At this time last year my message to you included reference to the buoyancy of the resources sector and analyst predictions on the opportunities the so-called once in a lifetime boom could offer – how the world has changed!

For GRD, the focus has clearly switched from the growth of successive years to consolidation of our core business. The Group, already evolving, has since responded rapidly and decisively to the changed conditions and continues to implement a program of reducing operating costs.

Our strategy has included streamlining our operations across the globe to reflect the market conditions, leveraging off our recognised reputation and relationships while also applying our expertise to more commodities and the sale of non-performing assets. There has also been a decision to accelerate the repayment of corporate debt and remove legacy financial obligations.

As part of our commitment to maximise value for our shareholders, and in line with the strategic review announced late in 2007, the decision was taken to sell Global Renewables Eastern Creek Facility.

While the facility continued to improve operationally – the economics did not. We have learnt the painful lessons of a commercial contract that did not deliver fair market revenue for the waste processed despite our ability to provide a climate change reducing technology at a time when the world continues to search for solutions to global warming.

The sale of the Eastern Creek facility eliminates project debt of $40 million and stops the cash burn that has been associated with that business. What’s more, the cash impact of the sale is set to be recouped in the first half of 2009.Eastern Creek proved a disappointment commercially but we should not lose sight of the fact that an operating plant was crucial in the successful bid for the Lancashire Waste PFI Project.

Lancashire itself is a much different proposition from Eastern Creek – it is fully funded, commercially more attractive due to a more realistic processing fee, subject to less onerous diversion targets and being undertaken in a country where policymakers have backed their words with legislation that requires a significant reduction in the landfilling of waste.

While the Lancashire PFI Project is robust, the impact of the financial downturn on the United Kingdom has prompted us to review and cease our business development spend in the UK market. Our priority is completing construction of the Lancashire PFI Project and receiving delivery of waste at the Leyland and Thornton sites.

The restructure of GRD that flows from the sale of Eastern Creek will allow us to focus on our core business – providing quality engineering and project management services to the mineral processing and waste services industries. This business is highly successful and well placed to continue to drive value for our shareholders.

GRD Minproc has also maintained its recognised process engineering expertise as a differentiator. This expertise is a significant factor in a market where a number of commodities have experienced substantial falls in demand, yet a level of strength still exists in gold, uranium and iron ore – with GRD Minproc having a demonstrated capability and a proven track record in them all.

The market shakeout associated with the global financial crisis has also served to highlight our competitiveness on projects with complex flow sheets.

We have maintained strong relationships with clients, perhaps best underlined by the ability to win recurring work. For example 2008 saw GRD Minproc awarded its second contract for BHP Billiton’s Olympic Dam Expansion, and while having completed work on Vale’s Niquel do Vermelho Project we were able to transition our expertise to assist with another of the company’s nickel deposits, this time in Indonesia.

GRD Minproc also has strong, underlying contracts that provide a solid foundation for 2009. However, the current financial conditions combined with a lack of exploration expenditure prior to 2004 is likely to limit the number of new greenfields projects, at least in the shorter term; even so, there is an increasing push by companies to switch from new project investment to that which will sustain or optimise their current operating assets. A similar trend has already been seen in the oil industry, where the approach of peak production has seen an increased focus on the operating efficiency of existing production facilities.

The technical expertise and flexibility of our engineers means GRD Minproc can add value on both greenfields and brownfields assignments. The growth of our Sustaining Capital Solutions business unit, and the significant contribution it will make to the bottom line of our engineering business in 2009, reflects the demand for skills in reinvigorating operations. The unit, which focuses on sustaining capital works (brownfields projects) has delivered engineering enhancements such as improved design, de-bottlenecking and plant optimisation studies and projects to an established and growing client base.

In 2008, Malcolm Brown, a 20 year veteran of our engineering business, was promoted to Chief Executive of GRD Minproc. Malcolm brings a wealthof experience in resource development and project management to the position,

and his knowledge of the engineering industry will provide the company with strong strategic and operational leadership in these challenging times.

Also in 2008, Ian McCubbing was appointed Chief Financial Officer. Ian is a Chartered Accountant with almost 30 years experience in a variety of finance and commercial roles, including investment banking, corporate finance and M&A. He has significant experience with ASX-listed companies in the industrial and mining sectors and his capabilities bring value to the development of our company.

Our efforts for the year ahead will continue to be focused on maximising earnings and reducing overhead costs without the loss of core competencies.

Despite the market conditions we believe the adapting GRD remains a value proposition for shareholders.

Finally I would like to thank all members of the GRD team for their continued efforts to deliver quality outcomes for our clients.