df, Westshore Terminals Ltd. Notes to Financial Statements December 31, 2002 and 2001 (Figures in tables are expressed in thousands of dollars) 4. Share capital 3. Notes payable 22 6. Bank operating facility 5. Income taxes The $470 million of notes payable (the Notes), all of which are held by the Fund, mature on March 31, 2022 and ate unsecured and subordinated to all secured obligations of the Company. Interest is determined using a variable interest rate based on a proportion of the Company’s earnings before depreciation, interest and income taxes calculated on a monthly basis. Interest for any month cannot be lower than 6% and not higher than 11.5%. During the year ended December 31, 2002, the Company incurred interest expense of $43.9 million (2001 - $50.2 million) on the Notes. On or about March 31, 2012, and from time to time thereafter, the Board of Directors of the Company (the Board) and the Trustees of the Fund (the Trustees) will jointly review the Company’s facilities and operations, the economic conditions relating to the coal industry, and the business prospects of the Company. If this review indicates, in the opinion of either the Board or the ‘Trustees, that it is unlikely that the indebtedness of the Company evidenced by the Notes could be refinanced on the same terms and conditions upon maturity of such Notes, then the Company will commence principal repayments on the Notes such that the Notes are fully repaid upon maturity or reduced to the level which the Board and the Trustees are of the opinion could be so refinanced. In that event, the Company’s available cash will be utilized to the extent required to fund such repayments in lieu of dividends on the common shares. ‘The Company has a $10 million (2001 - $10 million) secured operating facility. No amounts are outstanding on this facility as at December 31, 2002 and 2001. Interest on borrowings under the operating facility is at the lender’s prime rate or, if the borrowings are in the form of bankers’ acceptances, at the lender’s bankers’ The nature and tax effect of the temporary differences that give rise to future income tax assets and liabilities are as follows: A reconciliation of income taxes at the statutory tax rate to actual income taxes is as follows: Authorized 500,000,000 common shares without par value * ‘The excess of the net actuarial gain (loss) over 10% of the greater of the benefit obligation and the fair value of plan assets is amortized over the average remaining service period of active employees. 2002 2001 $ $ Plant and equipment 19,856 22,929 Accounts payable and accrued liabilities (1,380) (4,218) Employce future benefits 399 214 Future income tax liability 18,875 18,925 2002 2001 $ $ Income tax recovery at statutory Canadian rate (282) (593) Large corporations tax 204 222 Reduction in future income tax rate (1,202) (3,082) Loss carry-back at higher tax rate (188) - Other (75) 75 (1,543) (3,378) Income tax recovery Represented by: Current income tax (recovery) provision (1,493) 2,408 Future income tax recovery (50) (5,786) (1,543) (3,378) Number of Amount shares $ Issued and Outstanding — December 31, 2002 and 2001 177,964,001 177,964