Preliminary announcement of results

PRELIMINARY ANNOUNCEMENT OF FINAL RESULTS FOR THE YEAR ENDED

31 DECEMBER 2003 (audited)

The Directors recommend a final dividend of 4.24p per share making a total for
the year of 6.90p

Consolidated statement of total return

for the year ended 31 December

                                       2003                         2002           
                                                                                   
                              Revenue Capital    Total    Revenue  Capital    Total
                                                                                   
                                 £000    £000     £000       £000     £000     £000
                                                                                   
Total capital gains/(losses)        -  41,945   41,945          - (60,161) (60,161)
from investments                                                                   
                                                                                   
Income from investments and     9,475       -    9,475      9,287        -    9,287
deposits                                                                           
                                                                                   
Trustee and related services   13,517       -   13,517     12,766        -   12,766
income                                                                             
                                                                                   
Underwriting commission and       187       -      187        217        -      217
other income                                                                       
                                                                                   
Gross revenue and capital      23,179  41,945   65,124     22,270 (60,161) (37,891)
gains/losses                                                                       
                                                                                   
Administrative expenses      (11,932)       - (11,932)   (11,331)        - (11,331)
                                                                                   
Return, including profit on    11,247  41,945   53,192     10,939 (60,161) (49,222)
ordinary activities before                                                         
interest payable and                                                               
taxation                                                                           
                                                                                   
Interest payable              (2,456)       -  (2,456)    (2,451)        -  (2,451)
                                                                                   
Return, including profit on     8,791  41,945   50,736      8,488 (60,161) (51,673)
ordinary activities before                                                         
taxation                                                                           
                                                                                   
Taxation                        (718)       -    (718)    (1,086)        -  (1,086)
                                                                                   
Return, including profit        8,073  41,945   50,018      7,402 (60,161) (52,759)
attributable to shareholders                                                       
                                                                                   
Dividends                     (8,061)       -  (8,061)    (8,073)        -  (8,073)
                                                                                   
Transfer (from)/to reserves        12  41,945   41,957      (671) (60,161) (60,832)
                                                                                   
Return per share (pence)*        6.91   35.91    42.82       6.33  (51.41)  (45.08)

Statement of total recognised gains and losses

for the year ended 31 December

                                       2003                       2002           
                                                                                 
                              Revenue Capital   Total   Revenue  Capital    Total
                                                                                 
                                 £000    £000    £000      £000     £000     £000
                                                                                 
Return for the financial year   8,073  41,945  50,018     7,402 (60,161) (52,759)
                                                                                 
Foreign exchange                    -   (240)   (240)         -    (306)    (306)
                                                                                 
Total gains and losses          8,073  41,705  49,778     7,402 (60,467) (53,065)
relating to the year                                                             

Notes

The revenue columns of this statement represent the profit and loss accounts of
the Group.

*No dilutive effect

Chairman's statement

Performance

Over the year to 31 December 2003, our net asset value per share increased
20.9%, from 170.5p to 206.1p. This compares favourably with the increase in our
benchmark, the FTSE Actuaries All-Share Index, of 16.6%. Our net asset value
total return for the year was 25.9%, which exceeded our benchmark by 5.0%.
Approximately 40% of the outperformance was achieved by the performance of our
portfolio, the other 60% being due to our gearing.

Our gross revenue increased over the year by 4.1% from £22.3 million to £23.2
million. Profit attributable to shareholders was £8.1 million, an increase of
9.1% over the previous year as a result of improved performance in both the
investment trust and trustee and related services, together with a reduced
taxation charge.

Earnings and dividends

Earnings per share for the year to 31 December 2003 were 6.91p, an increase of
9.2% from the level of last year. The board is recommending a final dividend of
4.24p per share (2002: 4.24p), which, together with the interim dividend of
2.66p, gives a total unchanged dividend for the year of 6.90p. The final
dividend will be paid on 27 April 2004 to holders on the register on the record
date of 12 March 2004. It is disappointing that for the second year in
succession it has not been possible to recommend an increase in dividend. The
policy of the company continues to be to seek growth of income, in both its
investment trust and its trustee related activities, and hence growth of
dividends. The recent past has been generally flat for company dividends, and
trustee related profits have disappointed over the last two years. Shareholders
should remember that the earnings of Law Debenture are more conservatively
calculated than those of most other investment trusts, since all our expenses
are charged to the income account. We believe that this approach leaves us
better placed to achieve growth of both capital and income in the future.

Investment Trust

We continue to select investments on the basis of what appears most attractive
in the conditions of the time. We will not pay unrealistically high prices but
hope to be able to buy growth shares on reasonable terms. We do not feel
obliged to hold shares of any particular type of company or industry or market,
but seek to find the best value. We aim to achieve a better return than the
FTSE All-Share Index by backing our judgment in stock picking. We believe that
in the long term returns on equities will exceed the cost of our long term
borrowing. Consequently we take on a level of gearing which we believe balances
risk with the objective of increasing the return to shareholders.

When we saw improvements in the background to markets during the year, we took
the decision to invest a further £6 million in our portfolio, out of the funds
in the trustee services business. This worked to our advantage. Our gearing at
the year end was unchanged from the previous year at 16%.

In 2003 we added to our investments in the UK, North America and the Pacific
region and reduced our investments in Continental Europe. The increase in the
Pacific region in particular had a very positive impact on the performance of
the portfolio.

James Henderson took over the management of the portfolio following Michael
Moule's retirement in the middle of the year. Like his predecessor, James has
an independent, value based approach to investment, and we look to him to
extend the successful record of the company.

Growth in most major economies has picked up, in some cases quite strongly,
with favourable implications for company profits. Stock markets have benefited
from this, as well as from easy monetary policies. Despite this favourable near
term background we have concerns about the laxness of US monetary and fiscal
policies, reflected in high rates of borrowing and a record current account
deficit, and the dependence of the global economy on the readiness of Asian
exporting countries to hold ever increasing stocks of depreciating dollars.
Against this mixed background, we consider that we are still able to find
equities at reasonable valuations.

Trustee and related services

Our trustee and related services business increased revenue by 5.9% and profit
before tax by 5.0% over the previous year. This increase in profit was after a
number of one-off costs, including unrecovered costs in respect of defaults,
costs of restructuring the commercial trusts business and the continued
investment in our New York operations. New York corporate services business
returned a profit in its third year of operations and the trust business has
gained recognition in its local market.

A new bespoke IT system has been implemented in our commercial trusts business
and it is in the process of being rolled out across our other activities so
that we operate with a single database storing information on all our clients.
Our pension trustee business is expecting the major new legislation due later
in the year to provide further opportunities to grow the business. Corporate
services continues to grow significantly and our service of process business
has developed to provide virtually 24 hour a day cover throughout our
geographic range. Treasury management has built an experienced team of
investment professionals and is ready to increase business significantly by
managing trust funds and providing escrow solutions. The results of our Hong
Kong office have improved significantly following the restructuring in 2002 and
we expect further opportunities to arise with the current rate of expansion in
the Chinese economy.

Overall our trustee and related services business is well placed for growth in
2004.

Staff

In spite of the changes made during the year the revenues and profits of the
trustee and related services business have increased. These businesses make a
valuable contribution to the return to shareholders; their success is dependent
upon the professionalism and commitment of our people, whom I should like to
thank for their efforts during the year.

Douglas McDougall

Balance sheet

as at 31 December

                                               Group             Corporation   
                                                                               
                                             2003     2002        2002     2003
                                                                               
                                             £000     £000        £000     £000
                                                                               
Fixed assets                                                                   
                                                                               
Tangible                                    1,327    1,264           -        -
                                                                               
Investments                               281,140  232,313     276,014  228,909
                                                                               
                                          282,467  233,577     276,014  228,909
                                                                               
Current assets                                                                 
                                                                               
Debtors                                     8,461    8,997       5,660    4,952
                                                                               
Short term cash investments                 3,167   10,490         289    2,209
                                                                               
Bank balances and short term deposits      11,099    9,013          50    1,247
                                                                               
                                           22,727   28,500       5,999    8,408
                                                                               
Creditors                                                                      
                                                                               
Amounts falling due within one year      (14,516) (13,860)    (54,923) (51,193)
                                                                               
Net current assets/(liabilities)            8,211   14,640    (48,924) (42,785)
                                                                               
Total assets less current liabilities     290,678  248,217     227,090  186,124
                                                                               
Creditors                                                                      
                                                                               
Amounts falling due after more than one  (48,914) (48,586)       (321)    (498)
year                                                                           
                                                                               
Provision for liabilities and charges        (77)     (63)           -        -
                                                                               
Net assets                                241,687  199,568     226,769  185,626
                                                                               
Capital and reserves                                                           
                                                                               
Called-up share capital                     5,862    5,851       5,862    5,851
                                                                               
Share capital redemption reserve                8        8           8        8
                                                                               
Share premium account                       6,532    6,141       6,532    6,141
                                                                               
Capital reserves - realised               167,792  168,080     167,909  168,213
                                                                               
Capital reserves - unrealised              46,756    4,763      43,161    2,059
                                                                               
Revenue reserves                           14,737   14,725       3,297    3,354
                                                                               
Shareholders' funds - equity              241,687  199,568     226,769  185,626

Approved by the board

on 24 February 2004

Group cash flow statement

for the year ended 31 December

                                             2003                 2002       
                                                                             
                                           £000     £000        £000     £000
                                                                             
Net cash inflow from operating                    12,674               11,209
activities                                                                   
                                                                             
Servicing of finance                                                         
                                                                             
Debenture interest paid                 (2,450)              (2,450)         
                                                                             
Bank interest paid                          (6)                  (1)         
                                                                             
                                                 (2,456)              (2,451)
                                                                             
Taxation                                           (510)                (917)
                                                                             
Financial investment                                                         
                                                                             
Purchase of own shares                    (567)                    -         
                                                                             
Purchase of investments                (46,318)             (55,898)         
                                                                             
Sale of investments                      40,237               54,834         
                                                                             
                                                 (6,648)              (1,064)
                                                                             
Capital expenditure                                                          
                                                                             
Purchase                                  (334)                (305)         
                                                                             
Sale                                          -                    1         
                                                                             
                                                   (334)                (304)
                                                                             
Equity dividends paid                            (8,066)              (8,063)
                                                                             
Management of liquid resources                                               
                                                                             
Cash withdrawn from short term                     7,323                2,813
deposits                                                                     
                                                                             
Financing                                                                    
                                                                             
Proceeds of increase in share capital       402                  387         
                                                                             
Cash inflow from debt repayment               -                  542         
                                                                             
                                                     402                  929
                                                                             
Increase in cash                                   2,385                2,152
                                                                             
Reconciliation of the movement in net                                        
debt                                                                         
                                                                             
Increase in cash as above                          2,385                2,152
                                                                             
Cash outflow from liquid resources               (7,323)              (2,813)
                                                                             
                                                 (4,938)                (661)
                                                                             
Exchange movements                                 (242)                (112)
                                                                             
Amortisation of debenture costs                     (27)                 (27)
                                                                             
Net debt brought forward                        (19,704)             (18,904)
                                                                             
Net debt carried forward                        (24,911)             (19,704)

Changes in geographical distribution

                     Valuation  Purchases     Sales  Appreciation   Investments
                                           proceeds                            
                        31 Dec                                           31 Dec
                                                                               
                          2002                                             2003
                                                                               
                          £000       £000      £000          £000          £000
                                                                               
United Kingdom         166,839     23,150  (18,712)        26,463       197,740
                                                                               
North America           14,865     18,442  (15,582)         1,624        19,349
                                                                               
Europe                  33,867        910   (5,943)         6,337        35,171
                                                                               
Japan                    6,650          -         -         2,145         8,795
                                                                               
Other Pacific           10,092      3,816         -         5,610        19,518
                                                                               
                       232,313     46,318  (40,237)        42,179       280,573

The final dividend will be paid on 27 April 2004 to holders on the register on
the record date of 12 March 2004.

By order of the board

Law Debenture Corporate Services Limited

Secretary

25 February 2004

Copies of the annual report will be available from the Corporation's registered
office.