Variable Return

The Variable Return calculation is the formula used to determine the Variable Return on the Notes at the Maturity Date. The Variable Return per Note is calculated as follows:

The Average Realized Value will be determined by the simple average of the Realized Values (each of which may be positive or negative) determined for each Calculation Date. The Realized Value for any Calculation Date shall be equal to the rate of return, measured from the Issue Date to that Calculation Date, of the best performing Asset remaining in the Portfolio as of that Calculation Date based on its Closing Level, subject to a maximum of 50%. If a particular Asset is used to determine the Realized Value for any Calculation Date, that Asset will then be removed from the Portfolio and its performance will no longer factor into the calculation of Variable Return for any subsequent Calculation Date (although it may continue to be relevant to determine the Additional Variable Return, if any).

If the price return of each Asset exceeds 50% measured from the Issue Date to the final Calculation Date, then the Notes will pay additional Variable Return (‘‘Additional Variable Return’’) per Note equal to 50% of the price return in excess of 50% of the worst performing Asset over such time period.

Performance Commentary

As at January 13, 2012 the performance of the BNS Automatic Portfolio Allocation™ Deposit Notes, Series 3 on a NAV basis is 17.78% since inception. The Notes have locked in the returns from the strong performance of the WisdomTree India Earnings Fund, iShares MSCI Mexico Investable Market Index Fund and the Market Vectors Russia ETF. The performance of the remaining assets in the basket has also been strong with only two of ten assets falling since inception, contributing to an average gain of 29.08%. Additionally, the Canadian yield curve is consistently lower throughout all maturities making the zero coupon component more valuable. The positive impact of the underlying assets return on the NAV was helped by the movement of the Canadian Yield curve, contributing to an increase in the value of the Note since December 2010.

Basket Performance

Basket Assets	Weight	Initial Price 10/30/2008	Current Price 02/06/2012	Price Performance	Lock-in Date
Dow Jones EURO STOXX 50® Index	10.00%	$2,528.04	$2,507.89	-0.80%
FTSE 100 Index	10.00%	$4,291.65	$5,892.20	37.29%
Market Vectors Russia ETF	10.00%	$18.90	$28.35**	50.00%	05/02/2011
Nikkei-225™ Index	10.00%	$9,029.76	$8,929.20	-1.11%
S&P® 500 Index	10.00%	$954.09	$1,253.30	31.36%	10/31/2011
S&P/TSX 60 Index	10.00%	$599.57	$714.94	19.24%
WisdomTree India Earnings Fund	10.00%	$11.60	$17.40**	50.00%	05/03/2010
iShares FTSE/Xinhua China 25 Index Fund	10.00%	$25.65	$31.98	24.68%	05/01/2009
iShares MSCI Brazil Index Fund	10.00%	$39.09	$58.64**	50.01%	11/02/2009
iShares MSCI Mexico Investable Market Index Fund	10.00%	$31.56	$47.34**	50.00%	11/01/2010
Overall Return				31.07%
Indicative Variable Return *				$31.07

* This value assumes all current prices remain unchanged

** Price Performance capped at 50% as per the terms of the Note

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.

THE CONTENTS OF THIS SITE ARE DIRECTED AT, AND ARE FOR USE BY, RESIDENTS OF CANADA ONLY AND ARE NOT DIRECTED TO OR INTENDED FOR USE BY RESIDENTS OF ANY OTHER COUNTRY OR JURISDICTION. THE CONTENTS OF THIS SITE DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, DIRECTLY OR INDIRECTLY, ANY OF THE NOTES REFERRED TO HEREIN IN ANY JURISDICTION OUTSIDE OF CANADA. THE CONTENTS OF THIS SITE ARE NOT TO BE DOWNLOADED, DISSEMINATED, USED OR RELIED UPON BY PERSONS RESIDENT IN ANY NON- CANADIAN JURISDICTION. NO SECURITIES COMMISSION OR SIMILAR AUTHORITY IN CANADA OR ANY OTHER JURISDICTION HAS IN ANY WAY PASSED ON THE MERITS OF ANY OF THE NOTES OR THE ADEQUACY OF THE DISCLOSURE CONTAINED IN ANY OF THE DOCUMENTS ON THIS SITE.