137 FINANCIAL STATEMENTS & OTHERS ENRA GROUP BERHAD ANNUAL REPORT 2023 Notes To The Financial Statements 31 March 2023 (Cont’d) 16. REDEEMABLE CONVERTIBLE PREFERENCE SHARES (CONT’D) 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; (iii) ELSB shall in accordance with the provisions of the Companies Act 2016 and the terms of the Subscription Agreement redeem all or any of the RCPS-A; (iv) The RCPS-A carries the right to receive non-cumulative dividends at the same rate as the ordinary shares of ELSB. The RCPS-A ranks in priority to the ordinary share in respect of terms of the right to receive the dividend; (v) The RCPS-A ranks pari passu inter se in respect of entitlements to dividends, rights, allotment or other distributions should the entitlement date for such dividends, rights, allotments or other distributions be declared after the RCPS-A are issued; and (vi) The RCPS-A is not to be listed but is transferrable in accordance with the terms of the Shareholder Agreement. The 1st tranche of 104,450 unit of RCPS amounting to RM1,057,034 has matured on 2 March 2023. Based on the salient features of the RCPS-A, all outstanding RCPS-A shall be automatically converted upon maturity of the RCPS. ELSB is in the midst of converting the RCPS into new ordinary shares. As at the date of authorisation of the financial statements, the conversion of RCPS has yet to be completed. 17. TREASURY SHARES The shareholders of the Company, by way of an ordinary resolution passed at the annual general meeting held on 19 September 2007, approved the Company’s plan to repurchase up to 10% of the issued and paid-up share capital of the Company (“Share Buy Back”). The shares of the Company repurchased were held as treasury shares in accordance with Section 127(6) of the Companies Act 2016 in Malaysia. As at 31 March 2023, the Group held 1,289,400 (2022: 1,289,400) of the Company’s treasury shares at a total cost of RM1,199,000 (2022: RM1,199,000).
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