Silver Pearl Hospitality & Luxury Spaces Ltd Management Discussions

ANNUAL OVERVIEW AND OUTLOOK

The global economy demonstrated resilience during 2025 despite elevated geopolitical tensions, trade fragmentation risks, and episodic commodity price volatility. Global GDP is expected to grow by 3.4% in 2025 (2024: 3.3%), reflecting steady momentum across major emerging markets and continued, albeit moderating, expansion in advanced economies.

Global growth was supported by a gradual easing in inflation (expected at 4.1% in 2025 vs. 5.8% in 2024)* and the prospect of lower interest rates, alongside a broadening set of structural tailwinds; this created greater room for central banks to pivot toward policy easing.

Emerging markets and developing economies remained the principal drivers of global growth. India and select Asian economies sustained strong domestic demand and investment momentum, while Chinas economy stabilized amid targeted policy support and structural rebalancing.

Capital expenditure linked to artificial intelligence, digital infrastructure, and data centers continued to scale up, providing a meaningful investment-led impetus globally. The green-energy transition also gathered pace as declining solar and battery costs improved competitiveness and encouraged private investment. Household consumption remained firmer than anticipated, with notable resilience in the United States and key emerging markets, particularly India.

Global trade flows continued to adjust to US–China frictions, with "connector" economies such as Vietnam, Indonesia and Cambodia strengthening their position as manufacturing and logistics hubs.

The Organisation for Economic Cooperation and Development (OECD) projects global growth to moderate to 2.9% in 2026 from ~3.2% in 2025 as higher energy prices and the uncertain trajectory of the evolving West Asia conflict are expected to raise costs and soften demand, offsetting the tailwinds from sustained technology-led investment and production, lower effective tariff rates and the carry-forward momentum from 2025.

Indias economic outlook for FY2026-27 remains strong, with real GDP growth projected at approximately 6.9% and CPI inflation at around 4.6% (RBI), although the inflation outlook remains sensitive to movements in food and energy prices. Growth is expected to be driven by strong domestic demand, sustained government capital expenditure, and ongoing structural reforms.

INDUSTRY OVERVIEW

On the sectoral front, services are expected to remain the principal growth engine, particularly across financial services and hospitality. Manufacturing is gaining momentum under initiatives such as production-linked incentives (PLI), with continued expansion in sectors including electronics, automotive, and pharmaceuticals.

Financial policy is expected to progress along the consolidation path while retaining a strong emphasis on capital expenditure. Monetary policy is likely to remain calibrated and data-dependent, with an ongoing focus on maintaining price stability.

External sector conditions will be influenced by global growth and trade developments and by crude oil prices, which could influence the current account balance and imported inflation. Services exports are expected to provide a partial offset to these pressures.

The global tourism industry reached a new post-pandemic peak in 2025, fully surpassing pre-COVID levels. According to the UNWTO Barometer (January 2026), international tourist arrivals are estimated to have reached 1.52 billion in 2025, representing a 4% increase over 2024 and reaffirming a return to long-term growth trends. Growth was supported by strong demand from large source markets, expanded air connectivity, and continued visa facilitation initiatives across destinations.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Your Company has an Internal Audit team that is responsible for independently evaluating the adequacy and effectiveness of all internal control designs and implementation, risk management, systems and processes. Internal Audit team is manned by appropriately skilled, experienced and qualified personnel. The Internal Audit plan is also aligned with the business objectives of the Company which is reviewed and approved by the Audit Committee.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year under review, the Company earned revenue from operations of 102.35 lakh, along with other income of 32.35 lakh, taking the total income for the year to 134.80 lakh. While the Companys total expenses were less than its total income, resulting in a net profit for the year, the revenue generated from operations played a meaningful role in meeting the day-to-day operational and financial requirements of the Company. This, in turn, helped reduce the Companys dependence on additional borrowings from the Directors and from banks/financial institutions to fund its working capital and other requirements.

The management remains focused on improving operational efficiency, expanding revenue streams and exercising tighter control over costs, with the objective of strengthening the Companys overall financial performance in the coming years. These efforts are also aimed at progressively reducing the Companys reliance on external sources of finance and building a more self-sustaining operational and financial structure going forward.

OPPORTUNITIES & THREATS

ICRA projects demand growth of 8–10% CAGR compared with supply growth of 5–6% during FY2025–FY2028. Supply additions are expected to remain measured due to higher land and construction costs, longer approval timelines and talent availability, which may continue to support occupancy and ADR levels.

Ongoing initiatives under Swadesh Darshan 2.0 and PRASHAD, destination development across select iconic sites, connectivity enhancement measures and community-based tourism initiatives such as homestays are expected to improve destination readiness over time. Skilling programmes, including Capacity Building for Service Providers (CBSP), Paryatan Mitra and Paryatan Didi, may further support service quality and employability, although execution and uptake will remain important.

RCS-UDAN has also been introduced to strengthen regional air connectivity through affordability measures and viability support, with 53 tourism routes operational to improve access to key and iconic tourist destinations.

Effective September 22, 2025, the GST rate on hotel rooms priced up to 7,500 per day was reduced to 5% (without input tax credit), improving affordability, simplifying taxation, and supporting demand in the mid-scale and budget segments, despite the trade-off arising from the loss of input tax credit for businesses.

Key factors impacting the industry are: (i) the trajectory of domestic discretionary spending; (ii) the pace of inbound travel recovery and expansion in air connectivity; (iii) incremental room supply and conversion activity; (iv) trends in corporate travel and MICE; and (v) the geopolitical environment, weather-related events or other external risks.

RISKS AND CONCERNS

Silver Pearl Hospitality & Luxury Spaces Limited (SPHLSL) has exposures in the business of hospitality. SPHLSL are exposed to specific risks that are particular to their respective businesses and the environments within which they operate, including market risk, competition risk, credit risk, demand risk, risk of spread of pandemic, human resource risk, operational risk, information security risks, regulatory risk and macro-economic risks. The level and degree of each risk varies depending upon the nature of activity undertaken by them.

HUMAN RESOURCE DEVELOPMENT

The Company recognizes that its success is deeply embedded in the success of its human capital. During 2025-26, the Company continued to strengthen its HR processes in line with its objective of creating an inspired workforce. The employee engagement initiatives included placing greater emphasis on learning and development, launching leadership development programme, introducing internal communication, providing opportunities to staff to seek inspirational roles through internal job postings, streamlining the Performance Management System, making the compensation structure more competitive and streamlining the performance-link rewards and incentives.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The provision of the Companies Act, 2013 relating to CSR Initiatives are not applicable to the Company.

COMPLIANCE

The Compliance function of the Company is responsible for independently ensuring that operating and business units comply with regulatory and internal guidelines. The Compliance Department of the Company continues to play a pivotal role in ensuring implementation of compliance functions in accordance with the directives issued by regulators, the Companys Board of Directors and the Companys Compliance Policy. The Audit Committee of the Board reviews the performance of the Compliance Department and the status of compliance with regulatory/internal guidelines on a periodic basis.

Kolkata, August 28, 2026	By order of the Board
	For Silver Pearl Hospitality & Luxury Spaces Limited
Registered Office:	S/d-
3B, Lal Bazar Street, Sir RNM House, 5th Floor,	Rajesh Kumar Negi
Room No. 2, Kolkata – 700001 (West Bengal)	DIN: 08131019
	Chairman & Managing Director