Mercury Laboratories Ltd Directors Report

Dear Shareholders,

Your Directors have pleasure in presenting the44thAnnual Report of Mercury Laboratories Limited (the Company) on the business and operations of the Company together with the audited financial statements for the financial year ended on March 31,2025.

1. FINANCIAL SUMMARY

The financial performance of the Company for the financial year ended March 31,2025 along with figures of previous financial year is summarized below:.

Particulars	(Rs in Lakhs)
	2024-25	2023-24
Revenue from Operations	7,510.12	7,555.90
Profit before Depreciation & Amortization, Interest & Tax	808.52	1,011.88
Less: Interest	54.77	38.30
Less: Depreciation & Amortization	287.58	281.55
Profit before Exceptional Items , Extra Ordinary Items & Tax	466.17	692.03
Exceptional Items	-	-
Extra-Ordinary Item	-	-
Profit before Tax	466.17	692.03
Less: Current Tax including Income Tax of Previous Year & Deferred Tax	151.68	126.61
Profit of the year	314.49	565.42
Add: Balance brought forward from the previous year	593.13	419.71
Less: Dividend paid for the previous year	(42.00)	(42.00)
Less: Transfer to General Reserve	-	(350.00)
Balance to be carried forward	865.62	593.13
*Earning Per Share
Basic	26.21	47.12
Diluted	26.21	47.12

*Equity Shares are at par value of Rs 10 per share.

2. Dividend:

Your Directors have recommended Final Dividend of Rs 3.5/- (i.e. 35%) per Equity Share ofRs 10 each for the financial year ended on March 31,2025. The said dividend, if approved by the shareholders, would involve a cash outflow of Rs 42.00 Lakhs. The dividend, if declared, is subject to deduction of Tax at source in accordance with applicable provisions under the Income TaxAct, 1961. The Dividend Distribution Policy of the Company is set out as Annexure- A. The Dividend Distribution Policy, in terms of Regulation 43Aofthe Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (here in after referred to as ‘SEBI Listing Regulations) is also available on the website of the Company at https://investor.mercurylabs.com/wp- content/uploads/2022/03/DIVIDEND-DISTRIBUTION-POICY-2.pdf

3. Transfer to Reserves:

The Board of Directors has decided to retain the entire amount of profit for the financial year 2024-25 in the statement of profit and loss.

4. Financial Performance and Operations Review:

During the financial year under review, the Company recorded 0.61% decline in revenue as compared to the previous year. The company registered Rs 7,510.12 Lakhs revenue from operations compared to Rs 7,555.90 Lakhs in the previous year. This reduction in revenue was primarily attributed to a slowdown in the domestic business which impacted overall sales performance. Despite the overall drop in turnover, the export business demonstrated strong growth, registering 11.39% increase over the previous year. However, the overall profitability was adversely affected. Net profit aftertax (before OCI) also decreased by 44.38% as compared to previous year. The Company registered a net profit after tax (before OCI) of Rs 314.49 Lakhs as compared to net profit of Rs 565.42 Lakhs for the previous year ended March 31, 2024. The drop in profitability was due to the combined impact of stagnant revenue and notable increase in employee costs, otherselling expenses and partial cost passthrough.

5. Future Prospects:

The global economy is forecast to grow at a moderate pace, with the IMF projecting global GDP growth of 3.2% in 2025, stabilizing after post-pandemic volatility. Advanced economies are expected to grow at around 1.8%, while emerging markets are projected to expand by 4.2%. Healthcare remains a strategic growth sector, with global healthcare expenditure expected to grow at a CAGR of 5.4% from 2024 to 2028, driven by aging populations and rising chronic disease burden.

The global pharmaceutical market is projected to reach USD 1.9 trillion by 2028, growing at a CAGR of 5.8%. Growth will be underpinned by increasing demand for innovative therapies, specialty drugs, and biologics. Biopharmaceuticals are set to grow even faster, with a projected CAGR of over 9%, especially in oncology, immunology, and rare disease segments.

Emerging markets, particularly in Asia-Pacific and Latin America, are expected to see double-digit pharma growth, offering significant long-term opportunities for global players. Governments are boosting healthcare investment post- COVID, with many nations allocating 7-10% of GDP to healthcare annually. This structural support benefits the entire pharma ecosystem.

While challenges persist·including inflationary pressures, regulatory tightening, and geopolitical tensions·the medium- to long-term outlook remains strong. In summary, the pharmaceutical sector is well-positioned to grow in step with the global economy, with innovation, market expansion, and public health priorities shaping a resilient and dynamic future.

MANAGEMENTDISCUSSIONSANDANALYSIS

As stipulated by regulation 34(3) read with Schedule V(B) of the SEBI Listing Regulations, Management Discussion and Analysis forms parts of this report.

a) Industry Structure and Development

The global pharmaceutical industry continues to evolve with a clear shift toward personalized and biologic therapies, driving growth in formulation manufacturing. The global drug formulation market is expected to reach USD 456 billion by 2026, growing at a CAGR of 5.4%. Increased demand for generic and specialty drugs, alongside advancements in drug delivery technologies, are key growth drivers.

During FY 2024-25, the industry witnessed significant developments:

1. Increased focus on innovation with growing investments in R&D, particularly in biologics, biosimilars, and novel drug delivery systems.

2. Expansion of digital health technologies, including telemedicine, AI in drug discovery, and automation in manufacturing processes.

3. Policy support from governments across geographies. In India, schemes such as the Production Linked Incentive (PLI) and Bulk Drug Parks have been key enablers for capacity building and import Substitution.

4. Geopolitical shifts and supply chain diversification have also led companies to reassess their sourcing strategies and strengthen local manufacturing ecosystems

b) Outlook, Risks and Concerns

The pharmaceutical industrys outlook remains cautiously optimistic despite heightened geopolitical tensions, including ongoing conflicts and uncertainty in key regions. Global healthcare demand continues to rise, driven by aging populations and chronic diseases, but the sector faces significant risks from geopolitical instability.

Geopolitical tensions and the threat of war pose risks to global supply chains, particularly for raw materials and Active Pharmaceutical Ingredients (APIs). The U.S.-China trade tensions, in particular, could disrupt pharmaceutical imports and exports, creating potential shortages and driving up costs. Companies may also face higher tariffs, especially under new U.S. tariff policies, impacting pricing and margins.

Additionally, political uncertainty could delay regulatory approvals and complicate market access in emerging regions.Another concern is the increased regulatory scrutiny in response to geopolitical concerns, which could lead to more stringent compliance standards, adding pressure to manufacturing costs and timelines.

Despite these challenges, the pharmaceutical sector continues to be an essential part of the global economy. By investing in resilient supply chains, adapting to evolving regulatory landscapes, and focusing on innovation, companies can navigate these uncertainties and maintain long-term growth.

c) Economic overview & Global pharma landscape

The global economy in FY 2024-25 exhibited mixed trends amid ongoing geopolitical uncertainty, inflationary pressures, and shifting monetary policies. While advanced economies, particularly the United States and the Eurozone, experienced moderate recovery following 2023s monetary tightening cycles, emerging markets faced a more uneven path due to currency volatility, elevateddebt levels, and climate- related disruptions. The global pharmaceutical industry is navigating a period of transformation, with innovation, shifting market dynamics, and evolving consumer needs shaping its future. As of 2025, the global pharmaceutical market is valued at approximately USD 1.4 trillion and is expected to reach USD 1.9 trillion by 2028, growing at a CAGRof5.4%.

One of the most significant trends in the pharmaceutical industry is the shift toward biologics and personalized medicine. The biopharmaceutical market is set to dominate, with a CAGR of 7.2%, as advancements in gene therapies, immunotherapies, and targeted treatments continue to redefine how diseases are treated. The rise of precision medicine is enabling more effective treatments tailored to individual genetic profiles, opening new therapeutic areas and improving patient outcomes. The obesity is considered as chronic disease in the present world. Some of the pharma companies globally and Indian pharma companies are working for obesity particularly reduction of weight and diabetes.This trend will continue to grow in faster speed of 10%. By addressing obesity, disease pattern will change in different are of diseases. Hence, pharmaceutical landscape will change in developed and under developed countries.

India is emerging as one of the largest economy and senior citizens with available disposable health equipment 2.0 billion at present will increase to 12.0 billion by USD 2030. The senior citizens population will also increase and there is a high risk of acquiring non-communicable / chronic disease. By 2047, in every 5 Indians , one will be senior citizen and this will open another business opportunity for Geriatric.

Emerging markets are leading the way in pharmaceutical demand, particularly in Asia-Pacific, Latin America, and Africa, where increased access to healthcare is driving consumption. By 2028, emerging markets are expected to account for over 40% of global pharmaceutical spending. These regions will benefit from rising disposable incomes, better healthcare infrastructure, and the growing burden of both chronic and infectious Diseases.

Sustainability has become a focal point, with the pharmaceutical sector investing in greener manufacturing processes, reducing carbon footprints, and ensuring sustainable sourcing of raw materials. In alignment with broader ESG (Environmental, Social, and Governance) principles, pharmaceutical companies are increasingly being evaluated on their sustainability practices, from product lifecycle to corporate governance. Regulatory bodies and investors are placing more pressure on companies to meet sustainability targets while ensuring patient accessibility to medications.

d) Financial Performance and Operation Review

During Financial Year 2024-25, revenue of the Company was Rs 7,510.12 Lakhs as compared to Rs 7,555.90 Lakhs for the previous year ended March 31,2024 (Marginal reduction in revenue by 0.61% from the previous year).The Company registered a net profit (before OCI) ofRs 314.49 Lakhs as compared to net profit ofRs 565.42 Lakhs for the previous year ended March 31,2024. Return on Net Worth has been decreased to 11.12% from 12.98% and Operating profit margin has been decreased to 10.77% from 13.39%. Deterioration in ratio is mainly due to revenue remained stagnant during the year coupled with increase in employee cost and other cost.

Break-up of Sales	2024-25	2023-24	Growth / (Degrowth) In terms of %
Domestic	5,425.83	5,684.81	(4.56)
Direct Exports	2,084.29	1,871.09	11.39
Total	7,510.12	7,555.90	(0.61)

Details of significant changes in key Financial ratios are given at Note No. 62 of the Notes to financial statements with the details of significant changes and reason

e) Internal Control System and its adequacy

The Company has adopted policies and procedures covering all financial, operating and compliance functions. Mercury Laboratories believes that internal control is a prerequisite for governance and that business plans should be exercised within a framework of checks and balances. The Company has adequate internal control system including suitable monitoring procedures commensurate with its size and the nature of the business.

The internal control system provides for all documented policies, guidelines, authorization and approval procedures. The Company has an internal audit department which carries out audits throughout the year. The statutory auditors while conducting the statutory audit, review and evaluate the internal controls and their observations are discussed with the Audit Committee of the Board. Further the Company has in place adequate Internal Financial Controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed.

f) Human Resources

The Company values its employees as the most important asset and integral to its growth and competitive position. We promote a conducive, productive and harmonious work environment. We also motivate employees with recognition and rewards and support them through various training programs to enhance their skills and competencies. The company has built a competent team to handle challenging assignments. The Companys employee strength stood at 503 as on March 31,2025

g) Threats

Drug Price Control:

The Health Ministry keeps on revising the list of Drugs under price control. It is likely that the Government may bring more drugs and formulations under price control or change the mechanism of calculating the ceiling price of the drugs, which are under the ambit of the revised policy, which in turn will affect the net margins of the Company.

Generics:

The Government of India is continuously bringing in policies to shift the market towards generic products. The implementation of this process requires action by all stakeholders. This may have impact on future business strategies of the Company.

Manufacturing & Supplying Risk:

Although a major portion of the Companys finished formulations and injectable are being manufactured at inhouse facilities, the Company also depends on its suppliers for sourcing of its raw materials. Any significant disruption at in-house facilities or any of its suppliers locations due to economic, geo political & social factors or any other event may impair the Companys ability to meet the markets demand on a timely basis. In addition, the Companys manufacturing capabilities could be impacted by quality deficiencies in the products, which its suppliers provide, leading to impact on its financial performance.

Currency fluctuation risks:

Foreign currency risks arise out of overseas operations and financing activities. Exchange rate volatility significantly impacts earnings and net equity because of invoicing in foreign currencies, expenditure in foreign currencies and foreign currency borrowings. The Company has a defined foreign exchange risk management framework to manage these risks excluding translation risks.

International Taxation:

As the Company has potential tax exposure resulting from application of varying laws and interpretations, which include intercompany transactions with related parties in relation to various aspects of business. Although the Company believes, its cross border transactions between affiliates are based on internationally accepted practices, tax authorities in various jurisdictions may have different views or interpretations and subsequently challenge the amount of profits taxed in their jurisdiction resulting into increase in tax liability including interest and penalties causing the tax expenses to increase.

h) Formulation and Developments

The Company always works on quality and cost reduction by developing in house and re-engineering formulations. Company always consider Formulation and Development as crucial for sustain growth of the Company and tries to introduce newer and newer delivery systems for products available with regard to time by enhancing therapeutic values. To achieve this objective, we have experienced and qualified pharmacists whose activity is to maintain and find out newer and newer delivery system. This will help to the company to maintain its material consumption ratio.

I) Cautionary Statement

Certain statements in the above Report may be forward looking and are stated as required by the legislations in force. The actual results may be affected by many factors that may be different from what is envisaged in terms of future performance and the outlook presented above.

6. Directors Responsibility Statement

As required by Section 134(3) of the Act, your Directors, to the best of their knowledge and belief, confirm that

a. In the preparation of annual accounts for the year ended March 31, 2025, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b. Your 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 at March 31,2025 and of the Profit of the Company for the year ended on that date;

c. Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of thisAct for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. Your Directors have prepared the annual accounts on a going concern basis;

e. Your Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. Your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

7. Directors

As on March 31,2025, the Board comprised One Executive Directors, Two Non-Executive Independent Directors and Three Non-Executive Non- Independent Directors.

During the year under review, following changes occurred in the position of Directors of the Company:

• Mr. Divyakant Zaveri (DIN: 01382184) completed his second term as an Independent Director and ceased to be Director effective close of business hours on July 25, 2024 and Chairperson of the Board effective close of business hours on July 23, 2024. Mr. Bharat Mehta (DIN: 07180906), Independent Director was appointed as the Chairperson of the Board with effect from July 24,2024.

• Mr. Jayantilal Raval (DIN: 10662609) was appointed as an Independent Director of the Company for a period of five (5) years from July 24, 2024. His appointment was approved by the shareholders at the 43rd AGM held on September 27, 2024

• In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Ms. Janki R Shah (DIN: 08686344), Non- Executive Director of the Company is liable to retire by rotation at the ensuing 44th Annual General Meeting and being eligible, offered herself for reappointment. The retirement of director by rotation at the ensuing Annual General Meeting is determined in accordance with the provisions of the CompaniesAct, 2013.

• The second term of Mr. Bharat Mehta (DIN: 07180906) second term as an Independent Director would be completed on May 14,2025 and he would ceased to be Director and Chairperson of the Board effective close of business hours on May 14, 2025. Mr. Sanjay Patel (DIN: 00283429) was appointed as an Additional NonExecutive Independent Director with effect from May 14,2025 and was also appointed as a Chairperson of the Board with effect from May 15, 2025. He is also appointed as Chairperson of the Audit Committee effective from May 15,2025. The said appointment is subject to approval of the shareholders at the ensuing 44thAnnual General Meeting (‘AGM).

• There were no changes in Chief Financial Officer and Company Secretary of the Company during the year under review.

The Board and Management express their deepest gratitude to Mr. Divyakant Zaveri and Mr. Bharat Mehta for their guidance, consistent value creation, and direction to the Company during their association with the Company.

Necessary resolutions for appointment and re-appointment of the aforesaid directors and their detailed profiles as required under Regulation 36(3) of the SEBI Listing Regulations and SS - 2 (Secretarial Standards on General Meetings) have been included in the notice convening the ensuing AGM and details of proposal for appointment / reappointment are mentioned in the explanatory statement of the notice. Your directors commend their reappointment.

None of the Directors of your Company is disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures to this effect as required under CompaniesAct, 2013.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company except Mr. Paresh J Mistry & Ms. Janaki RShah, Director of the Company who are being paid for holding the position of Purchase Manager and Head of Export respectively in the Company.

Key Managerial Personnel as at March 31,2025 are as under:

1. Mr. Rajendra R Shah, Managing Director

2. Mr.Ashish Vasavada, Chief Financial Officer

3. Ms. Krishna Shah, Company Secretary

8. Number of Meetings of the Board and Committees

Four Meetings of the Board were held during the year on May 28,2024, July 24,2024, November 14,2024 & February 12,2025. For details of the meetings of the Board and Committees, please referto the Corporate Governance Report, which forms part of this report. The maximum interval between any two meetings did not exceed 120 days, as prescribed by theActand Listing Regulations.

9. Nomination Remuneration Policy

The Policy on appointment and remuneration of directors, key managerial persons (KMP) and senior management including criteria for determining qualifications, positive attributes and directors independence as required under Section 178(3) of the Act, and Regulation 19 read with Schedule II Part D of SEBI Listing Regulations has been formulated by the Company. Policy on Nomination and Remuneration of Directors, Key/Senior Managerial Personnel may be accessed on the Companys website at: https://investor.mercurvlabs.com/wp- content/uploads/2019/11/NOMINATION-AND-REMUNERATION-PQLICY.pdf

The remuneration paid to the Directors, Key Managerial Personnel and Senior Management is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 read with Schedule II of the SEBI Listing Regulations. Further details on the same are given in the Corporate Governance Report which forms part of thisAnnual Report.

10. Board Evaluation

Pursuant to SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the CompaniesAct, 2013 states that performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the Director being evaluated.

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India (SEBI) under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, Information and functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

11. Internal Financial Control Systems and their adequacy

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

12. Audit Committee

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

13. Share Capital

The paid-up Equity Share Capital of the Company as at March 31,2025 is Rs 120 Lakhs. The Company currently has no outstanding shares issued with differential rights, sweat equity or ESOS.

14. Risk Management

Risks are events, situations or circumstances which may lead to negative consequences on the Companys businesses. Risk management is a structured approach to manage uncertainty. Aformal enterprise wide approach to Risk Management is being adopted by the Company and key risks is getting managed within a unitary framework. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews. The Audit Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

15. Safety, Environment and Health

The Company considers safety, environment and health as the management responsibility. Regular employee training programs are carried out in the manufacturing facilities on safety, environment and health.

16. Particulars of Loans, Guarantees or Investments

The Company has not provided any loans and guarantees and no investments made pursuant to Section 186 of the CompaniesAct, 2013 during the year ended on March 31,2025. Details of loans, guarantees and investments covered under section 186 of theAct are given in the notes to the Financial Statements.

17. Particulars of contracts or arrangements with related parties:

There are no materially significant transactions made by the Company with related parties which may have potential conflict of interest with the Company at large. Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act along with the justification in prescribed Form AOC-2 is furnished as ‘Annexure-B to this report.

As a matter of policy, your Company carries out transactions with related parties on an armslength basis. Statement of these transactions is given at Note No. 48 of the Notes to financial statements.

The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is available on the Companys website and can be accessed at https://investor.mercurvlabs.com/wp- content/uploads/2023/02/Related-Party-Transaction-Policy.pdf

18. Corporate Social Responsibility (CSR)

Companys CSR initiatives and activities are aligned to the requirements of Section 135 of theAct.

A brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in ‘Annexure-C of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

This Policy is available on the Companys website at https://investor.mercurylabs.com/wp-content/uploads/2024/06/Corporate- Social-Responsibilitv-Policv-2-1.pdf. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report.

19. 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.

In compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company had constituted an Internal Complaints Committee. The Committee has not received any complaint of sexual harassment during the financial year 2024-25. The policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at work place is placed on website of the Company https://investor.mercurylabs.com/wp-content/uploads/2019/11/Policy-on-Prevention-of-Sexual-Harassment-at- Work-Place.pdf

20. 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 Companys Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and 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 theAudit Committee. The Whistle Blower Policy is posted on the website of the Company https://investor.mercurylabs.com/wp-content/uploads/2022/03/Whistle Blower Policy MLL-1.pdf

21. 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.

22. Conservation of Energy, TechnologyAbsorption, Foreign Exchange Earnings and Outgo

The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134 (3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed as ‘Annexure-D.

23. Particulars of Employees and Remuneration

The information under Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

A. The ratio of the remuneration of each director to the median remuneration of the employees of the Company and percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer and Company Secretary in the financial year:

Name of Director & KMP	Designation	Remuneration (Rs in Lakhs)	Ratio to Median Remuneration	Percentage increase/ decrease in the remuneration
Mr. Rajendra R Shah 2	Managing Director	20.96	9.19	10.97
Mr. Dilip R Shah	Non-Executive Director	·	·	·
Mr. Bharat Mehta	Independent Director	·	·	·
Mr. Paresh Mistry	Non-Executive Director	14.86	6.52	5.65
Ms. Janki R Shah 3	Non-Executive Director	18.22	7.99	·
Mr. Jayanti Raval	Independent Director	·	·	·
Mr. Ashish Vasavada	Chief Financial Officers	15.74	6.90	9.15
Ms. Krishna Shah	Company Secretary	6.61	2.90	39.03

Notes:

1. There was no change in the criteria for payment of remuneration to Managing Director. The variation reflected in column “% increase/(decrease) in remuneration in FY 2024-25” is due to change in amount of perquisites and other benefits. Basic salary was remaining same.

2. The remuneration to Directors is within the overall limits approved by the shareholders of the Company.

3. Ms. Janki RShah, Non-Executive Directorw.e.f. February 05,2020. Further, by way of Special Resolution passed at 42nd Annual General Meeting of the Company held on September 27, 2023, the shareholders of the Company approved payment of remuneration not exceeding f 62 Lakhs to Ms. Janki RShah as Non-Executive Director of the Company for the period of 3 years from April 01,2024.

i. The percentage increase in the median remuneration of employees in the financial year:

The percentage increase in the median remuneration of employees in thefinancial year was 10.53%.

ii. The number of permanent employees on the rolls of the Company: 503

iii. Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average percentile increase made in the salaries of employees other than the managerial personnel in the financial year ending March 31,2025 was approximately 5.67% and the average increase in the managerial personnel remuneration was 1.89%

iv. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms that the remuneration paid are as per the remuneration policy of the Company.

B. The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of theAct, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary, where upon a copy would be sent through email only.

24. Auditors & Their Reports

(1) StatutoryAuditors:

M/s. Naresh & Co., Chartered Accountants were appointed as StatutoryAuditors of your Company fora period of Five (5) years, commencing from the conclusion of the 41st AGM held in the year 2022, until the conclusion of the 46thAGM to be held in the year 2027.

The Statutory Auditors have confirmed their eligibility and submitted a certificate in affirming that they are not disqualified for holding the office of the Statutory Auditor. The report given by the Statutory Auditor on the financial statements of the Company forms part of the Annual Report. There was no instance of fraud during the year under review, which required the statutory auditors to report to theAudit Committee and/or Board under Section 143(12) of the Act, and the rules made thereunder. No fraud has been reported by the Auditors to theAudit Committee or the Board. The Notes on accounts, referred to in the Auditors Report, are self-explanatory and therefore do not call for any further comments.

(2) SecretarialAuditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Dholakia & Associates LLP, Company Secretary in Practice to undertake the Secretarial Audit of the Company for the financial year 2024-25. The Report on the Secretarial Audit carried out by the Secretarial Auditor i.e. M/s. Dholakia & Associates LLP, Practicing Company Secretary during the Financial Year 2024-25 is annexed herewith as Annexure-E. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Further, as per Regulation 24A(1)ofthe Listing Regulations, the Company may appoint an individual for not more than one term of five consecutive years and a SecretarialAudit Firm for not more than two terms of five consecutive years as SecretarialAuditors of the Company with the approval of its shareholders in its Annual General Meeting. In view of the same, your Directors, on the recommendation of the Audit Committee appointed M/s. Dholakia & Associates LLP, Mumbai, Practicing Company Secretary, for the first term of five consecutive years to carry out the Secretarial Audit of the Company from financial year 2025-26 upto financial year 2029-30 and to fix their remuneration.

Membersapproval for appointment of M/s. Dholakia &Associates LLP, Mumbai, Practicing Company Secretary, under Regulation 24A(1)ofthe Listing Regulations has been sought in the Notice convening the 44th Annual General Meeting of the Company.

Annual Secretarial Compliance Report

The Company has undertaken an audit for the Financial Year 2024-25 for all the applicable compliances as per Listing Regulations and Circulars/Guidelines issued by SEBI from time to time. The Annual Secretarial Compliance Report for aforesaid financial year shall be submitted to the stock exchanges within prescribed time limit as per Listing Regulations.

(3) Cost Auditors:

Pursuant to the provisions of Section 148 read with Companies (Cost Records and Audit) Amendment Rules, 2014 and as recommended by theAudit Committee, the Board had appointed M/s. V.M. Patel & Associates, Practicing Cost Accountants, who have given their consent to act as CostAuditors and laid on the table the consent letter received from them & confirmed that his appointment met the requirements of Section 141(3)(g) of the Act for the year 2025-26 and that he was free from disqualification as specified under section 141 read with Section 148oftheAct.

In terms of Rule 14 of the Companies (Audit and Auditors) Rule, 2014, remuneration payable to the cost auditors is required to be ratified by members. Accordingly, an ordinary resolution will be passed by members at the 44th Annual General Meeting approving the remuneration payable to M/s. V.M. Patel & Associates.

(4) InternalAuditors

The Board of Directors appointed M/s. K R & Associates, Chartered Accountant as InternalAuditors of the Company for financial year 2025-26.

25. Secretarial Standards:

The Company has complied with the all Secretarial Standards issued by the Institute of Company Secretaries of India and adopted undertheAct

26. Deposits:

The Company has no unpaid and / or unclaimed deposit. The Company has accepted deposit from the Shareholders and has complied with all applicable provisions of the Companies Act relating to acceptance and renewal of deposits.

The details relating to deposits, covered under Chapter V of theAct are as under:

Particulars	Amt (Rs in Lakhs)
Accepted during the year from the Directors and Members	217.07
Remained unpaid or unclaimed as at the end of the year	None
Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved (i) at the beginning of the year;(ii) maximum during the year; and (iii) at the end of the year;	None

27. Extract ofAnnual Return

A copy of Annual Return as required in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, has been placed on Companys website at http://investor.mercurvlabs.com/miscellaneous-shareholder-details/

28. Material Change & Commitments, if any

There is no material changes and commitments, that would affect financial position of the company from the end of the financial year of the company to which the financial statements relate and the date of signing of the Boards Report

29. Corporate Governance Report

As stipulated by Regulation 34(3) read with Schedule V(C) of the Listing Regulations, Corporate Governance Report forms part of this Annual Report Annexed to the said report is the Auditors Certificate as prescribed under Schedule V(E) of the Listing Regulations certifying compliance with conditions of corporate governance. A detailed report on Corporate Governance is annexed as “Annexure-F” to this Report alongwith the Auditors Certificate on its compliance by the Company.

30. Independent Directors

The Independent Directors of the Company have given the declaration and confirmation to the Company as required under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 confirming that they meet the criteria of independence and that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

The Board of Directors of your company confirms that the Independent Directors fulfill the conditions specified in Section 149 (6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are independent of the management.

31. Unclaimed Dividend Amounts and Transfer to IEPF

The Company has transferred dividend amounts which remained unpaid or unclaimed for a period of seven years from the date of their transfer to unpaid dividend account, from time to time, on due dates to the Investor Education and Protection Fund (IEPF) administered by the Central Government.

The Company has uploaded the details of unpaid and unclaimed dividends lying with the Company as on March 31, 2025 on the website of the Company.

During the year under review, the Company has transferred 3400 equity shares of Rs 10/- (Rupees Ten only) each of 11 members whose dividend has remained unclaimed / unpaid for a consecutive period of 7 (seven) years to the demat account of IEPF after giving notice to the members and advertisement in newspaper to claim their shares and the Company has credited unclaimed dividend of Rs 1,43,106 to the Investor Education and Protection Fund (IEPF) pursuant to Section 125(1) of the Act, pertaining to FY 2016-17. Details of shares transferred to IEPFAuthority during financial year 2024-25 are also available on the website of the Company http://investor.mercurylabs.com/details-of- shares-to-iepf/

32. Familiarisation Program for Independent Directors

All Independent Directors are familiarised with the operations and functioning of the Company at the time of their appointment and on an ongoing basis. The details of the training and familiarisation program are provided in the Corporate Governance Report and is also available on the website of the Company at https://investor. mercurylabs.com/wp-content/uploads/2023/06/Director-Familirazation-Programme 05.05.2023.pdf

33. Prohibition of Insider Trading

In compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) as amended, the Company has framed a Code of Conduct to regulate, monitor and report trading by all the employees, directors, designated persons and their immediate relatives, connected persons and such employees of the Company who are expected to have access to the UPSI relating to the Company. The Code lays down guidelines, which advises them on procedure to be followed and disclosures to be made, while dealing in the shares of the Company. Company also maintains the structured digital database as mandated in the PIT Regulations.

34. Other Disclosures

i. During the year under review, there was no change in Companys nature of business

ii. The Company has not failed to implement any corporate action during the year under review;

iii. The disclosure pertaining to explanation for any deviation or variation in connection with certain terms of Public issue, rights issue, preferential issue, etc. is not applicable to the Company;

iv. Company does not have any subsidiary, associate or joint venture Companies within the meaning of the Companies Act, 2013.

v. No application was made nor is any proceeding pending under the Insolvency and Bankruptcy Code, 2016.

vi. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

vii. No settlements have been done with banks orfinancial institutions.

Viii. The Company doesnt fulfill the criteria provided under Regulation 34(2)(f) of the SEBI Listing Regulations 2015, therefore Business Responsibility & Sustainability Report is not applicable to the Company

35. Acknowledgment

The Board of Directors wish to place on record their appreciation for the continued support extended by the Bankers, Business Associates, clients, vendors and suppliers, Government Authorities, Employees at all levels and Stakeholders, in furthering the interest of the Company.

Date: May 14,2025	On behalf of the Board of Directors,
Place: Vadodara	Mercury Laboratories Limited
	Rajendra R. Shah	Janki R Shah
	Managing Director	Director
	DIN: 00257253	DIN:08686344