Annual Report 2020

226 Transport International Holdings Limited 2020 Annual Report Notes to the Financial Statements (Expressed in Hong Kong dollars unless otherwise indicated) 30 Capital and reserves (continued) (b) Share capital (continued) (ii) Shares issued under the share option scheme During the year ended 31 December 2019, options were exercised to subscribe for 383,000 ordinary shares in the Company at a consideration of $8,977,000, of which $383,000 was credited to the share capital account and the balance of $8,594,000 was credited to the share premium account. $704,000 has been transferred from the capital reserve to the share premium account in accordance with policy set out in note 1(x)(iv). (c) Nature and purpose of reserves (i) Share premium The application of the share premium account is governed by the Company’s Bye-laws and the Companies Act 1981 of Bermuda. (ii) Capital reserve The capital reserve comprises the portion of the grant date fair value of unexercised share options granted to the Directors of the Company and certain employees of the Group that has been recognised in accordance with the accounting policy adopted for share-based payments in note 1(x)(iv). (iii) Exchange reserve The exchange reserve comprises all foreign exchange differences arising from the translation of the financial statements of entities outside Hong Kong. The reserve is dealt with in accordance with the accounting policy set out in note 1(w). (iv) Hedging reserve The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow hedges pending subsequent recognition of the hedged cash flow in accordance with the accounting policy adopted for cash flow hedges in note 1(i). (v) Fair value reserve (recycling) The fair value reserve (recycling) comprises the cumulative net change in the fair value of debt securities measured at FVOCI under HKFRS 9 held at the end of the reporting period (see note 1(g)). (vi) Fair value reserve (non-recycling) The fair value reserve (non-recycling) comprises the cumulative net change in the fair value of equity investments designated at FVOCI under HKFRS 9 that are held at the end of the reporting period (see note 1(g)).