1.  We have audited the attached Balance Sheet of STERLING
 INTERNATIONAL ENTERPRISES LIMITED as at 30th June, 2010 and also the
 Profit & Loss Account and the Cash Flow Statement for the year ended on
 that date annexed thereto. These Financial Statements are the
 responsibility of the Companys Management.  Our responsibility is to
 express an opinion on this financial statement based on our audit.
 
 2.  We have conducted our audit in accordance with auditing standards
 generally accepted in India. These standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 ouropinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003, issued
 by the Central Government of India in terms of sub Section (4A) of
 section 227 of the Companies Act 1956, we enclose in the annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 order.
 
 4.  Further to our comments in the annexure referred to in paragraph 3
 above, we state that:
 
 a) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 Audit;
 
 b) In our opinion, Proper books of account, as required by law, have
 been kept by the company, so far as appears from our examination of
 those books;
 
 c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in Sub-Section (3C) of Section 211 of the
 Companies Act, 1956.
 
 e) On the basis of the written representations received from the
 Directors as on 30th June, 2010 and taken on record by the Board of
 Directors, we report that none of the Directors of the company are
 disqualified as on 30th June, 2010 from being appointed as a Director
 in terms of Clause (g) of the sub- section (1) of section 274 of the
 Companies Act, 1956.
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with the other
 notes thereon give, the information required by the Companies Act, 1956
 in the manner so required and give a true and fair view in conformity
 with the accounting principles generally accepted in India:
 
 I) In the case of the Balance Sheet, of the state of affairs of the
 company as at 30th June, 2010;
 
 ii) In the case of the Profit & Loss Account, of the Profit of the
 company for the year ended on that date; and
 
 iii) In the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE
 MEMBERS OF STERLING INTERNATIONAL ENTERPRISES LIMITED ON THE ACCOUNTS
 AS AT AND FOR THE PERIOD ENDED 30th June, 2010.
 
 (I) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) Fixed assets have been physically verified by the management based
 on a phased program of verification of all the assets during the year,
 which in our opinion is reasonable having regard to the size of the
 company and the nature of its business. No material discrepancies were
 noticed on such verification.
 
 (c) As per the information and explanations given to us, during the
 year, the company has not disposed off any substantial part of fixed
 assets thatwouldaffectthe going concern.
 
 (ii) (a) As per the information and explanations given to us, there is
 no trading or manufacturing activities in the company during the year,
 as a result there are no inventories in the company during the year.
 Therefore the clause is notapplicable.
 
 (b) The clause is not applicable to the company as explained above.
 
 (c) The clause is not applicable to the company as explained above.
 
 (iii) The Company has not granted any unsecured loan to a company
 covered in the register maintained
 
 under section 301 of the companies Act, 1956. The Company has not taken
 any loans, secured or unsecured, from companies, firms or other parties
 covered in the register maintained under section 301 of the Companies
 Act, 1956.
 
 (iv) According to information and explanations given to us, there are
 adequate internal control procedures
 
 commensurate with the size of the company and nature of its business
 for the purchase of inventory and fixed assets and sales of Goods and
 service. We have not observed any continuing failure to correct major
 weakness in internal controls.
 
 (v). (a) According to the information and explanations given to us, we
 are of the opinion thatthe particulars of contracts or arrangements
 that need to be entered in to the register maintained under section 301
 of the Companies Act, 1956 have been so entered.  (b) In our opinion
 and according to the information and explanations given to us, there
 are no transactions of purchase of Goods and materials and sales of
 Goods, material & services made in pursuance of contracts or
 arrangements required to be entered in the register maintained under
 section 301 of the Companies Act, 1956, aggregating during the year to
 Rs. 5,00,000/- or more in respect of each party.
 
 (vi) The Company has not accepted any deposits from the public and
 hence directives issued by the Reserve
 
 Bank of India and provisions of section 58A and 58AA or any other
 relevant provisions of the companies Act, 1956 and rules framed there
 under are not applicable for the year under audit.
 
 (vii) In our opinion, the Company has an internal audit System
 commensurate with the size and nature of its business.
 
 (viii) The maintenance of cost records has not been prescribed by the
 Central Government of India under section 209 (1)(d) of the companies
 Act, 1956 for the products manufactured by the company.
 
 (ix) (a) According to the records of the company, the company has been
 regular in depositing with appropriate authorities, Undisputed
 statutory dues including Provident Fund, Income tax, Sales Tax / VAT,
 Wealth tax, Service Tax, Custom duty, Cess and other statutory dues.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of such statutory dues were
 outstanding as at the 30th June 2010 for a period of more than six
 months from the date they became payable.
 
 (c) According to the information and explanations given to us, there
 are no such statutory dues which have not been deposited on account of
 any dispute.
 
 (x).  The Company neither has Accumulated losses nor it has incurred
 any cash losses during the year and in the immediately preceding
 financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 company has not defaulted in the repayment of the dues to financial
 institutions or banks.
 
 (xii) According to the information and explanations given to us and
 based on the documents and records produced to us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.  (xiii) In our opinion, the
 Company is not a chit fund, a nidhi or a mutual benefit fund society.
 Therefore, the provisions of clause 4
 
 (xiii) of the companies (Auditors Report) Order, 2003 are not
 applicable to the company.
 
 (xiv) In our opinion, the company is not dealing in or trading in
 shares, securities, debentures and other investments. Accordingly, the
 provisions of clause 4(xiv) of the companies (Auditors Report) Order,
 2003 are not applicable to the company. All the Investments made by the
 company are held in its own name.
 
 (xv) According to the information and explanations given to us by the
 management, the company has not given any Guarantee for loan taken by
 other from banks or financial institutions.
 
 (xvi) According to the information and explanations given to us by the
 management, the company has not taken any term loans.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the company, we report
 that no funds raised on short term basis have been used for long term
 investments. No long term funds have been used to finance short term
 assets except permanent working capital.
 
 (xviii) According to the information and explanations given to us,
 during the year the Company has not made any preferential allotment of
 shares to the parties or companies covered in the register maintained
 undeletion 301 of the companies Act, 1956.
 
 (xix) The Company has not issued any debentures and hence clause 4(XIX)
 of the companies (Auditors Report) Order, 2003 is not applicable to
 the company.
 
 (xx) We have verified the end use of money raised by GDR as disclosed
 in the notes to the financial statements.
 
 (xxi) According to the information and explanations given to us no
 frauds on or by the company has been noticed or reported during the
 year.
 
                                                For H.S.Hathi & Co.  
                                              Chartered Accountants 
                                            Firm Reg. No. : 103596W
 
                                                    Hemant S. Hathi
                                                        (Partner)
                                               Membership No. 37109
 
 Place: Mumbai
 
 Date: 19th November, 2010