CORPORATE GOVERNANCE STATEMENT

INTRODUCTION

The Board of Directors is committed to maintaining high standards of safety, performance and corporate governance for Queste Communications Ltd (Company or Queste) and the entities it controls (Group or Queste Group). Good corporate governance is about having a set of core values and behaviours that underpin the Group's activities and ensure transparency, fair dealing and protection of the interests of stakeholders - including shareholders, personnel, suppliers and communities in which the Group operates.

The Board of Directors supports the Corporate Governance Principles and Recommendations (3rd Edition, released in March 2014) (ASX Recommendations) developed by the ASX Corporate Governance Council (Council).

The Company's practices are largely consistent with the ASX Recommendations. The Board considers that the implementation of a small number of ASX Recommendations is not appropriate, for the reasons set out below in relation to the items concerned. The Board uses its best endeavours to ensure that exceptions to the ASX Recommendations do not have a negative impact on the Company and the best interests of shareholders as a whole.

As required by the ASX Listing Rules, this Corporate Governance Statement (CGS) discloses the extent to which the Company has followed the ASX Recommendations during the 2019/2020 financial year (Reporting Period), as summarised below:

ASX Corporate Governance Principles and Recommendations

CGS Reference

Principle 1 - Lay solid foundations for management and oversight

1.1 - 1.7

Principle 2 - Structure the Board to add value

2.1 - 2.15

Principle 3 - Act ethically and responsibly

3.1

Principle 4 - Safeguard integrity in corporate reporting

4.1 - 4.3

Principle 5

- Make timely and balanced disclosure

5.1

Principle 6

- Respect the rights of security holders

6.1 - 6.4

Principle 7

- Recognise and manage risk

7.1 - 7.3

Principle 8

- Remunerate fairly and responsibly

8.1 - 8.3

The Company has also prepared an ASX Appendix 4G - Key to Disclosures (which reports on the Company's compliance with each of the ASX Recommendations) - this Key has been lodged with the CGS on ASX and may be viewed and downloaded from the Company's website (details below).

A copy of the ASX Recommendations can be found on the ASX website at the following URL: http://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-3rd-edn.pdf

The Company's latest 2020 Annual Report (and other ASX market announcements and releases) may be viewed and downloaded from the Company's website at the following URL: http://www.queste.com.au

The Corporate Governance page of the Queste website contains most of the charters, codes and policies which are referred to in this CGS, at the following URL: http://queste.com.au/corporate-governance

The names of the Executive Chairman/Managing Director, Executive Director (also the Company Secretary) and Non-Executive Director currently in office and their qualifications, experience and positions in other listed companies are stated in the Company's latest 2020 Annual Report.

Approved by the Board and current as at 13 October 2020

www.queste.com.au

QUESTE COMMUNICATIONS LTD

A.B.N. 58 081 688 164

Level 2, 31 Ventnor Avenue, West Perth, Western Australia 6005

ASX : QUE

T | (08) 9214 9777

F | (08) 9214 9701

E | info@queste.com.au

2019/2020 FINANCIAL YEAR

Queste Communications Ltd

A.B.N. 58 081 688 164

CORPORATE GOVERNANCE STATEMENT

PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

1.1. Role and Responsibilities of the Board of Directors and Senior Management 1.1.1 Board of Directors

In general the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Company. The Board is also responsible for the overall corporate governance of the Company, and recognises the need for the highest standards of behaviour and accountability in acting in the best interests of the Company as a whole.

The Board also seeks to ensure that the Company complies with all of its contractual, statutory and any other legal and regulatory obligations. The Board has the final responsibility for the successful operations of the Company. Where the Board considers that particular expertise or information is required, which is not available from within its members, appropriate external advice may be taken and reviewed prior to a final decision being made by the Company.

Without intending to limit the general role of the Board, the principal functions and responsibilities of the Board include the matters set out below, subject to delegation to Senior Management as specified elsewhere in this Statement or as otherwise appropriate:

  1. formulation and approval of the strategic direction, objectives and goals of the Company;
  2. the prudential control of the Company's finances and operations and monitoring the financial performance of the Company;
  3. the resourcing, review and monitoring of Senior Management;
  4. ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained;
  5. the identification of significant business risks and ensuring that such risks are adequately managed;
  6. The timeliness, accuracy and effectiveness of communications and reporting to shareholders and the market;
  7. the establishment and maintenance of appropriate ethical standards;
  8. responsibilities typically assumed by a nomination committee, including (refer also Section 2.2):
    1. devising criteria for Board membership, regularly reviewing the need for various skills and experience on the Board and identifying specific individuals for nomination as Directors; and
    2. oversight of Board and Company Executive succession plans;
  9. responsibilities typically assumed by an audit committee, including (refer also Section 4.1):
    1. reviewing and approving the audited annual and reviewed half-yearly financial reports; and
    2. reviewing the appointment of the external auditor, their independence, the audit fee and any questions of resignation or dismissal;
  10. responsibilities typically assumed by a risk committee, including (refer also Section 7.1):
    1. ensuring that an appropriate risk-management framework is in place and is operating properly; and
    2. reviewing and monitoring legal and policy compliance systems and issues; and
  11. responsibilities typically assumed by a remuneration committee, including (refer also Section 8.1):
    1. reviewing the remuneration and performance of Directors;
    2. setting policies for Senior Executive remuneration, setting the terms and conditions of employment for Senior Executives, undertaking reviews of Senior Executive performance, including setting goals and reviewing progress in achieving those goals; and
    3. reviewing the Company's Senior Executive and employee incentive schemes (where applicable) and making recommendations on any proposed changes.

2020 CORPORATE GOVERNANCE | 2

2019/2020 FINANCIAL YEAR

Queste Communications Ltd

A.B.N. 58 081 688 164

CORPORATE GOVERNANCE STATEMENT

In view of the current composition of the Board (which comprises an Executive Chairman/Managing Director, an Executive Director and a Non-Executive Director) and the nature and scale of the Company's activities, the Board has considered that establishing formally-constituted committees for audit, risk, board nominations and remuneration would not add value for shareholders, and is therefore not required.

Accordingly audit matters, risk matters, the nomination of new Directors and the setting, or review, of remuneration levels of Directors and Executives are considered by the Board as a whole and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest). That is, matters typically dealt with by audit, risk, nominations and remuneration committees are within the responsibility of the full Board.

1.1.2 Senior Management

The role of Senior Management is to deliver the strategic direction and goals determined by the Board.

The Board has delegated to the Executive Chairman/Managing Director, and through the Executive Chairman/Managing Director to other Senior Executives, responsibility for the day-to-day management of the Group, which includes:

  1. management of the Group's operations and finances;
  2. reporting to the Board on matters including the Group's operations and financial performance;
  3. recommending Group strategy, budgets, plans, policies and risk management systems to the Board; and
  4. determining Group policies, other than those reserved for the Board.

Senior Management may also be delegated responsibility for other matters under policies adopted by the Board.

The Company's Senior Management Team comprises the Executive Chairman/Managing Director, Mr Farooq Khan (a founding Director appointed on 10 March 1998) and Executive Director/Company Secretary, Mr Victor Ho (appointed Executive Director on 3 April 2013 and Company Secretary on 30 August 2003).

1.2. Board Nominations

The Board will consider nominations for appointment or election of Directors that may arise from time to time, having regard to the skills and experience required by the Company (as detailed in the Board Skills Matrix referred to in Section 2.1 below) and procedures outlined in the Company's Constitution and the Corporations Act 2001 (Cth).

The Company undertakes appropriate checks before appointing a person, or putting forward to shareholders a candidate for election, as a Director. Candidates are assessed through interviews, meetings and background and reference checks (which may be conducted both by external consultants and by Directors) as appropriate.

The Company gives shareholders all material information in its possession relevant to the decision on whether or not to elect (or re-elect) a Director, either in the notice of the meeting at which the election of the Director is to be held, or by including in the notice a clear reference to the location on the Company's website, Annual Report or other document lodged with ASX where the information can be found.

1.3. Terms of Appointment - Directors and Senior Executives

Each new Non-Executive Director will receive a letter formalising their appointment and outlining the material terms of their appointment including: the time commitment expected; the requirement to disclose their interests and matters affecting their independence to the Company; the obligation to comply with key Company policies, including the Code of Conduct and the Share Trading Policy; the Company's policy on Directors seeking independent advice, the policy in relation to the payment of additional remuneration in respect of special exertions undertaken by the Director (at the request of the Company) and the retirement requirements (subject to the right to seek re-election at the Company's AGM). In addition, the Company and each Director are party to Director's Indemnity Deeds, discussed in more detail in Section 2.15 below. The sole Non-Executive Director of the Company has not been appointed for a fixed term.

2020 CORPORATE GOVERNANCE | 3

2019/2020 FINANCIAL YEAR

Queste Communications Ltd

A.B.N. 58 081 688 164

CORPORATE GOVERNANCE STATEMENT

Senior Executives will generally have written employment agreements with the Company setting out their duties, obligations and remuneration. The Company does not presently have a formal service or employment agreement with the Executive Chairman/Managing Director or the Executive Director (but has entered into a formal employment agreement with Mr Victor Ho in his capacity as Company Secretary) (being the current Senior Executives). The present Senior Executives are experienced company executives and are well aware of the requirements of their positions, including their roles and responsibilities and their duties as directors/officers of the Company. Their remuneration has been determined by the Board. The Company will consider entering into service or employment agreements with its Executive Directors to formalise their duties, obligations, remuneration, reporting arrangements and termination (including any termination entitlements, where applicable).

The remuneration paid/payable to the Company's "Key Management Personnel" (as defined in the Accounting Standards), which includes the Executive Chairman/Managing Director and Executive Director/Company Secretary, are outlined within the Remuneration Report in the Company's latest 2020 Annual Report.

The Company's constitution requires one third of the Directors (or if that is not a whole number, the whole number nearest to one third) to retire at each Annual General Meeting (AGM). The Director(s) who retire under this rule are those who have held office the longest since last being elected or appointed. If two or more Directors have been in office for the same period, those Directors may agree which of them will retire. This rule does not apply to any Managing Director. A Director appointed by the Board since the last AGM and subject to retirement and re-election at the following AGM is also not taken into account in determining the number of Directors who must retire by rotation.

The initial appointment and last re-election dates of each current Director are listed below:

Director

First Appointed

AGM Last Re-elected

Farooq Khan

10 March 1998

Not required to stand for re-election, being the

Managing Director

Yaqoob Khan

10 March 1998

2019 AGM held on 28

November 2019;

Victor Ho

3 April 2013

2018 AGM held on 30

November 2018

(also Company Secretary since 30

Retires and will stand for re-election at the 2020 AGM

August 2000)

1.4. The Company Secretary

The Company Secretary is appointed by the Board and is responsible for developing and maintaining the information systems and processes that are appropriate for the Board to fulfil its role. The Company Secretary is responsible to the Board for ensuring compliance with Board policies and procedures and governance matters. The Company Secretary ensures the timely despatch of Board papers and the accurate minuting of Board meetings. He has responsibility to facilitate the ongoing professional development of Directors. The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board. The Company Secretary is also responsible for overseeing and coordinating disclosure of information to the ASX as well as communicating with the ASX.

The Company Secretary is Mr Victor Ho (appointed 30 August 2000) (also an Executive Director, appointed 3 April 2013), whose qualifications, experience and positions in other listed companies are stated in the Company's latest 2020 Annual Report.

1.5. Diversity

The Board, Senior Management and workforce of the Company/Group currently comprises individuals that are culturally diverse, together with possessing an appropriate blend of qualifications and skills. The Company recognises the positive advantages of a diverse workplace and is committed to:

  1. creating a working environment conducive to the appointment of well qualified employees, Senior Management and Board candidates; and
  2. identifying ways to promote a corporate culture which embraces diversity.

2020 CORPORATE GOVERNANCE | 4

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Queste Communications Limited published this content on 14 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 October 2020 02:19:01 UTC