Variable Return

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

The Variable Return, if any, on a Note will be the sum of: (i) the Capital Appreciation and (ii) the Additional Amount, where the Variable Return may not be less than zero.

Capital Appreciation equals the amount, if any, by which NAVFINAL exceeds the Original Principal Amount ($100).

The Additional Amount, which may be positive or negative, is an amount equal to: (i) the Undiscounted Fixed Amount discounted for a term of one year at the 1-year Bankers’ Acceptance Rate prevailing at the Maturity Date; less (ii) the Principal Outstanding at the Maturity Date. The Undiscounted Fixed Amount is a sum in excess of $100 to be established by the Calculation Agent.

Example:

NAVFINAL = $180
Principal Outstanding = $70.00
Total of Quarterly Principal Repayments = $30.00
Undiscounted Fixed Amount = $104.00
1 yr BA CDOR at Maturity = 4.30%

(i) Capital Appreciation = NAVFINAL ($180) - $100 = $80.00

(ii) Additional Amount = $104.00/ (1 + 0.043) - $70.00 = $29.71

(iii) Variable Return = Additional Amount + Capital Appreciation = $29.71 + $80.00

(iv) Maturity Payment Amount = Principal Outstanding + Variable Return
= $70.00 + $109.71 = $179.71

Maturity Payment Amount is in addition to Quarterly Principal Payments of $30.00 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.

Fund Account Exposure

Fund exposure was 121% on the issue date (April 23, 2008) and has changed as noted below:

Quarterly Partial Principal Repayments

An amount equal to 1.305% of the Fund Account Value will be credited to the Principal Repayment Account, and deducted from the Fund Account, as of the 9th day of July, October, February and April in each year during the term of the Notes or, if such day is not a Business Day, on the next following Business Day (each a “Quarterly Partial Principal Repayment Determination Date”). The Principal Repayment Account will fund the Quarterly Partial Principal Repayments on the Notes. Any Distributions and Special Distributions made on Units in the Fund Account as of the applicable record date(s) will be notionally paid in kind on the relevant payment date to the Fund Account via a notional distribution reinvestment program as of the applicable payment date. The Quarterly Partial Principal Repayment of 1.305% of the Fund Account Value is equal to an annual principal repayment of 5.22%. Payment of the Quarterly Partial Principal Repayments will require liquidation of assets in the Fund Account equal to 5.22% calculated on a quarterly basis before giving effect to any liquidation required to pay the portion of the Program Fee that is calculated on the value of the Fund Account.

Performance Commentary

As at July 31, 2008 the performance of the BNS Dynamic Distinction Series Deposit Notes (ROC), Series 1 on a NAV basis is
-10.04% since inception. The Notes have paid a total of $1.06 in all quarterly partial principal repayments. Canadian equities have underperformed over the past several months, and Global equity markets continue to be extremely volatile, negatively affecting the overall performance of the Notes. The Canadian yield curve rallied over the month, increasing the cost of principal protection and therefore decreasing distance in CPPI Notes. During the period from July 1, 2008 to July 31, 2008 there were 2 de-leveraging events. As at July 31, 2008 the Notes have a fund exposure of 68%.

Fund Performance

Fund Units	Weight	Initial Unit NAV	Month End Unit NAV	Change %	Lock-in Date
Dynamic Dividend Fund	33.33%	$6.36	$5.35	-15.88%	10/06/2008
Dynamic Global Discovery Fund	11.11%	$9.00	$7.33	-18.56%	10/06/2008
Dynamic Global Value Fund	11.11%	$7.59	$5.01	-33.99%	10/06/2008
Dynamic Power Canadian Growth Fund	11.11%	$9.42	$5.76	-38.85%	10/06/2008
Dynamic Power Small Cap Fund	22.22%	$10.53	$7.77	-26.21%	10/06/2008
Dynamic Value Fund of Canada	11.11%	$8.81	$6.83	-22.47%	10/06/2008
Overall Return				-23.77%

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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