136 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 CONT’D 24. RESERVES Group Company 2022 2021 2022 2021 RM RM RM RM Non-distributable Exchange translation reserve (1,331,626) (3,250,116) - - Retirement benefit reserve 774,961 (305,431) - - ESS shares - - - - (556,665) (3,555,547) - - 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) Retirement benefit reserve The retirement benefit reserve represents the non-contributory, defined benefit plan granted to employees. (c) 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 2022 2021 Unit RM Unit RM Balance as at 1 January - - 1,477,550 2,253,505 Purchase of ESS shares - - 61,450 110,610 Transfer to employees - - (1,539,000) (2,364,115) Balance as at 31 December - - - - The number of outstanding ordinary shares in issue after deducting the ESS shares is 1,141,499,842 (2021: 1,141,499,842) ordinary shares as at 31 December 2022.
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