ENRA Group Berhad | Annual Report 2022 135 NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2022 16. REDEEMABLE CONVERTIBLE PREFERENCE SHARES Group and Company 2022 2021 Number Number of shares Amount of shares Amount ’000 RM’000 ’000 RM’000 Equity component of redeemable convertible preference share (“RCPS”) with no par value At beginning/end of the financial year 800 2,886 800 2,886 The carrying amount of the liability component of RCPS at the reporting date is arrived at as follow: Group 2022 2021 RM’000 RM’000 Liability component of RCPS with no par value Face value of RCPS at date of issuance 8,096 8,096 Less: Equity component (2,886) (2,886) Liability component at initial recognition 5,210 5,210 At beginning of the financial year 6,465 6,006 Unwinding of discount 494 459 At end of the financial year 6,959 6,465 On 2 March 2017, ENRA Labuan Sdn. Bhd. (“ELSB”), a wholly-owned direct subsidiary of the Company, had entered into a Subscription Agreement with a third party subscriber for the issuance and subscription of 800,000 Redeemable Convertible Preference Shares Series A (“RCPS-A”) at the subscription price of RM10.12 per RCPS-A amounting to RM8,096,000. ELSB shall utilise the said subscription amount solely for the purpose of or in relation to their acquisition of land (that is to be reclaimed) in Labuan. On 2 March 2017, ELSB had also entered into a Shareholder Agreement with the third party subscriber of the RCPS-A and the Company, being its shareholder to regulate the management of the ELSB, the relationships of each other and certain aspects of the affairs of, and their dealings with ELSB. The salient features of the RCPS-A are as follows: (i) The RCPS-A has a tenure of 6 years from the issue date and matures on the business day immediately preceding the 6th anniversary of the said issue date; (ii) The RCPS-A is convertible at any time at the option of the holder in accordance with the terms of the Subscription Agreement. One new ordinary share will be issued as fully paid upon the conversion of one RCPS-A. All outstanding RCPS-A shall be automatically converted upon maturity of the RCPS;
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