Dato' Capt. Ahmad Sufian @ Qurnain bin Abdul Rashid Independent, Non-Executive Chairman

       GD Express Sdn Bhd (GDex) was formed in 1997 to provide express delivery service for both the domestic and international markets. It operates a network of 96 stations, comprising 53 branches, 2 affiliate stations and 41 agents throughout East and West Malaysia. GDEX has a fleet of more than 280 trucks and vans used primarily for hauling of documents and parcels between stations and the National Hub (termed "line-haul" fleet) for local pick-ups and deliveries. The company's express delivery service operations are structured along the principles of the "Hub and Spoke" concept whereby customers' packages are collected by the branches, sent by trucks to a Central Clearing Hub for sorting and then redirected to their ultimate destinations. The group currently employs more than 1300 staff.

The financial year 2008/09 was one of the toughest years the Group has ever experienced since its listing on the Bursa Malaysia in 2005. In fact, it was one of the worst economic and fnancial periods the world has ever witnessed since the depression of 1930s.

In any major economic upheaval, the transportation sector is always the frst to be hit as local and international businesses contract. Transport providers, often seen as the barometer of economic activities, will experience an immediate contraction in their business as the haulage of goods and services dry up.

Although fuel prices dropped considerably from its peak of US$147 per barrel to below US$40 per barrel during FY 2008/09, operating costs continued to go up as labour costs increased while prices of commodities and other services remained high.

Against this background, I am contented to report that the Group achieved a modest increase in sales but suffered a slight drop in proftability. For the year reviewed, the Group achieved a 10% increase in turnover to RM75.09million from RM68.08 million previously. The Group pre-tax proft however declined by 18% to RM3.56 million from RM4.36 million previously. Net proft was RM2.08 million against RM2.98 million in the previous financial year, a decline of 30%. Net earnings per share amounts to 0.81sen per every 10 sen share.

In the current challenging business environment, we should review our Group’s performance since our listing in 2005. I am proud to report that the Group has produced 5 really solid years of revenue and EBITDA (earnings before interest, tax, depreciation and amortisation) growth. Since 2005, our revenue has shown a compounded annual growth rate (CAGR) of 17.1% per annum while EBITDA has shown a CAGR of 16.4% per annum. The above table charts our steady growth in the 5 year period.

EBITDA is an alternative measure to evaluate companies like GDex which are in a rapid growth and heavy reinvestment phase.

I must congratulate our management and staff for their hard work for such achievements during this challenging period.

The bulk of our Group’s capital reinvestment programme has been successfully implemented, thanks to our aggressive reinvestment policy of the previous few years. We have been able to conserve our financial resources and are able to continue to reward our shareholders with a dividend for the second year running.

It is my great pleasure, as such, to announce that the Board of Directors has proposed a final single tier dividend of 5% and a special single tier dividend of 5% for the financial year ended 30 June 2009. These proposed dividends will result in a payout of RM2.57 million to our shareholders. While this proposed dividend payout is modest, it nevertheless refects our Group’s commitment to meet our earnings distribution policy whenever we can.

For the year reviewed, our Group has undertaken the following signifcant developments:

• Signed a Memorandum of Understanding in January 2009 with the Lao National Post to develop international and domestic express delivery services under shared brands for the Laos market. By the end of the FY08/09, both parties have already carried out their feasibility studies and will decide whether to proceed with a joint venture in the current fnancial year.
• Adopted a revised Corporate Vision to refect the Group’s direction.
• Revamped the Group Quality Policy to guide the Group towards world-class service excellence.
• Completed setting up line-haul operations in Sabah and Sarawak.
• Revised the pay structure of various operational, service and support departments of the Group to ensure we have a competitive pay package that attracts and retains the best people in the organisation.

In times of fnancial and economic uncertainties, as in the current global recession, companies and industries are looking for ways and means to reduce costs and expenses while improving quality in an effort to stay afoat.

It is in the Group’s interests and has been our challenge to frst put our ears to the ground, listen intently and understand the concerns faced by our customers. Secondly, for us to strategise and to provide innovative and cost-effective express carrier solutions to meet the needs of our customers.

Even in a crisis, there exists major opportunities for the Group to tap. The challenge for our Group is to be able to identify such opportunities, put our resources to work and transform these opportunities into proftable activities for the Group.

The Group is always looking ahead not only in the area of business and marketing improvement, but also in its management succession. The Group believes in the rejuvenation process. There should be a continuous infusion of new blood into management, while allowing the more experienced members to mentor and guide the new and less experienced. This ensures the Group remains relevant at all times while providing room for management to be upwardly mobile.

In this respect, I am pleased to inform that Mr Leong Chee Tong, formerly our Deputy Chief Executive Officer, has been appointed Chief Executive Officer of the Group in January 2008. He brings with him a wealth of management experience, having understudied our former Chief Executive Officer Mr Teong Teck Lean for many years. I am confident that Mr Leong is more than up to the task in continuing to build the Group, meet our goals and add value for our shareholders.

Mr Teong, who is the Group's Executive Deputy Chairman, will continue to bless the Group with his vast experience and guide the management in his role as "senior mentor". He will also be channeling his energies into reshaping the GDex Culture - a key area of development that needs to be looked into seriously if the Group is to move forward to meet the increasing high standards of the express carrier industry and the challenges of globalization.

In this respect, I would like to express my heartfelt thanks and gratitude to Mr Teong for having set the pace and building a firm foundation from which the Group will spring to greater heights.

While the Group is constantly looking to improve bottom-line, we are always mindful that we need to continually improve on the quality of service delivery. The greatest challenge in developing service quality lies not only in training but in transforming the mindset and value system of our people. We must appreciate and adopt frst world mentality of service excellence in every aspect of our operations. Only then, can we rise up to meet and exceed the international standards of delivery service and compete effectively.

During the year reviewed, despite the tough economic conditions, our Group continued to train and develop a core group of executives capable of performing to international standards of service excellence. This places our Group in strategic position, ready to be “Firing On All Cylinders” as the world emerges from the recession.

Stiffer market competition and increased cost of doing business are likely to stay for the express carrier industry today. We expect fuel prices to remain high and infationary pressures to mount. The world economic outlook is likely to remain uncertain and the business environment will be tough. However, the Group has taken several measures to mitigate such problems and I am certain that these measures, when carried out, will enable the Group to overcome the challenges.

Meanwhile, we have identifed areas of opportunities, like the commencement of AFTA (ASEAN Free Trade Area) in 2010 and the various development initiatives of our Government that we can capitalise on.

I would like to thank the management and staff for their continued dedication and untiring efforts to expand the Group.

My sincere thanks and appreciation also goes to our customers,vendors, business associates and the various statutory and government bodies, which have facilitated the Group in its operations.

I would also like to thank our shareholders for their patience and confdence in us. I believe the proposed dividends for the second consecutive year refect our Board’s efforts to consistently reward our loyal stakeholders.

Last but not least, I would like to commend my fellow board members who have continued to fulfll their commitments and obligations to the board.

Thank you for all your valuable contributions. I look forward to a better year ahead.