<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-K


                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    FOR THE FISCAL YEAR ENDED MARCH 31, 2001

                         COMMISSION FILE NUMBER 0-24762

                            FIRSTSERVICE CORPORATION
             (Exact name of Registrant as specified in its charter)


           ONTARIO, CANADA                             NOT APPLICABLE
    (State or other jurisdiction of         (I.R.S. employer identification no.)
     incorporation or organization)


            FIRSTSERVICE BUILDING
         1140 BAY STREET, SUITE 4000                             M5S 2B4
          TORONTO, ONTARIO, CANADA                            (Postal Code)
   (Address of Principal Executive Offices)

       Registrant's telephone number, including area code: (416) 960-9500

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE


     SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: SUBORDINATE
                                  VOTING SHARES


         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ or No / /

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of the  Registrant's  knowledge,  in definitive proxy or information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment  to this Form 10-K.  /X/

         The  aggregate  market  value  of  Subordinate  Voting  Shares  held by
non-affiliates  of the Registrant as of June 15, 2001 was $279,178,000  U.S. The
number of the Registrant's  Subordinate Voting Shares outstanding as of June 15,
2001 was 12,829,893 and the closing market price of such shares on that date was
$21.76 U.S. The number of Multiple  Voting Shares  outstanding  on June 15, 2001
was 662,847.



<PAGE>

                                      -2-


                            FIRSTSERVICE CORPORATION

                           ANNUAL REPORT ON FORM 10-K
                                 MARCH 31, 2001


                                      INDEX

<TABLE>
<CAPTION>
                                                                            PAGE
<S>
PART  I       <C>                                                           <C>

ITEM 1.       BUSINESS                                                        3
ITEM 2.       PROPERTIES                                                     15
ITEM 3.       LEGAL PROCEEDINGS                                              16
ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS            16

PART  II

ITEM 5.       MARKET FOR REGISTRANT'S SHARES AND
                   RELATED SHAREHOLDER MATTERS                               17
ITEM 6.       SELECTED FINANCIAL DATA                                        18
ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS             19
ITEM 7A.      FINANCIAL INSTRUMENTS - QUANTITATIVE AND QUALITATIVE
                 DISCLOSURES ABOUT MARKET RISK                               25
ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                    25
ITEM 9.       DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE           44


PART  III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT             45
ITEM 11.      EXECUTIVE COMPENSATION                                         47
ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                   AND MANAGEMENT                                            51
ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                 52


PART  IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND
                   REPORTS ON FORM 8-K                                       53


SIGNATURES                                                                   55

</TABLE>





<PAGE>

                                      -3-

PART  I

ITEM 1.  BUSINESS

         UNLESS OTHERWISE INDICATED, ALL DOLLAR AMOUNTS IN THIS FORM 10-K ARE
EXPRESSED IN UNITED STATES DOLLARS.

         This annual report is prepared on Form 10-K and is filed by
FirstService Corporation, an Ontario company (hereinafter sometimes referred
to as the "Registrant"). The Registrant and its subsidiaries are referred to
as "FirstService" or the "Company". The Registrant is a "foreign private
issuer" as defined under Rule 405 of Regulation C under the Securities Act of
1933, as amended. However, commencing with the year ended March 31, 2000, the
Registrant elected to file its annual, quarterly and current reports on forms
designated for U.S. domestic issuers.

FORWARD-LOOKING STATEMENTS

         This annual report on Form 10-K contains or incorporates by reference
certain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company intends that such forward-looking
statements be subject to the safe harbors created by such legislation. Such
forward-looking statements involve risks and uncertainties and include, but are
not limited to, statements regarding future events and the Company's plans,
goals and objectives. Such statements are generally accompanied by words such as
"intend", "anticipate", "believe", "estimate", "expect" or similar statements.
The Company's actual results may differ materially from such statements. Among
the factors that could result in such differences are the impact of weather
conditions, increased competition, labor shortages, the condition of the United
States and Canadian economies, and the ability of the Company to make
acquisitions at reasonable prices. Although the Company believes that the
assumptions underlying its forward-looking statements are reasonable, any of the
assumptions could prove inaccurate and, therefore, there can be no assurance
that the results contemplated in such forward-looking statements will be
realized. The inclusion of such forward-looking statements should not be
regarded as a representation by the Company or any other person that the future
events, plans or expectations contemplated by the Company will be achieved. The
Company notes that past performance in operations and share price are not
necessarily predictive of future performance.


OVERVIEW

         FirstService is a leader in the rapidly growing service sector,
providing a variety of Property and Business Services to commercial and
residential customers in the following areas: residential property management,
integrated security services, consumer services and business services. Each
service line provides essential or near-essential services, generates a high
percentage of recurring revenues, has strong cash flows, generates high returns
on invested capital and can be leveraged through margin enhancement,
cross-selling or consolidation.

         From the time of going public in 1993, the Company has posted a track
record of consistent growth in revenues and profitability by leveraging off the
expertise it has developed since the predecessor to the Company was founded by
Jay S. Hennick, Chairman and CEO, in 1972. For the fiscal year ending March 31,
2001 ("Fiscal 2001"), revenue and earnings before interest, taxes, depreciation
and amortization ("EBITDA") were $424.2 million and $47.9



<PAGE>

                                      -4-

million, respectively.  Approximately 72% of the Company's revenues are
generated  in the United  States,  with the  balance in Canada.  The  Company is
listed on both the NASDAQ National  Market (symbol:  FSRV) and the Toronto Stock
Exchange (symbol: FSV) and its internet address is WWW.FIRSTSERVICE.COM.

The Company's operations are conducted through two operating divisions and four
operating segments:


                            FIRSTSERVICE CORPORATION

             Property Services                               Business Services
                  Division                                        Division

Residential          Integrated         Consumer
 property             security          services*
management


* Includes both franchised and Company-owned services.


<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------
REVENUE BY OPERATING SEGMENT
(In thousands of U.S. dollars)
                                                          YEAR ENDED      YEAR ENDED       YEAR ENDED
                                                            MARCH 31        MARCH 31         MARCH 31
                                                                2001            2000             1999
-----------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>              <C>
Property Services Division
     Residential property management                        $181,730       $ 133,782         $ 90,649
     Integrated security services                             81,007          61,539           52,827
     Consumer services                                        78,838          71,330           61,618
Business Services Division                                    82,346          73,198           58,162
Corporate                                                        253             186              105
                                                          ----------        --------        ---------
TOTAL                                                     $  424,174        $340,035        $ 263,361
                                                          ----------        --------        ---------
                                                          ----------        --------        ---------
-----------------------------------------------------------------------------------------------------
</TABLE>

         Please note that (i) residential property management was previously
disclosed as management services and (ii) integrated security services was
previously disclosed as security services.

         Note 15 to the Consolidated Financial Statements included herein under
Part II contains further details regarding the operating profit and total assets
of the operating segments of the Company.


DESCRIPTION OF BUSINESS

PROPERTY SERVICES DIVISION
         RESIDENTIAL PROPERTY MANAGEMENT
         FirstService is the largest manager of private residential communities
in North America. Private residential communities include condominiums,
cooperatives, gated communities and a variety of other residential developments
governed by multiple unit residential community associations (collectively
referred to as "community associations"). In total, the Company manages more
than 360,000 residential units in 1,800 community associations in the States of

<PAGE>

                                      -5-

Florida, New Jersey, Arizona, New York, Virginia, Pennsylvania, Delaware,
Maryland, and the District of Columbia.

         In Florida, the Company operates under the Continental Group, Prime
Management Group, Dickinson Management and Sterling Management brands. In the
mid-Atlantic region, the Company operates under the Wentworth Group, Armstrong
Management and Arco Management brands. The Company's Arizona operations are
conducted through Rossmar & Graham Community Association Management.

         In addition, through its subsidiary American Pool Enterprises, Inc.
("American Pool"), FirstService is the largest manager of commercial swimming
pools and recreation facilities in North America. American Pool currently serves
more than 1,400 commercial swimming pools and recreation facilities and more
than 5,500 residential swimming pools in ten U.S. States and in Canada,
providing recreational facility management, staffing, maintenance and
restoration services. The operations of American Pool, outside of the Florida
and Arizona markets, are seasonal in nature with the majority of revenues being
earned in the first and second fiscal quarters.

         In the residential property management industry, there are two types of
professional property management companies: (i) traditional property managers,
and (ii) full-service property managers. Traditional property managers primarily
handle administrative property management functions such as collecting
maintenance fees, sourcing and paying suppliers, preparing financial statements
and contracting out support services. Full-service property managers provide the
same services as traditional property managers but also provide a variety of
other services under one exclusive contract. FirstService is a full-service
property manager and in many markets provides a full range of services including
grounds maintenance, landscaping, painting, restoration, pest control,
irrigation, real estate sales and leasing, heating, air conditioning, plumbing
and swimming pool management and maintenance.

         The aggregate budget of the communities managed by FirstService is
approximately $650 million. The aggregate budget of all the community
associations in the United States is estimated to be $25 billion, which gives
FirstService a market share of approximately 2.5%. Currently, FirstService
accesses 18-20% of the aggregate budget of its communities through the various
services that it offers. The Company's strategy is to continue to add
communities under management while striving to earn a greater percentage of the
aggregate budget by introducing additional services and products.

         INTEGRATED SECURITY SERVICES
         FirstService is one of North America's largest providers of integrated
security services, primarily to the commercial market, with operations in ten
branches: six in the United States and four in Canada. The Company operates two
security brands, Intercon (primarily in Canada) and SST (in the United States).

         FirstService designs, installs, repairs and maintains integrated
electronic security systems including identification badging, access control and
closed-circuit television for office buildings, commercial and industrial
facilities, institutional campuses and multi-unit residential properties.
FirstService's customers include FORTUNE 1000 corporations, property management
companies, prominent hospitals and universities, and all levels of government.
Revenues are derived from installation projects, on-going service, branch and
head-office upgrades, central station monitoring and maintenance-related work.


<PAGE>

                                      -6-

         In executing its growth strategy to date, FirstService has focused on
the development of long-term customer relationships, providing complete
enterprise-wide electronic security solutions for all of its customers'
facilities and operations. Going forward, this growth strategy will be augmented
by acquisitions in key U.S. markets enabling FirstService to add strong regional
operators that are leaders in their markets, establish national service
capabilities and leverage its existing national account relationships and
supplier base.

         In Canada, FirstService supplements its integrated electronic security
service offerings with a premium security officer service, providing highly
trained manpower on-site, via mobile patrol and in response to central station
calls. This full service approach of providing both security systems expertise
and security officer services has been a key success factor in delivering growth
in the Canadian market, where commercial security clients often express a desire
for a comprehensive security service.

         CONSUMER SERVICES
         In consumer services, FirstService provides a variety of residential
and commercial services through its network of 1,700 franchised and 15
Company-owned locations across North America and internationally. The principal
brands in the consumer services unit include California Closets, Paul Davis
Restoration, Certa ProPainters, College Pro Painters, ChemLawn Canada, Green
Lawn Care and Nutri-Lawn. Franchised brands are operated by The Franchise
Company, Inc. ("TFC") and Company-owned lawn care brands are operated by
Greenspace Services, Inc. ("Greenspace").

         California Closets is the largest provider of installed closet and home
storage systems in North America. Headquartered in San Rafael, California,
California Closets has approximately 125 franchises in the United States and
Canada as well as master franchises in other countries around the world.
California Closets receives royalties from franchisees based on a percentage of
franchisee revenues.

         Paul Davis Restoration is a Florida-based franchiser of residential and
commercial restoration services serving the insurance restoration industry in
the United States through 215 franchises. This company provides restoration
services for property damaged by natural or man-made disasters. Paul Davis
Restoration receives royalties from franchisees based on a percentage of
franchisee revenues.

         Certa ProPainters is a residential and commercial painting franchise
system with approximately 210 franchisees operating in major markets across the
United States and Canada as well as master franchises in other countries around
the world. Certa ProPainters focuses on high-end residential and commercial
painting and decorating work and other programs for property managers who have
portfolios of condominium and commercial properties. Franchisees pay Certa
ProPainters a fixed fee royalty, plus administrative fees for various ancillary
services.

         College Pro Painters is a seasonal exterior residential painting
franchise system operating in 24 U.S. States and across Canada with
approximately 750 franchisees. It recruits students and trains them to operate
the business, including price estimating, marketing, operating procedures,
hiring, customer service and safety. College Pro Painters receives a royalty
from each franchisee based on a percentage of revenues. College Pro Painters'
operations are seasonal with significant revenue and earnings in the Company's
first and second quarters followed by losses in the third and fourth quarters.


<PAGE>

                                      -7-

         In addition to the franchise systems described above, the Company
operates Stained Glass Overlay, Inc., an Orange, California based franchiser of
decorative glass treatments and Action Window Cleaners, an Ontario-based
seasonal franchise system for students that offers residential window cleaning.

         Franchise agreements are generally for a term of ten years, with the
exception of College Pro Painters and Action Window Cleaners, where the
agreements are for a term of one year.

         In October 2000, TFC acquired Creative Closets, Inc. ("Creative
Closets"), the Boston franchise of California Closets, as its first foray into
"branchising". The goal of branchising is to re-acquire well-established and
profitable franchises to accelerate growth in the territories served by these
franchises. TFC intends to make several more branchising acquisitions as
opportunities arise.

         The Company provides Company-owned residential and commercial lawn care
and landscape services, primarily in Canada, under the ChemLawn, Green Lawn
Care, Natural Alternative and Sears Lawn Care brands, and franchised lawn care
services under the Nutri-Lawn brand. Services to residential customers include
fertilization, weed and pest control for lawns, trees and shrubs and lawn
aeration. The Company, through Greenspace, serves over 120,000 residential lawn
care customers through its Company-owned network of branches in Ontario, Quebec
and Alberta and is estimated to have 40% market share among households who
purchase lawn care services, excluding mowing, in those provinces. Services to
commercial customers include all of the services provided to residential
customers plus mowing, landscaping, irrigation and other services comprising
comprehensive grounds maintenance. The Company's lawn care operations are
seasonal in nature, with the majority of revenue and operating profit earned
during the summer months, offset by operating losses during the winter months.

BUSINESS SERVICES DIVISION
         FirstService's Business Services Division provides customer support and
fulfillment  as well as business  process  outsourcing  services to FORTUNE 1000
companies through 25 branches occupying more than 2.3 million square feet in the
United States,  Canada and Australia.  The principal Business Services operating
subsidiaries  are BDP Business  Data  Services Ltd.  ("BDP"),  DDS  Distribution
Services Ltd. ("DDS"), and Herbert A. Watts Ltd. ("Watts").

         Customer support and fulfillment services, offered by DDS and Watts,
include Customer Relationship Management ("CRM"), order processing, inventory
management, warehousing, order assembly and shipping, rebating and client
profiling. The Company works with its clients to create fully integrated
customer support and fulfillment solutions, which can include on-going technical
service or product support, order processing (including customized e-commerce
solutions), inventory management and fulfillment. Significant customer support
and fulfillment clients include Rogers AT&T Wireless, Merck, Readers Digest, TD
Waterhouse, M&M Mars and DaimlerChrysler.

         CRM services are provided through four state-of-the-art inbound
customer contact centers with a total of 850 workstations, three of which are in
Canada and one in Australia. The Company's recent acquisition of Watts has
greatly enhanced its capabilities in CRM while adding a blue chip client base
and incremental cross-selling opportunities.

         Fulfillment services are provided from 17 branches in the United States
and Canada, including significant facilities in Cleveland, Philadelphia,
Toronto, Los Angeles, Dallas and

<PAGE>

                                      -8-

Chicago. In aggregate,  the Company occupies more than 2 million square feet of
dedicated  fulfillment  capacity,  utilizing  bar  coding  and  on-line
inventory control systems.

         BDP is FirstService's business process outsourcing unit. BDP's
objective is to be recognized as the best strategic partner to businesses and
governments in Canada for the outsourcing of labor-intensive, back-office
functions. BDP provides administrative functions that typically are not
strategic to an organization and can be more efficiently and cost-effectively
performed by third parties that specialize in such activities. BDP has developed
expertise in performing services that require significant labor in coordination
with technology, such as the processing of loan portfolios, credit card and
affinity programs and drug and dental claims. BDP is the second largest student
loan processor in Canada. BDP provides its services from four branches in
Canada. Typical contracts vary in length from one to five years. Significant
customers include Bank of Nova Scotia, Royal Bank of Canada, the Government of
Canada, Manulife Financial and Sun Life.

         A key objective of the Company's Business Services Division is to
establish long-term relationships with clients and leverage such relationships
through the provision of additional services. BDP, DDS and Watts have similar
customer bases and the Company believes there are significant cross-selling
opportunities between these businesses.


INDUSTRY POSITION, COMPETITION AND CUSTOMERS

         The following information is based solely on estimates made by
management of the Company and cannot be verified. In considering the Company's
industry and competitive position, it should be recognized that FirstService
competes with many other companies in the sale of its services, franchises and
products and that some of these competitors are larger and may have greater
financial and marketing strength than FirstService.

PROPERTY SERVICES DIVISION
         RESIDENTIAL PROPERTY MANAGEMENT
         Based on the most recent available industry data, the Company estimates
that: (i) more than 42 million Americans, representing approximately 16 million
households, live in condominiums, cooperatives, planned communities and other
residential developments governed by multiple unit residential community
associations; (ii) more than 50% of new homes currently being built in and
around major metropolitan areas in the United States are within these
categories; (iii) there are approximately 205,000 community associations in the
United States; and (iv) the total annual operating expenses for all community
associations in the U.S. is estimated to be $25 billion. The market is growing
at a rate of 3-4% per year as a result of the 6,000-8,000 new community
associations formed each year. In addition, the growing trend from
self-management to professional management, currently almost 50% of the market,
is believed to at least double the effective growth rate for professional
property management companies.

         Typically, owners of privately owned residential units are required to
pay quarterly or monthly fees to cover the expenses of managing the condominium
or homeowner association's business activities and maintaining community
properties. Historically, decision making for communities was delegated to
volunteer boards of directors elected by the owners. Increasingly, these
volunteer boards have outsourced the responsibility to manage the day-to-day
operation and maintenance of community property to professional property
management companies.

<PAGE>

                                      -9-

         The residential property management industry is extremely fragmented
and dominated by numerous local and regional management companies. Only a small
number of such companies, however, have the expertise and capital to provide
both traditional property management services as well as the other support
services provided by full-service property managers. FirstService is the largest
full-service manager of private residential communities in the United States,
managing approximately 2.5% of the nation's approximately 16.4 million units in
community associations. FirstService enjoys a competitive advantage because of
its size, depth of financial and management resources, and operating expertise.

         The Company's business is subject to regulation by the States in which
it operates. For example, the Florida Department of Professional Regulation
requires that property managers must be licensed which involves certain
examinations and continuing education. In addition, the unit's real estate sales
and leasing operations are subject to regulation as a real estate brokerage by
the various states in which it operates.

         INTEGRATED SECURITY SERVICES
         U.S.  security  systems  integration  is a $3 billion  industry  and is
expected  to grow at an  annual  rate of  approximately  20% over the next  five
years. Factors driving this growth include:

-        THE TREND TOWARD CONSOLIDATION OF SECURITY FUNCTIONS AND REDUCING
         COSTS: Corporate and institutional security embodies a variety of
         independent functions (access control, physical security, employee/user
         security, surveillance, etc.) operating concurrently. Integrating these
         functions into one system is simpler to use, more efficient and
         requires fewer people and resources to operate. An integrated system
         may also replace a number of different legacy systems that had to be
         managed independently, improving functionality and reducing operating
         and maintenance costs.
-        CONTINUED DEVELOPMENT OF NETWORK AND INFORMATION TECHNOLOGY: Security
         systems are highly reliant on modern computer and electronic technology
         and have benefited from advancements in these technologies, becoming
         increasingly more powerful, flexible, and functional. Security systems
         and information for multiple sites can be integrated and controlled
         from a centralized location and administered remotely using advanced
         network and communication technology, including LANs, WANs, and
         web-based networking.
-        INCREASED PUBLIC AWARENESS OF SECURITY ISSUES: Recent examples of
         escalating violence have made security a priority in the workplace,
         schools and other public facilities.

         The industry is highly fragmented but undergoing consolidation. The
market is comprised of many small and medium-sized, and a few very large,
competitors. Of the top 100 systems integrators compiled by SDM MAGAZINE for
2000, only the largest 5 had revenues over $100 million and the smallest 70 had
revenues from ranging from $1 million to $10 million. FirstService is one of the
largest integrated security services providers in North America.

         Larger competitors are driving consolidation in response to customer
demands for comprehensive solution providers with national service capabilities.
Customers are moving away from developing and sourcing each of their security
systems separately from several different suppliers. System integrators must be
able to evaluate customer needs, design an integrated suite of systems and
products that is simple and effective, and provide quality installation and
service in multiple geographic locations. Critical mass and geographic reach
have become increasingly important success factors in this industry.

         FirstService's strategy is to combine strong regional operators into a
national network focusing on long-term relationships with customers that have
complex security needs.

<PAGE>

                                     -10-

FirstService  differentiates  itself through superior  customer service and by
designing  open  architecture  systems  (versus  proprietary  or  closed
systems).

         CONSUMER SERVICES
         The consumer services industry is highly fragmented, consisting
principally of a large number of smaller, single-service or single-concept
companies. Due to the large size of the overall market for these services,
dominant market share is not considered necessary for becoming a major player in
the industry. However, because of the low barriers to entry in this segment, the
Company believes that brand name recognition among consumers is a critical
factor in achieving long term success in the businesses in which it operates.

         The Company believes that the largest franchise companies in North
America have been successful because of their ability to realize economies of
scale through the centralization and successful application of certain
administrative functions such as finance, marketing, purchasing, training and
support staffing.

         Franchise businesses are subject to U.S. Federal Trade Commission
regulations and State and Provincial laws that regulate the offering and sale of
franchises. Presently, the Company is authorized to sell franchises in 49 U.S.
States, in all Canadian Provinces and in several other countries around the
world. In all jurisdictions, the Company endeavors to have its franchisees meet
or exceed regulatory standards.

         The professional lawn care industry is estimated to be an $8 billion
market (including mowing) in North America, and despite some consolidation, is
still highly fragmented. Local and regional competitors, as well as
do-it-yourself homeowners, provide strong competition in the Canadian lawn care
industry, the primary market for the Company's lawn care operations carried out
through Greenspace.

         Federal and Provincial environmental laws are applicable in all
jurisdictions in which Greenspace operates. These regulations dictate which
products and methods may be used and require employees to be properly trained
and licensed in the use of pesticides and herbicides. These laws, together with
municipal bylaws, may limit or restrict the use of certain lawn care practices
and if such laws change, Greenspace's business may be adversely affected.

BUSINESS SERVICES DIVISION
         The Business Services industry is diverse and comprised of distinct
sectors, including the areas in which FirstService participates: (i) customer
support and fulfillment and (ii) business process outsourcing. Competitors range
from large, sophisticated companies to smaller niche providers, with many
possessing adequate size and technical capabilities. Given the large size of the
market, significant growth can be achieved without significant market share.

         Corporations are increasingly concerned with focusing scarce resources
on core operations that provide the greatest competitive advantage and best
return on investment. As a result, non-core functions are being outsourced to
companies that can perform them better, cheaper and faster.

CUSTOMER SUPPORT AND FULFILLMENT: The outsourced portion of the $200 billion CRM
industry is estimated to be $25 billion and is currently growing at a rate of
25-30% per year. Outsourced fulfillment services are a $3.2 billion industry and
have grown at a rate of 9.7% annually since 1996.

<PAGE>

                                     -11-

         The emergence of new technologies in conjunction with recent equity
market and venture capital liquidity has stimulated competition in this segment,
although many new entrants appear to lack significant industry experience. There
are many competitors of all sizes, including a number of public CRM companies.
FirstService is among a handful of successful competitors, none of which
dominate this large, diverse market segment.

         Technology investment is the single largest factor driving change in
the customer support sector with sophisticated CRM software platforms,
high-speed redundant networking, and web-enabled customer care systems quickly
becoming the standard. Outsourced fulfillment is evolving due to the adoption of
technologies such as web-based ordering, real-time inventory, and bar-code and
radio-frequency warehouse systems that are forcing competitors to become larger
and more sophisticated to compete.

BUSINESS PROCESS OUTSOURCING: It is estimated that the outsourced "back office"
processing segment was approximately $23 billion in 2000, with an expected
5-year compound annual growth rate of about 13%. This segment is occupied by
some of the largest business services companies in the world, leveraging their
size to realize economies of scale on very large outsourcing contracts. BDP
tends to focus on certain niches, such as loan processing and credit and loyalty
card administration, where it can capitalize on its specialized expertise.

         FirstService competes on the basis of providing competitively priced
value-added services, supported by strong operating efficiencies.


BUSINESS STRATEGY

OPERATING STRATEGY
         The Company's objective is to increase the revenues, profitability, and
market position of each operating company and subsequently acquired business,
while maintaining the highest level of service to its customers. Key elements of
the Company's operating strategy are:

SENIOR MANAGEMENT COMMITMENT: The Company strongly believes that management
ownership at each of its primary operating units has contributed significantly
to its ability to grow its businesses. As a result, the Company expects to
continue its practice of encouraging strong operators of newly acquired platform
businesses to retain or acquire a significant equity stake in the businesses
they operate, generally in the form of a non-transferable direct equity
ownership position. In all cases, the Company retains the right to purchase the
minority interest at a pre-determined formula price based on a multiple of
trailing twelve month EBITDA. These minority interests average approximately
15%. Management believes that its strategy of aligning the interests of
operating management with those of the Company provides a powerful incentive to
deliver superior financial performance.

PERFORMANCE-BASED COMPENSATION: The Company uses performance-based compensation
programs throughout each of its businesses to attract, retain and motivate its
employees. In general, senior managers receive bonuses which are based on a
percentage of the amount by which their results exceed budgeted EBITDA. Lower
level managers' incentives are also linked to EBITDA targets, but may include
other measures deemed important for growing their business. The Company believes
these programs are effective incentives to operating management and employees to
deliver consistent, high-quality service in a cost-effective manner.


<PAGE>

                                     -12-

OPERATING EFFICIENCIES: The Company has been able to obtain significant
operating efficiencies through the implementation of a variety of "best
practices" and has achieved meaningful cost savings through certain economies of
scale. The Company attempts to identify and refine its best practices across all
of its businesses in order to benefit from the most innovative and effective
management techniques. The implementation of best practices has resulted in
improved labor management, customer service, and service delivery routing. The
Company also achieves significant savings through the volume purchasing of
vehicles, insurance, group benefits, advertising and professional and financial
services.

MARKETING PENETRATION AND JOINT MARKETING: The Company capitalizes on the
complementary nature of its businesses by introducing new or additional services
to customers with which it already has long-term contractual relationships. The
complementary nature of the Company's property services businesses also provides
certain advantages when introducing a new service in a market where the Company
has existing operations. These advantages include significant market knowledge,
demographic information and the ability to share the established overhead of
another company operation. Because the Company provides a number of property
services, it is able to effectively utilize consolidated customer lists,
in-house telemarketing capabilities and other marketing data that is accumulated
to conduct cost-efficient customer referral, couponing and other direct mail
programs across its businesses.

ACQUISITION STRATEGY
         The acquisition strategy of FirstService has been developed to
complement the internal growth strategies of its existing service lines and as a
component of the Company's overall growth strategy of building a significant,
diversified service business that generates recurring and predictable cash flows
and earnings. The acquisition strategy entails the systematic acquisition of
established, well managed, and profitable service companies operating in
fragmented industries that will:

1.       Enhance the market position of an existing service line, provide an
         entry into a new geographic region / market, or introduce a new service
         line, and
2.       Provide a return on invested capital that exceeds FirstService's
         weighted average cost of capital.

         Acquisitions are classified as "tuck-under" or "platform". The vast
majority of acquisitions that FirstService targets and completes are tuck-under
acquisitions. These acquisitions are generally smaller transactions completed
within an existing service line that strengthen its regional presence or
competitive position through increased market share or the addition of a
complementary service line. Platform acquisitions are larger transactions that
either establish an existing service line in a new geographic region or provide
a vehicle for FirstService to add a new service offering that can be leveraged
through cross selling of services, sharing of best practices or other synergies,
or through further consolidation. Each acquisition must meet a strict criteria,
that includes the following:

1.       Strong,  experienced  management  teams in place that are interested
         in growing their businesses and in being rewarded through
         performance-based compensation;
2.       History of consistent profitability, supported by significant
         contractual revenues;
3.       Non-capital intensive operations with variable cost structure;
4.       Leading positions in the markets served; and,
5.       In the case of platform  acquisitions,  one or more senior  managers
         who wish to retain a significant  minority  interest in the acquired
         company in order to  participate  directly in its future growth and
         development as part of FirstService.

<PAGE>

                                     -13-

         In general, platform companies continue to operate on a stand-alone
basis in accordance with FirstService's operating strategy, while drawing on the
resources of FirstService to facilitate future growth. Most tuck-under
acquisitions are fully integrated into the operations of the service line making
the acquisition.

         FirstService has historically paid approximately 4 times normalized and
sustainable EBITDA ("Valuation EBITDA") for its acquisitions. Usually,
consideration is paid with a combination of cash at closing and a contingent
note. Contingent notes are typically paid over a 3-year period, subject to
achievement of the Valuation EBITDA on an averaged basis over the 3-year period
subsequent to closing. In the event that the actual average EBITDA is less than
the Valuation EBITDA, the purchase price and contingent payments are reduced by
a multiple of the deficiency in EBITDA.

         In executing acquisitions, the acquisition team works closely with
operating management of its service lines to identify, negotiate and complete
acquisitions. A substantial majority of acquisitions are negotiated on an
exclusive basis, without the imposition of an intermediary-controlled auction
process, thereby facilitating a focused effort by FirstService to build a
relationship with its prospective partner and emphasize the appropriate balance
of financial and non-financial, as well as long-term and short-term attributes
of the acquisition to the vendor. Notwithstanding the varied acquisition
opportunities available to FirstService, management remains committed to a
disciplined approach to acquisitions, including a rigorous adherence to its
strict acquisition criteria and transaction structure. As well, FirstService
only allocates its financial and human resources to existing service lines for
acquisitions if the management team has the capacity to integrate the
acquisition and the performance of current operations is meeting or exceeding
expectations.

         The integration process is a critical component of all acquisitions
executed by FirstService. This process is initiated during due diligence, when
opportunities for integration, operational improvements, and the sharing of best
practices are identified and a first 100 day plan (the "Plan") is drafted by
FirstService. Post-closing, the Plan is reviewed with management of the acquired
company to ensure that the Plan accurately captures and prioritizes the issues
to be addressed. Once a buy-in has been obtained, the Plan is finalized and a
timetable established for the execution of the Plan by the management of the
acquired company. This is a collaborative process with a high degree of
involvement from FirstService's integration team in overseeing the
implementation and in monitoring progress against the timetable.


RECURRING REVENUE

         A common theme and key focus across FirstService is recurring,
contractual revenue. This is driven by the near-essential nature of the services
provided by the Property Services and Business Services Divisions.

         Approximately 80% of the Company's revenue is contractual in nature. In
the Property Services Division, residential property management contracts are
generally for terms of one to three years, and integrated security services
contracts are generally one year in duration. Contracts with franchisees in
consumer services are primarily for ten-year periods. In the Business Services
Division, contracts have terms of one to five years, with larger contracts
having longer terms. Furthermore, FirstService has historically experienced
contract renewal rates in excess of 90%.

<PAGE>

                                     -14-

CURRENT YEAR DEVELOPMENTS

         In July 2000, the Company acquired an 80% interest in Security Services
and Technologies ("SST"), a Pennsylvania-based provider of integrated security
services, for cash consideration of $7.5 million plus contingent consideration
payable if SST meets certain EBITDA thresholds over a three-year period.

         In March 2001, the Company acquired an 82.15% interest in Herbert A.
Watts Ltd. ("Watts"), a customer support and fulfillment business operating
primarily in Canada, for cash consideration of $10.9 million plus contingent
consideration payable if Watts meets certain earnings thresholds over a
three-year period.

         During  Fiscal  2001,  the  Company  acquired  shares of The  Franchise
Company, Inc. from a minority shareholder, as well as 14.9% of Intercon Security
Ltd. from a minority shareholder, for aggregate consideration of $4.1 million.

         During the year, the Company also acquired the following tuck-under
companies: Silver Plumbing, based in Miami; Aquashield Corporation, a
restoration contractor based in Miami; Creative Closets, Inc., the Boston
franchise of the Company's California Closets franchise system; Century
Security, a Toronto-based security services business and Dickinson Management,
Inc., a Jupiter, Florida residential property management business.

         Subsequent to the end of the fiscal year, on June 29, 2001, the Company
amended its lending agreement to allow for the issuance of additional debt. The
amended agreement provides $140 million of committed revolving credit facilities
renewable and extendible in 364-day increments, and if not renewed, a two-year
final maturity. The facility allows for borrowing in U.S. and / or Canadian
currency and bears interest at 1.50% to 3.00% over floating reference rates,
depending on certain leverage ratios. Also on June 29, 2001, the Company
completed a private placement of $100 million of ten-year 8.06% Senior Secured
Notes.


FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS

         Notes 10 and 15 to the Consolidated Financial Statements included
herein under Part II contain information regarding revenues, earnings before
income taxes and minority interest, and total long-lived assets, by geographic
region.


MINORITY SHAREHOLDERS OF SUBSIDIARIES

         The Company owns a majority interest (on average, 85% of the equity) in
all of its subsidiaries, while the operating management of each non-wholly owned
subsidiary owns the remaining shares. This structure was designed to maintain
control by FirstService while providing significant incentives to management at
the operating companies. In all cases, the Company has the right to repurchase
management's shares at a predetermined formula price, usually payable at the
Company's option with any combination of Subordinate Voting Shares or cash. The
Company may also be obligated to acquire certain of these minority interests in
the event of the death, disability or cessation of employment of minority
shareholders or if minority shareholders exercise their right to require the
Company to repurchase their shares. These

<PAGE>

                                     -15-

arrangements   provide  significant   flexibility  to  the  Company  in
connection  with  management succession planning and shareholder liquidity
matters.

MAJOR CUSTOMERS

         FirstService has no single customer which accounts for more than 2% of
its total revenues. No part of the Company's business is dependent on a single
customer or a few customers, the loss of which would have a material adverse
effect on the Company as a whole. Revenues from governmental sources are not
material.


EMPLOYEES

         The Company has approximately 9,700 full-time employees, rising to a
total of 13,500 in the spring and summer months with seasonal employees.


TRADEMARKS

         FirstService's trademarks are important for the advertising and brand
awareness of all of its businesses and franchises. Trademarks are renewed at
each registration expiry date.



ITEM 2.  PROPERTIES

         The head office of the Registrant is a 20,000 square foot owned
building located at 1140 Bay Street, Toronto, Ontario, Canada, M5S 2B4,
approximately three-quarters of which is leased to third party tenants.

BUSINESS SERVICES DIVISION
         DDS leases approximately 1.7 million square feet of warehouse and
office space in connection with its fulfillment operations. Principal warehouse
locations include 360,000 square feet in Norristown, Pennsylvania; 360,000
square feet in Elyria, Ohio; 300,000 square feet in Strongsville, Ohio; 175,000
square feet in Toronto, Ontario; 108,000 square feet in Dallas, Texas; 116,000
square feet in Whittier, California; and 83,000 square feet in Chicago,
Illinois.

         Watts occupies approximately 106,000 square feet of owned and 454,000
square feet of leased space to house its customer support and fulfillment
operations. The owned space is comprised of its St. John, New Brunswick and two
Prince Edward Island locations. Watts leases 292,000 square feet of space in
Toronto, Ontario as well as 51,000 square feet in Syndey, Australia; 40,000
square feet in Bridgewater, Nova Scotia; 30,000 square feet in Tasmania,
Australia; 26,000 square feet in Delta, British Columbia and 15,000 square feet
in Amherst, New York.

         BDP leases approximately 115,000 square feet of office space,
consisting of 67,000 square feet in Toronto, Ontario; 27,000 square feet in
Orangeville, Ontario; and 21,000 square feet in Ottawa, Ontario.

<PAGE>

                                     -16-

PROPERTY SERVICES DIVISION
         Within the residential property management unit, FirstService owns a
38,000 square foot office and warehouse building located in Boca Raton, Florida,
most of which is occupied by Prime Management Group, Inc. and part of which is
leased to a third party. The Company also owns a 22,000 square foot office and
warehouse building in Hollywood, Florida, which is occupied by The Continental
Group, Ltd. All other residential property management operations are housed in
55 locations totaling approximately 300,000 square feet in aggregate located in
the States where services are offered.

         In integrated security services, Intercon leases approximately 70,000
square feet of office space in Toronto, Ontario, Vancouver, British Columbia and
Oakbrook, Illinois. SST leases 34,000 square feet of space in five locations
within Pennsylvania, New York and New Jersey.

         In consumer services, The Franchise Company, Inc. leases approximately
77,000 square feet of office and warehouse space in several locations across
North America to house its franchise systems. Lawn care services occupy
approximately 135,000 square feet of space in eight locations primarily in
Ontario, Quebec and Alberta.

         The Company believes its existing premises, as described above, are
sufficient to meet its current operating requirements. All significant leased
properties are held under long-term leases.



ITEM 3.  LEGAL PROCEEDINGS

         In the ordinary course of business, FirstService may become involved in
legal proceedings with private or public parties. As at June 29, 2001, these
proceedings included several general liability actions, none of which are
material to the Company, and no environmental actions.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         During the fourth quarter of the year ended March 31, 2001, no matters
were submitted to a vote of security holders.


<PAGE>

                                     -17-

PART  II

ITEM 5.  MARKET FOR REGISTRANT'S SHARES AND RELATED SHAREHOLDER MATTERS

         The Registrant's Subordinate Voting Shares are traded on the NASDAQ
National Market ("NASDAQ") (symbol: FSRV) and the Toronto Stock Exchange ("TSE")
(symbol: FSV). The Registrant's Multiple Voting Shares are not traded on any
established public trading market.

         The following table sets forth the highest and lowest closing prices of
the Registrant's Subordinate Voting Shares in each quarter of the two years
ending March 31, 2001 and 2000:

<TABLE>
<CAPTION>

           -----------------------------------------------------------------------------------
                                         NASDAQ          NASDAQ            TSE             TSE
                                      QUARTERLY       QUARTERLY      QUARTERLY       QUARTERLY
                                     HIGH PRICE       LOW PRICE     HIGH PRICE       LOW PRICE
           QUARTER                       ($ US)          ($ US)        ($ CDN)         ($ CDN)
           -----------------------------------------------------------------------------------
          <S>               <C>          <C>             <C>            <C>             <C>

           FISCAL 2000      Q1           $17.00          $13.06         $25.85          $19.65
                            Q2            15.31           12.00          23.00           17.75
                            Q3            13.69           11.00          19.90           16.25
                            Q4            13.13           11.03          20.50           16.05
           -----------------------------------------------------------------------------------
           FISCAL 2001      Q1           $12.75          $10.50         $19.20          $15.50
                            Q2            13.00           11.00          19.50           16.00
                            Q3            15.38           12.45          23.75           18.80
                            Q4            18.00           13.63          26.77           20.75
           -----------------------------------------------------------------------------------

</TABLE>

         As of June 15, 2001, in relation to the Subordinate Voting Shares,
there were approximately 300 shareholders of record and approximately 4,000
persons who held shares in the names of nominees. One shareholder, the
President and Chief Executive Officer of the Company, held all of the
Multiple Voting Shares.

         No dividends were declared by the Registrant during the two fiscal
years ending March 31, 2001 and 2000. The Company's lending agreement with its
lenders prohibits the Company from declaring dividends without the prior
approval of the lenders.


TAXATION

         The following discussion summarizes certain tax considerations relevant
to an investment by individuals and corporations who, for income tax purposes,
are resident in the United States and not in Canada, hold shares as capital
property, and do not use or hold the shares in carrying on business through a
permanent establishment or in connection with a fixed base in Canada
(collectively, "Unconnected U.S. Shareholders"). The Canadian tax consequences
of investment in the shares by investors who are not Unconnected U.S.
Shareholders may be expected to differ substantially from the tax consequences
discussed herein. This discussion is based on upon the provisions of the Income
Tax Act (Canada) (the "Tax Act"), the Convention between Canada and the United
States of America with respect to taxes on Income and Capital (the "Convention")
and the published administrative practices of the Canada Customs and Revenue
Agency and judicial decisions, all of which are subject to change. This
discussion does not take into account the tax laws of the various provinces or
territories of Canada.

<PAGE>

                                     -18-

         This discussion is intended to be a general description of the Canadian
tax considerations and does not take into account the individual circumstances
of any particular shareholder.

         Any cash and stock dividends on the shares payable to Unconnected U.S.
Shareholders generally will be subject to Canadian withholding tax. Under the
Convention, the rate of withholding tax generally applicable to Unconnected U.S.
Shareholders is 15%. In the case of a United States corporate shareholder owning
10% or more of the voting shares of the Company, the applicable withholding tax
under the Convention is 5%.

         Capital gains realized on the disposition of shares by Unconnected U.S.
Shareholders will not be subject to tax under the Tax Act unless such shares are
taxable Canadian property within the meaning of the Tax Act. Shares will not be
taxable Canadian property to a holder unless, at any time during the five-year
period immediately preceding the disposition, the holder, or persons with whom
the holder did not deal at arm's length, or any combination thereof, owned 25%
or more of the issued shares of any class or series of the Company. If the
shares are considered taxable Canadian property to a holder, the Convention will
generally exempt Unconnected U.S. Shareholders from tax under the Tax Act in
respect of a disposition of shares provided the value of the shares of the
Company is not derived principally from real property situated in Canada.



ITEM 6.  SELECTED FINANCIAL DATA

FIVE-YEAR FINANCIAL SUMMARY
(in thousands of U.S. Dollars, except per share amounts) - in accordance with
United States generally accepted accounting principles.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31                             2001         2000         1999         1998         1997
--------------------------------------------------------------------------------------------------------
<S>                                         <C>          <C>          <C>          <C>          <C>
OPERATIONS
Revenue                                     $424,174     $340,035     $263,361     $196,488     $131,084
EBITDA (1)                                   $47,855      $37,977      $28,767      $18,608      $12,117
Net earnings                                 $12,707       $9,868       $7,222       $4,435       $2,708

FINANCIAL POSITION
Total assets                                $313,660     $230,887     $184,306     $126,019      $76,624
Long-term debt (2)                          $149,374     $102,177      $84,516      $38,163      $28,737
Shareholders' equity                         $79,456      $68,338      $59,020      $44,807      $20,088
Book value per share                           $6.03        $5.26        $4.57        $3.65        $2.12

SHARE DATA
Net earnings per share
    Basic                                      $0.97        $0.76        $0.57        $0.43        $0.30
    Diluted                                    $0.92        $0.72        $0.54        $0.41        $0.30
Weighted average shares (thousands)
    Basic                                     13,074       12,948       12,564       10,370        9,070
    Diluted                                   13,841       13,708       13,475       10,936        9,167
Cash dividends per share                           -            -            -            -            -
--------------------------------------------------------------------------------------------------------
</TABLE>

NOTES
(1)      Earnings before interest, taxes, depreciation and amortization.
(2)      Excluding current portion of long-term debt.

<PAGE>

                                     -19-

ITEM 7.  MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

RESULTS OF OPERATIONS - YEAR ENDED MARCH 31, 2001

         Consolidated revenues for the year ended March 31, 2001 ("Fiscal 2001")
were $424.2 million, a 25% increase from the $340.0 million reported for the
year ended March 31, 2000 ("Fiscal 2000"). Approximately $44.0 million of the
increase resulted from the acquisitions of Security Services and Technologies
("SST") and Herbert A. Watts Ltd. ("Watts"), several smaller tuck-under
companies and the full-year impact of acquisitions completed in Fiscal 2000. The
balance resulted from internal growth of approximately 12%.

         Earnings before interest, taxes, depreciation and amortization
("EBITDA") increased 26%, to $47.9 million from $38.0 million in the prior year,
while EBITDA margins increased 10 basis points to 11.3% of revenue. Fiscal 2001
marks the fifth consecutive year that the Company has reported improved EBITDA
margins.

         Depreciation for the year ended March 31, 2001 was $7.7 million, up 19%
from the previous year due largely to acquisitions. Amortization for the year
was $4.2 million, up 17% over Fiscal 2000 due to the significant amount of
goodwill that has resulted from the acquisitions completed during the years
ended March 31, 2001 and 2000.

         Interest expense increased 24% over prior year levels to $9.8 million
as a result of increased borrowings related to acquisitions completed during
Fiscal 2001 and 2000 and higher interest rates. Weighted average interest rates
were approximately 8.1% in Fiscal 2001 compared to 7.7% in Fiscal 2000. The
change in rates is attributable to increases in floating reference rates. All
acquisitions completed during the last two fiscal years have been financed
through the Company's credit facilities.

         The income tax provision for the year ended March 31, 2001 was
approximately 40% of earnings before taxes, similar to the prior year. The
Company anticipates that its tax rate will decline to approximately 38% for
Fiscal 2002 as it continues to leverage the cross-border tax structure
implemented in Fiscal 2000, subject to the adoption of the new Financial
Accounting Standards Board ("FASB") pronouncement, Statements on Business
Combinations and Goodwill and Intangible Assets which would increase pre-tax
earnings and reduce the effective tax rate.

         Minority interest expense increased to $3.0 million or 19% of earnings
before minority interest from $2.2 million, or 18% in the prior year. The
increase reflects a change in the mix of earnings relative to the prior year as
certain operations having higher minority shareholdings contributed more to
consolidated earnings. In those operations where operating management are also
minority owners, the Company is party to a shareholders' agreement. These
agreements allow the Company to "call" the minority position for a predetermined
formula price, which is usually equal to the multiple of earnings paid by the
Company for the original acquisition. While it is not management's intention to
acquire outstanding minority interests, this step would materially increase
earnings per share. Minority owners may also "put" their interest to the Company
at the same price, with certain limitations. The purchase price may, at the
option of the Company, be paid primarily in Subordinate Voting Shares of the
Company.

         Net earnings were $12.7 million, a 29% increase over the prior year,
while diluted earnings per share increased 28% to $0.92. Diluted earnings per
share reflect a 1% increase in

<PAGE>

                                     -20-

the weighted average number of shares outstanding as a result of shares
issued upon the acquisition of a minority shareholding and as a result of the
shares issued in connection with stock option exercises.

         Revenues for the Property Services Division were $341.6 million, an
increase of $74.9 million or 28% over the prior year. Approximately $40.0
million of the revenue increase resulted from the acquisitions of SST and
several tuck-under companies in Fiscal 2001 in addition to the full year impact
of acquisitions completed during Fiscal 2000. The balance of the increase
resulted from internal growth. Property Services EBITDA grew 35% to $36.6
million or 10.7% of revenue compared to an EBITDA margin of 10.2% in the prior
year.

         Within Property Services, the residential property management unit
generated $181.7 million of revenue for the year, up 36% over the prior year due
to internal growth and several tuck-under acquisitions including Silver
Plumbing, Aquashield Corporation, and Dickinson Management Inc., all completed
during Fiscal 2001. Residential property management EBITDA was $18.1 million, up
58% over the prior year. The EBITDA margin was 9.9% compared to 8.5% in the
prior year, up due to productivity improvements and changes in the service mix
due to higher margin restoration and swimming pool management acquisitions
completed during the two years.

         The integrated security services unit reported revenue of $81.0
million, representing growth of 32% over the prior year fuelled by the
acquisitions of SST and Century Security. EBITDA was $6.0 million, up 20% over
the prior year and EBITDA margins were 7.4% compared with 8.2%. Fiscal 2000's
unusually high margin was due to several highly profitable special contracts
completed during that year.

         Consumer services revenue was $78.8 million, up 11% over the prior year
due to internal growth and the October 2000 acquisition of Creative Closets.
EBITDA was $12.5 million, up 16% over the prior year. EBITDA margins rose from
15.1% in the prior year to 15.9% in Fiscal 2001 as a result of operating
efficiency improvements and the mix change from the Creative Closets
acquisition.

         Revenues for the Business Services Division were $82.3 million, an
increase of 13% or $9.1 million over Fiscal 2000. Approximately $4.0 million of
the revenue increase is attributable to the March 1, 2001 acquisition of Watts
with the balance from internal growth of approximately 7%. Business Services
EBITDA grew 8.0% to $15.9 million, while margins fell to 19.3% from 20.1%. The
margin decline was primarily due to the inclusion of Watts, which carries
margins of approximately 13% due to its lower-margin direct mail and customer
contact operations.

         Corporate expenses increased to $4.7 million in Fiscal 2001 from $4.0
million primarily as a result of higher professional services fees relating to
income taxes and to the investigation of potential acquisitions that were not
completed.


RESULTS OF OPERATIONS - YEAR ENDED MARCH 31, 2000

         Consolidated revenues for the year ended March 31, 2000 were $340.0
million, a 29% increase from the $263.4 million reported for the year ended
March 31, 1999 ("Fiscal 1999"). Approximately $45.0 million of the increase
resulted from the acquisitions of American Pool Enterprises Inc. ("American
Pool"), Southwest Distribution Services Group ("DDS SW"),

<PAGE>

                                     -21-

several smaller tuck-under companies and the full-year impact of acquisitions
completed in Fiscal 1999. The balance resulted from internal growth of
approximately 13%.

         Earnings before interest, taxes, depreciation and amortization
("EBITDA") increased 32%, to $38.0 million from $28.8 million in the prior year,
while EBITDA margins increased 25 basis points to 11.2% of revenue. The
increased margins reflect productivity improvements, overhead leveraging and the
impact of certain acquisitions including California Closet Company, Inc., which
carry higher EBITDA margins.

         Depreciation for the year ended March 31, 2000 was $6.5 million, up 20%
from the previous year due largely to acquisitions. However, the increase also
reflects a sharp step-up in capital investment in management information systems
over the past three years. Generally, these investments are depreciated over a
short time frame relative to the Company's other pool of assets. Amortization
for the year was $3.6 million, up 32% over Fiscal 1999 due to the significant
amount of goodwill that resulted from the acquisitions completed during the
years ended March 31, 2000 and 1999.

         Interest expense increased 40% over prior year levels to $7.8 million
as a result of increased borrowings related to acquisitions completed during
Fiscal 2000 and 1999 and higher interest rates. All acquisitions completed
during the last two Fiscal years have been financed through the Company's credit
facilities.

         The income tax provision for the year ended March 31, 2000 was
approximately 40% of earnings before taxes, compared with 43% for the year ended
March 31, 1999. The lower tax provision reflects a more efficient cross-border
tax structure resulting from amendments to the Company's credit facilities on
April 1, 1999, which split the facilities into separate Canadian and US
tranches.

         Minority interest expense increased to $2.2 million or 18% of earnings
before minority interest from $1.4 million, or 16% in the prior year. The
increase reflects a change in the mix of earnings relative to the prior year as
certain operations having higher minority shareholdings contributed more to
consolidated earnings.

         Net earnings were $9.9 million, a 37% increase over the prior year,
while diluted earnings per share increased 33% to $0.72. Diluted earnings per
share reflect a 1.7% increase in the weighted average number of shares
outstanding primarily as a result of the shares issued for the acquisition of an
additional 34.9% interest in Intercon Security Ltd. in December 1998.

         Revenues for the Property Services Division were $266.7 million, an
increase of $61.6 million or 30% over the prior year. Approximately $35.0
million of the revenue increase resulted from the acquisitions of American Pool
and several tuck-under companies in Fiscal 2000 in addition to the full year
impact of acquisitions completed during Fiscal 1999. The balance of the increase
resulted from internal growth. Property Services EBITDA grew 36% to $27.2
million or 10.2% of revenue compared to an EBITDA margin of 9.7% in the prior
year.

         Within Property Services, the residential property management unit
generated $133.8 million of revenue for the year, up 48% over the prior year due
to internal growth and acquisitions including American Pool and several smaller
tuck-unders. EBITDA was $11.4 million, up 37% over the prior year. EBITDA
margins were 8.5% compared with 9.2% in the prior year due in part to systems
conversion costs and start-up costs associated with new contract wins.

<PAGE>

                                     -22-

         Integrated security services reported revenue of $61.5 million,
representing growth of 16% over the prior year, comprised of internal growth and
a tuck-under acquisition. EBITDA was $5.0 million, a 55% increase over the prior
year. The EBITDA margin was 8.2% compared to 6.1% in the prior year due to
several highly profitable special contracts and a shift in service mix from
security officers toward higher-margin systems integration.

         Consumer services revenue was $71.3 million, up 16% over the prior
year, all from internal growth. EBITDA was $10.8 million, 29% over the prior
year, and EBITDA margins were 15.1% compared with 13.7% in the prior year. This
margin expansion was made possible by increased operating leverage resulting
from higher revenue levels.

         Revenues for the Business Services Division were $73.2 million, an
increase of 26% or $15.0 million over 1999, a consequence of strong double-digit
internal growth and the impact of the acquisition of DDS SW. Strong internal
growth primarily reflected increases in the scope of services provided to
several clients at both BDP and DDS. Business Services EBITDA grew 23% to $14.7
million, while margins fell slightly to 20.1% from 20.5%, primarily reflecting
higher expenses at DDS relating to capacity expansion.

         Corporate expenses increased to $4.0 million in Fiscal 2000 from $3.2
million as a result of higher staffing levels and increased travel and legal
costs related, in part, to the investigation of prospective acquisitions that
were not completed.


SEASONALITY AND QUARTERLY FLUCTUATIONS

         Certain segments of the Company's operations, which in the aggregate
comprise approximately 14% of revenues, are subject to seasonal variations.
Specifically, the demand for lawn care services, exterior painting services, and
swimming pool maintenance in the northern United States and Canada is highest
during late spring, summer and early fall and very low during winter. As a
result, these operations generate a large percentage of their annual revenues
between April and September. The Company has historically generated lower
profits or net losses during its third and fourth fiscal quarters, from October
to March. Residential property management, integrated security services,
business services and most of the franchised consumer services generate revenues
approximately evenly throughout the fiscal year.

         The seasonality of the lawn care, painting and swimming pool
maintenance operations results in variations in quarterly EBITDA margins.
Variations in quarterly EBITDA margins can also be caused by acquisitions that
alter the consolidated service mix. The Company's non-seasonal businesses
typically generate a consistent EBITDA margin over all four quarters, while the
Company's seasonal businesses experience high EBITDA margins in the first two
quarters, offset by negative EBITDA in the last two quarters. As non-seasonal
revenues increase as a percentage of total revenues, the Company's quarterly
EBITDA margin fluctuations should be reduced.


LIQUIDITY AND CAPITAL RESOURCES

         Net cash provided by operating activities for the year ended March 31,
2001 was $22.3 million, up approximately 13% over the prior year. Working
capital investment increased by $6.8 million during Fiscal 2001 compared to a
$4.0 million increase during Fiscal 2000. During


<PAGE>

                                     -23-

Fiscal 2000, operating management successfully implemented one-time reductions
in working capital investment. In Fiscal 2001, the Company's growth and the
acquisitions of SST and Watts were responsible for the expansion in working
capital investment.

         Bank borrowings and cash flow from operations have historically been
the primary funding sources for working capital requirements, capital
expenditures and acquisitions. Management believes that funds from these sources
and proceeds from capital stock issues will remain available and are adequate to
support ongoing operational requirements and near-term acquisition growth.

         FirstService's lending agreement provided six-year committed revolving
credit facilities of $50 million Cdn. and $130 million U.S. to fund
acquisitions. Outstanding indebtedness bore interest at a rate based on
competitive floating reference rates, as selected by the Company, such as LIBOR,
plus a margin of 1.00% to 1.50% per annum, depending on certain leverage ratios.
The agreement required the Company to meet specific financial ratios and placed
certain limitations on additional borrowing and the ability to pay dividends or
sell assets. As of March 31, 2001, the Company had drawn $142.8 million U.S. and
was in compliance with all financial covenants. Net borrowings increased by
approximately $43.4 million from March 31, 2000 to March 31, 2001.

         On June 29, 2001, the Company amended its lending agreement to allow
for the issuance of additional debt. The amended agreement provides $140 million
of committed revolving credit facilities renewable and extendible in 364-day
increments, and if not renewed, a two-year final maturity. The facility allows
for borrowing in U.S. and / or Canadian currency and bears interest at 1.50% to
3.00% over floating reference rates, depending on certain leverage ratios. Also
on June 29, 2001, the Company completed a private placement of $100 million of
8.06% Senior Secured Notes (the "Notes"). The Notes have a final maturity of ten
years, with equal annual principal repayments beginning at the end of the fourth
year, resulting in a seven-year average life. Covenants and other limitations
within the amended lending agreement and the Notes are similar to those
contained in the prior lending agreement.

         The Company believes these new credit arrangements will provide
stability and flexibility to finance acquisitions and working capital
requirements for the foreseeable future. Under the new credit arrangements,
un-drawn available credit under the credit facilities would be $97.2 million on
a pro forma basis as at March 31, 2001. The higher interest rates in the new
credit arrangements, relative to the prior lending agreement, offset by recent
declines in LIBOR, will result in a slightly higher average interest rate in
Fiscal 2002.

         The Company expects to record an extraordinary loss in the first
quarter of Fiscal 2002 of approximately $1.4 million ($0.8 million net of taxes)
due to the write-off of financing fees related to the prior lending agreement.

         During Fiscal 2001, capital expenditures totaled $10.5 million
comprising approximately $4.0 million in expenditures on production equipment,
$2.5 million on vehicles, $2.5 million on computer equipment and software and
$1.5 million for leasehold improvements. During the year, the Business Services
division expanded, making investments in leasehold improvements and production
equipment at its Orangeville, Ontario and Los Angeles (Whittier, California)
locations.

         Looking forward to Fiscal 2002, capital expenditures are expected to be
higher than 2001 levels, primarily as a result of the acquisition of Watts. In
Business Services, the Company


<PAGE>

                                     -24-

intends to relocate and expand its Dallas facility as well as construct a new
customer contact center in Canada. In Property Services, the Company will
continue to invest in productivity-enhancing computer systems, as well as expand
its facilities in Miami and Phoenix.

         Acquisition expenditures during the year totaled $44.7 million. All of
the acquisition consideration was in the form of cash except $0.7 million paid
with Subordinate Voting Shares. In connection with certain acquisitions, the
Company has agreed to pay additional consideration contingent on the future
operating results of the acquired entities. The payment of any such amounts
would be in cash and would result in an increase in the purchase prices for such
acquisitions and, as a result, additional goodwill.


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

         Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities will become effective in the first
quarter of Fiscal 2002. The adoption of this Statement will have no impact on
the financial results of the Company.

         The Company expects to early-adopt the FASB pronouncement Statements on
Business Combinations and Goodwill and Intangible Assets in the first quarter of
Fiscal 2002. This change would have the impact of materially increasing the net
earnings of the Company.


FORWARD-LOOKING STATEMENTS

         This Management Discussion and Analysis of Financial Condition and
Results of Operations contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. The Company
intends that such forward-looking statements be subject to the safe harbors
created by such legislation. Such forward-looking statements involve risks and
uncertainties and include, but are not limited to, statements regarding future
events and the Company's plans, goals and objectives. Such statements are
generally accompanied by words such as "intend", "anticipate", "believe",
"estimate", "expect" or similar statements. The Company's actual results may
differ materially from such statements. Among the factors that could result in
such differences are the impact of weather conditions, increased competition,
labor shortages, the condition of the United States and Canadian economies, and
the ability of the Company to make acquisitions at reasonable prices. Although
the Company believes that the assumptions underlying its forward-looking
statements are reasonable, any of the assumptions could prove inaccurate and,
therefore, there can be no assurance that the results contemplated in such
forward-looking statements will be realized. The inclusion of such
forward-looking statements should not be regarded as a representation by the
Company or any other person that the future events, plans or expectations
contemplated by the Company will be achieved. The Company notes that past
performance in operations and share price are not necessarily predictive of
future performance.



<PAGE>

                                     -25-

ITEM 7A. FINANCIAL INSTRUMENTS - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
         MARKET RISK

         The Company has identified two market risks that may impact its
earnings and cash flows: interest rate risk and foreign currency risk. The
Company uses sensitivity analysis as its primary analytical technique to
evaluate the hypothetical effects of market risks on future earnings and cash
flows, and sensitivity analyses are provided below.

INTEREST RATE RISK

         FirstService's exposure to market risk for changes in interest rates
relates to its revolving debt facility which bears interest at floating
reference rates, primarily LIBOR, plus a spread that is variable depending on
certain leverage ratios. On March 31, 2001, the amount drawn on the revolving
debt facility was $142.8 million, bearing interest at a rate of approximately
7.8%. The Company may from time to time use derivative instruments to manage its
interest rate risk, and as at March 31, 2001, no such instruments were held.

         A 10% change in interest rates, or 80 basis points, would change
interest expense by approximately $1.1 million, and net earnings by $0.6
million, over a full year. An increase in market interest rates would increase
FirstService's interest expense.

FOREIGN CURRENCY RISK

         Approximately 30% of FirstService's operations are conducted in foreign
currencies, principally in Canadian dollars and to a much smaller extent in
Australian dollars. FirstService monitors its foreign currency exposure. The
Company may from time to time use derivative instruments to manage its foreign
currency risk, and as at March 31, 2001, no such instruments were held.

         FirstService has mitigated, and expects to continue to mitigate, a
portion of its currency exposure through the decentralized nature of its
organization, where, in each business unit, generally both revenue and the
related costs are local currency based. FirstService has the ability to borrow
funds under its revolving debt facility in either or both U.S. and Canadian
currencies. This allows the Company to effectively match the currency of
earnings with the currency of principal and interest payments, which also
mitigates some foreign currency risk.

         A 3% (2 U.S. cents) change in the value of the Canadian dollar would
have the impact of changing net earnings by approximately $0.2 million, over a
full year. A decline in the value of the Canadian dollar relative to the U.S.
dollar would have the impact of reducing the revenue and earnings of
FirstService.



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         Set forth below is the report of PricewaterhouseCoopers LLP dated May
11, 2001, the consolidated balance sheets of FirstService Corporation as at
March 31, 2001 and 2000, the consolidated statements of earnings, shareholders'
equity and cash flows for the three-year period ended March 31, 2001 and the
notes to the financial statements.


<PAGE>

                                     -26-


REPORT OF INDEPENDENT ACCOUNTANTS

TO THE SHAREHOLDERS OF FIRSTSERVICE CORPORATION:

We have audited the consolidated balance sheets of FirstService Corporation as
at March 31, 2001 and 2000 and the consolidated statements of earnings,
shareholders' equity and cash flows for each year in the three-year period ended
March 31, 2001. These financial statements and the financial statement schedule
listed in the index appearing under Item 14 on page 53 are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with United States generally accepted
auditing standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at March 31, 2001
and 2000 and the results of its operations and cash flows for each year in the
three-year period ended March 31, 2001 in accordance with United States
generally accepted accounting principles.

In addition, in our opinion, the financial statement schedule referred to above
presents fairly, in all material respects, the information set forth herein when
read in conjunction with the related consolidated financial statements.




PRICEWATERHOUSECOOPERS LLP

Chartered Accountants

Toronto, Ontario
May 11, 2001

<PAGE>

                                     -27-


FIRSTSERVICE CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of U.S. Dollars, except per share amounts) - in accordance with
United States generally accepted accounting principles.

<TABLE>
<CAPTION>

For the years ended March 31                                            2001              2000            1999
--------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>               <C>             <C>
Revenues                                                            $424,174          $340,035        $263,361
Cost of revenues                                                     284,474           226,154         176,089
Selling, general and administrative expenses                          91,845            75,904          58,505
Depreciation and amortization                                         11,929            10,107           8,145
Interest                                                               9,767             7,849           5,589
--------------------------------------------------------------------------------------------------------------
Earnings before income taxes and minority
     interest                                                         26,159            20,021          15,033
Income taxes (note 10)                                                10,464             7,989           6,402
--------------------------------------------------------------------------------------------------------------
Earnings before minority interest                                     15,695            12,032           8,631
Minority interest share of earnings                                    2,988             2,164           1,409
--------------------------------------------------------------------------------------------------------------
NET EARNINGS                                                         $12,707           $ 9,868         $ 7,222
==============================================================================================================

Earnings per share (note 11)
NET EARNINGS:

     BASIC                                                            $ 0.97           $  0.76         $  0.57

     DILUTED                                                          $ 0.92           $  0.72         $  0.54
==============================================================================================================

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.






<PAGE>

                                     -28-

FIRSTSERVICE CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. Dollars) - in accordance with United States generally
accepted accounting principles.

<TABLE>
<CAPTION>

As at March 31                                                                        2001          2000
--------------------------------------------------------------------------------------------------------
<S>                                                                                <C>           <C>
ASSETS
CURRENT ASSETS
     Cash and cash equivalents                                                     $ 5,115       $ 3,297
     Accounts receivable, net of an allowance of $4,123  (2000 - $3,273)            79,473        53,170
     Inventories (note 4)                                                            9,627         8,929
     Prepaids and other (note 12)                                                   10,757         8,491
     Deferred income taxes (note 10)                                                 1,136         1,063
--------------------------------------------------------------------------------------------------------
                                                                                   106,108        74,950
--------------------------------------------------------------------------------------------------------

Other receivables (note 5)                                                           5,092         4,405
Fixed assets (note 6)                                                               40,741        29,693
Other assets (note 6)                                                                4,934         4,074
Deferred income taxes (note 10)                                                      1,472           270
Goodwill (note 7)                                                                  155,313       117,495
--------------------------------------------------------------------------------------------------------
                                                                                   207,552       155,937
--------------------------------------------------------------------------------------------------------
                                                                                  $313,660      $230,887
========================================================================================================

LIABILITIES
CURRENT LIABILITIES
     Accounts payable                                                             $ 22,220      $ 11,752
     Accrued liabilities (note 12)                                                  34,001        23,013
     Income taxes payable                                                            2,436         2,879
     Unearned revenue                                                                9,505        10,725
     Long-term debt - current (note 8)                                               3,050         2,733
     Deferred income taxes (note 10)                                                   558           459
--------------------------------------------------------------------------------------------------------
                                                                                    71,770        51,561
--------------------------------------------------------------------------------------------------------

Long-term debt less current portion (note 8)                                       149,374       102,177
Deferred income taxes (note 10)                                                      4,236         1,836
Minority interest                                                                    8,824         6,975
--------------------------------------------------------------------------------------------------------
                                                                                   162,434       110,988
--------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
     Capital stock (note 9)                                                         54,863        53,849
          Issued and outstanding 12,505,393 (2000 - 12,326,683)
          Subordinate Voting Shares and 662,847 (2000 - 662,847)
          convertible Multiple Voting Shares
     Receivables pursuant to share purchase plan (note 9)                           (3,196)       (3,294)
     Retained earnings                                                              27,972        15,614
     Cumulative other comprehensive (loss) earnings                                   (183)        2,169
--------------------------------------------------------------------------------------------------------
                                                                                    79,456        68,338
--------------------------------------------------------------------------------------------------------
                                                                                  $313,660      $230,887
========================================================================================================

</TABLE>

Commitments and contingencies (note 14)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

Signed on behalf of the Board

Director                                                               Director

<PAGE>

                                     -29-

FIRSTSERVICE CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands of U.S. Dollars) - in accordance with United States generally
accepted accounting principles.

<TABLE>
<CAPTION>

                                                                  Receivables
                                                                  pursuant to                       Cumulative
                                  Issued and                            share                            other
                                 outstanding           Capital  purchase plan      Retained      comprehensive           Total
                                      shares             stock                       earnings         earnings   shareholders'
                                    (note 9)          (note 9)                      (deficit)        (deficit)          equity
------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                  <C>           <C>               <C>              <C>            <C>
Balance, March 31, 1998           12,285,538           $48,496       $(2,329)          $(515)           $(845)         $44,807
------------------------------------------------------------------------------------------------------------------------------
Comprehensive earnings:
     Net earnings                        -                 -               -            7,222              -             7,222
     Foreign currency
        translation adjustments          -                 -               -               -             3,337           3,337
                                                                                                                    ----------
Comprehensive earnings                                                                                                  10,559
                                                                                                                    ----------
Subordinate Voting Shares:
     Issued for purchase
        of minority interest         239,437             2,823             -               -               -             2,823
     Stock options exercised         358,380             1,375             -               -               -             1,375
     Issued under share
          purchase plan               97,500             1,166        (1,166)              -               -                -
     Purchased for
          cancellation               (61,800)             (206)             -            (539)              -             (745)
Cash payments on share
      purchase plan                      -                 -              201              -               -               201
------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 1999           12,919,055            53,654        (3,294)           6,168            2,492          59,020
------------------------------------------------------------------------------------------------------------------------------
Comprehensive earnings:
     Net earnings                      -                    -              -            9,868              -             9,868
     Foreign currency
        translation
        adjustments (note 12)          -                    -              -               -             (323)           (323)
                                                                                                                    ----------
Comprehensive earnings                                                                                                   9,545
                                                                                                                    ----------
Subordinate Voting Shares:
     Stock options exercised         132,475               465              -             -                -               465
     Purchased for
         cancellation               (62,000)             (270)             -            (422)              -             (692)
------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2000           12,989,530            53,849        (3,294)          15,614            2,169          68,338
------------------------------------------------------------------------------------------------------------------------------
Comprehensive earnings:
     Net earnings                    -                 -               -               12,707          -                12,707
     Foreign currency
       translation
       adjustments (note 12)         -                 -               -               -               (2,352)         (2,352)
                                                                                                                    ----------
Comprehensive earnings                                                                                                  10,355
                                                                                                                    ----------
Subordinate Voting Shares:
     Issued for purchase
         of minority interest         69,360               649         -               -               -                   649
     Stock options exercised         158,850               580         -               -               -                   580
     Purchased for
         cancellation               (49,500)             (215)         -                (349)          -                 (564)
Cash payments on share
      purchase plan                  -                 -                   98          -               -                    98
------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2001           13,168,240           $54,863       $(3,196)         $27,972           $(183)         $79,456
==============================================================================================================================

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.


<PAGE>

                                     -30-

FIRSTSERVICE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. Dollars) - in accordance with United States generally
accepted accounting principles.

<TABLE>
<CAPTION>

For the years ended March 31                                        2001          2000             1999
-------------------------------------------------------------------------------------------------------
<S>                                                             <C>             <C>            <C>
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net earnings                                                     $12,707         $9,868         $7,222
Items not affecting cash:
     Depreciation and amortization                                11,929         10,107          8,145
     Deferred income taxes                                         1,056          1,087            418
     Minority interest share of earnings                           2,988          2,164          1,409
     Other                                                           451            446            292
Changes in operating assets and liabilities:
     Accounts receivable                                         (5,235)        (2,080)        (7,015)
     Inventories                                                   (450)          (949)          2,084
     Prepaids and other                                          (1,270)        (1,360)          (681)
     Accounts payable                                              3,304        (1,395)        (4,242)
     Accrued liabilities                                         (4,103)            686          2,610
     Income taxes payable                                          2,520          1,698          (634)
     Unearned revenue                                            (1,607)          (599)        (1,500)
------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                         22,290         19,673          8,108
------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Acquisition of businesses, net of cash acquired                 (40,583)       (22,069)       (38,831)
Purchases of minority shareholders' interest                     (4,070)              -        (2,956)
Purchases of fixed assets                                       (10,502)        (8,824)        (5,810)
Proceeds from sale of business and other assets                        -            105          2,648
Purchases of other assets                                           (91)        (1,038)          (569)
Increase in other receivables                                      (607)          (980)        (2,382)
------------------------------------------------------------------------------------------------------
Net cash used in investing                                      (55,853)       (32,806)       (47,900)
------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Increases in long-term debt                                       43,374         23,056         48,079
Repayments of long-term debt                                     (7,006)       (10,706)        (6,995)
Financing fees paid                                                    -          (545)          (746)
Proceeds received on exercise of stock options and
      share purchase plan                                            580            465          1,576
Repurchases of Subordinate Voting Shares                           (564)          (692)          (745)
Dividends paid to minority shareholders of subsidiaries            (475)          (190)          (226)
------------------------------------------------------------------------------------------------------
Net cash provided by financing                                    35,909         11,388         40,943
------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash                            (528)            415            847
------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents
     during the year                                               1,818        (1,330)          1,998

Cash and cash equivalents, beginning of year                       3,297          4,627          2,629
------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of year                            $5,115        $ 3,297         $4,627
======================================================================================================

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>

                                     -31-

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. Dollars, except per share amounts, in accordance with
United States generally accepted accounting principles)

1.       DESCRIPTION OF THE BUSINESS

         FirstService Corporation (the "Company") is a provider of property and
         business services to residential, corporate and public sector customers
         in the United States and Canada. The Company's operations are conducted
         through two operating divisions, Property Services and Business
         Services. The Property Services Division includes residential property
         management, integrated security services and consumer services, which
         represents approximately 80% of the Company's revenues for the year
         ended March 31, 2001. The Business Services Division provides customer
         support & fulfillment and business process outsourcing services to
         corporations and government agencies.


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The preparation of the financial statements in conformity with
         generally accepted accounting principles 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 fixed assets and goodwill. 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 and its subsidiaries. Intercompany transactions and accounts
         are eliminated on consolidation.

         CASH AND CASH EQUIVALENTS

         Cash equivalents consist of highly liquid investments, which are
         readily convertible into cash and have maturities of three months or
         less.

         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. The weighted average and the first-in, first-out methods
         represent approximately 30% and 70% of total inventories, respectively.
         Finished goods and work-in-progress include the cost of materials,
         direct labor and manufacturing overhead costs.

         FIXED ASSETS

         Fixed assets are stated at cost less accumulated depreciation and
         amortization. The cost of additions and improvements are capitalized
         while maintenance and repairs are expensed as incurred. Fixed assets
         are depreciated and amortized over their estimated useful lives as
         follows:
<TABLE>
         <S>                                   <C>

         Buildings                             5% declining balance and 40 years
                                               straight-line
         Vehicles                              3 to 10 years straight-line
         Furniture and equipment               20% to 30% declining balance and
                                               3 to 10 years straight-line
         Computer equipment and software       20% declining balance and 3 to
                                               5 years straight-line
         Enterprise system software            5 to 10 years straight-line
         Leasehold improvements                term of the leases to a maximum
                                               of 10 years
</TABLE>

         The Company reviews the carrying value of fixed assets for impairment
         whenever events and circumstances indicate that the carrying value of
         an asset may not be recoverable from the estimated future cash flows
         expected to result from its use and eventual disposition. In cases
         where undiscounted expected future cash flows are less than the
         carrying value, an impairment loss is recognized equal to an amount by
         which the carrying value exceeds the fair value of assets.


<PAGE>

                                     -32-

         GOODWILL AND OTHER ASSETS

         These assets are stated at cost less accumulated amortization.
         Goodwill, which represents costs in excess of net assets acquired, and
         other assets are amortized on a straight-line basis over periods
         expected to be benefited at the following rates:
<TABLE>

         <S>                                         <C>
         Goodwill                                    10 to 40 years
         Management contracts                        over life of contract
         Deferred costs                              1 to 3 years
</TABLE>

         Goodwill in excess of associated expected operating cash flows
         determined on an undiscounted cash flow basis is considered to be
         impaired and is written down to fair value. Any difference would be
         recorded as an impairment adjustment. Management is of the opinion that
         there has been no decline in the value assigned to goodwill.

         Financing fees are amortized on a straight-line basis over the term of
         the associated debt.

         REVENUE RECOGNITION AND UNEARNED REVENUE

(a)      Company-owned property services and business services

         Revenue from residential property management, Company-owned consumer
         services, and business services are recognized at the time the service
         is rendered or the product is shipped. Revenue from integrated security
         installation and residential property management painting and
         restoration contracts in process are recognized on the percentage of
         completion method, generally in the ratio of actual costs to total
         estimated contract costs.

         Amounts received from customers in advance of services being provided
         are recorded as unearned revenue when received.

(b)      Franchised consumer services

         The Company's franchised consumer services are conducted principally
         through subsidiaries California Closet Company, Inc. ("California
         Closets"), Paul W. Davis Systems, Inc. ("Paul Davis Restoration"),
         Certa ProPainters Ltd. in the United States and Canada (collectively -
         "Certa ProPainters"), and College Pro Painters U.S. Ltd. and in Canada
         by College Pro Painters Ltd. (collectively - "College Pro"). Initial
         franchise fees are recognized by California Closets, Paul Davis
         Restoration and Certa ProPainters when the required initial services
         have been substantially performed. College Pro does not charge any such
         fees to franchisees. Royalties are generally charged as a percentage of
         revenue, as defined, where reported by the franchisees except for Certa
         ProPainters, where the franchisees are charged a fixed monthly amount.
         Revenue from administrative and other support services, as applicable,
         is recognized as the services are provided.

         ADVERTISING COSTS

         Advertising costs are expensed as incurred except for prepaid
         advertising, which is recorded as a current asset and is amortized over
         the period of expected sales revenue resulting from such advertising.

         FOREIGN CURRENCY TRANSLATION

         Effective April 1, 1999, the Company adopted the U.S. Dollar as its
         reporting currency since a majority of the Company's revenues,
         expenses, assets and liabilities are in the United States and the
         increasing focus of the Company's operations are in that country.
         Comparative financial statements were restated as if the U.S. Dollar
         had been the reporting currency in prior years.

         Assets and liabilities of the Company's self-sustaining Canadian
         operations are translated into U.S. dollars at the exchange rates
         prevailing at year-end and revenue and expenses at the weighted average
         exchange rates for the year. All exchange gains and losses on
         translation are shown as a separate component of shareholders' equity.

<PAGE>

                                     -33-

         INCOME TAXES

         Income taxes have been provided using the liability method whereby
         deferred tax assets and liabilities are recognized for the expected
         future tax consequences of events that have been recognized in the
         financial statements or tax returns. Deferred tax assets and
         liabilities are measured using 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 tax assets and liabilities
         of a change in tax rates is recognized in earnings in the period in
         which the change occurs.

         Income taxes are not provided on the unremitted earnings of U.S.
         subsidiaries since it has been the practice and is the intention of the
         Company to reinvest these earnings in the U.S. businesses.

         STOCK BASED COMPENSATION

         The Company measures compensation costs for employee stock options
         using the intrinsic value method as prescribed by APB opinion No. 25,
         Accounting for Stock Issued to Employees.

         CONCENTRATIONS OF CREDIT RISK

         Financial instruments, which potentially subject the Company to
         concentrations of credit risk, consist principally of accounts
         receivable. Concentrations of credit risk with respect to accounts
         receivable are limited due to the large number of entities comprising
         the Company's customer base and their dispersion across many different
         service lines in two countries.

         FINANCIAL INSTRUMENTS

         Financial instruments are initially recorded at historical cost. If
         subsequent circumstances indicate that a decline in the fair value of a
         financial asset is other than temporary, the financial asset is written
         down to its fair value. The fair values of accounts receivable,
         accounts payable, accrued liabilities, income taxes payable and
         unearned revenue approximate recorded amounts because of the short
         period to maturity of these instruments. The fair values of other
         receivables and long-term debt are based on rates applicable to the
         Company based on similar items and maturities of these instruments.
         Off-balance sheet derivative financial instruments may include interest
         rate swap contracts to hedge against interest rate exposure on a
         portion of the Company's long-term revolving debt facilities and are
         fair valued based on current termination values or quoted market prices
         of comparable contracts.


3.       SIGNIFICANT BUSINESS ACQUISITIONS

         2001 ACQUISITIONS:
         On July 1, 2000, the Company acquired an 80% interest in Security
         Services and Technologies ("SST") headquartered in Pennsylvania. SST is
         an integrated security services provider.

         On March 1, 2001, the Company acquired an 82.15% interest in Herbert A.
         Watts Limited ("Watts") headquartered in Toronto, Canada. Watts is a
         customer support and fulfillment company.

         2000 ACQUISITIONS:
         On June 1, 1999, the Company acquired an 80% interest in American Pool
         Enterprises, Inc. ("American Pool") headquartered in Maryland. American
         Pool provides commercial swimming pool management services.

         On July 1, 1999, an 89% owned subsidiary of the Company (DDS
         Distribution Services Ltd. or "DDS") acquired 100% of Southwest
         Distribution Services Group ("DDS SW"), a Texas-based textbook
         fulfillment business.

         1999 ACQUISITIONS:
         On April 1, 1998, DDS acquired 100% of the Harris Fulfillment and
         Harris Direct Mail divisions of Telespectrum Worldwide Inc. ("DDS
         Harris") headquartered in Pennsylvania.

         On October 1, 1998, an 83.3% owned subsidiary of the Company, The
         Franchise Company, Inc. acquired 90% of California Closets, a
         California-based franchiser of installed closet and home storage
         systems.

<PAGE>

                                     -34-

         Details of these acquisitions are as follows:

<TABLE>
<CAPTION>

                                          2001                                 2000                            1999
                               ----------------------------          -------------------------     ---------------------------
                                       Watts            SST          American           DDS SW     DDS Harris       California
                                                                         Pool                                          Closets
<S>                                 <C>               <C>            <C>                <C>            <C>             <C>
Net assets acquired, at fair
market value:
      Tangible assets, net
          of liabilities              $  139           $ 792         $(6,444)            $ 673         $5,448           $  577
      Minority interest                 (25)           (158)                -                -              -             (57)
                               -------------     -----------    -------------      -----------     ----------     ------------
                                         114             634          (6,444)              673          5,448              520
                               -------------     -----------    -------------      -----------     ----------     ------------

Cash consideration                    10,865           7,500            4,755            8,711         23,000           12,488
                               -------------     -----------    -------------      -----------     ----------     ------------

Goodwill                             $10,751          $6,866          $11,199           $8,038        $17,552          $11,968
                               =============     ===========    =============      ===========     ==========    =============
                               $ 16,515 Cdn.
                               =============

Contingent consideration
    at date of acquisition           $10,424          $4,250           $2,800           $3,000         $4,000           $3,600
                               =============     ===========    =============      ===========     ==========    =============
                               $ 16,012 Cdn.
                               =============

</TABLE>

         In addition to the acquisitions disclosed above, the Company made
         various other acquisitions and acquired certain minority interests for
         total consideration of $16,183 (2000 - $5,730) (1999 - $9,403)
         comprised of cash of $15,534 (2000 - $5,730) (1999 - $6,580) and
         capital stock of $649 (2000 - $nil) (1999 - $2,823) to acquire net
         tangible assets of $3,391 (2000 - $1,040) (1999 - $1,505) resulting in
         goodwill of $12,792 (2000 - $4,690) (1999 - $7,898).

         The Company is currently finalizing the allocation of the purchase
         price with respect to the Watts acquisition. Consequently, the purchase
         price allocation as presented in these financial statements may be
         retroactively adjusted to reflect the fair market value of acquired
         intangible assets. The completion of the purchase price allocation may
         also result in adjustments to goodwill, amortization and income taxes
         retroactively to the date of acquisition.

         In 2000 and 1999, the Company also disposed of business assets of
         subsidiaries with a net book value of $209 (1999 - $1,481) for net
         proceeds of $105 (1999 - $1,682).

         Certain vendors, at the time of acquisition, are entitled to receive
         contingent consideration if the acquired businesses exceeded certain
         financial thresholds during the two to four-year period following the
         date of acquisition. As at March 31, 2001 there was contingent
         consideration outstanding of up to $24,161 payable during the period
         extending to March 31, 2005. In addition, vendors are entitled to
         receive interest on the principal amount of each contingent payment, to
         the extent payable, which interest is calculated from the acquisition
         date to the payment date at interest rates ranging from 7 to 9%. These
         amounts have been treated as contingent consideration and any resulting
         payments will be recorded as goodwill to the extent that the
         contingencies are determined payable. Contingent consideration paid or
         accrued during the year ended March 31, 2001 was $11,715 (2000 -
         $6,570) (1999 - $nil).

         The acquisitions referred to above were accounted for by the purchase
         method of accounting for business combinations. Accordingly, the
         accompanying consolidated statements of earnings and comprehensive
         income do not include any revenues or expenses related to these
         acquisitions prior to these respective closing dates. The cash portions
         of the acquisitions were financed through available cash and borrowings
         from the Company's revolving debt facility.

         Following are the Company's unaudited pro forma results assuming the
         acquisitions of Watts, SST, American Pool and DDS SW occurred on April
         1 on the respective year of acquisition. The year immediately prior to
         the year of each respective acquisition also includes the pro forma
         results of that respective acquisition.

<PAGE>

                                     -35-

<TABLE>
<CAPTION>

                                                       2001              2000
                                                   --------          --------
        <S>                                        <C>               <C>
        Pro forma revenue                          $470,756          $407,335
        Pro forma net earnings                     $ 14,328          $ 13,379

        Pro forma earnings per share:
             Basic                                    $1.10             $1.03
             Diluted                                  $1.04             $0.98

</TABLE>

         These unaudited pro forma results have been prepared for comparative
         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 year or of future results of
         operations.


4.       INVENTORIES

<TABLE>
<CAPTION>
                                                          2001             2000
                                                       -------          -------
        <S>                                            <C>              <C>
        Supplies and other                             $ 3,422          $ 3,637
        Finished goods                                   4,574            2,969
        Work-in-progress                                 1,380            2,071
        Small equipment                                    251              252
                                                       -------          -------
        Total                                          $ 9,627          $ 8,929
                                                       =======          =======
</TABLE>


5.       OTHER RECEIVABLES

         Other receivables are comprised of:

         (a) $1,094 (2000 - $2,137) of secured interest and non-interest bearing
             loans due from minority shareholders of three (2000 - four)
             subsidiaries;

         (b) $2,130 (2000 - $885) of long-term receivables, certain of which are
             interest bearing, relating to painting, restoration and integrated
             security installation projects conducted by the Company's Property
             Services Division; and

         (c) $1,868 (2000 - $1,383) of interest bearing franchise fees
             receivable from franchisees in the Company's consumer services
             unit.

6.       FIXED ASSETS AND OTHER ASSETS

<TABLE>
<CAPTION>

                                                                            Accumulated
        2001                                                              depreciation /                 Net
                                                              Cost          amortization                2001
                                                  ----------------       ---------------      --------------
        <S>                                       <C>                    <C>                  <C>

        FIXED ASSETS
        Land                                               $ 1,812              $      -             $ 1,812
        Buildings                                            5,901                   647               5,254
        Vehicles                                            13,388                 8,069               5,319
        Furniture and equipment                             29,375                14,430              14,945
        Computer equipment and software                     13,647                 7,924               5,723
        Enterprise system software                           3,921                 1,136               2,785
        Leasehold improvements                               9,451                 4,548               4,903
                                                  ----------------       ---------------      --------------

        Total                                              $77,495              $ 36,754             $40,741
                                                  ================       ===============      ==============
        OTHER ASSETS
        Funds held in trust                                $ 1,904              $      -             $ 1,904
        Investments                                            647                     -                 647
        Financing fees                                       2,897                 1,422               1,475
        Management contracts                                 1,860                 1,214                 646
        Deferred costs                                         702                   440                 262
                                                  ----------------       ---------------      --------------
        Total                                              $ 8,010              $  3,076             $ 4,934
                                                  ================       ===============      ==============
</TABLE>


<PAGE>

                                     -36-


<TABLE>
<CAPTION>

                                                                             Accumulated
        2000                                                              depreciation /                 Net
                                                               Cost         amortization                2000
                                                   ----------------       --------------      --------------
        <S>                                        <C>                    <C>                 <C>
        FIXED ASSETS
        Land                                                 $  937               $    -              $  937
        Buildings                                             5,596                  858               4,738
        Vehicles                                             11,646                6,974               4,672
        Furniture and equipment                              18,823               10,880               7,943
        Computer equipment and software                      12,039                7,613               4,426
        Enterprise system software                            3,720                  740               2,980
        Leasehold improvements                                7,839                3,842               3,997
                                                   ----------------       --------------      --------------
        Total                                              $ 60,600             $ 30,907             $29,693
                                                   ================       ==============      ==============
        OTHER ASSETS
        Investments                                          $  725               $    -              $  725
        Financing fees                                        3,093                1,066               2,027
        Management contracts                                  1,696                  636               1,060
        Deferred costs                                        1,107                  845                 262
                                                   ================       ==============      ==============
        Total                                               $ 6,621              $ 2,547             $ 4,074
                                                   ================       ==============      ==============

</TABLE>

         Included in fixed assets are vehicles under capital lease at a cost of
         $4,460 (2000 - $3,662) with a net book value of $2,282 (2000 - $2,103)
         and computer equipment and software under capital lease at a cost of
         $2,441 (2000 - $3,849) with a net book value of $1,187 (2000 - $1,714).


7.       GOODWILL

<TABLE>
<CAPTION>
                                                                                      2001                    2000
                                                                           ---------------       -----------------
        <S>                                                                <C>                   <C>

        Cost                                                                      $167,171               $ 125,750
        Less: Accumulated amortization                                              11,858                   8,255
                                                                           ---------------       -----------------
                                                                                  $155,313               $ 117,495
                                                                           ===============       =================
</TABLE>


8.       LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                                      2001                    2000
                                                                           ---------------       -----------------
        <S>                                                                <C>                   <C>

        Revolving debt facility of $130,000 U.S. and
             $50,000 Cdn. due June 1, 2004                                        $142,812                 $99,400
        Obligations under capital leases bearing interest
             ranging primarily from 6% to 9% and maturing at
             various dates through the year 2006                                     2,409                   2,891
        Other long-term debt bearing interest primarily at 8%,
              and maturing at various dates through the year 2007                    7,203                   2,619
                                                                           ---------------       -----------------
                                                                                   152,424                 104,910
        Less: Current portion                                                        3,050                   2,733
                                                                           ===============       =================
                                                                                 $ 149,374               $ 102,177
                                                                           ===============       =================
</TABLE>

         The revolving debt facility at March 31, 2001 is comprised of
         borrowings of $120,045 U.S. and $35,887 Cdn. ($22,767 U.S.) (2000 -
         $99,400 U.S.).

         Included in capital leases at March 31, 2001 and 2000 are obligations
         in Canadian dollars of $1,561 ($990 U.S.) and $2,486 ($1,715 U.S.),
         respectively.

         Included in other long term debt at March 31, 2001 and 2000 are
         obligations in Canadian dollars of $5,921 ($3,756 U.S.) and $364 ($251
         U.S.), respectively.

<PAGE>

                                     -37-

         At March 31, 2001, the estimated aggregate amount of principal
         repayments on long-term debt required in each of the next five fiscal
         years and thereafter to meet the retirement provisions are as follows:

<TABLE>
                     <S>                                         <C>
                     2002                                        $ 3,050
                     2003                                          3,751
                     2004                                            419
                     2005                                        143,749
                     2006                                            911
                     Thereafter                                      544
</TABLE>

         On April 1, 1999 the Company amended and restated its lending
         agreement. The amended facility split the senior debt facility into a
         $50 million Cdn. ($31.7 million U.S.) and a $130 million U.S. tranche.
         The revolving facility provides that the Company may borrow using LIBOR
         or Bankers Acceptance interest rate options that vary within a range
         depending on certain leverage ratios. Borrowings currently bear
         interest at the lenders' cost of funds rate plus 1.25%.

         As security for the debt facility, the Company has granted the lenders
         various security including the following: an interest in all of the
         assets of the Company including the Company's share of its
         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. The lending agreement prohibits the Company
         from paying dividends and, without prior approval, from undertaking
         significant mergers, acquisitions and dispositions. The covenants also
         require the Company to maintain certain ratios, including debt to
         EBITDA, debt to capitalization, fixed charge coverage, working capital,
         business value and debt to interest coverage.


9.       CAPITAL STOCK

         The authorized capital stock of the Company is as follows:

         An unlimited number of preference 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 every Multiple Voting
         Share outstanding.

         The following table provides a continuity of total capital stock:

<TABLE>
<CAPTION>
                                SUBORDINATE VOTING SHARES      MULTIPLE VOTING SHARES            Total         Total
                                     Number        Amount       Number         Amount           Number        Amount
                              -------------    ----------    ---------    -----------     ------------    ----------
<S>                              <C>             <C>           <C>              <C>         <C>            <C>
Balance,  March 31, 1999         12,256,208      $ 53,281      662,847          $ 373       12,919,055      $ 53,654
Balance,  March 31, 2000         12,326,683        53,476      662,847            373       12,989,530        53,849
Balance,  March 31, 2001         12,505,393        54,490      662,847            373       13,168,240        54,863

</TABLE>

         On May 17, 2000, the Company purchased shares of its subsidiary, The
         Franchise Company, Inc., from a minority shareholder. As consideration
         69,360 Subordinate Voting Shares with a value of $971 Cdn. ($649 U.S.)
         were issued.

         The Company has $3,196 ($4,513 Cdn.) (2000 - $3,294 ($4,663 Cdn.)) of
         secured non-interest bearing loans related to the purchase of 492,500
         Subordinate Voting Shares (2000 - 522,500 shares). The loans, which are
         secured by the shares issued, have a five-year term from the grant
         date; however, they are open for repayment at any time. The maturities
         of these loans are as follows:

<TABLE>

                  <S>                               <C>
                   Year ending March 31
                   2002                                     $ 1,128
                   2003                                         902
                   2004                                       1,166
                                                    ---------------
                                                            $ 3,196
                                                    ===============
</TABLE>

<PAGE>

                                     -38-

         The Company has a Stock Option Plan for directors, officers and key
         full-time employees of the Company and its subsidiaries. At March 31,
         2001 a total of 3,550,000 Subordinate Voting Shares were reserved and
         approved by the shareholders of the Company for issuance pursuant to
         stock options. Each option usually vests over a four-year term and
         expires five years from the date granted and allows for the purchase of
         one Subordinate Voting Share. At March 31, 2001 there were 2,119,640
         options outstanding to 80 employees and directors at prices ranging
         from $5.00 to $22.50 Cdn. per share, which expire on various dates
         through February 2006. There were 461,030 options available for future
         grants as at March 31, 2001.

         The number of Subordinate Voting Shares issuable under options and the
         average option prices per share in $Cdn. are as follows:

<TABLE>
<CAPTION>

                                         SHARES ISSUABLE UNDER OPTIONS            WEIGHTED AVERAGE PRICE PER SHARE ($CDN.)
                                   ------------------------------------------     ---------------------------------------
                                         2001            2000           1999          2001           2000           1999
                                   ------------------------------------------     ---------------------------------------
      <S>                          <C>              <C>           <C>             <C>              <C>            <C>
      Shares issuable under
          options - Beginning
          of year                   1,879,200       1,342,675      1,558,180        $11.62         $ 8.10         $ 7.17
      Granted                         419,790         669,000        171,500         19.08          17.61          11.91
      Exercised for cash            (158,850)       (132,475)      (358,380)          5.55           5.17           5.78
      Expired or cancelled           (20,500)          -            (28,625)         15.46            -             8.67
                                   -----------     -----------    -----------     ---------     ----------    -----------

      Shares issuable under
          options - End of
          year                      2,119,640       1,879,200      1,342,675        $13.52        $ 11.62         $ 8.10
                                   ===========     ===========    ===========     =========     ==========    ===========
      Options exercisable -
          End of year               1,117,624         896,803        726,459
                                   ===========     ===========    ===========
</TABLE>

         The weighted average fair value of options granted in 2001, 2000 and
         1999 was $4.84 ($7.28 Cdn.), $4.54 ($6.68 Cdn.) and $3.91 ($5.89 Cdn.)
         per share, respectively.

         The options outstanding as at March 31, 2001 to purchase Subordinate
         Voting Shares are as follows:

<TABLE>
<CAPTION>

                                                      OPTIONS OUTSTANDING                       OPTIONS EXERCISABLE
                                         ---------------------------------------------    ------------------------------
                                                            Weighted-        Weighted-                         Weighted-
                                                              average          average                           average
                                                            remaining         exercise                          exercise
                                              Number      contractual            price           Number            price
Range of exercise prices ($Cdn.)         outstanding     life (years)          ($Cdn.)      exercisable          ($Cdn.)
----------------------------------      ------------    -------------    -------------    -------------    -------------
<S>                                     <C>             <C>              <C>              <C>              <C>

   $5.00 to $9.50                            577,850             0.92           $ 6.06          525,245           $ 5.93
   $11.00 to $16.00                          604,790             2.49            12.78          328,979            11.97
   $16.47 to $22.50                          937,000             3.69            18.59          263,400            18.45
                                         ------------    -------------    -------------    -------------    -------------
                                           2,119,640             2.58          $ 13.52        1,117,624          $ 10.66
                                         ============    =============    =============    =============    =============
</TABLE>

         Statement of Financial Accounting Statements ("SFAS") No. 123 requires
         pro forma disclosures of earnings and earnings per share as if the fair
         value method of accounting for employee stock options had been applied.
         The following table presents the results that would be obtained if the
         Company had adopted SFAS No. 123, effective April 1, 1995. Compensation
         cost is based on the fair value of the award using the Black-Scholes
         option-pricing model. The disclosures in the table below show the
         company's earnings and earnings per share after including the effect of
         the compensation cost.

<TABLE>
<CAPTION>

                                                                      2001              2000             1999
                                                                 --------------     -------------     ------------
        <S>                                                      <C>                <C>               <C>
        Pro forma net earnings                                         $11,737            $9,164           $6,347
        Pro forma net earnings per share:
             Basic                                                     $  0.90            $ 0.71           $ 0.51
             Diluted                                                   $  0.85            $ 0.67           $ 0.47

        Assumptions:
             Risk-free interest rate                                      5.5%              5.5%             5.5%
             Expected life in years                                       4.50              4.50             4.00
             Volatility                                                  35.0%             35.0%            40.0%
             Dividend yield                                               0.0%              0.0%             0.0%

</TABLE>

<PAGE>

                                     -39-

10.      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:

<TABLE>
<CAPTION>
                                                                                 2001              2000             1999
                                                                         -------------    --------------    -------------
        <S>                                                              <C>              <C>               <C>

        Income tax expense using combined statutory rates of
              approximately 44% (2000 and 1999 - 45%)                        $ 11,509            $9,009           $6,764
        Non-deductible expenses:
             Amortization of goodwill                                           1,085               397              389
             Other                                                                210               185              165
        Foreign tax rate reduction                                            (2,340)           (1,602)            (916)
                                                                         -------------    --------------    -------------
        Provision for income taxes as reported                                $10,464            $7,989           $6,402
                                                                         =============    ==============    =============

</TABLE>

         Earnings before income taxes and minority interest by tax jurisdiction
         comprise the following:

<TABLE>
<CAPTION>
                                                                                2001              2000             1999
                                                                         -------------    --------------    -------------
        <S>                                                              <C>              <C>               <C>

        Canada                                                                 $7,494           $ 9,132         $  6,284
        United States                                                          18,665            10,889            8,749
                                                                         -------------    --------------    -------------
        Total                                                                 $26,159           $20,021         $ 15,033
                                                                         =============    ==============    =============
</TABLE>

         The provision for income taxes comprises the following:

<TABLE>
<CAPTION>
                                                                                2001              2000             1999
                                                                         -------------    --------------    -------------
        <S>                                                              <C>              <C>               <C>
        Current
             Canada                                                          $  2,664           $ 3,414          $ 2,732
             United States                                                      6,744             3,488            3,252
                                                                         -------------    --------------    -------------
                                                                                9,408             6,902            5,984
                                                                         -------------    --------------    -------------
        Deferred
             Canada                                                               633               143              511
             United States                                                        423               944             (93)
                                                                         -------------    --------------    -------------
                                                                                1,056             1,087              418
                                                                         -------------    --------------    -------------
        Total                                                                $ 10,464           $ 7,989          $ 6,402
                                                                         =============    ==============    =============
</TABLE>

         The significant components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                                                                                 2001               2000
                                                                                        --------------     --------------
        <S>                                                                             <C>                <C>
        Deferred income tax assets
             Expenses not currently deductible                                                 $  790              $ 508
             Provision for doubtful accounts                                                      107                259
             Inventory and other reserves                                                          84                 80
             Loss carry-forwards                                                                1,536                216
             Capital stock underwriting expenses                                                   91                270
                                                                                        --------------     --------------

                                                                                                2,608              1,333
                                                                                        --------------     --------------

        Deferred income tax liabilities
             Depreciation and amortization                                                      3,933              1,660
             Prepaid and other expenses deducted for tax purposes                                 558                459
             Financing fees                                                                       303                176
                                                                                        --------------     --------------
                                                                                                4,794              2,295
                                                                                        --------------     --------------
        Net deferred income tax liability                                                   $ (2,186)             $(962)
                                                                                        ==============     ==============
</TABLE>

<PAGE>

                                     -40-

         Cumulative undistributed earnings of U.S. subsidiaries approximated
         $22,305 as at March 31, 2001 (2000 - $12,840).

11.      EARNINGS PER SHARE

<TABLE>
<CAPTION>
                                                                                2001               2000             1999
                                                                       --------------    ---------------    -------------
      <S>                                                              <C>               <C>                <C>
      Net earnings available to Subordinate and Multiple
           Voting Shares                                                    $ 12,707            $ 9,868          $ 7,222
                                                                       ==============    ===============    =============

      Shares issued and outstanding at beginning of year                  12,989,530         12,919,055       12,285,538
      Weighted average number of shares:
           Issued in the year                                                117,728             33,617          294,852
           Repurchased in the year                                          (33,396)            (4,623)         (16,107)
                                                                       --------------    ---------------    -------------

      Weighted average number of shares used in computing
           basic earnings per share                                       13,073,862         12,948,049       12,564,283
      Assumed exercise of stock options, net of shares assumed
           acquired under the Treasury Stock Method                          767,134            759,689          910,361
                                                                       --------------    ---------------    -------------
      Number of shares used in computing diluted earnings per
           share                                                          13,840,996         13,707,738       13,474,644
                                                                       ==============    ===============    =============

</TABLE>

12.      OTHER SUPPLEMENTAL INFORMATION

<TABLE>
<CAPTION>
                                                                                 2001              2000             1999
                                                                         -------------    --------------    -------------
        <S>                                                              <C>              <C>               <C>

        Products and services:
        Revenue
            Products                                                          $54,091           $28,670          $17,985
            Services                                                          370,083           311,365          245,376
                                                                         -------------    --------------    -------------
        Total                                                                 424,174           340,035          263,361
                                                                         -------------    --------------    -------------
        Cost of revenue
            Products                                                           36,557            22,545           13,664
            Services                                                          247,917           203,609          162,425
                                                                         -------------    --------------    -------------
        Total                                                                 284,474           226,154          176,089
                                                                         -------------    --------------    -------------
        Net                                                                 $ 139,700         $ 113,881          $87,272
                                                                         =============    ==============    =============

        Cash payments made during the year on account of:
            Income taxes                                                      $ 4,308           $ 4,571          $ 4,452
                                                                         =============    ==============    =============
            Interest                                                          $ 9,616           $ 7,992          $ 5,806
                                                                         =============    ==============    =============

        Non cash financing activity:
            Issuance of subordinate voting shares to acquire
            minority interest                                                  $  649           $   -            $ 2,823
                                                                         =============    ==============    =============
        Depreciation and amortization comprise the following:
            Fixed assets                                                      $ 7,708           $ 6,486          $ 5,395
            Goodwill                                                            3,603             2,755            2,393
            Other                                                                 618               866              357
                                                                         -------------    --------------    -------------
                                                                              $11,929           $10,107          $ 8,145
                                                                         =============    ==============    =============

        Revenue from franchised operations                                    $55,661           $51,541         $ 39,933
                                                                         =============    ==============    =============
        Operating profit from franchised operations                           $ 7,999           $ 6,861          $ 5,618
                                                                         =============    ==============    =============
        Initial franchise fee revenue                                         $ 4,157           $ 3,224          $ 1,951
                                                                         =============    ==============    =============
</TABLE>

<PAGE>

                                     -41-

<TABLE>
<CAPTION>

                                                                                 2001              2000             1999
                                                                         -------------    --------------    -------------
        <S>                                                              <C>              <C>               <C>
        Advertising expense                                                   $ 8,264           $ 7,056          $ 5,921
                                                                         =============    ==============    =============
        Rent expense                                                          $10,599           $ 9,359          $ 7,136
                                                                         =============    ==============    =============
        Components of prepaids and other:
             Marketing                                                        $ 3,222           $ 3,271
             Insurance                                                          1,240               463
             Security deposits                                                  1,120               849
             Transportation                                                       104             1,222
             Other                                                              5,071             2,686
                                                                         -------------    --------------
                                                                             $ 10,757           $ 8,491
                                                                         =============    ==============

        Components of accrued liabilities:
             Accrued payroll and benefits                                    $ 14,567           $10,223
             Customer advances                                                 13,295             5,143
             Contingent acquisition liability                                     396             3,512
             Other                                                              5,743             4,135
                                                                         -------------    --------------
                                                                              $34,001           $23,013
                                                                         =============    ==============
</TABLE>

         The foreign currency translation adjustment for the year ended March
         31, 2001 is net of current income taxes of $444 (2000 - $1,139) on
         realized exchange gains for income tax purposes.


13.      FINANCIAL INSTRUMENTS

         The carrying amounts and fair values of the Company's significant
         financial instruments as at March 31, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>

                                                                         2001                            2000
                                                               --------------------------     ---------------------------
                                                                 Carrying          Fair         Carrying            Fair
                                                                   amount          value          amount           Value
        <S>                                                     <C>             <C>              <C>            <C>
        Cash and cash equivalents                               $   5,115       $  5,115         $ 3,297        $  3,297
        Other receivables                                           5,092          5,004           4,405           4,333
        Long-term debt including current portion                  152,424        152,424         104,910         104,910
        Interest rate swap contract receivable                          -              -               -             251

</TABLE>

14.      COMMITMENTS AND CONTINGENCIES

         (A)      LEASE COMMITMENTS

         Minimum operating lease payments are as follows:

<TABLE>
                      <S>                                                <C>
                      Year ending March 31
                      2002                                               $12,413
                      2003                                                10,775
                      2004                                                 8,720
                      2005                                                 7,238
                      2006                                                 4,624
                      Thereafter                                          11,509
</TABLE>

         (B)      SHAREHOLDER AGREEMENTS

         The Company has shareholder agreements with the minority owners of its
         subsidiaries. These agreements allow the Company to "call" the minority
         position for a predetermined formula price, which is usually equal to
         the multiple of earnings before interest, taxes, depreciation, and
         amortization paid by the Company

<PAGE>

                                     -42-

         for the original acquisition. The minority owners may also "put" their
         interest to the Company at the same price subject to certain
         limitations. The purchase price may, at the option of the Company, be
         paid primarily in Subordinate Voting Shares. Acquisitions of these
         minority interests would be accounted for using the purchase method.

         (C)      CONTINGENCIES

         The Company is involved in legal proceedings and claims primarily
         arising in the normal course of its business. In the opinion of
         management, the Company's liability, if any, would not materially
         affect its financial condition or operations.


15.      SEGMENTED INFORMATION

         OPERATING SEGMENTS
         Within the Property Services Division, three operating units
         (residential property management, integrated security services and
         consumer services) provide a variety of services to residential and
         commercial customers. The Business Services Division provides customer
         support and fulfillment and business process outsourcing services to
         corporate and institutional clients.

<TABLE>
<CAPTION>

2001                              Property          Property
                                Services -        Services -         Property
                               residential        integrated       Services -
                                  property          security         consumer         Business
                                management          services         services         Services       Corporate      Consolidated

<S>                            <C>             <C>              <C>               <C>              <C>             <C>

Revenues                       $   181,730     $      81,007         $ 78,838      $    82,346     $       253     $     424,174
                               ===========     =============    =============     ============     ===========     =============
Depreciation and
    amortization               $     4,505     $       1,371         $  2,555      $     3,397     $       101     $      11,929
                               ===========     =============    =============     ============     ===========     =============
Segment operating profit       $    13,546     $       4,654         $  9,947      $    12,491     $   (4,712)            35,926
                               ===========     =============    =============     ============     ===========
Interest expense                                                                                                         (9,767)
Income taxes                                                                                                            (10,464)
Minority interest                                                                                                        (2,988)
                                                                                                                   -------------
Net earnings                                                                                                       $      12,707
                                                                                                                   =============
Total assets                   $    84,332     $      42,033         $ 55,295      $  124,580      $     7,420     $     313,660
                               ===========     =============    =============     ============     ===========     =============
Total additions to long
    lived assets               $    15,652     $      10,194         $  8,535      $    25,796     $     -         $      60,177
                               ===========     =============    =============     ============     ===========     =============

</TABLE>

<TABLE>
<CAPTION>

2000                              Property          Property
                                Services -        Services -         Property
                               residential        integrated       Services -
                                  property          security         consumer         Business
                                management          services         services         Services       Corporate      Consolidated
<S>                            <C>             <C>              <C>               <C>              <C>             <C>

Revenues                     $     133,782      $     61,539         $ 71,330     $     73,198     $       186     $     340,035
                             =============     =============    =============     ============     ===========     =============
Depreciation and
     amortization            $       3,511      $        887         $  2,847     $      2,801     $        61     $      10,107
                             =============     =============    =============     ============     ===========     =============

Segment operating profit     $       7,903      $      4,143         $  7,933     $     11,874     $   (3,983)            27,870
                             =============     =============    =============     ============     ===========
Interest expense                                                                                                         (7,849)
Income taxes                                                                                                             (7,989)
Minority interest                                                                                                        (2,164)
                                                                                                                   -------------

Net earnings                                                                                                       $       9,868
                                                                                                                   =============
Total assets                 $      73,518      $     25,282         $ 50,953     $     74,476     $     6,658     $     230,887
                             =============     =============    =============     ============     ===========     =============
Total additions to long
    lived assets             $      23,909      $      3,175         $  3,735     $     10,923     $        97     $      41,839
                             =============     =============    =============     ============     ===========     =============

</TABLE>

<PAGE>

                                     -43-

<TABLE>
<CAPTION>

1999                              Property          Property
                                Services -        Services -         Property
                               residential        integrated       Services -
                                  property          security         consumer         Business
                                management          services         services         Services       Corporate      Consolidated

<S>                          <C>               <C>              <C>               <C>              <C>             <C>
Revenues                     $      90,649      $     52,827         $ 61,618     $     58,162     $       105     $     263,361
                             =============     =============    =============     ============     ===========     =============
Depreciation and
     amortization            $       2,639      $        797         $  2,125     $      2,503     $        81     $       8,145
                             =============     =============    =============     ============     ===========     =============
Segment operating profit     $       5,671      $      2,436         $  6,292     $      9,447     $   (3,224)     $      20,622
                             =============     =============    =============     ============     ===========
Interest expense                                                                                                         (5,589)
Income taxes                                                                                                             (6,402)
Minority interest                                                                                                        (1,409)
                                                                                                                   -------------
Net earnings                                                                                                       $       7,222
                                                                                                                   =============
Total assets                 $      62,516      $     16,633         $ 46,650     $     50,727     $     7,780     $     184,306
                             =============     =============    =============     ============     ===========     =============
Total additions to long
    lived assets             $      10,259      $      1,512         $ 14,959     $     23,397     $        47     $      50,174
                             =============     =============    =============     ============     ===========     =============
</TABLE>


<TABLE>
<CAPTION>

         GEOGRAPHIC SEGMENTS

         CANADA
                                              2001             2000            1999
                                      -------------    -------------   -------------
        <S>                           <C>              <C>             <C>
        Revenues                          $119,372         $109,410        $ 96,456
                                      =============    =============   =============
        Total long lived assets           $ 49,651         $ 31,970        $ 30,968
                                      =============    =============   =============
</TABLE>

<TABLE>
<CAPTION>

         UNITED STATES
                                              2001            2000             1999
                                      -------------    ------------     ------------
        <S>                           <C>              <C>              <C>
        Revenues                          $304,802        $230,625         $166,905
                                      =============    ============     ============
        Total long lived assets           $146,403        $115,218         $ 83,643
                                      =============    ============     ============
</TABLE>

<TABLE>
<CAPTION>

         CONSOLIDATED
                                              2001            2000             1999
                                      -------------    ------------     ------------
        <S>                           <C>              <C>              <C>
        Revenues                          $424,174        $340,035         $263,361
                                      =============    ============     ============
        Total long lived assets           $196,054        $147,188         $114,611
                                      =============    ============     ============

</TABLE>

16.      IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

         Statement of Financial Accounting Standards No. 133, Accounting for
         Derivative Instruments and Hedging Activities will become effective in
         the first quarter of the Company's 2002 fiscal year. The adoption of
         this Statement will have no impact on the financial results of the
         Company.

<PAGE>


                                     -44-


ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.





<PAGE>

                                     -45-


PART  III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS

The Directors of the Company stand for re-election each year. The Directors as
at June 29, 2001 were as follows:

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------
   NAME                      AGE  PRESENT POSITION AND TENURE                 BUSINESS EXPERIENCE DURING
                                                                                         LAST FIVE YEARS
--------------------------------------------------------------------------------------------------------
   <S>                      <C>   <C>                             <C>

   Michael H. Appleton      61    Director since 1994 and             Managing Partner, Fogler, Rubinoff
                                  Secretary                                           (Toronto law firm)

   C. Robert Burgess        59    Director since 1988              President, Rossmar & Graham Community
                                                                            Association Management, Inc.
                                                                           (subsidiary of FirstService);
                                                                   Former President, Burgess & Co., Inc.
                                                                          (Florida real estate sales and
                                                                             financial services company)

   Brendan Calder           55    Director since 1996               Executive Director, Rotman School of
                                                                      Management, University of Toronto;
                                                                     Former Chairman and Chief Executive
                                                                            Officer, CIBC Mortgages Inc.
                                                                               (subsidiary of a Canadian
                                                                                         chartered bank)

   Peter F. Cohen           49    Director since 1990                    President, Dawsco Capital Corp.
                                                                        (Ontario-based holding company);
                                                                     Former Chairman and Chief Executive
                                                                              Officer, Centrefund Realty
                                                                                             Corporation
                                                                   (publicly-traded Canadian real estate
                                                                                                company)

   Jay S. Hennick           44    President, Chief Executive       President and Chief Executive Officer
                                  Officer and Director

   Samuel Hennick           70    Director since 1993              Chairman and Chief Executive Officer,
                                                                                           Stargems Inc.
                                                                  (Toronto-based jewellery manufacturer)

   Steven Rogers            45    Director since 1989                      President and Chief Executive
                                                                                                Officer,
                                                                             The Franchise Company, Inc.
                                                                            (subsidiary of FirstService)

   James R. Rollwagen       49    Director since 1996                       Senior Attorney, Ecolab Inc.
                                                                   (publicly-traded diversified services
                                                                                                company)

   David R. Beatty          59    Director since May 2001             Professor of Strategic Management,
                                                                   Rotman School of Business, University
                                                                          of Toronto; corporate director
--------------------------------------------------------------------------------------------------------
</TABLE>

         Mr. Samuel Hennick is the father of Mr. Jay S. Hennick, the President
and Chief Executive Officer of the Company. Mr. Jay S. Hennick and Mr. Cohen
each held directorships of Centrefund Realty Corporation until August 2000 at
which time the company was sold and each of them resigned.

AUDIT COMMITTEE
         The Audit Committee is composed of three non-management members. The
committee reviews the annual financial statements intended for circulation among
shareholders and reports upon these to the Board. In addition, the Board may
refer to the Audit Committee on other matters and questions relating to the
financial position of the Company. The Audit Committee members are Messrs.
Appleton, Calder and Cohen.

<PAGE>

                                     -46-

COMPENSATION COMMITTEE
         The Compensation Committee is composed of three non-management members
and makes recommendations to the Board on, among other things, the compensation
of the Chief Executive Officer including grants of options under the Company's
Stock Option Plan to the Chief Executive Officer. The Compensation Committee
members are Messrs. Appleton, Calder and Cohen.

DIRECTORS' COMPENSATION
         During Fiscal 2001, each Director who was not a full-time employee of
the Company or any of its subsidiaries received an annual retainer of $1,660
plus a fee equal to $500 for each meeting of the Board of Directors or Committee
thereof attended by such Director in person and $230 for each meeting held by
telephone. During Fiscal 2001, the Company paid the Directors aggregate fees
totaling $15,600. In addition, most Directors have received stock option grants
under the Company's Stock Option Plan. During Fiscal 2001, Mr. Samuel Hennick
was granted 10,000 options and Mr. Beatty was granted 25,000 options.


EXECUTIVE OFFICERS

         The following shows the names and ages, as of June 29, 2001, of the
present executive officers of the Registrant, all positions presently held by
each officer, and the year each person became an officer. The executive officers
do not have a fixed term of office.

<TABLE>
<CAPTION>
     ---------------------------------------------------------------------------------------------
                                                                                     FIRST BECAME
     NAME                    AGE   PRESENT POSITION WITH THE COMPANY                   AN OFFICER
     ---------------------------------------------------------------------------------------------
     <S>                     <C>   <C>                                                       <C>

     Jay S. Hennick          44    President, Chief Executive Officer and Director           1988

     D. Scott Patterson      40    Senior Vice President and Chief Financial Officer         1995

     Timothy J. Greener      50    Senior Vice President, Integration                        1996

     John B. Friedrichsen    39    Senior Vice President, Acquisitions                       1998

     Douglas G. Cooke        41    Corporate Controller                                      1995
     ---------------------------------------------------------------------------------------------

</TABLE>

         Mr. Hennick is the founder of the Company and has been President and
Chief Executive Officer since its inception.

         Mr. Patterson has held his current position since February 1995. Mr.
Patterson is a Chartered Accountant.

         Mr. Greener was president of a subsidiary of the Company until October
1996, at which time he assumed his present position.

         Mr. Friedrichsen was Vice President, Corporate Finance with Ernst &
Young Corporate Finance Inc. prior to becoming Vice President, Acquisitions in
January 1998. Mr. Friedrichsen is a Chartered Accountant.

         Mr. Cooke has held his current position since June 1995. Mr. Cooke is a
Chartered Accountant.

<PAGE>

                                     -47-


ITEM 11.  EXECUTIVE COMPENSATION

         The following table sets forth all compensation awarded to, earned by,
or paid to the Chief Executive Officer and the four next most highly compensated
executive officers in respect of Fiscal 2001. Each of the listed persons was
holding the office indicated on the table on March 31, 2001.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
SUMMARY   COMPENSATION TABLE                                                   LONG TERM COMPENSATION
                                                                         -------------------------------------------
                                          ANNUAL COMPENSATION                    AWARDS             PAYOUTS
                                   ------------------------------------- ----------------------------------  ---------
<S>                       <C>      <C>           <C>        <C>          <C>          <C>         <S>        <S>

                                                                   OTHER RESTRICTED   SECURITIES                     ALL
                                                                  ANNUAL      STOCK   UNDERLYING      LTIP          OTHER
NAME AND PRINCIPAL        FISCAL      SALARY         BONUS  COMPENSATION     AWARDS      OPTIONS   PAYOUTS   COMPENSATION
POSITION                    YEAR      ($ US)        ($ US)        ($ US)     ($ US)          (#)     ($ US)        ($ US)
---------------------------------------------------------------------------------------------------------------------------
Jay S. Hennick,             2001   $ 475,400     $ 660,000             -          -       62,100          -             -
President and Chief         2000     442,000       736,700             -          -      150,000          -             -
Executive Officer           1999     351,500       448,400             -          -       75,000          -             -
---------------------------------------------------------------------------------------------------------------------------
D. Scott Patterson,         2001   $ 146,300     $ 203,200             -          -       81,150          -             -
Senior Vice President       2000     136,000       226,700             -          -       75,000          -             -
and Chief Financial         1999     132,900       230,800             -          -       37,500          -             -
Officer
---------------------------------------------------------------------------------------------------------------------------
Timothy J. Greener,         2001   $ 180,000     $ 220,000             -          -       37,460          -             -
Senior Vice                 2000     175,000       145,800             -          -       25,000          -             -
President, Integration      1999     116,300       195,500             -          -       15,000          -             -
---------------------------------------------------------------------------------------------------------------------------
John B. Friedrichsen,       2001   $ 109,700      $ 91,400             -          -       60,770          -             -
Senior Vice                 2000      91,800        76,500             -          -       50,000          -             -
President,                  1999      89,700        78,200             -          -       15,000          -             -
Acquisitions
---------------------------------------------------------------------------------------------------------------------------
Douglas G. Cooke,           2001    $ 86,400      $ 30,000             -          -       18,310          -             -
Corporate Controller        2000      78,200        32,600             -          -       15,000          -             -
                            1999      66,400        28,900             -          -        5,000          -             -
---------------------------------------------------------------------------------------------------------------------------
</TABLE>


         The  following  table  summarizes  the number and terms of the stock
options  granted  during  Fiscal  2001 to the  executive officers.

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------
OPTION GRANTS IN                                                                POTENTIAL REALIZED VALUE
FISCAL 2001                                                                    AT ASSUMED ANNUAL RATES OF
                                                                                STOCK PRICE APPRECIATION
                                          INDIVIDUAL GRANTS                          FOR OPTION TERM
                          --------------------------------------------------  -----------------------------
                            NUMBER OF   % OF TOTAL
                           SECURITIES      OPTIONS
                           UNDERLYING   GRANTED TO  EXERCISE
                              OPTIONS    EMPLOYEES       PRICE
                              GRANTED    IN FISCAL   ($ US         EXPIRATION             5%           10%
NAME                              (#)         2001  PER SHARE)           DATE         ($ US)        ($ US)
-----------------------------------------------------------------------------------------------------------
<S>                            <C>           <C>       <C>      <C>                <C>           <S>
Jay S. Hennick                 62,100        14.8%     $ 10.50  Apr. 12, 2005      $ 180,000     $ 398,000
-----------------------------------------------------------------------------------------------------------
D. Scott Patterson             31,150         7.4%     $ 10.50  Apr. 12, 2005       $ 90,000     $ 200,000
                               50,000        11.9%       13.50   Jan. 7, 2006        187,000       412,000
-----------------------------------------------------------------------------------------------------------
Timothy J. Greener             12,460         3.0%     $ 10.50  Apr. 12, 2005       $ 36,000      $ 80,000
                               25,000         5.9%       13.50   Jan. 7, 2006         93,000       206,000
-----------------------------------------------------------------------------------------------------------
John B. Friedrichsen           20,770         4.9%     $ 10.50  Apr. 12, 2005       $ 60,000     $ 133,000
                               40,000         9.5%       13.50   Jan. 7, 2006        149,000       330,000
-----------------------------------------------------------------------------------------------------------
Douglas G. Cooke                8,310         2.0%     $ 10.50  Apr. 12, 2005       $ 24,000      $ 53,000
                               10,000         2.4%       13.50   Jan. 7, 2006         37,000        82,000
-----------------------------------------------------------------------------------------------------------

</TABLE>

NOTE:
One option entitles the holder to purchase one Subordinate Voting Share. All
options listed in the table above vest in the following manner: 10% on grant
date, 15% on the first anniversary, 20% on second anniversary, 25% on
third anniversary and 30% on the fourth anniversary of the grant date. The
expiration date is the fifth anniversary of the grant date.

<PAGE>

                                     -48-

         The following table summarizes the exercises of stock options during
Fiscal 2001 by the executive officers and the number of, and the spread on,
unexercised options held by such officers on March 31, 2001.

<TABLE>
<CAPTION>

     ----------------------------------------------------------------------------------------------------
     AGGREGATED OPTION                                   NUMBER OF SECURITIES       VALUE OF UNEXERCISED
     EXERCISES IN FISCAL                                           UNDERLYING               IN-THE-MONEY
     2001 AND YEAR-END                                    UNEXERCISED OPTIONS                 OPTIONS AT
     OPTION VALUES                                          AT MARCH 31, 2001             MARCH 31, 2001
                                                                          (#)                     ($ US)
     ------------------------                         ------------------------  -------------------------
                                   SHARES        VALUE
                              ACQUIRED ON     REALIZED          EXERCISABLE /              EXERCISABLE /
     NAME                    EXERCISE (#)       ($ US)          UNEXERCISABLE              UNEXERCISABLE
     ----------------------------------------------------------------------------------------------------
     <S>                           <C>       <C>            <C>                <C>
     Jay S. Hennick                     -            -      382,460 / 254,640  $ 3,763,000 / $ 1,498,000
     ----------------------------------------------------------------------------------------------------
     D. Scott Patterson            30,000    $ 317,000      196,240 / 172,410    $ 1,895,000 / $ 869,000
     ----------------------------------------------------------------------------------------------------
     Timothy J. Greener            15,000    $ 107,000        59,246 / 68,214      $ 538,000 / $ 327,000
     ----------------------------------------------------------------------------------------------------
     John B. Friedrichsen               -            -       46,327 / 109,443      $ 304,000 / $ 518,000
     ----------------------------------------------------------------------------------------------------
     Douglas G. Cooke              14,500    $ 135,000        16,831 / 51,479      $ 124,000 / $ 386,000
     ----------------------------------------------------------------------------------------------------

</TABLE>

EMPLOYMENT AGREEMENT

         The Company has an employment agreement with Jay S. Hennick, the
President and Chief Executive Officer of the Company, made as of April 1, 1998
having a term of five years, with one-year renewals at the option of Mr.
Hennick. In the event of a change of control of the Company, or in the event the
Company terminates Mr. Hennick's employment without cause after March 31, 2003,
Mr. Hennick will be entitled to:

         (a) Payment of 300% of the aggregate of: (i) Mr. Hennick's then current
             salary; (ii) the benefits and other payments paid pursuant to the
             agreement in the previous fiscal year; and (iii) an amount equal
             to the bonus paid to Mr. Hennick in the previous fiscal year;
         (b) Certain job relocation expenses; and
         (c) At Mr. Hennick's option, an amount equal to the difference between
             the exercise price of any rights or options to purchase shares of
             the Company that he owned, or was entitled to receive, and the
             market value of such shares.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         The Directors who served on the Compensation Committee during Fiscal
2001 were Messrs. Appleton, Calder and Cohen. None of the persons who served as
members of the Compensation Committee in Fiscal 2001 was an officer or employee
of the Company or any of its subsidiaries during Fiscal 2001 and none of such
persons was formerly an officer of the Company or any of its subsidiaries.

         Mr. Jay S. Hennick served on the board of directors of Centrefund
Realty Corporation during Fiscal 2001 until August 2000, at which time that
company was sold and he resigned. Mr. Cohen, who was Centrefund Realty
Corporation's Chairman and Chief Executive Officer until August 2000, served on
the Compensation Committee of the Company during Fiscal 2001.

<PAGE>

                                     -49-


COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

COMPENSATION POLICY
         When determining the compensation of executive officers, the Committee
considers the objectives of: (i) retaining executives critical to the success of
the Company and the enhancement of shareholder value; (ii) providing fair and
competitive compensation; (iii) balancing the interests of management and
shareholders of the Company; (iv) rewarding performance, both on an individual
basis and with respect to the business in general; and (v) ensuring the
recognition of the fact that the Company carries on business with a small number
of executives relative to other public companies of similar size. In order to
achieve these objectives, the compensation paid to the executive officers
consists of three components:
    (a) Base salary;
    (b) Annual bonus incentive; and
    (c) Long-term incentive in the form of stock options granted in accordance
        with the Stock Option Plan.

BASE SALARY
         The base salary of each executive officer is determined by an
assessment by the Committee of such executive's performance, a consideration of
competitive compensation levels in corporations similar to the Company and a
review of the performance of the Company as a whole and the role the executive
officer played in such performance.

ANNUAL BONUS INCENTIVE
         Annual cash bonus incentive awards are based entirely on a formula that
relates to earnings per share growth of the Company. This establishes a direct
link between executive compensation and the Company's operating performance.

LONG-TERM INCENTIVE
         The Company provides a long-term incentive by granting stock options to
the executive officers. The options permit each executive officer to acquire
Subordinate Voting Shares of the Company at an exercise price equal to the
market price of such shares under option at the date the option was granted. The
objective of granting options is to encourage each executive officer to acquire
an increased ownership interest in the Company over a period of time, which acts
as a financial incentive for each executive officer to consider the long-term
interests of the Company and its shareholders.

<PAGE>

                                     -50-

PERFORMANCE GRAPH

         The following graph compares the five-year cumulative total return to
shareholders of the Company with the five-year cumulative total return of the
Russell 2000 Index and The ServiceMaster Company.


<TABLE>

            COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN ON $100 INVESTED AMONG
        FIRSTSERVICE CORPORATION, THE RUSSELL 2000 INDEX AND THE SERVICEMASTER COMPANY

<S>                <C>                                             <C>
                   500.00 -------------------------------------
                   450.00 -------------------------------------
                   400.00 -------------------------------------    FirstService
                   350.00 -------------------------------------    Corporation
Cumulative return  300.00 -------------------------------------
                   250.00 -------------------------------------    Russell 2000
                   200.00 -------------------------------------    Index
                   150.00 -------------------------------------
                   100.00 -------------------------------------    Servicemaster
                    50.00 -------------------------------------    Company
                     --   -------------------------------------
                           1996  1997  1998  1999  2000  2001
                                   AS AT MARCH 31

</TABLE>

* $100.00 invested on March 31, 1996 in stock or index, assuming reinvestment of
  dividends.

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------
AS AT MARCH 31                           1996       1997       1998      1999       2000       2001
                                         ----       ----       ----      ----       ----       ----
<S>                                  <C>        <C>        <C>       <C>        <C>        <C>

FirstService Corporation             $ 100.00   $ 165.60   $ 350.40  $ 367.90   $ 310.70   $ 443.70

Russell 2000 Index                     100.00     105.10     149.30    125.00     171.60     145.30

The ServiceMaster Company              100.00     128.60     181.40    215.80     120.30     121.40
----------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

                                     -51-

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth the beneficial shareholders of more than
5% of any class of shares known to the Registrant as of June 15, 2001.

<TABLE>
<CAPTION>

     -------------------------------------------------------------------------------------------------
                             NAME AND ADDRESS OF              NUMBER OF SHARES    PERCENTAGE OF CLASS
     NAME OF CLASS           BENEFICIAL OWNER               BENEFICIALLY OWNED                  OWNED
     -------------------------------------------------------------------------------------------------
     <S>                     <C>                                      <C>                      <C>
     Multiple Voting Shares  Jay S. Hennick                            662,847                 100.0%
                             1140 Bay Street
                             Suite 4000
                             Toronto, Ontario
                             M5S 2B4
     -------------------------------------------------------------------------------------------------
     Subordinate Voting      Safeco Corporation                        774,100                   6.0%
     Shares                  4333 Brooklyn Ave. NE
                             Seattle, WA
                             98185
     -------------------------------------------------------------------------------------------------

</TABLE>

         The table below sets forth, as of June 15, 2001, the beneficial
ownership of the Company's shares with respect to the Company's Directors,
executive officers and the Company's Directors and officers as a group.

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                           NAME OF                       NUMBER OF SHARES     EXERCISABLE       PERCENTAGE OF
NAME OF CLASS              BENEFICIAL OWNER            BENEFICIALLY OWNED         OPTIONS     CLASS OWNED (1)
--------------------------------------------------------------------------------------------------------------
<S>                        <C>                                    <C>             <C>                  <C>
Multiple Voting Shares     Jay S. Hennick                         662,847               -              100.0%
--------------------------------------------------------------------------------------------------------------
Subordinate Voting Shares  Michael H. Appleton                          -           7,750                0.0%
                          ------------------------------------------------------------------------------------
                           David R. Beatty                              -           2,500                0.0%
                          ------------------------------------------------------------------------------------
                           C. Robert Burgess                       74,770           7,000                0.6%
                          ------------------------------------------------------------------------------------
                           Brendan Calder                          24,175           2,500                0.2%
                          ------------------------------------------------------------------------------------
                           Peter F. Cohen                          30,000           5,500                0.3%
                          ------------------------------------------------------------------------------------
                           Douglas G. Cooke                        16,500          16,831                0.3%
                          ------------------------------------------------------------------------------------
                           John Friedrichsen                       30,000          26,327                0.4%
                          ------------------------------------------------------------------------------------
                           Timothy J. Greener                     160,343          59,246                1.7%
                          ------------------------------------------------------------------------------------
                           Jay S. Hennick                         585,887         192,460                6.0%
                          ------------------------------------------------------------------------------------
                           Samuel Hennick                         187,790          11,500                1.6%
                          ------------------------------------------------------------------------------------
                           D. Scott Patterson                     210,700         196,240                3.1%
                          ------------------------------------------------------------------------------------
                           Steven Rogers                           98,485          17,950                0.9%
                          ------------------------------------------------------------------------------------
                           All Directors and
                           officers as a group (12              1,418,650         545,804               14.7%
                           persons)
-------------------------------------------------------------------------------------------------------------
</TABLE>

NOTE
(1) Percentage ownership is calculated using as a denominator the total number
of shares of the class outstanding plus the number of shares of the class to
which the beneficial owner indicated has a right to acquire pursuant to options
currently exercisable or exercisable within 60 days.


<PAGE>

                                     -52-

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         The legal firm of Fogler, Rubinoff, of which Mr. Appleton is a partner,
received fees from the Company during the year for legal services performed.


INDEBTEDNESS OF MANAGEMENT

         Executive officers were indebted to the Company in connection with the
purchase of the Company's Subordinate Voting Shares. This indebtedness is
secured by the Subordinate Voting Shares acquired. The indebtedness has a
five-year term from the grant date, is non-interest bearing and is open for
repayment at any time. The following table lists the indebtedness of each
executive officer:

<TABLE>
<CAPTION>

     -----------------------------------------------------------------------------------------------
                                  LARGEST                                                 NUMBER OF
                                   AMOUNT        AMOUNT          FINANCIALLY     SUBORDINATE VOTING
                              OUTSTANDING   OUTSTANDING             ASSISTED   SHARES HELD IN TRUST
                                   DURING    AS AT JUNE           SECURITIES          BY COMPANY AS
                              FISCAL 2001      15, 2001     PURCHASES DURING           SECURITY FOR
     NAME                          ($ US)        ($ US)          FISCAL 2001           INDEBTEDNESS
     -----------------------------------------------------------------------------------------------
     <S>                       <C>           <C>                 <C>                       <C>

     Jay S. Hennick            $2,143,200    $2,143,200                    -                365,000
     -----------------------------------------------------------------------------------------------
     D. Scott Patterson          $615,100      $549,800                    -                 75,000
     -----------------------------------------------------------------------------------------------
     Timothy J. Greener          $127,200      $127,200                    -                 10,000
     -----------------------------------------------------------------------------------------------
     John Friedrichsen           $282,600      $282,600                    -                 30,000
     -----------------------------------------------------------------------------------------------
     Douglas G. Cooke            $126,100       $93,500                    -                 12,500
     -----------------------------------------------------------------------------------------------

</TABLE>

         No executive officer had any other indebtedness to the Company in
excess of $60,000 at any time during the year.


<PAGE>

                                     -53-

PART  IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(A)  FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS

         1.       Financial statements

         The documents listed below are included herein under Part II and are
         also contained in the FirstService Annual Report to Shareholders for
         2001:

             -     Report of Independent Accountants;
             -     Consolidated Statements of Earnings for the three years
                   ended March 31, 2001, 2000 and 1999;
             -     Consolidated Balance Sheets as at March 31, 2001 and 2000;
             -     Consolidated Statements of Shareholders' Equity for the three
                   years ended March 31, 2001, 2000 and 1999;
             -     Consolidated Statements of Cash Flows for the three
                   years ended March 31, 2001, 2000, and 1999; and
             -     Notes to the Consolidated Financial Statements.

         2.        Financial statement schedules
             -     Schedule - Amounts  receivable from related  parties and
                   underwriters,  promoters and employees  other than related
                   parties:  None.
             -     Included in Part IV of this report: Schedule II - Valuation
                   and Qualifying Accounts

         3.        Exhibits

         Included in Part IV of this report:
             -     List of Exhibits
             -     Exhibit 21 - Subsidiaries of the Registrant

(B)      REPORTS ON FORM 8-K FILED DURING THE LAST QUARTER OF FISCAL 2001

         None.


<PAGE>

                                     -54-

FIRSTSERVICE CORPORATION


SCHEDULE II


VALUATION AND QUALIFYING ACCOUNTS
(in thousands of U.S. dollars)

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
                                                                                           DEDUCTIONS
                                                                           ADDITIONS           DUE TO
                                         BALANCE AT        ADDITIONS            FROM    WRITE-OFFS OF      BALANCE AT
                                       BEGINNING OF   CHARGED TO BAD    ACQUISITIONS    UNCOLLECTIBLE          END OF
DESCRIPTION                                    YEAR     DEBT EXPENSE   OF BUSINESSES         ACCOUNTS            YEAR
----------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                <C>            <C>             <C>             <C>

ALLOWANCE FOR DOUBTFUL ACCOUNTS
RECEIVABLE (CURRENT):
   Year ended March 31, 2001                 $3,273            2,303             728          (2,181)          $4,123
   Year ended March 31, 2000                 $2,620            2,406             546          (2,299)          $3,273
----------------------------------------------------------------------------------------------------------------------



</TABLE>


<PAGE>

                                     -55-

SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereto duly authorized.


                                            FIRSTSERVICE CORPORATION
                                            Registrant



                                            /S/ D. SCOTT PATTERSON
                                            ----------------------------------
Date:  June 29, 2001                        D. Scott Patterson
                                            Senior Vice President and
                                            Chief Financial Officer



         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in their capacities and on the date indicated.

<TABLE>
<CAPTION>

NAME AND SIGNATURE            TITLE                                DATE

<S>                           <C>                                 <C>

/S/ JAY S. HENNICK            President, Chief Executive          June 29, 2001
-------------------------     Officer and Director
Jay S. Hennick                (PRINCIPAL EXECUTIVE OFFICER)



/S/ D. SCOTT PATTERSON         Senior Vice President and          June 29, 2001
-------------------------      Chief Financial Officer
D. Scott Patterson             (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)


/S/ MICHAEL H. APPLETON             Director                      June 29, 2001
-------------------------
Michael H. Appleton


/S/ C. ROBERT BURGESS               Director                      June 29, 2001
-------------------------
C. Robert Burgess

</TABLE>


<PAGE>

                                     -56-

<TABLE>

<S>                                 <C>                           <C>
/S/ BRENDAN CALDER                  Director                      June 29, 2001
-------------------------
Brendan Calder


/S/ SAMUEL HENNICK                  Director                      June 29, 2001
-------------------------
Samuel Hennick


/S/ STEVEN ROGERS                   Director                      June 29, 2001
-------------------------
Steven Rogers


/S/ JAMES R. ROLLWAGEN              Director                      June 29, 2001
-------------------------
James R. Rollwagen


/S/ DAVID R. BEATTY                 Director                      June 29, 2001
-------------------------
David R. Beatty

</TABLE>


<PAGE>


                                     -57-

LIST OF EXHIBITS

<TABLE>
<CAPTION>

EXHIBIT #    DESCRIPTION
---------   ------------

<S>         <C>

3.1          Articles of Incorporation and Amendment. Incorporated by reference
             to Form 10-Q for the period ended June 30, 1999, filed on August
             12, 1999.

3.2          By-Laws and Amendments. Incorporated by reference to Form 10-Q for
             the period ended June 30, 1999, filed on August 12, 1999.

10.1         Credit Facility dated April 1, 1999 among the Company and a
             syndicate of bank lenders. Incorporated by reference to Form 10-Q
             for the period ended June 30, 1999, filed on August 12, 1999.

10.2         FirstService Corporation Amended Stock Option Plan #2. Incorporated
             by reference to Form 10-K for the year ended March 31, 2000, filed
             on June 29, 2000.

10.3         FirstService Corporation Amended Share Purchase Plan #2.
             Incorporated by reference to Form 10-K for the year ended March 31,
             2000, filed on June 29, 2000.

21           Subsidiaries of FirstService Corporation. Included herein.

</TABLE>