1.  We have audited the attached Balance Sheet of CIL-NOVA
 PETROCHEMICALS LIMITED as at 31st March 2011, the Profit and Loss
 Account and also Cash Flow Statement for the year ended on that date
 annexed thereto (together read as financial statements). These
 financial statements are the responsibility of the Company''s
 Management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We 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 also
 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
 our opinion.
 
 3.  As required by the Companies (Auditors'' Report) Order, 2003 issued
 by the Company Law Board in terms of section 227 (4 A) of the Companies
 Act, 1956, we enclose in the Annexure a statement on the matters
 specified in paragraphs 4 & 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (i) We have obtained all the information and explanations, which are to
 the best of our knowledge and belief, were necessary for the purpose of
 our audit;
 
 (ii) 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;
 
 (iii) The Balance Sheet, Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (iv) In our opinion, the Balance Sheet, Profit and 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.
 
 (v) On the basis of written representation received from the directors,
 as on 31st March, 2011 and taken on record by the Board of Directors,
 none of the directors is disqualified as on 31st March 2011, from being
 appointed as director of the company in terms of clause (g) of
 subsection (1) of section 274 of the Companies Act, 1956.
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, read together with the
 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 31st March, 2011;
 
 (ii) In the case of the Profit and Loss Account, of the Profit of the
 Company for the year ended on that date; and
 
 (iii) In the case of the Cash Flow Statement, of the Cash Flow of the
 Company for the year ended on that date.
 
 
 ANNEXURE TO THE AUDITORS REPORT
 
 Referred to in paragraph 3 of our Report of even date to the Members of
 CIL-NOVA PETROCHEMICALS LIMITED for the year ended 31st March, 2011.
 
 1.  In respect of Fixed Assets:
 
 a.  The Company has maintained proper records showing full particulars
 including quantitative details and situation of Fixed Assets on the
 basis of available information.
 
 b.  As per the information and explanations given to us, the management
 at reasonable intervals during the year in accordance with a programme
 of physical verification physically verified the fixed assets and no
 material discrepancies were noticed on such verification as compared to
 the available records.
 
 c.  In our opinion, the Company has not disposed off any major /
 substantial part of the fixed assets during the year and the going
 concern status of the company is not affected.
 
 2.  In respect of its Inventories: v
 
 a.  The inventory other than the inventory of work in process has been
 physically verified during the year by the management. We have been
 informed that looking at the manufacturing process, it is not possible
 to physically verify the inventory of work in process. In our opinion,
 the frequency of verification is reasonable.
 
 b.  The procedures of physical verification of inventories followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 c.  On the basis of our examination of the records of inventory, we are
 of opinion that the Company is maintaining proper records of inventory.
 The discrepancies noticed on verification between the physical stocks
 and books records were not material.
 
 3.  In respect of loans, secured or unsecured, granted or taken by the
 company to/from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956.
 
 a.  During the year under audit, the company has not granted any loans,
 secured or unsecured, to the companies, firms and other parties covered
 in the register maintained under section 301 of the Companies Act, 1956
 hence clause 4 (iii) (a), (iii) (b), (iii) (c) and (iii) (d) of the
 Companies (Auditor''s Report) Order, 2003 are not applicable.
 
 b.  There are 7 parties covered in the register maintained under
 section 301 of the Companies Act, 1956 from whom the company has taken
 loans. The maximum amount involved during the year was Rs.1114.42 Lacs
 and the year-end balance of loans taken from such parties was Rs.
 1114.42 Lacs.
 
 c.  In our opinion and according to the information and explanations
 given to us, in case of loans taken during the year, the rates of
 interest, wherever applicable and other terms and conditions are not
 prima facie prejudicial to the interest of the company.
 
 d.  In respect of loans taken by the company, the company has taken
 interest free loans and in case of principal, the terms of repayment
 have not been stipulated hence the question of regularity of payment of
 interest and principal does not arise.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business with regard to purchases of inventory, fixed assets and with
 regard to the sale of goods and services. During the course of our
 audit, no major weakness has been noticed in the internal controls.
 
 5.  In respect of contracts or arrangements covered under Section 301
 of the Companies Act, 1956:
 
 a.  Based on the audit procedures applied by us and according to the
 information and explanations provided by the management, we are of the
 opinion that the contracts or arrangements that need to be entered into
 the register maintained under section 301 have been so entered.
 
 b.  In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the registers maintained under section 301 in
 respect of any party during the year have been made at prices which are
 reasonable having regard to prevailing market prices at the relevant
 time.
 
 6.  The company has not accepted any deposits from public.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company pursuant to the Rules made by the Central Government for the
 maintenance of cost records under Section 209 (1) (d) of the Companies
 Act, 1956 and are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained. We have not,
 however, made a detailed examination of the said records with a view to
 determine whether they are accurate or complete.
 
 9.  In respect of Statutory Dues:
 
 a. According to the records of the Company, the Company is by and large
 regular in depositing with appropriate authorities undisputed statutory
 dues including income tax, wealth tax, custom duty, Provident fund,
 excise duty, cess and other statutory dues applicable to it with the
 appropriate authorities, all though there have been delays in
 depositing Service Tax, Gujarat Valued Added Tax, Central Sales Tax,
 Professional Tax and Income Tax Deducted at Source. According to the
 information and explanations given to us, no undisputed amounts payable
 in respect of Income Tax, Service Tax, Customs Duty, Gujarat Valued
 Added Tax, Central Sales Tax and Excise Duty were outstanding as at
 31st March, 2011 for a period of more than six months from the date
 they became payable except Investor Education & Protection Fund of
 Rs.3.39 Lacs has not been deposited till balance sheet date.
 
 b.  On the basis of our examination of the records, following disputed
 statutory dues have not been deposited with the appropriate
 authorities;
 
 Name of the Statute    Nature of the Dues     Period          Amount
                                                        (Rs. In Lacs)
 
 The Income Tax Act, 
 1961                   Income Tax& Interest   1998-99 to       36.59
                                               2004-05 &
                                               2007-08
 
 
 The Income Tax Act, 
 1961                   Interest on Income 
                        Tax                    2001-02           2.72
 
 
 The Gujarat Value 
 Added                  Interest & Penalty     2006-07          12.77
 Tax Act, 2003
 
 
 The Central Excise 
 and Customs Act        Excise Duty and 
                        Penalty                June 2001      1787.33
                                               to 2006
 
 The Central Excise 
 and Customs Act        Excise Duty and 
                        Penalty                2004 to 2008    36.25
 
 
 
 The Central Excise 
 and Customs Act        Excise Duty and 
                        Penalty                2005-06          1.46
 
 
 
 The Central Excise 
 and Customs Act        Excise Duty and 
                        Penalty                2006 to 2008     1.22
 
 
 Service Tax Act        Service Tax and 
                        Penalty                2006 to 2009     5.79
 
 
 The Textile Committee  Textile Cess           1995 to 2005    50.90
 Amendment Act, 1973
 
 
 
 
 
 Name of the Statute           Forum where dispute is pending
 
 
 
 The Income Tax Act, 1961      Commissioner of Income Tax, Appeals
 
 The Income Tax Act,1961       The Income Tax Appellate Tribunal
 
 The Gujarat Value Added       Joint Commissioner Appeal
 Tax Act,2003 
 
 The Central Excise and        Custom Excise and Service Tax
 Customs Act                   Appellate Tribunal
 
 
 The Central Excise and        Commissioner of Excise and Customs
 Customs Act                   (Appeals)
 
 
 The Central Excise and        Assistant Commissioner of Central
 Customs Act                   Excise
 
 
 The Central Excise and        Hon''ble High Court of Gujarat
 Customs Act
 
 
 Service Tax Act               Custom Excise and Service Tax
                               Appellate Tribunal
 
 
 The Textiles Committee        Textiles Committee, Government of
 Amendment Act,1973            India, Ministry of Textiles
 
 
 10.  The accumulated losses at the end of the financial year are not
 more than fifty percent of its net worth. The Company has not incurred
 cash loss during the year under audit and in the immediately preceding
 financial year.
 
 11.  Based on our audit procedure and according to the information &
 explanations given to us, we are of the opinion that the company has
 not defaulted in repayment of dues to banks.
 
 12.  Based on our examination of documents and records and information
 and explanations given to us, the Company has not granted any loans and
 advances on the basis of security by way of pledge of shares,
 debentures and other securities.
 
 13.  The provisions of any special statute applicable to Chit Fund,
 Nidhi or Mutual benefit Fund/Societies are not applicable to the
 Company.  Therefore, clause 4 (xiii) of the Companies (Auditor''s
 Report) Order, 2003 is not applicable to the company.
 
 14.  The Company is not dealing or trading in shares, securities,
 debentures or other investments and hence, the requirements of Para 4
 (xiv) are not applicable to the Company.
 
 15.  As per the information provided to us, the Company has not given
 any guarantee for loans taken by others from bank or financial
 institutions.
 
 16.  The company has not obtained any term loans from banks or
 financial institutions during the year under audit.
 
 17.  According to the information and explanations given to us and on
 the basis of an overall examination of the balance sheet of the
 company, we report that no funds raided on short-term basis have been
 used for long-term purpose.
 
 18.  During the year, the Company has not made any preferential
 allotment of shares to parties and companies covered in the register
 maintained under Section 301 of the Companies Act, 1956.
 
 19.  During the year, the company has not issued any debentures.
 
 20.  During the year, the Company has not raised any money by way of
 Public issues.
 
 21.  Based upon the audit procedures performed and information and
 explanations given by the management, we report that no fraud on or by
 the Company has been noticed or reported during the year.
 
 
                                             For, J. T. SHAH & COMPANY
 
                                                 Chartered Accountants
 
                                                     (FRN No. 109616W)
 
                                                           (J.T. Shah)
 
 Place :  Ahmedabad                                            Partner
 
 Date  :   11.08.2011                                     [M  No 3983]