EXHIBIT
2
 
 FIRSTSERVICE
CORPORATION
 
 
 MANAGEMENT’S
REPORTS
 
 MANAGEMENT’S
RESPONSIBILITY FOR FINANCIAL STATEMENTS
 The
accompanying consolidated financial statements and management discussion and
analysis (“MD&A”) ofFirstService Corporation
(the “Company”) and all information in this annual report are the responsibility
of management and have been approved by the Board of Directors.
 
 The
consolidated financial statements have been prepared by management in accordance
with accounting principles generally accepted in the United States of America
using the best estimates and judgments of management, where
appropriate.  The most significant of these accounting principles are
set out in note 2 to the consolidated financial statements. Management has
prepared the financial information presented elsewhere in this annual report and
has ensured that it is consistent with the consolidated financial
statements.
 
 The
MD&A has been prepared in accordance with National Instrument 51-102 of the
Canadian Securities Administrators, taking into consideration other relevant
guidance, including Regulation S-K of the US Securities and Exchange
Commission.
 
 The Board
of Directors of the Company has an Audit Committee consisting of three
independent directors.  The Audit Committee meets regularly to review
with management and the independent auditors any significant accounting,
internal control, auditing and financial reporting matters.
 
 These
consolidated financial statements have been audited by PricewaterhouseCoopers
LLP, which have been appointed as the independent auditors of the Company by the
shareholders.  As auditors, PricewaterhouseCoopers LLP obtain an
understanding of the Company’s internal controls and procedures for financial
reporting to plan and conduct such audit procedures as they consider necessary
to express their opinion on the consolidated financial statements. As auditors,
PricewaterhouseCoopers LLP have full and independent access to the Audit
Committee to discuss their findings.
 
 
 MANAGEMENT’S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
 Management
is responsible for establishing and maintaining adequate internal control over
financial reporting for the Company.  Internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles.
 
 Due to
its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of its
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
 
 Management
has excluded six individually insignificant entities acquired by the Company
during the last fiscal period from its assessment of internal control over
financial reporting as at December 31, 2008.   The total assets
and total revenues of these majority-owned entities of the Company represent
1.6%and 1.4%,
respectively, of the related consolidated financial statement amounts including
discontinued operations as at and for the nine-month period ended December 31,
2008.
 
 
 Management
has assessed the effectiveness of the Company’s internal control over financial
reporting as at December 31, 2008, based on the criteria set forth in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this assessment, management has concluded that, as
at December 31, 2008, the Company’s internal control over financial reporting
was effective.
 
 The
effectiveness of the Company's internal control over financial reporting as at
December 31, 2008, has been audited by PricewaterhouseCoopers LLP, the Company’s
independent auditors as stated in their report which appears
herein.
 
 
 
 /s/
      Jay S. Hennick
                Chief
      Executive Officer
              /s/
      John B. Friedrichsen
                Chief
      Financial Officer
 February
27, 2009
 
 
 Page 2 of
42
 INDEPENDENT
AUDITORS’ REPORT
 
 To the
Shareholders of FirstService Corporation
 
 We have
completed integrated audits of FirstService Corporation’s December 31, 2008 and
March 31, 2008 consolidated financial statements and of its internal control
over financial reporting as at December 31, 2008 and audits of its 2007 and 2006
consolidated financial statements.  Our opinions, based on our audits,
are presented below.
 
 Consolidated
financial statements
 We have
audited the accompanying consolidated balance sheets of FirstService Corporation
as at December 31, 2008, March 31, 2008 and March 31, 2007, and the related
consolidated statements of earnings, shareholders’ equity and cash flows for the
nine-month period ended December 31, 2008 and each of the years in the
three-year period ended March 31, 2008.  These financial statements
are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our
audits.
  We
conducted our audits of the Company’s financial statements as at December 31,
2008 and March 31, 2008 and for the nine months and year then ended in
accordance with Canadian generally accepted auditing standards and the standards
of the Public Company Accounting Oversight Board (United States).  We
conducted our audits of the Company’s financial statements as at March 31, 2007
and March 31, 2006 and for the years then ended in accordance with Canadian
generally accepted auditing standards.  Those standards require that
we plan and perform an audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit of
financial statements includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  A financial
statement audit also includes assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.
  In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of the Company as at December
31, 2008, March 31, 2008 and March 31, 2007 and the results of its operations
and its cash flows for nine-month period ended December 31, 2008 and each of the
years in the three-year period ended March 31, 2008 in accordance with
accounting principles generally accepted in the United States of
America.
 
 Internal
control over financial reporting
 We have
also audited FirstService Corporation’s internal control over financial
reporting as at December
31, 2008, based on criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”).  The Company’s management is responsible
for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting,
included in the accompanying Management’s Report on Internal Control over
Financial Reporting.  Our responsibility is to express an opinion on
the effectiveness of the Company’s internal control over financial reporting
based on our audit.
 
 We
conducted our audit of internal control over financial reporting in accordance
with the standards of the Public Company Accounting Oversight Board (United
States).  Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects.  An audit
of internal control over financial reporting includes obtaining an understanding
of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk, and
  Page 3 of
42
 performing
such other procedures as we consider necessary in the
circumstances.  We believe that our audit provides a reasonable basis
for our opinion.
 
 A
company’s internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.  A company’s internal
control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of
the company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and
(iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the Company’s assets that
could have a material effect on the financial statements.
 
 Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
 
 As
described in Management’s Report on Internal Control over Financial Reporting,
management has excluded six individually insignificant entities acquired by the
Company from its assessment of internal control over financial reporting as at
December 31, 2008 because these entities were acquired by the Company in
purchase business combinations during the nine-month period ended December 31,
2008.  The total assets and total revenues of these majority owned
entities represent 1.6% and 1.4%, respectively, of the related consolidated
financial statement amounts including discontinued operations as at and for the
nine months ended December 31, 2008.
 
 In our
opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as at December 31, 2008 based on criteria
established in Internal
Control — Integrated Framework issued by COSO.
 
 /s/
PricewaterhouseCoopers LLP
 Chartered
Accountants, Licensed Public Accountants
 
 Toronto,
Canada
 February
27, 2009
 
 Comments
by auditor for U.S. readers on Canada-U.S. reporting differences
 In the
United States, reporting standards for auditors require the addition of an
explanatory paragraph (following the opinion paragraph) when there is a change
in accounting principles that has a material effect on the comparability of the
Company’s consolidated financial statements, such as the change from the
adoption of a new accounting standard on April 1, 2007 described in note 14 to
the consolidated financial statements. Our report to the shareholders dated
February 27, 2009 is expressed in accordance with Canadian reporting standards
which do not require a reference to such a change in accounting principles in
the Auditors’ Report when the change is properly accounted for and adequately
disclosed in the consolidated financial statements.
 
 /s/
PricewaterhouseCoopers LLP
 Chartered
Accountants, Licensed Public Accountants
 
 Toronto,
Canada
 February
27, 2009
 
 Page 4 of
42
 FIRSTSERVICE
CORPORATION
 CONSOLIDATED
STATEMENTS OF EARNINGS
 (in
thousands of US dollars, except per share amounts)
 Nine
      months
                          ended
                          December
      31,
                        
                        
                        Year
      ended March 31,2008
                        
                        
                        2008
                        
                        
                        2007
                        
                        
                        2006RevenuesServices
                        
                        $
                        1,280,167
                        
                        
                        $
                        1,486,972
                        
                        
                        $
                        1,043,768
                        
                        
                        $
                        855,572Products
                        
                        
                        42,513
                        
                        
                        
                        62,741
                        
                        
                        
                        109,053
                        
                        
                        
                        63,096Total
      revenues
                        
                        
                        1,322,680
                        
                        
                        
                        1,549,713
                        
                        
                        
                        1,152,821
                        
                        
                        
                        918,668Cost
      of revenues (exclusive of depreciation shown below)Services
                        
                        
                        779,305
                        
                        
                        
                        884,976
                        
                        
                        
                        632,926
                        
                        
                        
                        539,855Products
                        
                        
                        22,116
                        
                        
                        
                        32,851
                        
                        
                        
                        75,688
                        
                        
                        
                        34,309Selling,
      general and administrative expenses
                        
                        
                        406,383
                        
                        
                        
                        516,091
                        
                        
                        
                        341,180
                        
                        
                        
                        262,496Depreciation
                        
                        
                        18,814
                        
                        
                        
                        19,727
                        
                        
                        
                        13,707
                        
                        
                        
                        9,873Amortization
      of intangible assets other than brokerage backlog
                        
                        
                        11,229
                        
                        
                        
                        12,730
                        
                        
                        
                        6,161
                        
                        
                        
                        3,494Amortization
      of brokerage backlog
                        
                        
                        1,703
                        
                        
                        
                        5,216
                        
                        
                        
                        6,154
                        
                        
                        
                        7,55483,130
                        
                        
                        
                        78,122
                        
                        
                        
                        77,005
                        
                        
                        
                        61,087Interest
      expense
                        
                        
                        11,107
                        
                        
                        
                        16,859
                        
                        
                        
                        13,151
                        
                        
                        
                        11,272Interest
      income
                        
                        
                        (2,855
                        )
                        
                        
                        (3,472
                        )
                        
                        
                        (5,308
                        )
                        
                        
                        (1,038
                        )Other
      income, net (note 5)
                        
                        
                        (2,422
                        )
                        
                        
                        (4,650
                        )
                        
                        
                        (4,589
                        )
                        
                        
                        (3,766
                        )Integrated
      Security division divestiture bonus
                        
                        
                        5,715
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Impairment
      loss on available-for-sale securities (note 7)
                        
                        
                        14,680
                        
                        
                        
                        -
                        
                        
                        
                        3,139
                        
                        
                        
                        -Earnings
      before income taxes and minority interest
                        
                        
                        56,905
                        
                        
                        
                        69,385
                        
                        
                        
                        70,612
                        
                        
                        
                        54,619Income
      taxes (note 14)
                        
                        
                        30,878
                        
                        
                        
                        17,108
                        
                        
                        
                        20,367
                        
                        
                        
                        16,084Earnings
      before minority interest
                        
                        
                        26,027
                        
                        
                        
                        52,277
                        
                        
                        
                        50,245
                        
                        
                        
                        38,535Minority
      interest share of earnings
                        
                        
                        14,519
                        
                        
                        
                        16,803
                        
                        
                        
                        15,282
                        
                        
                        
                        11,778Net
      earnings from continuing operations
                        
                        
                        11,508
                        
                        
                        
                        35,474
                        
                        
                        
                        34,963
                        
                        
                        
                        26,757Net
      earnings (loss) from discontinued operations, net of income taxes (note
      4)
                        
                        
                        50,528
                        
                        
                        
                        (1,075
                        )
                        
                        
                        1,253
                        
                        
                        
                        42,740Net
      earnings before cumulative effect of change in accounting
      principle
                        
                        
                        62,036
                        
                        
                        
                        34,399
                        
                        
                        
                        36,216
                        
                        
                        
                        69,497Cumulative
      effect of change in accounting principle, net of income taxes (note
      2)
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (1,353
                        )
                        
                        
                        -Net
      earnings
                        
                        $
                        62,036
                        
                        
                        $
                        34,399
                        
                        
                        $
                        34,863
                        
                        
                        $
                        69,497Preferred
      share dividends
                        
                        
                        7,760
                        
                        
                        
                        6,952
                        
                        
                        
                        -
                        
                        
                        
                        -Net
      earnings available to common shareholders
                        
                        $
                        54,276
                        
                        
                        $
                        27,447
                        
                        
                        $
                        34,863
                        
                        
                        $
                        69,497Net
      earnings (loss) per common share (note 15)BasicContinuing
      operations
                        
                        $
                        0.12
                        
                        
                        $
                        0.95
                        
                        
                        $
                        1.17
                        
                        
                        $
                        0.89Discontinued
      operations
                        
                        
                        1.71
                        
                        
                        
                        (0.03
                        )
                        
                        
                        0.04
                        
                        
                        
                        1.41Cumulative
      effect of change in accounting principle
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (0.04
                        )
                        
                        
                        -$
                        1.83
                        
                        
                        $
                        0.92
                        
                        
                        $
                        1.17
                        
                        
                        $
                        2.30DilutedContinuing
      operations
                        
                        $
                        0.11
                        
                        
                        $
                        0.89
                        
                        
                        $
                        1.08
                        
                        
                        $
                        0.83Discontinued
      operations
                        
                        
                        1.70
                        
                        
                        
                        (0.04
                        )
                        
                        
                        0.04
                        
                        
                        
                        1.38Cumulative
      effect of change in accounting principle
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (0.04
                        )
                        
                        
                        -$
                        1.81
                        
                        
                        $
                        0.85
                        
                        
                        $
                        1.08
                        
                        
                        $
                        2.21
 The
accompanying notes are an integral part of these consolidated financial
statements.
  Page 5 of
42
 FIRSTSERVICE
CORPORATION
 CONSOLIDATED
BALANCE SHEETS
 (in
thousands of US dollars)
 
 December
      31,
                            2008
                          
                          
                          March
      31,
                            2008
                          
                          
                          March
      31,
                            2007Assets
                            Current
      assetsCash
      and cash equivalents
                          
                          $
                          79,642
                          
                          
                          $
                          75,371
                          
                          
                          $
                          97,191Restricted
      cash
                          
                          
                          10,240
                          
                          
                          
                          8,858
                          
                          
                          
                          16,930Accounts
      receivable, net of an allowance of $12,817 (March 31, 2008 - $10,716;
      March 31, 2007 - $7,543)
                          
                          
                          175,520
                          
                          
                          
                          185,384
                          
                          
                          
                          128,568Income
      taxes recoverable
                          
                          
                          18,080
                          
                          
                          
                          16,887
                          
                          
                          
                          9,968Inventories
      (note 6)
                          
                          
                          10,572
                          
                          
                          
                          11,178
                          
                          
                          
                          10,124Prepaid
      expenses and other current assets
                          
                          
                          20,876
                          
                          
                          
                          20,748
                          
                          
                          
                          15,508Deferred
      income taxes (note 14)
                          
                          
                          11,718
                          
                          
                          
                          19,540
                          
                          
                          
                          10,430Assets
      held for sale (note 4)
                          
                          
                          14,210
                          
                          
                          
                          90,849
                          
                          
                          
                          73,638340,858
                          
                          
                          
                          428,815
                          
                          
                          
                          362,357Other
      receivables
                          
                          
                          16,832
                          
                          
                          
                          4,445
                          
                          
                          
                          6,599Other
      assets (note 7)
                          
                          
                          12,459
                          
                          
                          
                          29,383
                          
                          
                          
                          28,942Fixed
      assets (note 8)
                          
                          
                          76,789
                          
                          
                          
                          79,949
                          
                          
                          
                          60,880Deferred
      income taxes (note 14)
                          
                          
                          10,072
                          
                          
                          
                          12,194
                          
                          
                          
                          2,684Intangible
      assets (note 9)
                          
                          
                          178,227
                          
                          
                          
                          163,220
                          
                          
                          
                          92,064Goodwill
      (note 10)
                          
                          
                          348,897
                          
                          
                          
                          311,413
                          
                          
                          
                          209,652Assets
      held for sale (note 4)
                          
                          
                          6,503
                          
                          
                          
                          59,924
                          
                          
                          
                          53,820649,779
                          
                          
                          
                          660,528
                          
                          
                          
                          454,641$
                          990,637
                          
                          
                          $
                          1,089,343
                          
                          
                          $
                          816,998Liabilities
                            Current
      liabilitiesAccounts
      payable
                          
                          $
                          58,172
                          
                          
                          $
                          49,465
                          
                          
                          $
                          28,905Accrued
      liabilities (note 6)
                          
                          
                          157,820
                          
                          
                          
                          188,130
                          
                          
                          
                          150,313Income
      taxes payable
                          
                          
                          7,567
                          
                          
                          
                          36
                          
                          
                          
                          4,390Unearned
      revenues
                          
                          
                          27,600
                          
                          
                          
                          23,846
                          
                          
                          
                          17,282Long-term
      debt – current (note 11)
                          
                          
                          20,899
                          
                          
                          
                          24,777
                          
                          
                          
                          22,101Deferred
      income taxes (note 14)
                          
                          
                          75
                          
                          
                          
                          411
                          
                          
                          
                          3,318Liabilities
      related to assets held for sale (note 4)
                          
                          
                          12,946
                          
                          
                          
                          46,977
                          
                          
                          
                          30,518285,079
                          
                          
                          
                          333,642
                          
                          
                          
                          256,827Long-term
      debt – non-current (note 11)
                          
                          
                          245,470
                          
                          
                          
                          331,253
                          
                          
                          
                          213,030Other
      liabilities
                          
                          
                          21,832
                          
                          
                          
                          17,914
                          
                          
                          
                          4,506Deferred
      income taxes (note 14)
                          
                          
                          42,072
                          
                          
                          
                          41,618
                          
                          
                          
                          29,084Liabilities
      related to assets held for sale (note 4)
                          
                          
                          278
                          
                          
                          
                          763
                          
                          
                          
                          370Minority
      interest
                          
                          
                          50,067
                          
                          
                          
                          58,468
                          
                          
                          
                          48,306359,719
                          
                          
                          
                          450,016
                          
                          
                          
                          295,296Shareholders’
      equityPreferred
      shares (note 12)
                          
                          
                          144,307
                          
                          
                          
                          149,477
                          
                          
                          
                          -Common
      shares (note 12)
                          
                          
                          86,913
                          
                          
                          
                          88,919
                          
                          
                          
                          80,108Contributed
      surplus
                          
                          
                          25,899
                          
                          
                          
                          13,135
                          
                          
                          
                          6,557Receivables
      pursuant to share purchase plan
                          
                          
                          -
                          
                          
                          
                          (765
                          )
                          
                          
                          (1,232
                          )Retained
      earnings
                          
                          
                          88,349
                          
                          
                          
                          43,415
                          
                          
                          
                          175,346Accumulated
      other comprehensive earnings
                          
                          
                          371
                          
                          
                          
                          11,504
                          
                          
                          
                          4,096345,839
                          
                          
                          
                          305,685
                          
                          
                          
                          264,875$
                          990,637
                          
                          
                          $
                          1,089,343
                          
                          
                          $
                          816,998
 Commitments
and contingencies (notes 12 and 18)
 The
accompanying notes are an integral part of these consolidated financial
statements.
 
 On
behalf of the Board of Directors,
 /s/
Bernard I.
Ghert                                            /s/
Jay S. Hennick
 Director                                                                Director
 
 Page 6 of
42
 FIRSTSERVICE
CORPORATION
 CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ EQUITY
 (in
thousands of US dollars, except share amounts)
 
 Preferred
      shares
                                                                                                                      
                                                                                                                      
                                                                                                                      Common
      sharesIssued
                                                                                                                        and
      out-
                                                                                                                        standing
                                                                                                                        shares
                                                                                                                        (note
      12)
                                                                                                                      
                                                                                                                      
                                                                                                                      Amount
                                                                                                                      
                                                                                                                      
                                                                                                                      Issued
      and
                                                                                                                        outstanding
                                                                                                                        shares
                                                                                                                        (note
      12)
                                                                                                                      
                                                                                                                      
                                                                                                                      Amount
                                                                                                                      
                                                                                                                      
                                                                                                                      Contri-
                                                                                                                        buted
                                                                                                                        surplus
                                                                                                                      
                                                                                                                      
                                                                                                                      Receivables
                                                                                                                        pursuant
      to
                                                                                                                        share
                                                                                                                        purchase
                                                                                                                        plan
                                                                                                                      
                                                                                                                      
                                                                                                                      Retained
                                                                                                                        earnings
                                                                                                                      
                                                                                                                      
                                                                                                                      Accumulated
                                                                                                                        other
                                                                                                                        comprehen-
                                                                                                                        sive
      earnings
                                                                                                                        (loss)
                                                                                                                      
                                                                                                                      
                                                                                                                      Total
                                                                                                                        shareholders’
                                                                                                                        equityBalance,
      March 31, 2005
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      30,192,788
                                                                                                                      
                                                                                                                      
                                                                                                                      $
                                                                                                                      73,542
                                                                                                                      
                                                                                                                      
                                                                                                                      $
                                                                                                                      805
                                                                                                                      
                                                                                                                      
                                                                                                                      $
                                                                                                                      (2,148
                                                                                                                      )
                                                                                                                      
                                                                                                                      $
                                                                                                                      103,011
                                                                                                                      
                                                                                                                      
                                                                                                                      $
                                                                                                                      10,661
                                                                                                                      
                                                                                                                      
                                                                                                                      $
                                                                                                                      185,871Comprehensive
      earnings:Net earnings
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      69,497
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      69,497Foreign currency
                                                                                                                        translation
      adjustments
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (7,988
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      (7,988
                                                                                                                      )Unrealized
      loss on available for-sale equity securities, net of income taxes of
      $335
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (1,528
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      (1,528
                                                                                                                      )Comprehensive
      earnings
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      59,981Subordinate
      Voting Shares:Stock
      option expense
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      1,380
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      1,380Stock
      options exercised
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      434,650
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      3,740
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (22
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      3,718Purchased
      for cancellation
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (571,650
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      (1,595
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (12,116
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (13,711
                                                                                                                      )Cash
      payments received
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      513
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      513Balance,
      March 31, 2006
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      30,055,788
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      75,687
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      2,163
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (1,635
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      160,392
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      1,145
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      237,752SAB
      108 adjustment (note 22)
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (5,377
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (5,377
                                                                                                                      )Comprehensive
      earnings:Net
      earnings
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      34,863
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      34,863Foreign
      currency
                                                                                                                        translation
      adjustments
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      1,423
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      1,423Reclass
      to earnings of unrealized loss on available-for-sale equity securities,
      net of income taxes of $335
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      1,528
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      1,528Comprehensive
      earnings
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      37,814Subsidiaries’
      equity transactions
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      2,562
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      2,562Subordinate
      Voting Shares:Stock
      option expense
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      1,879
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      1,879Stock
      options exercised
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      564,800
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      6,482
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (47
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      6,435Purchased
      for cancellation
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (697,700
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      (2,061
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (14,532
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (16,593
                                                                                                                      )Cash
      payments received
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      403
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      403Balance,
      March 31, 2007
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      29,922,888
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      80,108
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      6,557
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (1,232
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      175,346
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      4,096
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      264,875
 
 Page 7 of
42
 FIRSTSERVICE
CORPORATION
 CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ EQUITY
 (in
thousands of US dollars, except share amounts)
 
 
 Preferred
      shares
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              Common
      sharesIssued
                                                                                                                                                                                                                                and
      out-
                                                                                                                                                                                                                                standing
                                                                                                                                                                                                                                shares
                                                                                                                                                                                                                                (note
      12)
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              Amount
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              Issued
      and
                                                                                                                                                                                                                                outstanding
                                                                                                                                                                                                                                shares
                                                                                                                                                                                                                                (note
      12)
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              Amount
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              Contri-
                                                                                                                                                                                                                                buted
                                                                                                                                                                                                                                surplus
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              Receivables
                                                                                                                                                                                                                                pursuant
      to
                                                                                                                                                                                                                                share
                                                                                                                                                                                                                                purchase
                                                                                                                                                                                                                                plan
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              Retained
                                                                                                                                                                                                                                earnings
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              Accumulated
                                                                                                                                                                                                                                other
                                                                                                                                                                                                                                comprehen-
                                                                                                                                                                                                                                sive
      earnings
                                                                                                                                                                                                                                (loss)
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              Total
                                                                                                                                                                                                                                shareholders’
                                                                                                                                                                                                                                equityBalance,
      March 31, 2007
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              29,922,888
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              80,108
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              6,557
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (1,232
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              175,346
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              4,096
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              264,875FIN
      48 adjustment (note 14)
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (4,200
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (4,200
                                                                                                                                                                                                                              )Comprehensive
      earnings:Net
      earnings
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              34,399
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              34,399Foreign
      currency
                                                                                                                                                                                                                                translation
      adjustments
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              7,497
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              7,497Unrealized loss on available-for-sale equity securities, net of income
      taxes of $20
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (89
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (89
                                                                                                                                                                                                                              )Comprehensive
      earnings
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              41,807Subsidiaries’
      equity transactions
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              1,634
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              1,634Subordinate
      Voting Shares:Issued
      for purchase of
                                                                                                                                                                                                                                minority
      interest
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              282,649
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              5,868
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              5,868Stock
      option expense
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              2,440
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              3,498
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              5,938Stock
      options exercised
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              159,550
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              1,372
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (198
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              1,174Purchased
      for cancellation
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (252,500
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (869
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (5,701
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (6,570
                                                                                                                                                                                                                              )Cash
      payments received
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              1,644
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              467
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              2,111Stock
      dividend (note 12)
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              5,979,074
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              149,477
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (149,477
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -Preferred
      Shares:
                                                                                                                                                                                                                                Dividends
      (note 12)
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (6,952
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (6,952
                                                                                                                                                                                                                              )Balance,
      March 31, 2008
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              5,979,074
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              149,477
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              30,112,587
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              88,919
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              13,135
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (765
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              43,415
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              11,504
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              305,685Comprehensive
      earnings:Net
      earnings
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              62,036
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              62,036Foreign
      currency
                                                                                                                                                                                                                                translation
      adjustments
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (11,222
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (11,222
                                                                                                                                                                                                                              )Reclass to earnings of unrealized loss on available-for-sale equity
      securities, net of income taxes of $20
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              89
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              89Comprehensive
      earnings
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              50,903Subsidiaries’
      equity transactions
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              11,268
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              11,268Subordinate
      Voting Shares:Issued
      for purchase of
                                                                                                                                                                                                                                minority
      interest
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              23,952
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              263
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              263Stock
      option expense
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              1,723
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              1,723Tax
      benefit on options exercised
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              376
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              376Stock
      options exercised
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              157,245
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              1,388
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (603
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              785Purchased
      for cancellation
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (960,300
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (3,657
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (11,123
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (14,780
                                                                                                                                                                                                                              )Cash
      payments received
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              765
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              765Preferred
      Shares:Purchased
      for cancellation
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (206,800
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (5,170
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              1,781
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (3,389
                                                                                                                                                                                                                              )Dividends
      (note 12)
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (7,760
                                                                                                                                                                                                                              )
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              (7,760
                                                                                                                                                                                                                              )Balance,
      December 31, 2008
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              5,772,274
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              $
                                                                                                                                                                                                                              144,307
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              29,333,484
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              $
                                                                                                                                                                                                                              86,913
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              $
                                                                                                                                                                                                                              25,899
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              $
                                                                                                                                                                                                                              -
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              $
                                                                                                                                                                                                                              88,349
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              $
                                                                                                                                                                                                                              371
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              $
                                                                                                                                                                                                                              345,839
 
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  Page 8 of
42
 FIRSTSERVICE
CORPORATION
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (in thousands of US
dollars)
  Cash
      provided by (used in)
                    
                    Nine
      months ended
                      December
      31,
                    
                    
                    Year
      ended March 31,2008
                    
                    
                    2008
                    
                    
                    2007
                    
                    
                    2006Operating
      activitiesNet
      earnings
                    
                    $
                    62,036
                    
                    
                    $
                    34,399
                    
                    
                    $
                    34,863
                    
                    
                    $
                    69,497Cumulative
      effect of change in accounting principle
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,353
                    
                    
                    
                    -Net
      (earnings) loss from discontinued operations
                    
                    
                    (50,528
                    )
                    
                    
                    1,075
                    
                    
                    
                    (1,253
                    )
                    
                    
                    (42,740
                    )Items
      not affecting cash:Depreciation
      and amortization
                    
                    
                    31,746
                    
                    
                    
                    37,673
                    
                    
                    
                    26,022
                    
                    
                    
                    20,921Deferred
      income taxes
                    
                    
                    10,125
                    
                    
                    
                    (19,860
                    )
                    
                    
                    (7,142
                    )
                    
                    
                    (3,970
                    )Minority
      interest share of earnings
                    
                    
                    14,519
                    
                    
                    
                    16,803
                    
                    
                    
                    15,282
                    
                    
                    
                    11,778Stock
      option expense
                    
                    
                    1,620
                    
                    
                    
                    7,446
                    
                    
                    
                    3,707
                    
                    
                    
                    1,932Impairment
      loss on available-for-sale securities
                    
                    
                    14,680
                    
                    
                    
                    -
                    
                    
                    
                    3,139
                    
                    
                    
                    -Other
                    
                    
                    822
                    
                    
                    
                    2,446
                    
                    
                    
                    (1,036
                    )
                    
                    
                    716Incremental
      tax benefit on stock options exercised
                    
                    
                    (5,184
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Changes
      in operating assets and liabilities:Accounts
      receivable
                    
                    
                    16,584
                    
                    
                    
                    (23,222
                    )
                    
                    
                    (14,116
                    )
                    
                    
                    (12,664
                    )Inventories
                    
                    
                    (61
                    )
                    
                    
                    (915
                    )
                    
                    
                    (3,022
                    )
                    
                    
                    (3,124
                    )Prepaid
      expenses and other assets
                    
                    
                    1,397
                    
                    
                    
                    (3,431
                    )
                    
                    
                    (1,459
                    )
                    
                    
                    (2,658
                    )Accounts
      payable
                    
                    
                    13,144
                    
                    
                    
                    1,058
                    
                    
                    
                    (9,932
                    )
                    
                    
                    7,425Accrued
      liabilities
                    
                    
                    (55,268
                    )
                    
                    
                    23,409
                    
                    
                    
                    28,912
                    
                    
                    
                    13,531Income
      taxes
                    
                    
                    1,858
                    
                    
                    
                    (22,095
                    )
                    
                    
                    (6,612
                    )
                    
                    
                    (5,047
                    )Unearned
      revenues
                    
                    
                    (917
                    )
                    
                    
                    3,994
                    
                    
                    
                    293
                    
                    
                    
                    190Other
      liabilities
                    
                    
                    11,622
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Discontinued
      operations
                    
                    
                    (1,815
                    )
                    
                    
                    (1,610
                    )
                    
                    
                    (9,209
                    )
                    
                    
                    3,562Net
      cash provided by operating activities
                    
                    
                    66,380
                    
                    
                    
                    57,170
                    
                    
                    
                    59,790
                    
                    
                    
                    59,349Investing
      activitiesAcquisitions
      of businesses, net of cash acquired
                    
                    
                    (36,494
                    )
                    
                    
                    (152,529
                    )
                    
                    
                    (66,617
                    )
                    
                    
                    (14,105
                    )Purchases
      of minority shareholders’ interests in subsidiaries
                    
                    
                    (38,463
                    )
                    
                    
                    (6,773
                    )
                    
                    
                    (6,437
                    )
                    
                    
                    (11,625
                    )Sales
      of interests in subsidiaries to minority shareholders
                    
                    
                    168
                    
                    
                    
                    3,294
                    
                    
                    
                    3,167
                    
                    
                    
                    -Purchases
      of fixed assets
                    
                    
                    (14,719
                    )
                    
                    
                    (31,624
                    )
                    
                    
                    (25,095
                    )
                    
                    
                    (16,242
                    )Proceeds
      on sale of equity securities
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    4,875
                    
                    
                    
                    -Changes
      in restricted cash
                    
                    
                    (1,381
                    )
                    
                    
                    8,071
                    
                    
                    
                    (9,797
                    )
                    
                    
                    -Other
      investing activities
                    
                    
                    (2,679
                    )
                    
                    
                    3,790
                    
                    
                    
                    (78
                    )
                    
                    
                    (383
                    )Discontinued
      operations
                    
                    
                    153,682
                    
                    
                    
                    (3,794
                    )
                    
                    
                    (2,163
                    )
                    
                    
                    98,837Net
      cash provided by (used in) investing activities
                    
                    
                    60,114
                    
                    
                    
                    (179,565
                    )
                    
                    
                    (102,145
                    )
                    
                    
                    56,482Financing
      activitiesIncrease
      in long-term debt
                    
                    
                    89,238
                    
                    
                    
                    206,924
                    
                    
                    
                    5,935
                    
                    
                    
                    102,614Repayment
      of long-term debt
                    
                    
                    (180,033
                    )
                    
                    
                    (87,386
                    )
                    
                    
                    (21,430
                    )
                    
                    
                    (74,100
                    )Financing
      fees paid
                    
                    
                    -
                    
                    
                    
                    (544
                    )
                    
                    
                    (150
                    )
                    
                    
                    (1,396
                    )Proceeds
      received on exercise of stock options
                    
                    
                    785
                    
                    
                    
                    1,174
                    
                    
                    
                    6,435
                    
                    
                    
                    3,740Incremental
      tax benefit on stock options exercised
                    
                    
                    5,184
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Repurchase
      of Subordinate Voting Shares
                    
                    
                    (14,780
                    )
                    
                    
                    (6,570
                    )
                    
                    
                    (16,593
                    )
                    
                    
                    (13,711
                    )Repurchase
      of Preferred Shares
                    
                    
                    (3,389
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Collection
      of receivables pursuant to share purchase plan
                    
                    
                    765
                    
                    
                    
                    467
                    
                    
                    
                    403
                    
                    
                    
                    513Capital
      contributions
                    
                    
                    -
                    
                    
                    
                    1,644
                    
                    
                    
                    -
                    
                    
                    
                    -Dividends
      paid to preferred shareholders
                    
                    
                    (7,760
                    )
                    
                    
                    (6,952
                    )
                    
                    
                    -
                    
                    
                    
                    -Distributions
      paid to minority shareholders of subsidiaries
                    
                    
                    (11,379
                    )
                    
                    
                    (6,878
                    )
                    
                    
                    (3,296
                    )
                    
                    
                    (1,939
                    )Discontinued
      operations
                    
                    
                    -
                    
                    
                    
                    (5,184
                    )
                    
                    
                    4,904
                    
                    
                    
                    -Net
      cash (used in) provided by financing activities
                    
                    
                    (121,369
                    )
                    
                    
                    96,695
                    
                    
                    
                    (23,792
                    )
                    
                    
                    15,721Effect
      of exchange rate changes on cash and cash equivalents
                    
                    
                    (5,742
                    )
                    
                    
                    2,196
                    
                    
                    
                    2,379
                    
                    
                    
                    (1,072
                    )(Decrease)
      increase in cash and cash equivalents during the period
                    
                    
                    (617
                    )
                    
                    
                    (23,504
                    )
                    
                    
                    (63,768
                    )
                    
                    
                    130,480Cash
      and cash equivalents, beginning of period
                    
                    $
                    75,371
                    
                    
                    $
                    97,191
                    
                    
                    $
                    164,407
                    
                    
                    $
                    30,511Amount
      held by discontinued operations
                    
                    
                    5,295
                    
                    
                    
                    6,979
                    
                    
                    
                    3,531
                    
                    
                    
                    6,94780,666
                    
                    
                    
                    104,170
                    
                    
                    
                    167,938
                    
                    
                    
                    37,458Cash
      and cash equivalents, end of period
                    
                    $
                    79,642
                    
                    
                    $
                    75,371
                    
                    
                    $
                    97,191
                    
                    
                    $
                    164,407Amount
      held by discontinued operations
                    
                    
                    407
                    
                    
                    
                    5,295
                    
                    
                    
                    6,979
                    
                    
                    
                    3,53180,049
                    
                    
                    
                    80,666
                    
                    
                    
                    104,170
                    
                    
                    
                    167,938
 The
accompanying notes are an integral part of these consolidated financial
statements.
 
 Page 9 of
42
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 (in
thousands of US dollars, except share and per share amounts)
 
 1.
            Description
      of the business
 
 FirstService
Corporation (the “Company”) is a provider of real estate-related services to
commercial, institutional and residential customers in North America and various
countries around the world.  The Company’s operations are conducted in
three segments: Commercial Real Estate Services, Residential Property Management
and Property Services.  As described in note 4, the Company reported
two former segments in discontinued operations: (i) Integrated Security Services
segment, which was sold on July 1, 2008 and (ii) Business Services segment,
which was disposed in March 2006.
 
 On May
14, 2008, the Company’s Board of Directors approved a change in the Company’s
fiscal year-end from March 31 to December 31.  Accordingly, these
consolidated financial statements have been prepared for the nine-month period
ended December 31, 2008.  See note 21 for unaudited comparative
prior period results for the nine-month period.
 
 2.
            Summary
      of significant accounting policies
 
 The
preparation of consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and
expenses during the reporting period.  The most significant estimates
are related to the fair value determination of assets acquired and liabilities
assumed in business combinations, impairment testing of fair values of goodwill
and intangible assets, the collectibility of accounts receivable and
determination of deferred income taxes.  Actual results could be
materially different from these estimates.  Significant accounting
policies are summarized as follows:
 
 Basis
of consolidation
 The
consolidated financial statements include the accounts of the Company, its
majority-owned subsidiaries and those variable interest entities where the
Company is the primary beneficiary.  Where the Company does not have a
controlling interest but has the intent and ability to exert significant
influence, the equity method is used.  Inter-company transactions and
accounts are eliminated on consolidation.
 
 Cash
and cash equivalents
 Cash
equivalents consist of short term interest-bearing securities, which are readily
convertible into cash and have original maturities at the date of purchase of
three months or less.
 
 Restricted
cash
 Restricted
cash consists of cash and cash equivalents over which the Company has legal
ownership but is restricted as to its availability or intended use, including
funds restricted by statutory deposit requirements and funds held on behalf of
clients.
 
 Inventories
 Inventories
are carried at the lower of cost and net realizable value.  Cost is
determined by the weighted average or first in, first out methods.
 
 Page 10
of 42
 Fixed
assets
 Fixed
assets are carried at cost less accumulated depreciation.  The costs
of additions and improvements are capitalized, while maintenance and repairs are
expensed as incurred.  Fixed assets are depreciated over their
estimated useful lives as follows:
 
 Buildings
                  20
      to 40 years straight-lineVehicles
                  3
      to 5 years straight-lineFurniture
      and equipment
                  3
      to 10 years straight-lineComputer
      equipment and software
                  3
      to 5 years straight-lineLeasehold
      improvements
                  term
      of the lease to a maximum of 10
years
 Investments in securities
 The
Company classifies investments in securities as a component of other
assets.  Investments in available-for-sale marketable equity
securities are carried at fair value with unrealized gains and losses included
in other comprehensive earnings on an after-tax
basis.  Other-than-temporary impairment losses are recorded in current
period earnings.  Investments in held-to-maturity marketable debt
securities are carried at amortized cost and are subject to impairment
testing.  Investments in other equity securities are accounted for
using the equity method or cost method, as applicable, and are subject to
impairment testing.  Realized gains or losses and equity earnings or
losses are recorded in other income.
 
 Fair
value
 On April
1, 2008, the Company adopted Statement of Financial Accounting Standards No.
157, Fair Value
Measurements (“SFAS 157”).  SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements.  SFAS 157 applies under other accounting
pronouncements that require or permit fair value measurements.  As a
result of FASB Staff Position No. 157-2, the application of SFAS 157 is delayed
to January 1, 2009 for all non-financial assets and liabilities that are
recognized or disclosed at fair value on a non-recurring basis.
 
 The
adoption of SFAS 157 did not have a material effect on the Company’s results of
operations or financial position, however additional disclosures are now
required (see note 17).  Financial assets and liabilities are measured
using inputs from the three levels of the fair value hierarchy.  A
financial asset or liability’s classification within the hierarchy is determined
based on the lowest level input that is significant to the fair value
measurement.  The three levels are as follows:
 
 Level 1 –
Quoted prices (unadjusted) in active markets for identical assets or
liabilities
 Level 2 –
Observable market-based inputs other than quoted prices in active markets for
identical assets or liabilities
 Level 3 –
Unobservable inputs
 
 Financing
fees
 Financing
fees related to the revolving credit facility and Senior Notes are deferred and
amortized to interest expense using the effective interest method.
 
 Goodwill
and intangible assets
 Goodwill
represents the excess of purchase price over the fair value of assets acquired
and liabilities assumed in a business combination and is not subject to
amortization.
 
 Intangible
assets are recorded at cost and, where lives are finite, are amortized over
their estimated useful lives as follows:
 
 Customer
      lists and relationships
                    straight-line
      over 4 to 25 yearsFranchise
      rights
                    by
      pattern of use, currently estimated at 2.5% to 15% per
  yearTrademarks
      and trade names:Indefinite
      life
                    not
      amortized
 
 Page 11
of 42
 Finite
      life
                    straight-line
      over 15 to 35 yearsManagement
      contracts and other
                    straight-line
      over life of contract ranging from 2 to 15 yearsBrokerage
      backlog
                    as
      underlying brokerage transactions are
completed
 
 The
Company reviews the carrying value of finite life intangible assets for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset group may not be recoverable from the estimated
future cash flows expected to result from their use and eventual
disposition.  If the sum of the undiscounted expected future cash
flows is less than the carrying amount of the asset group, an impairment loss is
recognized.  Measurement of the impairment loss is based on the excess
of the carrying amount of the asset group over the fair value calculated using
discounted expected future cash flows.
 
 Goodwill
and indefinite life intangible assets are tested for impairment annually or more
frequently if events or changes in circumstances indicate the asset might be
impaired, in which case the carrying amount of the asset is written down to fair
value.  Impairment of goodwill is tested at the reporting unit level
by comparing the reporting unit’s carrying amount, including goodwill, to the
fair value of the reporting unit.  The fair values of the reporting
units are estimated using a discounted cash flow approach.  If the
carrying amount of the reporting unit exceeds its fair value, then a second step
is performed to measure the amount of impairment loss, if
any.  Impairment of indefinite life intangible assets is tested by
comparing the carrying amount to fair value on an individual intangible asset
basis.
 
 Revenue
recognition and unearned revenue
 Real
estate brokerage operations
 Commission
revenues from sales brokerage transactions are recognized at the time the
service has been provided and the commission becomes legally due, except when
future contingencies exist.  In most cases, close of escrow or
transfer of title is a future contingency, and accordingly revenue recognition
is deferred until this contingency is satisfied.
 
 Commission
revenues from real estate leasing are recognized once obligations under the
commission arrangement are satisfied.  Terms and conditions of a
commission arrangement generally include execution of the lease agreement and
satisfaction of future contingencies such as tenant occupancy.  In
most cases, a portion of the commission is earned upon execution of the lease
agreement, with the remaining portion contingent on a future event, typically
tenant occupancy; revenue recognition for the remaining portion is deferred
until all contingencies are satisfied.
 
 (b)  Franchisor
operations
 The
Company operates several franchise systems within its Property Services
segment.  Initial franchise fees are recognized when all material
services or conditions related to the sale of the franchise have been performed
or satisfied.  Royalty revenues are recognized based on a contracted
percentage of franchisee revenues, as reported by the
franchisees.  Revenues from administrative and other support services,
as applicable, are recognized as the services are provided.
 
 (c) Service
operations other than real estate brokerage and franchisor
operations
 Revenues
are recognized at the time the service is rendered or the product is
shipped.  Revenues from painting, restoration and real estate project
management and appraisal projects in process are recognized on the percentage of
completion method, generally in the ratio of actual costs to total estimated
contract costs.  In cases where anticipated costs to complete a
project exceed the revenue to be recognized, a provision for the additional
estimated losses is recorded in the period when the loss becomes apparent.
  Page 12
of 42
 Amounts
received from customers in advance of services being provided are recorded as
unearned revenues when received.
 
 Stock
based compensation
 On April
1, 2006, the Company adopted SFAS No. 123R, Share Based Payment, (“SFAS
123R”) using the modified prospective approach.  The aggregate
cumulative effect of the change in accounting principle upon adoption of this
standard, net of income taxes of nil, was $1,353.
 
 SFAS 123R
requires that, for equity classified awards, compensation cost is measured at
the grant date based on the estimated fair value of the award.  The
related stock option compensation expense is allocated using the graded
attribution method.  For liability classified awards, the fair value
of the award is measured each period it is outstanding and changes in fair value
are recorded as compensation expense.
 
 Notional
value appreciation plans
 Under
these plans, subsidiary employees are compensated if the notional value of the
subsidiary increases.  Awards under these plans generally have a ten
year term and vest after five years.  The increase in notional value
is calculated with reference to growth in earnings relative to a fixed threshold
amount plus or minus changes in indebtedness relative to a fixed opening
amount.  The calculation is designed to motivate and reward employees
to grow earnings and repay indebtedness and is not measured by or linked to the
growth in fair value of the subsidiary’s stock.  If an award is
subject to a vesting condition, then graded attribution is applied to the
intrinsic value.  The related compensation expense is recorded in the
consolidated statement of earnings and the liability is recorded in accrued
liabilities on the consolidated balance sheet.
 
 Foreign
currency translation
 Assets,
liabilities and operations of foreign subsidiaries are recorded based on the
functional currency of each entity.  For certain foreign operations,
the functional currency is the local currency, in which case the assets,
liabilities and operations are translated at current exchange rates from the
local currency to the reporting currency, the US dollar.  The
resulting unrealized gains or losses are reported as a component of cumulative
other comprehensive earnings.  Realized and unrealized foreign
currency gains or losses related to any foreign dollar denominated monetary
assets and liabilities are included in net earnings.
 
 Income
taxes
 Income
taxes have been provided using the liability method whereby deferred income tax
assets and liabilities are recognized for the expected future income tax
consequences of events that have been recognized in the consolidated financial
statements or income tax returns.  Deferred income tax assets and
liabilities are measured using enacted income tax rates expected to apply to
taxable income in the years in which temporary differences are expected to be
recovered or settled.  The effect on deferred income tax assets and
liabilities of a change in income tax rates is recognized in earnings in the
period in which the change occurs.  A valuation allowance is recorded
unless it is more likely than not that realization of a deferred income tax
asset will occur.
 
 Income
taxes are not provided on the unremitted earnings of US and foreign subsidiaries
because it has been the practice and is the intention of the Company to reinvest
these earnings indefinitely in these subsidiaries.
 
 On April
1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes, an interpretation of SFAS 109, (“FIN 48”) which clarifies the
accounting and reporting for uncertainties in income tax law (see note
14).  In
  Page 13
of 42
 accordance
with FIN 48, the Company classifies interest and penalties associated with
income tax positions in income tax expense.
 
 Prior
period comparative information
 In prior
periods, earned but unbilled revenues related to staffing services were
classified within inventory.  These amounts are classified within
accounts receivable as at December 31, 2008.  Comparative figures have
been adjusted for this classification change in the amounts of $9,340 as of
March 31, 2008 (March 31, 2007 - $5,169).
 
 
 3.
            Acquisitions
 
 Nine
months ended December 31, 2008 acquisitions:
 The
Company completed six individually insignificant acquisitions across the three
operating segments during the nine-month period ended December 31,
2008.  The Company acquired minority interests from shareholders in
all operating segments.
 
 Certain
of the purchase price allocations for these acquisitions are preliminary pending
finalization of analyses of the assets acquired and liabilities
assumed.  Details of these acquisitions are as follows:
 
 Nine
      months ended
                                                December
      31, 2008Aggregate
                                                acquisitions
                                              
                                              
                                              Purchases
      of
                                                minority
                                                shareholders’
                                                interestsCurrent
      assets
                                              
                                              $
                                              7,897
                                              
                                              
                                              $
                                              -Long-term
      assets
                                              
                                              
                                              286
                                              
                                              
                                              
                                              619Current
      liabilities
                                              
                                              
                                              (3,919
                                              )
                                              
                                              
                                              -Long-term
      liabilities
                                              
                                              
                                              (1,901
                                              )
                                              
                                              
                                              (5,447
                                              )Minority
      interest
                                              
                                              
                                              (2,472
                                              )
                                              
                                              
                                              8,398(109
                                              )
                                              
                                              
                                              3,570Subordinate
      Voting Share
                                                consideration
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              263Cash
      consideration
                                              
                                              $
                                              31,760
                                              
                                              
                                              $
                                              38,463Acquired
      intangible assets
                                              
                                              
                                              13,652
                                              
                                              
                                              
                                              17,149Goodwill
                                              
                                              
                                              18,217
                                              
                                              
                                              
                                              18,007
 
 
 Year
ended March 31, 2008 acquisitions:
 On
October 1, 2007, the Company acquired 80% of the shares of Field Asset Services,
Inc., a provider of property services to foreclosed residential properties on
behalf of its financial institution clients, headquartered in Austin,
Texas.  The Company also completed 14 individually insignificant
acquisitions in its Commercial Real Estate Services, Residential Property
Management and Property Services segments during the year ended March 31,
2008.  The Company acquired minority interests from shareholders in
all operating segments.
 
 Page 14
of 42
 Details
of the initial acquisition allocations are as follows:
 Year
      ended March 31, 2008Field
      Asset
                                                                              Services,
      Inc.
                                                                            
                                                                            
                                                                            Aggregate
      other
                                                                              acquisitions
                                                                            
                                                                            
                                                                            Purchases
      of
                                                                              minority
                                                                              shareholders’
                                                                              interestsCurrent
      assets
                                                                            
                                                                            $
                                                                            9,012
                                                                            
                                                                            
                                                                            $
                                                                            26,894
                                                                            
                                                                            
                                                                            $
                                                                            92Long-term
      assets
                                                                            
                                                                            
                                                                            564
                                                                            
                                                                            
                                                                            
                                                                            9,052
                                                                            
                                                                            
                                                                            
                                                                            (695
                                                                            )Current
      liabilities
                                                                            
                                                                            
                                                                            (10,855
                                                                            )
                                                                            
                                                                            
                                                                            (41,135
                                                                            )
                                                                            
                                                                            
                                                                            (276
                                                                            )Long-term
      liabilities
                                                                            
                                                                            
                                                                            -
                                                                            
                                                                            
                                                                            
                                                                            (16,880
                                                                            )
                                                                            
                                                                            
                                                                            (2,321
                                                                            )Minority
      interest
                                                                            
                                                                            
                                                                            (89
                                                                            )
                                                                            
                                                                            
                                                                            (3,109
                                                                            )
                                                                            
                                                                            
                                                                            4,253(1,368
                                                                            )
                                                                            
                                                                            
                                                                            (25,178
                                                                            )
                                                                            
                                                                            
                                                                            1,053Subordinate
      Voting Share
                                                                              consideration
                                                                            
                                                                            $
                                                                            -
                                                                            
                                                                            
                                                                            $
                                                                            -
                                                                            
                                                                            
                                                                            $
                                                                            5,868Cash
      consideration
                                                                            
                                                                            $
                                                                            43,337
                                                                            
                                                                            
                                                                            $
                                                                            102,226
                                                                            
                                                                            
                                                                            $
                                                                            6,773Acquired
      intangible assets
                                                                            
                                                                            
                                                                            22,080
                                                                            
                                                                            
                                                                            
                                                                            59,277
                                                                            
                                                                            
                                                                            
                                                                            6,069Goodwill
                                                                            
                                                                            
                                                                            22,625
                                                                            
                                                                            
                                                                            
                                                                            68,127
                                                                            
                                                                            
                                                                            
                                                                            5,519
 
 
 Year
ended March 31, 2007 acquisitions:
 On May
19, 2006, the Company acquired all of the shares of PRDnationwide Group, a
commercial real estate services business headquartered in Brisbane,
Australia.  The Company also completed 12 individually insignificant
acquisitions in all three operating segments during the year ended March 31,
2007.  The Company also acquired minority interests from shareholders
in all segments, but primarily in Commercial Real Estate Services.
 
 Details
of the initial acquisition allocations are as follows:
 Year
      ended March 31, 2007PRDnationwide
                                                                            Group
                                                                          
                                                                          
                                                                          Aggregate
      other
                                                                            acquisitions
                                                                          
                                                                          
                                                                          Purchases
      of
                                                                            minority
                                                                            shareholders’
                                                                            interestsCurrent
      assets
                                                                          
                                                                          $
                                                                          2,134
                                                                          
                                                                          
                                                                          $
                                                                          16,390
                                                                          
                                                                          
                                                                          $
                                                                          -Long-term
      assets
                                                                          
                                                                          
                                                                          2,627
                                                                          
                                                                          
                                                                          
                                                                          22,162
                                                                          
                                                                          
                                                                          
                                                                          (1,561
                                                                          )Current
      liabilities
                                                                          
                                                                          
                                                                          (4,796
                                                                          )
                                                                          
                                                                          
                                                                          (34,096
                                                                          )
                                                                          
                                                                          
                                                                          201Long-term
      liabilities
                                                                          
                                                                          
                                                                          (4,892
                                                                          )
                                                                          
                                                                          
                                                                          (7,074
                                                                          )
                                                                          
                                                                          
                                                                          (48
                                                                          )Minority
      interest
                                                                          
                                                                          
                                                                          (223
                                                                          )
                                                                          
                                                                          
                                                                          (6,200
                                                                          )
                                                                          
                                                                          
                                                                          645(5,150
                                                                          )
                                                                          
                                                                          
                                                                          (8,818
                                                                          )
                                                                          
                                                                          
                                                                          (763
                                                                          )Note
      consideration
                                                                          
                                                                          $
                                                                          -
                                                                          
                                                                          
                                                                          $
                                                                          2,522
                                                                          
                                                                          
                                                                          $
                                                                          1,044Cash
      consideration
                                                                          
                                                                          $
                                                                          21,475
                                                                          
                                                                          
                                                                          $
                                                                          43,604
                                                                          
                                                                          
                                                                          $
                                                                          6,603Acquired
      intangible assets
                                                                          
                                                                          
                                                                          9,519
                                                                          
                                                                          
                                                                          
                                                                          29,156
                                                                          
                                                                          
                                                                          
                                                                          2,376Goodwill
                                                                          
                                                                          
                                                                          17,106
                                                                          
                                                                          
                                                                          
                                                                          25,788
                                                                          
                                                                          
                                                                          
                                                                          6,034
 
 
 Year
ended March 31, 2006 acquisitions:
 During
the year ended March 31, 2006, the Company completed six individually
insignificant acquisitions in all three operating segments.  The
Company also acquired minority interests from shareholders in all
segments.
 
 Page 15
of 42
 Details
of the initial acquisition allocations are as follows:
  Year
      ended March 31, 2006Aggregate
                                                              acquisitions
                                                            
                                                            
                                                            Purchases
      of
                                                              minority
                                                              shareholders’
                                                              interestsCurrent
      assets
                                                            
                                                            $
                                                            5,915
                                                            
                                                            
                                                            $
                                                            -Long-term
      assets
                                                            
                                                            
                                                            2,257
                                                            
                                                            
                                                            
                                                            -Current
      liabilities
                                                            
                                                            
                                                            (11,931
                                                            )
                                                            
                                                            
                                                            -Long-term
      liabilities
                                                            
                                                            
                                                            (5,899
                                                            )
                                                            
                                                            
                                                            (2,254
                                                            )Minority
      interest
                                                            
                                                            
                                                            (840
                                                            )
                                                            
                                                            
                                                            2,679(10,498
                                                            )
                                                            
                                                            
                                                            425Note
      consideration
                                                            
                                                            $
                                                            3,050
                                                            
                                                            
                                                            $
                                                            -Cash
      consideration
                                                            
                                                            $
                                                            11,346
                                                            
                                                            
                                                            $
                                                            11,998Acquired
      intangible assets
                                                            
                                                            
                                                            14,854
                                                            
                                                            
                                                            
                                                            6,213Goodwill
                                                            
                                                            
                                                            10,040
                                                            
                                                            
                                                            
                                                            5,360
 
 The
purchase prices of acquisitions resulted in the recognition of
goodwill.  The primary factors contributing to goodwill are assembled
workforces, synergies with existing operations and future growth
prospects.  For acquisitions completed during the nine-month period
ended December 31, 2008, goodwill in the amount of $9,575 is deductible for
income tax purposes (year ended March 31, 2008 - $49,410; year ended March 31,
2007 - $6,814; year ended March 31, 2006 - nil).
 
 Certain
vendors, at the time of acquisition, are entitled to receive contingent
consideration if the acquired businesses achieve specified earnings levels
during the one- to four-year periods following the dates of
acquisition.  Such contingent consideration is paid in cash at the
expiration of the contingency period.  As at December 31, 2008, there
was contingent consideration outstanding of up to $51,800 (March 31, 2008 -
$53,600; March 31, 2007 - $14,800).  The contingencies will expire
during the period extending to February 2012.  The contingent
consideration is recorded when the contingencies are resolved and the
consideration is paid or becomes payable, at which time the Company records the
fair value of the consideration paid or payable, including interest, if any, as
additional costs of the acquired businesses.  Total contingent
consideration recognized for the nine-month period ended December 31, 2008 was
$10,242, net of income tax of nil (year ended March 31, 2008 - $2,864, net of
income tax of $1; year ended March 31, 2007 - $5,732, net of income tax of $342;
year ended March 31, 2006 - $2,759 net of income tax of
$90).  Contingent consideration paid during the nine-month period
ended December 31, 2008 was $4,734 (year ended March 31, 2008 - $6,848; year
ended March 31, 2007 - $1,747) and the amount payable as at December 31, 2008
was $5,508 (March 31, 2008 - nil; March 31, 2007 - $4,306); see note
6.
 
 The
acquisitions referred to above were accounted for by the purchase method of
accounting for business combinations. Accordingly, the accompanying consolidated
statements of earnings do not include any revenues or expenses related to these
acquisitions prior to their respective closing dates.  The
consideration for the acquisitions during the nine-month period ended December
31, 2008 was financed from cash on hand and borrowings on the Company’s
revolving credit facility.
 
 Following
are the Company’s unaudited consolidated pro forma results assuming the
acquisitions occurred on the first day of the period of
acquisition.  The year immediately prior to the period of acquisition
also includes the pro forma results of the acquisitions.
 
 Page 16
of 42
 (unaudited)
                    
                    Nine
      months ended
                      December
      31,
                      2008
                    
                    
                    Year
      ended
                      March
      31,
                      2008Pro
      forma revenues
                    
                    $
                    1,356,153
                    
                    
                    $
                    1,761,163Pro
      forma net earnings from continuing operations
                    
                    
                    12,587
                    
                    
                    
                    41,198Pro
      forma net earnings per share from continuing operationsBasic
                    
                    $
                    0.16
                    
                    
                    $
                    1.15Diluted
                    
                    
                    0.14
                    
                    
                    
                    1.07
 
 These
unaudited consolidated pro forma results have been prepared for illustrative
purposes only and do not purport to be indicative of results of operations that
would have actually resulted had the combinations been in effect at the
beginning of each period or of future results of operations.
 
 4.
            Dispositions
 
 On July
1, 2008, the Company completed the sale of the businesses comprising its
Integrated Security Services (“ISS”) segment.  As a condition to
closing, the Company was required to acquire the minority interests of its
non-wholly owned ISS subsidiaries.  The Company received aggregate
cash consideration of $162,385 ($155,031 net of cash sold).  The
pre-tax gain on the disposal was $80,497, before current income taxes of
$10,788, resulting in a net gain of $69,709.  The net gain on disposal
included the realization of a gain of $6,792 related to cumulative foreign
currency translation.  The ISS segment has been reported as
discontinued operations for all periods presented.
 
 In
December 2008, the Company decided to sell its Chicago-based US mortgage
brokerage and servicing operation (“USMB”) due to adverse credit market
conditions.  USMB was previously reported within the Commercial Real
Estate Services segment.  USMB is classified as held for sale as of
December 31, 2008, and its operating results are reported as discontinued
operations for all periods presented.  The Company wrote the net
assets of USMB down to fair value less cost to sell as of December 31, 2008,
with a loss in the amount of $11,021, which included a deferred income tax
valuation allowance of $1,501.
 
 In
January 2008, the Company decided to exit its Canadian commercial mortgage
securitization operation (“CCMS”) due to adverse credit market
conditions.  CCMS was previously reported within the Commercial Real
Estate Services segment.  The exit was complete as of March 31, 2008
except for the disposal of the remaining mortgage loans receivable and related
taxes and interest rate derivative contracts.  The mortgage assets are
expected to be sold as soon as practicable.  This operation has been
reported as discontinued operations for all periods presented.
 
 On March
17, 2006, the Company sold its 88.3% interest in Resolve Corporation
(“Resolve”), its Business Services segment, to a subsidiary of Resolve Business
Outsourcing Income Fund (“RBO Fund”) upon the initial public offering of RBO
Fund.  The Company received aggregate consideration of $137,393,
comprised of $116,972 in the form of cash ($110,476 net of cash sold) and
$20,421 in the form of equity securities of a subsidiary of RBO Fund, which are
exchangeable for publicly traded units of RBO Fund.  These securities
are classified as available-for-sale (note 7).  The pre-tax gain on
the disposal was $44,082, before current income taxes of $4,693 and deferred
income taxes of $3,570, resulting in a net gain of $35,819.  The net
gain on disposal included the realization of a gain of $5,487 related to
cumulative foreign currency translation.  Resolve is reported as
discontinued operations for all periods presented.
 
 During
the year ended March 31, 2008, a gain was recognized in connection with the
settlement of a liability related to the Resolve disposal.  The
settlement resulted in a cash
  Page 17
of 42
 payment
to the purchaser of the disposed operation in the amount of $1,036 and a gain on
settlement in the amount of $2,265 (including an income tax benefit of
$187).
 
 The
operating results of the discontinued operations are as follows:
 
 Operating
      results
                                                                                                        
                                                                                                        Nine
      months
                                                                                                          ended
                                                                                                          December
      31,
                                                                                                        
                                                                                                        
                                                                                                        Year
      ended March 31,2008
                                                                                                        
                                                                                                        
                                                                                                        2008
                                                                                                        
                                                                                                        
                                                                                                        2007
                                                                                                        
                                                                                                        
                                                                                                        2006RevenuesISS
                                                                                                        
                                                                                                        $
                                                                                                        47,158
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        208,430
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        176,475
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        149,064USMB
                                                                                                        
                                                                                                        
                                                                                                        8,840
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        23,502
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        28,169
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        -CCMS
                                                                                                        
                                                                                                        
                                                                                                        (6,407
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (9,064
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        2,221
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        402Resolve
                                                                                                        
                                                                                                        
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        160,20449,591
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        222,868
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        206,865
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        309,670Operating
      earnings (loss) before income taxesISS
                                                                                                        
                                                                                                        $
                                                                                                        1,595
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        10,174
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        5,337
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        3,217USMB
                                                                                                        
                                                                                                        
                                                                                                        (5,566
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (3,322
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (1,038
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        -CCMS
                                                                                                        
                                                                                                        
                                                                                                        (5,651
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (11,413
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (1,205
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (816
                                                                                                        )Resolve
                                                                                                        
                                                                                                        
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        2,078
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        (728
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        7,429(9,622
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (2,483
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        2,366
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        9,830(Recovery
      of) provision for income taxes
                                                                                                        
                                                                                                        
                                                                                                        (1,462
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (1,408
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        1,113
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        2,909Net
      operating (loss) earnings from discontinued operations
                                                                                                        
                                                                                                        
                                                                                                        (8,160
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (1,075
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        1,253
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        6,921Net
      gain on disposal
                                                                                                        
                                                                                                        
                                                                                                        69,709
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        35,819Net
      loss on write down of USMB
                                                                                                        
                                                                                                        
                                                                                                        (11,021
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        -Net
      earnings (loss) from discontinued operations
                                                                                                        
                                                                                                        $
                                                                                                        50,528
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        (1,075
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        1,253
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        42,740Net
      earnings (loss) per share from discontinued operationsBasic
                                                                                                        
                                                                                                        $
                                                                                                        1.71
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        (0.03
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        0.04
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        1.41Diluted
                                                                                                        
                                                                                                        
                                                                                                        1.70
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        (0.04
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        0.04
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        1.38
 
 The
assets and liabilities of ISS are classified as held for sale and are as
follows:
 
 Balance
      sheets
                                                    
                                                    December
      31,
                                                      2008
                                                    
                                                    
                                                    March
      31,
                                                      2008
                                                    
                                                    
                                                    March
      31,
                                                      2007Assets
      held for saleCash
      and cash equivalents
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    3,834
                                                    
                                                    
                                                    $
                                                    1,210Accounts
      receivable, net
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    46,937
                                                    
                                                    
                                                    
                                                    38,900Inventories
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    15,164
                                                    
                                                    
                                                    
                                                    16,475Prepaid
      expenses and other current assets
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    856
                                                    
                                                    
                                                    
                                                    1,158Fixed
      assets
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    5,153
                                                    
                                                    
                                                    
                                                    4,500Goodwill
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    30,630
                                                    
                                                    
                                                    
                                                    30,784Other
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    2,671
                                                    
                                                    
                                                    
                                                    2,272Total
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    105,245
                                                    
                                                    
                                                    $
                                                    95,299Liabilities
      held for saleBank
      overdraft
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    5,132Accounts
      payable
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    11,765
                                                    
                                                    
                                                    
                                                    6,516Accrued
      liabilities
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    18,048
                                                    
                                                    
                                                    
                                                    15,139Unearned
      revenues
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    3,585
                                                    
                                                    
                                                    
                                                    3,001Other
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    472
                                                    
                                                    
                                                    
                                                    18Total
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    33,870
                                                    
                                                    
                                                    $
                                                    29,806
 
 Page 18
of 42
 The
assets and liabilities of USMB are classified as held for sale and are as
follows:
 
 Balance
      sheets
                                                    
                                                    December
      31,
                                                      2008
                                                    
                                                    
                                                    March
      31,
                                                      2008
                                                    
                                                    
                                                    March
      31,
                                                      2007Assets
      held for saleCash
      and cash equivalents
                                                    
                                                    $
                                                    406
                                                    
                                                    
                                                    $
                                                    1,447
                                                    
                                                    
                                                    $
                                                    5,615Accounts
      receivable, net
                                                    
                                                    
                                                    714
                                                    
                                                    
                                                    
                                                    1,005
                                                    
                                                    
                                                    
                                                    1,268Deferred
      income taxes
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    1,888
                                                    
                                                    
                                                    
                                                    963Fixed
      assets
                                                    
                                                    
                                                    594
                                                    
                                                    
                                                    
                                                    1,042
                                                    
                                                    
                                                    
                                                    812Goodwill
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    10,682
                                                    
                                                    
                                                    
                                                    10,694Intangible
      assets
                                                    
                                                    
                                                    1,886
                                                    
                                                    
                                                    
                                                    2,699
                                                    
                                                    
                                                    
                                                    3,177Other
                                                    
                                                    
                                                    294
                                                    
                                                    
                                                    
                                                    244
                                                    
                                                    
                                                    
                                                    266Total
                                                    
                                                    $
                                                    3,894
                                                    
                                                    
                                                    $
                                                    19,007
                                                    
                                                    
                                                    $
                                                    22,795Liabilities
      held for saleAccrued
      liabilities
                                                    
                                                    $
                                                    1,790
                                                    
                                                    
                                                    $
                                                    1,219
                                                    
                                                    
                                                    $
                                                    4,041Other
                                                    
                                                    
                                                    278
                                                    
                                                    
                                                    
                                                    321
                                                    
                                                    
                                                    
                                                    1,209Total
                                                    
                                                    $
                                                    2,068
                                                    
                                                    
                                                    $
                                                    1,540
                                                    
                                                    
                                                    $
                                                    5,250
  The
assets and liabilities of CCMS are classified as held for sale and are as
follows:
 
 Balance
      sheets
                                                    
                                                    December
      31,
                                                      2008
                                                    
                                                    
                                                    March
      31,
                                                      2008
                                                    
                                                    
                                                    March
      31,
                                                      2007Assets
      held for saleCash
      and cash equivalents
                                                    
                                                    $
                                                    1
                                                    
                                                    
                                                    $
                                                    14
                                                    
                                                    
                                                    $
                                                    154Mortgage
      loans receivable
                                                    
                                                    
                                                    12,679
                                                    
                                                    
                                                    
                                                    20,809
                                                    
                                                    
                                                    
                                                    13,716Deferred
      income taxes
                                                    
                                                    
                                                    3,945
                                                    
                                                    
                                                    
                                                    6,803
                                                    
                                                    
                                                    
                                                    503Other
                                                    
                                                    
                                                    194
                                                    
                                                    
                                                    
                                                    642
                                                    
                                                    
                                                    
                                                    124Total
                                                    
                                                    $
                                                    16,819
                                                    
                                                    
                                                    
                                                    28,268
                                                    
                                                    
                                                    $
                                                    14,497Liabilities
      held for saleInterest
      rate derivative contracts
                                                    
                                                    $
                                                    10,820
                                                    
                                                    
                                                    $
                                                    11,724
                                                    
                                                    
                                                    $
                                                    368Other
                                                    
                                                    
                                                    336
                                                    
                                                    
                                                    
                                                    2,354
                                                    
                                                    
                                                    
                                                    595Total
                                                    
                                                    $
                                                    11,156
                                                    
                                                    
                                                    $
                                                    14,078
                                                    
                                                    
                                                    $
                                                    963
 
 CCMS has
fixed-rate commercial mortgage loans receivable.  The mortgages were
funded under co-lending agreements whereby CCMS advanced 20% or less of the
principal amount.  The co-lenders advanced 80% or more of the
principal amount directly to the borrowers.  The CCMS interest in the
mortgages is subordinate to the co-lenders’ interests.  CCMS has the
right to purchase the co-lenders’ interest in any mortgage at any time at par
value and the co-lenders have the right to purchase the CCMS interest in the
mortgages after six months at par value.  Mortgage loans receivable
are carried on an individual basis at the lower of cost and market, which is
calculated based on contractually established commitments from investors or
current investor yield requirements.
 
 When CCMS
sells mortgage loans, the mortgage loans are removed from the balance sheet and
a gain or loss is recognized in current period earnings immediately, based on
the carrying values of the mortgage loans transferred.  Servicing
rights are sold with the mortgages and it is CCMS policy not to retain a
residual interest in the mortgages sold.
 
 CCMS
entered into interest rate derivative contracts to cover the full value of the
mortgages written, including the portion funded by a co-lender which CCMS has
the right and intention to call, while mortgages await sale.  The
contracts are recorded on the consolidated balance sheets as assets or
liabilities and carried at fair value.  Changes in the fair value of
contracts are recognized in net earnings from discontinued operations. The
contracts effectively convert the fixed-rate mortgage loans to floating
rates.  Hedge
  Page 19
of 42
 accounting
has not been accorded to the portion of the contracts that match the mortgages
held for sale as the contracts do not meet the criteria for hedge
accounting.
 
 As at
December 31, 2008, CCMS had interest rate derivative contracts to convert
$60,344 of fixed-rate mortgage loans receivable to floating rates (March 31,
2008 - $143,500; March 31, 2007 - $167,807) with a fair value loss of $10,758
(March 31, 2008 - $11,724; March 31, 2007 – gain of $368).  The
derivative contracts expire on March 31, 2009.  The fair values of
derivative contracts are determined based on the present value of the estimated
future net cash flows using implied rates in the applicable yield curve as of
the valuation date.
 
 For the
nine-month period ended December 31, 2008 a loss of $6,407 was recorded in
discontinued operations relating to the derivative contracts, which was
comprised of $875 unrealized losses (year ended March 31, 2008 - unrealized
losses of $11,278; year ended March 31, 2007 - unrealized gains of $3,245) on
outstanding contracts and $5,532 of realized losses (year ended March 31, 2008 -
realized gains of $1,812; year ended March 31, 2007 - realized losses of $3,613)
on the settlement of the contracts.
 
 During
the nine-month period ended December 31, 2008, CCMS recognized pre-tax gains
(after realized gains on derivatives contracts) of nil (year ended March 31,
2008 - $2,516; year ended March 31, 2007 - $2,120) on the securitization of
mortgage loans with unpaid principal balances of nil (year ended March 31, 2008
- $195,903; year ended March 31, 2007 - $39,208).  In connection with
the sale of mortgages, CCMS is obligated to cure or repurchase any mortgage sold
that has a breach or defect related to the origination and underwriting
process.  As at December 31, 2008, the Company determined that the
fair value of future payments under this obligation was nil.  The fair
value was initially measured based on a the present value of the expected cash
flows in conjunction with considering the premium that would be required to
issue a similar guarantee in a standalone arm’s length transaction with an
unrelated party.
 
 
 5.
            Other
      income
 Nine
      months
                                                  ended
                                                  December
      31,
                                                
                                                
                                                Year
      ended March 31,2008
                                                
                                                
                                                2008
                                                
                                                
                                                2007
                                                
                                                
                                                2006Earnings
      from available-for-sale securities
                                                
                                                $
                                                1,268
                                                
                                                
                                                $
                                                2,292
                                                
                                                
                                                $
                                                2,078
                                                
                                                
                                                $
                                                -Earnings
      from equity method investments
                                                
                                                
                                                207
                                                
                                                
                                                
                                                2,006
                                                
                                                
                                                
                                                1,625
                                                
                                                
                                                
                                                1,329Net
      gain on sale of equity securities
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                886
                                                
                                                
                                                
                                                2,211Other
                                                
                                                
                                                947
                                                
                                                
                                                
                                                352
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                226$
                                                2,422
                                                
                                                
                                                $
                                                4,650
                                                
                                                
                                                $
                                                4,589
                                                
                                                
                                                $
                                                3,766
 
 Page 20
of 42
 6.
            Components
      of working capital accounts
 
 December
      31,
                                                            2008
                                                          
                                                          
                                                          March
      31,
                                                            2008
                                                          
                                                          
                                                          March
      31,
                                                            2007InventoriesWork-in-progress
                                                          
                                                          $
                                                          4,465
                                                          
                                                          
                                                          $
                                                          3,530
                                                          
                                                          
                                                          $
                                                          3,295Finished
      goods
                                                          
                                                          
                                                          2,797
                                                          
                                                          
                                                          
                                                          4,251
                                                          
                                                          
                                                          
                                                          4,350Supplies
      and other
                                                          
                                                          
                                                          3,310
                                                          
                                                          
                                                          
                                                          3,397
                                                          
                                                          
                                                          
                                                          2,479$
                                                          10,572
                                                          
                                                          
                                                          $
                                                          11,178
                                                          
                                                          
                                                          $
                                                          10,124Accrued
      liabilitiesAccrued
      payroll, commission and benefits
                                                          
                                                          $
                                                          107,756
                                                          
                                                          
                                                          $
                                                          159,696
                                                          
                                                          
                                                          $
                                                          92,668Accrued
      interest
                                                          
                                                          
                                                          2,160
                                                          
                                                          
                                                          
                                                          3,871
                                                          
                                                          
                                                          
                                                          4,159Customer
      advances
                                                          
                                                          
                                                          3,161
                                                          
                                                          
                                                          
                                                          2,937
                                                          
                                                          
                                                          
                                                          9,713Contingent
      acquisition consideration payable
                                                          
                                                          
                                                          5,508
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          4,306Liabilities
      in connection with Resolve operation
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          2,912Other
                                                          
                                                          
                                                          39,235
                                                          
                                                          
                                                          
                                                          21,626
                                                          
                                                          
                                                          
                                                          36,555$
                                                          157,820
                                                          
                                                          
                                                          $
                                                          188,130
                                                          
                                                          
                                                          $
                                                          150,313
  7.
            Other
      assets
 
 December
      31,
                                        2008
                                      
                                      
                                      March
      31,
                                        2008
                                      
                                      
                                      March
      31,
                                        2007Available-for-sale
      equity securities
                                      
                                      $
                                      2,720
                                      
                                      
                                      $
                                      17,291
                                      
                                      
                                      $
                                      17,419Equity
      method investments
                                      
                                      
                                      2,703
                                      
                                      
                                      
                                      5,086
                                      
                                      
                                      
                                      5,046Held-to-maturity
      debt securities
                                      
                                      
                                      2,446
                                      
                                      
                                      
                                      2,280
                                      
                                      
                                      
                                      3,763Financing
      fees, net of accumulated amortization of $1,655 (March 31, 2008 - $1,703;
      March 31, 2007 - $1,554)
                                      
                                      
                                      1,223
                                      
                                      
                                      
                                      1,754
                                      
                                      
                                      
                                      1,690Other
                                      
                                      
                                      3,367
                                      
                                      
                                      
                                      2,972
                                      
                                      
                                      
                                      1,024$
                                      12,459
                                      
                                      
                                      $
                                      29,383
                                      
                                      
                                      $
                                      28,942
 
 The
Company’s available-for-sale equity securities consist of securities of a
subsidiary of RBO Fund (see note 4).  During the nine-month period
ended December 31, 2008, the Company’s available-for-sale securities were deemed
to be other-than-temporarily impaired and a non-cash charge of $14,680 ($12,038
net of income taxes) was recorded in the statement of earnings as of December
31, 2008.
 
 8.
            Fixed
      assets
 
 December
      31, 2008
                                      
                                      
                                      
                                      
                                      AccumulatedCost
                                      
                                      
                                      depreciation
                                      
                                      
                                      NetLand
                                      
                                      $
                                      3,070
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      
                                      3,070Buildings
                                      
                                      
                                      11,683
                                      
                                      
                                      
                                      2,717
                                      
                                      
                                      
                                      8,966Vehicles
                                      
                                      
                                      22,158
                                      
                                      
                                      
                                      14,842
                                      
                                      
                                      
                                      7,316Furniture
      and equipment
                                      
                                      
                                      51,713
                                      
                                      
                                      
                                      28,678
                                      
                                      
                                      
                                      23,035Computer
      equipment and software
                                      
                                      
                                      47,457
                                      
                                      
                                      
                                      25,100
                                      
                                      
                                      
                                      22,357Leasehold
      improvements
                                      
                                      
                                      27,814
                                      
                                      
                                      
                                      15,769
                                      
                                      
                                      
                                      12,045163,895
                                      
                                      
                                      
                                      87,106
                                      
                                      
                                      
                                      76,789
  Page 21
of 42
 March
      31, 2008
                                      
                                      
                                      
                                      
                                      AccumulatedCost
                                      
                                      
                                      depreciation
                                      
                                      
                                      NetLand
                                      
                                      $
                                      3,070
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      3,070Buildings
                                      
                                      
                                      11,683
                                      
                                      
                                      
                                      2,517
                                      
                                      
                                      
                                      9,166Vehicles
                                      
                                      
                                      21,217
                                      
                                      
                                      
                                      13,050
                                      
                                      
                                      
                                      8,167Furniture
      and equipment
                                      
                                      
                                      46,327
                                      
                                      
                                      
                                      21,850
                                      
                                      
                                      
                                      24,477Computer
      equipment and software
                                      
                                      
                                      40,462
                                      
                                      
                                      
                                      18,681
                                      
                                      
                                      
                                      21,781Leasehold
      improvements
                                      
                                      
                                      24,874
                                      
                                      
                                      
                                      11,586
                                      
                                      
                                      
                                      13,288$
                                      147,633
                                      
                                      
                                      $
                                      67,684
                                      
                                      
                                      $
                                      79,949
 
 
 March
      31, 2007
                                      
                                      
                                      
                                      
                                      AccumulatedCost
                                      
                                      
                                      depreciation
                                      
                                      
                                      NetLand
                                      
                                      $
                                      3,070
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      3,070Buildings
                                      
                                      
                                      11,225
                                      
                                      
                                      
                                      2,093
                                      
                                      
                                      
                                      9,132Vehicles
                                      
                                      
                                      18,425
                                      
                                      
                                      
                                      10,742
                                      
                                      
                                      
                                      7,683Furniture
      and equipment
                                      
                                      
                                      31,486
                                      
                                      
                                      
                                      13,910
                                      
                                      
                                      
                                      17,576Computer
      equipment and software
                                      
                                      
                                      26,060
                                      
                                      
                                      
                                      11,452
                                      
                                      
                                      
                                      14,608Leasehold
      improvements
                                      
                                      
                                      16,138
                                      
                                      
                                      
                                      7,327
                                      
                                      
                                      
                                      8,811$
                                      106,404
                                      
                                      
                                      $
                                      45,524
                                      
                                      
                                      $
                                      60,880
 
 Included
in fixed assets are vehicles and computer equipment under capital lease at a
cost of $11,750 (March 31, 2008 - $11,510; March 31, 2007 - $9,385) and net book
value of $4,773 (March 31, 2008 - $5,518; March 31, 2007 - $4,937).
 
 9.
            Intangible
      assets
 December
      31, 2008
                                        
                                        Gross
                                          carrying
                                          amount
                                        
                                        
                                        Accumulated
                                          amortization
                                        
                                        
                                        NetCustomer
      lists and relationships
                                        
                                        $
                                        115,585
                                        
                                        
                                        $
                                        23,157
                                        
                                        
                                        $
                                        92,428Franchise
      rights
                                        
                                        
                                        34,266
                                        
                                        
                                        
                                        9,154
                                        
                                        
                                        
                                        25,112Trademarks
      and trade names:Indefinite
      life
                                        
                                        
                                        20,907
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        20,907Finite
      life
                                        
                                        
                                        35,369
                                        
                                        
                                        
                                        4,425
                                        
                                        
                                        
                                        30,944Management
      contracts and other
                                        
                                        
                                        10,641
                                        
                                        
                                        
                                        4,285
                                        
                                        
                                        
                                        6,356Brokerage
      backlog
                                        
                                        
                                        7,054
                                        
                                        
                                        
                                        4,574
                                        
                                        
                                        
                                        2,480$
                                        223,822
                                        
                                        
                                        $
                                        45,595
                                        
                                        
                                        $
                                        178,227
 
 March
      31, 2008
                                            
                                            Gross
                                              carrying
                                              amount
                                            
                                            
                                            Accumulated
                                              amortization
                                            
                                            
                                            NetCustomer
      lists and relationships
                                            
                                            $
                                            99,005
                                            
                                            
                                            $
                                            15,126
                                            
                                            
                                            $
                                            83,879Franchise
      rights
                                            
                                            
                                            31,682
                                            
                                            
                                            
                                            7,941
                                            
                                            
                                            
                                            23,741Trademarks
      and trade names:Indefinite
      life
                                            
                                            
                                            18,559
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            18,559Finite
      life
                                            
                                            
                                            30,155
                                            
                                            
                                            
                                            3,833
                                            
                                            
                                            
                                            26,322Management
      contracts and other
                                            
                                            
                                            11,850
                                            
                                            
                                            
                                            3,518
                                            
                                            
                                            
                                            8,332Brokerage
      backlog
                                            
                                            
                                            5,608
                                            
                                            
                                            
                                            3,221
                                            
                                            
                                            
                                            2,387$
                                            196,859
                                            
                                            
                                            $
                                            33,639
                                            
                                            
                                            $
                                            163,220
 
 
 Page 22
of 42
 March
      31, 2007
                                          
                                          Gross
                                            carrying
                                            amount
                                          
                                          
                                          Accumulated
                                            amortization
                                          
                                          
                                          NetCustomer
      lists and relationships
                                          
                                          $
                                          41,308
                                          
                                          
                                          $
                                          6,638
                                          
                                          
                                          $
                                          34,670Franchise
      rights
                                          
                                          
                                          26,862
                                          
                                          
                                          
                                          6,597
                                          
                                          
                                          
                                          20,265Trademarks
      and trade names:Indefinite
      life
                                          
                                          
                                          15,696
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          15,696Finite
      life
                                          
                                          
                                          18,000
                                          
                                          
                                          
                                          2,742
                                          
                                          
                                          
                                          15,258Management
      contracts and other
                                          
                                          
                                          6,502
                                          
                                          
                                          
                                          1,520
                                          
                                          
                                          
                                          4,982Brokerage
      backlog
                                          
                                          
                                          6,936
                                          
                                          
                                          
                                          5,743
                                          
                                          
                                          
                                          1,193$
                                          115,304
                                          
                                          
                                          $
                                          23,240
                                          
                                          
                                          $
                                          92,064
 
 During
the nine-month period ended December 31, 2008, the Company acquired the
following intangible assets:
  Amount
                                                        
                                                        
                                                        Estimated
      weighted
                                                          average
      amortization
                                                          period
      (years)Customer
      lists and relationships
                                                        
                                                        $
                                                        20,140
                                                        
                                                        
                                                        
                                                        10.3Franchise
      rights
                                                        
                                                        
                                                        1,951
                                                        
                                                        
                                                        
                                                        19.2Trademarks
      and trade names
                                                        
                                                        
                                                        6,867
                                                        
                                                        
                                                        
                                                        19.4Brokerage
      backlog
                                                        
                                                        
                                                        1,843
                                                        
                                                        
                                                        
                                                        0.9$
                                                        30,801
                                                        
                                                        
                                                        
                                                        10.9
 
 The
following is the estimated annual amortization expense for recorded intangible
assets for each of the next five years ending December 31:
 
 2009
                      $
      17,9222010
                      14,7302011
                      13,1602012
                      11,8622013
                      10,551
 
 During
the nine-month period ended December 31, 2008, charges of $275 (year ended March
31, 2008 - $1,149; year ended March 31, 2007 - $437; year ended March 31, 2006 -
nil) were recognized in connection with impairments of intangible
assets.  In all three periods, the impairments were attributable to
faster than expected erosion of customer relationships in the Commercial Real
Estate and Residential Property Management segments.  The charges were
recorded in amortization expense.  The fair value of the intangible
assets and the asset groups they are components of were estimated using
discounted expected future cash flows.
 
 
 Page 23
of 42
 10.
            Goodwill
 Commercial
                                                                          Real
      Estate
                                                                          Services
                                                                        
                                                                        
                                                                        Residential
                                                                          Property
                                                                          Management
                                                                        
                                                                        
                                                                        Property
                                                                          Services
                                                                        
                                                                        
                                                                        ConsolidatedBalance,
      March 31, 2006
                                                                        
                                                                        $
                                                                        51,867
                                                                        
                                                                        
                                                                        $
                                                                        71,297
                                                                        
                                                                        
                                                                        $
                                                                        43,245
                                                                        
                                                                        
                                                                        $
                                                                        166,409Adjustments
      to goodwill resulting from adjustments to purchase price
      allocations
                                                                        
                                                                        
                                                                        363
                                                                        
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        (566
                                                                        )
                                                                        
                                                                        
                                                                        (203
                                                                        )Goodwill
      resulting from contingent acquisition consideration
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        5,654
                                                                        
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        5,654Goodwill
      resulting from purchases of minority shareholders’
    interests
                                                                        
                                                                        
                                                                        4,985
                                                                        
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        883
                                                                        
                                                                        
                                                                        
                                                                        5,868Goodwill
      acquired during period
                                                                        
                                                                        
                                                                        29,695
                                                                        
                                                                        
                                                                        
                                                                        1,296
                                                                        
                                                                        
                                                                        
                                                                        1,209
                                                                        
                                                                        
                                                                        
                                                                        32,200Goodwill
      disposed during period
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        (836
                                                                        )
                                                                        
                                                                        
                                                                        (836
                                                                        )Foreign
      exchange
                                                                        
                                                                        
                                                                        560
                                                                        
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        560Balance,
      March 31, 2007
                                                                        
                                                                        
                                                                        87,470
                                                                        
                                                                        
                                                                        
                                                                        78,247
                                                                        
                                                                        
                                                                        
                                                                        43,935
                                                                        
                                                                        
                                                                        
                                                                        209,652Adjustments
      to goodwill resulting from adjustments to purchase price
      allocations
                                                                        
                                                                        
                                                                        27
                                                                        
                                                                        
                                                                        
                                                                        (594
                                                                        )
                                                                        
                                                                        
                                                                        71
                                                                        
                                                                        
                                                                        
                                                                        (496
                                                                        )Goodwill
      resulting from contingent acquisition consideration
                                                                        
                                                                        
                                                                        2,757
                                                                        
                                                                        
                                                                        
                                                                        26
                                                                        
                                                                        
                                                                        
                                                                        81
                                                                        
                                                                        
                                                                        
                                                                        2,864Goodwill
      resulting from purchases of minority shareholders’
    interests
                                                                        
                                                                        
                                                                        2,228
                                                                        
                                                                        
                                                                        
                                                                        1,109
                                                                        
                                                                        
                                                                        
                                                                        2,212
                                                                        
                                                                        
                                                                        
                                                                        5,549Goodwill
      acquired during period
                                                                        
                                                                        
                                                                        39,103
                                                                        
                                                                        
                                                                        
                                                                        29,024
                                                                        
                                                                        
                                                                        
                                                                        22,625
                                                                        
                                                                        
                                                                        
                                                                        90,752Goodwill
      disposed during period
                                                                        
                                                                        
                                                                        (421
                                                                        )
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        (421
                                                                        )Foreign
      exchange
                                                                        
                                                                        
                                                                        3,332
                                                                        
                                                                        
                                                                        
                                                                        11
                                                                        
                                                                        
                                                                        
                                                                        170
                                                                        
                                                                        
                                                                        
                                                                        3,513Balance,
      March 31, 2008
                                                                        
                                                                        
                                                                        134,496
                                                                        
                                                                        
                                                                        
                                                                        107,823
                                                                        
                                                                        
                                                                        
                                                                        69,094
                                                                        
                                                                        
                                                                        
                                                                        311,413Adjustments
      to goodwill resulting from adjustments to purchase price
      allocations
                                                                        
                                                                        
                                                                        (1,838
                                                                        )
                                                                        
                                                                        
                                                                        (2,239
                                                                        )
                                                                        
                                                                        
                                                                        4,500
                                                                        
                                                                        
                                                                        
                                                                        423Goodwill
      resulting from contingent acquisition consideration
                                                                        
                                                                        
                                                                        1,898
                                                                        
                                                                        
                                                                        
                                                                        6,477
                                                                        
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        8,375Goodwill
      resulting from purchases of minority shareholders’
    interests
                                                                        
                                                                        
                                                                        4,842
                                                                        
                                                                        
                                                                        
                                                                        10,024
                                                                        
                                                                        
                                                                        
                                                                        3,141
                                                                        
                                                                        
                                                                        
                                                                        18,007Goodwill
      acquired during period
                                                                        
                                                                        
                                                                        16,681
                                                                        
                                                                        
                                                                        
                                                                        297
                                                                        
                                                                        
                                                                        
                                                                        1,239
                                                                        
                                                                        
                                                                        
                                                                        18,217Foreign
      exchange
                                                                        
                                                                        
                                                                        (7,391
                                                                        )
                                                                        
                                                                        
                                                                        (62
                                                                        )
                                                                        
                                                                        
                                                                        (85
                                                                        )
                                                                        
                                                                        
                                                                        (7,538
                                                                        )Balance,
      December 31, 2008
                                                                        
                                                                        $
                                                                        148,688
                                                                        
                                                                        
                                                                        $
                                                                        122,320
                                                                        
                                                                        
                                                                        $
                                                                        77,889
                                                                        
                                                                        
                                                                        $
                                                                        348,897
 
 Goodwill
in the amount of $10,682 related to the USMB discontinued operation was written
off as of December 31, 2008.
 
 11.
            Long-term
      debt
 December
      31,
                                                  2008
                                                
                                                
                                                March
      31,
                                                  2008
                                                
                                                
                                                March
      31,
                                                  2007Revolving
      credit facility
                                                
                                                $
                                                62,482
                                                
                                                
                                                $
                                                132,500
                                                
                                                
                                                $
                                                -8.06%
      Senior Notes
                                                
                                                
                                                42,856
                                                
                                                
                                                
                                                57,142
                                                
                                                
                                                
                                                71,4286.40%
      Senior Notes
                                                
                                                
                                                50,000
                                                
                                                
                                                
                                                50,000
                                                
                                                
                                                
                                                50,0005.44%
      Senior Notes
                                                
                                                
                                                100,000
                                                
                                                
                                                
                                                100,000
                                                
                                                
                                                
                                                100,000Capital
      leases bearing interest ranging from 5% to 10%, maturing at various dates
      through 2013
                                                
                                                
                                                4,460
                                                
                                                
                                                
                                                5,589
                                                
                                                
                                                
                                                4,455Other
      long-term debt bearing interest at 4% to 10%, maturing at various dates
      through 2014
                                                
                                                
                                                6,571
                                                
                                                
                                                
                                                10,799
                                                
                                                
                                                
                                                9,248266,369
                                                
                                                
                                                
                                                356,030
                                                
                                                
                                                
                                                235,131Less:
      current portion
                                                
                                                
                                                20,899
                                                
                                                
                                                
                                                24,777
                                                
                                                
                                                
                                                22,101$
                                                245,470
                                                
                                                
                                                $
                                                331,253
                                                
                                                
                                                $
                                                213,030
 
 Page 24
of 42
 On
September 6, 2007, the Company entered into an amended and restated credit
agreement with a syndicate of banks to provide a $225,000 committed senior
revolving credit facility with a five-year term.  The amended
revolving credit facility bears interest at 0.75% to 1.30% over floating
reference rates, depending on certain leverage ratios determined
quarterly.  The revolving credit facility had $134,236 of available
un-drawn credit as at December 31, 2008 ($70,700 was un-drawn at March 31, 2008;
nil was drawn at March 31, 2007).  As of December 31, 2008, letters of
credit in the amount of $5,782 were outstanding ($4,300 as at March 31, 2008;
$4,900 as at March 31, 2007).  The revolving credit facility requires
a commitment fee of 0.25% to 0.50% of the unused portion, depending on certain
leverage ratios, and also includes an uncommitted accordion provision providing
an additional $50,000 of borrowing capacity under certain
circumstances.
 
 The
Company has outstanding $42,856 of 8.06% fixed-rate Senior Notes (the “8.06%
Notes”) (March 31, 2008 - $57,142; March 31, 2007 - $71,428).  The
8.06% Notes have a final maturity of June 29, 2011, with seven equal annual
principal repayments which began on June 29, 2005.  The Company also
has outstanding $50,000 of 6.40% fixed-rate Senior Notes (the “6.40%
Notes”).  The 6.40% Notes have a final maturity of September 30, 2015
with four equal annual principal repayments commencing on September 30,
2012.  The Company also has outstanding $100,000 of 5.44% fixed-rate
Senior Notes (the “5.44% Notes”).  The 5.44% Notes have a final
maturity of April 1, 2015 with five equal annual principal repayments beginning
on April 1, 2011.
 
 The
Company has indemnified the holders of the 8.06% Notes, 6.40% Notes and 5.44%
Notes (collectively, the “Notes”) from all withholding taxes that are or may
become applicable to any payments made by the Company on the
Notes.  The Company believes this exposure is not material as of
December 31, 2008.
 
 The
revolving credit facility and the Notes rank equally in terms of
seniority.  The Company has granted these lenders collateral including
the following: an interest in all of the assets of the Company including the
shares of the Company’s subsidiaries; an assignment of material contracts; and
an assignment of the Company’s “call” rights with respect to shares of the
subsidiaries held by minority interests (note 18(b)).
 
 The
covenants of the revolving credit facility and the Notes agreements require the
Company to maintain certain ratios including leverage, fixed charge coverage,
interest coverage and net worth.  The Company is prohibited from
undertaking certain mergers, acquisitions and dispositions without prior
approval.
 
 The
effective interest rate on the Company’s debt is 5.4%.  The estimated
aggregate amount of principal repayments on long-term debt required in each of
the next five years ending December 31 and thereafter to meet the retirement
provisions are as follows:
 
 2009
                $
      20,8992010
                16,6552011
                35,1262012
                95,2362013
                32,655Thereafter
                65,798
  Page 25
of 42
 12.
            Capital
      stock
 
 The
authorized capital stock of the Company is as follows:
 
 An
unlimited number of Preferred Shares, issuable in series;
 An
unlimited number of Subordinate Voting Shares having one vote per share;
and
 An
unlimited number of Multiple Voting Shares having 20 votes per share,
convertible at any time into Subordinate Voting Shares at a rate of one
Subordinate Voting Share for each Multiple Voting Share
outstanding.
 
 The
following table provides a summary of total capital stock issued and
outstanding:
 
 Preferred
      Shares
                Subordinate
      Voting Shares
                Multiple
      Voting Shares
                Total
      Common SharesNumber
                Amount
                Number
                Amount
                Number
                Amount
                Number
                amountBalance,
      March 31, 2007
                -
                $
      -
                28,597,194
                $
      79,735
                1,325,694
                $
      373
                29,922,888
                $
      80,108Balance,
      March 31, 2008
                5,979,074
                149,477
                28,786,893
                88,546
                1,325,694
                373
                30,112,587
                88,919Balance,
      December 31, 2008
                5,772,274
                144,307
                28,007,790
                86,540
                1,325,694
                373
                29,333,484
                86,913
 
 On
      August 1, 2007, the Company issued a stock dividend in the form of 7%
      Cumulative Preference Shares, Series 1 (the “Preferred Shares”) to holders
      of Subordinate Voting Shares and Multiple Voting Shares (together the
      “Common Shares”).  One Preferred Share was issued for every five
      outstanding Common Shares.  The stock dividend resulted in the
      issuance of 5,979,074 Preferred Shares, with an aggregate par value of
      $149,477.  Each Preferred Share has a stated amount of
      $25.00.  Preferred dividends are payable quarterly on or about
      the last day of each quarter.
 
 As at
December 31, 2008, the Company may redeem each Preferred Share for $25.75
payable in cash, or alternatively the Company may convert each Preferred Share
into Subordinate Voting Shares based on a price of $25.75.  The
redemption or conversion price is scheduled to decline in annual increments of
$0.25 such that the price will be fixed at $25.00 on and after August 1,
2011.  Holders of the Preferred Shares have no redemption or
conversion rights.
 
 The
following table provides the pro forma impact on diluted earnings per common
share of the preferred dividends on the comparative periods.
 
 Nine
      months
                                              ended
                                              December
      31,
                                            
                                            
                                            Year
      ended March 31,2008
                                            
                                            
                                            2008
                                            
                                            
                                            2007
                                            
                                            
                                            2006Diluted
      earnings per common share from continuing operations:As
      reported
                                            
                                            $
                                            0.11
                                            
                                            
                                            $
                                            0.89
                                            
                                            
                                            $
                                            1.08
                                            
                                            
                                            $
                                            0.83Impact
      of preferred dividends on comparative periods
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (0.12
                                            )
                                            
                                            
                                            (0.35
                                            )
                                            
                                            
                                            (0.35
                                            )Pro
      forma
                                            
                                            $
                                            0.11
                                            
                                            
                                            $
                                            0.77
                                            
                                            
                                            $
                                            0.73
                                            
                                            
                                            $
                                            0.48
 
 During
      the nine-month period ended December 31, 2008, the Company repurchased
      960,300 (year ended March 31, 2008 - 252,500; year ended March 31, 2007 -
      697,700) Subordinate Voting Shares for cancellation under a Normal Course
      Issuer Bid filed with the Toronto Stock Exchange, which allowed the
      Company to repurchase up to 5% of its outstanding shares on the open
      market during a twelve-month period. The repurchase cost is allocated to
      common shares for the weighted average book value and to retained earnings
      for any excess.
 
 Page 26
of 42
 During
      the nine-month period ended December 31, 2008, the Company repurchased
      206,800 (years ended March 31, 2008 and 2007 - nil) Preferred Shares for
      cancellation under a Normal Course Issuer Bid filed with the Toronto Stock
      Exchange, which allowed the Company to repurchase up to 5% of its
      outstanding shares on the open market during a twelve-month period. The
      repurchase cost is allocated to preferred shares for the weighted average
      book value and to retained earnings for any
  deficiency.
 
 Pursuant
      to an agreement approved in February 2004, the Company agreed that it will
      make payments to its Chief Executive Officer (“CEO”) that are contingent
      upon the arm’s length sale of control of the Company or upon a
      distribution of the Company’s assets to shareholders.  The
      payment amounts will be determined with reference to the price per
      Subordinate Voting Share received by shareholders upon an arm’s length
      sale or upon a distribution of assets.  The right to receive the
      payments may be transferred among members of the CEO’s family, their
      holding companies and trusts.  The agreement provides for the
      CEO to receive each of the following two payments.  The first
      payment is an amount equal to 5% of the product of: (i) the total number
      of Subordinate and Multiple Voting Shares outstanding on a fully diluted
      basis at the time of the sale and (ii) the per share consideration
      received by holders of Subordinate and Multiple Voting Shares minus a base
      price of C$5.675.  The second payment is an amount equal to 5%
      of the product of (i) the total number of shares outstanding on a fully
      diluted basis at the time of the sale and (ii) the per share consideration
      received by holders of Subordinate Voting Shares minus a base price of
      C$11.05.
 
 13.
            Stock-based
      compensation
 
 The
following table provides a summary of stock-based compensation
expense:
 
 Nine
      months
                                                ended
                                                December
      31,
                                              
                                              
                                              Year
      ended March 31,2008
                                              
                                              
                                              2008
                                              
                                              
                                              2007
                                              
                                              
                                              2006Stock
      option expense – Company plan
                                              
                                              $
                                              1,723
                                              
                                              
                                              $
                                              5,938
                                              
                                              
                                              $
                                              1,916
                                              
                                              
                                              $
                                              1,380Stock
      option expense – subsidiary plan
                                              
                                              
                                              (103
                                              )
                                              
                                              
                                              1,508
                                              
                                              
                                              
                                              1,791
                                              
                                              
                                              
                                              552Notional
      value appreciation plans – subsidiaries
                                              
                                              
                                              931
                                              
                                              
                                              
                                              373
                                              
                                              
                                              
                                              1,249
                                              
                                              
                                              
                                              379$
                                              2,551
                                              
                                              
                                              $
                                              7,819
                                              
                                              
                                              $
                                              4,956
                                              
                                              
                                              $
                                              2,311
 
 
 Company
stock option plan
 The
Company has a stock option plan for certain officers and key full-time employees
of the Company and its subsidiaries, other than its CEO.  Options are
granted at the market price for the underlying shares on the date of
grant.  Each option vests over a four-year term and expires five years
from the date granted and allows for the purchase of one Subordinate Voting
Share.  All Subordinate Voting Shares issued under the plan are new
shares.  As at December 31, 2008, there were 854,000 options available
for future grants (March 31, 2008 - 338,000; March 31, 2007 -
506,000).
 
 
 Page 27
of 42
 Grants
under the Company’s stock option plan are equity classified awards under SFAS
123R.  Stock option activity for the three years ended March 31, 2008
and nine-month period ended December 31, 2008 was as follows:
 
 Number
      of
                  options
                
                Weighted
                  average
                  exercise
      price
                
                Weighted
                  average
                  remaining
                  contractual
      life
                  (years)
                
                Aggregate
                  intrinsic
      valueShares
      issuable under options –
                  March
      31, 2005
                
                1,844,000
                
                $
      9.72Granted
                
                328,000
                
                19.61Exercised
                
                (434,650)
                
                8.60Forfeited
                
                (21,000)
                
                9.38Shares
      issuable under options –
                  March
      31, 2006
                
                1,716,350
                
                $
      11.96Granted
                
                305,000
                
                20.65Exercised
                
                (564,800)
                
                11.40Forfeited
                
                (11,000)
                
                13.43Shares
      issuable under options –
                  March
      31, 2007
                
                1,445,550
                
                14.12Granted
                
                175,500
                
                32.24Exercised
                
                (159,550)
                
                7.28Forfeited
                
                (7,500)
                
                27.81Shares
      issuable under options –
                  March
      31, 2008
                
                1,454,000
                
                16.94Granted
                
                349,000
                
                17.10Exercised
                
                (157,245)
                
                4.76Forfeited
                
                (65,000)
                
                15.54Shares
      issuable under options –
                  December
      31, 2008
                
                1,580,755
                
                $
      18.24
                
                2.61
                
                $
      753Options
      exercisable –
                  December
      31, 2008
                
                676,055
                
                $
      15.61
                
                1.70
                
                $
      752
 
 As at
December 31, 2008, the range of option exercise prices was $5.59 to $33.25 per
share.  Also as at December 31, 2008, the aggregate intrinsic value
and weighted average remaining contractual life for in-the-money options vested
and expected to vest were $753 and 0.9 years, respectively.
 
 The
following table summarizes information about option exercises during the
nine-month period ended December 31, 2008 and three years ended March 31,
2008:
 
 Nine
      months
                                                            ended
                                                            December
      31,
                                                          
                                                          
                                                          Year
      ended March 31,2008
                                                          
                                                          
                                                          2008
                                                          
                                                          
                                                          2007
                                                          
                                                          
                                                          2006Number
      of options exercised
                                                          
                                                          
                                                          157,245
                                                          
                                                          
                                                          
                                                          159,550
                                                          
                                                          
                                                          
                                                          564,800
                                                          
                                                          
                                                          
                                                          434,650Aggregate
      fair value
                                                          
                                                          $
                                                          2,342
                                                          
                                                          
                                                          $
                                                          4,885
                                                          
                                                          
                                                          $
                                                          13,266
                                                          
                                                          
                                                          $
                                                          10,784Intrinsic
      value
                                                          
                                                          
                                                          1,593
                                                          
                                                          
                                                          
                                                          3,711
                                                          
                                                          
                                                          
                                                          6,831
                                                          
                                                          
                                                          
                                                          7,044Amount
      of cash received
                                                          
                                                          $
                                                          749
                                                          
                                                          
                                                          $
                                                          1,174
                                                          
                                                          
                                                          $
                                                          6,435
                                                          
                                                          
                                                          $
                                                          3,740Tax
      benefit recognized
                                                          
                                                          $
                                                          542
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -
 
 As at
December 31, 2008, there was $2,343 of unrecognized compensation cost related to
non-vested awards which is expected to be recognized over the next 4.0
years.  During the nine-month period ended December 31, 2008, the fair
value of options vested
  Page 28
of 42
 was $682
(year ended March 31, 2008 - $1,734; year ended March 31, 2007 - $1,220; year
ended March 31, 2006 - $739).
 
 In
October 2007, the Company received an inquiry from the Ontario Securities
Commission related to granting of Company stock options.  A
comprehensive review of historical stock option granting processes and the
related accounting for the 13-year period from 1995 to 2007 was conducted by a
Special Committee of the Company’s Board of Directors comprised of independent
directors.  As a result of the review, the Special Committee found
that the practice followed by the Company in granting stock options was not
accounted for correctly and recommended the measurement dates of certain option
grants be revised for accounting purposes.  As a result, $3,278 of
incremental non-cash compensation expense was recorded in the year ended March
31, 2008 to correct the error and exercise prices of outstanding unexercised
options were revised.  In addition, cash payments of $1,644 were
received in the year ended March 31, 2008 on account of adjustments to exercise
prices of previously exercised options and recorded as contributed
surplus.
 
 The fair
value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model, utilizing the following weighted average
assumptions:
 
 Nine
      months
                          ended
                          December
      31,
                        
                        
                        Year
      ended March 31,2008
                        
                        
                        2008
                        
                        
                        2007
                        
                        
                        2006Risk-free
      interest rate
                        
                        
                        2.2
                        %
                        
                        
                        4.8
                        %
                        
                        
                        4.3
                        %
                        
                        
                        4.7
                        %Expected
      life in years
                        
                        
                        4.70
                        
                        
                        
                        3.75
                        
                        
                        
                        3.75
                        
                        
                        
                        4.40Expected
      volatility
                        
                        
                        30.5
                        %
                        
                        
                        26.4
                        %
                        
                        
                        25.2
                        %
                        
                        
                        30.0
                        %Dividend
      yield
                        
                        
                        0
                        %
                        
                        
                        0
                        %
                        
                        
                        0
                        %
                        
                        
                        0
                        %Weighted
      average fair value per option granted
                        
                        $
                        4.53
                        
                        
                        $
                        9.31
                        
                        
                        $
                        6.70
                        
                        
                        $
                        7.65
 
 The
risk-free interest rate is based on the implied yield of a zero-coupon US
Treasury bond with a term equal to the option’s expected term.  The
expected term represents the estimated period of time until exercise and is
based on historical experience.  Prior to January 1, 2008, the
expected term was calculated using the simplified method under SAB
107.  The expected volatility is based on the historical prices of the
Company’s shares.  The dividend yield assumption is based on the
Company’s present intention to retain all earnings in respect of the Common
Shares.
 
 Subsidiary stock option
plan
 The
Company has a stock option plan at one of its subsidiaries.  Grants
under the subsidiary stock option plan are equity classified awards and
liability classified awards under SFAS 123R.  The impact of potential
dilution from this plan is reflected in the Company’s diluted earnings per
common share (note 15).
 
 Page 29
of 42
 14.
            Income
      taxes
 
 Income
taxes differ from the amounts that would be obtained by applying the statutory
rate to the respective years’ earnings before taxes.  These
differences result from the following items:
 
 Nine
      months
                                                  ended
                                                  December
      31,
                                                
                                                
                                                Year
      ended March 31,2008
                                                
                                                
                                                2008
                                                
                                                
                                                2007
                                                
                                                
                                                2006Income
      tax expense using combined statutory rate of 34% (March 31, 2008 – 35%;
      March 31, 2007 - 36%; March 31, 2006 – 36%)
                                                
                                                $
                                                19,062
                                                
                                                
                                                $
                                                24,588
                                                
                                                
                                                $
                                                25,504
                                                
                                                
                                                $
                                                19,728Permanent
      differences
                                                
                                                
                                                (1,117
                                                )
                                                
                                                
                                                70
                                                
                                                
                                                
                                                1,023
                                                
                                                
                                                
                                                (917
                                                )Adjustments
      in tax liabilities of prior periods
                                                
                                                
                                                (2,405
                                                )
                                                
                                                
                                                522
                                                
                                                
                                                
                                                (1,790
                                                )
                                                
                                                
                                                -Effects
      of changes in enacted tax rates
                                                
                                                
                                                1,495
                                                
                                                
                                                
                                                (420
                                                )
                                                
                                                
                                                (451
                                                )
                                                
                                                
                                                -Changes
      in provisions for uncertain tax positions
                                                
                                                
                                                2,629
                                                
                                                
                                                
                                                1,733
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Stock-based
      compensation
                                                
                                                
                                                (645
                                                )
                                                
                                                
                                                (1,290
                                                )
                                                
                                                
                                                1,353
                                                
                                                
                                                
                                                834Foreign
      tax rate differential
                                                
                                                
                                                (4,498
                                                )
                                                
                                                
                                                (9,373
                                                )
                                                
                                                
                                                (5,272
                                                )
                                                
                                                
                                                (3,561
                                                )Withholding
      taxes
                                                
                                                
                                                476
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Other
      taxes
                                                
                                                
                                                254
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Losses
      not recognized – valuation allowance
                                                
                                                
                                                15,627
                                                
                                                
                                                
                                                1,278
                                                
                                                
                                                
                                                -Provision
      for income taxes as reported
                                                
                                                $
                                                30,878
                                                
                                                
                                                $
                                                17,108
                                                
                                                
                                                $
                                                20,367
                                                
                                                
                                                $
                                                16,084
 
 
 Earnings
before income taxes and minority interest by tax jurisdiction comprise the
following:
 
 Nine
      months
                                              ended
                                              December
      31,
                                            
                                            
                                            Year
      ended March 31,2008
                                            
                                            
                                            2008
                                            
                                            
                                            2007
                                            
                                            
                                            2006Canada
                                            
                                            $
                                            17,399
                                            
                                            
                                            $
                                            15,515
                                            
                                            
                                            $
                                            3,340
                                            
                                            
                                            $
                                            1,075United
      States
                                            
                                            
                                            18,043
                                            
                                            
                                            
                                            32,154
                                            
                                            
                                            
                                            45,892
                                            
                                            
                                            
                                            41,401Foreign
                                            
                                            
                                            21,463
                                            
                                            
                                            
                                            21,716
                                            
                                            
                                            
                                            21,380
                                            
                                            
                                            
                                            12,143Total
                                            
                                            $
                                            56,905
                                            
                                            
                                            $
                                            69,385
                                            
                                            
                                            $
                                            70,612
                                            
                                            
                                            $
                                            54,619
 
 Page 30
of 42
 The
provision for income taxes comprises the following:
 
 Nine
      months
                                                                            ended
                                                                            December
      31,
                                                                          
                                                                          
                                                                          Year
      ended March 31,2008
                                                                          
                                                                          
                                                                          2008
                                                                          
                                                                          
                                                                          2007
                                                                          
                                                                          
                                                                          2006CurrentCanada
                                                                          
                                                                          $
                                                                          3,554
                                                                          
                                                                          
                                                                          $
                                                                          8,839
                                                                          
                                                                          
                                                                          $
                                                                          (1,494
                                                                          )
                                                                          
                                                                          $
                                                                          328United
      States
                                                                          
                                                                          
                                                                          22,496
                                                                          
                                                                          
                                                                          
                                                                          18,063
                                                                          
                                                                          
                                                                          
                                                                          19,912
                                                                          
                                                                          
                                                                          
                                                                          14,936Foreign
                                                                          
                                                                          
                                                                          7,989
                                                                          
                                                                          
                                                                          
                                                                          12,743
                                                                          
                                                                          
                                                                          
                                                                          7,343
                                                                          
                                                                          
                                                                          
                                                                          4,48234,039
                                                                          
                                                                          
                                                                          
                                                                          39,645
                                                                          
                                                                          
                                                                          
                                                                          25,761
                                                                          
                                                                          
                                                                          
                                                                          19,746DeferredCanada
                                                                          
                                                                          
                                                                          (6,553
                                                                          )
                                                                          
                                                                          
                                                                          (10,829
                                                                          )
                                                                          
                                                                          
                                                                          (713
                                                                          )
                                                                          
                                                                          
                                                                          (1,235
                                                                          )United
      States
                                                                          
                                                                          
                                                                          4,596
                                                                          
                                                                          
                                                                          
                                                                          (8,319
                                                                          )
                                                                          
                                                                          
                                                                          (3,094
                                                                          )
                                                                          
                                                                          
                                                                          (2,146
                                                                          )Foreign
                                                                          
                                                                          
                                                                          (1,204
                                                                          )
                                                                          
                                                                          
                                                                          (3,389
                                                                          )
                                                                          
                                                                          
                                                                          (1,587
                                                                          )
                                                                          
                                                                          
                                                                          (281
                                                                          )(3,161
                                                                          )
                                                                          
                                                                          
                                                                          (22,537
                                                                          )
                                                                          
                                                                          
                                                                          (5,394
                                                                          )
                                                                          
                                                                          
                                                                          (3,662
                                                                          )Total
                                                                          
                                                                          $
                                                                          30,878
                                                                          
                                                                          
                                                                          $
                                                                          17,108
                                                                          
                                                                          
                                                                          $
                                                                          20,367
                                                                          
                                                                          
                                                                          $
                                                                          16,084
 
 
 The
significant components of deferred income taxes are as follows:
 
 December
      31,
                                                                2008
                                                              
                                                              
                                                              March
      31,
                                                                2008
                                                              
                                                              
                                                              March
      31,
                                                                2007Deferred
      income tax assetsLoss
      carry-forwards
                                                              
                                                              $
                                                              8,117
                                                              
                                                              
                                                              $
                                                              24,106
                                                              
                                                              
                                                              $
                                                              4,819Expenses
      not currently deductible
                                                              
                                                              
                                                              8,641
                                                              
                                                              
                                                              
                                                              3,155
                                                              
                                                              
                                                              
                                                              7,605Stock-based
      compensation
                                                              
                                                              
                                                              1,942
                                                              
                                                              
                                                              
                                                              3,284
                                                              
                                                              
                                                              
                                                              -Provision
      for doubtful accounts
                                                              
                                                              
                                                              2,566
                                                              
                                                              
                                                              
                                                              1,092
                                                              
                                                              
                                                              
                                                              649Inventory
      and other reserves
                                                              
                                                              
                                                              524
                                                              
                                                              
                                                              
                                                              97
                                                              
                                                              
                                                              
                                                              4121,790
                                                              
                                                              
                                                              
                                                              31,734
                                                              
                                                              
                                                              
                                                              13,114Deferred
      income tax liabilitiesDepreciation
      and amortization
                                                              
                                                              
                                                              39,956
                                                              
                                                              
                                                              
                                                              34,172
                                                              
                                                              
                                                              
                                                              28,365Unrealized
      foreign exchange gains
                                                              
                                                              
                                                              1,428
                                                              
                                                              
                                                              
                                                              4,582
                                                              
                                                              
                                                              
                                                              1,010Investments
                                                              
                                                              
                                                              526
                                                              
                                                              
                                                              
                                                              2,717
                                                              
                                                              
                                                              
                                                              2,397Prepaid
      and other expenses deducted for tax purposes
                                                              
                                                              
                                                              132
                                                              
                                                              
                                                              
                                                              448
                                                              
                                                              
                                                              
                                                              458Financing
      fees
                                                              
                                                              
                                                              105
                                                              
                                                              
                                                              
                                                              110
                                                              
                                                              
                                                              
                                                              17242,147
                                                              
                                                              
                                                              
                                                              42,029
                                                              
                                                              
                                                              
                                                              32,402Net
      deferred income tax liability
                                                              
                                                              $
                                                              (20,357
                                                              )
                                                              
                                                              $
                                                              (10,295
                                                              )
                                                              
                                                              $
                                                              (19,288
                                                              )
 
 As at
December 31, 2008, the Company had Canadian net operating loss carry-forward
balances of approximately $26,235 (March 31, 2008 - $41,432; March 31, 2007 -
$15,515) prior to a valuation allowance of nil (March 31, 2008 - $3,950; March
31, 2007 - $3,950).  These amounts are available to reduce future
federal and provincial income taxes.  Net operating loss carry-forward
balances attributable to Canada and the United States expire over the next 20
years.  The Company also had foreign net operating loss carry-forward
balances as at December 31, 2008 of approximately $58,633 (March 31, 2008 -
$43,582; March 31, 2007 - $17,619), prior to a valuation allowance of $57,457
(March 31, 2008 - $19,062; March 31, 2007 - $15,416).  Foreign capital
loss carry-forward balances amounted to $8,017 (March 31, 2008 - $9,870; March
31, 2007 - $9,870) as at December 31, 2008 prior to a valuation allowance of
$8,017 (March 31, 2008 - $9,870; March 31, 2007 - $9,870).  Additional
net operating loss and capital loss carry-forward balances of $15,416 as at
December 31, 2008 (March 31, 2008 - $15,416; March 31, 2007 - $15,416) and
$8,017 (March 31, 2008 - $9,870; March 31, 2007 - $9,870) respectively relate to
losses acquired in the 2004 CMN acquisition.  Any benefit realized
with respect to these losses would be recorded as a reduction in
goodwill.
 
 Page 31
of 42
 Cumulative
unremitted earnings of US and foreign subsidiaries approximated $141,730 as at
December 31, 2008 (March 31, 2008 - $145,014; March 31, 2007 -
$110,898).
 
 The
cumulative effect of the adoption of FIN 48 was an increase in tax provisions of
$3,800, including $700 of accrued interest, which was accounted for as a
reduction to retained earnings as at April 1, 2007 of $4,200 and a reduction in
goodwill of $400.  The liability for income taxes associated with
uncertain tax positions was $4,735 as at April 1, 2007, $10,671 as at March 31,
2008 and $12,903 as at December 31, 2008.
 
 A
reconciliation of the beginning and ending amounts of gross unrecognized tax
benefit is as follows:
 
 Balance,
      April 1, 2007
                              
                              $
                              4,735Increases
      based on tax positions related to the current period
                              
                              
                              445Increases
      for tax positions of prior periods
                              
                              
                              1,470Decreases
      for tax positions of prior periods
                              
                              
                              (490
                              )Increases
      from acquisitions
                              
                              
                              4,511Balance,
      March 31, 2008
                              
                              $
                              10,671Increases
      based on tax positions related to the current period
                              
                              
                              2,459Increases
      for tax positions of prior periods
                              
                              
                              603Decreases
      for tax positions of prior periods (including lapses in statutes of
      limitations)
                              
                              
                              (830
                              )Balance,
      December 31, 2008
                              
                              $
                              12,903
 
 Of the
$12,903 (March 31, 2008 - $10,671) in gross unrecognized tax benefits, $8,062,
(March 31, 2008 - $5,341) would affect the Company’s effective tax rate if
recognized.  For the nine-month period ended December 31, 2008, $554
of interest and penalties related to provisions for income taxes was recorded in
income tax expense (year ended March 31, 2008 - $77).  As at December
31, 2008, the Company had accrued $1,331 (March 31, 2008 - $777; March 31, 2007
- $700) for potential income-tax related interest and penalties.
 
 The
Company’s significant tax jurisdictions include the United States of America,
Canada and Australia.  The number of years with open tax audits varies
depending on the tax jurisdictions.  Generally, income tax returns
filed with the Canada Revenue Agency and related provinces are open for three to
four years and income tax returns filed with the U.S. Internal Revenue Service
and related states are open for three to five years.  Tax returns in
Australia are generally open for four years.
 
 Within
the next twelve months, the Company believes it is reasonably possible that the
total amount of unrecognized tax benefits associated with certain positions may
be reduced due to lapses in the statutes of limitations.  The Company
estimates that the unrecognized tax benefits at December 31, 2008 could be
reduced by approximately $753.
 
 The
Company does not currently expect any other material impact on earnings to
result from the resolution of matters related to open taxation years, other than
noted above.  Actual settlements may differ from the amounts
accrued.  The Company has, as part of its FIN 48 analysis, made its
current estimates based on facts and circumstances known to date and cannot
predict changes in facts and circumstances that may affect its current
estimates.
 
 Page 32
of 42
 15.
            Earnings
      per common share
 
 The
following table reconciles the numerator used to calculate diluted earnings per
common share:
 
 Nine
      months
                                                                      ended
                                                                      December
      31,
                                                                    
                                                                    
                                                                    Year
      ended March 31,2008
                                                                    
                                                                    
                                                                    2008
                                                                    
                                                                    
                                                                    2007
                                                                    
                                                                    
                                                                    2006Net
      earnings from continuing operations
                                                                    
                                                                    $
                                                                    11,508
                                                                    
                                                                    
                                                                    $
                                                                    35,474
                                                                    
                                                                    
                                                                    $
                                                                    34,963
                                                                    
                                                                    
                                                                    $
                                                                    26,757Dilution
      of net earnings resulting from assumed exercise of stock options in
      subsidiaries
                                                                    
                                                                    
                                                                    (530
                                                                    )
                                                                    
                                                                    
                                                                    (1,473
                                                                    )
                                                                    
                                                                    
                                                                    (2,228
                                                                    )
                                                                    
                                                                    
                                                                    (1,253
                                                                    )Preferred
      Share dividends
                                                                    
                                                                    
                                                                    (7,760
                                                                    )
                                                                    
                                                                    
                                                                    (6,952
                                                                    )
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -Net
      earnings from continuing operations for diluted earnings per share
      calculation purposes
                                                                    
                                                                    $
                                                                    3,218
                                                                    
                                                                    
                                                                    $
                                                                    27,049
                                                                    
                                                                    
                                                                    $
                                                                    32,735
                                                                    
                                                                    
                                                                    $
                                                                    25,504Net
      earnings available to common shareholders
                                                                    
                                                                    $
                                                                    54,276
                                                                    
                                                                    
                                                                    $
                                                                    27,447
                                                                    
                                                                    
                                                                    $
                                                                    34,863
                                                                    
                                                                    
                                                                    $
                                                                    69,497Dilution
      of net earnings resulting from assumed exercise of stock options in
      subsidiaries
                                                                    
                                                                    
                                                                    (530
                                                                    )
                                                                    
                                                                    
                                                                    (1,473
                                                                    )
                                                                    
                                                                    
                                                                    (2,228
                                                                    )
                                                                    
                                                                    
                                                                    (1,253
                                                                    )Net
      earnings for diluted earnings per share calculation
    purposes
                                                                    
                                                                    $
                                                                    53,746
                                                                    
                                                                    
                                                                    $
                                                                    25,974
                                                                    
                                                                    
                                                                    $
                                                                    32,635
                                                                    
                                                                    
                                                                    $
                                                                    68,244
 
 The
Preferred Shares are anti-dilutive and thus not included in the denominator for
diluted earnings per common share calculations.  The following table
reconciles the denominator used to calculate earnings per common
share:
 
 Nine
      months
                                                          ended
                                                          December
      31,
                                                        
                                                        
                                                        Year
      ended March 31,2008
                                                        
                                                        
                                                        2008
                                                        
                                                        
                                                        2007
                                                        
                                                        
                                                        2006Shares
      issued and outstanding at beginning of period
                                                        
                                                        
                                                        30,112,587
                                                        
                                                        
                                                        
                                                        29,922,888
                                                        
                                                        
                                                        
                                                        30,055,788
                                                        
                                                        
                                                        
                                                        30,192,788Weighted
      average number of shares:Issued
      during the period
                                                        
                                                        
                                                        63,469
                                                        
                                                        
                                                        
                                                        106,139
                                                        
                                                        
                                                        
                                                        210,843
                                                        
                                                        
                                                        
                                                        137,943Repurchased
      during the period
                                                        
                                                        
                                                        (592,113
                                                        )
                                                        
                                                        
                                                        (124,371
                                                        )
                                                        
                                                        
                                                        (364,101
                                                        )
                                                        
                                                        
                                                        (160,040
                                                        )Weighted
      average number of shares used in computing basic earnings per
      share
                                                        
                                                        
                                                        29,583,943
                                                        
                                                        
                                                        
                                                        29,904,656
                                                        
                                                        
                                                        
                                                        29,902,530
                                                        
                                                        
                                                        
                                                        30,170,691Assumed
      exercise of stock options, net of shares assumed acquired under the
      Treasury Stock Method
                                                        
                                                        
                                                        170,739
                                                        
                                                        
                                                        
                                                        642,310
                                                        
                                                        
                                                        
                                                        451,774
                                                        
                                                        
                                                        
                                                        725,286Number
      of shares used in computing diluted earnings per share
                                                        
                                                        
                                                        29,754,682
                                                        
                                                        
                                                        
                                                        30,546,966
                                                        
                                                        
                                                        
                                                        30,354,304
                                                        
                                                        
                                                        
                                                        30,895,977
 
 Page 33
of 42
 16.
            Other
      supplemental information
 Nine
      months
                      ended
                      December
      31,
                    
                    
                    Year
      ended March 31,2008
                    
                    
                    2008
                    
                    
                    2007
                    
                    
                    2006Franchisor
      operationsRevenues
                    
                    $
                    63,987
                    
                    
                    $
                    99,351
                    
                    
                    $
                    95,354
                    
                    
                    $
                    88,531Operating
      earnings
                    
                    
                    17,308
                    
                    
                    
                    26,199
                    
                    
                    
                    21,163
                    
                    
                    
                    16,728Initial
      franchise fee revenues
                    
                    
                    3,887
                    
                    
                    
                    5,606
                    
                    
                    
                    5,571
                    
                    
                    
                    3,482Cash
      payments made during the periodIncome
      taxes
                    
                    $
                    20,628
                    
                    
                    $
                    45,275
                    
                    
                    $
                    25,748
                    
                    
                    $
                    25,179Interest
                    
                    
                    13,907
                    
                    
                    
                    19,268
                    
                    
                    
                    16,276
                    
                    
                    
                    12,481Non-cash
      financing activitiesIncreases
      in capital lease obligations
                    
                    $
                    1,403
                    
                    
                    $
                    4,115
                    
                    
                    $
                    1,502
                    
                    
                    $
                    3,284Other
      expensesRent
      expense
                    
                    $
                    35,546
                    
                    
                    $
                    46,681
                    
                    
                    $
                    31,794
                    
                    
                    $
                    26,762
 
 17.
            Financial
      instruments
 
 Concentration
of credit risk
 The
Company is subject to credit risk with respect to its cash and cash equivalents,
accounts receivable and other receivables.  Concentrations of credit
risk with respect to the receivables are limited due to the large number of
entities comprising the Company’s customer base and their dispersion across many
different service lines in various countries.
 
 Interest
rate risk
 The
Company maintains an interest rate risk management strategy that uses interest
rate hedging contracts from time to time.  The Company’s specific
goals are to: (i) manage interest rate sensitivity by modifying the
characteristics of its debt and (ii) lower the long-term cost of its borrowed
funds.Fluctuations
in interest rates affect the fair value of the hedging contracts as their value
depends on the prevailing market interest rate.  Hedging contracts are
monitored on a monthly basis.
 
 As at
December 31, 2008, March 31, 2008 and March 31, 2007, except as disclosed in
note 4, the Company had no interest rate hedges.
 
 Fair
values of financial instruments
 The carrying amounts for cash and
cash equivalents, accounts receivable, accounts payable and accrued liabilities
approximate fair values due to the short maturity of these instruments, unless
otherwise indicated.  The following are estimates of the fair values
for other financial instruments:
 
 December
      31, 2008
                                
                                
                                March
      31, 2008
                                
                                
                                March
      31, 2007Carrying
                                  amount
                                
                                
                                Fair
      value
                                
                                
                                Carrying
                                  amount
                                
                                
                                Fair
      value
                                
                                
                                Carrying
                                  amount
                                
                                
                                Fair
      valueOther
      receivables
                                
                                $
                                16,832
                                
                                
                                $
                                16,832
                                
                                
                                $
                                4,445
                                
                                
                                $
                                4,445
                                
                                
                                $
                                6,599
                                
                                
                                $
                                6,599Held-to-maturity
      securities
                                
                                
                                6,195
                                
                                
                                $
                                6,199
                                
                                
                                
                                4,773
                                
                                
                                $
                                4,833
                                
                                
                                $
                                5,592
                                
                                
                                $
                                5,561Available-for-sale
      securities
                                
                                
                                2,720
                                
                                
                                
                                2,720
                                
                                
                                
                                17,291
                                
                                
                                
                                17,291
                                
                                
                                
                                17,419
                                
                                
                                
                                17,419Long-term
      debt
                                
                                
                                266,369
                                
                                
                                
                                302,494
                                
                                
                                
                                356,030
                                
                                
                                
                                392,429
                                
                                
                                
                                235,131
                                
                                
                                
                                261,009
 
 Other
receivables include notes receivable from minority shareholders and from the
sale of former subsidiaries.  Held-to-maturity investments have
various maturities through to
  Page 34
of 42
 2013 and
are included under the balance sheet captions “restricted cash”, “prepaid
expenses and other current assets” and “other
assets”.  Available-for-sale securities consist of equity securities
of a subsidiary of RBO Fund (see note 7).
 
 The
following table provides the financial assets and liabilities carried at fair
value measured on a recurring basis as of December 31, 2008:
 
 Carrying
      value at
                    December
      31,
                  
                  
                  Fair
      value measurements at December 31, 20082008
                  
                  
                  Level
      1
                  
                  
                  Level
      2
                  
                  
                  Level
      3Available-for-sale
      securities
                  
                  $
                  2,720
                  
                  
                  $
                  2,720
                  
                  
                  $
                  -
                  
                  
                  $
                  -Interest
      rate derivative contracts
                    (discontinued
      operations)
                  
                  
                  10,758
                  
                  
                  
                  -
                  
                  
                  
                  10,758
                  
                  
                  
                  -
 
 
 The
valuation technique used to measure the fair value for available-for-sale
securities is the quoted market price.  Interest rate derivative
contracts are measured at fair value using a valuation model with market price
inputs obtained from third parties.
 
 The
following table provides the financial assets and liabilities measured at fair
value for impairment assessment as of December 31, 2008 and are subject to fair
value adjustments in certain circumstances:
 Carrying
      value at
                  December
      31,
                
                
                Fair
      value measurements at December 31, 20082008
                
                
                Level
      1
                
                
                Level
      2
                
                
                Level
      3Held-to-maturity
      securities
                
                $
                6,195
                
                
                $
                -
                
                
                $
                6,199
                
                
                $
                -
 
 
 Held-to-maturity
investments are valued based on market prices obtained from third
parties.
 
 
 18.
            Commitments
      and contingencies
 
 (a)
            Lease
      commitments
 Minimum
operating lease payments are as follows:
 
 Year
      ending December 312009
                          $
      40,7742010
                          38,4182011
                          33,5572012
                          28,1272013
                          22,465Thereafter
                          40,580
 
 (b)
            Minority
      shareholder agreements
 The
Company has shareholder agreements with the minority owners of its
subsidiaries.  These agreements allow the Company to “call” the
minority position at fair value determined with the use of a formula price,
which is usually equal to a multiple of average net earnings before
extraordinary items, minority interest share of earnings, income taxes,
interest, depreciation, and amortization for a defined period.  The
minority owners may also “put” their interest to the Company at the same price
subject to certain limitations.  The purchase price may be paid in
cash or in Subordinate Voting Shares.  Acquisitions of these
non-controlling interests, if any, would be accounted for as a reduction in
non-controlling interest (see note 23).  The total obligation if all
call or put
  Page 35
of 42
 options
were exercised as at December 31, 2008 was approximately $193,000 (March 31,
2008 - $233,000; March 31, 2007 - $154,000).  As at December 31, 2008,
the Company had $14,867 of loans receivable from minority shareholders secured
by the shares and accordingly, the net obligation was $178,133.  If
all put or call options were settled with Subordinated Voting Shares as at
December 31, 2008, approximately 13,975,000 such shares would be
issued.
 
 (c)
            Contingencies
 In the
normal course of operations, the Company is subject to routine claims and
litigation incidental to its business.  Litigation currently pending
or threatened against the Company includes disputes with former employees and
commercial liability claims related to services provided by the
Company.  The Company believes resolution of such proceedings,
combined with amounts recorded, will not have a material impact on the Company’s
financial condition or the results of operations.
 
 19.
            Related
      party transactions
 
 During
the nine-month period ended December 31, 2008, the Company paid $2,640 (year
ended March 31, 2008 - $2,579; year ended March 31, 2007 - $826; year ended
March 31, 2006 - $775) in rent to entities controlled by minority shareholders
of subsidiaries.  In addition, $2,249 (year ended March 31, 2008 -
$1,168; year ended March 31, 2007 - $388; year ended March 31, 2006 - $335) of
service revenues were earned from entities controlled by minority shareholders
of subsidiaries and $1,103 (year ended March 31, 2008 - $493; year ended March
31, 2007 - $66; year ended March 31, 2006 - $62) of expenses were paid to
entities controlled by minority shareholders of subsidiaries.  During
the year ended March 31, 2008, the Company received $1,644 of cash payments from
officers and directors on account of adjustments to exercise prices of
previously exercised options.
 
 As at
December 31, 2008, the Company had $14,867 of loans receivable from minority
shareholders (March 31, 2008 – $1,946; March 31, 2007 - $1,514).
 
 20.
            Segmented
      information
 
 Operating
segments
 The
Company has three reportable operating segments. The segments are grouped with
reference to the types of services provided and the types of clients that use
those services.  The Company assesses each segment’s performance based
on operating earnings or operating earnings before depreciation and
amortization.  Commercial Real Estate Services provides commercial
property brokerage and other advisory services to clients in North America and
in various other countries around the world.  Residential Property
Management provides property management and related property services to
residential communities in the United States.  Property Services
operates franchise systems, a vendor network and Company-owned “branchise”
stores with customers in the United States and Canada. Corporate includes the
costs of operating the Company’s corporate head office.
 
 Included
in total assets of the Commercial Real Estate Services segment at December 31,
2008 is $2,377 (March 31, 2008 - $3,342; March 31, 2007 - $4,667; March 31, 2006
- $4,608) of investments in subsidiaries accounted for under the equity
method.
 
 
 Page 36
of 42
 Nine
      months ended December 31, 2008
                                                                                                                                                                
                                                                                                                                                                Commercial
                                                                                                                                                                  Real
      Estate
                                                                                                                                                                  Services
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                Residential
                                                                                                                                                                  Property
                                                                                                                                                                  Management
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                Property
                                                                                                                                                                  Services
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                Corporate
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                ConsolidatedRevenues
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                578,192
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                475,251
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                269,114
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                123
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                1,322,680Depreciation
      and
                                                                                                                                                                  amortization
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                17,975
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                7,815
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                5,695
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                261
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                31,746Operating
      earnings
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                17,442
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                36,436
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                36,278
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                (7,026
                                                                                                                                                                )
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                83,130Other
      expense, net
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                (17,973
                                                                                                                                                                )Interest
      expense, net
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                (8,252
                                                                                                                                                                )Income
      taxes
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                (30,878
                                                                                                                                                                )Minority
      interest
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                (14,519
                                                                                                                                                                )Net
      earnings from continuing operations
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                11,508Net
      earnings from discontinued operations
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                50,528Net
      earnings
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                62,036Total
      assets
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                404,781
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                332,765
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                222,485
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                9,893
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                969,924Discontinued
      operations
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                20,713$
                                                                                                                                                                990,637Total
      additions to long-lived assets
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                21,501
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                21,068
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                7,395
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                -
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                49,964
 
 
 Year
      ended March 31, 2008
                                                                                                                                                            
                                                                                                                                                            Commercial
                                                                                                                                                              Real
      Estate
                                                                                                                                                              Services
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            Residential
                                                                                                                                                              Property
                                                                                                                                                              Management
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            Property
                                                                                                                                                              Services
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            Corporate
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            ConsolidatedRevenues
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            787,467
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            544,926
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            216,972
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            348
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            1,549,713Depreciation
      andamortization
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            21,219
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            10,450
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            5,654
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            350
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            37,673Operating
      earnings
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            21,554
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            39,790
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            32,745
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            (15,967
                                                                                                                                                            )
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            78,122Other
      income, net
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            4,650Interest
      expense, net
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            (13,387
                                                                                                                                                            )Income
      taxes
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            (17,108
                                                                                                                                                            )Minority
      interest
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            (16,803
                                                                                                                                                            )Net
      earnings from continuing operations
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            35,474Net
      loss from discontinued operations
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            (1,075
                                                                                                                                                            )Net
      earnings
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            34,399Total
      assets
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            407,850
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            290,692
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            191,553
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            48,475
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            938,570Discontinued
      operations
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            150,773$
                                                                                                                                                            1,089,343Total
      additions to long-lived assets
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            79,873
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            64,471
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            53,560
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            364
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            198,268
 
 
 
 Page 37
of 42
 Year
      ended March 31, 2007
                                                                                                                                                            
                                                                                                                                                            Commercial
                                                                                                                                                              Real
      Estate
                                                                                                                                                              Services
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            Residential
                                                                                                                                                              Property
                                                                                                                                                              Management
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            Property
                                                                                                                                                              Services
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            Corporate
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            ConsolidatedRevenues
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            577,676
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            423,797
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            150,794
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            554
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            1,152,821Depreciation
      and amortization
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            13,502
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            7,644
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            4,653
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            223
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            26,022Operating
      earnings
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            33,250
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            32,622
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            25,911
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            (14,778
                                                                                                                                                            )
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            77,005Other
      income, net
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            1,450Interest
      expense, net
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            (7,843
                                                                                                                                                            )Income
      taxes
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            (20,367
                                                                                                                                                            )Minority
      interest
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            (15,282
                                                                                                                                                            )Net
      earnings from continuing operations
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            34,963Net
      earnings from  discontinued operations
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            1,253Cumulative
      effect of change in accounting principle
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            (1,353
                                                                                                                                                            )Net
      earnings
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            34,863Total
      assets
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            292,708
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            206,977
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            123,832
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            66,023
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            $
                                                                                                                                                            689,540Discontinued
      operations
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            127,458816,998Total
      additions to long-lived assets
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            72,137
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            27,917
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            10,165
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            331
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            
                                                                                                                                                            110,550
 
 
 Year
      ended March 31, 2006
                                                                                                                                                          
                                                                                                                                                          Commercial
                                                                                                                                                            Real
      Estate
                                                                                                                                                            Services
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          Residential
                                                                                                                                                            Property
                                                                                                                                                            Management
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          Property
                                                                                                                                                            Services
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          Corporate
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          ConsolidatedRevenues
                                                                                                                                                          
                                                                                                                                                          $
                                                                                                                                                          438,032
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          $
                                                                                                                                                          346,133
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          $
                                                                                                                                                          134,136
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          $
                                                                                                                                                          367
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          $
                                                                                                                                                          918,668Depreciation
      and amortization
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          11,386
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          5,618
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          3,749
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          168
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          20,921Operating
      earnings
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          25,940
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          25,767
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          22,016
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          (12,636
                                                                                                                                                          )
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          61,087Other
      income, net
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          3,766Interest
      expense, net
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          (10,234
                                                                                                                                                          )Income
      taxes
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          (16,084
                                                                                                                                                          )Minority
      interest
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          (11,778
                                                                                                                                                          )Net
      earnings from continuing operations
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          26,757Net
      earnings from discontinued operations
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          42,740Net
      earnings
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          $
                                                                                                                                                          69,497Total
      assets
                                                                                                                                                          
                                                                                                                                                          $
                                                                                                                                                          204,042
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          $
                                                                                                                                                          150,641
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          $
                                                                                                                                                          114,188
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          $
                                                                                                                                                          149,375
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          $
                                                                                                                                                          618,246Discontinued
      operations
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          92,758711,004Total
      additions to long-lived assets
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          36,799
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          10,400
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          9,909
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          546
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          
                                                                                                                                                          57,654
 
 Page 38
of 42
 Geographic
information
 Revenues
in each geographic region are reported by customer location.  Amounts
reported in geographic regions other than the United States, Canada and
Australia are primarily denominated in US dollars and Euros.
 
 Nine
      months
                                                                                                                              ended
                                                                                                                              December
      31,
                                                                                                                            
                                                                                                                            
                                                                                                                            Year
      ended March 31,2008
                                                                                                                            
                                                                                                                            
                                                                                                                            2008
                                                                                                                            
                                                                                                                            
                                                                                                                            2007
                                                                                                                            
                                                                                                                            
                                                                                                                            2006United
      StatesRevenues
                                                                                                                            
                                                                                                                            $
                                                                                                                            852,644
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            978,868
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            760,366
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            621,548Total
      long-lived assets
                                                                                                                            
                                                                                                                            
                                                                                                                            444,192
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            394,168
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            253,077
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            211,853CanadaRevenues
                                                                                                                            
                                                                                                                            $
                                                                                                                            210,048
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            227,249
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            177,940
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            148,249Total
      long-lived assets
                                                                                                                            
                                                                                                                            
                                                                                                                            70,792
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            75,181
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            67,268
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            37,130AustraliaRevenues
                                                                                                                            
                                                                                                                            $
                                                                                                                            97,975
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            156,812
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            117,794
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            78,011Total
      long-lived assets
                                                                                                                            
                                                                                                                            
                                                                                                                            30,658
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            32,629
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            29,514
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            15,273OtherRevenues
                                                                                                                            
                                                                                                                            $
                                                                                                                            162,013
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            186,784
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            96,721
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            70,860Total
      long-lived assets
                                                                                                                            
                                                                                                                            
                                                                                                                            58,271
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            52,604
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            12,737
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            13,874ConsolidatedRevenues
                                                                                                                            
                                                                                                                            $
                                                                                                                            1,322,680
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            1,549,713
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            1,152,821
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            918,668Total
      long-lived assets
                                                                                                                            
                                                                                                                            $
                                                                                                                            603,913
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            554,582
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            362,596
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            278,130
 
 
 Page 39
of 42
 21.
            Transition
      period comparative data
 
 The
following table presents certain financial information for the nine-month
periods ended December 31, 2008 and 2007, respectively:
 
 Nine
      months
                                                                                  ended
                                                                                  December
      31,
                                                                                  2008
                                                                                
                                                                                
                                                                                Nine
      months
                                                                                  ended
                                                                                  December
      31,
                                                                                  2007(unaudited)Revenues
                                                                                
                                                                                $
                                                                                1,322,680
                                                                                
                                                                                
                                                                                $
                                                                                1,180,582Operating
      earnings
                                                                                
                                                                                
                                                                                83,130
                                                                                
                                                                                
                                                                                
                                                                                89,925Earnings
      before income taxes and minority interest
                                                                                
                                                                                
                                                                                56,905
                                                                                
                                                                                
                                                                                
                                                                                84,206Income
      taxes
                                                                                
                                                                                
                                                                                30,878
                                                                                
                                                                                
                                                                                
                                                                                25,740Earnings
      before minority interest
                                                                                
                                                                                
                                                                                26,027
                                                                                
                                                                                
                                                                                
                                                                                58,466Minority
      interest share of earnings
                                                                                
                                                                                
                                                                                14,519
                                                                                
                                                                                
                                                                                
                                                                                16,112Net
      earnings from continuing operations
                                                                                
                                                                                
                                                                                11,508
                                                                                
                                                                                
                                                                                
                                                                                42,354Net
      earnings from discontinued operations, net of income taxes
                                                                                
                                                                                
                                                                                50,528
                                                                                
                                                                                
                                                                                
                                                                                1,406Net
      earnings
                                                                                
                                                                                $
                                                                                62,036
                                                                                
                                                                                
                                                                                $
                                                                                43,760Net
      earnings per common shareBasic
                                                                                
                                                                                $
                                                                                1.83
                                                                                
                                                                                
                                                                                $
                                                                                1.32Diluted
                                                                                
                                                                                
                                                                                1.81
                                                                                
                                                                                
                                                                                
                                                                                1.21Weighed
      average common shares outstandingBasic
                                                                                
                                                                                
                                                                                29,583,943
                                                                                
                                                                                
                                                                                
                                                                                29,878,635Diluted
                                                                                
                                                                                
                                                                                29,754,682
                                                                                
                                                                                
                                                                                
                                                                                30,417,231
 
 22.
            Application
      of Staff Accounting Bulletin No.
108
 
 In
September 2006, the SEC staff issued Staff Accounting Bulletin No. 108 Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements (“SAB 108”).  SAB 108 was issued in order to
eliminate the diversity of practice surrounding how public companies quantify
financial statement misstatements.  Traditionally, the impacts of
misstatements were evaluated under either an earnings-based (“rollover”)
approach or a balance sheet-based (“iron curtain”) approach.  The
rollover approach focuses on the impact of misstatements on the statement of
earnings, including the reversing impact of prior year misstatements, but its
use can lead to the accumulation of misstatements on the balance
sheet.  The iron curtain approach focuses on the effect of correcting
the period-end balance sheet with less emphasis on the reversing effects of
prior years’ errors on the statement of earnings.  Prior to the
application of SAB 108, the Company used the rollover approach for quantifying
financial statement misstatements.
 
 In SAB
108, the SEC staff established an approach that requires quantification of
financial statement misstatements based on the effects of the misstatements on
each of the Company’s financial statements and the related financial statement
disclosures.  This model is commonly referred to as a “dual approach”
because it requires quantification of errors under both the rollover and iron
curtain approaches.
 
 The
Company adopted the provisions of SAB 108 in connection with the annual
consolidated financial statements for the year ended March 31,
2007.  The provisions of
  Page 40
of 42
 SAB 108
may be applied by either (i) restating prior financial statements as if the dual
approach had always been applied, or (ii) recording the cumulative effect of
initially applying the dual approach as adjustments to the carrying values of
assets and liabilities as of April 1, 2006 with an offsetting adjustment
recorded to the opening balance of retained earnings.  The Company
elected to record the effects of applying SAB 108 using the cumulative effect
transition method (method (ii)).  The following summarizes the effects
of applying SAB 108 to errors previously considered immaterial under the
rollover approach:
 
 (a)
            In
      the Company’s Commercial Real Estates Services operations, broker and
      management compensation vary during the calendar year based on exceeding
      pre-determined production or earnings thresholds.  Since the
      time this segment was acquired in November 2004, the Company recorded
      compensation expense incrementally as thresholds were exceeded, but should
      have recorded compensation expense systematically on a basis approximating
      the expected average commission rate for the calendar year.  As
      a result, the accrued compensation liability as of April 1, 2006 was
      understated by $7,951.  The Company recorded a $7,951 increase
      in the liability as of April 1, 2006 with a corresponding reduction in
      retained earnings to correct this
misstatement.
 (b)
            In
      the Company’s Residential Property Management operations, certain
      subsidiaries did not accrue vacation pay since the time they were acquired
      in 1996 and 1997.  As a result, accrued vacation pay liability
      as of April 1, 2006 was understated by $1,607.  The Company
      recorded a $1,607 increase in the liability as of April 1, 2006 with a
      corresponding reduction in retained earnings to correct this
      misstatement.
 (c)
            In
      the Company’s Residential Property Management operations, certain prepaid
      insurance expenses were not eliminated on consolidation.  As a
      result, prepaid insurance as of April 1, 2006 was overstated by
      $467.  The Company recorded a $467 decrease in the prepaid
      insurance as of April 1, 2006 with a corresponding reduction in retained
      earnings to correct this
misstatement.
 
 As a
result of the misstatements described above, the provision for income taxes was
cumulatively overstated by $3,599 as at April 1, 2006.  The Company
recorded an increase in deferred income tax asset in the amount of $3,599 with a
corresponding increase in retained earnings to correct this
misstatement.  The Company also recorded a reduction in minority
interest in the amount of $1,049 with a corresponding increase to retained
earnings.  Accordingly, the net reduction to retained earnings
recorded as of April 1, 2006 to record the initial application of SAB 108 was
$5,377.
 
 23.
            Impact
      of recently issued accounting
standards
 
 In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS
141R”).  SFAS 141R changes the method of accounting for business
acquisitions at the acquisition date and in subsequent periods.  This
standard is effective prospectively for business combinations for which the
acquisition date is on or after January 1, 2009. The Company has evaluated the
impact of the adoption of SFAS 141R and the following changes in practice will
be required for acquisitions completed under the standard: (i) transaction costs
will be expensed, resulting in increases to selling, general and administrative
expenses; (ii) contingent consideration will be recognized at the acquisition
date, resulting in increases to goodwill and accrued liabilities; and (iii) the
fair value of contingent consideration will be re-measured quarterly, resulting
in increased volatility in earnings.
 
 In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51 (“SFAS
160”).  SFAS
  Page 41
of 42
 160
changes the accounting and reporting for non-controlling (formerly referred to
as minority interests).  SFAS 160 also affects the guidance in EITF
No. D-98, Classification and
Measurement of Redeemable Securities (“EITF D-98”).  SFAS 160
is effective for the Company as of January 1, 2009.  The Company has
evaluated the impact of the adoption of SFAS 160 as well as the changes to
EITF-98.  The following changes in practice will be required: (i)
non-controlling interest will be presented in the “mezzanine” section of the
balance sheet at the redemption value, resulting in a significant increase in
non-controlling interest and (ii) purchases by the Company of non-controlling
interest will be recorded as a reduction of non-controlling
interest.  Upon the initial adoption of SFAS 160 on January 1, 2009,
the Company will increase non-controlling interest in the amount of
approximately $143,000 and will record a corresponding decrease to retained
earnings.
 
 In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities (“SFAS 161”).  SFAS 161
requires enhanced disclosures about the Company’s derivative and hedging
activities such as the objective for using derivative instruments, the method of
accounting for derivative instruments and related hedged items under SFAS No.
133 and its related interpretations, and the effect of derivative instruments
and related hedged items on the Company’s financial position, financial
performance, and cash flows. The Standard is effective for the Company as of
January 1, 2009.  The Company is currently evaluating the impact of
the adoption of SFAS 161 on its financial statement note
disclosures.
 
 In April
2008, the FASB staff issued Statement of Position No. 142-3, Determination of the Useful Life of
Intangible Assets (“FSP 142-3”).  FSP 142-3 amends the factors
used when considering the useful life of recognized intangible
assets.  The Standard is effective for the Company as of January 1,
2009.  The Company is currently evaluating the impact of the adoption
of FSP 142-3 on its financial position and results of operations.