On behalf of the Board of Directors, I am delighted to present the Annual Report of Eastern Holdings Ltd (“EHL”) for the financial year ended 31 March 2006.

The Group’s revenue decreased 26 percent from $25.3 million to $18.8 million. This was due to the shorter accounting period of 12 months as against last year’s 15 months as well as termination of non-profitable titles/marketing services. Cost of Sales decreased by $2.3 million and Operating expenses decreased by $4.09 million due to shorter accounting period, termination of non-profitable titles as well as stringent cost cutting measures. The rental income for the fully tenanted corporate building at 1100 Lower Delta Road, EPL Building, Singapore, boosted operating income. Even though business is becoming more competitive and despite a drop in revenue, the Group managed to turn in an impressive profit after tax and minority interest of  $2.936 million for the year(12 months) as compared to $2.896 million last financial period (15 months).

While we maintain our core competencies as a publishing entity we will continue with our efforts in creating new products alongside further developing our regional activities to enhance the growth of the Group. For the year under review, the Group continued to expand its readership base via the electronic media. The Group has currently seven varied websites and four different editions of electronic books (e-books) for the Trade publications. The e-book is an electronic version of the printed magazine where clients’ advertisements can be seen embedded in the flipbook complete with a hyperlink to their selected corporate site. Regular columns can also be reached by clicking through the e-pages. Advertisements can also be made interactive with audio and video multimedia capabilities.

The year also saw the Group acquiring another property in Singapore for re-development. I am pleased to add that we have obtained the sale license for the 24 units of apartments at 16 & 18 Evelyn Road, Singapore. Presently, the Group is proceeding from small to medium property development projects to curtail the risk factors. As for the three other property development projects, construction will be completed by March 2007. Moreover, we have already secured a buyer for one of the two units for the property project at Coronation Drive.

Expansion of the publishing, property development and investment businesses within the local market as well as overseas remains the key focus of the Group. The Group is optimistic with its prospects and its continued profitability in the next financial year especially with the completion of the construction of the properties and the improving business confidence level in the local and regional areas.

In view of the good results for the year, the Board has recommended a payment of a first and final gross dividend of 15 percent, which is subject to approval by the Shareholders at the forthcoming Annual General Meeting. The total net dividend payable will be $1.2 million ($1.5 million less 20 percent tax) as compared to last year’s $1.04 million ($1.3 million less 20 percent tax).

In closing, I would like to express my gratitude to the management and staff for their dedication and hard work. I extend my heartfelt appreciation to the Board of Directors for their unfaltering commitment; and, last but not least, I am truly grateful to our business partners and the community for their unwavering confidence and support in the Group.

Tay Thian Boon, Stephen
Chairman
2006