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Auditor Report of CIL Nova Petrochemicals Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of CIL NOVA PETROCHEMICALS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act 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 March 31, 2015;

ii. In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

iii. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

5. Report on Other Legal and Regulatory Requirements

i. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub- section (11) of section 143 of the Companies Act,2015, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

ii. As required by Section 143(3) of the Act, we report that:

(a) We have sought and 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 it appears from our examination of those books .

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 26 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph 5 (i) of our Report of even date to the Members of CIL NOVA PETROCHEMICALS LIMITED for the year ended 31st March, 2015.

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.

2. In respect of its Inventories :

(a) The inventory has been physically verified during the year by the management. 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 and Advances granted during the year.

As regards the loans , the company has not granted any loans, secured or unsecured during the year under audit, to the companies, firms and other parties covered in the register maintained under section 189 of the Companies Act, 2013 and therefore, the clauses (iii) (a) and (b) of the Companies (Auditor's Report) Order,2015 are not applicable.

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 continuing failures to correct major weaknesses has been observed.

5. During the year, the company has not accepted any deposits and hence the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under are not applicable to the company.

6. As per the information and explanation provided to us the company is not required to maintain the cost records as per the provisions of Companies(Cost Records and Audit) Rules,2014, hence Clause (vi) of the Companies (Auditor's Report) Order,2015.

7. 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 provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect statutory dues were outstanding as at 31st March, 2015 for a period of more than six months from the date they became payable.

(c) According to the records of the company, the dues of income tax, sales tax, wealth tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited on account of disputes and the forum where the dispute is pending are as under:

Name of the Statute Nature of the Dues Year Amount in

Wealth Tax Act,1957 Wealth Tax 2007-08 256,434

Income Tax Act,1961 Income Tax Demand 2010-11 2,719,970

Income Tax Demand 2011-12 23,721,760

The Central Excise Excise Duty & Penalty 2003-04 3,230,730 and Customs Act

Excise Duty & Penalty 2004-05 3,398,641

Excise Duty & Penalty 2005-06 146,479

Excise Duty & Penalty 2006-07 1,959,742 & 2007-08

Excise Duty & Penalty 2006-07 94,093

The Textile Committee Textile Cess 1995 to 2005 5,090,119 Amendment Act, 1973

Name of the Statute Forum where dispute is pending

Wealth Tax Act,1957 Commissioner of Income Tax (Appeals)

Income Tax Act,1961 Income Tax Appellate Tribunal

Commissioner of Income Tax (Appeals)

The Central Excise Custom Excise and Service Tax Appellate and Customs Act Tribunal

Custom Excise and Service Tax Appellate Tribunal

Assistant/Additional Commissioner of Central Excise

Commissioner of Excise and Customs (Appeals)

Custom Excise and Service Tax Appellate Tribunal

Textiles Committee, Government of India, The Textile Committee Ministry of Textiles Textile Cess Amendment Act, 1973

(d) During the year no amount is required to transfer to the investor education and protection fund and hence clause (c) of clause (vii) of the Companies (Auditor's Report) Order,2015 is not applicable to the company.

8. The company has no accumulated losses and has not incurred any cash losses during the financial year under review or in the immediately preceding financial year.

9. Based on our audit procedure and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to a Financial Institutions, Banks or debenture holders.

10. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

11. According to the information and explanations given to us, during year under review the company has not taken any term loans during the year.

12. Based upon the audit procedures performed and information and explanations given by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For J. T. Shah & Co. Chartered Accountants (FRN No. 109616W)

Sd/- ( J.T. Shah) Date : 30/05/2015 Partner Place : Ahmedabad (M. No. 3983)




Mar 31, 2014

We have audited the accompanying financial statements of CIL NOVA PETROCHEMICALS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year on that date annexed thereto (herein after referred to as financial statements), and a summary of significant accounting policies and other explanatory information.

2. Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditors'' Responsibility-

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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 March 31, 2014;

ii. In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

iii. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

5. Report on Other Legal and Regulatory Requirements

i. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

ii. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act,1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT Referred to in paragraph 5 (i) of our Report of even date to the Members of CIL NOVA PETROCHEMICALS LIMITED for the year ended 31st March, 2014.

1. In respect of Fixed Assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

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:

a. The inventory other than the inventory of work in progress 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 progress. 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 the 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 is One party 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.9,38,42,300/- and the year-end balance of loans taken from such parties was Rs. 9,38,42,300/-.

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 hence question of payment of interest does not arise. The company is regular in repayment of principal.

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 companies (Cost Accounting Records) Rule,2011 prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prime facie the prescribed accounts and records have been maintained. However, we have not made a detailed examination of the cost 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 wealth tax, Service Tax, Gujarat Valued Added Tax, Central Sales Tax, Professional Tax, Tax Deducted at Source, Custom duty, Provident fund, excise duty, Cess and other statutory dues applicable to it with the appropriate authorities.

b. 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, 2014 for a period of more than six months from the date they became payable except Investor Education & Protection Fund of Rs.3,38,715/- which is outstanding for more than six months from the date they became due.

c. 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 Amount in Rs.

The Income Tax Act, 1961 Interest on Income Tax 2,72,135

The Income Tax Act, 1961 Income Tax 27,19,970

The Income Tax Act, 1961 Penalty 1,33,650

3,49,750

11,050

Wealth Tax Act,1957 Wealth Tax 2,56,434

The Central Excise and Excise Duty and Penalty 32,30,730 Customs Act 33,98,641

The Central Excise and Excise Duty and Penalty 19,59,742 Customs Act

The Central Excise and Excise Duty and Penalty 1,46,479 Customs Act

The Textile Committee Textile Cess 50,90,119 Amendment Act, 1973

Name of the Statue Year Forum where dispute is pending

The Income Tax Act, 1961 2001-02 The Income Tax Appellate Tribunal

The Income Tax Act, 1961 2010-11 Commissioner of Income Tax (Appeals)

The Income Tax Act, 1961 2000-01 Commissioner of Income Tax, (Appeals)

2001-02 2003-04

Wealth Tax Act,1957 2007-08 Commissioner of Income Tax (Appeals)

The Central Excise and Customs Act 2003-04 Custom Excise and Service Tax 2004-05 Appellate Tribunal The Central Excise and Customs Act 2006-07 Commissioner of Excise and Customs & 2007-08 (Appeals) The Central Excise and Customs Act 2005-06 Assistant/Additional Commissioner of Central Excise

The Textile Committee Amendment Act, 1973 1995 to 2005 Textiles Committee, Government of 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 raised 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 & Co.

Chartered Accountants (FRN No. 109616W)

Sd/- ( J.T. Shah)

Date : 30/05/2014 Partner

Place : Ahmedabad (M. No. 3983)


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of CIL NOVA PETROCHEMICALS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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 March 31, 2013;

ii. In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

iii. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of subsection (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956

(Referred to in paragraph 1 of "Report on Other Legal and regulatory Requirements" of our report of even date.)

1. In respect of Fixed Assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

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:

a. The inventory other than the inventory of work in progress 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 progress. 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 the 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 is One party 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. 9,38,42,300/- and the year-end balance of loans taken from such parties was Rs. 9,38,42,300/-.

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 hence question of payment of interest does not arise. The company is regular in repayment of principal.

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 companies (Cost Accounting Records) Rule,2011 prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prime facie the prescribed accounts and records have been maintained. However, we have, however not made a detailed examination of the cost 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 wealth tax, Service Tax, Gujarat Valued Added Tax, Central Sales Tax, Professional Tax, Tax Deducted at Source, Custom duty, Provident fund, excise duty, Cess and other statutory dues applicable to it with the appropriate authorities. However, the Company is not regular in depositing Advance Income Tax.

b. 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, 2013 for a period of more than six months from the date they became payable except Investor Education & Protection Fund of Rs.3,38,715/- and Income Tax of Rs.40,24,162/- pertaining to current financial year which is outstanding for more than six months from the date they became due.

c. 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 Amount Year Forum where dispute is pending (Amount in Rs.)

The Income Tax Act, 1961 Interest on Income Tax 2,72,135 2001-02 The Income Tax Appellate Tribunal

The Income Tax Act, 1961 Penalty 1,33,650 2000-01 Commissioner of Income Tax, Appeals

3,49,750 2001-02

11,050 2003-04

The Central Excise and Excise Duty and Penalty 17,67,07,754 June 2001 Custom Excise and Service Tax

Customs Act to 2007 Appellate Tribunal

The Central Excise and Excise Duty and Penalty 19,59,742 2006-07 Commissioner of Excise and Customs Customs Act & 2007-08 (Appeals)

The Central Excise and Excise Duty and Penalty 1,46,479 2005-06 Assistant/Addi tional Commissioner of

Customs Act Central Excise

The Textile Committee Textile Cess 50,90,119 1995 to 2005 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 raised 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 & Co.

Chartered Accountants

(FRN No. 109616W)



Sd/-

( J.T. Shah)

Date : 30/05/2013 Partner

Place : Ahmadabad (M. No. 3983)


Mar 31, 2012

1. We have audited the attached Balance Sheet of CIL NOVA PETROCHEMICALS LIMITED as at 31st March 2012, the Statement of Profit and Loss 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 CompanyRss 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 (AuditorsRs 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss 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, 2012 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2012, 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, 2012;

(ii) In the case of the Statement of Profit and Loss, 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.

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,

2012.

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:

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 (AuditorRss Report) Order, 2003 are not applicable.

b. There are 2 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 9,38,42,300/- and the year-end balance of loans taken from such parties was Rs 9,37,88,300/-.

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 companies (Cost Accounting Records) Rule,2011 prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prime facie the prescribed accounts and records have been maintained. However, we have not made a detailed examination of the cost 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, Service Tax, Gujarat Valued Added Tax, Central Sales Tax, Professional Tax, Tax Deducted at Source, Custom duty, Provident fund, excise duty, Cess and other statutory dues applicable to it with the appropriate authorities. 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, 2012 for a period of more than six months from the date they became payable except Investor Education & Protection Fund of Rs 3,38,715/- 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 Nature of Amount Year Forum where Statute the Dues is pending (Amount in Rs)

The Income Tax Act, 1961 Income Tax& Interest 24,02,839 1998-99 Commissioner of Income Tax, Appeals to 2003-04 & 2007-08

The Income Tax Act, 1961 Interest on Income Tax 2,72,135 2001-02 The Income Tax Appellate Tribunal

The Gujarat Value Interest & Penalty 5,69,152 2006-07 Joint Commissioner Appeal

Added Tax Act,2003

The Central Excise and Excise Duty and Penalty17,87,32,622 June 2001 Custom Excise and Service Tax Customs Act to 2006 Appellate Tribunal

The Central Excise and Excise Duty and Penalty 32,18,949 2004 to 2008 Commissioner of Excise and Customs

Customs Act (Appeals)

The Central Excise and Excise Duty and Penalty 1,46,479 2005-06 Assistant/ Additional Commissioner of Customs Act Central Excise

The Central Excise and Excise Duty and Penalty 77,80,203 2006 to 2008 HonRsble High Court of Gujarat Customs Act

Service Tax Act Service Tax and Penalty 18,00,015 2006 to 2009 Custom Excise and Service Tax Appellate Tribunal

Service Tax Act Service Tax and Penalty 13,35,476 2006 to 2009 HonRsble High Court of Gujarat

The Textile Committee Textile Cess 50,90,119 1995 to 2005 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 & explanation given to us, we are of the opinion that the company is, by and large, regular 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 (AuditorRss 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 raised 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 & Co. Chartered Accountants (FRN No. 109616W)

Sd/- ( J.T Shah) Date : 27.08.2012 Partner Place : Ahmedabad (M. No. 3983)


Mar 31, 2011

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]


Mar 31, 2010

1. We have audited the attached Balance Sheet of CIL-NOVA PETROCHEMICALS LIMITED as at 31st March 2010, 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 Companys 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, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2010, 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, 2010;

(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, 2010.

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:

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 (Auditors 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. 1195.42 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, 2010 for a period of more than six months from the date they became payable except Wealth Tax of Rs. 5 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 Nature of the Amount Forum where dispute Statute Dues (Rs. In Lacs) Is pending

The Income Tax Act, Income Tax Commissioner of Income 34.29 1961 & Interest Tax, Appeals

The Income Tax Act, Interest on The Income Tax Appellate 2.72 1961 Income Tax Tribunal

The Central Excise and Excise Duty Custom Excise and Service 2718.59 Customs Act and Penalty Tax Appellate Tribunal

The Central Excise and Excise Duty Commissioner of Excise

52.17 Customs Act and Penalty and Customs (Appeals)

The Central Excise and Excise Duty Assistant Commissioner of

1.64 Customs Act and Penalty Excise and Customs

Service Tax Commissioner of Service

Service Tax Act 20.12 and Penalty Tax (Appeals)

Textiles Committee, The Textile Committee

Textile Cess 50.90 Government of India, Amendment Act, 1973 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. In our Opinion and according to the information and explanations given to us, there was a delay ranging upto 4 months in repayment of principal of Rs.65.52 Lacs and a delay ranging up to 10 month in repayment of interest of Rs.176.20 Lacs to State Bank of India. Further there was a delay ranging up to 60 days in repayment of rescheduled principal of Rs. 62.79 Lacs and delay ranging up to 77 days in respect of interest of Rs.219.64 Lacs in respect other 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 (Auditors 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 raised 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)

Sd/- (J. T. SHAH) PARTNER [M. No. 3983]

PLACE : Ahmedabad DATE : 07.08.2010

 
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