AUDITOR'S REPORT

Panama Petrochem Ltd.

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Market Cap. (₹)	2923.35 Cr.	P/BV	1.99	Book Value (₹)	242.78
52 Week High/Low (₹)	490/229	FV/ML	2/1	P/E(X)	13.76
Bookclosure	02/09/2025	EPS (₹)	35.13	Div Yield (%)	1.03

Year End :2025-03

We have audited the accompanying standalone financial
statements of Panama Petrochem Limited (“the Company”),

which comprises of the Balance Sheet as at March 31, 2025, the
Statement of Profit and Loss (including Other Comprehensive
Income), the Statement of Changes in Equity and the Statement of
Cash Flows for the year ended on that date and notes to financial
statements, including a summary of the significant accounting
policies and other explanatory information (hereinafter referred
to as “the Standalone Financial Statements").

In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone
financial statements gives a true and fair view in conformity,
with the aforesaid Ind AS and other accounting principles
generally accepted in India prescribed under section 133 of the
Act read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended, (“Ind AS") and other accounting
principles generally accepted in India, of the state of affairs
of the Company as at March 31, 2025 and its profit, total
comprehensive income, changes in equity and its cash flows
for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing (“SA"s) specified under
section 143(10) of the Act. Our responsibilities under those Standards
are further described in the Auditor's Responsibilities for the Audit
of the Standalone Financial Statements section of our report. We are
independent of the Company in accordance with the Code of Ethics
issued by the Institute of Chartered Accountants of India (“ICAI")
together with the ethical requirements that are relevant to our audit
of the Standalone Financial Statements under the provisions of the
Act and the Rules made thereunder, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and
the ICAI's Code of Ethics. We believe that the audit evidence obtained
by us is sufficient and appropriate to provide a basis for our audit
opinion on the Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the Standalone
Financial Statements of the current period. These matters were
addressed in the context of our audit of the Standalone Financial
Statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters. We have
determined the matters described below to be the key audit matters
to be communicated in our report.

Sr. No.	Key Audit Matter	Auditor's Response
1	Inventory Existence:
	The Company recognized inventory of H 326.02 crores as	We	have attended inventory counts at locations, which are
	at 31 March 2025. Inventory is held at various locations	selected based on financial significance and risk.
	across India.	For locations attended, we performed the following procedures
	Within each location, inventory is stored in warehouses,	at each site:
	tanks, containers and tanks attached to the Bonded Custom Warehouse.	•	Selected a sample of inventory items and compared the quantities we counted with the book balance.
	This is a key audit matter because of the	•	Observed a sample of managements inventory count
	• Significance of the inventory balance to the statement of		procedures to assess compliance with Company Policy and
	financial position and,	•	Made enquiries regarding obsolete inventory items and inspected the condition of items counted.
		•	Tested whether necessary adjustments are recorded in the financial statements for all material differences arising from physical stock counts.
		•	Evaluated the design and implementation of the controls over physical verification of inventories and tested the operating effectiveness of the controls during the year.

Sr. No.	Key Audit Matter	Auditor’s Response
	• Complexity involved in determining inventory quantities	•	For stocks at third party warehouses, obtained
	on hand due to the number, conversion from Ltr. to Kgs.,		confirmations, and as appropriate performed roll-back
	location and diversity of inventory storage locations,		procedures to tally with stock quantities at the year end, on
	inventories lying with third parties etc.		a sample basis.
		•	Verified the analytical reviews performed by the management such as consumption analysis and stock movement analysis for the year for raw material and finished goods at factories, on a sample basis.
2	Assessment of contingent liabilities and provisions related to Taxation, Litigations and claims:
	• The company has material uncertain tax positions	Our audit procedure included following:
	including matters under dispute relating to direct tax and indirect tax which involves significant judgment to determine the possible outcome of disputes.	•	Obtaining from the management details of matters under dispute including ongoing and completed tax assessments, demands and other litigations.
	• Assessment of contingent liabilities disclosure requires Management to make judgments and estimates in relation to the issues and exposures. Whether the liability is Inherently uncertain, the amounts involved are potentially significant and the application of accounting standards to determine the amount, if any, to be provided	•	Evaluation and testing of the design of internal controls followed by the Company relating to litigations, open tax positions for direct and indirect taxes and other matters and process followed to decide provisioning for the said liabilities or disclosure as Contingent Liabilities.
	as liability, is inherently subjective.	•	Discussing with Company's legal and taxation consultant
	• The assessment of the existence of the present legal or constructive obligation, analysis of the probability of the related payment and analysis of a reliable estimate,		for sufficient understanding of on-going and potential legal matters impacting the Company and the possible outcomes for the same.
	requires management's judgement to ensure appropriate	•	We also involved our firm's internal experts to evaluate
	accounting or disclosures.		the management's underlying judgements in making their
	• Due to the level of judgement relating to recognition,		estimates with regard to such matters.
	valuation and presentation of provisions and contingent	•	We have relied on the opinions of the Company where
	liabilities, this is considered to be a key audit matter.		Company has considered that the possibility of cash outflow is remote.
		•	We discussed the status and potential exposures in respect of significant litigation and claims with the Company's Management including their views on the likely outcome of each litigations, claims and the magnitude of potential exposure and sighted any relevant opinions given by the Company's advisors.
		We assessed the adequacy of disclosures made.

Information Other than the Standalone Financial
Statements and Auditor’s Report Thereon

The Company's Management and the Board of Directors are
responsible for the preparation of the other information. The
other information comprises the information included in the
Company's Annual Report, but does not include the standalone
financial statements and auditor's report thereon. The
Company's Annual Report is expected to be made available to us
after the date of this auditor's report.

Our opinion on the standalone financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.

In connection with our audit of the Standalone Financial
Statements, our responsibility is to read the other information
and, in doing so, consider whether the other information

is materially inconsistent with the Standalone Financial
Statements or our knowledge obtained during the course of our
audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that
there is a material misstatement of this other information;
we are required to report that fact. We have nothing to report
in this regard.

Responsibilities of Management and the Board of
Directors for the Standalone Financial Statements

The Company's Management and the Board of Directors are
responsible for the matters stated in Section 134(5) of the
Companies Act,2013 (“the Act") with respect to the preparation
and presentation of these standalone Ind AS financial statements
that give a true and fair view of the financial position, financial
performance (including other comprehensive income), cash

flows and changes in equity of the Company in accordance with
the accounting principles generally accepted in India, including
the Indian Accounting Standards (Ind AS) specified under section
133 of the Act, read with relevant rules issued thereunder.
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 standalone
Ind AS financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is
responsible for assessing the Company's ability to continue as
a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the
Company's financial reporting process.

Auditor’s Responsibility for the Audit of the Financial
Statements

Our objectives are to obtain reasonable assurance about whether
the standalone financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of the
standalone financial statements.

As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:

• Identify and assess the risks of material misstatement of
the standalone financial statements, whether due to fraud
or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section
143(3)(i) of the Act, we are also responsible for expressing

our opinion on whether the Company has adequate internal
financial controls system in place and the operating
effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.

• Conclude on the appropriateness of management's use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a
going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's
report to the related disclosures in the standalone financial
statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor's
report. However, future events or conditions may cause the
Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content
of the standalone financial statements, including the
disclosures, and whether the standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.

• Materiality is the magnitude of misstatements in the
Standalone Financial Statements that, individually or in
aggregate, makes it probable that the economic decisions
of a reasonably knowledgeable user of the financial
statements may be influenced. We consider quantitative
materiality and qualitative factors in (i) planning the scope
of our audit work and in evaluating the results of our
audit work; and (ii) to evaluate the effect of any identified
misstatements in the Standalone Financial Statements.

We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements
regarding independence, and to communicate with them
all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable,
related safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor's report unless law
or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit

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
(including Other Comprehensive Income), Statement
of Changes in Equity and the Statement of Cash Flow
dealt with by this Report are in agreement with the
relevant books of account.

d. In our opinion, the aforesaid standalone financial
statements comply with the Ind AS 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 March 31, 2025 taken
on record by the Board of Directors, none of the
directors is disqualified as on March 31, 2025 from
being appointed as a director in terms of Section 164
(2) of the Act.

f. With respect to the adequacy of the internal financial
controls over financial reporting of the Company and
the operating effectiveness of such controls, refer
to our separate Report in “Annexure A”. Our report
expresses an unmodified opinion on the adequacy
and operating effectiveness of the Company's internal
financial controls with reference to Standalone
Financial Statements..

g. With respect to the other matters to be included in the
Auditor's Report in accordance with the requirements
of section 197(16) of the Act, as amended, in our opinion
and to the best of our information and according to
the explanations given to us, the remuneration paid
by the Company to its directors during the year is in
accordance with the provisions of Section 197 of the
Companies Act, 2013 read with schedule V of the Act.

h. 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, as amended, 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
standalone financial statements.

ii. The Company has made provision, as required
under the applicable law or accounting
standards, for material foreseeable losses,
if any, on long-term contracts including
derivative contracts.

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

iv. (a) The Management has represented that,

to the best of its knowledge and belief, no
funds (which are material either individually
or in the aggregate) have been advanced or
loaned or invested (either from borrowed
funds or share premium or any other
sources or kind of funds) by the Company
to or in any other person or entity, including
foreign entity (“Intermediaries"), with the
understanding, whether recorded in writing
or otherwise, that the Intermediary shall,
whether, directly or indirectly lend or invest
in other persons or entities identified in
any manner whatsoever by or on behalf of
the Company (“Ultimate Beneficiaries") or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that,
to the best of its knowledge and belief,
no funds (which are material either
individually or in the aggregate) have been
received by the Company from any person
or entity, including foreign entity (“Funding
Parties"), with the understanding, whether
recorded in writing or otherwise, that
the Company shall, whether, directly or
indirectly, lend or invest in other persons
or entities identified in any manner
whatsoever by or on behalf of the Funding
Party (“Ultimate Beneficiaries") or provide
any guarantee, security or the like on
behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that
have been considered reasonable and
appropriate in the circumstances, nothing
has come to our notice that has caused us
to believe that the representations under
sub-clause (i) and (ii) of Rule 11(e) of the
Companies (Audit and Auditor's) Rules,
2014 as provided under (a) and (b) above,
contain any material misstatement.

v. As stated in Note 9 (e) to the Standalone
Financial Statements:

(a) The final dividend proposed in the previous
year, declared and paid by the Company

during the year is in accordance with
Section 123 of the Act, as applicable.

(b) The interim dividend declared and paid by
the Company during the year and until the
date of this report is in compliance with
Section 123 of the Act.

(c) The Board of Directors of the Company
have proposed final dividend for the year
which is subject to the approval of the
members at the ensuing Annual General
Meeting. The amount of dividend proposed
is in accordance with section 123 of the
Act, as applicable.

vi. Based on our examination which included test
checks, the company has used accounting
software for maintaining its books of account for
the financial year ended 31 March 2025 which
has a feature of recording audit trail (edit log)
facility and the same has operated throughout
the year for all relevant transactions recorded
in the software. Further, during the course of
our audit we did not come across any instance

of audit trail feature being tampered with
and the audit trail has been preserved by the
Company as per the statutory requirements for
record retention.

2. As required by the Companies (Auditor's Report) Order, 2016
(“the Order"), issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Companies
Act, 2013, we give in the “Annexure B” a statement on the
matters specified in paragraphs 3 and 4 of the Order, to the
extent applicable.

For JMR & Associates LLP

Chartered Accountants
Firm Registration No. 106912W / W100300

CA. Nikesh Jain

Partner

Place: Mumbai Membership No. 114003

Date: 26 May, 2025 UDIN: 25114003BMNTTZ6283

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