(Figures in tables are expressed in thousands of dollars, except unit amounts) 16 Effective February 28, 2003, the Fund along with ‘Teck Cominco Limited (Teck), Luscar Ltd. (Luscar), Sherritt International Corporation and the Ontario During the first quarter of 2003, the Fund will writeoff the portion of its purchase price discrepancy that relates to the damaged equipment. For accounting purposes, Westshore will record an extraordinary gain in 2003, which will be the insurance ptoceeds to replace the damaged equipment net of the carrying value of the damaged equipment which will be written off. The cost of replacement equipment will be capitalized to plant and equipment and depreciated consistent with Westshore’s current depreciation policy. Proceeds from business interruption insurance will be included in earnings before depreciation, interest and income taxes on Westshore’s statement of earnings. Under the management agreement, Westar earned a fee of $750,000 for the year ended December 31, 2002 (2001 - $750,000). The management fees are recorded in the accounts of Westshore and are included in equity in earnings of Westshore Terminals Ltd. on the statements of earnings and unitholders’ equity. Accounts payable and accrued liabilities include $21,000 (2001 - $nil) due to Westshore. See note 3. On January 2, 2003, high winds caused the two ship loaders at Berth 2 at Westshore’s terminal site to collapse. Both ship loaders were severely damaged. The ship loader at Berth 1 was undamaged by the storm. Westshore’s insurers have confirmed Westshore’s coverage under the All Risk Property Policy, including business interruption compensation for the accident (net of applicable deductions). The initial repair and replacement cost is estimated to be $15 million.  "This estimate may change as repairs and replacements are undertaken. Westshore anticipates that the operations at Berth 2 will resume in the summer of 2003. Westshore has entered into agreement with Westar. Under the terms of the agreement, Westar is responsible for providing executive management and other services to Westshore. The initial term of the agreement is 15 years, and the agreement is renewed thereafter for successive five-year terms unless Westshore gives notice of non-renewal at least 12 months before the end of the relevant term. The management agreement may be terminated by Westshore in certain circumstances, and Westar can terminate the agreement at any time on 12 months’ notice. Westar earns a fee of $750,000 per annum plus reimbursement of reasonable out-of-pocket expenses for providing these services. In addition, as an incentive to Westar to enhance the cash flow of Westshore, Westar is entitled to earn incentive fees that will be payable annually when the per-unit cash distributions to unitholders exceed certain defined levels. a management Teacher’s Pension Plan agreed with Fording Inc. (Fording) to proceed under a plan of arrangement to convert Fording into an income trust. As part of the plan of arrangement, existing Fording sharcholders were able to elect to receive cash or units (or both) of the Fording Canadian Coal Trust (Fording Trust). As part of the transaction, the Fund paid $150 million in cash for a 9.1% investment in the newly formed Fording Trust. The Fund financed this investment through loans of $120 million from a Canadian chartered bank and $30 million from an affiliate of Westar. These loans were guaranteed by Westshore. Fording Trust will hold 65% of the Canadian Coal Partnership (the Partnership) and 100% interest in Fording’s industrial minerals business. The Partnership acquired all the metallurgical coal assets of Fording, Teck and Luscar. Westshore’s coal handling contracts previously negotiated with Fording, Teck, and Luscar, including exclusivity agreements, will continue in effect. Accounts payable and acctued liabilities include $67,000 (2001 - $67,000) due to Westar for management fees and out-of-pocket expense reimbursement. Under the administration agreement, Westar earned a fee of $250,000 for the year ended December 31, 2002 (2001 - $250,000). The administration fees are included in administration costs on the statements of earnings and unitholders’ equity. Management agreement Other related party transactions 7, Subsequent events (a) Coal Partnership (b) Ship loader Accident December 31, 2002 and 2001 44a, Westshore Terminals Income Fund Notes to Financial Statements