OUR OPERATING ENVIRONMENT At Tropicana, we recognise that we operate within a dynamic and rapidly evolving external environment, where multiple forces of change create both opportunities and challenges that require careful navigation. Our approach to identifying, prioritising, and managing these external factors is guided by the widely adopted PESTLE framework, which categorises influences into Political, Economic, Social, Technological, Legal, and Environmental dimensions. By assessing these factors, we are able to identify those most material to our business model, evaluate associated risks and opportunities across the short, medium, and long term, and develop effective mitigation and adaptation strategies. This enables the Group to remain agile, resilient, and well-positioned to sustain long-term growth. We apply integrated thinking as shown in the diagram below: Tropicana has identified the following key undercurrents and external factors shaping its operating environment for FY2026: 1. Political • Government-led infrastructure development, foreign direct investment (“FDI”) policies, and strategic initiatives such as the Johor-Singapore Special Economic Zone (“JS-SEZ”); • Homeownership initiatives and supportive housing policies introduced by the Government; • Tourism- and travel-friendly policies and incentives introduced in FY2025 to stimulate industry growth; • Upward revision in Sales and Service Tax (“SST”). 2. Economic • Inflationary pressures; • Rising operational and construction costs; • Fluctuations in interest rates; • Volatility in foreign exchange rates. 3. Social • Sustained post-pandemic recovery in travel and tourism; • Evolving demographic profiles and lifestyle preferences; • Ongoing dynamics within the talent and labour market. 4. Technological • Accelerated adoption of digitalisation, innovation, and automation, including Artificial Intelligence (“AI”) and smart living solutions. 5. Legal • Strengthening governance, regulatory compliance, and evolving legal requirements. 6. Environmental • Growing focus on green buildings and sustainable developments; • Increasing emphasis on ESG practices and responsible business conduct; • Heightened awareness and impact of climate change. Identification of external environment and Impacted business/ operations Understanding of specific impact Allocation of capital and plans Mitigation and leveraging strategies 83
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