Tropicana Corporation Berhad Annual Report 2019

30. IRREDEEMABLE CONVERTIBLE PREFERENCE SHARES AND PERPETUAL BOND (CONT’D.) Perpetual bond (cont’d.) The salient features of the Perpetual bond were as follows: (i) the Perpetual bond is issued under the Shariah principle of Musharakah; (ii) perpetual in tenure, where the Company has a call option to redeem the Perpetual bond at the end of the 5th year and on each periodic distribution date thereafter; (iii) the Company also has the option to redeem the Perpetual bond upon the occurrence of an Accounting Event, Tax Event and/or any Stepped Up Event; (iv) the expected periodic distribution up to year 5 is 7% per annum payable semi-annually. If the Company does not exercise its option to redeem at the end of the 5th year, the periodic distribution increases by 2% per annum in year 6 and subsequently the periodic distribution increases by 1% per annum in year 7 onwards and subject to a maximum rate of 15% per annum; (v) deferred periodic distribution, if any, will be cumulative and shall be added for the purpose of calculating the Additional Periodic Distribution Amount; (vi) payment obligations on the Perpetual bond will at all times, rank ahead of the holders of Junior Obligations of the Company and rank pari passu with all other present and future unsecured, unconditional and unsubordinated obligations of the Company; and (vii) the Perpetual bond is not rated and is unsecured. (viii) Accounting Event If as a result of any changes or amendments to the Malaysian Financial Reporting Standards (“ MFRS ”) in Malaysia or any other accounting standards that may replace MFRS for the purposes of the Issuer’s consolidated financial statements, the Sukuk Musharakah are no longer recorded, or will no longer be recorded entirely as “equity” pursuant to the Relevant Accounting Standard, an Accounting Event shall have occurred. (ix) Tax Event If the Issuer has or will become obliged to pay additional amounts of tax (“ Additional Amounts ”) or increase the payment of such Additional Amounts or the Expected Periodic Distribution Amount made by the Issuer would not in the immediately following Periodic Distribution Date be fully tax deductible by the Issuer for Malaysian income tax purposes as a result of: (a) any change in, or amendment to, the laws (or any regulations, rulings or other administrative pronouncements of Malaysia) or any political subdivision or any authority thereof or therein having power to tax; or (b) any change in the application or official interpretation of such laws, regulations, rulings or other administrative pronouncements. Which change or amendment is made public on or after the issue date of the relevant Sukuk Musharakah and such obligations cannot be avoided by the Issuer taking reasonable measures available to it, then a Tax Event shall have occurred. (x) Stepped Up Event The Periodic Distribution Rate of the Sukuk Musharakah shall be stepped up to the Maximum Rate from the expiry of 45 days period from the date any of the Stepped Up Events first occurred until such Stepped Up Event ceases to subsist. For the financial year ended 31 December 2019 Notes to the Financial Statements Tropicana Corporation Berhad Annual Report 2019 pg 218 About Tropicana Our Strategic Performance Our Leadership