166 SECTION 05 : FINANCIAL STATEMENTS & OTHERS Notes To The Financial Statements (Cont’d) 31 March 2025 Registration No: 70 199201005296 (236800 - T) 14. REDEEMABLE CONVERTIBLE PREFERENCE SHARES (“RCPS”) (continued) The carrying amount of the liability component of RCPS at the reporting date is arrived at as follow: Group 2025 2024 Note RM’000 RM’000 Liability component of RCPS with no par value Face value of RCPS at date of issuance 7,038 7,038 Less: Equity component (2,477) (2,477) Liability component at initial recognition 4,561 4,561 At beginning of the financial year 6,916 7,491 Unwinding of discount 122 482 Accrual of interest 369 - Conversion of RCPS (b) - (1,057) At end of the financial year 7,407 6,916 (a) 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
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