Director's Report MediaHouse Limited

Hamilton, Bermuda: August 16, 2006 -- The year was one of much activity and involved significant challenges as the directors and company members continued in their efforts to position the Group for future growth and build shareholder value.

Although the Group made a small loss after taxation but prior to minority interest, much excellent work has been done and many things achieved which will improve on future performance.  I am therefore confident that better results lie ahead and look forward to presenting them to the shareholders in future years.

Caribbean Publishing Company Ltd. (CPC) continues to go from strength to strength and has now fully recovered from the effects of Hurricane Ivan, which as previously reported destroyed the Grand Cayman Head Office in September 2004.  CPC has once again made a substantial contribution to the Group in the year under review, although deferral of the publication of certain directories has resulted in the full impact of progress made, not being fully reflected in the financial statements to September, 2005

As previously announced, effective December 1, 2005 the Group entered into an agreement with Cable and Wireless (Jamaica) Limited to take over publication of the Jamaica telephone directories.  Previously the Group had provided management and marketing services to the Company. 

Effective November 1, 2005 the Group transferred its interest in a publishing contract in Maine, U.S.A., to a third party and closed its operations in that area.  The directors believe that action to be in the Group's best interests as the operation had made losses since its opening in 2002, due to a number of factors, and the directors felt that it was in the Group's best interest to bring the drain on the rest of the Group to an end.   

Bermuda.com continues to improve and substantial work was completed to enable the re-launch of a much improved web-site encompassing a re-design and an on-line reservation engine for tourists in April 2005.  These improvements will contribute to the continued success of the site and increased contribution to Group results.

The consolidation of the Group's Bermuda based activities into its Elliott Street premises which took place in May 2004 continues to have a beneficial impact on our results, and additional efficiencies resulting from synergies between the Groups operating units are still being developed.

As stated in last years financial statements and further explained in note 10 to the financial statements, an agreement was made to sell 15% of the share capital of Global Directories Limited to a related party.  The net impact of this transaction on these financial statements was expected to be fairly insignificant.  However due to the seasonal nature of the directory business and the fact that the transaction was completed in January 2005 this has not been the case.  As few directories were published prior to January 2005 there was a large loss to that date which resulted in gain on sale of $440,486.  This profit has been included directly in contributed surplus in the shareholders' equity section of the balance sheet.  Similarly as the revenues from most of the directories published during the year were recognized after January 2005 the consequent minority share of profit is larger than expected.  I believe that the impact of this transaction is something of an anomaly and both aspects should be considered together.

Your board continues to actively search for new opportunities for the Group with a view to stimulating growth and building shareholder value.  Although these activities consume significant resources of both manpower and funding I feel that they are essential for the continued development and profitability of the Group.

I would like to thank our board for their continued support and commitment.  The experience they bring and the advice they provide to both myself and management is invaluable.

The board would like to thank all our company members for their continued efforts on behalf of the Group and commitment in a period of constant change.

As a public company listed on the Bermuda Stock Exchange, it should be noted that the directors and officers of MediaHouse Limited held 341,445 of the common shares and 53,752 preference shares. No rights to subscribe for shares in MediaHouse Limited have been granted to any director or officer and there are no service contracts with any director or officer. No dividend is proposed on the common shares for the period under review. 

Basic Earnings Per Share for the year was -1.07 versus +0.23 in 2004.

Randy French, President and Chief Executive Officer