Variable Return

Principal Outstanding equals the Original Principal Amount ($100) less the aggregate of all Semi-Annual Partial Principal Repayments made during the term of the Notes.

The Variable Return, if any, on a Note equals (i) NAVFINAL ; less (ii) the Principal Outstanding.

NAVFINAL is an amount, expressed per Note, equal to the NAV determined on the third Business Exchange Day prior to the Maturity Date, excluding any amount notionally held in the Principal Repayment Account which will be paid out as a Semi-Annual Partial Principal Repayment on the Maturity Date determined on the third Exchange Business Day prior to the Maturity Date.

NAV means, at any time, the total of: (i) the value of the Index Account based on the then prevailing Closing Value (the "Index Account Value") and the value of the Bond Account; plus (ii) any cash in the Principal Repayment Account; minus (iii) the accrued and unpaid Program Fee; divided by (iv) the number of Notes outstanding.

Example:

Maturity Payment Amount of $120.00 per Note is in addition to total Semi-Annual Partial Principal Repayments of $19.125 paid over the term of the Notes.

If the Notes are held to the Maturity Date, the full Original Principal Amount ($100 per Note) will have been paid in total by the Maturity Date (regardless of the performance of the Portfolio and even if NAVFINAL is less than $100 for any reason.) An Investor cannot elect to receive the Variable Return, if any, prior to the Maturity Date and the Notes cannot be redeemed or retracted prior to the Maturity Date. There is a possibility that an Investor may not receive any Variable Return.

Index Account Exposure

Index exposure was 97.50% on the issue date (January 25, 2008) and has changed as noted below:

Semi-Annual Partial Principal Repayments

Subject to the occurrence of an Extraordinary Event (which may include a Market Disruption Event which continues in effect for eight or more consecutive Business Days) or a Protection Event, Semi-Annual Partial Principal Repayments per Note will be payable in Canadian dollars in an amount, if any, equal to 2.125% of the Original Principal Amount of such Notes. Upon payment of any Semi-Annual Partial Principal Repayment on the Notes of a series, the aggregate amount of such payment will be deducted from the applicable Principal Repayment Account. On any day, the $100 Original Principal Amount of a Note minus the aggregate Semi-Annual Partial Principal Repayments made on such Note to and including such date shall equal the Principal Outstanding of such Note. A cumulative maximum of $19.125 per Note of Semi-Annual Partial Repayments will be paid over the term of the Notes of each series.

Performance Commentary

As at January 13, 2012 the performance of the BNS DEX Universe Bond Index™ Notes (ROC), Series 2 on a NAV basis is 8.69% since inception. The Notes have paid a total of $14.875 in all semi-annual partial principal repayments. The Bond Index level has increased by 30.65% over the term of the Note. The Canadian yield curve is consistently lower throughout all maturities making the zero coupon component more valuable and contributing to the improvement in NAV for the Notes since December 2010. The notes continue to maintain 100% exposure to the Bond Index.

Index Performance

Note: An investment in principal protected notes may not be suitable for all investors. Important information about these investments is contained in the Information Statement of each note. Investors should obtain and carefully read a copy prior to investing, paying particular attention to the associated risks. Past performance is not indicative of future returns. Commissions, trailing commissions, management fees and expenses all may be associated with these investments. Principal is guaranteed at maturity only for products purchased at their issue price and held to maturity. The investment return on the notes, if any, is uncertain in that an investor may not receive more than return of the principal amount at maturity. A person should reach a decision to invest in the notes only after carefully considering with his or her advisor, the suitability of this investment in light of his or her investment objectives and the information set out in the respective Information Statement.

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