148 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2021 CONT’D 24. RESERVES (Cont’d) 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 shares 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 2021 2020 Unit RM Unit RM Balance as at 1 January 1,477,550 2,253,505 8,026,400 11,160,755 Purchase of ESS shares 61,450 110,610 1,230,800 2,225,353 Bonus issue - - 226,350 - Transfer to employees (1,539,000) (2,364,115) (8,006,000) (11,132,603) Balance as at 31 December - - 1,477,550 2,253,505 The number of outstanding ordinary shares in issue after deducting the ESS shares is 1,141,499,842 (2020: 1,140,022,292) ordinary shares as at 31 December 2021.
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