GHL System Berhad Annual Report 2020

151 a n n u a l r e p o r t 2 0 2 0 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 CONT’D 24. RESERVES Group Company 2020 2019 2020 2019 RM RM RM RM Non-distributable Exchange translation reserve (1,208,755) 260,437 - - Share options reserve 252,501 2,201,772 252,501 2,201,772 Retirement benefit reserve (305,431) 59,496 - - ESS shares (2,253,505) (11,160,755) (2,253,505) (11,160,755) (3,515,190) (8,639,050) (2,001,004) (8,958,983) The nature of each category of reserves is as follows: (a) Exchange translation reserve The exchange translation reserve is used to record foreign currency exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the presentation currency of the Group. It is also used to record the exchange differences arising from monetary items which form part of the net investment of the Group in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation. (b) Share options reserve The share options reserve represents the equity-settled share options granted to employees. This reserve is made up of the cumulative value of services received from employees recorded on the grant date of share options. (c) Retirement benefit reserve The retirement benefit reserve represents the non-contributory, defined benefit plan granted to employees. (d) ESS shares The ESS share represents the Company’s shares purchased and held by an appointed trustee from the market to transfers to participant of the Company’s ESS upon exercise of options. Movement of ESS shares are as follows: Group and Company 2020 2019 Unit RM Unit RM Opening as at 1 January 8,026,400 11,160,755 - - Purchase of ESS shares 1,230,800 2,225,353 8,601,400 11,943,043 Bonus issue 226,350 - - - Transfer to employees (8,006,000) (11,132,603) (575,000) (782,288) 1,477,550 2,253,505 8,026,400 11,160,755 The number of outstanding ordinary shares in issue after deducting the ESS Shares is 1,140,022,292 (2019: 741,182,739) ordinary shares as at 31 December 2020.