LOT Life Offices

Final Results PRESS RELEASE - 2 MARCH 2005 LIFE OFFICES OPPORTUNITIES TRUST PLC The investment objective of Life Offices Opportunities Trust Plc ("LOOT") is to achieve long term capital growth from a diversified portfolio of with-profits life assurance policies. The Trust, with net assets of �27 million, is managed by SVM Asset Management (`SVM'), the independent Edinburgh based investment boutique. Results for the year ended 31 December 2004 Salient Points * Net Asset Value per share fell by 4.6% to 117.8 pence reflecting the continuing decline in life office bonuses * Value of assets continues to lag the recovery in the financial markets as life offices smooth returns * Traded endowment policyholders seem likely to receive demutualization benefits from the Standard Life. Further details aren't expected until 2006 * Despite strength of markets, bonus cuts have already been seen in 2005 and this is expected to continue, but the scale is less as bonuses approach sustainable levels. For further information please contact: Brian Moretta SVM Asset Management 0131 226 6699 Roland Cross Broadgate 020 7726 6111 �.. LIFE OFFICES OPPORTUNITIES TRUST PLC Chairman's Statement for the year ended 31 December 2004 Commenting on the results, Chairman, John Brumwell, said: "This has been a disappointing year. Net assets again declined due to bonus cuts from life offices, with Standard Life in particular having two substantial reductions. Over the year, the net asset value per share fell by 4.6 per cent to 117.8 pence. The investment objective of your Company is to achieve long-term capital growth and no dividend is payable. Last year, I commented on the failure of the value of the assets to respond to the upturn in financial markets. In particular, the lagged effects of returns on bonuses as life offices smooth returns means that change in bonuses tend to lag the underlying markets. These features have been repeated this year, but to a lesser degree. Many life offices, having cut bonuses sooner, have had muted bonus changes, but some others have declared more substantial cuts. It should be noted that the payout figures are falling quicker than bonuses, as the effect of prior cuts generally leads to a reduction in payouts even if bonuses remain unchanged. The portfolio comprises a spread of endowments, with an emphasis on life offices we believe can benefit from the restructuring of the life industry. In the wake of early statements from Standard Life, I predicted more restructuring activity in 2004. The events at Standard Life have been much commented upon. A proposal will now be put forward in 2006 for the company to demutualise. The current assumption being that the company will become a listed entity in the second half of that year. It seems likely that traded endowment policyholders will receive demutualisation benefits, subject to cut-off dates, though the amounts look as though they will be substantially smaller than those talked about at the vote in 2000. The timing will be important as the demutualisation will probably run into the time in which significant numbers of policies start to mature. We hope that Standard Life will provide more clarity on these issues, although it may be into 2006 before the answers are known for certain. The main takeover activity has been in the area of closed life funds. There have been five significant deals this year, with some new companies entering the market. The only deal which seems to have had a noticeable effect on policyholders has been the takeover of Abbey by Santander. There, it seems the existing management decided to do some "kitchen sink" provisioning in Scottish Mutual to prepare the company for sale. This involved further substantial cuts to both bonuses and surrender values. The FSA has issued a Consultation Paper on closed funds, with particular emphasis on protecting policyholders and ensuring they receive fair payouts. These proposals are encouraging and should help ensure that policyholders in these funds, which now represent a significant proportion of the market, get treated properly. The final restructuring news has been on inherited estates. These have been mentioned in FSA consultative papers, though no firm conclusion appears to have been reached. Aviva appears to believe that it will get an attribution as part of the process of merging its life funds. The last payout to policyholders from this process, from AXA, was extremely small and while any payment will be welcomed, it is unlikely to be significant. As mentioned last year, several TEP market makers have withdrawn from trading policies. In the summer, Beale Dobie, the Policy Advisors to the fund, announced that they were withdrawing from market making. As they provide services to several funds, they have kept a residual business, with access to market data subcontracted. So far this has proved to be a satisfactory arrangement and we expect this to continue. The strength of the markets in the underlying assets has been supportive to the funds. With Aviva achieving a return over 10% in 2004, it is clear that many funds will have beaten their underlying assumptions. Despite this, bonus cuts have already been seen in 2005 and, as I said last year, will continue. But the scale of these will be much smaller than previously seen as bonuses approach sustainable levels. In some cases, these have already been achieved. We do believe that the portfolio continues to be well placed for these changes and should benefit from asset growth in the future." J C H Brumwell Chairman 2 March 2005 . Summarised Group Statement of Total Return (unaudited) Year to 31 December Year to 31 December 2003 2004 Revenue Capital Total Revenue Capital Total �'000 �'000 �'000 �'000 �'000 �'000 Gains / (losses) on - 78 78 - (5,526) (5,526) investments Income 7 - 7 2 - 2 Investment management - (335) (335) - (351) (351) fees Other expenses (120) (224) (344) (131) (233) (364) ------ ------ ------ ------ ------ ------ Return before interest (113) (481) (594) (129) (6,110) (6,239) and taxation Bank overdraft interest - (753) (753) - (677) (677) ------ ------ ------ ------ ------ ------ Transfer from reserves (113) (1,234) (1,347) (129) (6,787) (6,916) ------ ------ ------ ------ ------ ------ Return per ordinary (0.48p) (5.24p) (5.72p) (0.55p) (28.82p) (29.37p) share . Group Balance Sheet As at As at (unaudited) 31 December 31 December 2004 2003 �'000 �'000 Investments 41,193 41,093 Net current liabilities (13,458) (2,011) Bank loan - (10,000) ------- ------- Ordinary shareholders' funds 27,735 29,082 ------- ------- Net asset value per ordinary share 117.77p 123.49p . Summarised Group Cash Flow Statement Year to Year to (unaudited) 31 December 31 December 2004 2003 �'000 �'000 Net cash outflow from operating (674) (732) activities Returns on investments and servicing of (753) (680) finance Capital expenditure and financial 130 61 investment ------ ------ Decrease in cash (1,297) (1,351) ------ ------ Notes 1. The results reflect the adoption in the accounts of the 2003 Statement of Recommended Practice (SORP) issued by the Association of Investment Trust Companies. 2. Return per share is based on a weighted average of 23,550,000 (2003 - 23,550,000) ordinary shares in issue during the year. Capital return per share is based on net losses during the year of �1,234,000 (2003 - �6,787,000). Revenue return per share is based on the revenue loss after taxation for the year of (113,000 (2003 - �129,000). The number of shares in issue at 31 December 2004 was 23,550,000 (2003 - 23,550,000). 3. The above figures do not constitute full group accounts in terms of Section 240 of the Companies Act 1985. The accounts for the year to 31 December 2003, on which the auditors issued an unqualified report, have been lodged with the Registrar of Companies. The annual report and accounts will be mailed to shareholders and will be lodged with the Registrar of Companies during March 2005. Copies will be available for inspection at 7 Castle Street, Edinburgh EH2 3AH, the registered office of the Company. END

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