09:54 KC-ALUCO@EC0510<03875> & KC-YZ CM@EC0602<03876> - Ann. (2) If on any Expiry Date the Cash Settlement Amount is greater than zero, the Warrants will be automatically exercised (without notice being given to the holders of the Warrants) and the Issuer or its agent will pay to such holders an amount calculated in the manner described above. The payment and delivery obligations of the Issuer in relation to the Warrants will be unconditionally and irrevocably guaranteed by KBC Bank NV (the "Guarantor"). 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 Warrants on the Stock Exchange. The date of commencement of dealings is expected to be 14th February, 2005. All necessary arrangements will be made to enable the 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 Warrants are detailed below. These values may not be comparable to similar information provided by other issuers of derivative warrants as each Issuer may use different pricing models. Effective Warrants Implied Volatility Gearing gearing Premium Series A 65 per cent. 4.4x 2.5x 37.8 per cent. Series B 57 per cent. 7x 4.2x 26.5 per cent. 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 any 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 for each series of Warrants to make documents containing details of the Warrants and financial and other information on the Issuer and Guarantor available for inspection by holders of the Warrants. The documents available for inspection are a copy of the Base Listing Document dated 28th April, 2004, together with any addenda or successor document to the Base Listing Document (both the English version and the Chinese translation) and the Supplemental Listing Documents to be dated 7th February, 2005 (both the English version and the Chinese translation). These documents will be available for inspection at KBC Financial Products Hong Kong Limited, which is presently at Suite 806-814, 8/F, Two International Finance Centre, 8 Finance Street, Central, 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 it is 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 Documents and, where necessary, seek professional advice, before they invest in the Warrants. The Issuer and its appointed liquidity provider may be the only purchasers of the Warrants and the secondary market for the Warrants may be limited. The Issuer has appointed KBC Financial Products Trading Hong Kong Limited as its liquidity provider for the Warrants (Broker ID Number: 9569; Tel: 2238 6133; Address: Suite 806-814, 8/F, Two International Finance Centre, 8 Finance Street, Central, Hong Kong). The liquidity provider will provide liquidity by responding to requests for bid and offer quotes. A quote may be obtained by calling its telephone number.