09:06 KC-HSBC @XC0401<09391> - Announcement (2) the terms and conditions of the Warrants). `Quarterly Cash Settlement Amount' means, in respect of every Exercise Amount and in respect of each Quarterly Fixing Date, an amount in Hong Kong dollars calculated by the Issuer as equal to the greater of zero and (1) the arithmetic mean of the closing price of one Share (as derived from the Daily Quotation Sheet of the Stock Exchange, subject to any adjustments) for each Valuation Date (being each of the five Business Days (as defined in the terms and conditions of the Warrants) immediately preceding such Quarterly Fixing Date) less (2) the Exercise Price. Investors should note that the sum of the Quarterly Cash Settlement Amounts to date since 2nd January, 2003, the most recent Quarterly Fixing Date, is HK$0.0158 per warrant. If on any Expiry Date the Cash Settlement Amount is greater than zero, the Warrants will be automatically exercised (without notice being given by the holders of the Warrants) and the Issuer or its agent will pay to such holders an amount calculated in the manner described above, if applicable. The payment and delivery obligations of the Issuer in relation to the Warrants will be unconditionally and irrevocably guaranteed by KBC Bank NV. The Warrants will not be offered, transferred or sold as part of the initial distribution, or at any time thereafter, to or for the benefit of any persons resident, incorporated, established or having their usual residence in the United States. The offering of the Warrants will comply with all applicable rules in the countries in which they are offered. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the New Warrants on the Stock Exchange. The date of commencement of dealings in the New Warrants is expected to be 30th January, 2003. All necessary arrangements will be made to enable the New Warrants to be admitted to the Central Clearing and Settlement System. Other than the Guarantor being a licensed bank in Hong Kong regulated by the Hong Kong Monetary Authority, neither the Issuer nor the Guarantor is regulated by any of the bodies referred to in Rule 15A.13(2) or (3) of the Rules. The Guarantor is supervised by the Belgian Banking and Finance Commission. The implied volatility, gearing, effective gearing and premium of the New Warrants are 28 per cent., 22.3x, 7.5x, and 5.4 per cent. respectively. These values may not be comparable to similar information provided by other issuers of derivative warrants as each Issuer may use different pricing models. The Warrants will constitute general unsecured contractual obligations of the Issuer and the Guarantor and no other person. Investors are relying upon the creditworthiness of the Issuer and the Guarantor and have no rights under the Warrants against the Company. The Guarantor's long term credit ratings are A+ by Standard and Poor's Ratings Group, AA- by Fitch IBCA Ltd, and Aa3 by Moody's Investors Service. The Issuer and Guarantor have undertaken until the Expiry Date to make documents containing details of the New Warrants and financial and other information on the Issuer and Guarantor available for inspection by holders of the New Warrants. The documents available for inspection are a copy of the Base Listing Document dated 26th April, 2002, together with any addenda or successor document to the Base Listing Document (both the English version and the Chinese translation), the Supplemental Listing Document dated 2nd July, 2002, the Further Supplemental Listing Document dated 19th December, 2002, and the Second Further Supplemental Listing Document to be dated on or about 29th January, 2003 (both the English version and the Chinese translation). These documents will be available for inspection at the office of Computershare Hong Kong Investor Services Limited, which is presently at Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong. Information on the KBC Financial Products Group and the Guarantor can also be found on website www.kbcfp.com and www.kbc.be respectively. Before purchasing the Warrants you should ensure that you fully understand its potential risks and rewards and independently determine that they are appropriate for you given your objectives, experience, financial and operational resources, and other relevant circumstances. You should consult with such advisers as you deem necessary to assist you in making these determinations. Investors are warned that the price of the Warrants may fall in value as rapidly as it may rise and holders may sustain a total loss of their investment. Prospective purchasers should therefore ensure that they understand the nature of the Warrants and carefully study the risk factors set out in the Base Listing Document and the relevant Supplemental Listing Document and, where necessary, seek professional advice, before they invest in the Warrants.