OVERVIEW PERFORMANCE SUSTAINABILITY FINANCIALS APPENDIX 159 158 PERENNIAL HOLDINGS PRIVATE LIMITED ANNUAL REPORT 2025 Key Risk Objective Value Impact Mitigating Measures Key Risk Indicators Linkage to Strategic Priority (see legend below) Compliance Risk – Breach of relevant laws and regulations To ensure compliance with relevant laws and regulations in all material aspects • Penalty, legal actions and/or loss of operating licenses • Financial and reputational damage • Identifying applicable laws and regulatory obligations, highlighting emerging regulatory changes and inculcating active compliance into the day-to-day operations across all assets • Constantly keeping abreast of changes in laws and regulations through updates, trainings and consultations with legal counsels or external professional advisors • Regulatory queries, warning, fines and administrative penalties Macroeconomic Risk – Economic slowdown in Singapore or China – Adverse global economic conditions To ensure that the Company is prepared and takes appropriate strategies to mitigate any potential adverse impact from deteriorating macroeconomic conditions • Reduced revenue • Negative impact on valuation, as well as gearing and debt ratios • Increased cost of financing and holding cost of investment assets • Negative impact on asset divestment • Adopting a disciplined approach towards financial management • Constantly reviewing business strategies to formulate pre-emptive mitigations • Vigilant monitoring of budgets and expenditures, key global economic trends and the macroeconomic environment of Perennial Holdings’ investments • Strengthening competitiveness through product and service differentiation • Diversifying investment portfolio across geographies and asset classes • Focusing on cities and countries where the Shareholders have extensive market knowledge • Major economic Indicators such as GDP growth Healthcare Regulatory Risk – Lack of competency in the highly regulated industry – Medical malpractice and negligence To avoid any common pitfalls when operating in a complex and highly regulated industry • Regulatory or legal actions and/ or loss of Operating licenses • Reputational damage • Liaising with relevant local authorities and consultants to actively monitor medical and healthcare-related regulation or policy developments • Establishment of robust operational level SOPs to prevent errors and incidents • Engaging healthcare professionals with good track records • Number of warnings, fines, demerit points, administrative penalties and regulatory/legal actions received KEY RISKS Perennial Holdings takes the management of key risks as a key consideration towards fulfilling the Company’s strategic priorities and value creation objectives. Towards this end, it also undertakes a comprehensive review at least once a year to identify, monitor, manage and report key risks across the Group. Among all the risks identified, the key risks that are closely tracked are as follows: Key Risk Objective Value Impact Mitigating Measures Key Risk Indicators Linkage to Strategic Priority (see legend below) Project Development Risk – Inability to meet completion timeline and project specifications To minimise the likelihood and the impact of negative risk events that will affect timeliness, quality and safety of the development projects • Permit or approval not obtained due to non-compliance with specifications • Project delay due to inadequate resources or reworks • Reputational damage • Proactive management process to monitor project progress per approved timeline • Stringent pre-qualification procedures to appoint well-qualified vendors contractors with proven track records • Regular site visits by the Management and asset managers to monitor the development progress • Project cost overrun as a percentage of total project cost • Progress of the project compared to targeted timeline Financial/ Liquidity Risk – Access to financing resources – Foreign exchange and interest rate fluctuation To contain exposures to the various types of financial risks (liquidity, interest rate, foreign currency etc.) in order to limit any negative impact on the Group’s results and financial position • Increased financing costs which adversely impact financial performance • Inability to fulfil financial obligations or secure funding • Insufficient cash flows • Active monitoring of debt maturity profile and cash flows • Maintaining an adequate level of cash flows and available loan facilities • Expanding sources of funding through retail bond market and multicurrency debt issuance programme • Instilling financial discipline in all levels and maintaining a financially sound balance sheet • Improving cash flows through acquisition of new investments to generate recurring income and contribute to a stable income stream (For more details on how various types of financial risk are managed, please see pages 203 to 211) • Gearing and debt ratios • Working capital ratio Investment Risk – Financial loss on investment To ensure investments are made according to the stated investment strategy, consistent with the portfolio objectives, through careful analysis and assessment of the potential risks and returns (including the behavior and business practices of our joint venture partners) • Investment loss • Adverse impact on financial and operational performance • Adopting a systematic approach of risk assessment and risk evaluation for each investment proposal, including macro and project-specific risk analyses • Objective evaluation based on a comprehensive set of investment parameters, supported by due diligence, feasibility studies and sensitivity analyses on key investment assumptions and variables • Early identification of potential business and partnership synergies • Active tracking of project updates and overall investment portfolio performance • Return on investment ratio • Overall portfolio asset valuation Risk Management
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