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Directors Report of Panama Petrochem Ltd.

Mar 31, 2018

Dear Members

The Directors have pleasure in presenting the Thirty sixth Annual Report of the Company together with the Audited Statement of Accounts for the Financial Year ended March 31, 2018.

FINANCIAL HIGHLIGHTS (Rs. In lakhs)

Particulars	Standalone		Consolidated
Particulars	2017-2018	2016-2017	2017-2018	2016-2017
Net Profit before Tax	8,354.09	6,281.11	9,015.41	6,565.64
Less: Provision for Taxes	2,918.11	2,185.58	2,918.11	2,185.58
Net Profit After Tax	5,435.98	4,095.53	6,097.30	4,380.05
Other Comprehensive Income	1.91	8.70	1.91	8.70
Add: Profit Brought Forward	18,044.99	14,183.46	19,519.86	15,373.81
Profit available for appropriation	23,482.88	18,287.69	25,619.08	19,762.56
Dividend of previous year	403.29	201.65	403.29	201.65
Dividend distribution tax	82.10	41.05	82.10	41.05
Profit Carried Forward to Balance Sheet	22,997.49	18,044.99	25,133.68	19,519.86

OPERATIONAL PERFORMANCE

- Earnings before Interest, Depreciation, and Tax&Amortization on a standalone basis increased by 35.73% to Rs. 9,848.43 lakhs.

- Net Profit on a standalone basis increased by 32.73 % to â 5,435.98 lakhs.

- Revenue from Operations on a standalone basis increased by 50.35% to Rs. 1,18,967.45 lakhs.

- The consolidated revenue from operations of the Company for the year ended March 31, 2018 was Rs. 1,34,581.26 lakhs an increase of 49.64% on a Year on Year basis.

- Net Profit on a consolidated basis increased by 39.21% to Rs. 6,097.30 lakhs.

- EPS on standalone basis increased from Rs. 6.77 to Rs. 8.99

- EPS on consolidated basis increased from Rs. 7.24 to Rs. 10.08

A significant improvement in the operating performance of your company was witnessed during the financial year 2017-18. Net Profit on a standalone basis was boosted by 32.73 % as compare to the previous year. The Company was able to capitalize on the market conditions through its operational excellence, higher efficiency and well executed strategies which led to increase in consolidated profit ofthe Company by 39.21% to Rs. 6,097.30 lakhs.

The consolidated revenue from operations of the Company for year ended March 31, 2018 was increased by 49.64 % to Rs. 1,34,581.26 lakhs.

EPS of the year under review improved to Rs. 10.08 as against Rs. 7.24 in the previous year on consolidated basis. MANAGEMENT DISCUSSION & ANALYSIS

The detailed Management Discussion & Analysis Report for the year under review, as stipulated under Listing Regulations is presented in a separate section forming part of the Annual Report.

DIVIDEND

Your Board of Directors is pleased to propose a dividend at the rate of Rs. 1.2 per share (i.e. 60%) of â2/- each for the financial year 2017-18 as against Rs. 1.00/- per share of Rs. 2 each (50%) in the previous year, considering the promising future prospects of the Company.

The dividend will be paid to the members holding shares in electronic form as per the beneficiary position downloaded from the Depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) as at the close of business hours on August 16, 2018 and to those Members holding shares in physical form, after giving effect to valid transfers in respect of transfer requests lodged with the Company as at close of business hours August 16, 2018. Dividend will be paid within two weeks from the date of declaration of dividend.

The total outflow towards dividend on Equity Shares for the year would be Rs. 873.70 lakhs (including dividend tax).

BONUS SHARES

During the year under review, the Company has issued and allotted 2,01,64,533 bonus shares to the equity shareholders in the proportion of 1:2, i.e. 1 (One) bonus share of Rs. 2 each for every 2 (Two) fully paid-up equity shares.

TRANSFER TO RESERVES

The Company does not propose to transfer any amount to the General Reserve out of the amount available for appropriations.

CREDIT RATING

We are glad to announce that your Company got credit rating from one of the leading credit rating agencies CARE and is assigned a âCARE A â rating to the Long Term Facilities and âCARE A1â rating to the Short Term Facilities.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2018 was Rs. 1,209.87 lakhs as against Rs. 806.58 lakhs in previous year. During the year under review, the Company has issued 2,01,64,533 Bonus Shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweats equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date ofthis report. There has been no change in the nature of business ofthe Company.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

As on March 31, 2018 your Company has only one subsidiary, Panol Industries RMC FZE,UAE.

The Consolidated Financial Statements ofthe Company and its subsidiary, form part ofthe Annual Report and are reflected in the Consolidated Financial Statements of the Company.

The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation 16(1)(c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ). The Policy, as approved by the Board, is uploaded on the Companyâs website. http://panamapetro.com/wp-content/uploads/2015/12/ Subsidiary-Policy.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the accompanying Financial Statements.

PERFORMANCE AND FINANCIAL POSITION OF PANOL INDUSTRIES RMC FZE

Net sales of Panol Industries RMC FZE have increased significantly from Rs. 10,815.57 lakhs in the previous year to Rs. 15,629.94 lakhs during 2017-18. Net profit during the period is boosted to Rs. 661.32 lakhs, as compared to a net profit ofRs. 284.52 lakhs in the previous year.

Panol Industries RMC FZE, UAE, is a wholly owned subsidiary of the Company. The Company has built a brand new manufacturing facility in Ras Al Khaimah (UAE). At this new facility the Company will manufacture petroleum specialty products to cater to the GCC & MENA regions.

The plant enjoys logistic advantage since it is situated on the port and has direct dedicated pipelines to receive and discharge raw material and finished products directly to bulk vessels.

During the year under review, no Company has become or ceased to be a subsidiary of the Company. The Company does not have any associate or joint venture Companies. A statement containing the salient features of the financial position of the subsidiary companies in Form AOC.1 is annexed as Annexure A.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on an armâs length basis, in the ordinary course of business and were in compliance with the applicable provisions ofthe Companies Act, 2013 Othe Actâ) and the Listing Regulations. There were no materially significant Related Party Transactions made by the Company during the year.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Companyâs website at the web link: http://panamapetro.com/wp-content/uploads/2016/01/Related-Party-Transactions.pdf

Details of the transactions with Related Parties are provided in the accompanying financial statements.

RISK MANAGEMENT

Your Company has adopted a Risk Management Policy/ Plan in accordance with the provisions of the Companies Act, 2013 and the Listing Regulations. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk.

The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status.

This risk management process covers risk identification, assessment, analysis and mitigation. Incorporating sustainability in the process also helps to align potential exposures with the risk appetite and highlights risks associated with chosen strategies

DIRECTORS

Your Companyâs Board comprises of 8 Directors with considerable experience in their respective fields. Of these 4 are Executive Directors and 4 Non Executive (Independent) Directors. The Chairman of the Board is an Executive Director.

APPOINTMENT OF DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Companyâs Articles of Association, Mr. Samir A.Rayani, Director, retires by rotation and being eligible to offer himself for re-appointment. Directors recommend his re-appointment. The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed both under sub-section(6) of Section 149 of the Companies Act, 2013 and Regulation 16 (1) (b) ofthe Listing Regulations.

In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.

No Director has retired or resigned during the year.

WOMAN DIRECTOR

In terms ofthe provisions of Section 149 ofthe Companies Act, 2013 and Regulation 17 ofthe Listing Regulations, a company shall have at least one Woman Director on the Board of the Company. Your Company has appointed Ms. Nargis Mirza Kabani on its Board.

APPOINTMENTS/RESIGNATIONS OF THE KEY MANAGERIAL PERSONNEL

No Key Managerial Personnel has resigned or appointed during the year under review.

BOARD AND COMMITTEE MEETINGS

Your Companyâs Board of Directors met five times during the financial year under review. A calendar of Meetings is prepared and circulated in advance to your Directors.

Audit Committee of the Company as constituted by the Board is headed by Mr. Madan Mohan Jain with Mr. Samir Rayani and Mr. Mukesh Mehta as Members. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board. All the recommendations made by the Audit Committee were accepted by the Board.

Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations.

PROCEDURE FOR NOMINATION AND APPOINTMENT OF DIRECTORS:

The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, and financial condition and compliance requirements.

The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Directorâs appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the resume of potential candidates vis-a-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR:

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations.

Independence: In accordance with the above criteria, a Director will be considered as an âIndependent Directorâ if he/ she meets with the criteria for âIndependent Directorâ as laid down in the Companies Act, 2013 and Regulation 16 (1) (b) of the Listing Regulations.

Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill-domain mix of the Board.

Positive Attributes: In addition to the duties as prescribed under the Companies Act, 2013 the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal skills and soundness of judgment. Independent Directors are also expected to abide by the âCode for Independent Directorsâ as outlined in Schedule IV to the Act.

ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board had carried out evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.

The Boardâs functioning was evaluated on various aspects, including inter alia structure ofthe Board, including qualifications, experience and competency of Directors, diversity in Board and process of appointment; Meetings of the Board, including regularity and frequency, agenda, discussion and dissemination of information; functions of the Board, including strategy and performance evaluation, corporate culture and values, governance and compliance, evaluation of risks, grievance redressal for investors, stakeholder value and responsibility, conflict of interest, review of Board evaluation and facilitating Independent Directors to perform their role effectively; evaluation of managementâs performance and feedback, independence of management from the Board, access of Board and management to each other, succession plan and professional development; degree of fulfillment of key responsibilities, establishment and delineation of responsibilities to Committees, effectiveness of Board processes, information and functioning and quality of relationship between the Board and management.

Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director & CEO.

Areas on which the Committees ofthe Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings. The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors. The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.

REMUNERATION POLICY

Your Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and Senior Management, pursuant to the provisions of the Act and Listing Regulations.

The philosophy for remuneration of Directors, Key Managerial Personnel of the Company is based on the commitment of fostering a culture of leadership with trust. The Remuneration Policy of the Company is aligned to this philosophy.

The Nomination and Remuneration Committee has considered the following factors while formulating the Policy:

(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(iii) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

Details of the Remuneration Policy are given in the Corporate Governance Report.

LISTING OF SHARES

Your Companyâs shares are listed on the BSE Limited and National Stock Exchange of India Limited. The Company has paid the listing fees for the year 2017-2018. The GDRs ofthe Company are listed on Luxembourg Stock Exchange.

CORPORATE GOVERNANCE

Your Company has implemented all the mandatory requirements pursuant to Listing Regulations. A separate report on Corporate Governance is given as a part ofthe Annual Report along with the certificate received from the Practicing Company Secretary, M/s. Milind Nirkhe & Associates, Company Secretaries, confirming the compliance.

PUBLIC DEPOSITS

During the year under report, your Company did not accept any deposits from the public.

INSURANCE

Your Company has taken adequate insurance cover for all its assets.

INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls with reference to financial statements. Your Company has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness ofthe accounting records and the timely preparation of reliable financial disclosures.

CORPORATE SOCIAL RESPONSIBILITY

As a socially responsible Company, your Company has a strong sense of community responsibility.

As its operations have expanded, your Company has retained a collective focus on the various areas of corporate sustainability that impact people, environment and the society at large. Founded on the philosophy that society is not just another stakeholder in its business, but the prime purpose of it, the Company, across its various operations is committed to making a positive contribution.

The Board has constituted a Corporate Social Responsibility Committee headed by Mr. Mukesh Mehta as Chairman, with Mr. Amin A. Rayani and Ms. Nargis Kabani as Members. The Company has adopted a Corporate Social Responsibility (CSR) Policy in compliance with the provisions of the Companies Act, 2013. As part of its CSR initiatives, the Company has undertaken projects in the areas of promoting health care and education. The above projects are in accordance with Schedule VII of the Act. The Company has spent Rs. 114.13 lakhs towards the CSR projects during the current Financial Year 2017-18.

The Annual Report on CSR activities is annexed as Annexure B.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2017-18.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013, the amounts of dividend remaining unpaid or unclaimed for a period of seven years from the date of its transfer to the unpaid dividend account of the Company are required to be transferred to the Investor Education and Protection Fund (IEPF) set up by the Government of India. Consequently no claim shall lie against the Company in respect of any such amounts.

The amount of unpaid / unclaimed dividend up to the financial year 2009-2010 has been transferred to IEPF. Members who have not yet encashed their dividend warrant(s) for the financial year ended March 31, 2011 and for any subsequent financial year, are requested to make their claims to the Company without any delay, to avoid transfer oftheir dividend/ shares to the Fund/ IEPF Demat Account.

Members are also requested to note that, pursuant to the provisions of Section 124 of the Act and the IEPF Rules, the Company is obliged to transfer all shares on which dividend has not been paid or claimed for seven consecutive years or more to an IEPF Demat Account.

Members/ claimants whose shares, unclaimed dividend, have been transferred to the IEPF Demat Account or the Fund, as the case may be, may claim the shares or apply for refund by making an application to the IEPF Authority in Form IEPF- 5 (available on iepf.gov.in) along with requisite fee as decided by the IEPF Authority from time to time. The Member / Claimant can file only one consolidated claim in a financial year as per the IEPF Rules.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman ofthe Audit Committee. It is affirmed that no personnel ofthe Company has been denied access to the Audit Committee.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

AUDITORS

- STATUTORY AUDITORS

- COST AUDITORS

Based on the Audit Committee recommendation at its meeting held on May 25, 2018, GMVP & Associates LLP (LLPIN :- AAG-7360) were appointed by the Board as the Cost Auditors of the Company for conducting an audit of the cost accounting records ofthe Company for financial year commencing from April 1, 2018 to March 31, 2019.

Cost Audit Report for the financial year 2017-2018 will be submitted by Cost Auditor to the Central Government within the stipulated time period.

The Cost Audit Report for the financial year 2016-2017 was submitted to the Central Government within the stipulated time.

Pursuant to the provisions of Section 148 of the Act read with The Companies (Audit and Auditors) Rules, 2014, Members are requested to consider the ratification of the remuneration payable to GMVP & Associates LLP.

- SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed CS. Milind Nirkhe, Practicing Company Secretary (Proprietor), Practicing under the name & style M/S Milind Nirkhe & Associates, CP No: 2312 to undertake the Secretarial Audit of the Company for the year ended March 31, 2018. The Secretarial Audit Report for the year under review is annexed as Annexure C.

The Auditorsâ Report and the Secretarial Audit Report for the financial year ended March 31, 2018 do not contain any qualification, reservation, adverse remark or disclaimer.

SECRETARIAL STANDARDS OF ICSI

The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India and approved by the Central Government.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO A. Conservation of Energy:

The Company is aware of energy consumption and environmental issues related to it and is continuously making sincere efforts towards conservation of energy. The Company is in fact engaged in the continuous process of further energy conservation through improved operational and maintenance practices.

The Company has taken adequate actions to conserve the energy as Process time reduction by technically improved blending system.

(i) Steps Taken or Impact on Conservation of Energy:

In line with the Companyâs commitment towards conservation of energy, all plants continue with their efforts aimed at improving energy efficiency through innovative measures to reduce wastage and optimize consumption. Some of the measures taken by the Company in this direction are as under:

Include:

1. At its Plants, the Company has carried out various actions to optimize energy consumption and reduce losses.

2. Energy efficient motors are being installed in order to optimize use of power.

(ii) Steps taken by the Company for utilizing alternate sources of Energy:

In addition to various initiatives around energy efficiencies, the Company has also focused on renewable sources of energy. Various steps taken for utilizing alternate sources of energy.

(iii) Capital Investment on Energy Conservation Equipments:

During the year, the Company has invested in various energy conservation equipments. The equipment in which investment was made included, various energy efficient electric motors. The Company has also installed power efficient material handling and flowing system which has played role in energy saving.

The Company has technically improved its thermo packs to get better fuel efficiency and lower emission stack.

B. Technology Absorption:

(i) Efforts made towards Technology Absorption:

Technology is a key enabler and core facilitator as one of the strategic pillars of the Company. Since inception your Company has been at the forefront of leveraging technology to provide better products and services to its customer.

The Company has an updated R & D Center at its Ankleshwar Plant. It is the technical centre of the Company and has been the backbone for most of our major product break throughs. This Centre at Ankleshwar is fully equipped with modern testing & analytical equipments. The Centre is operated by the team of well qualified technocrats, as a result, the in - house R & D unit of Panama has been recognized by the Ministry of Science & Technology & the Department of Scientific and Industrial Research (DSIR). With this recognition Company will spend more on R & D activities and get more new products which will be of better quality. It will also assist in research for import substitution, energy conservation and control of pollution. The in-house R & D facility has enabled us to develop new products.

(ii) Benefits derived like product improvement, cost reduction, product development or import substitution:

Technology has responded by being true strategic partner with business. The Company has derived many benefits from R & D and technology absorption which includes product development, product improvement & effective cost management, technology has also played a major role in ensuring high level of service delivery.

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):

(a) the details of technology imported: The Company has not imported any technology during the last three financial years.

(b) the year of import: Not Applicable

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof: Not Applicable Expenditure on research & development

The expenditure on R & D activities incurred during the year is given hereunder:

C. Foreign exchange earnings and outgo:

i. Export Activities: During the year under review the Company has made Import/Export as given in (ii) below.

ii. Foreign Exchange Earnings and Outgo:

PARTICULARS OF EMPLOYEES

The information required under Section 197 (12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and the information required under Rule 5 (2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure D forming part of the Report.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in form MGT 9 is annexed as Annexure E.

AUDITORSâ REPORT

Comments made by the Statutory Auditors in the Auditorsâ Report are self-explanatory and do not require any further clarification.

DIRECTORSâ RESPONSIBILITY STATEMENT

In terms of the provisions of Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, and to the best of their knowledge and belief and according to the information and explanations obtained by them and same as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditorsâ Report thereon, your Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care for the 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 fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENT

We thank our Clients, Investors, Dealers, Suppliers and Bankers for their continued support during the year. We place on record our appreciation for the contributions made by employees at all levels. Our consistent growth was made possible by their hard work, solidarity, co-operation and support.

By Order of the Board of Directors

For Panama Petrochem Ltd.

Date : May 25, 2018 Amirali E. Rayani

Place : Mumbai Chairman

DIN:00002616

Mar 31, 2017

Dear Members

The Directors have pleasure in presenting the Thirty - fifth Annual Report of the Company together with the Audited Statement of Accounts for the Financial Year ended March 31, 2017.

FINANCIAL HIGHLIGHTS (Rs, In lakhs)

Particulars	Standalone		Consolidated
Particulars	2016-2017	2015-2016	2016-2017	2015-2016
Net Profit before Tax	6,274.52	3,169.74	6,559.04	3,665.49
Less: Provision for Taxes	2,240.68	1,150.08	2,240.68	1,150.08
Net Profit After Tax	4,033.84	2,019.66	4,318.36	2,515.41
Add: Profit Brought Forward	14,156.26	12,383.05	15,346.61	13,077.65
Profit available for appropriation	18,190.10	14,402.71	19,664.97	15,593.06
Dividend of previous year including Dividend distribution tax	(1.14)	2.61	(1.14)	2.61
Proposed Final Dividend	403.29	201.65	403.29	201.65
Dividend distribution tax	82.10	42.19	82.10	42.19
Less: Transfer to Reserves	Nil	Nil	Nil	Nil
Profit Carried Forward to Balance Sheet	17,705.85	14,156.26	19,180.72	15,346.61

OPERATIONAL PERFORMANCE

- Earnings before Interest, Depreciation, and Tax & Amortization on a standalone basis increased by 74.66% to Rs, 7,249.56 lakhs.

- Net Profit on a standalone basis increased by 99.73% to Rs, 4,033.84 lakhs.

- Revenue from Operations on a standalone basis increased by 9.14% to Rs, 72,537.87 lakhs.

- The consolidated revenue from operations of the Company for the year ended March 31, 2017 was Rs, 83,350.11 lakhs an increase of 10.88% on a Year on Year basis.

- Net Profit on a consolidated basis increased by 71.68% to Rs, 4318.36 lakhs.

A significant improvement in the operating performance of your company was witnessed during the financial year 2016-17. Net Profit on a standalone basis was boosted by nearly double as compare to the previous year. The Company was able to capitalize on the market conditions through its operational excellence, higher efficiency and well executed strategies which led to increase in consolidated profit of the Company by 71.68% to Rs, 4318.36 lakhs.

The consolidated revenue from operations of the Company for year ended March 31, 2017 was increased by 10.88% to Rs, 83,350.11 lakhs.

MANAGEMENT DISCUSSION & ANALYSIS

The detailed Management Discussion & Analysis Report for the year under review, as stipulated under Listing Regulations is presented in a separate section forming part of the Annual Report.

DIVIDEND

Your Board of Directors is pleased to propose a dividend at the rate of Rs, 1 per share (i.e. 50%) of Rs, 2/- each for the financial year 2016-17 as against Rs, 0.50/- per share of Rs, 2 each (25%) in the previous year, considering the promising future prospects of the Company.

The dividend will be paid to the members holding shares in electronic form as per the beneficiary position downloaded from the Depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) as at the close of business hours on August 28, 2017 and to those Members holding shares in physical form, after giving effect to valid transfers in respect of transfer requests lodged with the Company as at close of business hours August 28, 2017. Dividend will be paid within two weeks from the date of declaration of dividend.

The total outflow towards dividend on Equity Shares for the year would be Rs, 485.39 lakhs (including dividend tax).

BONUS SHARES

Considering the financial parameters ,and the position of reserves of the Company, the Board of Directors at its Meeting held on August 14, 2017 approved issue of bonus shares, in the proportion of 1:2, i.e. 1 (One) bonus share of Rs, 2 each for every 2 (Two) fully paid-up equity shares held as on the record date, subject to approval of the Members.

TRANSFER TO RESERVES

The Company does not propose to transfer any amount to the General Reserve out of the amount available for appropriations. CREDIT RATING

We are glad to announce that your Company got credit rating from one of the leading credit rating agencies CARE and is assigned a "CARE A" rating to the Long Term Facilities and "CARE A1" rating to the Short Term Facilities.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2017 was Rs, 806.58 lakhs. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweats equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

As on March 31, 2017 your Company has only one subsidiary, Panol Industries RMC FZE, UAE.

The Consolidated Financial Statements of the Company and its subsidiary, form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.

The Policy, as approved by the Board, is uploaded on the Company''s website.

http://panamapetro. com/wp-content/uploads/2015/12/Subsidiary-Policy. pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the accompanying Financial Statements.

PERFORMANCE AND FINANCIAL POSITION OF PANOL INDUSTRIES RMC FZE

Net sales of Panol Industries RMC FZE have increased from Rs, 8,710.81 lakhs in the previous year to Rs, 10,812.24 lakhs during 2016-17. Net profit during the period is Rs, 284.52 lakhs, as compared to a net profit of Rs, 495.76 lakhs in the previous year.

The plant enjoys logistic advantage since it is situated on the port and has direct dedicated pipelines to receive and discharge raw material and finished products directly to bulk vessels.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on an arm''s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 (''the Act'') and the Listing Regulations. There were no materially significant Related Party Transactions made by the Company during the year.

The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company''s website at the web link: http://panamapetro.com/wp-content/uploads/2016/01/Related-Party-Transactions.pdf

Details of the transactions with Related Parties are provided in the accompanying financial statements.

RISK MANAGEMENT

The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status.

DIRECTORS

Your Company''s Board comprises of 8 Directors with considerable experience in their respective fields. Of these 4 are Executive Directors and 4 Non Executive (Independent) Directors. The Chairman of the Board is an Executive Director.

APPOINTMENT OF DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Company''s Articles of Association, Mr. Amirali E. Rayani, Director, retires by rotation and being eligible to offer himself for re-appointment. Directors recommend his re-appointment.

At the Annual General Meeting of the Company held on September 26, 2016, the Members had approved the appointment of Mr. Hussein V. Rayani as Joint Managing Director of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed both under sub-section(6) of Section 149 of the Companies Act, 2013 and Regulation 16 (1) (b) of the Listing Regulations.

In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management. No Director has retired or resigned during the year.

WOMAN DIRECTOR

In terms of the provisions of Section 149 of the Companies Act, 2013 and Regulation 17 of the Listing Regulations, a company shall have at least one Woman Director on the Board of the Company. Your Company has appointed Ms. Nargis Mirza Kabani on its Board.

APPOINTMENTS/RESIGNATIONS OF THE KEY MANAGERIAL PERSONNEL

At the Annual General Meeting of the Company held on September 26, 2016, the Members had approved the appointment of Mr. Hussein V. Rayani as Joint Managing Director of the Company, apart from this none of the Key Managerial Personnel has resigned or appointed during the year under review.

BOARD AND COMMITTEE MEETINGS

Your Company''s Board of Directors met four times during the financial year under review. A calendar of Meetings is prepared and circulated in advance to your Directors.

PROCEDURE FOR NOMINATION AND APPOINTMENT OF DIRECTORS:

The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director''s appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the resume of potential candidates vis-a-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR:

Independence: In accordance with the above criteria, a Director will be considered as an ''Independent Director'' if he/ she meets with the criteria for ''Independent Director'' as laid down in the Companies Act, 2013 and Regulation 16 (1) (b) of the Listing Regulations.

Positive Attributes: In addition to the duties as prescribed under the Companies Act, 2013 the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal skills and soundness of judgment. Independent Directors are also expected to abide by the ''Code for Independent Directors'' as outlined in Schedule IV to the Act.

ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF DIRECTORS:

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.

The Board''s functioning was evaluated on various aspects, including inter alia structure of the Board, including qualifications, experience and competency of Directors, diversity in Board and process of appointment; Meetings of the Board, including regularity and frequency, agenda, discussion and dissemination of information; functions of the Board, including strategy and performance evaluation, corporate culture and values, governance and compliance, evaluation of risks, grievance redressal for investors, stakeholder value and responsibility, conflict of interest, review of Board evaluation and facilitating Independent Directors to perform their role effectively; evaluation of management''s performance and feedback, independence of management from the Board, access of Board and management to each other, succession plan and professional development; degree of fulfillment of key responsibilities, establishment and delineation of responsibilities to Committees, effectiveness of Board processes, information and functioning and quality of relationship between the Board and management.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings. The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors. The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.

REMUNERATION POLICY

Your Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and Senior Management, pursuant to the provisions of the Act and Listing Regulations.

The Nomination and Remuneration Committee has considered the following factors while formulating the Policy:

(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

Details of the Remuneration Policy are given in the Corporate Governance Report.

LISTING OF SHARES

Your Company''s shares are listed on the BSE Limited and National Stock Exchange of India Limited. The Company has paid the listing fees for the year 2016-2017. The GDRs of the Company are listed on Luxembourg Stock Exchange.

CORPORATE GOVERNANCE

Your Company has implemented all the mandatory requirements pursuant to Listing Regulations. A separate report on Corporate Governance is given as a part of the Annual Report along with the certificate received from the Practicing Company Secretary, M/s. Milind Nirkhe & Associates, Company Secretaries, confirming the compliance.

PUBLIC DEPOSITS

During the year under report, your Company did not accept any deposits from the public.

INSURANCE

Your Company has taken adequate insurance cover for all its assets.

INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls with reference to financial statements. Your Company has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

CORPORATE SOCIAL RESPONSIBILITY

As a socially responsible Company, your Company has a strong sense of community responsibility.

The Board has constituted a Corporate Social Responsibility Committee headed by Mr. Mukesh Mehta as Chairman, with Mr. Amin A. Rayani and Ms. Nargis Kabani as Members. The Company has adopted a Corporate Social Responsibility (CSR) Policy in compliance with the provisions of the Companies Act, 2013. As part of its CSR initiatives, the Company has undertaken projects in the areas of promoting health care, education and nationally recognized sports. The above projects are in accordance with Schedule VII of the Act. The Company has spent '' 76.85 lakhs towards the CSR projects during the current Financial Year 2016-17. The Annual Report on CSR activities is annexed as Annexure B.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The amount of unpaid / unclaimed dividend up to the financial year 2008-2009 has been transferred to IEPF. The unpaid / unclaimed dividend amount of equity shares of the Company for the financial year 2009-2010 can be claimed by the Members by September 24, 2017. Members who have not yet encashed their warrant (s) are requested to make their claims to the Company without any delay.

Members/ claimants whose shares, unclaimed dividend, have been transferred to the IEPF Demat Account or the Fund, as the case may be, may claim the shares or apply for refund by making an application to the IEPF Authority in Form IEPF- 5 (available on iepf.gov.in) along with requisite fee as decided by the IEPF Authority from time to time. The Member/ Claimant can file only one consolidated claim in a financial year as per the IEPF Rules.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

AUDITORS

- STATUTORY AUDITORS

Pursuant to the provisions of the Act and the Rules made there under, Bhuta Shah & Co LLP Chartered Accountants, (Previously known as M/s Bhuta Shah & Co.) were appointed as Statutory Auditors of the Company from the conclusion of the 33th AGM held on September 14, 2015 till the conclusion of the AGM to be held in the year 2020, subject to ratification of their appointment. Members are requested to consider the ratification of the appointment and authorize the Board of Directors to fix their remuneration.

Bhuta Shah & Co LLP., have furnished a certificate, confirming that if ratified, their re-appointment will be in accordance with Section 139 read with Section 141 of the Act. Pursuant to the provisions of the Act and the Rules made there under.

- COST AUDITORS

Based on the Audit Committee recommendation at its meeting held on May 30, 2017, GMVP & Associates LLP (LLPIN :- AAG-7360) were appointed by the Board as the Cost Auditors of the Company for conducting an audit of the cost accounting records of the Company for financial year commencing from April 1, 2017 to March 31, 2018.

Cost Audit Report for the financial year 2016-2017 will be submitted by Cost Auditor to the Central Government within the stipulated time period.

The Cost Audit Report for the financial year 2015-2016 was submitted to the Central Government within the stipulated time.

- SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed CS. Milind Nirkhe, Practicing Company Secretary (Proprietor), Practicing under the name & style M/S Milind Nirkhe & Associates, CP No: 2312 to undertake the Secretarial Audit of the Company for the year ended March 31, 2017. The Secretarial Audit Report for the year under review is annexed as Annexure C.

The Auditors'' Report and the Secretarial Audit Report for the financial year ended March 31, 2017 do not contain any qualification, reservation, adverse remark or disclaimer.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A. Conservation of Energy:

The Company has taken adequate actions to conserve the energy as Process time reduction by technically improved blending system.

(i) Steps Taken or Impact on Conservation of Energy:

In line with the Company''s commitment towards conservation of energy, all plants continue with their efforts aimed at improving energy efficiency through innovative measures to reduce wastage and optimize consumption. Some of the measures taken by the Company in this direction are as under:

Include:

1. At its Plants, the Company has carried out various actions to optimize energy consumption and reduce losses.

2. Energy efficient motors are being installed in order to optimize use of power.

(ii) Steps taken by the Company for utilizing alternate sources of Energy:

In addition to various initiatives around energy efficiencies, the Company has also focused on renewable sources of energy. Various steps taken for utilizing alternate sources of energy.

(iii) Capital Investment on Energy Conservation Equipments:

The Company has technically improved its thermo packs to get better fuel efficiency and lower emission stack.

B. Technology Absorption:

(i) Efforts made towards Technology Absorption:

The Company has an updated R & D Center at its Ankleshwar Plant. It is the technical centre of the Company and has been the backbone for most of our major product breakthroughs. This Centre at Ankleshwar is fully equipped with modern testing & analytical equipments. The Centre is operated by the team of well qualified technocrats, as a result, the in - house R & D unit of Panama has been recognized by the Ministry of Science & Technology & the Department of Scientific and Industrial Research (DSIR). With this recognition Company will spend more on R & D activities and get more new products which will be of better quality. It will also assist in research for import substitution, energy conservation and control of pollution. The in-house R & D facility has enabled us to develop new products.

(ii) Benefits derived like product improvement, cost reduction, product development or import substitution:

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):

(a) the details of technology imported: The Company has not imported any technology during the last three financial years.

(b) the year of import: Not Applicable

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof: Not Applicable Expenditure on research & development

The expenditure on R & D activities incurred during the year is given hereunder:

Particulars	Amount (Rs, In lakhs)
Capital	25.52
Revenue	49.39
Total R & D Expenditure	74.91
Total Turnover	72537.87
Total R & D Expenditure as a Percentage of total turnover	0.10%

C. Foreign exchange earnings and outgo:

i. Export Activities: During the year under review the Company has made Import/Export as given in (ii) below.

ii. Foreign Exchange Earnings and Outgo:

Amount (Rs, In lakhs)

Total Foreign Exchange Inflow	21589.91
Total Foreign Exchange outflow	51282.18

PARTICULARS OF EMPLOYEES

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in form MGT 9 is annexed as Annexure E.

AUDITORS'' REPORT

Comments made by the Statutory Auditors in the Auditors'' Report are self-explanatory and do not require any further clarification.

DIRECTORS'' RESPONSIBILITY STATEMENT

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENT

By Order of the Board of Directors For Panama Petrochem Ltd.

Date : August 14, 2017 Amirali E. Rayani

Place : Mumbai Chairman

DIN:00002616

Mar 31, 2015

Dear Members

The Directors have pleasure in presenting the Thirty - third Annual Report of the Company together with the Audited Statement of Accounts for the Financial Year ended March 31, 2015.

FINANCIAL HIGHLIGHTS (Rs. In lakhs)

Particulars Standalone Consolidated

2015 2014 2015 2014

Net Profit before Tax 1,760.76 2,044.86 2,156.12 2,344.10

Less: Provision for Taxes 384.89 504.48 384.89 504.48

Net Profit After Tax 1,375.87 1,540.38 1,771.23 1,839.62

Add :Profit Brought Forward 12,120.13 11,346.82 12,419.37 11,346.82

Profit available for appropriation 13,496.00 12,887.20 14,190.60 13,186.44

Dividend of previous year including Dividend distribution tax - (7.34) - (7.34)

Proposed Final Dividend 806.58 483.95 806.58 483.95

Dividend distribution tax 168.78 82.25 168.78 82.25

Less: Transfer to Reserves 137.59 208.22 137.59 208.22

Profit Carried Forward to Balance Sheet 12,383.05 12,120.13 13,077.64 12,419.37

OPERATIONAL PERFORMANCE

- Revenue from operations on a standalone basis increases by 23% to Rs. 72,981.94 lakhs.

- Earnings before Interest, Depreciation, Tax & Amortization on a standalone basis decreased by 4% to Rs. 2,748.12 lakhs.

- Net Profit on a standalone basis decreased by 11% to Rs. 1,375.87 lakhs.

- The consolidated revenue from operations of the Company for the year ended March 31, 2015 was Rs. 80,530.79 lakhs an increase of 27% on a Year on Year basis.

- Net Profit on a consolidated basis decreased by 4% to Rs. 1,771.23 lakhs

The consolidated net profit of the Company for year ended March 31, 2015 was down by 4 % to Rs. 1,771.23 lakhs. The decline in profit reflects a sharp fall in crude oil prices during the second half of the year.

Though the Company was able to capitalize on the market conditions through its operational excellence, higher efficiency and well executed strategies which led to increase in consolidated revenue from operations of the Company by 27% to Rs. 80,530.79 lakhs.

MANAGEMENT DISCUSSION & ANALYSIS

The detailed Management Discussion & Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

DIVIDEND

Your Board of Directors is pleased to recommend a dividend of 100% i.e. Rs. 2/- per share of Rs. 2 each for the year ended March 2015 as against Rs. 6/- per share of Rs. 10 each (60%) in the previous year, considering the promising future prospects of the Company.

The dividend will be paid to the members, whose names appear in the Register of Members of the Company as on September 9, 2015. In respect of shares held in the electronic form, the dividend will be payable on the basis of beneficial ownership furnished by National Securities Depository Limited and Central Depository Services (India) Limited for this purpose. Dividend will be paid within two weeks from the date of declaration of dividend.

The total outflow towards dividend on Equity Shares for the year would be Rs. 975.36 lakhs (including dividend tax). TRANSFER TO RESERVES

Your Company proposes to transfer Rs. 137.59 lakhs to the general reserve out of the amount available for appropriation and an amount of Rs. 262.92 lakhs is proposed to be retained in the statement of Profit and Loss.

CREDIT RATING

We are glad to announce that your Company got credit rating from one of the leading credit rating agencies CARE and is assigned a "CARE A" rating to the Long Term Facilities and "CARE A1" rating to the Short Term Facilities.

SUB-DIVISION OF EQUITY SHARES

In order to facilitate affordability of the Company's shares for investors at large and to enhance the liquidity of the Company's equity shares in the stock market, the shareholders in their meeting held on September 4, 2014 approved the sub-division of one equity share of the Company having a face value of Rs. 10 each into five equity shares of face value of Rs. 2 each. The record date of September 22, 2014, was fixed to determine the Members eligible to receive equity shares of face value of Rs. 2/- each in lieu of equity shares of face value of Rs. 10/- each and equity shares of face value Rs. 2/- each were accordingly issued to all the Members who were holding equity shares of Rs. 10/- each on September 22, 2014.

Pursuant to the Sub-division of equity shares, ratio between the GDRs and the underlying Equity Shares has been revised to that 'one GDR representing five underlying Equity Share of the Company' to 'one GDR representing twenty five underlying Equity Shares of the Company'.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2015 was Rs. 806.57 lakhs. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

As on March 31, 2015 your Company has only one subsidiary, Panol Industries RMC FZE.

The Consolidated Financial Statements of the Company and its subsidiary, prepared in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India, form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.

The Company has adopted a Policy for determining Material Subsidiaries in terms of Clause 49 of the Listing Agreement. The Policy, as approved by the Board, is uploaded on the Company's website at the web link: http://www.panamapetro.com/Subsidiary%20Policy.pclf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has given guarantees for its wholly owned subsidiary, Panol Industries RMC FZE., amounting to Rs. 2,816.59 lakhs during the year. The Company has not made an investment and given any loan during the year.

PERFORMANCE AND FINANCIAL POSITION OF PANOL INDUSTRIES RMC FZE

Net sales of Panol Industries RMC FZE has increased from Rs. 4,365.26 lakhs in the previous year to Rs. 7,548.85 lakhs during 2014-15. Net profit during the period is Rs. 395.36 lakhs , as compared to a net profit of Rs. 299.24 crores in the previous year.

Panol Industries RMC FZE, UAE, a wholly owned subsidiary of the Company. The Company has built a brand new manufacturing facility in Ras Al Khaimah. The plant is having a total production capacity of 30,000 MT/ year. At this new facility the Company will manufacture petroleum specialty products to cater to the GCC & MENA regions.

The plant enjoys logistic advantage since it is situated on the port and has direct dedicated pipelines to receive and discharge raw material and finished products directly to bulk vessels.

During the year under review, no Company has become or ceased to be a subsidiary of the Company. The Company does not have any associate or joint venture Companies. A statement containing the salient features of the financial position of the subsidiary companies in Form AOC.1 is annexed as Annexure A.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on an arm's length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 ('the Act") and the Listing Agreement. There were no materially significant Related Party Transactions made by the Company during the year.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The Company has adopted a Related Party ransactions Policy. The Policy, as approved by the Board, is uploaded on the Company's website at the web link: http://www.panamapetro.com/RPT.pdf

Details of the transactions with Related Parties are provided in the accompanying financial statements.

RISK MANAGEMENT

Your Company has adopted a Risk Management Policy/ Plan in accordance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk.

The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status.

This risk management process covers risk identification, assessment, analysis and mitigation. Incorporating sustainability in the process also helps to align potential exposures with the risk appetite and highlights risks associated with chosen strategies.

DIRECTORS

Your Company's Board comprises of 7 Directors with considerable experience in their respective fields. Of these 3 are Executive Directors and 4 Non Executive (Independent) Directors. The Chairman of the Board is an Executive Director.

APPOINTMENT OF DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Company's Articles of Association, Mr. Samir Rayani, Director retires by rotation and being eligible offer himself for re-appointment. Directors recommend his re-appointment.

At the Annual General Meeting of the Company held on September 4, 2014, the Members had approved the appointment of Mr. Mukesh Mehta, Mr. Dilip Sobhag Phatarphekar and Mr. Madan Mohan Jain as Independent Directors for a term of five years.

The members have also re-appointed Mr. Amirali E. Rayani as a whole-time director designated as Chairman, and Mr. Samir Rayani as a Whole-time Directors designated as Executive Director and Mr. Amin A. Rayani as a Managing Director & CEO.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed both under sub-section(6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.

No Director has retired or resigned during the year.

WOMAN DIRECTOR

In terms of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a company shall have at least one Woman Director on the Board of the Company. Your Company has appointed Ms. Nargis Mirza Kabani as an Additional Director on the Board w.e.f February 13, 2015, who holds office till the date of this AGM ,in respect of whom the Company has received a notice in writing under Section 160 of the Companies Act, 2013 from a member proposing her candidature for the office of Director. Accordingly, the approval of shareholders is being sought for her appointment as an Independent Director of the Company.

APPOINTMENTS/RESIGNATIONS OF THE KEY MANAGERIAL PERSONNEL

Mr. Amin A. Rayani, Managing Director & CEO; Mr. Pramod Maheshwari, Chief Financial Officer and Ms. Gayatri Sharma, Company Secretary of the Company are Key Managerial Personnel. Apart from re-appointment of Mr. Amin A. Rayani as a Managing Director & CEO none of the Key Managerial Personnel has resigned or appointed during the year under review.

BOARD AND COMMITTEE MEETINGS

Your Company's Board of Directors met four times during the financial year under review. A calendar of Meetings is prepared and circulated in advance to your Directors.

Audit Committee of the Company as constituted by the Board is headed by Mr. Madan Mohan Jain with Mr. Samir Rayani and Mr. Mukesh Mehta as Members. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board. All the recommendations made by the Audit Committee were accepted by the Board.

Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Agreement.

CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR:

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Clause 49 of the Listing Agreement.

Independence: In accordance with the above criteria, a Director will be considered as an 'Independent Director' if he/ she meets with the criteria for 'Independent Director' as laid down in the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill-domain mix of the Board.

Positive Attributes: In addition to the duties as prescribed under the Companies Act, 2013 the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal skills and soundness of judgment. Independent Directors are also expected to abide by the 'Code for Independent Directors' as outlined in Schedule IV to the Act.

ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board had carried out evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors. The Board's functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.

Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director & CEO.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings. The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors. The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.

REMUNERATION POLICY

Your Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and Senior Management , pursuant to the provisions of the Act and Clause 49 of the Listing Agreement.

The philosophy for remuneration of Directors, Key Managerial Personnel of the Company is based on the commitment of fostering a culture of leadership with trust. The Remuneration Policy of the Company is aligned to this philosophy.

The Nomination and Remuneration Committee has considered the following factors while formulating the Policy:

(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(iii) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

Details of the Remuneration Policy are given in the Corporate Governance Report.

LISTING OF SHARES

Your Company's shares are listed on the BSE Limited and National Stock Exchange of India Limited. The Company has paid the listing fees for the year 2014-2015. The GDRs of the Company are listed on Luxembourg Stock Exchange.

CORPORATE GOVERNANCE

Your Company has implemented all the mandatory requirements pursuant to Clause 49 of the Listing Agreement. A separate report on Corporate Governance is given as a part of the Annual Report along with the certificate received from the Practicing Company Secretary, M/s. Milind Nirkhe & Associates, Company Secretaries, confirming the compliance.

PUBLIC DEPOSITS

During the year under report, your Company did not accept any deposits from the public.

INSURANCE

Your Company has taken adequate insurance cover for all its assets.

INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls with reference to financial statements. Your Company has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

CORPORATE SOCIAL RESPONSIBILITY

As a socially responsible Company, your Company has a strong sense of community responsibility.

As its operations have expanded, your Company has retained a collective focus on the various areas of corporate sustainability that impact people, environment and the society at large. Founded on the philosophy that society is not just another stakeholder in its business, but the prime purpose of it, the Company, across its various operations is committed to making a positive contribution.

The Board has constituted a Corporate Social Responsibility Committee headed by Mr. Mukesh Mehta as Chairman, with Mr. Amin A. Rayani and Mr. Amirali E. Rayani as Members. The Company has adopted a Corporate Social Responsibility (CSR) Policy in compliance with the provisions of the Companies Act ,2013. As part of its CSR initiatives, the Company has undertaken projects in the areas of promoting health care, promoting education and setting up old age homes.

The above projects are in accordance with Schedule VII of the Act. The Company has spent Rs. 57.78 lakhs towards the CSR projects during the current Financial Year 2014-15.

The average Net Profit of the Company made during the three immediately preceding financial years is Rs.2,426.85 lakhs. Thus, the Company requires to spend not less than Rs. 48.54 lakhs being the 2% of the amount.

The Annual Report on CSR activities is annexed as Annexure B.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2014-15.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 205C of the Companies Act, 1956, the amounts of dividend remaining unpaid or unclaimed for a period of seven years from the date of its transfer to the unpaid dividend account of the Company are required to be transferred to the Investor Education and Protection Fund (IEPF) set up by the Government of India. Consequently no claim shall lie against the Company in respect of any such amounts.

The amount of unpaid / unclaimed dividend up to the financial year 2006-2007 has been transferred to IEPF. Members who have not yet encashed their warrant (s) for any subsequent years are requested to make their claims to the Company without any delay.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

AUDITORS

- STATUTORY AUDITOR

M/s Bhuta Shah & Co., Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and being eligible to offer themselves for re-appointment.

M/s Bhuta Shah & Co., have furnished a certificate, confirming that if re-appointed, their re-appointment will be in accordance with Section 139 read with Section 141 of the Act. Pursuant to the provisions of the Act and the Rules made there under, it is proposed to appoint M/s Bhuta Shah & Co; as the statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the 38th AGM to be held in the year 2020, subject to ratification at every subsequent Annual General Meeting held after this Annual General Meeting.

Members are requested to consider the re-appointment of M/s Bhuta Shah & Co. and authorize the Board of Directors to fix their remuneration.

- COST AUDITOR

Based on the Audit Committee recommendation at its meeting held on May 30, 2015, Mr. Girikrishna S. Maniar, Cost Accountant (Membership No. 8202) was re-appointed by the Board as the Cost Auditor of the Company for conducting an audit of the cost accounting records of the Company for financial year commencing from April 1, 2015 to March 31, 2016.

Cost Audit Report for the financial year 2014-2015 will be submitted by Cost Auditor to the Central Government within the stipulated time period.

The Cost Audit Report for the financial year 2013-2014 was submitted to the Central Government within the stipulated time.

Pursuant to the provisions of Section 148 of the Act read with The Companies (Audit and Auditors) Rules, 2014, Members are requested to consider the ratification of the remuneration payable to Mr. Girikrishna S. Maniar.

- SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed CS. Milind Nirkhe , Practicing Company Secretary (Proprietor), Practicing under the name & style M/S Milind Nirkhe & Associates, CP No: 2312 to undertake the Secretarial Audit of the Company for the year ended March 31, 2015. The Secretarial Audit Report is annexed as Annexure C.

The Auditors' Report and the Secretarial Audit Report for the financial year ended March 31 , 2015 do not contain any qualification, reservation, adverse remark or disclaimer.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO A. Conservation of Energy:

The Company is aware of energy consumption and environmental issues related to it and is continuously making sincere efforts towards conservation of energy. The Company is in fact engaged in the continuous process of further energy conservation through improved operational and maintenance practices.

The Company has taken adequate actions to conserve the energy as Process time reduction by technically improved mixing system.

(i) Steps Taken or Impact on Conservation of Energy:

In the past few years, the Company has tried to improve energy efficiency significantly by various measures. Steps taken to conserve energy include:

1. At its Plants, the Company has carried out various actions to optimize energy consumption and reduce losses.

2. Energy efficient motors are being installed in order to optimize use of power.

3. In its Plants and Offices, the Company has replaced conventional light fixtures with energy efficient fixtures.

(ii) Steps taken by the Company for utilizing alternate sources of Energy:

In addition to various initiatives around energy efficiencies, the Company has also focused on renewable sources of energy. Various steps taken for utilizing alternate sources of energy.

(iii) Capital Investment on Energy Conservation Equipments:

During the year, the Company has invested in various energy conservation equipments. The equipment in which investment was made included, various energy efficient motors. The Company has also installed power efficient material handling and flowing system which has played role in energy saving.

The Company has technically improved its thermo packs to get better fuel efficiency and lower emission stack.

B. Technology Absorption:

(i) Efforts made towards Technology Absorption:

Technology is a key enabler and core facilitator as one of the strategic pillars of the Company. Since inception your Company has been at the forefront of leveraging technology to provide better products and services to its customer.

The Company has an updated R & D Center at its Ankleshwar Plant. It is the technical centre of the Company and has been the backbone for most of our major product breakthroughs. This Centre at Ankleshwar is fully equipped with modern testing & analytical equipments. The Centre is operated by the team of well qualified technocrats, as a result, the in - house R& D unit of Panama has been recognized by the Ministry of Science & Technology & the Department of Scientific and Industrial Research (DSIR). With this recognition Company will spend more on R& D activities and get more new products which will be of better quality. It will also assist in research for import substitution, energy conservation and control of pollution. The in-house R& D facility has enabled us to develop new products which have resulted in the evolution of the Dahej Plant.

(ii) Benefits derived like product improvement, cost reduction, product development or import substitution:

Technology has responded by being true strategic partner with business. The Company has derived many benefits from R& D and technology absorption which includes product development, product improvement & effective cost management, technology has also played a major role in ensuring high level of service delivery.

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):

(a) the details of technology imported: The Company has not imported any technology during the last three financial years.

(b) the year of import: Not Applicable

(c) whether the technology has been fully absorbed: Not Applicable

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof: Not Applicable Expenditure on research & development

The expenditure on R& D activities incurred during the year is given hereunder:

Particulars Amount (Rs. In lakhs)

Capital 0.00

Revenue 39.69

Total R& D Expenditure 39.69

Total Turnover 72,981.94

Total R& D Expenditure as a Percentage of total turnover 0.05

PARTICULARS OF EMPLOYEES

During the financial year under review, none of the Company's employees was in receipt of remuneration as prescribed under Rule 5 (2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules. Hence, no particulars are required to be disclosed in this Report.

The information required under Section 197 (12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure D.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in form MGT.9 is annexed as Annexure E.

AUDITORS' REPORT

Comments made by the Statutory Auditors in the Auditors' Report are self- explanatory and do not require any further clarification.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of the provisions of Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, and to the best of their knowledge and belief and according to the information and explanations obtained by them and same as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors' Report thereon, your Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care for the 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 fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENT

We thank our Clients, Investors, Dealers, Suppliers and Bankers for their continued support during the year. We place on record our appreciation for the contributions made by employees at all levels. Our consistent growth was made possible by their hard work, solidarity, co-operation and support.

By Order of the Board of Directors For Panama Petrochem Ltd

Date : July 30, 2015 Amirali E Rayani

Place : Mumbai Chairman

Mar 31, 2014

Dear Members

The Directors have pleasure in presenting the Thirty Â Second Annual Report of the Company together with the Audited Statement of Accounts for the Financial Year ended March 31, 2014.

FINANCIAL HIGHLIGHTS (Rs. In Lac)

Particulars Standalone Consolidated

2014 2013 2014 2013

Net Profit before Tax 2,044.86 1,293.90 2,344.10 1,293.90

Less: Provision for Taxes 504.48 105.79 504.48 105.79

Net Profit After Tax 1,540.38 1,188.11 1,839.62 1,188.11

Add :Profit Brought Forward 11,346.82 10,678.85 11,346.82 10,678.85

Profit available for appropriation 12,887.20 11,866.96 13,186.44 11,866.96

Dividend of previous year including Dividend distribution tax (7.34) Nil (7.34) Nil

Proposed Final Dividend 483.95 344.30 483.95 344.30

Dividend distribution tax 82.25 55.85 82.25 55.85

Less: Transfer to Reserves 208.22 119.99 208.22 119.99

Profit Carried Forward to Balance Sheet 12,120.11 11,346.82 12,419.35 11,346.82

OPERATIONAL PERFORMANCE

- Revenue from operations on a standalone basis decreases by 7% to Rs. 59,137.06 lac.

- Earnings before Interest, Depreciation, Tax & Amortization on a standalone basis increased by 21% to Rs. 2,863.44 lac.

- Net profit on a standalone basis increased by 30% to Rs. 1,540.38 lac.

- The consolidated revenue from operations of the Company for the year ended March 31, 2014 was Rs. 63,502.32 lac an increase by 0.04% on a Year on Year basis.

- Net profit on a consolidated basis increased by 55% to Rs. 1,839.62 lac.

MANAGEMENT DISCUSSION & ANALYSIS

The detailed Management Discussion & Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

DIVIDEND

The Board of Directors is pleased to recommended a dividend of 60% i.e. Rs. 6/- per share for the year ended March 2014 as against Rs. 4/- per share in the previous year.

The dividend will be paid to members, whose names appear in the Register of Members of the Company as on 14th August, 2014. In respect of shares held in the electronic form, the dividend will be payable on the basis of beneficial ownership furnished by National Securities Depository Limited and Central Depository Services (India) Limited for this purpose. Dividend will be paid within 30 days from the date of declaration of dividend.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 154.04 lac to the general reserve out of the amount available for appropriation and an amount of Rs. 12,120.11 lac is proposed to be retained in the statement of profit and loss.

CREDIT RATING

We are glad to announce that your Company got conducted credit rating from one of the leading credit rating agency CARE and is assigned a "CARE A" rating to the Long Term Facilities and "CARE A1" rating to the Short Term Facilities.

BUY BACK OF EQUITY SHARES

The Buy-back offer announced by the Company on 14th February 2013 was closed on 13th February 2014. Pursuant to the said buy-back, the Company bought back and extinguished 5,53,522 equity shares of Rs. 10 each and the total amount utilized in buyback is Rs. 7,86,61,799 ( excluding brokerage, transactional Charges and taxes) which represents 44.02% of the Maximum Buyback Size.

Consequent to the buy -back, the paid up share capital of the Company as on March 31, 2014 stood as Rs. 8,06,58,130.

SUB-DIVISION OF EQUITY SHARES

In order to facilitate affordability of the Company''s shares for investors at large and to enhance the liquidity of the Company''s equity shares in the stock market, the Board of Directors at its meeting held on 28th July, 2014 has considered and approved the sub-division of one equity share of the Company having a face value of Rs. 10 each into five equity shares of face value of Rs. 2 each. The sub-division of shares is subject to approval of the shareholders.

SUBSIDIARY

Panol Industries RMC FZE, UAE a wholly owned subsidiary of the Company has started its business operation during the year under review. The Company has built a brand new manufacturing facility in Ras Al Khaimah. The plant is having a total production capacity of 30,000 MT/ year. At this new facility the Company will manufacture petroleum specialty products to cater to the GCC & MENA regions.

The plant enjoys logistic advantage since it is situated on the port and has direct dedicated pipelines to receive and discharge raw material and fnished products directly to bulk vessels.

Panol Industries posted a net profit of Rs. 299.24 lac during the financial year ended 31st March, 2014.

As required under the Listing Agreements entered into with the Stock Exchanges, consolidated financial statements of the Company and its subsidiary is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed in the Companies Act, 1956.

Pursuant to the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, the Board of Directors of the Company has accorded its consent for not attaching the accounts of the aforesaid Subsidiary Company along with the accounts of your Company. However, the financial information pertaining to the aforesaid Company, as required in the aforesaid Circular, is provided in the Annual Report of your Company. The accounts of aforesaid Company are kept for inspection by any shareholders at the registered office of your Company. Your Company further undertakes that the Annual Accounts of the Subsidiary Company and the related detailed information shall be made available to Shareholders of the Company on demand.

The Consolidated Audited Annual Accounts of your Company together with its subsidiary for the Financial Year 2013-2014 are being published pursuant to Clause 32 of the Listing Agreement.

COST AUDITORS

Based on the Audit Committee recommendation at its meeting held on 21st May,2014, Mr. Girikrishna S. Maniar, Cost Accountant (Membership No. 8202) was re-appointed by the Board as the Cost Auditor of the Company for conducting an audit of the cost accounting records of the Company for financial year commencing from 1st April, 2014 to 31st March, 2015

Cost Audit Report for the financial year 2013-2014 will be submitted by Cost Auditor along with his observations and suggestions, and annexure to the Central Government within the stipulated time period.

The Cost Audit Report for the financial year 2012-2013 was submitted to the Central Government within the stipulated time.

SECRETARIAL AUDIT REPORT

As per Companies Act, 2013 every listed company and every public company having a paid up share capital of Rs. fifty crore or more; or every public company having a turnover of Rs. two hundred fifty crore or more is required to conduct Secretarial Audit by a Company Secretary in Practice.

Accordingly, the Board of Directors in its meeting held on 21st May, 2014 appointed Mr. Milind Nirkhe, Practicing Company Secretary, to conduct the Secretarial Audit of the Company.

The Secretarial Audit Report will confirm that the Company has complied with all the applicable provisions of the Companies Act, 2013 and rules made thereunder, the Securities Contracts (Regulation) Act, 1956, Depositories Act, 1996, the Foreign Exchange Management Act, 1999 to the extent applicable to Overseas Direct Investment (ODI), Foreign Direct Investment (FDI) and External Commercial Borrowings (ECB), all the Regulations and Guidelines of SEBI as applicable to the Company, including the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008, the Securities and Exchange Board of India (Register to an issue and share Transfer Agents) Regulations, 1993, Secretarial Standard issued by ICSI ,Listing Agreements with the Stock Exchanges and the Memorandum and Article Association of the Company, and other applicable laws/ rules/ regulations etc., if any, as mentioned in form No. MR-3 Pursuant to Section 204(1) of the Companies Act, 2013 and Rule no. 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014.

LISTING OF SHARES

Your Company''s shares are listed on the BSE Limited and National Stock Exchange of India Limited. The Company has paid the listing fees for the year 2013Â2014. The GDRs of the Company are listed on Luxembourg Stock Exchange.

CORPORATE GOVERNANCE

Your company has implemented all the mandatory requirements pursuant to Clause 49 of the Listing Agreement. A separate report on Corporate Governance is given as a part of the Annual Report along with the certifcate received from the Practicing Company Secretary, M/s. Milind Nirkhe & Associates, Company Secretaries, confirming the compliance.

PUBLIC DEPOSITS

During the year under report, your Company did not accept any deposits from the public in terms of the provisions of Section 58A of the Companies Act, 1956.

INSURANCE

Your Company has taken adequate insurance cover for all its assets.

CORPORATE SOCIAL RESPONSIBILITY

As a socially responsible Company, your Company has a strong sense of community responsibility.

As its operations have expanded, your Company has retained a collective focus on the various areas of corporate sustainability that impact people, environment and the society at large. Founded on the philosophy that society is not just another stakeholder in its business, but the prime purpose of it, the Company, across its various operations is committed to making a positive contribution.

As a policy, your Company promotes and encourages economic and social development within its communities while providing active support to local initiatives for upliftment of society in general.

In discharge of social obligations, your company regularly contributes to trusts formed for charitable purpose.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 205C of the Companies Act, 1956, the amounts of dividend remaining unpaid or unclaimed for a period of seven years from the date of its transfer to the unpaid dividend account of the Company are required to be transferred to the Investor Education and Protection Fund (IEPF) set up by the Government of India. Consequently no claim shall lie against the Company in respect of any such amounts.

The amount of unpaid / unclaimed dividend up to the financial year 2005-2006 has been transferred to IEPF. The unpaid / unclaimed dividend amount of equity shares of the Company for the financial year 2006-2007 are due for transfer to the said fund in the month of December, 2014. Members who have not yet encashed their warrant (s) are requested to make their claims to the Company without any delay.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A. Conservation of Energy:

The Company is aware of energy consumption and environmental issues related to it and are continuously making sincere efforts towards conservation of energy. The Company is in fact engaged in the continuous process of further energy conservation through improved operational and maintenance practices. Information as required under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure A, forming part of this Report .

B. Technology Absorption:

The Company has an updated R & D Center at its Ankleshwar Plant. It is the technical centre of the Company and has been the backbone for most of our major product breakthroughs. This Centre at Ankleshwar is fully equipped with modern testing & analytical equipments. The Centre is operated by the team of well qualified technocrats, as a result, the in Â house R & D unit of Panama has been recognized by the Ministry of Science & Technology & the Department of Scientifc and Industrial Research (DSIR). With this recognition Company will spend more on R & D activities and get more new products which will be of better quality. It will also assist in research for import substitution, energy conservation and control of pollution. The in-house R & D facility has enabled us to develop new products which have resulted in the evolution of the Dahej Plant.

Expenditure on research & development

The expenditure on R&D activities incurred during the year is given hereunder:

Particulars Amount (Rs. In lac)

Capital 0.89

Revenue 30.57

Total R& D Expenditure 31.46

Total Turnover 59,137.06

Total R& D Expenditure as a Percentage of total turnover 0.05%

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements have been prepared in accordance with the Accounting Standard (AS) 21 on Consolidated Financial Statement read with Accounting Standard (AS ) 23 on Accounting for Investment in Associates, notifed under section 211 (3C) of the Companies Act, 1956.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Mr. Amirali E. Rayani, Director retires by rotation and being eligible offer himself for re-appointment. Directors recommend his re- appointment.

As per section 149(4) of the Companies Act, 2013, which came into effect from April 1, 2014, every listed company is required to have at least one-third of the total number of directors as Independent Directors. Accordingly, resolution proposing appointment of Mr. Mukesh Mehta, Mr. Dilip Sobhag Phatarphekar and Mr. Madan Mohan Jain form part of the Notice of the Annual General Meeting and the Company has received requisite notice in writing under Section 160 of the Companies Act, 2013

The Company has received declarations from all the Independents Directors of the Company confirming that they meet with the criteria of Independents as prescribed both under sub-section(6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

AUDITORS

M/s Bhuta Shah & Co., Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and being eligible to offer themselves for re-appointment.

A letter under Section 141(3) (g) of the Companies Act, 2013 regarding their eligibility for the proposed appointment has been obtained from them. Your Directors recommend their appointment.

KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Companies Act, 2013, your Company is required to appoint Key Managerial Personnel. Accordingly, your Company has appointed its Key Managerial Personnel viz., Mr. Amin A. Rayani as Managing Director & Chief Executive officer , Mr. Pramod Maheshwari as Chief Financial officer and Ms. Gayatri Sharma as Company Secretary. All the three Key Managerial Personnel prescribed under the said Act were in the employment of your Company even prior to the Companies Act, 2013 became applicable.

AUDITORS'' REPORT

Comments made by the Statutory Auditors in the Auditors'' Report are self- explanatory and do not require any further clarifcation.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of the provisions of section 217(2AA) of the Companies Act, 1956, and to the best of their knowledge and belief and according to the information and explanations obtained by them and same as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors'' Report thereon, your Directors confirm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit of the Company for the year ended on that date;

c. the Directors have taken proper and suffcient care for the 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 fraud and other irregularities; and

d. the Directors have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

We thank our Clients, Investors, Dealers, Suppliers and Bankers for their continued support during the year. We place on record our appreciation for the contributions made by employees at all levels. Our consistent growth was made possible by their hard work, solidarity, co-operation and support.

By Order of the Board of Directors For Panama Petrochem Ltd.

Place : Mumbai Amirali E Rayani

Date : 28th July, 2014 Chairman

Mar 31, 2013

Dear Members

The Directors have pleasure in presenting the Thirty-First Annual Report of the company together with the Audited Statement of Accounts for the Financial Year ended March 31, 2013 for your consideration and approval.

FINANCIAL HIGHLIGHTS (Stand Alone Basis) (In Lakhs) As on As on Particulars March March 31st, 2013 31st, 2012

Net Proft before Tax 1,293.90 3,932.50

Less: Provision for Taxes 105.79 869.43

Net Proft After Tax 1,188.11 3,063.07

Add : Proft Brought Forward 10,678.85 8,565.78

Proft available for appropriation 11,866.96 11,628.85

Dividend of previous year including 142.80

Dividend distribution tax

Interim Dividend paid 258.58

Proposed Final Dividend 344.30 172.39

Dividend distribution tax 55.85 69.91

Less : Transfer to Reserves 119.99 306.32

Proft Carried Forward to Balance Sheet 11346.82 10,678.85

OPERATIONAL PERFORMANCE

The Company had revenue from operations of Rs. 63,474.96 Lakhs during the fnancial year 2012-13 as against Rs. 58,422.22 Lakhs in the fnancial year 2011-12 showing a growth of 9% as compared to last year. Earnings before Interest, Depreciation, tax & amortization were Rs. 2,363.33 Lakhs as against Rs. 4,828.94 Lakhs during the previous year. The Company posted a Net Proft of Rs. 1,188.11 Lakhs as against Rs. 3,063.07 Lakhs in the previous year.

The proft of the company was affected because of the fuctuating raw materials cost. Consequently, margin on the fnished product plunged sharply. Further, proftability was adversely impacted due to the sharp depreciation of the rupee''s exchange rate.

A large part of the raw materials used for the production of various products is imported and the steep increase in the cost of global commodities has affected the bottom-line as well as the operating proft margin of the company.

MANAGEMENT DISCUSSION & ANALYSIS

The detailed Management Discussion & Analysis Report is attached hereto with the Director''s Report and should be read as a part of this Report.

DIVIDEND

Considering the proft earned during the year under review as compared to the previous year, your Directors have recommended a dividend of 40% i.e. Rs. 4/- per share for the year ended March 2013.

CREDIT RATING

We are glad to announce that your Company got conducted credit rating from one of the leading credit rating agency CARE and is assigned a "CARE A " rating to the Long Term Facilities and "CARE A1 " rating to the Short Term Facilities.

BUY BACK OF EQUITY SHARES

As a policy of constantly rewarding and enhancing the shareholders value, your Company vide Board Resolution dated February 14th, 2013 has approved the proposal of buyback of fully paid up equity shares of the Company from open market through stock market mechanisms, at a price not exceeding 160/- per share, upto an amount not exceeding Rs. 17.87 crore being 7.97 % of the aggregate of the Company''s paid up equity share capital and free reserves as at March 31st 2012.

The buyback commenced on March 20th, 2013. The Company has bought back 11,765 equity share upto March 31st 2013 and all the shares bought back in the buyback offer upto March 31st, 2013 have been extinguished as on date. Further, 62040 Equity shares were bought back as on the date of the report.

SUBSIDIARY

During the year, Panol Industries RMZ FZE, UAE was formed as a wholly owned subsidiary of the Company.

Pursuant to the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, the Board of Directors of the Company has accorded its consent for not attaching the accounts of the aforesaid Subsidiary Company along with the accounts of your Company. However, the fnancial information pertaining to the aforesaid Company, as required in the aforesaid Circular, is provided in the Annual Report of your Company. The accounts of aforesaid Company are kept for inspection by any shareholders at the registered offce of your Company. Your Company further undertakes that the Annual Accounts of the Subsidiary Company and the related detailed information shall be made available to Shareholders of the Company on demand.

The Consolidated Audited Annual Accounts of your Company together with its subsidiary for the Financial Year 2012-2013 are being published pursuant to Clause 32 of the Listing Agreement.

COST AUDITORS

Based on the Audit Committee recommendation at its meeting held on 29th May, 2013, Mr. Girikrishna S. Maniar, Cost Accountant (Membership No. 8202) was re-appointed by the Board as the Cost Auditor of the Company for conducting an audit of the cost accounting records of the Company for fnancial year commencing from 1st April, 2013 to 31st March, 2014.

Cost Audit Report for the Financial Year 2012-2013 will be submitted by Cost Auditor along with his observations and suggestions, and annexure to the Central Government within the stipulated time period.

The Cost Audit Report for the fnancial year 2011-2012 was submitted to the Central Government within the stipulated time.

LISTING OF SHARES

Your Company''s shares are listed on the BSE Limited and National Stock Exchange of India Limited. The Company has paid the listing fees for the year 2012Â2013. The GDRs of the Company are listed on Luxembourg Stock Exchange.

CORPORATE GOVERNANCE

Your company has implemented all the mandatory requirements pursuant to Clause 49 of the Listing Agreement. A separate report on Corporate Governance is given as a part of the Annual Report along with the certifcate received from the practicing Company Secretary, M/s. Milind Nirkhe & Associates, Company Secretaries, confrming the compliance.

PUBLIC DEPOSITS

During the year under report, your Company did not accept any deposits from the public in terms of the provisions of section 58A of the Companies Act, 1956.

INSURANCE

Your Company has taken adequate insurance cover for all its assets.

CORPORATE SOCIAL RESPONSIBILITY

As a socially responsible Company, your Company has a strong sense of community responsibility.

As its operations have expanded, your Company has retained a collective focus on the various areas of corporate sustainability that impact people, environment and the society at large. Founded on the philosophy that society is not just another stakeholder in its business, but the prime purpose of it, the Company, across its various operations is committed to making a positive contribution.

As a policy, your Company promotes and encourages economic and social development within its communities while providing active support to local initiatives for upliftment of society in general.

In discharge of social obligations, your company regularly contributes to trusts formed for charitable purpose.

TRANSFER TO THE INVESTOR EDUCTION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 205C of the Companies Act, 1956, the amounts of dividend remaining unpaid or unclaimed for a period of seven years from the date of its transfer to the unpaid dividend account of the Company are required to be transferred to the Investor Education and Protection Fund (IEPF) set up by the Government of India. Consequently no claim shall lie against the Company in respect of any such amounts.

The amount of unpaid / unclaimed dividend up to the fnancial year 2004-2005 has been transferred to IEPF. The unpaid / unclaimed dividend amount of equity shares of the Company for the fnancial year 2005-2006 are due for transfer to the said fund in the month of November, 2013. Members who have not yet encashed their warrant (s) are requested to make their claims to the Company without any delay.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A. Conservation of Energy:

The Company is aware of energy consumption and environmental issues related to it and is continuously making sincere efforts towards conservation of energy. The Company is in fact engaged in the continuous process of further energy conservation through improved operational and maintenance practices. Information as required under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure A, forming part of this Report.

B. Technology Absorption:

The Company has an updated R & D Center at its Ankleshwar Plant. It is the technical centre of Panama and has been the backbone for most of our major product breakthroughs. This Centre at Ankleshwar is fully equipped with modern testing & analytical equipments. The Centre is operated by the team of well qualifed technocrats, as a result, the in Â house R & D unit of Panama has been recognized by the Ministry of Science & Technology & the Department of Scientifc and Industrial Research (DSIR). With this recognition Company will spend more on R & D activities and get more new products which will be of better quality. It will also assist in research for import substitution, energy conservation and control of pollution. The in-house R & D facility has enabled us to develop new products which have resulted in the evolution of the Dahej Plant.

Expenditure on research & development

The expenditure on R & D activities incurred during the year is given hereunder:

Amount Particulars (Rs. In Lakhs)

Capital 0.31

Revenue 29.13

Total R & D Expenditure 29.44

Total Turnover 63,474.96

Total R & D Expenditure as a Percentage

of total turnover 0.05%

C. Foreign exchange earnings and outgo:

i. Export Activities: During the year under review the Company has made Import/Export as given in (ii) below.

ii. Foreign Exchange Earnings and Outgo:

(Amount in Rs. Lakhs)

Total Foreign Exchange Infow 22,149.60

Total Foreign Exchange outfow 43,681.11

PARTICULARS OF EMPLOYEES

During the fnancial year under review, none of the Company''s employees was in receipt of remuneration as prescribed under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, and the Companies (Particulars of Employees) Amendment Rules, 2011. Hence, no particulars are required to be disclosed in this Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements have been prepared in accordance with the Accounting Standard (AS) 21 on Consolidated Financial Statement read with Accounting Standard (AS) 23 on Accounting for Investment in Associates, notifed under section 211 (3C) of the Companies Act, 1956.

DIRECTORS

After the last Annual General Meeting, Mr. Moiz H. Motiwala and Mr. Hussein V. Rayani have resigned from the Board.

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, M r. Amirali E. Rayani and Mr. Samir A. Rayani retire by rotation and being eligible offer themselves for re-appointment. Directors recommend their re-appointment.

AUDITORS

M/s Bhuta Shah & Co., Statutory Auditors of the Company hold offce until the conclusion of the ensuing Annual General Meeting and being eligible to offer themselves for re-appointment.

A certifcate under section 224(1) of the Companies Act, 1956 regarding their eligibility for the proposed appointment has been obtained from them. Your Directors recommend their appointment.

AUDITORS'' REPORT

Comments made by the Statutory Auditors in the Auditors'' Report are self- explanatory and do not require any further clarifcation.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of the provisions of section 217(2AA) of the Companies Act, 1956, and to the best of their knowledge and belief and according to the information and explanations obtained by them and same as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors'' Report thereon, your Directors confrm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the proft of the Company for the year ended on that date;

c. the Directors have taken proper and suffcient care for the 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 fraud and other irregularities; and

d. the Directors have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

We thank our Clients, Investors, Dealers, Suppliers and Bankers for their continued support during the year. We place on record our appreciation for the contributions made by employees at all levels. Our consistent growth was made possible by their hard work, solidarity, co-operation and support.

By Order of the Board of Directors For Panama Petrochem Ltd.

Place : Mumbai Amirali E Rayani

Date : 29th May, 2013 Chairman

Mar 31, 2012

The Directors have pleasure in presenting the Thirtieth Annual Report of the company together with the Audited Statement of Accounts for the Financial Year ended March 31, 2012 for your consideration and approval.

FINANCIAL HIGHLIGHTS (Rs In Lakhs)

Particulars As on As on March March 31st,2012 31st,2011

Net Profit before Tax 3932.50 5026.73

Less: Provision for Taxes 869.43 1,346.18

Net Profit After Tax 3063.07 3,680.55

Add :Profit Brought Forward 8,565.78 5,589.15

Add: Balance transferred Pursuant to Nil 22.22 scheme of amalgamation

Less: Dividend paid for the previous 142.80 Nil year including Dividend distribution tax

Profit available for appropriation 11486.05 9291.92

Interim Dividend paid 258.58 Nil

Proposed Final Dividend 172.39 308.10

Dividend distribution tax 69.92 49.98

Less: Transfer to Reserves 306.31 368.06

Profit Carried Forward to Balance Sheet 10,678.85 8,565.78

OPERATIONS

The Company had a revenue from operations of Rs. 58,422.22 lakhs during the financial year 2011-12 as against 46,437.34 lakhs in the financial year 2010-11 showing a growth of 25% as compared to last year. Earnings before Interest, Depreciation, tax & amortization were 4,828.94 lakhs as against Rs. 5,794.00 lakhs during the previous year. The Company posted a Net Profit of Rs. 3,063.07 lakhs as against Rs. 3,680.55 lakhs in the previous year

MANAGEMENT DISCUSSION & ANALYSIS

The detailed Management Discussion & Analysis Report is attached hereto with the Director's Report and should be read as part of this Report.

DIVIDEND

The Company has paid an interim dividend @ 30% i.e. Rs. 3/- per share during the year and directors have further recommend a final dividend @ 20% i.e Rs. 2/-per share, thereby making the total dividend 50% i.e. Rs. 5/- per share (previous year Rs. 5/- per share) for the year ended March 31, 2012.

CREDIT RATING

We are glad to announce that your Company got conducted credit rating from one of the leading credit rating agency CARE and is assigned a "CARE A " rating to the Long Term Facilities and "CARE A1 " rating to the Short Term Facilities.

SUBSIDIARY

Your Company is in process of setting up its subsidiary in United Arab Emirates for further expansion of its business and to cater to the international demand more economically & promptly. In this regard, in-principle approval of Board of Directors has already been taken in its meeting held on 13* February, 2012. Various statutory permissions, approvals & sanctions are being obtained for incorporation of subsidiary.

COST AUDITORS

Mr. Girikrishna S. Maniar, Cost Accountant (Membership No. 8202) was re-appointed as Cost Auditor of the Company for conducting an audit of the cost accounting records of the Company for financial year commencing from 01st April, 2012 to 31st March, 2013. Due date for filing of cost audit report for financial year ending on 31st March, 2012 is 27th September 2012.

LISTING OF SHARES

Your Company's shares are listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Company has paid the listing fees for the year 2011-2012. The GDRs of the Company are listed on Luxembourg Stock Exchange.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreement with the Bombay Stock Exchange Limited & National Stock Exchange of India Limited the following have been made a part of the Annual Report:

- Management discussion and Analysis Report

- Corporate Governance Report

- Practicing Company Secretary Certificate regarding compliance of conditions of Corporate Governance.

- Declaration on compliance with Code of Conduct. PUBLIC DEPOSITS

During the year under report, your Company did not accept any deposits from the public in terms of the provisions of section 58A of the Companies Act, 1956.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A. Conservation of Energy:

The Company is aware about energy consumption and environmental issues related to it and is continuously making sincere efforts towards conservation of energy. The Company is in fact engaged in the continuous process of further energy conservation through improved operational and maintenance practices. Information as required under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure A, forming part of this Report .

B. Technology Absorption:

The Company has an updated R & D Center at its Ankleshwar Plant. It is the technical centre of Panama and has been the backbone for most of our major product breakthroughs. This Centre at Ankleshwar is fully equipped with modern testing & analytical equipments. The Centre is operated by the team of well qualified technocrats, as a result, the in - house R& D unit of Panama has been recognized by the Ministry of Science & Technology & the Department of Scientific and Industrial Research(DSIR). With this recognition Company will spend more on R& D activities and get more new products which will be of better quality. It will also assist in research for import substitution, energy conservation and control of pollution. The in-house R& D facility has enabled us to develop new products which have resulted in the evolution of the Dahej Plant.

Expenditure on research & development

The expenditure on R& D activities incurred during the year is given hereunder:

Amoun Particulars (Rs In lakhs)

Capital 33.14

Revenue 38.70

Total R& D Expenditure 71.84

Total Turnover 58,422.22

Total R& D Expenditure as a Percentage 0.12% of total turnover

C. Foreign exchange earnings and outgo:

i. Export Activities: During the year under review the Company has made Import/Export as given in (ii) below.

ii. Foreign Exchange Earnings and Outgo:

(Amount in Lakhs)

Total Foreign Exchange Inflow 23,397.84

Total Foreign Exchange outflow 43,515.85

PARTICULARS OF EMPLOYEES

During the financial year under review, none of the Company's employees was in receipt of remuneration as prescribed under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, and hence no particulars are required to be disclosed in this Report.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. Madan Mohan Jain and Mr. Dilip Sobhag Phatarphekar retire by rotation and being eligible offer themselves for re-appointment. Directors recommend their re-appointment.

AUDITORS

M/s S.R. Batliboi & Co., Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting, have expressed their inability to continue as auditors of the Company and, accordingly, do not seek reappointment as auditors, at the forthcoming Annual General Meeting.

The Company has received a special notice from a member of the Company, under the provisions of section 190(1) of the Companies Act, 1956, requesting that M/s Bhuta Shah & Co, Mumbai, be appointed as the statutory auditors of the Company, from the completion of the forthcoming Annual General Meeting on 6th August, 2012, to the completion of the next Annual General Meeting. A certificate under section 224(1) of the Companies Act, 1956 regarding their eligibility for the proposed appointment has been obtained from them. Your Directors recommend their appointment.

AUDITORS' REPORT

Comments made by the Statutory Auditors in the Auditors' Report are self-explanatory and do not require any further clarification.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of the provisions of section 217(2AA) of the Companies Act, 1956, and to the best of their knowledge and belief and according to the information and explanations obtained by them and same as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors' Report thereon, your Directors confirm that: :

a. in preparation of the annual accounts, the applicable accounting standards have been followed;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year ended on that date;

c. the Directors have taken proper and sufficient care for the 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 fraud and other irregularities; and

d. the Directors have prepared the Annual Accounts on a going concern basis

ACKNOWLEDGEMENT

We thank our Clients, Investors, Dealers, Suppliers and Bankers for their continued support during the year. We place on record our appreciation for the contributions made by employees at all levels. Our consistent growth was made possible by their hard work, solidarity, co-operation and support.

By Order of the Board of Directors For Panama Petrochem Ltd

Place : Mumbai Amirali E Rayani

Date : 29th June, 2012 Chairman

Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the Twenty Ninth Annual Report of the company together with the Audited Statement of Accounts for the Financial Year ended March 31, 2011 for your consideration and approvall.

FINANCIAL HIGHLIGHTS ( Rs. In Thousands)

Particulars As on As on

March 31, March 31, 2011 2010

Net Profit before Tax 502,782 323,323

Less: Provision for Taxes 134,725 84,123

Net Profit After Tax 368,057 239,200

Less: Transfer to Reserves 36,806 23,920

Less: Proposed Dividend 35,808 34,164

including Corporate Dividend Tax

Net Profit After Appropriations 295,443 181,116

Profit Brought Forward 558,915 377,799

Profit Carried Forward to

Balance Sheet 854,358 558,915

OPERATIONS

The Company had a sales turnover of Rs. 46406.81 lac during the financial year 2010-11 as against Rs. 31925.61 lac in the financial year 2009-10. Profit before Interest, Depreciation and tax was Rs. 5795.10 lac as against Rs. 3872.11 lac during the previous year showing a growth of around 50% as compared to the last year. The Company posted a Net Profit of Rs. 3680.57 lac as against Rs. 2392.00 lac in the previous year showing a growth of 54% as compared to the last year.

Dahej Unit

Panama has set up a state-of-the-art manufacturing facility located in the Special Economic Zone in Dahej. The plant is being developed in two Phases. Construction of Phase I of the Dahej plant with a capacity of 30,000 metric tonnes was completed in August 2010. The Phase I facility is equipped with the latest technology to manufacture various petroleum fractions suitable to feed the requirements of the Drilling & Mining Industries. The Dahej plant will rapidly grow to become a major logistic hub for the Import & Export of bulk liquids & containers, which will help Panama Petrochem Ltd. to expand its businesses with the international markets and subsequently reduce logistic costs. This phase houses the Distillation & Refining Units.

Construction for Phase II of the Dahej Plant which has a capacity of 70,000 metric tonnes will commence soon.

MANAGEMENT DISCUSSION & ANALYSIS

The detailed Management Discussion & Analysis Report is attached hereto with the Directors' Report and should be read as part of this Report.

DIVIDEND

In view of the continual satisfactory performance of the Company during the Financial Year 2010-11, your Directors are pleased to recommend a dividend @ 50% i.e. Rs. 5/- per share (previous year Rs. 5/- per share) for the year ended March 31, 2011.

Underlying Equity Shares allotted towards the GDR issue of the Company before the Book Closure for payment of dividend will rank pari pasu with the existing shares and be entitled to receive the dividend.

CREDIT RATING

We are glad to announce that your Company got conducted the credit rating from one of the leading credit rating agency CARE and is assigned a "CARE A " rating to the Long Term Facilities and "PR1 " rating to the Short Term Facilities.

MERGER & AMALGAMATION

The Hon'ble High Court of Gujarat, vide its order dated 23rd March, 2011 approved the Scheme of Amalgamation of Monaco Petroleum Pvt. Ltd. with Panama Petrochem Ltd. copies of the Hon'ble High Court Order have already been fled with the Registrar of Companies, Gujarat, and the Transferor Company was dissolved without the process of winding-up.

Pursuant to the Scheme of Amalgamation as approved by the High Court of Gujarat, the Company has issued and allotted 321,750 equity shares to the shareholders of the Transferor Company- Monaco Petroleum Pvt Ltd. in the Board Meeting held on 30th May 2011.

Requisite information about the amalgamation is given in 'Note 16 of Schedule 18' of 'Notes on Accounts'.

GLOBAL DEPOSITORY RECEIPTS (GDRS).

Company's GDR Issue closed successfully on, 20 July 2011 and Company received orders for 491,469 GDRs at a price of US$ 28.486 per GDR. The Board of Directors of the Company, at its meeting held on 20 July 2011, allotted 2,457,345 equity shares of Rs.10 each in favour of the overseas Depositary.

Each GDR represents five underlying equity share in the Company. The GDRs have been listed on the Luxembourg Stock Exchange.

LISTING OF SHARES

Your Company's shares are listed on the Bombay Stock Exchange Ltd. The Company has paid the listing fees for the year 2010Ã2011. The GDRs of the Company are listed on Luxembourg Stock Exchange. The Company has also applied for listing of shares with National Stock Exchange. The application for listing is under process.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreement with the Bombay Stock Exchange Limited the following have been made a part of the Annual Report:

- Management discussion and Analysis Report

- Corporate Governance Report

- Auditors Certificate regarding compliance of conditions of Corporate Governance.

- Declaration on compliance with code of Conduct.

PUBLIC DEPOSITS

During the year under report, your Company did not accept any deposits from the public in terms of the provisions of section 58A of the Companies Act, 1956.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A. CONSERVATION OF ENERGY:

The Company is aware about energy consumption and environmental issue related to it and is continuously making sincere efforts towards conservation of energy. The Company is in fact engaged in the continuous process of further energy conservation through improved operational and maintenance practices. Information as required under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure A, forming part of this Report.

B. Technology Absorption:

The Company has an updated R & D Center at its Ankleshwar Plant. It is the technical centre of Panama and has been the backbone for most of our major product breakthroughs. This Centre at Ankleshwar is fully equipped with modern testing & analytical equipments. The Centre is operated by the team of well qualified technocrats, as a result, the in Ã house R& D unit of Panama has been recognized by the Ministry of Science & Technology & the Department of Scientific and Industrial Research(DSIR).

With this recognition Company will spend more on R&D activities and get more new products which will be of better quality. It will also assist in research for import substitution, energy conservation and control of pollution. The in-house R& D facility has enabled us to develop new products which have resulted in the evolution of the Dahej Plant.

Expenditure on research & development

The expenditure on R& D activities incurred during the year is given hereunder:

Particulars Amount ( Rs. In Thousands)

Capital 2,458

Revenue 8,156

Total R& D Expenditure 10,614

Total Turnover 4,640,681

Total R& D Expenditure as a

Percentage of total turnover 0.23%

C. Foreign exchange earnings and outgo:

i. Export Activities: During the year under review the Company have made Import/Export as given in (ii) below.

ii. Foreign Exchange Earnings and Outgo:

(Amount in Rs. Thousands)

Total Foreign Exchange Infow 1,597,071

Total Foreign Exchange outfow 3,686,374

PARTICULARS OF EMPLOYEES

During the financial year under review, none of the Company's employees was in receipt of remuneration as prescribed under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, and hence no particulars are required to be disclosed in this Report

DIRECTORS

After the last Annual General Meeting, Mr. Hussein V. Rayani has been appointed as an Additional Director & Joint managing Director of the Company. His appointment as a Director and as a Joint Managing Director of the Company is placed before the members for consideration.

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. Mukesh Mehta and M r. Moiz H. Motiwala are liable to retire by rotation and being eligible offer themselves for re-appointment. Directors recommend their re-appointment.

AUDITORS

M/s S.R. Batliboi & Co., Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and being eligible to offer themselves for re-appointment. A certificate under section 224(1) of the Companies Act, 1956 regarding their eligibility for the proposed re-appointment has been obtained from them. Your Directors recommend their re-appointment.

AUDITORS' REPORT

Comments made by the Statutory Auditors in the Auditors' Report are self- explanatory and do not require any further clarification.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of the provisions of section 217(2AA) of the Companies Act, 1956, and to the best of their knowledge and belief and according to the information and explanations obtained by them and save as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors' Report thereon, your Directors confrm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profit of the Company for the year ended on that date;

c. the Directors have taken proper and sufficient care for the 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 fraud and other irregularities; and

d. the Directors have prepared the Annual Accounts on a going concern basis

ACKNOWLEDGEMENTS

We thank our Clients, Investors, Dealers, Suppliers and Bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels. Our consistent growth was made possible by their hard work, solidarity, co-operation and support.

By Order of the Board of

Directors

For Panama Petrochem Ltd.

Place : Mumbai Amirali E. Rayani

Date : 8th August, 2011 Chairman

Mar 31, 2010

The Directors have pleasure in presenting the Twenty Eighth Annual Report of the company together with the Audited Statement of Accounts for the Financial Year ended March 31, 2010 for your consideration and approval.

FINANCIAL HIGHLIGHTS (Rs. In Lacs)

Particulars As on As on

March 31. March 31,

2010 2009

Net Profit before Tax & Extra -

Ordinary Items 3,245.93 1,699.08

Prior Period Adjustments 12.70 34.95

Net Profit Before Tax 3,233.23 1664.13

Less: Provision for Taxes 841.23 496.60

Net Profit After Tax 2,392.00 1,167.53

Less: Transfer to Reserves 239.20 116.75

Less : Proposed Dividend including Corporate

Dividend Tax 341.64 273.31

Net Profit After Appropriations 1,811.16 777.47

Profit Brought Forward 3,777.99 2,943.07

Profit Carried Forward to

Balance Sheet 5,589.15 3,777.99

OPERATIONS

The Company had a sales turnover of Rs. 32,023.73 lacs as against Rs. 36,739.24 lacs in the financial year 2008-09. Profit before Interest, Depreciation and tax was Rs. 3,245.93 lacs as against Rs. 1699.08 lacs during the previous year showing a growth of around 90% as compared to the last year. The Company posted a Net Profit of Rs 2,392.00 lacs as against Rs. 1,167.53 lacsjrvthe previous year showing a growth of more than 100% as compared to the last year.

Dahej Unit: The Company has got permission to start plant in Dahej SEZ and construction and erection of machinery work is going smoothly and hopeful to start commercial production by September, 2010. As per the conditions of Government net foreign exchanges should be positive and company is hopeful to fulfill the export criteria.The Company will be manufacturing and exporting Liquid Paraffin, Petroleum Jelly, Ink Oil, Rubber Process Oil, Lubricating Oil & Greases, Transformer Oil, Antistatic Coning Oil, Mining Oil and Cable Jelly. The plant will be enjoying Income Tax, Excise, Sales Tax, Duty Free Electricity and Customs Duty benefits

The detailed Management Discussion & Analysis Report is attached hereto with the Directors Report and should be read as part of this Report.

DIVIDEND

In view of the continual satisfactory performance of the Company during the Financial Year 2009-10, your Directors are pleased to recommend a dividend @ 50% i.e. Rs. 5/- per share (previous year Rs. 4/- per share) for the year ended March 31, 2010.

The payment of dividend together with the tax thereon absorbed a sum of Rs. 341.63 Lakhs.

CARE RATING

We are glad to announce that your Company got conducted the credit rating from one of the leading credit rating agency CARE and is assigned a "CARE A+" rating to the Long Term Facilities and "PR1+" rating to the Short Term Facilities.

LISTING OF SHARES

Your Companys shares are listed on the Bombay Stock Exchange Ltd. The Company has paid the listing fees for the year 2009-2010. The Company has applied for listing of shares with National Stock Exchange.

The application for listing is under process.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreement with the Bombay Stock Exchange Limited the following have been made a part of the Annual Report:

- Management discussion and Analysis

- Corporate Governance Report

- Auditors Certificate regarding compliance of conditions of Corporate Governance.

- Declaration on compliance with code of Conduct.

PUBLIC DEPOSITS

During the year under report, your Company did not accept any deposits from the public in terms of the provisions of section 58A of the Companies Act, 1956.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A. Conservation of Energy: The Company is aware about energy consumption and environmental issue related to it and is continuously making sincere efforts towards conservation of energy. The Company is in fact engaged in the continuous process of further energy conservation through improved operational and maintenance practices. Information as required under section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure A, forming part of this Report

B. Technology Absorption: The Company has an updated R&D Center at its Ankleshwar Plant. It is equipped with all the advanced technological facilities with the latest instruments. The Center is operated by the team of well qualified and experienced technocrats and Company is trying to get recognised R&D Center from Government of India.

C. Foreign exchange earnings and outgo:

i. Export Activities: During the year under review the Company have made Import/Export as given in (ii) below.

ii. Foreign Exchange Earnings and Outgo:

(Amount in Rs Lacs)

Total Foreign Exchange Inflow 9276.09 Lacs

Total Foreign Exchange outflow 20202.93 Lacs

PARTICULARS OF EMPLOYEES

During the financial year under review, none of the Companys employees was in receipt of remuneration as prescribed under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, and hence no particulars are required to be disclosed in this Report.

DIRECTORS

After the last Annual General Meeting, Mr. Moiz H. Motiwala was appointed as an additional director. In terms of the provisions of Companies Act, 1956, he hold office until the date of ensuing Annual General Meeting. His appointment as an ordinary director of the Company is placed before the members for consideration.

After the last Annual General Meeting, Mr. Rajendra V. Thakkar resigned from the Board.

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Mr. Amirali E Rayani and Mr. Samir A Rayani are liable to retire by rotation and being eligible offer themselves for re-appointment. Directors recommend their re-appointment.

AUDITORS

M/s Habib & Co., Chartered Accountants, Statutory Auditors of the Company held office until the conclusion of the ensuing Annual General Meeting and indicated their inability to continue as auditors of the Company and, accordingly, do not seek reappointmentas auditors, at the forthcoming annual general meeting on September 25, 2010.

The Company has received a special notice from a member of the Company, under the provisions of section 190(1) of the Companies Act, 1956, requiring that M/s S.R.Batliboi & Co, Mumbai, be appointed as the statutory auditors of the Company, from the completion of the forthcoming annual general meeting on 25th September, 2010, to the completion of the next annual general meeting. A certificate under section 224(1) of the Companies Act, 1956 regarding their eligibility for the proposed appointment has been obtained from them. Your Directors recommend their appointment.

AUDITORS REPORT

Comments made by the Statutory Auditors in the Auditors Report are self-explanatory and do not require any further clarification except the following:

Note No.4 of the main Auditors Report states that the Company has not provided for the Leave Encashment payable to employees which is not in accordance with the Accounting Standard 15 as notified by the Companies (Accounting Standards) Rules 2006.

We would like to state that the Company do not permit any person to carry forward their leaves. All the leaves can be taken in the financial year only.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of the provisions of section 217(2AA) of the Companies Act, 1956, and to the best of their knowledge and belief and according to the information and explanations obtained by them and save as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors Report thereon, your Directors confirm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit of the Company for the year ended on that date;

c. the Directors have taken proper and sufficient care for the 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 fraud and other irregularities; and

d. the Directors have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

We thank our Clients, Investors, Dealers, Suppliers and Bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels. Our consistent growth was made possible by their hard work, solidarity, co-operation and support.

By Order of the Board of Directors

For Panama Petrochem Ltd

Place: Mumbai Amirali E Rayani

Date: 12th August, 2010 Chairman

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