A.B.N 58 081 688 164
2018
ANNUAL REPORT
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONTENTS
CORPORATE DIRECTORY
Directors’ Report
2
BOARD
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of
Profit or Loss and
Other Comprehensive Income
10
17
18
Farooq Khan (Chairman and Managing Director)
(Executive Director)
(Non-Executive Director)
Victor Ho
Yaqoob Khan
COMPANY SECRETARY
Victor Ho
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
19
PRINCIPAL & REGISTERED OFFICE
Level 2
20
23 Ventnor Avenue
West Perth, Western Australia 6005
Telephone:
Facsimile:
(08) 9214 9777
(08) 9214 9701
info@queste.com.au
www.queste.com.au
Consolidated Statement of Cash Flows
21
Email:
Website:
Notes to the Consolidated Financial
22
Statements
Directors’ Declaration
Independent Audit Report
Additional ASX Information
49
50
53
AUDITORS
Rothsay Auditing
Chartered Accountants
Level 1, Lincoln House
4 Ventnor Avenue
West Perth, Western Australia 6005
Telephone:
Website:
(08) 9486 7094
www.rothsayresources.com.au
STOCK EXCHANGE
Australian Securities Exchange
Perth, Western Australia
ASX CODE
QUE
Queste’s 2018
Corporate Governance Statement
can be found at the following
URL on the Company’s website:
http://www.queste.com.au/corporate-governance
SHARE REGISTRY
Advanced Share Registry Limited (ASX:ASW)
Main Office
110 Stirling Highway
Nedlands, Western Australia 6009
Local Telephone:
Telephone:
Facsimile:
Email:
1300 113 258
(08) 9389 8033
(08) 9262 3723
admin@advancedshare.com.au
Visit www.queste.com.au for:
•
•
•
•
•
Market Announcements
Financial Reports
Corporate Governance
Forms
Email subscription
Investor Web:
www.advancedshare.com.au
Sydney Office
Suite 8H, 325 Pitt Street
Sydney, New South Wales 2000
Telephone:
(02) 8096 3502
ANNUAL REPORT | 1
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
The Directors present their report on Queste Communications Ltd ABN 58 081 688 164 (Company or QUE) and
its controlled entities (Queste or the Consolidated Entity) for the financial year ended 30 June 2018 (Balance
Date).
QUE is a public company limited by shares that is incorporated and domiciled in Western Australia and has been
listed on the Australian Securities Exchange (ASX) since November 1998. (ASX Code: QUE)
Queste’s results incorporate the results of controlled entity, ASX-listed investment company, Orion Equities
Limited ABN 77 000 742 843 (Orion or OEQ). The Company has a 59.86% (9,367,653 shares) shareholding
interest in Orion (30 June 2017: 59.86% (9,367,653 shares)).
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,
and an olive grove operation.
FINANCIAL POSITION
COMPANY
Cash and cash equivalents
Current investments - equities
Investment in Associate entity (BEL)
Investment in controlled entity (OEQ)
Receivables
Deferred tax assets
Other assets
Total Assets
Tax liabilities (current and deferred)
Other payables and liabilities
Net Assets
Issued capital
Reserves
Accumulated losses
Total Equity
OPERATING RESULTS
COMPANY
Total revenues
Share of Associate entity’s profit/(loss)
Other Expenses
Profit/(Loss) before tax
Income tax expense
Profit/(Loss) for the year
2018
$
123,108
15,302
84,223
2017
$
27,774
3
57,487
1,545,663
1,405,148
3,906
523,632
54,325
8,245
523,632
53,757
2,350,159
2,076,046
-
-
(202,789)
(154,391)
2,147,370
1,921,655
6,239,370
2,347,229
6,149,888
2,138,012
(6,439,229)
(6,366,245)
2,147,370
1,921,655
2018
$
233,614
(32,224)
2017
$
13,737
(79,013)
(144,170)
(249,769)
57,220
(315,045)
-
-
57,220
(315,045)
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30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
EARNINGS PER SHARE
CONSOLIDATED ENTITY
Basic and diluted loss per share (cents)
Weighted average number of fully paid ordinary shares in the Company outstanding
during the year used in the calculation of basic and diluted earnings per share
DIVIDENDS
The Company’s Directors have not declared a dividend.
Orion paid a fully-franked special dividend during the financial year, as follows:
2018
(3.00)
2017
(5.11)
27,158,058
27,017,599
Dividend Rate
Record Date
Payment Date
0.90 cent per share
22 September 2017
29 September 2017
Franking
100% franked
The Company’s entitlement to the Orion dividend was $84,309.
Orion’s special dividend was funded from the company’s Profits Reserve account balance of $145,293 (at that time).
Orion’s Profits Reserve account ($2.784 million as at 30 June 2018) contains the appropriation of net profits from prior
relevant periods and represents profits available for distribution as dividends in future periods.
CAPITAL MANAGEMENT
(a)
Securities in the Company
At the Balance Date (and currently), the Company had 27,072,332 listed fully paid ordinary shares (30
June 2017: 26,578,358) on issue.
All such shares are listed on ASX. The Company does not have other securities on issue.
(b) Call and Conversion of Partly Paid Shares
On 10 October 2017, there was a conversion of 577,000 partly paid ordinary shares 1 into fully paid shares
upon payment of a call made by the Company in relation to 100% of the outstanding balance (being
$0.184775 each or $106,615 in total) due and payable in respect of these 577,000 partly paid shares.2
(c) Off-Market Equal Access Share Buy-Back
At the Company’s annual general meeting held on 30 November 2017, shareholders approved an equal
access scheme share buy-back of up to 100% of each shareholder’s shares in the Company (Buy-Back),
subject to a maximum cost to the Company of $300,000 (Buy-Back Cap).3
The record date for determining entitlements to participate in the Buy-Back was 7 December 2017 and on
11 December 2017, a Share Buy-Back Offer Booklet was despatched to eligible shareholders.
The Buy-Back was open to all shareholders on an equal basis. Participation by shareholders was entirely
voluntary, in whole or in part, in relation to their shareholding in the Company.
1 The terms of issue of the partly paid shares are disclosed in the Prospectus for the initial public offering of shares in the Company dated 6
August 1998 and also more recently, in the Company’s Share Buy-Back Offer Booklet dated 7 December 2017 and released on ASX on 11
December 2017
2 Refer Queste’s ASX announcement dated 19 October 2017: Appendix 3B – Application for Quotation of Additional Securities
3 Refer Queste ASX releases dated 30 October 2017: Information Memorandum for Annual General Meeting and 30 November 2017: Results of
2017 Annual General Meeting
ANNUAL REPORT | 3
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
As the Buy-Back Price (refer below) was set below the net tangible asset (NTA) backing of Queste, the
NTA backing of the Company has increased after completion of the Buy-Back. This benefits remaining
shareholders or those shareholders that only accepted the Company’s offer to buy back a portion of their
shares.
Please refer to Queste’s Information Memorandum 4 and Share Buy-Back Offer Booklet5 for further details
on the Buy-Back.
Under the Buy-Back (which closed on 5 January 2018)6:
(a)
(b)
83,026 fully paid ordinary shares were bought back for 5 cents per share, at a cost of $4,151.30;
and
5,193,000 partly-paid ordinary shares were bought back for 0.25 of a cent per share, at a cost of
$12,982.50.
The Buy-Back consideration was satisfied on 15 January 2018 as follows7:
(a)
(b)
Cash Component: One-third (by value) of an accepting shareholder’s Buy-Back consideration was
satisfied by Queste paying cash; and
Scrip Component: Two-thirds (by value) of an accepting shareholder’s Buy-Back consideration
was satisfied by Queste distributing shares in Bentley Capital Limited (ASX:BEL) (Bentley or BEL)
based on a deemed value of 15.3846 cents per BEL share (rounded to the nearest whole share in
BEL).
Queste may consider undertaking further/annual equal access scheme share buy-backs depending on the
Company’s financial position and the liquidity of trading in Queste shares on ASX shares at the relevant
time.
REVIEW OF OPERATIONS
1.
Orion Equities Limited (ASX: OEQ)
1.1. Current Status of Investment in Orion
Orion is an investment entity.
The Company holds 9,367,653 shares in Orion, being 59.86% of its issued ordinary share capital (2017:
9,367,653 shares and 59.86%). Orion has been recognised as a controlled entity and included as part of
the Queste’s results since 1 July 2002.
Queste shareholders are advised to refer to the 30 June 2018 Full Year Report and monthly NTA
disclosures lodged by Orion for further information about the status and affairs of the 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 and 1.3 below contain information extracted from Orion’s public statements.
4 Refer Queste ASX release dated 30 October 2017: Information Memorandum for Annual General Meeting and 30 November 2017: Results of
2017 Annual General Meeting
5 Refer Queste ASX release dated 11 December 2017: Share Buy-Back Offer Booklet
6 Refer Queste’s ASX announcements dated 9 January 2018: Results of Completion of Equal Access Share Buy-Back and dated 9 January 2018:
ASX Appendix 3F – Final Share Buy-Back Notice
7 Refer Section 2.3.3 of the Share Buy-Back Offer Booklet
ANNUAL REPORT | 4
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QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
1.2. Orion’s Portfolio Details as at 30 June 2018
Asset Weighting
Australian equities
Agribusiness 8
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
% of Net Assets
2018
45%
35%
31%
-
(11)%
100%
2017
48%
30%
24%
-
(2)%
100%
Equities
Bentley Capital Limited
Strike Resources Limited
CBG Australian Equities Fund (Wholesale) (CBG Fund)
TOTAL
Fair Value
$’million
% of Net
Assets
ASX
Code
Industry Sector
Exposures
1.95
0.53
-
49%
13%
-
BEL
SRK
N/A
2.48
62%
Diversified
Materials
Diversified
1.3. Orion’s Assets
(a) Bentley Capital Limited (ASX: BEL)
Bentley is a listed investment company.
Queste holds 1.61% (1,225,752 shares) of Bentley’s issued ordinary share capital with Orion holding
26.95% (20,513,783 shares) of Bentley’s issued ordinary share capital (2017: Queste held 1,300,000
shares (1.72%) and Orion held 20,513,783 shares (26.95%)).
Bentley’s asset weighting as at 30 June 2018 was 95.1% Australian equities (2017: 93.5%), 1% intangible
assets (2017: 1.7%) and 3.9% net cash/other assets (2017: 4.8%).
Bentley had net assets of $9.347 million as at 30 June 2018 (2017: $11.95 million) and incurred an after-
tax net loss of $1.844 million for the financial year (2016: $3.679 million after-tax net profit).
Bentley paid two 0.50 cent fully franked dividends that were distributed in August 2017 and January 2018
at a total cost of $0.761 million (2017 distributions: two 0.50 cent fully franked dividend totaling $0.756
million).
Orion received $205,138 distributions from Bentley during the financial year (2017: $205,138).
Queste received $13,000 distributions from Bentley during the financial year (2017: $13,000).
Subsequent to 30 June 2018, Bentley paid a fully-franked dividend of 0.50 cent per share. Orion’s and
Queste’s entitlement to this dividend was $102,569 and $6,500 respectively.
8 Agribusiness net assets include olive grove land, olive trees, buildings and plant and equipment.
ANNUAL REPORT | 5
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
Bentley has a long distribution track record, as illustrated below:
Rate per share
0.50 cent
0.50 cent
0.50 cent
0.50 cent
0.50 cent
0.50 cent
0.50 cent
0.55 cent
0.95 cent
One cent
One cent
One cent
One cent
One cent
5.0 cents
2.4 cents
One cent
Nature
Dividend
Dividend
Dividend
Dividend
Dividend
Dividend
Dividend
Dividend
Dividend
Dividend
Return of capital
Return of capital
Return of capital
Return of capital
Return of capital
Dividend (Special)
Dividend
Payment Date
25 January 2018
25 August 2017
31 August 2017
31 March 2017
29 September 2016
18 March 2016
25 September 2015
20 March 2015
26 September 2014
21 March 2014
12 December 2013
18 April 2013
30 November 2012
19 April 2012
14 October 2011
26 September 2011
26 September 2011
Note:
Bentley has paid a distribution to shareholders every year (save on 4 occasions in its 32 year history) since its admission to ASX
in 1986. Refer to Bentley’s website for full distribution history
Shareholders are advised to refer to the 30 June 2018 Full Year Report and monthly NTA disclosures
lodged by Bentley for further information about the status and affairs of the company.
Information concerning Bentley may be viewed from its website: www.bel.com.au.
Bentley’s market announcements may also be viewed from the ASX website (www.asx.com.au) under ASX
code “BEL”.
(b) Strike Resources Limited (ASX: SRK)
Strike owns the high grade Apurimac Magnetite Iron Ore Project and Cusco Magnetite Iron Ore Project in
Peru and is currently developing its Burke Graphite Project in Queensland and lithium exploration
tenements in Western Australia; Strike also retains relatively strong cash reserves and liquid investments
totalling ~$4.82 million (as at 30 June 2018)9.
Orion holds 10,000,000 Strike shares (6.88%) (2017: 10,000,000 shares (6.88%)) while Bentley holds
52,553,493 Strike shares (36.16%) currently and as at 30 June 2018. Therefore, Orion has a deemed
relevant interest in 62,553,493 Strike shares (43.041%10).
During the year, SRK shares traded on ASX within a range of 6 to 8.7 cents with a closing price of 5.3
cents as at 30 June 2018 and a current closing price of 5.3 cents (as at 29 August 2018).
Orion generated a $0.11 million unrealised gain on investment in Strike during the financial year.
Information concerning Strike may be viewed from its website: www.strikeresources.com.au
Strike’s market announcements may also be viewed from the ASX website (www.asx.com.au) under ASX
code “SRK”.
9 Refer SRK’s ASX Announcement dated 27 July 2018: June 2018 Quarterly Report
10 Refer Orion’s ASX Announcement dated 4 September 2016: Change in Substantial Holding Notice
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QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
(c) Other Assets
Orion also owns:
•
•
a 143 hectare commercial olive grove operation (currently on care and maintenance) with
approximately 64,500, 19 year old olive tree plantings located in Gingin, Western Australian; and
a property held for redevelopment or sale but currently rented out located in Mandurah, Western
Australia.
2.
Queste’s Other Assets
In addition to the investment in controlled entity, Orion, Queste has:
(a)
a direct share investment in Associate entity, Bentley, being 1,225,752 shares (or 1.61% of
Bentley’s issued ordinary share capital) (2017: 1,300,000 shares and 1.72%).
The Company notes that it lodges Monthly and Quarterly Cash Flow Reports on ASX, which may be viewed
and downloaded from the Company’s website: www.queste.com.au or the ASX website (www.asx.com.au)
under ASX Code: “QUE”.
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
The Consolidated Entity intends to continue its investment activities in future years. The results of these
investment activities depend upon the performance of the underlying companies and securities in which the
Consolidated Entity invests. The investments’ performances depend on many economic factors and also industry
and company specific issues. In the opinion of the Directors, it is not possible or appropriate to make a
prediction on the future course of markets, the performance of the Consolidated Entity’s investments or the
forecast of the likely results of the Consolidated Entity’s activities.
ENVIRONMENTAL REGULATION
The Consolidated Entity is not subject to any particular or significant environmental regulation under Australian
Commonwealth or State legislation.
ANNUAL REPORT | 7
30 JUNE 2018
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
sectors. He has considerable experience in the fields of capital raisings, mergers and acquisitions
and investments.
Relevant interest in shares 5,344,872 shares11
Other current directorships
in listed entities
(1)
(2)
(3)
Executive Chairman of Bentley Capital Limited (ASX:BEL) (since 2 December 2003)
Executive Chairman of Orion Equities Limited (ASX:OEQ) (since 23 October 2006)
Chairman (appointed 18 December 2015) of Strike Resources Limited (ASX:SRK) (Director
since 1 October 2015)
Former directorships in
other listed entities in past
3 years
None
Victor P. H. Ho
Executive Director and Company Secretary
Appointed Executive Director since 3 April 2013; Company Secretary since 30 August 2000
Qualifications BCom, LLB (Western Australia), CTA
Experience Mr Ho has been in Executive roles with a number of ASX listed companies across the
investments, resources and technology sectors over the past 18+ years. Mr Ho is a Chartered
Tax Adviser (CTA) and previously had 9 years’ experience in the taxation profession with the
Australian Tax Office (ATO) and in a specialist tax law firm. Mr Ho has been actively involved in
the investment management of listed investment companies (as an Executive Director and or a
member of the Investment Committee), the structuring and execution of a number of corporate,
M&A and international joint venture (in South America, Indonesia and the Middle East)
transactions, capital raisings and capital management initiatives and has extensive experience in
public company administration, corporations’ law and stock exchange compliance and
investor/shareholder relations.
Relevant interest in shares 17,500 shares12
Other current positions
held in listed entities
Former positions in other
listed entities in past 3
years
(1)
(2)
(3)
(4)
Executive Director and Company Secretary of Orion Equities Limited (ASX:OEQ)
(Secretary since 2 August 2000 and Director since 4 July 2003)
Director and Company Secretary of Strike Resources Limited (ASX:SRK) (Director since
24 January 2014 and Company Secretary since 1 October 2015)
Company Secretary of Bentley Capital Limited (ASX:BEL) (since 5 February 2004)
Company Secretary of Keybridge Capital Limited (ASX:KBC) (since 13 October 2016)
Company Secretary of Alara Resources Limited (ASX:AUQ) (4 April 2007 to 31 August 2015)
11 Refer Farooq Khan’s most recent Change of Director’s Interest Notice dated 8 January 2018
12 Refer Victor Ho’s Initial Director’s Interest Notice dated 3 April 2013
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QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
Yaqoob Khan
Non-Executive Director
Appointed 10 March 1998
Qualifications BCom (Western Australia), Master of Science in Industrial Administration (Carnegie Mellon)
Experience After working for several years in the Australian Taxation Office, Mr Khan completed his
postgraduate Masters degree and commenced work as a senior executive responsible for
product marketing, costing systems and production management. Mr Khan has been an
integral member of the team responsible for the pre-IPO structuring and IPO promotion of a
number of ASX floats and has been involved in the management of such companies. Mr Khan
brings considerable international experience in key aspects of corporate finance and the
strategic analysis of listed investments.
Relevant interest in shares 68,345 shares13
Other current
directorships in listed
entities
Non-Executive Director of Orion Equities Limited (ASX:OEQ) (since 5 November 1999).
Former directorships in
other listed entities in past
3 years
None
At the Balance Date, Yaqoob Khan is a resident overseas.
At the Company’s 2017 AGM 14:
•
Yaqoob Khan retired as a Director (by rotation) pursuant to the Company’s Constitution and was re-
elected a Director at that AGM.
DIRECTORS' MEETINGS
The following table sets out the numbers of meetings of the Company's Directors held during the financial year
(including Directors’ circulatory resolutions), and the numbers of meetings attended by each Director of the
Company:
Name of Director
Meetings Attended
Maximum Possible Meetings
Farooq Khan
Yaqoob Khan
Victor Ho
6
6
6
6
6
6
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 Queste’s activities, matters typically dealt with by an Audit or
Remuneration Committee are dealt with by the full Board.
13 Refer Yaqoob Khan’s Change of Director’s Interest Notice dated 6 September 2011
14 Refer Queste’s ASX announcement dated 30 November 2017: Results of 2017 Annual General Meeting
ANNUAL REPORT | 9
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QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
REMUNERATION REPORT
This Remuneration 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 Queste.
The information provided under headings (1) to (6) below has been audited for compliance with section 300A of
the Corporations Act 2001 (Cth) as required under section 308(3C).
(1) Remuneration Policy
The Board determines the remuneration structure of all Key Management Personnel having regard to the
Company’s strategic objectives, scale and scope of operations and other relevant factors, including
experience and qualifications, length of service, the duties and accountability of Key Management
Personnel, the frequency of Board meetings, market practice (including available data concerning
remuneration paid by other listed companies and in particular, companies of comparable size and nature)
and the objective of maintaining a balanced Board which has appropriate expertise and experience, at a
reasonable cost to the Company.
Corporate Governance Principles: The Company’s Corporate Governance Statement (CGS) also
addresses matters pertaining to the Board, Senior Management and Remuneration. The latest version of
the CGS may be downloaded from the Company’s website: http://queste.com.au/corporate-governance
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 $75,00015 per
annum inclusive of minimum employer superannuation contributions where applicable, to be divided as
the Board determines appropriate.
The Board has determined the following fixed cash remuneration for current Key Management Personnel
during the year as follows:
Executive Director
(1) Mr Farooq Khan (Executive Chairman and Managing Director) - a base salary of $31,250 (previously
voluntarily reduced from $62,500 to $31,250 (with effect on 1 April 2016) and from $125,000 to
$62,500 (with effect on 1 April 2013) to assist the Company in reducing its corporate overheads)
per annum plus employer superannuation contributions; and
(2) Mr Victor Ho (Executive Director and Company Secretary) - a base salary of $22,500 (previously
voluntarily reduced from $45,000 to $22,500 (with effect on 1 April 2016) to assist the Company in
reducing its corporate overheads) per annum plus employer superannuation contributions. Mr Ho
also agreed to join the Board as an Executive Director on 3 April 2013 at no further cost to the
Company.
Non – Executive Director
(3) Mr Yaqoob Khan (Non-Executive Director) - a base fee of $15,000 per annum.
Key Management Personnel can also opt to “salary sacrifice” their cash fees/salary and have them paid
wholly or partly as further employer superannuation contributions or benefits exempt from fringe benefits
tax.
15 As approved by shareholders at the Annual General Meeting held on 30 November 1999; refer Queste’s ASX announcement dated 30
November 1999: Results of Annual General Meeting of Shareholders
ANNUAL REPORT | 10
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QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
REMUNERATION REPORT
Special Exertions and Reimbursements: Pursuant to the Company’s Constitution, each Director is
entitled to receive:
(a)
(b)
Payment for reimbursement of all travelling, hotel and other expenses reasonably incurred by a
Director for the purpose of attending meetings of the Board or otherwise in and about the business
of the Company; and
In respect of Non-Executive Directors, payment for the performance of extra services or the making
of special exertions for the benefit of the Company (at the request of and with the concurrence of
the Board).
Short-Term Benefits: The Company does not have any short-term incentive (STI) cash bonus schemes
(or equivalent) in place for Key Management Personnel.
Long-Term Benefits: The Company does not have any long-term incentive (LTI) cash bonus schemes
(or equivalent) in place for Key Management Personnel.
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. Other than early termination benefits disclosed in ‘Employment Agreement’
below, Key Management Personnel also have no right to termination payments save for payment of
accrued unused annual and long service leave (where applicable) (these accrued employee entitlements
are not applicable in respect of Non-Executive Directors). The Company notes that shareholder approval is
required where a Company proposes to make a “termination payment” (for example, a payment in lieu of
notice, a payment for a post-employment restraint and payments made as a result of the automatic or
accelerated vesting of share based payments) in excess of one year’s “base salary” (defined as the
average base salary over the previous 3 years) to a director or any person who holds a managerial or
executive office.
Performance-Related Benefits and Financial Performance of Company: The Company does not
presently provide short- or long-term incentive/performance based benefits related to the Company’s
performance to Key Management Personnel, including payment of cash bonuses. The current
remuneration of Key Management Personnel is fixed, is not dependent on the satisfaction of a
performance condition and is unrelated to the Company’s performance.
The Board does not believe that it is appropriate at this time to implement an equity-based benefit scheme
or a performance related/variable component to Key Management Personnel remuneration or
remuneration generally linked to the Company’s performance but reserves the right to implement these
remuneration measures if appropriate in the future (subject to prior shareholder approval where
applicable).
In considering the Company's performance and its effects on shareholder wealth, Directors have had
regard to the data set out below for the latest financial year and the previous four financial years.
2018
2017
2016
2015
2014
Loss Before Income Tax ($)
(1,207,104)
(2,122,392)
(896,730)
(1,055,911)
(1,209,082)
Basic Earnings/(Loss) per Share (cents)
(3.00)
(5.11)
(2.35)
(2.52)
(5.24)
Dividends Paid ($)
VWAP Share Price on ASX for financial year (cents)
Closing Bid Share Price at 30 June (cents)
-
7
7
-
7
7
-
7
5
-
7
6
-
14
14
ANNUAL REPORT | 11
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
REMUNERATION REPORT
(2) Employment Agreement
Details of the material terms of an employment agreement entered by the Company with a Key
Management Personnel are as follows:
Key
Management
Personnel and
Position(s) Held
Victor Ho
Company
Secretary (since 30
August 2000)
Executive Director
(since 3 April
2013)
Relevant
Date(s)
Base
Salary/Fees per
annum
Other Material Terms
25 January 2000
(date of
employment
agreement)
2009/2010
(date of effect
of current
remuneration)
$45,000
• The agreement has no fixed term or fixed rolling
plus employer
superannuation
contributions
(currently 9.5%
of base salary)
terms of service.
• Standard annual leave (20 days) and personal/sick
leave (10 days paid) entitlements plus entitlement to
long service leave of 60 days after 7 years of service
with an additional 5 days after each year of service
thereafter.
• One month’s notice of termination by the Company
or employee. Immediate termination without notice
if employee commits any serious act of misconduct.
The Company does not presently have formal service agreements or employment agreements with any
other Key Management Personnel.
(3) 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
2018
Performance
related
Short-term Benefits
Post-
Employment
Benefits
Other Long-
term
Benefits
Key Management
Person
Executive Directors:
Farooq Khan
Victor Ho
Non-Executive Director:
Yaqoob Khan
Cash, salary
and
commissions
$
%
Non-cash
benefit
$
Superannuation
$
31,249
22,500
15,000
-
-
-
2,968
2,138
-
Long
service
leave
$
-
-
-
2017
Key
Management
Person
Executive Directors:
Farooq Khan
Victor Ho
Non-Executive Director:
Yaqoob Khan
Performance
related
Short-term Benefits
Post-
Employment
Benefits
Other
Long-term
Benefits
Cash, salary
and
commissions
$
Non-cash
benefit
$
Superannuation
$
31,249
22,500
15,000
-
-
-
1,425
2,138
-
%
-
-
-
Long
service
leave
$
-
-
-
Equity
Based
Shares &
Options
$
-
-
-
Equity Based
Shares &
Options
$
-
-
-
Total
$
34,217
24,638
15,000
Total
$
32,674
24,638
15,000
ANNUAL REPORT | 12
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
REMUNERATION REPORT
Paid by Orion to Key Management Personnel (who are also KMP of Queste)
2018
Key
Management
Personnel
Performance
related
%
Short-term Benefits
Cash, salary
and
commissions
$
Non-cash
benefit
$
Post-
Employment
Benefits
Other
Long-term
Benefits
Superannuation
$
Executive Directors:
Farooq Khan
Victor Ho
Non-Executive Director:
Yaqoob Khan
201,249
97,499
25,000
-
-
-
19,119
9,262
-
2017
Key
Management
Personnel
Performance
related
%
Short-term Benefits
Cash, salary
and
commissions
$
Non-cash
benefit
$
Post-
Employment
Benefits
Other
Long-term
Benefits
Superannuation
$
Executive Directors:
Farooq Khan
Victor Ho
Non-Executive Director:
Yaqoob Khan
-
-
-
186,834
97,499
25,000
-
-
-
17,749
9,262
-
Victor Ho is also Company Secretary of Queste and Orion.
Equity
Based
Shares &
Options
$
-
-
-
Equity
Based
Shares &
Options
$
-
-
-
Total
$
220,368
106,761
25,000
Total
$
204,583
106,761
25,000
Long
service
leave
$
-
-
-
Long
service
leave
$
-
-
-
The tables above may be aggregated to arrive at the aggregate amount of each element of remuneration
of each Key Management Personnel paid or payable by the Queste and Orion during the financial year.
(4) 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.
(5)
Engagement of Remuneration Consultants
The Company has not engaged any remuneration consultants to provide remuneration recommendations
in relation to Key Management Personnel during the year. The Board has established a policy for
engaging external Key Management Personnel remuneration consultants which includes, inter alia, that
the Non-Executive Directors on the Remuneration Committee be responsible for approving all
engagements of and executing contracts to engage remuneration consultants and for receiving
remuneration recommendations from remuneration consultants regarding Key Management Personnel.
Furthermore, the Company has a policy that remuneration advice provided by remuneration consultants be
quarantined from Management where applicable.
ANNUAL REPORT | 13
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
REMUNERATION REPORT
(6)
Shares held by Key Management Personnel
The number of ordinary shares in the Company held by Key Management Personnel is set below:
Key Management
Personnel
Executive Directors:
Farooq Khan
Victor Ho
Non-Executive Director:
Yaqoob Khan
Balance at 30
June 2017 Additions
Received as part
of remuneration
Disposals
Balance at
30 June
2018
5,344,872
17,500
3,649,41216
-
68,345
-
-
-
-
(3,649,412)19
-
5,344,872
17,500
-
68,345
Note:
The disclosures of shareholdings above are in accordance with the accounting standards which require 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).
(7) Voting and Comments on the Remuneration Report at the 2017 AGM
At the Company’s most recent (2017) AGM, a resolution to adopt the prior year (2017) Remuneration
Report was put to the vote and passed on a show of hands with the proxies received also indicating
majority 95.68%17 support in favour of adopting the Remuneration Report. No comments were made on
the Remuneration Report that was considered at the AGM.
This concludes the audited Remuneration Report.
16 Refer Farooq Khan’s Change of Director’s Interest Notices dated 6 December 2017, 11 December 2017 and 8 January 2018
17 Refer Queste’s ASX announcement dated 30 November 2017: Results of 2017 Annual General Meeting
ANNUAL REPORT | 14
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
DIRECTORS’ AND OFFICERS’ INSURANCE
The Company and Orion each insure Directors and Officers against liability they may incur in respect of any
wrongful acts or omissions made by them in such capacity (to the extent permitted by the Corporations Act 2001
(Cth)) (D&O Policy). Details of the amount of the premium paid in respect of the insurance policies are not
disclosed as such disclosure is prohibited under the terms of the contract.
DIRECTORS DEEDS
In addition to the rights of indemnity provided under the Company’s Constitution (to the extent permitted by the
Corporations Act 2001 (Cth)), 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 2001 (Cth)); and
Subject to the terms of the deed and the Corporations Act 2001 (Cth), 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.
AUDITORS
Details of the amounts paid or payable to the Auditors for audit and non-audit services (tax services) provided
during the financial year are set out below:
Auditor
Rothsay Auditing
36,000
Consolidated Entity
Non-Audit
Services
Audit &
Review
Fees
$
$
-
Total
$
Audit &
Review
Fees
$
36,000
14,000
Company
Non-Audit
Services
$
-
Total
$
14,000
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 (Cth). 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.
Rothsay Auditing continues in office in accordance with section 327B of the Corporations Act 2001 (Cth).
AUDITORS’ INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001
(Cth) forms part of this Directors Report and is set out on page 17. This relates to the Auditor’s Independent
Review Report, where the Auditors state that they have issued an independence declaration.
ANNUAL REPORT | 15
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ REPORT
EVENTS SUBSEQUENT TO BALANCE DATE
The Directors are not aware of any other matters or circumstances at the date of this Directors’ Report, other
than those referred to in this Directors’ Report (in particular, in Review of Operations) or the financial statements
or notes thereto (in particular Note 27, that have significantly affected or may significantly affect the operations,
the results of operations or the state of affairs of the Company in subsequent financial years.
Signed for and on behalf of the Directors in accordance with a resolution of the Board.
Farooq Khan
Chairman
31 August 2018
Victor Ho
Company Secretary
ANNUAL REPORT | 16
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
for the year ended 30 June 2018
Revenue
Other
Net gain on financial assets at fair value through profit or loss
Other revenue
Total revenue
Expenses
Share of Associate entity's loss
Olive grove operation expenses
Land operation expenses
Personnel expenses
Occupancy expenses
Corporate expenses
Finance expenses
Administration expenses
Loss before income tax
Income tax expense
Loss for the year
OTHER COMPREHENSIVE INCOME
Revaluation of assets, net of tax
Note
2
3
5
2018
$
40,221
133,447
132
173,800
2017
$
48,621
29,156
61
77,838
(586,548)
(105,374)
(10,053)
(440,899)
(36,983)
(57,653)
(3,005)
(140,389)
(1,207,104)
(1,324,263)
(37,913)
(140,470)
(479,847)
(34,615)
(53,800)
(4,645)
(124,677)
(2,122,392)
(22,233)
(1,229,337)
(125,927)
(2,248,319)
(35,086)
(164,786)
Total comprehensive income for the year
(1,264,423)
(2,413,105)
Loss attributable to:
Owners of Queste Communications Ltd
Non-controlling interest
Total comprehensive income for the year is attributable to:
Owners of Queste Communications Ltd
Non-controlling interest
(815,163)
(414,174)
(1,229,337)
(1,380,272)
(868,047)
(2,248,319)
(873,777)
(390,646)
(1,264,423)
(1,655,555)
(757,550)
(2,413,105)
Basic and diluted loss per share (cents) attributable to
the ordinary equity holders of the Company
6
(3.00)
(5.11)
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 18
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
as at 30 June 2018
Current assets
Cash and cash equivalents
Financial assets at fair value through profit or loss
Receivables
Other current assets
Total current assets
Non current assets
Receivables
Property held for development or resale
Investment in Associate entity
Property, plant and equipment
Olive trees
Deferred tax asset
Total non current assets
Total assets
Current liabilities
Payables
Provisions
Total current liabilities
Non current liabilities
Deferred tax liability
Total non current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Parent interest
Non-controlling interest
Total equity
Note
7
8
11
11
12
23
13
14
5
15
16
5
17
18
19
2018
$
158,883
567,203
86,091
6,196
2017
$
235,476
494,360
41,216
6,573
818,373
777,625
22,010
1,220,000
1,187,156
1,420,221
-
38,973
22,010
1,220,000
2,003,264
1,528,324
65,500
61,206
3,888,360
4,900,304
4,706,733
5,677,929
644,566
139,417
343,714
134,229
783,983
477,943
38,973
61,206
38,973
61,206
822,956
539,149
3,883,777
5,138,780
6,239,370
6,145,896
(10,085,211)
2,300,055
6,149,888
3,182,215
(6,281,531)
3,050,572
1,583,722
2,088,208
3,883,777
5,138,780
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 19
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
for the year ended 30 June 2018
Issued
capital
$
Reserves
$
Accumulated
losses
$
Non-
controlling
interest
$
Total
$
Balance at 1 July 2016
6,149,888
3,270,684
(4,769,667)
3,011,476
7,662,381
Loss for the year
Profit reserve transfer
Other comprehensive income
Total comprehensive
loss for the year
Transactions with owners in
their capacity as owners:
Transactions with
non-controlling interest
-
-
-
-
-
-
131,592
(275,283)
(143,691)
(1,380,272)
(131,592)
-
(1,511,864)
(868,047)
(2,248,319)
-
-
110,497
(757,550)
(164,786)
(2,413,105)
55,222
-
(165,718)
(110,496)
Balance at 30 June 2017
6,149,888
3,182,215
(6,281,531)
2,088,208
5,138,780
Balance at 1 July 2017
6,149,888
3,182,215
(6,281,531)
2,088,208
5,138,780
Loss for the year
Profit reserve
Other comprehensive income
Total comprehensive
loss for the year
Transactions with owners in
their capacity as owners:
Transactions with
non-controlling interest
Dividends paid
Partly paid shares
Equal access share buy-back
-
-
-
-
-
-
106,615
(17,133)
-
2,988,517
(58,614)
2,929,903
(815,163)
(2,988,517)
-
(3,803,680)
(414,174)
(1,229,337)
-
23,528
(390,646)
-
(35,086)
(1,264,423)
90,312
(56,534)
-
-
-
-
-
-
(113,840)
-
-
-
(23,528)
(56,534)
106,615
(17,133)
Balance at 30 June 2018
6,239,370
6,145,896
(10,085,211)
1,583,722
3,883,777
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 20
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
CONSOLIDATED STATEMENT
OF CASH FLOWS
for the year ended 30 June 2018
Cash flows from operating activities
Receipts from customers
Dividends received
Interest received
Other income
Payments to suppliers and employees
Interest paid
Sale of financial assets at fair value through profit or loss
Purchase of financial assets at fair value through profit or loss
2018
$
40,842
218,804
1,855
132
(396,773)
(31)
40,142
(28,000)
2017
$
111,674
215,959
1,917
-
(547,085)
(68)
269,576
(5,753)
Net cash used in operating activities
7(a)
(123,029)
46,220
Cash flows from investing activities
Purchase of plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from calls on partly paid shares
Orion dividends paid
Queste off-market share buy-back
Net cash provided by financing activities
(4,898)
(1,783)
(4,898)
(1,783)
106,615
(49,570)
(5,711)
51,334
-
-
-
-
Net decrease in cash held
(76,593)
44,437
Cash and cash equivalents at beginning of financial year
235,476
191,039
Cash and cash equivalents at end of financial year
7
158,883
235,476
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 21
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
1.
ABOUT THIS REPORT
1.1
Background
financial report covers
This
financial
statement of the consolidated entity consisting of Queste
Communications Ltd, its subsidiary and investment in its
associate (the Consolidated Entity or Queste). The
financial report is presented in the Australian currency.
the consolidated
Queste Communications Ltd (the Company) is a company
limited by shares, incorporated in Western Australia, Australia
and whose shares are publicly traded on the Australian
Securities Exchange (ASX).
These financial statements have been prepared on a
streamlined basis where key information is grouped together
for ease of understanding and readability. The notes include
information which is required to understand the financial
statements and is material and relevant to the operations,
financial position and performance of the Consolidated Entity.
Information is considered material and relevant if, for
example:
(a)
(b)
(c)
(d)
the amount in question is significant because of its
size or nature;
it is important for understanding the results of the
Consolidated Entity;
(e)
it helps to explain the impact of significant changes in
the Consolidated Entity’s business – for example,
acquisitions; or
it relates to an aspect of the Consolidated Entity’s
future
important
operations
performance.
that
its
to
is
The notes are organised into the following sections:
(a)
line
Key Performance: Provides a breakdown of the key
individual
of
comprehensive income that the Directors consider
most relevant to understanding performance and
shareholder returns for the year:
statement
items
the
in
Notes
2
3
4
5
6
Revenue
Expenses
Segment information
Tax
Loss per share
(b)
Financial Risk Management: Provides information
about
the Consolidated Entity’s exposure and
management of various financial risks and explains
how these affect the Consolidated Entity’s financial
position and performance:
Notes
7
8
9
10
Cash and cash equivalents
Financial assets at fair value through
profit or loss
Financial risk management
Fair value measurement of financial
instruments
(c)
Other Assets and Liabilities: Provides information
on other balance sheet assets and liabilities that do
not materially affect performance or give rise to
material financial risk:
Notes
11
12
13
14
15
16
Receivables
Property held for resale
Property, plant and equipment
Olive trees
Payables
Provisions
(d)
Capital Structure: This section outlines how the
Consolidated Entity manages its capital structure and
related financing costs, as well as capital adequacy
and reserves. It also provides details on the dividends
paid by the Company:
Notes
17
18
19
20
Issued capital
Reserves
Non-controlling interest
Dividends
Consolidated Entity Structure: Provides details
and disclosures relating to the parent entity of the
Consolidated Entity, controlled entities, investments in
associates and any acquisitions and/or disposals of
businesses in the year. Disclosure on related parties is
also provided in the section:
Notes
21
22
23
24
Parent entity information
Investment in controlled entity
Investment in associate entity
Related party transactions
(f)
Other: Provides information on items which require
disclosure to comply with Australian Accounting
Standards and other regulatory pronouncements
however,
in
understanding the financial performance or position
of the Consolidated Entity:
considered
significant
are not
Notes
25
26
27
Auditors' remuneration
Contingencies
Events occurring after the reporting
period
Significant and other accounting policies that summarise the
measurement basis used and presentation policies and are
relevant to an understanding of the financial statements are
provided throughout the notes to the financial statements.
ANNUAL REPORT | 22
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
1.2. Basis of preparation
1.6.
Impairment of Assets
These general purpose financial statements have been
prepared in accordance with Australian Accounting Standards,
the Australian
other authoritative pronouncements of
Accounting
Accounting
Board,
Interpretations and the Corporations Act 2001 (Cth), as
appropriate for for-profit entities.
Standards
Australia
Compliance with IFRS
The consolidated financial statements of the Consolidated
Entity 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.
1.3.
Principles of Consolidation
The consolidated financial statements incorporate the assets
and liabilities of the subsidiary of Queste Communications Ltd
as at 30 June 2018 and the results of its subsidiary for the
year then ended. Queste Communications Ltd and its
subsidiary are referred to in this financial statement as the
Consolidated Entity.
The controlled entity has a June financial year-end. All inter-
company balances and transactions between entities in the
Consolidated Entity, including any unrealised profits or losses,
have been eliminated on consolidation.
1.4. Comparative Figures
Certain comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
1.5. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the
amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Tax Office. In these
circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense.
Receivables and payables in the Statement of Financial
Position are shown inclusive of GST. Cash flows are
presented in the Statement of Cash Flows on a gross basis,
except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
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
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.
its recoverable amount
1.7. Dividends Policy
Provision is made for the amount of any dividend declared;
being appropriately authorised and no longer at the discretion
of the entity, on or before the end of the financial year but
not distributed at the Balance Date.
1.8. New,
or
Standards and Interpretations adopted
revised
amending Accounting
The Consolidated Entity has adopted all of the new, revised
or amending Accounting Standards and Interpretations issued
by the AASB that are mandatory for the current reporting
period.
Any new, revised or amending Accounting Standards or
Interpretations that are not mandatory have not been early
adopted.
ANNUAL REPORT | 23
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
1.9. Summary of Accounting Standards Issued but not yet Effective
The following new Accounting Standards and Interpretations (which have been released but not yet adopted) have been
considered and is expected to have limited material impact on the Consolidated Entity’s financial statements or the associated
notes therein.
Title and
Affected
Standard(s)
Financial
Instruments
AASB
reference
AASB 9, and
relevant
amending
standards
Application
date
Annual reporting
periods beginning
on or after 1
January 2018
Nature of Change
AASB 9 replaces AASB 139 Financial Instruments: Recognition and
Measurement.
Except for certain trade receivables, an entity initially measures a
financial asset at its fair value plus, in the case of a financial asset
not at fair value through profit or loss, transaction costs.
Debt instruments are subsequently measured at fair value through
profit or loss (FVTPL), amortised cost, or fair value through other
comprehensive income (FVOCI), on the basis of their contractual
cash flows and the business model under which the debt
instruments are held.
There is a fair value option (FVO) that allows financial assets on
initial recognition to be designated as FVTPL if that eliminates or
significantly reduces an accounting mismatch.
Equity instruments are generally measured at FVTPL. However,
entities have an irrevocable option on an instrument-by-instrument
basis to present changes in the fair value of non-trading
income (OCI) without
instruments
subsequent reclassification to profit or loss.
in other comprehensive
For financial liabilities designated as FVTPL using the FVO, the
amount of change in the fair value of such financial liabilities that is
attributable to changes in credit risk must be presented in OCI. The
remainder of the change in fair value is presented in profit or loss,
unless presentation in OCI of the fair value change in respect of the
liability’s credit risk would create or enlarge an accounting
mismatch in profit or loss.
All other AASB 139 classification and measurement requirements
for financial liabilities have been carried forward into AASB 9,
including the embedded derivative separation rules and the criteria
for using the FVO.
The incurred credit loss model in AASB 139 has been replaced with
an expected credit loss model in AASB 9.
The requirements for hedge accounting have been amended to
more closely align hedge accounting with risk management,
establish a more principle-based approach to hedge accounting and
address inconsistencies in the hedge accounting model in AASB
139.
ANNUAL REPORT | 24
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
1.9
Summary of Accounting Standards Issued but not yet Effective (continued)
AASB
reference
AASB 2014-10
Title and
Affected
Standard(s)
Amendments to
Australian Accounting
Standards – Sale or
Contribution of Assets
between an Investor
and its Associate or
Joint Venture
AASB 2016-5
Amendments to
Australian Accounting
Standards –
Classification and
Measurement of Share-
based Payment
Transactions
AASB 15, and
relevant
amending
standards
Revenue from
Contracts with
Customers
Nature of Change
Application date
The amendments clarify that a full gain or loss is
recognised when a transfer to an associate or joint
venture involves a business as defined in AASB 3
Business Combinations.
Annual reporting
periods beginning on
or after 1 January
2018
Annual reporting
periods beginning on
or after 1 January
2018
Annual reporting
periods beginning on
or after 1 January
2018
Any gain or loss resulting from the sale or contribution of
assets that does not constitute a business, however, is
recognised only to the extent of unrelated investors’
interests in the associate or joint venture.
AASB 2015-10 defers the mandatory effective date
(application date) of AASB 2014-10 so
the
amendments are required to be applied for annual
reporting periods beginning on or after 1 January 2018
instead of 1 January 2016.
that
This Standard amends AASB 2 Share-based Payment,
clarifying how to account for certain types of share-based
payment transactions. The amendments provide
requirements on the accounting for:
• The effects of vesting and non-vesting conditions on
share-based
the measurement of cash-settled
payments
• Share-based payment
transactions with a net
settlement feature for withholding tax obligations
• A modification to the terms and conditions of a share-
based payment that changes the classification of the
transaction from cash-settled to equity-settled.
AASB 15 replaces all existing revenue requirements in
Australian Accounting Standards (AASB 111 Construction
Contracts, AASB 118 Revenue, AASB Interpretation 13
Customer Loyalty Programmes, AASB Interpretation 15
Agreements for the Construction of Real Estate, AASB
Interpretation 18 Transfers of Assets from Customers and
AASB Interpretation 131 Revenue – Barter Transactions
Involving Advertising Services) and applies to all revenue
arising
from contracts with customers, unless the
contracts are in the scope of other standards, such as
AASB 117 (or AASB 16 Leases, once applied).
The core principle of AASB 15 is that an entity recognises
revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the
consideration to which an entity expects to be entitled in
exchange
for those goods or services. An entity
recognises revenue in accordance with the core principle
by applying the following steps:
• Step 1: Identify the contract(s) with a customer
• Step 2: Identify the performance obligations in the
contract
• Step 3: Determine the transaction price
• Step 4: Allocate the transaction price to the
performance obligations in the contract
• Step 5: Recognise revenue when (or as) the entity
satisfies a performance obligation
ANNUAL REPORT | 25
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
1.9
Summary of Accounting Standards Issued but not yet Effective (continued)
AASB
reference
AASB 2017-1
Title and
Affected
Standard(s)
Amendments to
Australian Accounting
Standards – Transfers
of Investments
Property, Annual
Improvements 2014-
2016 Cycle and Other
Amendments
AASB
Interpretation
22
Foreign Currency
Transactions and
Advance Consideration
AASB 16
Leases
Nature of Change
The amendments clarify certain requirements in:
• AASB 1 First-time Adoption of Australian Accounting
Standards –deletion of exemptions for first-time
adopters and addition of an exemption arising from
AASB
Currency
Foreign
Transactions and Advance Consideration
Interpretation
22
• AASB 12 Disclosure of Interests in Other Entities –
clarification of scope
• AASB 128 Investments in Associates and Joint
Ventures – measuring an associate or joint venture at
fair value
• AASB 140 Investment Property – change in use.
The Interpretation clarifies that in determining the spot
exchange rate to use on initial recognition of the related
asset, expense or income (or part of it) on the
derecognition of a non-monetary asset or non-monetary
liability relating to advance consideration, the date of the
transaction is the date on which an entity initially
recognises the non-monetary asset or non-monetary
liability arising from the advance consideration. If there
are multiple payments or receipts in advance, then the
entity must determine a date of the transactions for each
payment or receipt of advance consideration.
AASB 16 requires lessees to account for all leases under a
single on-balance sheet model in a similar way to finance
leases under AASB 117 Leases. The standard includes
two recognition exemptions for lessees – leases of ’low-
value’ assets (e.g. personal computers) and short-term
leases (i.e. leases with a lease term of 12 months or
less). At the commencement date of a lease, a lessee will
recognise a liability to make lease payments (i.e. the
lease liability) and an asset representing the right to use
the underlying asset during the lease term (i.e., the right-
of-use asset).
Application date
Annual reporting
periods beginning on
or after 1 January
2018
Annual reporting
periods beginning on
or after 1 January
2018
Annual reporting
periods beginning on
or after 1 January
2019
Lessees will be required to separately recognise the
interest expense on
the
depreciation expense on the right-of-use asset.
liability and
lease
the
Lessees will be required to re-measure the lease liability
upon the occurrence of certain events (e.g. a change in
the lease term, a change in future lease payments
resulting from a change in an index or rate used to
determine those payments). The lessee will generally
recognise the amount of the re-measurement of the lease
liability as an adjustment to the right-of-use asset.
Lessor accounting is substantially unchanged from today’s
accounting under AASB 117. Lessors will continue to
classify all leases using the same classification principle as
in AASB 117 and distinguish between two types of leases:
operating and finance leases.
ANNUAL REPORT | 26
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
2. REVENUE
The Consolidated Entity's operating loss before income tax includes the
following items of revenue:
Revenue
Rental revenue
Dividend revenue
Interest revenue
Other
Net gain on financial assets at fair value through profit or loss
Other revenue
2018
$
37,700
666
1,855
40,221
133,447
132
173,800
2017
$
44,200
2,504
1,917
48,621
29,156
61
77,838
Accounting policy
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:
(a) Sale of financial assets, goods and other assets
Revenue from the sale of financial assets, goods or other assets is recognised when the Consolidated Entity
has passed control of the financial assets, goods or other assets to the buyer.
(b) Interest revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
(c) 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
(d) Other revenues
Other revenues are recognised on a receipts basis.
3.
EXPENSES
The Consolidated Entity's operating loss before income tax includes the
following items of expenses:
Share of Associate entity's loss
Olive grove operations
Depreciation of olive grove assets
Impairment of olive trees
Other expenses
Land operations
Impairment loss on property 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
2018
$
586,548
2017
$
1,324,263
26,441
65,500
13,433
-
10,053
440,899
36,983
3,005
42,955
11,126
3,572
32,863
-
5,050
130,000
10,470
479,847
34,615
4,645
33,456
15,279
5,065
ANNUAL REPORT | 27
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
3.
EXPENSES (continued)
Administration expenses
Professional fees
Audit fees
Legal fees
Depreciation
Other administration expenses
4.
SEGMENT INFORMATION
2018
Segment revenues
Revenue
Other
Total segment revenues
Personnel expenses
Finance expenses
Administration expenses
Depreciation expenses
Other expenses
Total segment loss
2018
$
21,350
36,000
1,933
5,713
75,393
1,380,904
2017
$
21,837
36,000
6,902
7,566
52,372
2,200,230
Investments
$
40,221
133,447
173,668
Olive grove
$
Corporate
$
-
-
-
-
132
132
Total
$
40,221
133,579
173,800
-
95
586,547
-
11,802
(424,776)
-
101
2,732
91,950
10,590
(105,373)
440,899
2,910
93,702
5,735
133,841
(676,955)
440,899
3,106
682,981
97,685
156,233
(1,207,104)
Segment assets
Cash and cash equivalents
Financial assets
Property held for development or resale
Investment in Associate entity
Property, plant and equipment
Other assets
Total segment assets
-
567,203
1,220,000
1,187,156
-
-
2,974,359
62
-
-
-
907,547
492,679
1,400,288
158,821
-
-
-
20,221
153,044
332,086
158,883
567,203
1,220,000
1,187,156
927,768
645,723
4,706,733
2017
Segment revenues
Revenue
Other
Total segment revenues
Personnel expenses
Finance expenses
Administration expenses
Depreciation expenses
Other expenses
Total segment loss
48,621
29,156
77,777
-
-
1,324,263
-
135,564
(1,382,050)
-
-
-
-
61
61
48,621
29,217
77,838
(10,915)
190
5,139
32,862
10,637
(37,913)
479,847
4,715
86,074
7,088
124,766
(702,429)
468,932
4,905
1,415,476
39,950
270,967
(2,122,392)
ANNUAL REPORT | 28
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
4.
SEGMENT INFORMATION (continued)
Segment assets
Cash and cash equivalents
Financial assets
Property held for development or resale
Investment in Associate entity
Property, plant and equipment
Other assets
Total segment assets
Investments
$
-
494,360
1,220,000
2,003,266
-
-
3,717,626
Olive grove
$
3,392
-
-
-
933,987
638,759
1,576,138
Corporate
$
232,085
-
-
-
21,036
131,044
384,165
Total
$
235,477
494,360
1,220,000
2,003,266
955,023
769,803
5,677,929
Accounting policy
The operating segments are reported in a manner consistent with the internal reporting provided to the "Chief
Operating Decision Maker" (CODM). The Consolidated Entity's CODM is the Board of Directors who is responsible
for allocating resources and assessing performance of the operating segments.
The Board has considered the business and geographical perspectives of the operating results and determined that
the Consolidated Entity operates only within Australia, with the main segments being Investments and Olive Grove.
Corporate items are mainly comprised of corporate assets, office expenses and income tax assets and liabilities.
Description of segments
(a)
Investments comprise equity investments in companies listed on the Australian Securities Exchange (ASX),
unlisted managed funds and liquid financial assets;
(b) Olive grove is in relation to the olive grove farm in Gingin;
(c) Corporate items comprise corporate assets and operations.
Liabilities
Liabilities are not reported to the Board of Directors by segment. All liabilities are assessed at a consolidated entity
level.
5.
INCOME TAX
The components of tax expense comprise:
Current tax
Deferred tax
(a)
The prima facie tax on operating loss before income tax is
reconciled to the income tax as follows:
Prima facie tax payable on operating loss before income tax at 27.5%
(2017: 27.5%)
Adjust tax effect of:
Other assessable income
Non-deductible expenses
Share of net loss of associate entity
Current year tax losses not brought to account
Prior year's deferred tax assets recognition reversal
Income tax attributable to entity
2018
$
22,233
-
2017
$
125,927
-
22,233
125,927
(331,953)
(583,658)
104,022
1,425
161,301
65,205
22,233
22,233
85,992
1,434
364,172
132,060
125,927
125,927
ANNUAL REPORT | 29
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
5.
INCOME TAX EXPENSE (continued)
(b) Deferred tax assets
Fair value losses
Deferred tax liabilities
Fair value gains
(i) Movements - deferred tax assets
At 1 July 2016
(Credited)/charged to income statement
At 30 June 2017
At 1 July 2017
(Credited)/charged to income statement
At 30 June 2018
(ii) Movements - deferred tax liabilities
At 1 July 2016
Charged/(Credited) to the profit and loss
At 30 June 2017
At 1 July 2017
Charged/(Credited) to the profit and loss
At 30 June 2018
(iii)
2018
$
38,973
38,973
38,973
38,973
Fair value
losses
$
73,267
(12,061)
61,206
61,206
(22,233)
38,973
Fair value
gains
$
116,782
(55,576)
61,206
61,206
(22,233)
38,973
2017
$
61,206
61,206
61,206
61,206
Total
$
73,267
(12,061)
61,206
61,206
(22,233)
38,973
Total
$
116,782
(55,576)
61,206
61,206
(22,233)
38,973
Deferred tax recognised directly in Other Comprehensive Income
Revaluations of land & intangible assets
22,233
125,926
Unrecognised deferred tax balances
Unrecognised deferred tax asset - revenue losses
Unrecognised deferred tax asset - capital losses
Unrecognised deferred tax asset - timing differences
4,069,081
276,732
1,516,399
5,862,212
3,847,565
277,958
1,554,693
5,680,216
Critical accounting judgement and estimate
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 | 30
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
5.
INCOME TAX EXPENSE (continued)
Accounting policy
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based
on the notional
income tax rate for each taxing jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, and to unused tax losses (if applicable).
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when
the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively
enacted for each taxing jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible
and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain
temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability
is recognised in relation to these temporary differences if they arose in a transaction, other than a business
combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. The amount of
deferred tax assets benefits brought to account or which may be realised in the future, is based on the assumption
that no adverse change will occur in income taxation legislation and the anticipation that the Consolidated Entity
will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions
of deductibility imposed by the law.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the Company 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.
6.
LOSS PER SHARE
Basic and diluted loss per share (cents)
The following represents the loss and weighted average number of shares used
in the loss per share calculations:
Loss after income tax attributable to Owners of Queste Communications Ltd ($)
Weighted average number of ordinary shares
2018
2017
(3.00)
(5.11)
(815,163)
(1,380,272)
Number of shares
27,158,058
27,017,599
Under AASB 133 Earnings per Share, potential ordinary shares such as partly paid shares will only be treated as
dilutive when their conversion to ordinary shares would increase the earnings/(loss) per share. Diluted
earnings/(loss) per share is not calculated as it does not increase the earnings/(loss) per share.
ANNUAL REPORT | 31
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
6.
LOSS PER SHARE (continued)
Accounting policy
Basic earnings per share is determined by dividing the operating result after income tax by the weighted average
number of ordinary shares on issue during the financial period.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking into
account amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise from
the exercise of options outstanding during the financial period.
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.
7.
CASH AND CASH EQUIVALENTS
Cash at bank
(a)
Reconciliation of operating loss after income tax to net cash used
in operating activities
Loss after income tax
Add non-cash items:
Depreciation
Net loss/(gain) on financial assets at fair value through profit or loss
Impairment of olive trees
Loss on land held for development or resale
Share of net loss of Associate entity
Changes in assets and liabilities:
Financial assets at fair value through profit or loss
Receivables
Other current assets
Investments accounted for using the equity method
Payables
Provisions
Deferred tax
2018
$
158,883
2017
$
235,476
(1,229,337)
(2,248,319)
32,154
(133,447)
65,500
-
586,549
40,429
(29,156)
-
130,000
1,324,263
60,604
(44,876)
376
218,138
293,889
5,188
22,233
(123,029)
263,824
893
1,292
218,138
192,097
26,832
125,927
46,220
Accounting policy
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.
ANNUAL REPORT | 32
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
8.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Listed securities at fair value
Unlisted managed fund at fair value
2018
$
567,203
-
567,203
2017
$
420,004
74,356
494,360
Accounting policy
Financial
instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition, financial assets at fair value
through profit and loss 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
will recognise its realised and unrealised gains and losses arising from changes in the fair value of these assets are
included in the Statement of Profit or Loss and Other Comprehensive Income in the period in which they arise.
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 sheet date which is the current
bid price. The fair value of the unlisted managed fund is determined from unit price information provided by
investment manager. The Consolidated Entity’s investment portfolio is accounted for as a “financial assets at fair
value through profit and loss” and is carried at fair value.
9.
FINANCIAL RISK MANAGEMENT
The Consolidated Entity's financial instruments consist of deposits with banks, accounts receivable and payable,
investments in listed securities, and other unlisted securities. The principal activity of the Consolidated Entity is the
management of these investments - "financial assets at fair value" (refer to Note 8). The Consolidated Entity's
investments are subject to market (which includes interest rate and price risk), credit and liquidity risks.
The Board of Directors is responsible for the overall internal control framework (which includes risk management)
but no cost-effective internal control system will preclude all errors and irregularities. The system is based, in part,
on the appointment of suitably qualified management personnel. The effectiveness of the system is continually
reviewed by management and at least annually by the Board.
The financial receivables and payables of the Consolidated Entity in the table below are due or payable within 30
days. The financial investments are held for trading and are realised at the discretion of the Board of Directors.
The Consolidated Entity holds the following financial assets and liabilities:
Cash and cash equivalents
Financial assets at fair value through profit or loss
Receivables
Payables
Net financial assets
Note
7
8
11
15
2018
$
158,883
567,203
86,091
812,177
(644,566)
167,611
2017
$
235,476
494,360
41,216
771,052
(343,714)
427,338
ANNUAL REPORT | 33
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
9.
FINANCIAL RISK MANAGEMENT (continued)
(a) Market risk
Market risk is the risk that the fair value and/or future cash flows from a financial instrument will fluctuate as
a result of changes in market factors. Market risk comprises of price risk from fluctuations in the fair value of
equities and interest rate risk from fluctuations in market interest rates.
(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.
ASX All Ordinaries
Accumulation Index
Increase 15%
Decrease 15%
(ii) Interest rate risk
Impact on
post-tax profit
Impact on other
components of equity
2018
$
(12,943)
12,943
2017
$
(27,204)
27,204
2018
$
(12,943)
12,943
2017
$
(27,204)
27,204
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 1.35% (2017: 1.35%). The revenue exposure is immaterial in terms of the
possible impact on profit or loss or total equity.
Cash at bank and in hand
2018
$
158,883
2017
$
235,476
ANNUAL REPORT | 34
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
9.
FINANCIAL RISK MANAGEMENT (continued)
(b) Credit risk
Credit risk refers to the risk that a counterparty under a financial instrument will default (in whole or in part)
on its contractual obligations resulting in financial loss to the Consolidated Entity. Credit risk arises from cash
and cash equivalents and deposits with banks and financial institutions, including outstanding receivables and
committed transactions. Concentrations of credit risk are minimised primarily by undertaking appropriate due
diligence on potential
investments, carrying out all market transactions through approved brokers, settling
non-market transactions with the involvement of suitably qualified legal and accounting personnel (both
internal and external), and obtaining sufficient collateral or other security (where appropriate) as a means of
mitigating the risk of 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-
A-
Receivables (due within 30 days)
No external credit rating available
2018
$
158,729
-
158,729
2017
$
234,523
59
234,582
86,091
41,216
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.
10. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
Fair value hierarchy
AASB 13 (Fair Value Measurement) requires disclosure of fair value measurements by level of the following fair
value measurement hierarchy:
(i)
(ii)
(iii)
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).
ANNUAL REPORT | 35
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
10. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (continued)
2018
Financial assets at fair value through profit or loss:
Level 1
$
Level 2
$
Level 3
$
Total
$
Listed securities at fair value
Land at independent valuation
Total
567,203
-
567,203
-
-
-
-
1,259,608
1,259,608
567,203
1,259,608
1,826,811
2017
Financial assets at fair value through profit or loss:
Listed securities at fair value
Unlisted managed fund at fair value
Land at independent valuation
Olive trees
Total
420,004
-
-
-
-
74,356
-
-
420,004
74,356
-
-
1,340,455
65,500
1,405,955
420,004
74,356
1,340,455
65,500
1,900,315
There have been no transfers between the levels of the fair value hierarchy during the financial year.
(a) Valuation techniques
The fair value of the listed securities traded in active markets is based on closing bid prices at the end of the
reporting period. These investments are included in Level 1.
The fair value of any assets that are not traded in an active market are determined using certain valuation
techniques. The valuation techniques maximise the use of observable market data where it is available, or
independent valuation and rely as little as possible on entity specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in Level 2. If one or more of
the significant inputs is not based on observable market data, the instrument is included in Level 3.
The fair value of the unlisted managed fund investment is valued at the audited unit price published by the
investment manager and as such this financial instrument is included in Level 2.
At Level 3, the land was valued by an independent qualified valuer (a Certified Practising Valuer and Associate
Member of the Australian Property Institute) as at 15 June 2017. These assets have been valued based on
similar assets, location and market conditions or Direct Comparison or Comparative Sales Approach. The land
value per hectare based on rural
location provided a rate which included ground
water licence. A 4% change would increase or decrease the land's fair value by approximately $50,500.
land sold in the general
(b) Level 3 assets
At 1 Jul 2016
Revaluation
At 30 Jun 2017
Revaluation
At 30 Jun 2018
Land
$
1,741,664
(401,209)
1,340,455
(80,847)
1,259,608
Olive trees
$
65,500
-
65,500
(65,500)
-
Total
$
1,807,164
(401,209)
1,405,955
(146,347)
1,259,608
ANNUAL REPORT | 36
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
10. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (continued)
(c) Fair values of other financial assets and liabilities
Cash and cash equivalents
Receivables
Payables
2018
$
158,883
86,091
244,974
(644,566)
(399,592)
2017
$
235,476
41,216
276,692
(343,714)
(67,022)
Due to their short-term nature, the carrying amounts of cash, current receivables and current payables is
assumed to approximate their fair value.
Accounting policy
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.
trade receivables and payables are assumed to
The nominal value less estimated credit adjustments of
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
“financial assets at fair value through profit and loss” and is carried at fair value based on the quoted last bid
prices at the reporting date (refer Note 8).
11. RECEIVABLES
Current
Deposit
GST receivable
Other receivables
Receivable from related parties
Non current
Bonds and guarantees
2018
$
27,500
5,747
52,844
-
86,091
2017
$
27,500
8,583
3,242
1,891
41,216
22,010
22,010
Risk exposure
The Consolidated Entity’s exposure to credit and interest rate risks is discussed in Note 9.
Impaired trade receivables
None of the Consolidated Entity's receivables are impaired or past due.
ANNUAL REPORT | 37
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
11. RECEIVABLES (continued)
Accounting policy
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.
12. PROPERTY HELD FOR RESALE
Property held for development or resale
Revaluation of property
2018
$
3,797,339
(2,577,339)
1,220,000
2017
$
3,797,339
(2,577,339)
1,220,000
Critical accounting judgement and estimate
Property held for development or resale was last valued by an independent qualified valuer (a Certified Practising
Valuer and Associate Member of the Australian Property Institute) as at 9 June 2017. The Directors have
maintained this carrying value as at 30 June 2018 and are of the view that the property is not impaired.
Accounting policy
Property held for reale is valued at the lower of cost and net realisable value. Cost includes the cost of acquisition,
development, borrowing costs and holding costs until completion of development. Finance costs and holding
charges incurred after development are expensed. Profits are brought
to account on the signing of an
unconditional contract of sale.
13. PROPERTY, PLANT AND EQUIPMENT
Accumulated
Total
2018
Freehold land
Buildings
Plant and equipment
2017
Freehold land
Buildings
Plant and equipment
Movements in carrying amounts
At 1 July 2016
Revaluation
Additions
Depreciation expense
At 30 June 2017
At 1 July 2017
Revaluation
Additions
Depreciation expense
At 30 June 2018
Revaluation Depreciation
$
Cost
$
1,117,889
124,867
1,393,490
2,636,246
1,117,889
124,867
1388593
$
141,719
-
-
141,719
222,566
-
-
2,631,349
222,566
Freehold land
$
1,741,664
(401,209)
-
-
Buildings
$
63,879
-
-
(4,791)
-
(70,211)
(1,287,533)
(1,357,744)
-
(65,779)
(1,259,812)
(1,325,591)
Plant and
equipment
$
162,636
-
1,783
(35,638)
$
1,259,608
54,656
105,957
1,420,221
1,340,455
59,088
128,781
1,528,324
Total
$
1,968,179
(401,209)
1,783
(40,429)
1,340,455
59,088
128,781
1,528,324
1,340,455
59,088
128,781
1,528,324
(80,847)
-
-
-
-
(4,432)
-
4,898
(27,722)
(80,847)
4,898
(32,154)
1,259,608
54,656
105,957
1,420,221
ANNUAL REPORT | 38
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
13. PROPERTY, PLANT AND EQUIPMENT (continued)
Critical accounting judgement and estimate
Land was valued by an independent qualified valuer (a Certified Practising Valuer and Associate Member of the
Australian Property Institute) as at 15 June 2017. The Directors have impaired the carrying value by $80,847.
In assessing the recoverable amount of the groups farm property, plant and equipment, management monitors the
worldwide olive oil prices annually in determining if the Gingin olives should be harvested. As such the property,
plant and equipment is carried at its written down value and continues to be depreciated as it is in a condition to
be used to generate economic benefits to the group at such time as required and the assets are maintained in fair
condition and therefore their recoverable amount has been assessed to be in excess of their carrying values at
reporting date.
Accounting policy
All plant and equipment are stated at historical cost less accumulated depreciation and impairment losses.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Freehold land is not depreciated. Increases in the carrying amounts arising on revaluation of land 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 asset’s employment and subsequent disposal. The expected net cash flows
have been discounted to their present value in determining the recoverable amount.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Consolidated Entity
and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the
Statement of Profit or Loss and Other Comprehensive Income during the financial period in which they are
incurred.
The 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 or loss. When revalued assets are sold, amounts included in the revaluation reserve relating to that
asset are transferred to retained earnings.
The depreciation rates used for each class of depreciable asset are:
Class of Fixed Asset
Buildings
Plant and Equipment
Rate
7.50%
5-75%
Method
Diminishing Value
Diminishing Value
ANNUAL REPORT | 39
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
14. OLIVE TREES
Olive trees - at cost
Revaluation
2018
$
300,000
(300,000)
-
2017
$
300,000
(234,500)
65,500
Critical accounting judgement and estimate
There are approximately 64,500 19 year old olive trees on Orion's 143 hectare Olive Grove located in Gingin,
Western Australia. The Directors have impaired the carrying value to nil.
Accounting policy
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 is
measured at its fair value less estimated point-of-sale costs at the point of harvest.
15. PAYABLES
Current
Trade payables
Dividend payable
GST payable
Other payables and accrued expenses
Directors' fees and entitlements
2018
$
15,586
-
14,716
223,607
390,657
644,566
2017
$
6
-
14,931
86,053
242,724
343,714
Risk exposure
The Consolidated Entity’s exposure to risks arising from current payables is set out in Note 10.
Accounting policy
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end of
the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
16. PROVISIONS
Current
Employee benefits - annual leave
Employee benefits - long service leave
2018
$
2017
$
14,457
124,960
139,417
15,014
119,215
134,229
(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:
ANNUAL REPORT | 40
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
16. PROVISIONS (continued)
Leave obligations expected to be settled after 12 months
2018
$
124,960
2017
$
119,215
Accounting policy
Short-term obligations
Provision is made for the Consolidated Entity’s liability for employee benefits arising from services rendered by
employees to the Balance Date. Employee benefits that are expected to be settled within one year have been
measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee
benefits payable later than one year from the Balance Date have been measured at the present value of the
estimated future cash outflows to be made for those benefits. Employer superannuation contributions are made
by the Consolidated Entity in accordance with statutory obligations and are charged as an expense when incurred.
Other long-term employee benefit obligations
The liability for long-service leave is recognised in the provision for employee benefits and measured as the
present value of expected future payments to be made in respect of services provided by employees up to the
reporting date. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service.
17. ISSUED CAPITAL
Fully paid ordinary shares
Partly paid ordinary shares
2018
Number
27,072,332
-
2017
Number
26,578,358
5,770,000
Date of issue
Number
of shares
26,578,358
26,578,358
577,000
(83,026)
-
27,072,332
5,770,000
5,770,000
Movement in fully paid ordinary shares
At 1 Jul 2016
At 30 Jun 2017
Issue of shares
Equal access share buy-back - refer (b)
Partly paid shares cancelled
At 30 Jun 2018
Movement in partly paid ordinary shares
At 1 Jul 2016
At 30 Jun 2017
Call on partly paid shares - refer (b)
Partly paid shares cancelled
Equal access share buy-back - refer (b)
Partly paid shares cancelled
At 30 Jun 2018
19-Oct-17
(577,000)
(5,193,000)
0.20
-
2018
$
6,239,370
-
6,239,370
Issue price
$
0.20
2017
$
5,935,679
214,209
6,149,888
$
5,935,679
5,935,679
115,400
(4,151)
192,442
6,239,370
214,209
214,209
106,615
(115,400)
(12,982)
(192,442)
-
ANNUAL REPORT | 41
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
17.
ISSUED CAPITAL (continued)
(a) Call on partly paid ordinary shares
On 19 October 2017 there was a conversion of 577,000 partly paid shares respectively into fully paid shares
upon payment of a call made by the Company in relation to 100% of the outstanding balance (being
$0.184775 each or $106,615 in total) due and payable in respect of these 577,000 partly paid shares.
(b) Equal access share buy-back
On 5 January 2018, the Company's Off-Market Equal Access Share Buy-Back (approved by shareholders at the
Annual General Meeting held on 30 November 2017) (Buy-Back) closed with the following shares being
bought-back and cancelled:
83,026 fully paid ordinary shares were bought back for 5 cents per share at a cost of $4,151; and
(i)
(ii) 5,193,000 partly paid ordinary shares were bought back for 0.25 cent per share at a total cost of $12,983,
with the total cost of the Buy-Back being $17,134.
The Buy-Back consideration was satisfied as follows:
(i)
Cash Component: One-third (by value) of an accepting shareholder’s Buy-Back consideration was
satisfied by Queste paying cash; and
Scrip Component: Two-thirds (by value) of an accepting shareholder’s Buy-Back consideration was
satisfied by Queste distributing shares in Bentley Capital Limited (ASX:BEL) based on a deemed value of
15.3846 cents per BEL share (rounded to the nearest whole share in BEL).
(ii)
(c) Capital risk management
The Company's objectives when managing its capital are to safeguard its ability to continue as a going
concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to
maintain a capital structure balancing the interests of all shareholders.
The Board will consider capital management initiatives as is appropriate and in the best interests of the
Company and shareholders from time to time, including undertaking capital raisings, share Buy-backs, capital
reductions and the payment of dividends.
The Consolidated Entity has no external borrowings. The Consolidated Entity's non-cash investments can be
realised to meet accounts payable arising in the normal course of business.
Accounting policy
Ordinary shares are classified as equity. Fully paid ordinary shares carry one vote per share and the right to
dividends. 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
is not to be included as an amount paid on a share for the
the shares. An amount paid in advance of a call
purposes of calculating an entitlement to dividends.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the
acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.
ANNUAL REPORT | 42
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
18. RESERVES
Profit reserve
Option premium reserve
Asset revaluation reserve
Revaluations of freehold land
Deferred tax on revaluations
Non-controlling interest
Other reserve
Dilution movement
Non-controlling interest
2018
$
3,077,276
2,138,012
2017
$
145,293
2,138,012
141,719
(38,973)
(41,242)
61,504
222,566
(61,206)
(64,770)
96,590
1,071,663
(202,559)
869,104
1,071,663
(269,343)
802,320
Total reserves
6,145,896
3,182,215
Movements in Profit reserve
Opening balance
Profits reserve transfer
OEQ Dividends paid to non-controlling interest (Note 20)
Closing balance
Movements in Asset revaluation reserve
Opening balance
Revaluations of freehold land
Deferred tax on revaluations
Non-controlling interest
145,293
2,988,517
(56,534)
3,077,276
13,701
131,592
-
145,293
96,590
(80,847)
22,233
23,528
61,504
261,376
(401,209)
125,926
110,497
96,590
The Asset Revaluation Reserve relates to the revaluation of Orion's Olive Grove Land, as assessed by an
independent qualified valuer (a Certified Practising Valuer and Associate Member of the Australian Property
Institute) as at 15 June 2017. The Directors have impaired the carrying value of the land by $80,847 (Refer to
Note 13).
Other Reserve relates the differences which may arise as a result of transactions with non-controlling interests that
do not result in a loss of control.
Profits Reserve increase will arise when the Company or its subsidiaries generates a net profit (after tax) for a
relevant financial period (i.e. half year or full year) which the Board determines to credit to the company’s Profits
Reserve. Dividends may be paid out of (and debited from) the Company’s Profits Reserve, from time to time.
19. NON-CONTROLLING INTEREST
Issued capital
Asset revaluation reserve
Other reserve
Accumulated losses
2018
$
7,549,512
41,242
202,559
(6,209,591)
1,583,722
2017
$
7,549,512
64,770
269,343
(5,795,417)
2,088,208
The non-controlling interest is a 40.14% (2017: 40.14%) equity holding in Orion Equities Limited (not held by the
Company).
ANNUAL REPORT | 43
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
19. NON-CONTROLLING INTEREST (continued)
Accounting policy
The Consolidated Entity treats transactions with non-controlling interests that do not result in a loss of control as
transactions with equity owners of the Consolidated Entity. A change in ownership interest results in an adjustment
between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in
the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any
consideration paid or received is recognised in a separate reserve (refer to Note 18) within equity attributable to
owners of Queste Communications Ltd.
20. DIVIDENDS
Paid On
2018
$
2017
$
Dividends paid in cash during the financial year:
by OEQ - 0.90 cent per share fully franked dividend
29-Sep-17
140,843
OEQ Franking credits available for subsequent periods based
on a tax rate of 27.5%
3,030,179
-
-
The above amounts represent the balance of the franking account as at the end of the reporting period, adjusted
for:
(a) Franking credits that will arise from the receipt of dividends recognised as receivables at balance date;
(b) Franking credits that will arise from the payment of the amount of the provision for income tax; and
(c) Franking debits that will arise from the payment of dividends recognised as a liability at balance date.
The franking credits attributable to the Consolidated Entity include franking credits that would be available to the
parent entity if distributable profits of subsidiaries were paid as dividends.
21. PARENT ENTITY INFORMATION
The following information provided relates to the Company, Queste Communications Ltd, as at 30 June 2018.
Statement of profit or loss and other comprehensive income
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive loss for the year
Statement of financial position
Current assets
Non current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Option premium reserve
Accumulated losses
Equity
2018
$
57,220
-
2017
$
(315,045)
-
57,220
(315,045)
$
138,410
2,211,749
2,350,159
$
36,022
2,040,024
2,076,046
202,789
202,789
154,391
154,391
2,147,370
1,921,655
6,239,370
2,347,229
(6,439,229)
2,147,370
6,149,888
2,138,012
(6,366,245)
1,921,655
ANNUAL REPORT | 44
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
22. INVESTMENT IN CONTROLLED ENTITY
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary with
non-controlling interest:
Ownership Interest
Orion Equities Limited
Incorporated
Australia
Parent
2018
59.86%
Non-Controlling Interest
2017
59.86%
2018
40.14%
2017
40.14%
information of
Summarised financial
consolidated entity are set out below:
the subsidiary with non-controlling interests that are material
to the
Summarised statement of profit or loss and other comprehensive
income
Revenue
Expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense
Other comprehensive income
Total comprehensive loss for the year
2018
$
169,379
(1,204,511)
(1,035,132)
(22,233)
(1,057,365)
(58,614)
(1,115,979)
2017
$
78,019
(1,976,940)
(1,898,921)
(125,927)
(2,024,848)
-
(2,024,848)
Summarised Statement of Financial Position
Current assets
Non-current assets
Total Assets
Current liabilities
Non-current liabilities
Total Liabilities
Net Assets
Statement of cash flows
Net cash from operating activities
Net cash used in investing activities
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Other financial information
Profit/(Loss) attributable to non-controlling interest
Accumulated non-controlling interest at the end of the year
658,580
3,907,099
4,565,679
725,358
4,861,645
5,587,003
581,197
38,973
620,170
323,466
61,206
384,672
3,945,509
5,202,331
(36,603)
(1,446)
(133,879)
(171,928)
129,038
(123)
-
128,915
(414,174)
1,583,722
(868,047)
2,088,208
ANNUAL REPORT | 45
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
22. INVESTMENT IN CONTROLLED ENTITY (continued)
Accounting policy
Subsidiaries are all entities (including structured entities) over which the Consolidated Entity has control. The
Consolidated Entity controls an entity when it is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the group. They are
deconsolidated from the date that control ceases.
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. The controlled entity has 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.
Changes in Ownership Interests
When the Consolidated Entity ceases to have control, any retained interest in the entity is re-measured to its fair
value with the change in carrying amount recognised in profit or loss. The fair value becomes the initial carrying
amount for the purposes of subsequently accounting for the retained interest as an associate or financial asset. In
addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted
for as if the Consolidated Entity has directly disposed of the related assets or liabilities. This may mean that
amounts previously recognised in other comprehensive income are reclassified to profit or loss.
23. INVESTMENT IN ASSOCIATE ENTITY
Bentley Capital Limited (ASX:BEL)
Ownership Interest
2018
28.56%
2017
28.66%
Carrying Amount
2018
$
1,187,156
2017
$
2,003,264
Movements in carrying amounts
Opening balance
Share of net loss after tax
Dividends received
Disposal of shares through Equal access share buy-back (Note 17(b))
Closing balance
2,003,264
(586,548)
(218,138)
(11,422)
3,545,665
(1,324,263)
(218,138)
-
1,187,156
2,003,264
Fair value (at market price on ASX) of investment in Associate entity
2,065,256
2,399,516
Net asset backing value of investment in Associate entity
2,669,174
3,425,714
Summarised statement of profit or loss and other comprehensive income
Revenue
Expenses
Loss before income tax
Income tax expense
Loss after income tax
Other comprehensive income
Total comprehensive income
1,291,720
(3,135,545)
(1,843,825)
190,401
(3,868,917)
(3,678,516)
-
-
(1,843,825)
(3,678,516)
-
-
(1,843,825)
(3,678,516)
ANNUAL REPORT | 46
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
23. INVESTMENT IN ASSOCIATE ENTITY (continued)
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
2018
$
7,092,182
2,593,165
9,685,347
2017
$
8,107,288
4,063,419
12,170,707
323,579
14,805
338,384
209,628
9,015
218,643
9,346,963
11,952,064
Accounting policy
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. On
initial recognition investment in associates are recognised at cost, for investments which were classified as fair
value through profit or loss, any gains or losses previously recognised are reversed through profit or loss. Under
this method, the Consolidated Entity’s share of the post-acquisition profits or losses of associates are recognised in
the consolidated Statement of Profit or Loss and Other Comprehensive Income, and its share of post-acquisition
movements in reserves is recognised in other comprehensive income. The cumulative post-acquisition movements
are adjusted against the carrying amount of the investment.
Dividends receivable from associates are recognised in the Company’s Statement of Profit or Loss and Other
Comprehensive Income, while in the consolidated financial statements they reduce the carrying amount of the
investment. When the Consolidated Entity’s share of losses in an associate equals or exceeds its interest in the
associate, including any other unsecured long-term receivables, the Consolidated Entity does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the Consolidated Entity and its associates are eliminated to the extent of
the Consolidated Entity’s interest in the associates. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed
where necessary to ensure consistency with the policies adopted by the Consolidated Entity. The associated entity
has a June financial year-end.
Changes in ownership interests
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share
of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where
appropriate.
24. RELATED PARTY TRANSACTIONS
The Company has control of Orion Equities Limited (Orion) as it holds 59.86% (9,367,653 shares) of Orion's
issued capital (2017: 59.86% and 9,367,653 shares). During the year there were transactions between the
Company, Orion and Associate Entity, Bentley Capital Limited (ASX:BEL), pursuant
to shared office and
administration expense arrangements. There were no outstanding amounts at the reporting date.
Bentley Capital Limited
Dividends Received
2018
$
218,138
2017
$
218,138
ANNUAL REPORT | 47
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
24. RELATED PARTY TRANSACTIONS (continued)
(a) Transactions with key management personnel
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 2018. The total
remuneration paid to KMP of the Consolidated Entity during the year is as follows:
Directors
Short-term employment benefits
Post-employment benefits
2018
$
392,497
33,488
425,985
2017
$
378,082
30,574
408,656
During the year, the Consolidated Entity generated $37,700 rental income from a KMP/close family member of
KMP (the KMP being Queste and Orion Director, Farooq Khan), pursuant to a standard form residential
tenancy agreement
in respect of Property Held for Resale (held by Orion subsidiary, Silver Sands
Developments Pty Ltd) (2017: $44,200).
25. AUDITORS' REMUNERATION
During the year the following fees were paid for services provided by the auditor of the parent entity:
Rothsay Auditing
Audit and Review of Financial Statements
26.
CONTINGENCIES
2018
$
36,000
2017
$
36,000
(a)
Directors' Deeds
The Company has entered into Deeds of Indemnity with each of its Directors indemnifying them against
liability incurred in discharging their duties as Directors/Officers of the Consolidated Entity. At the end of the
financial period, no claims have been made under any such indemnities and accordingly, it is not possible to
quantify the potential financial obligation of the Consolidated Entity under these indemnities.
(b)
Tenement Royalties
The Consolidated Entity is entitled to receive a royalty of 2% of gross revenues (exclusive of GST) from any
commercial exploitation of any minerals from the Paulsens East (Iron Ore) Project tenement (currently a
Retention Licence RL 47/7) in Western Australia currently held by Strike Resources Limited (ASX:SRK).
27.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
(a)
Associate entity, Bentley Capital Limited (ASX:BEL), paid a fully-franked dividend of 0.5 cent per share on 20
July 2018. The Company and Orion received a cash dividend payment of $6,500 and $102,569 respectively.
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 | 48
30 JUNE 2008
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
(1)
(2)
(3)
(4)
The financial statements, Consolidated Statement of Profit or Loss and Other Comprehensive Income,
Consolidated Statement of Financial Position, Consolidated Statement of Cash Flows, Consolidated
Statement of Changes in Equity, and accompanying notes as set out on pages 18 to 48 are in accordance
with the Corporations Act 2001 (Cth) and:
(a)
(b)
comply with Australian Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting; and
give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2018 and of its
performance for the year ended on that date;
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable;
The Directors have been given the declarations required by section 295A of the Corporations Act 2001
(Cth) by the Executive Chairman/Managing Director (the person who, in the opinion of the Directors,
performs the Chief Executive Officer function) and Company Secretary (the person who, in the opinion of
the Directors, performs the Chief Financial Officer function); and
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 (Cth).
Farooq Khan
Chairman
31 August 2018
Victor Ho
Company Secretary
ANNUAL REPORT | 49
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
ADDITIONAL ASX INFORMATION
as at 23 October 2018
CORPORATE GOVERNANCE STATEMENT
The Company has adopted the Corporate Governance Principles and Recommendations (3rd Edition, March 2014)
issued by the ASX Corporate Governance Council in respect of the financial year ended 30 June 2018.
Pursuant to ASX Listing Rule 4.10.3, the Company’s 2018 Corporate Governance Statement (dated on or about 24
October 2018) and ASX Appendix 4G (Key to Disclosures of Corporate Governance Principles and
Recommendations) can be
Internet website:
http://queste.com.au/corporate-governance
following URL on
the Company’s
found at
the
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)
Each shareholder entitled to vote may vote in person or by proxy or by power of attorney or, in the case
of a shareholder which is a corporation, by representative;
Every person who is present in the capacity of shareholder or the representative of a corporate
shareholder shall, on a show of hands, have one vote;
Every shareholder who is present in person, by proxy, by power of attorney or by corporate representative
shall, on a poll, have one vote in respect of every fully paid share held by him; and
SUBSTANTIAL SHAREHOLDERS
Substantial Shareholders
Registered Shareholder
Azhar Chaudhri,
Chi Tung Investments Limited
and Renmuir Holdings Limited(1)
Farooq Khan
and Associate(2)
Geoff Wilson
and Associates(3)
Fred Woollard and
Samuel Terry Asset Management Pty
Ltd ATF Samuel Terry Absolute Return
Fund(4)
Chi Tung Investments Ltd
Renmuir Holdings Ltd
Mr Azhar Chaudhri
Mr Farooq Khan
& Ms Rosanna De Campo
Island Australia Pty Ltd
Dynasty Peak Pty Ltd
Frederick Raymond Woollard
J P Morgan Nominees Australia
Limited
Total
Shares
8,322,737
%Voting
Power(5)
30.743%
Shareholding
3,608,956
3,277,780
1,436,001
3,671,295
5,344,872
19.743%
1,673,577
4,391,975
4,391,975
16.22%
19,512
3,737,332
13.80%
3,717,820
Notes:
(1)
(2)
(3)
(4)
(5)
Based on the substantial shareholding notice filed by Azhar Chaudhri and associates dated 23 October 2017 (updated to reflect
current registered shareholdings and percentage voting power)
Based on the Change of Interests of Substantial Holder notice filed by Farooq Khan and associates dated 20 November 2014
(updated to reflect current registered shareholdings and percentage voting power) and the Change of Director’s Interest Notice
filed by Farooq Khan dated 8 January 2018
Based on the Change of Interests of Substantial Holder Notice filed by Geoff Wilson and associates dated 21 March 2018
Based on the Notice of Initial Substantial Holder notice filed by Samuel Terry Asset Management Pty Ltd dated 5 February 2018
(updated to reflect current registered shareholdings and percentage voting power)
Movements of less than 1% in voting power are not required to be disclosed to ASX via an updated substantial shareholding
notice and accordingly, there may be variances between the shareholdings recorded in the table above and the most recent
substantial shareholding notices lodged on ASX. Current registered shareholdings have been disclosed (where applicable).
ANNUAL REPORT | 53
30 JUNE 2018
QUESTE COMMUNICATIONS LTD
A.B.N. 58 081 688 164
ADDITIONAL ASX INFORMATION
as at 23 October 2018
DISTRIBUTION OF LISTED ORDINARY FULLY PAID SHARES
Spread of Holdings
Number of Holders
Number of Units
% of Total Issue Capital
1
1,001
5,001
10,001
100,001
Total
-
-
-
-
-
1,000
5,000
10,000
100,000
and over
UNMARKETABLE PARCELS
17
44
59
88
20
228
8,811
121,362
526,496
2,457,867
23,957,796
27,072,332
0.03%
0.45%
1.95%
9.08%
88.50%
100%
Spread
of Holdings
Number of Holders
Number of Shares
% of Total Issued Capital
-
-
6,849
over
1
6,850
TOTAL
69
159
228
177,742
26,894,590
27,072,332
0.66%
99.34%
100%
An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of 6,849 shares or less, being a
value of $500 or less in total, based upon the Company’s last sale price on ASX as at 23 October 2018 of $0.073 per share.
TOP 20 ORDINARY FULLY PAID SHAREHOLDERS
Rank Shareholder
1
CHI TUNG INVESTMENTS LTD
RENMUIR HOLDINGS LTD
MR AZHAR AMIN CHAUDHRI
2
MR FAROOQ KHAN & MS ROSANNA DE CAMPO
ISLAND AUSTRALIA PTY LTD
3
4
5
6
7
8
9
DYNASTY PEAK PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
MS ROSANNA DE CAMPO
GLENVIEW SERVICES PTY LTD
GIBSON KILLER PTY LTD
MR AYUB KHAN
MRS AFIA KHAN
10 MR SIMON KENNETH CATO & MRS KAYE LOUISE HOPKINS
ROSEMONT ASSET PTY LTD
11
12
GA & AM LEAVER INVESTMENTS PTY LTD
TOMATO 2 PTY LTD
13 MR JOHN CHENG-HSIANG YANG & MS PEGA PING MOK
14 MR ANTHONY NEALE KILLER & MRS SANDRA MARIE KILLER
15 MR EUGENE RODRIGUEZ
16 MRS MARY THERESE CAMILLERI
17 MRS LINDA ANN OATES
18
DR SIEW NAM UN
19 MRS WENDY MARGARET BELL
20 MANAR NOMINEES PTY LTD
Total
Shares
Held
3,608,956
3,277,780
1,436,001
Sub-total
3,671,295
1,673,577
Sub-total
118,000
75,000
Sub-total
Total
Shares
% Issued
Capital
8,322,737
30.74%
5,344,872
4,391,975
3,869,568
268,100
250,000
220,000
215,000
215,000
193,000
191,400
185,019
136,125
130,000
110,000
100,000
100,000
87,500
75,000
72,247
19.74%
16.22%
14.29%
0.99%
0.92%
0.81%
0.79%
0.79%
0.71%
0.71%
0.68%
0.50%
0.48%
0.41%
0.37%
0.37%
0.32%
0.28%
0.27%
24,477,543
90.39%
ANNUAL REPORT | 54
ASX Code: QUE
Queste Communications Ltd
A.B.N. 58 081 688 164
PRINCIPAL & REGISTERED OFFICE:
Level 2
23 Ventnor Avenue
West Perth, Western Australia 6005
T | (08) 9214 9777
F | (08) 9214 9701
E | info@queste.com.au
W | www.queste.com.au
SHARE REGISTRY:
Advanced Share Registry Limited
Western Australia – Main Office
110 Stirling Highway
Nedlands, Western Australia 6009
PO Box 1156, Nedlands
Western Australia 6909
Local T | 1300 113 258
T | (08) 9389 8033
F | (08) 9262 3723
E | admin@advancedshare.com.au
New South Wales – Branch Office
Suite 8H, 325 Pitt Street
Sydney, New South Wales 2000
PO Box Q1736
Queen Victoria Building, New South Wales 1230
T | (02) 8096 3502
W | www.advancedshare.com.au