Abstract: The lattice code is an important component of the nuclear design code system. It generates tabulated cross section sets for reactor neutronics calculations. The development and improvement of lattice codes are always significant topics in reactor physics. The PANDA code is a PWR lattice code developed by Shanghai Nuclear Engineering Research and Design Institute (SNERDI). In PANDA, the one-step calculation flow based on Method of Characteristics(MOC) is utilized, which means the 2D heterogeneous transport calculation is performed without any group collapse and cell homogenization. The multi-group library is processed from the evaluated nuclear data library ENDF/B-VI under a 70-group energy structure, and an improved version based on the ENDF/B-VII library is under development. The Spatially Dependent Dancoff Method (SDDM) is applied to treat the resonance self-shielding phenomena. It supports concentric sub-ring mesh divisions in a fuel pellet, but still preserves the same level of efficiency as the conventional Stammler method. Modular 2D MOC with two-level Coarse Mesh Finite Difference (CMFD) acceleration is used as the heterogeneous transport solver, which has favorable accuracy and efficiency. Various matrix exponential methods are studied to solve the Bateman burnup equation. The PANDA code is developed on the basis of these methodologies. The numerical results preliminarily demonstrate that the PANDA code has the basic ability for engineering computations.