Global Defence Industries Limited Management Discussions

Your directors are pleased to present the Management Discussion and Analysis Report for the year ended on March 31, 2026. Investors are cautioned that these discussions contain certain forward-looking statements that involve risk and uncertainties including those risks which are inherent in the Companys growth and strategy. The Company undertakes no obligation to publicly update or revise any of the opinions or forward-looking statements expressed in this report consequent to new information or developments, events or otherwise.

This report covers the operations and financial performance of the Company for the year ended March 31, 2026 and forms part of the Annual Report.

Your Companys performance for the year 2025-26 has to be viewed in the context of aforesaid development.

BUSINESS AND INDUSTRY ENVIRONMENT:

The Government of India allocated 6,81,210 crore to the Ministry of Defence in FY 2025 26, representing a 9.53% increase over FY 2024 25. The total defence expenditure accounted was around 13.45% of the total Union Budget, making it the largest allocation among all ministries. Considering these numbers Indias defence production reached an all time high of 1.78 lakh crore in FY 2025 26, registering a 15.6% year on year growth over FY 2024 25. India has also achieved record defence exports of 38,424 crore in FY 2025 26, indicating strong global demand for indigenous products.

The Ministry of Defence designated FY 2025 26 as the "Year of Reforms" to strengthen procurement efficiency and modernization, considering the review of Defence Acquisition Procedure (DAP 2020) and significant expansion of the exports from 686 crore in FY 2013 14 to 38,424 crore in FY 2025 26, demonstrating exponential growth driven by policy reforms and indigenisation.

The Atmanirbhar Bharat Programme has also facilitated substantial progress in the indigenisation of arms and ammunition, which is critical for strategic autonomy and operational readiness. Government policy initiatives have prioritised local design, development, and manufacturing of defence equipment, including ammunition systems, with a strong emphasis on reducing import dependence.

Ref: www.pib.gov. in/PressReleasePage. aspx?PRID=2273824&reg=48&lang=2 www.. pib. eov. in/PressReleasePage. aspx?PRID=2210549&reg=3&lang=1 OPERATING RESULTS OF THE COMPANY:

During the financial year 2025-26 under review, the total income was Rs. 668.24 lacs as compared to Rs. 164.97 lacs of the previous financial year. At consolidated level the Company achieved a gross revenue of Rs. 4,300.07 lacs as compared to Rs. 450.68 lacs the in the previous financial year.

During the financial year 2025-26 under review, the standalone profit/(loss) before tax of the Company was at Rs. (201.32) lacs during the financial year as compared to Rs. 11.06 lacs in the previous financial year. The consolidated profit/(loss) before tax of the Company was at Rs. (583.21) lacs during the financial year as compared to Rs. 158.86 lacs in the previous year.

The Company has recently inaugurated Advance Shirdi Defence Manufacturing Complex located at Shirdi MIDC in Maharashtra in the presence of Honble Shri. Rajnath Singh, Defence Minister of India and Honble Shri. Devendra Fadnavis, Chief Minister of Maharashtra and other dignities under its subsidiary Company i.e. Globe Forge Limited.

The integrated Defence Manufacturing Complex has been envisioned as a next-generation ecosystem dedicated to 155mm Ammunition Shell Manufacturing Plant, with a capacity of around 5 lakh shells annually, Inauguration of Indigenous TNT Plant Technology, Inauguration Indigenous RDX Plant Technology.

This milestone marked a significant advancement in Indias defence manufacturing ecosystem and aligns with the Government of Indias "Atmanirbhar Bharat" initiative, which aims to strengthen indigenous capabilities and enhance self-reliance in the defence sector. The commissioning of this facility underscores the Companys commitment to contributing to the nations strategic and defence requirements through advanced manufacturing and innovation.

Risk Management:

The Company has a well-devised risk management process aimed at identifying, prioritizing, mitigating and monitoring risks. The key risks impacting its business include economic, foreign exchange, raw material, technology, funding, talent, changes in Government policies and cyber security risks. The Company has undertaken measures to mitigate these risks.

Risks:

• Challenges on inflation and supply chain persists globally. These macroeconomic conditions remain critical to business growth of the Company.

• Central banks globally are increasing rates to cool down inflation. This may have an adverse impact on the Companys end customers demand and subsequently impact growth.

• Ensuring proper working of all our equipment is a key operational risk. Any shortfall on that front may impact the Companys ability to meet customer requirements on time.

• With rising shortage of skilled labour, retaining workers remains a risk for the Company to mitigate.

• Changing technology paradigm and dynamic customer needs are important to remain relevant and sustain business growth.

• Given the global nature of the Companys business, any disruption of movement of goods to its customers is a key operational risk.

Opportunities:

• The government has developed numerous programs to help manufacturers, such as the Production Linked Incentive (PLI) Scheme, which is a cornerstone of the governments endeavor to achieve an Atmanirbhar Bharat.

• The schemes goal is to stimulate domestic defence manufacturing in strategic and emerging areas, improve the cost competitiveness of domestically-made goods, and increase local capacity and economies of scale.

• Increase in defence spending by all major countries and the focus on infrastructure globally is acting as a tailwind for the Companys industrial business.

• Domestic producers are given a preference in the defence sector which will provide new opportunities to the industry. Threats:

• Any shift of Government policies may have a meaningful impact on our business.

• Several new companies are entering the market, and existing rivals in adjacent product categories are also increasing their offering.

Internal Control Systems and their Adequacy:

The Company has a robust internal control system that authorizes, records, and reports transactions to safeguard assets and protect against loss from unauthorized use or disposition. The internal controls ensure the reliability of data and financial information to maintain accountability of assets. These internal controls are supplemented by extensive internal audits, management review, and documented policies, guidelines, and procedures.

Human Resource Development:

The Company believes that human capital is a critical factor of success and hence constantly strives to strengthen its work ethics, work culture and align the workforce towards the common goal. Current workforce of the Company is rightly poised to navigate through the current Volatile, Uncertain, Complex situation and to always maintain industry leading quality standards while maintaining the highest service levels.

The Company continues to focus on upgrading knowledge and skill levels among its employees through various Learning & Development, training activities to enable them to move up the ladder. The Company has well defined HR policies in place which enables it to build a strong performance-oriented culture, belongingness to work and commitment to work.

Cautionary Statement:

The statements within this Management Discussion and Analysis report, articulating the Companys objectives, projections, estimates, expectations, or predictions, are considered forward-looking in compliance with applicable laws and regulations. These statements rest upon specific assumptions and anticipations of forthcoming events. However, it is crucial to acknowledge that actual results may substantially deviate from both expressed and implied expectations.

Several pivotal factors have the potential to significantly impact the Companys operations. These encompass fluctuations in finished goods prices, raw material costs and their availability, fluctuations in global and domestic demand-supply dynamics, shifts in exchange rates, alterations in Government regulations and tax structures, as well as economic developments within India and the nations with which the Company maintains business ties.

It is essential to note that the Company disclaims any responsibility concerning the forward-looking statements presented herein, as they may evolve in the future due to subsequent developments, additional information, or unforeseen events.