STEINER LEISURE LIMITED - Steiner Leisure Ltd.

AUDIT COMMITTEE REPORTThe Audit Committee consists of three members, Steven J. Preston, Chair, Cynthia R. Cohen and David S.Harris. The board of directors has determined that each of the Audit Committee members is independent of theCompany as defined in the Nasdaq Rules. The board also has determined that each member of the Audit Committeequalifies as an "Audit Committee Financial Expert" within the meaning of applicable SEC regulations.Management has the primary responsibility for the Company's internal controls, the financial reportingprocess and preparation of the consolidated financial statements of the Company. The independent auditors areresponsible for performing an independent audit of the Company's consolidated financial statements in accordancewith auditing standards generally accepted in the United States and issuing a report thereon. The independentauditors are also responsible for auditing the Company's internal control over financial reporting as of December 31,2007, based on criteria established in Internal Control – Integrated Framework, issued by the Committee ofSponsoring Organizations of the Treadway Commission, and issuing a report thereon. The Audit Committee'sresponsibility is to oversee these processes.The Audit Committee reviewed and discussed with management and the Company's independent auditors,Ernst & Young, the Company's internal control over financial reporting as of December 31, 2007 and the Company'saudited consolidated financial statements for the fiscal year ended December 31, 2007. Management represented tothe Audit Committee that the Company's consolidated financial statements were prepared in accordance withaccounting principles generally accepted in the United States. Management also represented to the Audit Committeethat, as of December 31, 2007, the Company's internal control over financial reporting was effective. The AuditCommittee also discussed with the Company's independent auditors the matters required to be discussed byStatement on Auditing Standards No. 61 (Communication with Audit Committees), as amended by Statement onAuditing Standards No. 90 (Audit Committee Communications).The Audit Committee received from the independent auditors the written disclosures and letter required byIndependence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) on (i) that firm'sindependence as required by the Independence Standards Board and (ii) the matters required to be communicatedunder generally accepted auditing standards. The Audit Committee also has discussed with the independent auditorstheir independence from the Company and has considered whether the provision of non-audit services to theCompany is compatible with the independence of the auditors.Based upon the review and discussions referenced above, the Audit Committee recommended to the boardof directors that the audited consolidated financial statements of the Company be included in the Company's AnnualReport on Form 10-K for the year ended December 31, 2007.Members of the Audit Committee:Steven J. Preston, ChairCynthia R. CohenDavid S. HarrisNotwithstanding anything to the contrary set forth in any of the Company's previous filings under theSecurities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), thatmight incorporate future filings, including this Proxy Statement, in whole or in part, the Audit Committee Reportshall not be incorporated by reference into any such filings.Bowne ID # g12968-5.pdf 13 May 2, 2008 12:16:289