At Tropicana, we are cognisant that we operate amidst a dynamic and fast-evolving external operating environment, where multiple forces of change continue to create a wide range of ensuing impacts, which businesses must successfully navigate. Our approach to identifying, prioritising, and managing these external forces are based on the commonly used PESTLE classiûcation, where external forces are categorised into the following categories: Political, Economic, Social, Technological, Legal and Environmental forces, trends or developments. Our focus on these factors is to determine which are the most material in terms of positive or negative impact on our business model, the identiûcation of risks and opportunities over the short, medium, and long-term horizons and ultimately, the development of eûective mitigation and adaptation strategies. We apply integrated thinking as shown in the diagram below: OUR OPERATING ENVIRONMENT Tropicana is able to determine the signiûcant undercurrents and major external factors of FY2025 as provided below: 1. Political • Government Infrastructure Development, Foreign Direct Investment Policies, Johor-Singapore Special Economic Zone (<JS-SEZ=), Government Homeownership Initiatives and Policies, etc • Tourist and travel friendly policies and incentives launched in FY2024 to drive industry growth • Upward Revision in Sales and Service Tax (<SST=) 2. Economic • Inûation • Rising operational costs • Fluctuation in interest rates • Fluctuation in foreign currency 3. Social • Continued robust post pandemic travel and tourism boom in FY2025 • Continued evolution in demographic and social trends • Prevailing talent market conditions 4. Technological • Proliferation of digitalisation, innovation and automation including Artiûcial Intelligence (AI) and Smart Living 5. Legal • Governance and Compliance 6. Environmental • Green Buildings and Developments • Increasing emphasis on ESG and best practices • Climate Change 1 Identification of external environment and 4 Mitigation and leveraging strategies 3 Impacted business/ operations 5 Allocation of capital and plans 2 Understanding of specific impact 82 ANNUAL REPORT 2024
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