NCX 2007 Annual Report | Management’s Annual Report on Internal Control Over Financial Reporting


The following report is provided by management in respect of NOVA Chemicals’ internal control over financial reporting (as defined in Rules 13a-15f and 15d-15f under the United States Securities Exchange Act of 1934):

1.	NOVA Chemicals’ management is responsible for establishing and maintaining adequate internal control over financial reporting for NOVA Chemicals.

2.	Management has used the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework to evaluate the effectiveness of NOVA Chemicals’ internal control over financial reporting. Management believes that the COSO framework is a suitable framework for its evaluation of NOVA Chemicals’ internal control over financial reporting because it is free from bias, permits reasonably consistent qualitative and quantitative measurements of NOVA Chemicals’ internal controls, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of NOVA Chemicals’ internal controls are not omitted and is relevant to an evaluation of internal control over financial reporting.

3.	NOVA Chemicals’ Consolidated Financial Statements include the accounts of the INEOS NOVA joint venture via proportionate consolidation in accordance with Canadian GAAP. Management is unable to evaluate the effectiveness of internal control within the joint venture due to the fact that NOVA Chemicals does not have the right or authority to evaluate the internal controls of the joint venture and does not have the access necessary, in practice, to evaluate those controls. Management’s conclusion regarding the effectiveness of internal controls does not extend to the internal controls of the joint venture. The 2007 Consolidated Financial Statements of NOVA Chemicals included $920 million and $396 million of total and net assets, respectively, related to the INEOS NOVA joint venture as of December 31, 2007, and $1,005 million and $60 million of revenues and net loss, respectively, for the year then ended.

4.	Management has assessed the effectiveness of NOVA Chemicals’ internal control over financial reporting, as at December 31, 2007, and has concluded that such internal control over financial reporting is effective. There are no material weaknesses in NOVA Chemicals’ internal control over financial reporting that have been identified by management.

5.	Ernst & Young LLP, who has audited the Consolidated Financial Statements of NOVA Chemicals for the year ended December 31, 2007, has also issued a report on internal controls under Auditing Standard No. 5 of the Public Company Accounting Oversight Board (United States). This report is located on page 70 of this Annual Report.


Jeffrey M. Lipton	Larry A. MacDonald
Chief Executive Officer	Senior Vice President & Chief Financial Officer

February 7, 2008 Calgary, Canada