HALIFAX LIFE LIMITED

Annual PRA Insurance Returns for the year ended 31 December 2014 IPRU(INS) Appendices 9.1, 9.3, 9.4, 9.6

Balance Sheet and Profit and Loss Account Contents Form 2 Statement of solvency - long-term insurance business 1 Form 3 Components of capital resources 3 Form 13 Analysis of admissible assets 6 Form 14 Long term insurance business liabilities and margins 12 Form 15 Liabilities (other than long term insurance business) 13 Form 16 Profit and loss account (non-technical account) 14 Form 17 Analysis of derivative contracts 15 Long Term Insurance Business: Revenue Account and Additional Information Form 40 Revenue account 16 Form 41 Analysis of premiums 17 Form 42 Analysis of claims 18 Form 43 Analysis of expenses 19 Form 44 Linked funds balance sheet 20 Form 45 Revenue account for internal linked funds 21 Form 46 Summary of new business 22 Form 47 Analysis of new business 23 Form 48 Assets not held to match linked liabilities 26 Form 49 Fixed and variable interest assets 27 Form 50 Summary of mathematical reserves 28 Form 51 Valuation summary of non-linked contracts (other than 29 accumulating with-profits contracts) Form 52 Valuation summary of accumulating with-profits contracts 31 Form 53 Valuation summary of property linked contracts 33 Form 54 Valuation summary of index linked contracts 35 Form 55 Unit prices for internal linked funds 37 Form 57 Analysis of valuation interest rate 38 Form 58 Distribution of surplus 39 Form 60 Long-term insurance capital requirement 40 Supplementary notes to the return 41 Additional information on derivative contracts 47 Additional information on controllers 48 Abstract of the Valuation Report 49 Statement of information on the with-profits actuary 60 Directors' Certificate 61 Auditor's Report 62

24032015:09:32:38 Form 2 Statement of solvency - long-term insurance business Global business Adjusted solo solvency calculation Company GL/ registration UK/ day month year Units number CM R2 2233654 GL 31 12 2014 000 As at end of this financial year As at end of the previous year 1 2 Capital resources Capital resources arising within the long-term insurance fund 11 42379 41138 Capital resources allocated towards long-term insurance business arising outside the long-term insurance fund Capital resources available to cover long-term insurance business capital resources requirement (11+12) 12 792445 647142 13 834824 688280 Guarantee fund Guarantee fund requirement 21 96110 115280 Excess (deficiency) of available capital resources to cover guarantee fund requirement 22 738713 573000 Minimum capital requirement (MCR) Long-term insurance capital requirement 31 53632 55462 Resilience capital requirement 32 5710 4270 Base capital resources requirement 33 2902 3146 Individual minimum capital requirement 34 59342 59732 Capital requirements of regulated related undertakings 35 78233 96793 Minimum capital requirement (34+35) 36 137575 156525 Excess (deficiency) of available capital resources to cover 50% of MCR 37 766036 610017 Excess (deficiency) of available capital resources to cover 75% of MCR 38 731643 570886 Enhanced capital requirement With-profits insurance capital component 39 Enhanced capital requirement 40 137575 156525 Capital resources requirement (CRR) Capital resources requirement (greater of 36 and 40) 41 137575 156525 Excess (deficiency) of available capital resources to cover long-term insurance business CRR (13-41) 42 697249 531755 Contingent liabilities Quantifiable contingent liabilities in respect of long-term insurance business as shown in a supplementary note to Form 14 51 1

24032015:09:32:38 Form 2 Covering Sheet to Form 2 Global business A M Parsons Director D J Walkden Director R F C Taylor Director Date 24 March 2015 2

24032015:09:32:38 Components of capital resources Form 3 (Sheet 1) Global business Company GL/ registration UK/ day month year Units number CM R3 2233654 GL 31 12 2014 000 Core tier one capital General Long-term Total as at Total as at insurance insurance the end of the end of business business this financial the previous year year 1 2 3 4 Permanent share capital 11 460000 460000 460000 Profit and loss account and other reserves 12 261759 261759 227844 Share premium account 13 Positive valuation differences 14 Fund for future appropriations Core tier one capital in related undertakings 15 16 291954 291954 231124 Core tier one capital (sum of 11 to 16) 19 1013713 1013713 918968 Tier one waivers Unpaid share capital / unpaid initial funds and calls for supplementary contributions Implicit Items 22 Tier one waivers in related undertakings 23 21 Total tier one waivers as restricted (21+22+23) 24 Other tier one capital Perpetual non-cumulative preference shares as restricted Perpetual non-cumulative preference shares in related undertakings Innovative tier one capital as restricted Innovative tier one capital in related undertakings 25 26 27 28 Total tier one capital before deductions (19+24+25+26+27+28) Investments in own shares Intangible assets Amounts deducted from technical provisions for discounting Other negative valuation differences Deductions in related undertakings Deductions from tier one (32 to 36) Total tier one capital after deductions (31-37) 31 1013713 1013713 918968 32 33 34 35 957 957 2031 36 37 957 957 2031 39 1012756 1012756 916937 3

24032015:09:32:38 Components of capital resources Form 3 (Sheet 2) Global business Tier two capital Company GL/ registration UK/ day month year Units number CM R3 2233654 GL 31 12 2014 000 General Long-term Total as at Total as at insurance insurance the end of the end of business business this financial the previous year year 1 2 3 4 Implicit items, (tier two waivers and amounts excluded from line 22) Perpetual non-cumulative preference shares excluded from line 25 Innovative tier one capital excluded from line 27 Tier two waivers, innovative tier one capital and perpetual noncumulative preference shares treated as tier two capital (41 to 43) Perpetual cumulative preference shares Perpetual subordinated debt and securities 41 42 43 44 45 46 Upper tier two capital in related undertakings 47 Upper tier two capital (44 to 47) 49 Fixed term preference shares 51 Other tier two instruments 52 Lower tier two capital in related undertakings 53 Lower tier two capital (51+52+53) 59 Total tier two capital before restrictions (49+59) 61 Excess tier two capital 62 Further excess lower tier two capital Total tier two capital after restrictions, before deductions (61-62-63) 63 69 4

24032015:09:32:38 Components of capital resources Form 3 (Sheet 3) Global business Total capital resources Company GL/ registration UK/ day month year Units number CM R3 2233654 GL 31 12 2014 000 General Long-term Total as at Total as at insurance insurance the end of the end of business business this financial the previous year year 1 2 3 4 Positive adjustments for regulated non-insurance related undertakings Total capital resources before deductions (39+69+71) Inadmissible assets other than intangibles and own shares Assets in excess of market risk and counterparty limits Deductions for related ancillary services undertakings Deductions for regulated non-insurance related undertakings Deductions of ineligible surplus capital Total capital resources after deductions (72-73-74-75-76-77) 71 72 1012756 1012756 916937 73 177932 177932 228657 74 75 76 77 79 834824 834824 688280 Available capital resources for GENPRU/INSPRU tests Available capital resources for guarantee fund requirement Available capital resources for 50% MCR requirement Available capital resources for 75% MCR requirement 81 834824 834824 688280 82 834824 834824 688280 83 834824 834824 688280 Financial engineering adjustments Implicit items Financial reinsurance - ceded Financial reinsurance - accepted Outstanding contingent loans Any other charges on future profits Sum of financial engineering adjustments (91+92-93+94+95) 91 92 93 94 95 96 5

24032015:09:32:38 Analysis of admissible assets Form 13 (Sheet 1) Global business Category of assets Total other than long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 2233654 GL 31 12 2014 000 1 As at end of this financial year As at end of the previous year 1 2 Land and buildings 11 Investments in group undertakings and participating interests UK insurance dependants Other insurance dependants Non-insurance dependants Other group undertakings Participating interests Shares Shares Shares Shares Shares 21 23 25 27 29 617671 493969 Debts and loans Debts and loans Debts and loans Debts and loans Debts and loans 22 24 26 28 30 Other financial investments Equity shares 41 Other shares and other variable yield participations 42 Holdings in collective investment schemes 43 96615 56465 Rights under derivative contracts 44 Fixed interest securities Variable interest securities Approved Approved 45 47 Other Other 46 48 Participation in investment pools 49 Loans secured by mortgages 50 Loans to public or local authorities and nationalised industries or undertakings 51 Loans secured by policies of insurance issued by the company Other loans 53 Bank and approved credit & financial institution deposits Other financial investments 56 Deposits with ceding undertakings 57 Assets held to match linked liabilities One month or less withdrawal More than one month withdrawal Index linked Property linked 52 54 55 58 59 6

24032015:09:32:38 Analysis of admissible assets Form 13 (Sheet 2) Global business Category of assets Total other than long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 2233654 GL 31 12 2014 000 1 As at end of this financial year As at end of the previous year Reinsurers' share of technical provisions 1 2 Provision for unearned premiums Claims outstanding Provision for unexpired risks Other 60 61 62 63 Debtors and salvage Direct insurance business Salvage and subrogation recoveries Reinsurance Dependants Other Other assets Policyholders Intermediaries Accepted Ceded due in 12 months or less due in more than 12 months due in 12 months or less due in more than 12 months 71 72 73 74 75 76 77 78 79 Tangible assets Deposits not subject to time restriction on withdrawal with approved institutions Cash in hand Other assets (particulars to be specified by way of supplementary note) Accrued interest and rent Deferred acquisition costs (general business only) Other prepayments and accrued income 80 81 82 83 84 27 16 85 86 Deductions from the aggregate value of assets 87 Grand total of admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (11 to 86 less 87) 89 714313 550450 7

24032015:09:32:38 Analysis of admissible assets Form 13 (Sheet 3) Global business Category of assets Total other than long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 2233654 GL 31 12 2014 000 1 As at end of this financial year As at end of the previous year 1 2 Reconciliation to asset values determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting Total admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (as per line 89 above) Admissible assets in excess of market and counterparty limits Inadmissible assets directly held Capital resources requirement deduction of regulated related undertakings Ineligible surplus capital and restricted assets in regulated related insurance undertakings Inadmissible assets of regulated related undertakings Book value of related ancillary services undertakings Other differences in the valuation of assets (other than for assets not valued above) Deferred acquisition costs excluded from line 89 Reinsurers' share of technical provisions excluded from line 89 Other asset adjustments (may be negative) Total assets determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (91 to 101) 91 714313 550450 92 93 94 78233 96793 95 96 132230 176542 97 98 (291953) (231124) 99 100 101 102 632823 592661 Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance 103 8

24032015:09:32:38 Analysis of admissible assets Form 13 (Sheet 1) Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 2233654 GL 31 12 2014 000 10 As at end of this financial year As at end of the previous year 1 2 Land and buildings 11 Investments in group undertakings and participating interests UK insurance dependants Other insurance dependants Non-insurance dependants Other group undertakings Participating interests Shares Shares Shares Shares Shares 21 23 25 27 29 Debts and loans Debts and loans Debts and loans Debts and loans Debts and loans 22 24 26 28 30 Other financial investments Equity shares 41 Other shares and other variable yield participations 42 Holdings in collective investment schemes 43 126614 150451 Rights under derivative contracts 44 47267 10152 Fixed interest securities Variable interest securities Approved Approved 45 47 37254 27902 361972 23543 Other Other 46 48 383397 Participation in investment pools 49 Loans secured by mortgages 50 Loans to public or local authorities and nationalised industries or undertakings 51 Loans secured by policies of insurance issued by the company Other loans 53 Bank and approved credit & financial institution deposits Other financial investments 56 Deposits with ceding undertakings 57 Assets held to match linked liabilities One month or less withdrawal More than one month withdrawal Index linked Property linked 52 54 55 58 4251 4383 59 4919181 5057938 9

24032015:09:32:38 Analysis of admissible assets Form 13 (Sheet 2) Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 2233654 GL 31 12 2014 000 10 As at end of this financial year As at end of the previous year Reinsurers' share of technical provisions 1 2 Provision for unearned premiums Claims outstanding Provision for unexpired risks Other 60 61 62 63 Debtors and salvage Direct insurance business Salvage and subrogation recoveries Reinsurance Dependants Other Other assets Policyholders Intermediaries Accepted Ceded due in 12 months or less due in more than 12 months due in 12 months or less due in more than 12 months 71 4894 4570 72 73 74 75 76 65 77 78 1976 2848 79 Tangible assets Deposits not subject to time restriction on withdrawal with approved institutions Cash in hand Other assets (particulars to be specified by way of supplementary note) Accrued interest and rent Deferred acquisition costs (general business only) Other prepayments and accrued income 80 81 6802 4045 82 83 84 5589 2798 85 86 Deductions from the aggregate value of assets 87 Grand total of admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (11 to 86 less 87) 89 5565192 5622699 10

24032015:09:32:38 Analysis of admissible assets Form 13 (Sheet 3) Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 2233654 GL 31 12 2014 000 10 As at end of this financial year As at end of the previous year 1 2 Reconciliation to asset values determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting Total admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (as per line 89 above) Admissible assets in excess of market and counterparty limits Inadmissible assets directly held Capital resources requirement deduction of regulated related undertakings Ineligible surplus capital and restricted assets in regulated related insurance undertakings Inadmissible assets of regulated related undertakings Book value of related ancillary services undertakings Other differences in the valuation of assets (other than for assets not valued above) Deferred acquisition costs excluded from line 89 Reinsurers' share of technical provisions excluded from line 89 Other asset adjustments (may be negative) Total assets determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (91 to 101) 91 5565192 5622699 92 93 2 94 95 96 97 98 99 44212 51718 100 11931 11634 101 7839 9106 102 5629173 5695160 Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance 103 11

24032015:09:32:38 Long term insurance business liabilities and margins Form 14 Global business Total business/sub fund LONG TERM BUSINESS FUND - NON PROFIT Units 000 As at end of As at end of this financial the previous year year 1 2 Mathematical reserves, after distribution of surplus 11 5429147 5539407 Cash bonuses which had not been paid to policyholders prior to end of the financial year Balance of surplus/(valuation deficit) 13 42346 41099 Long term insurance business fund carried forward (11 to 13) 14 5471493 5580506 Claims outstanding Provisions 12 Gross 15 5852 4389 Reinsurers' share 16 Net (15-16) 17 5852 4389 Taxation 21 Other risks and charges 22 Deposits received from reinsurers 23 Creditors Debenture loans Direct insurance business 31 Reinsurance accepted 32 2726 206 Reinsurance ceded 33 4031 660 Secured 34 Unsecured 35 Amounts owed to credit institutions 36 Creditors Taxation 37 17666 8804 Other 38 63391 28095 Accruals and deferred income 39 Provision for "reasonably foreseeable adverse variations" Total other insurance and non-insurance liabilities (17 to 41) 49 93666 42154 Excess of the value of net admissible assets 51 Total liabilities and margins 59 5565159 5622660 41 Amounts included in line 59 attributable to liabilities to related companies, other than those under contracts of insurance or reinsurance Amounts included in line 59 attributable to liabilities in respect of property linked benefits 61 11753 8550 62 4919181 5057938 Total liabilities (11+12+49) 71 5522813 5581561 Increase to liabilities - DAC related 72 9904 11641 Reinsurers' share of technical provisions 73 11931 11634 Other adjustments to liabilities (may be negative) 74 (4512) (4961) Capital and reserves and fund for future appropriations 75 89037 95284 Total liabilities under insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (71 to 75) 76 5629173 5695158 12

24032015:09:32:38 Form 15 Liabilities (other than long term insurance business) Global business Company GL/ registration UK/ day month year Units number CM R15 2233654 GL 31 12 2014 000 Technical provisions (gross amount) As at end of As at end of this financial the previous year year 1 2 Provisions for unearned premiums 11 Claims outstanding 12 Provision for unexpired risks 13 Equalisation provisions Credit business 14 Other than credit business 15 Other technical provisions 16 Total gross technical provisions (11 to 16) 19 Provisions and creditors Provisions Taxation 21 Other risks and charges 22 Deposits received from reinsurers 31 Creditors Debenture loans Direct insurance business 41 Reinsurance accepted 42 Reinsurance ceded 43 Secured 44 Unsecured 45 Amounts owed to credit institutions 46 Creditors Taxation 47 Foreseeable dividend 48 Other 49 101 101 Accruals and deferred income 51 Total (19 to 51) 59 101 101 Provision for "reasonably foreseeable adverse variations" 61 Cumulative preference share capital 62 Subordinated loan capital 63 Total (59 to 63) 69 101 101 Amounts included in line 69 attributable to liabilities to related insurers, other than those under contracts of insurance or reinsurance 71 101 101 Amounts deducted from technical provisions for discounting 82 Other adjustments (may be negative) 83 (0) Capital and reserves 84 632722 592561 Total liabilities under insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (69-82+83+84) 85 632823 592661 13

24032015:09:32:38 Form 16 Profit and loss account (non-technical account) Global business Company GL/ registration UK/ day month year Units number CM R16 2233654 GL 31 12 2014 000 This financial year Previous year 1 2 Transfer (to)/from the general insurance business technical account From Form 20 11 Equalisation provisions 12 Transfer from the long term insurance business revenue account Income 13 40000 20000 14 207 100181 Value re-adjustments on Investment income 15 investments Gains on the realisation of investments Investment management charges, including interest Value re-adjustments on Investment charges 18 investments Loss on the realisation of investments Allocated investment return transferred to the general insurance business technical account Other income and charges (particulars to be specified by way of supplementary note) Profit or loss on ordinary activities before tax (11+12+13+14+15+16-17-18-19-20+21) 16 17 2 19 20 21 29 40205 120181 Tax on profit or loss on ordinary activities 31 44 214 Profit or loss on ordinary activities after tax (29-31) 39 40161 119967 Extraordinary profit or loss (particulars to be specified by way of supplementary note) 41 Tax on extraordinary profit or loss 42 Other taxes not shown under the preceding items 43 Profit or loss for the financial year (39+41-(42+43)) 49 40161 119967 Dividends (paid or foreseeable) 51 160000 Profit or loss retained for the financial year (49-51) 59 40161 (40033) 14

24032015:09:32:38 Form 17 Analysis of derivative contracts Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R17 2233654 GL 31 12 2014 000 10 Derivative contracts Value as at the end of this financial year Notional amount as at the end of this financial year Futures and contracts for differences In the money options Out of the money options 11 Assets Liabilities Bought / Long Sold / Short 1 2 3 4 Interest rates 12 44263 46226 204465 234717 Inflation 13 3003 4035 30100 29990 Credit index / basket 14 Credit single name 15 16 Equity stock 17 Land 18 Currencies 19 Mortality 20 Other 21 31 Equity index calls 32 34 595 Equity stock calls 33 Equity index puts 34 Equity stock puts 35 Other 36 Swaptions 41 Equity index calls 42 Equity stock calls 43 5 302 Equity index puts 44 Equity stock puts 45 Other 46 Total (11 to 46) 51 47306 50262 235462 264707 Adjustment for variation margin Total (51 + 52) Fixed-interest securities Equity index Swaptions 52 53 47306 50262 THE NOTIONAL AMOUNTS IN COLUMNS 3 AND 4 ARE NOT A MEASURE OF EXPOSURE. Please see instructions 11 and 12 to this Form for the meaning of these figures. 15

24032015:09:32:38 Long-term insurance business : Revenue account Form 40 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 Financial year Previous year 1 2 Income Earned premiums 11 144819 150219 Investment income receivable before deduction of tax Increase (decrease) in the value of non-linked assets brought into account Increase (decrease) in the value of linked assets 12 144316 153466 13 57913 (33379) 14 111896 611494 Other income 15 295 511 Total income 19 459239 882311 Expenditure Claims incurred 21 493616 787305 Expenses payable Interest payable before the deduction of tax Taxation 22 22930 20785 23 81 75 24 11625 5632 Other expenditure 25 Transfer to (from) non technical account 26 40000 20000 Total expenditure 29 568252 833797 Business transfers - in 31 Business transfers - out 32 Increase (decrease) in fund in financial year (19-29+31-32) 39 (109013) 48515 Fund brought forward 49 5580506 5531991 Fund carried forward (39+49) 59 5471493 5580506 16

24032015:09:32:38 Long-term insurance business : Analysis of premiums Form 41 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Regular premiums 11 8386 114930 123315 133512 Single premiums 12 1253 21904 23157 18115 Reinsurance - external Regular premiums 13 900 900 900 Single premiums 14 Reinsurance - intra-group Regular premiums 15 95 95 96 Single premiums 16 659 659 411 Net of reinsurance Regular premiums 17 8386 113934 122320 132516 Single premiums 18 1253 21245 22498 17703 Total Gross 19 9639 136834 146473 151626 Reinsurance 20 1654 1654 1407 Net 21 9639 135180 144819 150219 17

24032015:09:32:38 Long-term insurance business : Analysis of claims Form 42 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Death or disability lump sums 11 13722 18498 32220 28191 Disability periodic payments 12 Surrender or partial surrender 13 9561 375926 385487 630158 Annuity payments 14 1255 36707 37961 36975 Lump sums on maturity 15 788 59327 60115 113874 Total 16 25325 490458 515783 809198 Reinsurance - external Death or disability lump sums 21 Disability periodic payments 22 Surrender or partial surrender 23 Annuity payments 24 Lump sums on maturity 25 Total 26 Reinsurance - intra-group Death or disability lump sums 31 4971 2208 7179 7778 Disability periodic payments 32 Surrender or partial surrender 33 131 7952 8083 7230 Annuity payments 34 627 6003 6630 6006 Lump sums on maturity 35 147 128 276 878 Total 36 5877 16291 22167 21893 Net of reinsurance Death or disability lump sums 41 8751 16290 25041 20413 Disability periodic payments 42 Surrender or partial surrender 43 9430 367974 377404 622928 Annuity payments 44 627 30704 31331 30968 Lump sums on maturity 45 640 59199 59839 112996 Total 46 19449 474167 493616 787305 18

24032015:09:32:38 Long-term insurance business : Analysis of expenses Form 43 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Commission - acquisition 11 Commission - other 12 2259 2259 835 Management - acquisition 13 1839 1839 1071 Management - maintenance 14 2371 16462 18833 18965 Management - other 15 Total 16 2371 20559 22930 20871 Reinsurance - external Commission - acquisition 21 Commission - other 22 Management - acquisition 23 Management - maintenance 24 Management - other 25 Total 26 Reinsurance - intra-group Commission - acquisition 31 Commission - other 32 Management - acquisition 33 Management - maintenance 34 86 Management - other 35 Total 36 86 Net of reinsurance Commission - acquisition 41 Commission - other 42 2259 2259 835 Management - acquisition 43 1839 1839 1071 Management - maintenance 44 2371 16462 18833 18879 Management - other 45 Total 46 2371 20559 22930 20785 19

24032015:09:32:38 Long-term insurance business : Linked funds balance sheet Form 44 Total business Units 000 Financial year Previous year 1 2 Internal linked funds (excluding cross investment) Directly held assets (excluding collective investment schemes) Directly held assets in collective investment schemes of connected companies Directly held assets in other collective investment schemes 11 90233 836150 12 4582146 4188867 13 235636 20230 Total assets (excluding cross investment) (11+12+ 13) 14 4908015 5045246 Provision for tax on unrealised capital gains 15 1847 Secured and unsecured loans 16 Other liabilities 17 7480 9106 Total net assets (14-15-16-17) 18 4898689 5036141 Directly held linked assets Value of directly held linked assets 21 24037 24889 Total Value of directly held linked assets and units held (18+21) 31 4922726 5061029 Surplus units 32 4644 5043 Deficit units 33 1100 1952 Net unit liability (31-32+33) 34 4919181 5057938 20

24032015:09:32:38 Long-term insurance business : Revenue account for internal linked funds Form 45 Total business Units 000 Financial year Previous year 1 2 Income Value of total creation of units Investment income attributable to the funds before deduction of tax Increase (decrease) in the value of investments in the financial year Other income 11 192874 340072 12 127200 138940 13 112630 607472 14 340 Total income 19 432704 1086824 Expenditure Value of total cancellation of units Charges for management Charges in respect of tax on investment income Taxation on realised capital gains Increase (decrease) in amount set aside for tax on capital gains not yet realised Other expenditure 21 528516 960133 22 40977 43746 23 207 (21) 24 54 (272) 25 177 1573 26 225 736 Total expenditure 29 570155 1005895 Increase (decrease) in funds in financial year (19-29) Internal linked fund brought forward Internal linked funds carried forward (39+49) 39 (137451) 80929 49 5036140 4955211 59 4898689 5036140 21

24032015:09:32:38 Long-term insurance business : Summary of new business Form 46 Total business Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Number of new policyholders/ scheme members for direct insurance business Regular premium business 11 64 64 63 Single premium business 12 587 587 905 Total 13 651 651 968 Amount of new regular premiums Direct insurance business 21 3488 3488 4493 External reinsurance 22 3924 3924 3865 Intra-group reinsurance 23 Total 24 7411 7411 8358 Amount of new single premiums Direct insurance business 25 3828 3828 16279 External reinsurance 26 18077 18077 5072 Intra-group reinsurance 27 1253 1253 (3237) Total 28 1253 21904 23157 18115 22

23 24032015:09:32:38 Form 47 Long-term insurance business : Analysis of new business Total business Units 000 UK Life / Reinsurance accepted intra-group Product code number Product description Regular premium business Number of policyholders / scheme members Amount of premiums Single premium business Number of policyholders / scheme members Amount of premiums 1 2 3 4 5 6 700 Life property linked single premium 1253

24 24032015:09:32:38 Form 47 Long-term insurance business : Analysis of new business Total business Units 000 UK Pension / Direct Insurance Business Product code number Product description Regular premium business Number of policyholders / scheme members Amount of premiums Single premium business Number of policyholders / scheme members Amount of premiums 1 2 3 4 5 6 400 Annuity non-profit (CPA) 289 1373 725 Individual pensions property linked 3 1750 2 2284 735 Group money purchase pensions property linked 61 1738 296 171

25 24032015:09:32:38 Form 47 Long-term insurance business : Analysis of new business Total business Units 000 UK Pension / Reinsurance accepted external Product code number Product description Regular premium business Number of policyholders / scheme members Amount of premiums Single premium business Number of policyholders / scheme members Amount of premiums 1 2 3 4 5 6 435 Miscellaneous non-profit (ELAS) 3924 18077

24032015:09:32:38 Long-term insurance business : Assets not held to match linked liabilities Form 48 Category of assets 10 Total long term insurance business assets Units 000 Unadjusted assets Economic exposure Expected income from assets in column 2 Yield before adjustment Return on assets in financial year 1 2 3 4 5 Assets backing non-profit liabilities and non-profit capital requirements Land and buildings 11 Approved fixed interest securities 12 37621 39782 1280 2.45 Other fixed interest securities 13 388504 391651 15750 3.51 Variable interest securities 14 27945 37584 277 (0.53) UK listed equity shares 15 34 Non-UK listed equity shares 16 Unlisted equity shares 17 Other assets 18 187690 172707 299 0.17 Total 19 641760 641760 17606 2.31 Assets backing with-profits liabilities and with-profits capital requirements Land and buildings 21 Approved fixed interest securities 22 Other fixed interest securities 23 Variable interest securities 24 UK listed equity shares 25 Non-UK listed equity shares 26 Unlisted equity shares 27 Other assets 28 Total 29 Overall return on with-profits assets Post investment costs but pre-tax 31 Return allocated to non taxable 'asset shares' 32 Return allocated to taxable 'asset shares' 33 26

24032015:09:32:38 Form 49 Long-term insurance business : Fixed and variable interest assets Category of assets 10 Total long term insurance business assets Units 000 Value of assets Mean term Yield before adjustment Yield after adjustment 1 2 3 4 UK Government approved fixed interest securities 11 28463 19.21 2.29 2.29 Other approved fixed interest securities 21 11319 11.05 2.84 2.49 Other fixed interest securities AAA/Aaa 31 47491 12.11 2.90 2.77 AA/Aa 32 93982 15.08 3.17 2.82 A/A 33 250177 16.06 3.75 3.12 BBB/Baa 34 BB/Ba 35 B/B 36 CCC/Caa 37 Other (including unrated) 38 Total other fixed interest securities 39 391651 15.34 3.51 3.01 Approved variable interest securities 41 29118 21.89 (0.77) (0.77) Other variable interest securities 51 8466 0.27 0.27 Total (11+21+39+41+51) 61 469018 15.60 3.10 2.67 27

24032015:09:32:38 Long-term insurance business : Summary of mathematical reserves Form 50 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Form 51 - with-profits 11 Form 51 - non-profit 12 6483 440162 446645 408787 Form 52 13 12386 12386 12308 Form 53 - linked 14 164114 4755067 4919181 5057938 Form 53 - non-linked 15 228 23877 24105 36574 Form 54 - linked 16 71 4181 4251 4383 Form 54 - non-linked 17 34509 34509 31050 Total 18 170896 5270181 5441077 5551041 Reinsurance - external Form 51 - with-profits 21 Form 51 - non-profit 22 Form 52 23 Form 53 - linked 24 Form 53 - non-linked 25 Form 54 - linked 26 Form 54 - non-linked 27 Total 28 Reinsurance - intra-group Form 51 - with-profits 31 Form 51 - non-profit 32 Form 52 33 11931 11931 11634 Form 53 - linked 34 Form 53 - non-linked 35 Form 54 - linked 36 Form 54 - non-linked 37 Total 38 11931 11931 11634 Net of reinsurance Form 51 - with-profits 41 Form 51 - non-profit 42 6483 440162 446645 408787 Form 52 43 455 455 674 Form 53 - linked 44 164114 4755067 4919181 5057938 Form 53 - non-linked 45 228 23877 24105 36574 Form 54 - linked 46 71 4181 4251 4383 Form 54 - non-linked 47 34509 34509 31050 Total 48 170896 5258251 5429147 5539407 28

29 24032015:09:32:38 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 Amount of mathematical reserves 435 Miscellaneous non-profit (ELAS) 28043 2093656 5479 6483

30 24032015:09:32:38 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Pension / Gross Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 Amount of mathematical reserves 325 Level term assurance 10747 1013732 2450 5453 380 Miscellaneous protection rider 14 2435 5 11 390 Deferred annuity non-profit 2782 7189 182003 400 Annuity non-profit (CPA) (per annum) 8799 11447 237135 435 Miscellaneous non-profit 11268 440 Additional reserves non-profit OB 4293

31 24032015:09:32:38 Long-term insurance business : Valuation summary of accumulating with-profits contracts Form 52 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Pension / Gross Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 Amount of mathematical reserves 525 Individual pensions UWP 1036 13452 409 11931 11931 455 12386

32 24032015:09:32:38 Long-term insurance business : Valuation summary of accumulating with-profits contracts Form 52 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Pension / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 Amount of mathematical reserves 525 Individual pensions UWP 11931 11931 11931 11931

33 24032015:09:32:38 Long-term insurance business : Valuation summary of property linked contracts Form 53 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 Amount of mathematical reserves 700 Life property linked single premium 125 5985 22 11523 11523 1 11525 700 Life property linked single premium (SAL) 36137 36137 36137 720 Life property linked endowment regular premium - target cash (SAL) 674 674 674 795 Miscellaneous property linked 115780 115780 227 116007

34 24032015:09:32:38 Long-term insurance business : Valuation summary of property linked contracts Form 53 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Pension / Gross Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 Amount of mathematical reserves 725 Individual pensions property linked 80752 2426822 50122 2441897 2441897 7116 2449014 735 Group money purchase pensions property linked 7070 187098 2754 187098 187098 2585 189683 750 Income drawdown property linked 3123 370980 370980 370980 223 371203 755 Trustee investment plan 40 5803 5803 5803 87 5890 795 Miscellaneous property linked 1679122 1742297 1742297 13785 1756082 795 Miscellaneous property linked (ELAS) 106 601 6992 6992 80 7072

35 24032015:09:32:38 Long-term insurance business : Valuation summary of index linked contracts Form 54 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 Amount of mathematical reserves 910 Miscellaneous index linked (ELAS) 71 71 71

36 24032015:09:32:38 Long-term insurance business : Valuation summary of index linked contracts Form 54 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 UK Pension / Gross Product code number Product description Number of policyholders / scheme members Amount of benefit Amount of annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 Amount of mathematical reserves 905 Index linked annuity 418 384 11663 11663 905 Index linked annuity (ELAS) 381 710 22846 22846 910 Miscellaneous index linked ELAS 4181 4181 4181

37 24032015:09:32:38 Long-term insurance business : Unit prices for internal linked funds Form 55 Total business Units 000 Fund name Type of fund Net assets Main series Unit management charge Price at previous valuation date Price at current valuation date 1 2 3 4 5 6 7 8 Change in price during year HL PROPERTY LIFE DUAL PRICED 7 - life - property 148381 Property Life DP 0.50 589.3000 666.8000 13.15 HL MANAGED PENSION DUAL PRICED 14 - individual pension - other managed fund 654290 Managed Pension Fund DP 0.50 1071.6000 1118.3000 4.36 HL PELICAN PENSION GROSS 15 - individual pension - UK equity 167260 Pelican Pension DP 0.50 1251.6000 1254.9000 0.26 HL PELICAN PENSION 2000 GROSS 15 - individual pension - UK equity 504120 Pelican Pension SP 1.45 159.6000 158.5000 (0.69) HL HIGH INCOME PENSION GROSS 15 - individual pension - UK equity 124055 High Income Pension DP 0.50 1885.0000 1870.7000 (0.76) HL HIGH INCOME PENSION 2000 GR 15 - individual pension - UK equity 383862 High Income Pension SP 1.45 164.7000 161.9000 (1.70) HL UK ALL SHARE PENSION 2000 G HL UK FTSE PENSION GROSS HL FITS PENSION GROSS 11 - individual pension - stock market managed fund 11 - individual pension - stock market managed fund 11 - individual pension - stock market managed fund 282789 UK FTSE All Share Pension F 0.90 162.0000 161.8000 (0.12) 107107 UK FTSE 100 Pension Fund D 0.50 283.1000 283.0000 (0.04) 129665 Leeds Linked Pension Founda 0.50 2038.7000 2171.2000 6.50 HL FAR EAST PENSION GROSS 16 - individual pension - overseas equity 160294 Far Eastern Pension DP 0.50 1810.2000 1979.6000 9.36 HL INTL GROWTH PENSION GROSS 16 - individual pension - overseas equity 124987 International Growth Pension D 0.50 825.4000 900.8000 9.13 HL INTL GROWTH PENSION 2000 GR 16 - individual pension - overseas equity 375312 International Growth Pension S 1.45 172.9000 186.9000 8.10 HL STERLING MONEY PENS GROSS 14 - individual pension - other managed fund 214417 Money Pension Fund DP 0.50 485.5000 485.6000 0.02 GILT & FIXED GROSS ASSET 14 - individual pension - other managed fund 641391 Gilt & Fixed Interest Pension F 1.45 138.8000 154.1000 11.02 0 0

24032015:09:32:38 Long-term insurance business: Analysis of valuation interest rate Form 57 Total business LONG TERM BUSINESS FUND - NON PROFIT Units 000 Product group HL PROPERTY LIFE DUAL PRICED 1 Net mathematical reserves Net valuation interest rate Gross valuation interest rate Risk adjusted yield on matching assets 2 3 4 5 103407 2.03 2.03 2.19 UK Pens NP Form 51 ELAS Annuities 332445 2.93 2.93 3.01 UK Pens Form 51 ELAS Pensions Term Assurance 3696 0.98 0.98 1.01 UK Pens Form 53 Pensions 23877 1.01 1.01 1.04 UK Life Form 53 Life 228 1.01 1.01 1.04 UK Pens Form 54 Index linked annuity 11663 (1.61) (1.61) (1.65) UK Pens Form 54 ELAS Index linked annuity 22846 (0.27) (0.27) (0.28) Misc 7553 n/a n/a 1.02 Total 505714 38

24032015:09:32:38 Long-term insurance business : Distribution of surplus Form 58 Total business / subfund LONG TERM BUSINESS FUND - NON PROFIT Units 000 Financial year Previous year 1 2 Valuation result Fund carried forward 11 5471492 5580505 Bonus payments in anticipation of a surplus 12 Transfer to non-technical account 13 40000 20000 Transfer to other funds / parts of funds 14 Subtotal (11 to 14) 15 5511492 5600505 Mathematical reserves 21 5429147 5539407 Surplus including contingency and other reserves held towards the capital requirements (deficiency) (15-21) 29 82345 61098 Composition of surplus Balance brought forward 31 41098 50985 Transfer from non-technical account 32 Transfer from other funds / parts of fund 33 Surplus arising since the last valuation 34 41247 10113 Total 39 82345 61098 Distribution of surplus Bonus paid in anticipation of a surplus 41 Cash bonuses 42 Reversionary bonuses 43 Other bonuses 44 Premium reductions 45 Total allocated to policyholders (41 to 45) 46 Net transfer out of fund / part of fund 47 40000 20000 Total distributed surplus (46+47) 48 40000 20000 Surplus carried forward 49 42345 41098 Total (48+49) 59 82345 61098 Percentage of distributed surplus allocated to policyholders Current year 61 Current year - 1 62 Current year - 2 63 Current year - 3 64 39

24032015:09:32:38 Long-term insurance capital requirement Global business Units 000 LTICR factor Insurance death risk capital component Life protection reinsurance 11 0.0% Classes I (other), II and IX 12 0.1% Gross reserves / capital at risk Net reserves / capital at risk Reinsurance factor LTICR Financial year Form 60 LTICR Previous year 1 2 3 4 5 6 Classes I (other), II and IX 13 0.15% 1.00 Classes I (other), II and IX 14 0.3% 2798559 2798559 8396 9894 Classes III, VII and VIII 15 0.3% 15575 14473 0.93 43 40 Total 16 2814135 2813033 8439 9934 Insurance health risk and life protection reinsurance capital component Class IV supplementary classes 1 and 2 and life protection reinsurance Insurance expense risk capital component Life protection and permanent 31 0% health reinsurance 21 Classes I (other), II and IX 32 1% 481154 481154 1.00 4812 4398 Classes III, VII and VIII (investment risk) Classes III, VII and VIII (expenses fixed 5 yrs +) Classes III, VII and VIII (other) Class IV (other) 36 1% Class V 37 1% Class VI 38 1% 33 1% 28812 28812 1.00 288 416 34 1% 2393928 2393928 1.00 23939 24404 35 25% 855 1865 Total 39 29894 31084 Insurance market risk capital component Life protection and permanent 41 0% health reinsurance Classes I (other), II and IX 42 3% 481154 481154 1.00 14435 13195 Classes III, VII and VIII (investment risk) Classes III, VII and VIII (expenses fixed 5 yrs +) Classes III, VII and VIII (other) Class IV (other) 46 3% Class V 47 0% Class VI 48 3% 43 3% 28812 28812 1.00 864 1249 44 0% 2393928 2393928 45 0% 2537183 2525253 Total 49 5441077 5429147 15299 14444 Long term insurance capital requirement 51 53632 55462 40

RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES FINANCIAL YEAR ENDED 31 DECEMBER 2014 NOTES TO THE FORMS *0201* Waiver and modification rules The FSA, on the application of the firm, made a direction under section 148 of the Financial Services and Markets Act 2000 in December 2010. The effect of the direction is to modify the provisions of INSPRU 3.1.35R and IPRU(INS) Appendix 9.3 so that a more appropriate rate of interest is used for assets taken in combination. *0301* Form 3 reconciliation of net admissible assets to total capital resources after deductions Total of admissible assets - other than long term business assets Form 13 Line 89 Total of admissible assets - long term business assets Form 13 Line 89 Less: Mathematical reserves, after distribution of surplus Form 14 Line 11 000 714,313 5,565,192 (5,429,147) Total other long term business liabilities Form 14 line 49 (93,666) Total liabilities - other than long term insurance business Form 15 Line 69 Capital requirements of regulated related undertakings Form 2 Line 35 Net admissible assets / total capital resources after deductions Form 3 Line 79 (101) 78,233 834,824 *0310* Details of positive and negative valuation differences 000 Positive valuation differences on liabilities 11,380 Negative valuation differences on liabilities 10,423 Positive valuation difference Form 3 line 35 957 The positive valuation difference is due to the deferred tax liability and deferred income reserve. Negative valuation differences due to inclusion of Sterling reserves on investment contract business. 41

RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES FINANCIAL YEAR ENDED 31 DECEMBER 2014 NOTES TO THE FORMS (CONTINUED) *0313* Reconciliation of profit and loss and other reserves to Form 16 Profit and Loss Account and other reserves as at 31 st December 2013 Form 3 Line 12 Column 4 Profit and Loss Account and other reserves as at 31 st December 2014 Form 3 Line 12 Column 3 000 227,844 261,759 Movement in Profit and Loss Account and Other Reserves 33,915 Reporting basis differences 7,493 Less Long Term Business Fund (profit)/loss retained for the financial year (1,247) Profit retained for the financial year - Form 16 Line 59 40,161 *1301* Aggregate value of certain securities The company held no other assets meeting the specified criteria. *1308* Aggregate value of certain securities The company held no assets meeting the specified criteria. *1304 & 1310* Set off of amounts Amounts have been set off to the extent permitted by generally accepted accounting principles. *1305 & 1319* Maximum Counterparty Limits The Company s investment guidelines set maximum counterparty limits in order to maintain the admissibility of assets in accordance with INSPRU 2.1.22. This is with the exception of approved securities and any holdings under the UCITS Directive, and includes exposures with both approved counterparties and other than approved counterparties. The exposure applies to long term business assets and other than long term business assets combined. There were no occasions during the financial period when limits were exceeded. *1306 & 1312* Amount and nature of exposure at the year end to large counterparties There were no exposures to any counterparty subject to limits in INSPRU 2.1.22R(3) at 31 December 2014 which exceeded 5% of the base capital resource requirement and its long term insurance business liabilities, excluding property linked. *1307 & 1313* Aggregate value of fully secured rights Value of Rights - 8,900,000 This represents the value of derivative assets secured by derivative collateral received from counterparties as disclosed in the financial statements. *1318* Details of other adjustments to assets 000 Reclassification of unit linked liabilities included in Net Asset Value of unit 7,839 linked funds on Form 13 Line 59 Other adjustments to assets Form 13 Line 101 7,839 42

RETURNS UNDER THE ACCOUNTS AND STATEMENTS RULES FINANCIAL YEAR ENDED 31 DECEMBER 2014 NOTES TO THE FORMS (CONTINUED) *1401* Provision for adverse changes No provision for adverse changes under either GENPRU 1.3.30R to GENPRU 1.3.33R or INSPRU 3.2.17R and INSPRU 3.2.18R has been made. The Company considers asset valuations in the context of the requirements of GENPRU 1.3.30R to GENPRU 1.3.33R. The need for a provision for adverse variation is also considered by the Actuarial Function Holder. The Company's mark to model valuations are formally reviewed and signed off to provide additional comfort over robustness. The Company reviews any potential liquidity issues on assets on a regular basis and incorporates valuation adjustments if required. The Company reviews its investments to identify whether any provisions are required pursuant to INSPRU 3.2.17R and INSPRU 3.2.18R. Sufficient cover is held for all positions to match reasonably foreseeable adverse variations and no non-approved derivatives or quasiderivatives are held. *1402 & 1502* Details of contingencies and commitments: a) Charges over assets There are no charges over assets. b) Potential capital gains tax liability There is no potential capital gains tax liability should the Company dispose of its assets, based on asset values as at 31 st December 2014. c) Contingent liabilities There are no contingent liabilities. d) Guarantees, indemnities or other contractual commitments affected other than in the ordinary course of insurance business and in respect of related companies There are no such items. e) Other fundamental uncertainties There are no other uncertainties which it is necessary to disclose. *1405* Details of other adjustments to liabilities 000 Reclassification of unit linked liabilities included in Net Asset Value of unit 7,839 linked funds on Form 13 Line 59 Deferred income reserve recognised in IFRS accounts 519 Differences between IFRS and PRA mathematical reserves (11,380) Other adjustments (1,490) Other adjustments to liabilities (4,512) Differences between IFRS and PRA mathematical reserves are detailed in note *0310* 43