New South Wales 2000
PO Box 1156, Nedlands
Western Australia 6909
PO Box Q1736, Queen Victoria Building
New South Wales 1230
T | (08) 9389 8033
F | (08) 9389 7871
E | admin@advancedshare.com.au
W | www.advancedshare.com.au
T | (02) 8096 3502