Dear shareholders,
 
 Sterling made bold moves and undertook smart ventures during the year
 under review. Our destination has always been above us, while a
 vertical take off coupled with optimum speed is our means to meet our
 objectives.
 
 Keeping up with the pace of changing industry scenarios, we entered the
 Oil and Gas exploration industry.  And in due course we diversified
 itself into mining, oil trading, leasing of oil rigs and also providing
 seismic data interpretation during 2007-08.
 
 Oil prices are comprehensively linked with the fundamentals of growth
 and development of a given economy. Empirical research draws a link
 between the price of oil and key macroeconomic indicators, such as GNPp
 trade balance, unemployment, inflation and interest rates. It suggests
 that the price of oil has a major impact on the health of domestic
 economies. The continued growth in Oil and Gas exploration and
 production activity, is one of the primary drivers in the use of
 seismic surveys and seismic equipment.
 
 The global economy is reeling under a spell of inflation, influenced
 significantly by the accelerating crude oil prices. Even though oil
 prices softened in July-August 2008, it looks like it has not yet eased
 the double- digit inflationary pressures. However, the world oilfield
 service market is expected to expand to a USD 15 billion industry
 within the next five years. The industry is primarily driven by
 increased exploration and production activities, translating into a
 huge opportunity for Sterling.
 
 Presenting a brief review of Sterling''s performance during 2007-08, I
 take the privilege of declaring, that even during this period
 transition, we earned a consolidated income of Rs. 2,014.28 million.
 Our consolidated profit before tax was recorded at Rs. 533 million,
 while our consolidated net profit stood at Rs.  524 million.
 
 Given the growing demand and supportive government policies, we are
 optimistic about our future presence because, the demand for Oil and
 Gas is expected to remain strong in any feasible futuristic scenario.
 Again, the emerging low-carbon economies trend, presents lucrative
 opportunities for us.
 
 In recent years, the Oil and Gas sector was characterised by a growing
 appetite of oil products and low reserve accretion. The outlook for the
 industry continues to be optimistic, as the increase in oil prices is
 making a number of marginal fields profitable.
 
 These factors make the prospects of the oil industry particularly
 exciting and we are armed and eagerly waiting to seize the upcoming
 opportunities, which can only mean that we are in the process of fast
 forwarding our growth.
 
 Warm Regards,
 
 Nitin J. Sandesara
 
 Chairman