09:51 PING AN<02318> - Announcement (2) investment funds and bonds, long-term equity investments and property leasing as well as managing assets in accordance with the instructions of the trust settlors for the benefit of the beneficiaries or for other specific purposes. It also acts as an investment holding company for some of the long-term equity investments of the Company and provides real estate development, management and leasing services to other subsidiaries of the Company. Ping An Securities is principally engaged in the provision of brokerage services, investment banking services and assets management services and its registered capital is RMB1 billion. It was wholly owned by the Company when it was established as a limited liability company in the PRC on 18 July 1996 with a registered capital of RMB150 million. Pursuant to the applicable PRC laws and regulations in 1998 which required minimum registered capital of RMB500 million for a comprehensive securities company, the registered capital of Ping An Securities increased to RMB1 billion and there were new shareholders which subscribed for part of the increased registered capital of Ping An Securities in cash. Further financial information of Ping An Securities is set out in the following table : For the year ended For the year ended For the year ended 31 December 2002 31 December 2003 31 December 2004 (audited figures) (audited figures) (unaudited figures) Revenue RMB42 million RMB291 million RMB285.72 million Profit/(loss) before tax RMB(192) million RMB8 million RMB9.40 millionProfit/(loss) after tax RMB(197) million RMB8 million RMB6.13 million As at As at As at 31 December 2002 31 December 2003 31 December 2004 (audited figures) (audited figures) (unaudited figures) Total assets RMB4,109 million RMB3,798 million RMB3,230.86 million Net assets RMB620 million RMB629 million RMB634.67 million LISTING RULES IMPLICATIONS Ping An Trust and Ping An Securities are respectively 99.26% and 74.44% owned subsidiaries of the Company. As New Horse Development, which is a shareholder of the Company holding approximately 6.29% of the issued share capital of the Company, is one of the promoters of the Company, New Horse Development is a connected person of the Company under Rule 14A.11(3) of the Listing Rules. New Horse Development is also a substantial shareholder of Ping An Securities, Ping An Securities is thus a connected person of the Company under Rule 14A.11(5). New Horse Development, which holds approximately 0.18% of the issued share capital of each of Ping An Life and Ping An P&C, is also one of the promoters of each of Ping An Life and Ping An P&C. New Horse Development is owned directly as to 95% by Ping An Insurance (Group) Company of China, Ltd. Labor Union through which employees of the Group including directors, supervisors, senior consultants, regular full-time employees and certain insurance sales agents who have made significant contributions of the Group made indirect investments in the Group. Save for the above, there is no other connected relationship between Ping An Securities and New Horse Development and its ultimate beneficial owners on one hand and the Company and its connected persons on the other hand. The increase in capital contribution by Ping An Trust to Ping An Securities constitutes a connected transaction of the Company under the Listing Rules, which is subject to reporting and announcement requirements set out in Rules 14A.45 and 14A.47 of the Listing Rules for the consideration ratio of the capital increase under the Capital Increase Agreement is more than 0.1% but less than 2.5%. INFORMATION RELATING TO THE COMPANY The Company together with its subsidiaries is an insurance group in the PRC with the ability to provide multiple financial services and products. The Capital Increase Agreement was entered into on normal commercial terms after arm's length negotiation. The directors of the Company (including the independent non-executive directors) believe that the terms of the Capital Increase Agreement are fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole. REASONS AND BENEFITS TO THE GROUP As the objective of the Company is to become one of the leading multiple financial services providers in the world and the Group offers