**EXHIBIT      2**

**REPORT      OF MANAGEMENT**

| */s/              Jay S.              Hennick*      | */s/              John B.              Friedrichsen* |
|------------------------------------------------------------------------------|------------------------------------------------------|
| Jay S.              Hennick                    | John B.              Friedrichsen                    |
| Chief Executive              Officer                | Chief Financial              Officer                 |

----

**AUDITORS’      REPORT**

*/s/      PricewaterhouseCoopers LLP*

----

| For                the years ended March 31                                                                     |   | **2006** |                | 2005   |    |  2004    |   |
|-----------------------------------------------------------------------------------------------------------------|--------|----------|---------------------|--------|---------|---------------|--------|
|                                                                                                            |   |     |                |   |    |          |   |
| Revenues                                                                                                        |   | **$**    | **1,068,134**  |   |  $ | 651,376  |   |  $ | 441,333  |   |
| Cost                of revenues (exclusive of depreciation shown below)                                         |   |     | **684,280**         |   |    | 422,784       |   |   | 316,259 |   |
| Selling,                general and administrative expenses                                                     |   |     | **295,050**         |   |    | 172,179       |   |   | 88,855 |   |
| Depreciation                                                                                                    |   |     | **12,340**          |   |    | 9,603         |   |   | 6,837 |   |
| Amortization                of intangibles other than brokerage backlog                                         |   |     | **3,684**           |   |    | 2,769         |   |   | 1,749 |   |
| Amortization                of brokerage backlog                                                                |   |     | **7,554**           |   |    | 8,735         |   |   | - |   |
|                                                                                                            |   |     | **65,226**          |   |    | 35,306        |   |   | 27,633 |   |
| Interest                expense                                                                                 |   |     | **13,128**          |   |    | 7,192         |   |   | 4,139 |   |
| Interest                income                                                                                  |   |     | **(1,249**          | **)**  |    | -             |   |   | - |   |
| Other                income, net (note 5)                                                                       |   |     | **(3,776**          | **)**  |    | (375          | )      |   | (1,116 | ) |
| Earnings                before income taxes and minority interest                                               |   |     | **57,123**          |   |    | 28,489        |   |   | 24,610 |   |
| Income                taxes (note 13)                                                                           |   |     | **17,208**          |   |    | 7,014         |   |   | 7,184 |   |
| Earnings                before minority interest                                                                |   |     | **39,915**          |   |    | 21,475        |   |   | 17,426 |   |
| Minority                interest share of earnings                                                              |   |     | **11,881**          |   |    | 6,085         |   |   | 2,777 |   |
| Net                earnings from continuing operations                                                          |   |     | **28,034**          |   |    | 15,390        |   |   | 14,649 |   |
| Net                earnings from discontinued operations, net of income taxes                (note 4) |   |     | **41,463**          |   |    | 7,817         |   |   | 4,375 |   |
| Net                earnings                                                                                     |   | **$**    | **69,497**          |   | $       | 23,207        |   | $ | 19,024 |   |
| Net                earnings per share (note 14)                                                                 |   |     |                |   |    |          |   |   |   |   |
| Basic                                                                                                           |   |     |                |   |    |          |   |   |   |   |
|     Continuing                operations                                                    |   | **$**    | **0.93**            |   | $       | 0.52          |   | $ | 0.51 |   |
|     Discontinued                operations                                                  |   |     | **1.37**            |   |    | 0.26          |   |   | 0.16 |   |
|                                                                                                            |   | **$**    | **2.30**            |   | $       | 0.78          |   | $ | 0.67 |   |
| Diluted                                                                                                         |   |     |                |   |    |          |   |   |   |   |
|     Continuing                operations                                                    |   | **$**    | **0.87**            |   | $       | 0.49          |   | $ | 0.50 |   |
|     Discontinued                operations                                                  |   |     | **1.34**            |   |    | 0.25          |   |   | 0.15 |   |
|                                                                                                            |   | **$**    | **2.21**            |   | $       | 0.74          |   | $ | 0.65 |   |

**The      accompanying notes are an integral part of these consolidated financial      statements.**

----

| As                at March 31                                                                                                                                                                                                                                                                                                |   | **2006** |              | 2005   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|-------------------|--------|--------|
| **Assets**                                                                                                                                                                                                                                                                                                                   |   |     |              |   |   |
| **Current                assets**                                                                                                                                                                                                                                                                                            |   |     |              |   |   |
|     Cash                and cash equivalents                                                                                                                                                                                                                                                             |   | **$**    | **167,938**  |   | $      |  37,458  |   |
|     Accounts                receivable, net of an allowance of $7,482 (2005 - $8,471)                                                                                                                                                                                                                    |   |     | **128,276**       |   |   | 168,927 |   |
|     Mortgage                loans                receivable                                                                                                                                                                                                                                              |   |     | **6,874**         |   |   | - |   |
|     Income                taxes recoverable                                                                                                                                                                                                                                                              |   |     | **6,665**         |   |   | 2,498 |   |
|     Inventories                (note 6)                                                                                                                                                                                                                                                                  |   |     | **27,267**        |   |   | 20,878 |   |
|     Prepaids                and                other (note 6)                                                                                                                                                                                                                                            |   |     | **12,858**        |   |   | 12,591 |   |
|     Deferred                income                taxes (note 13)                                                                                                                                                                                                                                        |   |     | **5,531**         |   |   | 6,418 |   |
|                                                                                                                                                                                                                                                                                                                         |   |     | **355,409**       |   |   | 248,770 |   |
|  Other                receivables (note 7)                                                                                                                                                                                                                                                                              |   |     | **8,311**         |   |   | 7,077 |   |
| Fixed                assets (note 8)                                                                                                                                                                                                                                                                                         |   |     | **48,733**        |   |   | 57,241 |   |
| Other                assets (note 8)                                                                                                                                                                                                                                                                                         |   |     | **26,908**        |   |   | 6,685 |   |
| Deferred                income taxes (note 13)                                                                                                                                                                                                                                                                               |   |     | **4,381**         |   |   | 8,992 |   |
| Intangible                assets (note 9)                                                                                                                                                                                                                                                                                    |   |     | **70,775**        |   |   | 61,423 |   |
| Goodwill                (note 10)                                                                                                                                                                                                                                                                                            |   |     | **196,487**       |   |   | 236,540 |   |
|                                                                                                                                                                                                                                                                                                                         |   |     | **355,595**       |   |   | 377,958 |   |
|                                                                                                                                                                                                                                                                                                                         |   | **$**    | **711,004**       |   | $      | 626,728 |   |
| **Liabilities**                                                                                                                                                                                                                                                                                                              |   |     |              |   |   |   |   |
| **Current                liabilities**                                                                                                                                                                                                                                                                                       |   |     |              |   |   |   |   |
|     Accounts                payable                                                                                                                                                                                                                                                                      |   | **$**    | **41,790**        |   | $      | 41,905 |   |
|     Accrued                liabilities (note 6)                                                                                                                                                                                                                                                          |   |     | **108,085**       |   |   | 113,524 |   |
|     Income                taxes payable                                                                                                                                                                                                                                                                  |   |     | **5,726**         |   |   | 3,673 |   |
|     Unearned                revenues                                                                                                                                                                                                                                                                     |   |     | **5,349**         |   |   | 5,154 |   |
|     Long-term                debt                - current (note 11)                                                                                                                                                                                                                                     |   |     | **18,646**        |   |   | 18,206 |   |
|     Deferred                income                taxes (note 13)                                                                                                                                                                                                                                        |   |     | **5,112**         |   |   | 320 |   |
|                                                                                                                                                                                                                                                                                                                         |   |     | **184,708**       |   |   | 182,782 |   |
|  Long-term                debt - non-current (note 11)                                                                                                                                                                                                                                                                  |   |     | **230,040**       |   |   | 201,809 |   |
| Deferred                income taxes (note 13)                                                                                                                                                                                                                                                                               |   |     | **30,041**        |   |   | 29,802 |   |
| Minority                interest                                                                                                                                                                                                                                                                                             |   |     | **28,463**        |   |   | 26,464 |   |
|                                                                                                                                                                                                                                                                                                                         |   |     | **288,544**       |   |   | 258,075 |   |
| **Shareholders’                equity**                                                                                                                                                                                                                                                                                |   |     |              |   |   |   |   |
|     Capital                stock (note 12)                                                                                                                                                                                                                                                               |   |     | **75,687**        |   |   | 73,542 |   |
|           Issued              and              outstanding: 28,730,094 (2005 - 28,867,094) Subordinate          Voting              Shares and 1,325,694 (2005 - 1,325,694) convertible Multiple Voting Shares |   |     |              |   |   |   |   |
|     Contributed                surplus (note 12)                                                                                                                                                                                                                                                         |   |     | **2,163**         |   |   | 805 |   |
|     Receivables                pursuant to share purchase plan (note 12)                                                                                                                                                                                                                                 |   |     | **(1,635**        | **)**  |   | (2,148 | ) |
|     Retained                earnings                                                                                                                                                                                                                                                                     |   |     | **160,392**       |   |   | 103,011 |   |
|     Cumulative                other comprehensive earnings                                                                                                                                                                                                                                               |   |     | **1,145**         |   |   | 10,661 |   |
|                                                                                                                                                                                                                                                                                                                         |   |     | **237,752**       |   |   | 185,871 |   |
|                                                                                                                                                                                                                                                                                                                         |   | **$**    | **711,004**       |   | $      | 626,728 |   |
| **Commitments                and contingencies (notes 12 and 17)**                                                                                                                                                                                                                                                           |   |     |              |   |   |   |   |

**The      accompanying notes are an integral part of these consolidated financial      statements.**

|  */s/              Peter F. Cohen* | */s/              Jay S.              Hennick* |
|-----------------------------------------|------------------------------------------------|
| Director                                | Director                                       |

----

| FIRSTSERVICE                CORPORATIONCONSOLIDATED                STATEMENTS OF SHAREHOLDERS’ EQUITY(in                thousands of US dollars) - in accordance with generally accepted                accounting principles in the United                States |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                      |   | Issued                and outstanding shares (note                12) |           | Capital                stock |    | Contributed                surplus |   | Receivables                pursuant to share purchase plan |      | Retained                earnings |    | Cumulative                other comprehensive earnings (loss) |   | Total                shareholders’ equity |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|----------------|------------------------------|---------|------------------------------------|--------|------------------------------------------------------------|-----------|----------------------------------|---------|---------------------------------------------------------------|--------|-------------------------------------------------|-------------|
|                                                                                                                                                      |   |                                                                  |           |                         |    |                               |   |                                                       |      |                             |    |                                                          |   |                                            |        |
| Balance,                March 31, 2003                                                                                                                    |   |                                                                  | 28,328,380     |                         |  $ | 60,571                             |   |  $                                                    |  -   |                             |  $ | (2,434                                                        | )      |  $                                         | 62,948      |   |  $ | 2,321 |   |  $ | 123,406 |   |
| Comprehensive                earnings:                                                                                                                    |   |                                                                  |           |                         |    |                               |   |                                                       |      |                             |    |                                                          |   |                                            |        |   |   |   |   |   |   |   |
|     Net                earnings                                                                                                       |   |                                                                  | -              |                         |    | -                                  |   |                                                       | -         |                             |    | -                                                             |   |                                            | 19,024      |   |   | - |   |   | 19,024 |   |
|     Foreign                currency translation                adjustments                                                            |   |                                                                  | -              |                         |    | -                                  |   |                                                       | -         |                             |    | -                                                             |   |                                            | -           |   |   | 4,216 |   |   | 4,216 |   |
| Comprehensive                earnings                                                                                                                     |   |                                                                  |           |                         |    |                               |   |                                                       |      |                             |    |                                                          |   |                                            |        |   |   |   |   |   | 23,240 |   |
| Subordinate                Voting Shares:                                                                                                                 |   |                                                                  |           |                         |    |                               |   |                                                       |      |                             |    |                                                          |   |                                            |        |   |   |   |   |   |   |   |
|     Stock                option expense                                                                                               |   |                                                                  | -              |                         |    | -                                  |   |                                                       | 322       |                             |    | -                                                             |   |                                            | -           |   |   | - |   |   | 322 |   |
|     Stock                options exercised                                                                                            |   |                                                                  | 1,171,350      |                         |    | 7,986                              |   |                                                       | (139      | )                                |    | -                                                             |   |                                            | -           |   |   | - |   |   | 7,847 |   |
| Cash                payments on share purchase                plan                                                                                        |   |                                                                  | -              |                         |    | -                                  |   |                                                       | -         |                             |    | 286                                                           |   |                                            | -           |   |   | - |   |   | 286 |   |
| Balance,                March 31, 2004                                                                                                                    |   |                                                                  | 29,499,730     |                         |    | 68,557                             |   |                                                       | 183       |                             |    | (2,148                                                        | )      |                                            | 81,972      |   |   | 6,537 |   |   | 155,101 |   |
| Comprehensive                earnings:                                                                                                                    |   |                                                                  |           |                         |    |                               |   |                                                       |      |                             |    |                                                          |   |                                            |        |   |   |   |   |   |   |   |
|     Net                earnings                                                                                                       |   |                                                                  | -              |                         |    | -                                  |   |                                                       | -         |                             |    | -                                                             |   |                                            | 23,207      |   |   | - |   |   | 23,207 |   |
|     Foreign                currency translation                adjustments                                                            |   |                                                                  | -              |                         |    | -                                  |   |                                                       | -         |                             |    | -                                                             |   |                                            | -           |   |   | 4,124 |   |   | 4,124 |   |
| Comprehensive                earnings                                                                                                                     |   |                                                                  |           |                         |    |                               |   |                                                       |      |                             |    |                                                          |   |                                            |        |   |   |   |   |   | 27,331 |   |
| Subordinate                Voting Shares:                                                                                                                 |   |                                                                  |           |                         |    |                               |   |                                                       |      |                             |    |                                                          |   |                                            |        |   |   |   |   |   |   |   |
|     Stock                option expense                                                                                               |   |                                                                  | -              |                         |    | -                                  |   |                                                       | 622       |                             |    | -                                                             |   |                                            | -           |   |   | - |   |   | 622 |   |
|     Stock                options exercised                                                                                            |   |                                                                  | 911,130        |                         |    | 5,515                              |   |                                                       | -         |                             |    | -                                                             |   |                                            | -           |   |   | - |   |   | 5,515 |   |
|     Purchased                for                cancellation                                                                          |   |                                                                  | (218,072       | )                            |    | (530                               | )      |                                                       | -         |                             |    | -                                                             |   |                                            | (2,168      | ) |   | - |   |   | (2,698 | ) |
| Balance,                March 31, 2005                                                                                                                    |   |                                                                  | 30,192,788     |                         |    | 73,542                             |   |                                                       | 805       |                             |    | (2,148                                                        | )      |                                            | 103,011     |   |   | 10,661 |   |   | 185,871 |   |
| Comprehensive                earnings:                                                                                                                    |   |                                                                  |           |                         |    |                               |   |                                                       |      |                             |    |                                                          |   |                                            |        |   |   |   |   |   |   |   |
|     Net                earnings                                                                                                       |   |                                                                  | -              |                         |    | -                                  |   |                                                       | -         |                             |    | -                                                             |   |                                            | 69,497      |   |   | - |   |   | 69,497 |   |
|     Foreign                currency translation                adjustments                                                            |   |                                                                  | -              |                         |    | -                                  |   |                                                       | -         |                             |    | -                                                             |   |                                            | -           |   |   | (7,988 | ) |   | (7,988 | ) |
|     Unrealized                loss                on available-for-sale                equity securities,                net of taxes |   |                                                                  |           |                         |    | -                                  |   |                                                       | -         |                             |    | -                                                             |   |                                            | -           |   |   | (1,528 | ) |   | (1,528 | ) |
| Comprehensive                earnings                                                                                                                     |   |                                                                  |           |                         |    |                               |   |                                                       |      |                             |    |                                                          |   |                                            |        |   |   |   |   |   | 59,981 |   |
| Subordinate                Voting Shares:                                                                                                                 |   |                                                                  |           |                         |    |                               |   |                                                       |      |                             |    |                                                          |   |                                            |        |   |   |   |   |   |   |   |
|     Stock                option expense                                                                                               |   |                                                                  | -              |                         |    | -                                  |   |                                                       | 1,380     |                             |    | -                                                             |   |                                            | -           |   |   | - |   |   | 1,380 |   |
|     Stock                options exercised                                                                                            |   |                                                                  | 434,650        |                         |    | 3,740                              |   |                                                       | (22       | )                                |    | -                                                             |   |                                            | -           |   |   | - |   |   | 3,718 |   |
|     Purchased                for                cancellation                                                                          |   |                                                                  | (571,650       | )                            |    | (1,595                             | )      |                                                       | -         |                             |    | -                                                             |   |                                            | (12,116     | ) |   | - |   |   | (13,711 | ) |
| Cash                payments on share purchase                plan                                                                                        |   |                                                                  | -              |                         |    | -                                  |   |                                                       | -         |                             |    | 513                                                           |   |                                            | -           |   |   | - |   |   | 513 |   |
| **Balance,                March 31, 2006**                                                                                                                |   |                                                                  | **30,055,788** |                         | **$**   | **75,687**                         |   | **$**                                                      | **2,163** |                             | **$**   | **(1,635**                                                    | **)**  | **$**                                           | **160,392** |   | **$** | **1,145** |   | **$** | **237,752** |   |

**The      accompanying notes are an integral part of these consolidated financial      statements.**

----

** **

| For                the years ended March 31                                     |   | **2006** |        | 2005   |   | 2004    |   |
|---------------------------------------------------------------------------------|--------|----------|-------------|--------|--------|---------|--------|
| **Cash                provided by (used in)**                                   |   |     |        |   |   |    |   |
|                                                                            |   |     |        |   |   |    |   |   |   |   |
| **Operating                activities**                                         |   |     |        |   |   |    |   |   |   |   |
| Net                earnings from continuing operations                          |   | **$**    | **28,034**  |   | $      | 15,390  |   | $ | 14,649 |   |
| Items                not affecting cash:                                        |   |     |        |   |   |    |   |   |   |   |
|     Depreciation                and amortization            |   |     | **23,578**  |   |   | 21,107  |   |   | 8,586 |   |
|     Deferred                income                taxes     |   |     | **(4,901**  | **)**  |   | 473     |   |   | (787 | ) |
|     Minority                interest share of earnings      |   |     | **11,881**  |   |   | 6,085   |   |   | 2,777 |   |
|     Stock                option expense                     |   |     | **1,380**   |   |   | 622     |   |   | 322 |   |
|     Other                                                   |   |     | **1,268**   |   |   | 343     |   |   | (504 | ) |
|                                                                            |   |     |        |   |   |    |   |   |   |   |
| Changes                in operating assets and liabilities:                     |   |     |        |   |   |    |   |   |   |   |
|     Accounts                receivable                      |   |     | **(8,483**  | **)**  |   | (3,171  | )      |   | 13,095 |   |
|     Mortgage                loans                receivable |   |     | **(6,874**  | **)**  |   | -       |   |   | - |   |
|     Inventories                                             |   |     | **(8,622**  | **)**  |   | (6,678  | )      |   | 2,030 |   |
|     Prepaids                and                other        |   |     | **(2,585**  | **)**  |   | 2,319   |   |   | (1,441 | ) |
|     Accounts                payable                         |   |     | **9,640**   |   |   | (8,337  | )      |   | (5,637 | ) |
|     Accrued                liabilities                      |   |     | **12,612**  |   |   | 5,387   |   |   | (3,452 | ) |
|     Income                taxes                             |   |     | **(4,846**  | **)**  |   | (3,051  | )      |   | (517 | ) |
|     Unearned                revenues                        |   |     | **166**     |   |   | 1,386   |   |   | 605 |   |
| Discontinued                operations                                          |   |     | **7,101**   |   |   | 4,566   |   |   | 5,925 |   |
| Net                cash provided by operating activities                        |   |     | **59,349**  |   |   | 36,441  |   |   | 35,651 |   |
| **Investing                activities**                                         |   |     |        |   |   |    |   |   |   |   |
| Acquisitions                of businesses, net of cash acquired                 |   |     | **(14,105** | **)**  |   | (56,830 | )      |   | (15,677 | ) |
| Purchases                of minority shareholders’ interests              |   |     | **(11,998** | **)**  |   | (2,148  | )      |   | (1,098 | ) |
| Purchases                of fixed assets                                        |   |     | **(18,837** | **)**  |   | (12,499 | )      |   | (6,763 | ) |
| Decrease                (increase) in other assets                              |   |     | **109**     |   |   | 1,236   |   |   | (38 | ) |
| (Increase)                decrease in other receivables                         |   |     | **(600**    | **)**  |   | 1,928   |   |   | 1,987 |   |
| Proceeds                on sale of Resolve Corporation                          |   |     | **110,476** |   |   | -       |   |   | - |   |
| Discontinued                operations                                          |   |     | **(8,563**  | **)**  |   | (142    | )      |   | (8,990 | ) |
| Net                cash provided by (used in) investing activities              |   |     | **56,482**  |   |   | (68,455 | )      |   | (30,579 | ) |
| **Financing                activities**                                         |   |     |        |   |   |    |   |   |   |   |
| Increase                in long-term debt                                       |   |     | **102,614** |   |   | 59,586  |   |   | 60,522 |   |
| Repayment                of long-term debt                                      |   |     | **(74,100** | **)**  |   | (10,956 | )      |   | (62,559 | ) |
| Financing                fees paid                                              |   |     | **(1,396**  | **)**  |   | (124    | )      |   | (525 | ) |
| Proceeds                received on exercise of stock options                   |   |     | **3,740**   |   |   | 5,515   |   |   | 7,847 |   |
| Repurchase                of Subordinate Voting Shares                          |   |     | **(13,711** | **)**  |   | (2,698  | )      |   | - |   |
| Collection                of receivables pursuant to share purchase plan        |   |     | **513**     |   |   | -       |   |   | 286 |   |
| Dividends                paid to minority shareholders of subsidiaries          |   |     | **(1,939**  | **)**  |   | (606    | )      |   | (510 | ) |
| Discontinued                operations                                          |   |     | **-**       |   |   | -       |   |   | 584 |   |
| Net                cash provided by financing activities                        |   |     | **15,721**  |   |   | 50,717  |   |   | 5,645 |   |
| Effect                of exchange rate changes on cash                          |   |     | **(1,072**  | **)**  |   | 3,135   |   |   | (475 | ) |
| Increase                in cash and cash equivalents during the year            |   |     | **130,480** |   |   | 21,838  |   |   | 10,242 |   |
| Cash                and cash equivalents, beginning of year                     |   |     | **37,458**  |   |   | 15,620  |   |   | 5,378 |   |
| Cash                and cash equivalents, end of year                           |   | **$**    | **167,938** |   | $      | 37,458  |   | $ | 15,620 |   |

**The      accompanying notes are an integral part of these consolidated financial      statements.**

----

| **1.** | **Description                of the business** |
|--------|------------------------------------------------|

| **2.** | **Summary                of significant accounting                policies** |
|--------|------------------------------------------------------------------------------|

**Basis      of consolidation**

**Cash      and cash equivalents**

**Mortgage      loans receivable**

**Inventories**

**Fixed      assets**

| Buildings                                        | 20                  to 40 years straight-line                                 |
|--------------------------------------------------|-------------------------------------------------------------------------------|
| Vehicles                                         | 3                  to 5 years straight-line                                   |
| Furniture                  and equipment         | 3                  to 10 years straight-line                                  |
| Computer                  equipment and software | 3                  to 5 years straight-line                                   |
| Leasehold                  improvements          | term                  of the leases to a maximum of 10                  years |

----

**Investment      in Securities**

**Financial      instruments and derivatives**

**Financing      fees**

**Goodwill      and intangible assets**

| Brokerage                  backlog                       | as                  underlying brokerage transactions are completed                              |
|----------------------------------------------------------|--------------------------------------------------------------------------------------------------|
| Management                  contracts and other          | straight-line                  over life of contract ranging from 2 to 15 years                  |
| Customer                  lists and relationships        | straight-line                  over 1 to 25 years                                                |
| Trademarks                  and trade names:             |                                                                                                  |
|     Indefinite                  life | not                  amortized                                                                   |
|     Amortized                        | straight-line                  over 25 to 35 years                                               |
| Franchise                  rights                        | by                  pattern of use, currently estimated at 2.5% to 15% per                  year |

----

**Revenue      recognition and unearned revenue**

|   | *(a)* | *Real                estate brokerage operations* |
|--------|-------|---------------------------------------------------|

|   | *(b)* | *Service                operations other than real estate brokerage* |
|--------|-------|----------------------------------------------------------------------|

|   | *(c)* | *Franchise                operations* |
|--------|-------|---------------------------------------|

**Foreign      currency translation**

**Income      taxes**

----

**Stock-based      compensation**

*Accounting      for Stock-Based Compensation*
*Accounting      for Stock-Based Compensation - Transition and Disclosure, an amendment of SFAS      123*

*Accounting      for Stock Issued to Employees *

| **3.** | **Acquisitions** |
|--------|------------------|

*2006      acquisitions:*

|                                      |   |             |        |
|-------------------------------------------|--------|------------------|-------------|
|                                      |   | **2006**         |        |
|                                      |   | **Acquisitions** |        | **Purchases                of minority shareholders’ interests** |   |
|                                      |   |             |        |   |   |
| Current                assets             |   |  **$**      | **5,915**   |   | **$**  | - |   |
| Long-term                assets           |   |             | **2,257**   |   |   | - |   |
| Current                liabilities        |   |             | **(11,931** | **)** |   | - |   |
| Long-term                liabilities      |   |             | **(5,899**  | **)** |   | **(2,254** | **)** |
|                                      |   |             |        |   |   |   |   |
| Minority                interest          |   |             | **(840**    | **)** |   | **2,679** |   |
|                                      |   |             |        |   |   |   |   |
|                                      |   |             | **(10,498** | **)** |   | **425** |   |
| Note                consideration         |   | **$**            | **3,050**   |   | **$** | **-** |   |
| Cash                consideration         |   | **$**            | **11,346**  |   | **$** | **11,998** |   |
|                                      |   |             |        |   |   |   |   |
| Acquired                intangible assets |   |             | **14,854**  |   |   | **6,213** |   |
| Acquired                goodwill          |   |             | **10,040**  |   |   | **5,360** |   |

----

*2005      acquisitions:*

|                                                             |   | 2005   |         |
|------------------------------------------------------------------|--------|--------|--------------|
|                                                             |   | CMN    |         | Aggregate                other acquisitions |   | Purchases                of minority shareholders’ interests |   |
| Current                assets                                    |        | $      | 57,150  |   | $ |  1,281 |   | $ | - |  |
| Long-term                assets                                  |   |   | 16,807       |   |   | 1,747 |   |  | - |  |
| Current                liabilities                               |   |   | (83,644      | ) |   | (2,351 | ) |   | - |   |
| Long-term                liabilities                             |   |   | (15,167      | ) |   | (2,604 | ) |   | - |   |
|                                                             |   |   |         |   |   |   |   |   |   |   |
| Minority                interest                                 |   |   | (3,720       | ) |   | (89 | ) |   | 272 |   |
|                                                             |   |   |         |   |   |   |   |   |   |   |
|                                                             |   |   | (28,574      | ) |   | (2,016 | ) |   | 272 |   |
| Note                consideration                                |   | $      | -            |   | $ | 405 |   | $ | - |   |
| Cash                consideration                                |   | $      | 39,833       |   | $ | 10,512 |   | $ | 2,148 |   |
|                                                             |   |   |         |   |   |   |   |   |   |   |
| Acquired                intangible assets                        |   |   | 29,402       |   |   | 6,289 |   |   | - |   |
| Acquired                goodwill                                 |   |   | 39,005       |   |   | 6,644 |   |   | 1,876 |   |
|                                                             |   |   |         |   |   |   |   |   |   |   |
| Contingent                  consideration at date of acquisition |   | $      | -            |   | $ | 3,759 |   | $ | - |   |

*2004      acquisitions:*

----

|                                                             |   | 2004         |        |
|------------------------------------------------------------------|--------|--------------|-------------|
|                                                             |   | Acquisitions |        | Purchases                of minority shareholders’ interests |   |
|                                                             |   |         |        |   |   |
| Current                assets                                    |   |  $      | 2,587  |   |  $ | - |   |
| Long-term                assets                                  |   |         | 700         |   |   | - |   |
| Current                liabilities                               |   |         | (2,136      | ) |   | - |   |
| Long-term                liabilities                             |   |         | (3,238      | ) |   | - |   |
|                                                             |   |         |        |   |   |   |   |
| Minority                interest                                 |   |         | (223        | ) |   | 674 |   |
|                                                             |   |         |        |   |   |   |   |
|                                                             |   |         | (2,310      | ) |   | 674 |   |
| Cash                consideration                                |   | $            | 13,722      |   | $ | 1,098 |   |
|                                                             |   |         |        |   |   |   |   |
| Acquired                intangible assets                        |   |         | 8,011       |   |   | - |   |
| Acquired                goodwill                                 |   |         | 8,021       |   |   | 424 |   |
|                                                             |   |         |        |   |   |   |   |
| Contingent                  consideration at date of acquisition |   | $            | 6,002       |   | $ | - |   |

| Accrual                as at March 31, 2005               |   | $      | 3,128  |   |
|-----------------------------------------------------------|--------|--------|--------|--------|
| Less:                cash or other payments               |   |   | (2,000 | )      |
| Less:                amount related to disposed operation |   |   | (1,128 | )      |
| Accrual                as at March 31, 2006               |   | $      | -      |   |

----

| (unaudited)                                                                |   | 2005    |          | 2004   |    |
|----------------------------------------------------------------------------|--------|---------|---------------|--------|---------|
|                                                                       |   |    |          |   |    |   |   |
| Pro                forma revenues                                          |   |  $ | 848,043  |   |  $ | 766,333  |   |
| Pro                forma net earnings from continuing operations           |   |    | 16,551        |   |    | 13,359 |   |
|                                                                            |   |    |          |   |    |   |   |
| Pro                forma net earnings per share from continuing operations |   |    |          |   |    |   |   |
|     Basic                                              |   | $  | 0.56          |   |  $ | 0.47 |   |
|     Diluted                                            |   |    | 0.52          |   |    | 0.46 |   |

| **4.** | **Dispositions** |
|--------|------------------|

----

| **Operating                results for years ended March 31**                                     |   | **2006**    |              | 2005   |    | 2004          |   |
|---------------------------------------------------------------------------------------------------|--------|-------------|-------------------|--------|---------|---------------|--------|
|                                                                                              |   |        |              |   |    |          |   |   |   |   |
| Revenues                                                                                          |   |  **$** | **160,204**  |   |  $ | 174,078  |   |  $ | 168,461  |   |
| Operating                earnings from discontinued operations before                income taxes |   |        | **7,429**         |   |    | 10,452        |   |   | 6,392 |   |
| Provision                for income taxes                                                         |   |        | **1,785**         |   |    | 3,835         |   |   | 2,017 |   |
| Net                operating earnings from discontinued operations                                |   |        | **5,644**         |   |    | 6,617         |   |   | 4,375 |   |
| Net                gain on disposal                                                               |   |        | **35,819**        |   |    | 1,200         |   |   | - |   |
| Net                earnings from discontinued operations                                          |   |        | **41,463**        |   |    | 7,817         |   |   | 4,375 |   |
|                                                                                              |   |        |              |   |    |          |   |   |   |   |
| Net                earnings per share from discontinued operations                                |   |        |              |   |    |          |   |   |   |   |
|     Basic                                                                     |   |        | **1.37**          |   |    | 0.26          |   |   | 0.16 |   |
|     Diluted                                                                   |   |        | **1.34**          |   |    | 0.25          |   |   | 0.15 |   |

| **Balance                sheets as at March 31** |   | **2006** |   | 2005   |   |    |   |
|--------------------------------------------------|--------|----------|--------|--------|--------|---------|--------|
|                                             |        |     |   |   |   |    |   |   |   |
| Current                assets                    |   | **$**    | **-**  |   | $      | 93,565  |   |   |   |
| Non-current                assets                |   |     | **-**  |   |   | 79,118  |   |   |   |
| Total                assets                      |   |     | **-**  |   |   | 172,683 |   |   |   |
| Current                liabilities               |   |     | **-**  |   |   | 45,507  |   |   |   |
| Non-current                liabilities           |   |     | **-**  |   |   | 70,837  |   |   |   |
| Total                liabilities                 |   |     | **-**  |   |   | 116,344 |   |   |   |

| **5.** | **Other                income** |
|--------|---------------------------------|

|                                                                                                             |   | **2006** |            | 2005   |   | 2004      |    |
|------------------------------------------------------------------------------------------------------------------|--------|----------|-----------------|--------|--------|-----------|---------|
|                                                                                                             |   |          |            |   |   |      |    |
| Gain                (loss) on sale of equity securities                                                          |   | **$**    | **2,211**  |   | $      | (62  | )  | $ | - |   |
| Earnings                from equity investments                                                                  |   |     | **1,329**       |   |   | 125       |    |   | - |   |
| Gain                on foreign exchange contracts                                                                |   |     | **121**         |   |   | 200       |    |   | 219 |   |
| Dilution                gains on sales of shares of subsidiaries                                                 |   |     | **115**         |   |   | 112       |    |   | 1,137 |   |
| Disposal                of security officer assets of Chicago Integrated                Security Services branch |   |     | **-**           |   |   | -         |    |   | (240 | ) |
|                                                                                                             |   | **$**    | **3,776**       |   | $      | 375       |    | $ | 1,116 |   |

----

| **6.** | **Components                of working capital                accounts** |
|--------|--------------------------------------------------------------------------|

| **Inventories**                                                          |   | **2006** |       | 2005   |   |
|--------------------------------------------------------------------------|--------|----------|------------|--------|--------|
|     Work-in-progress                                 |   | **$**    | **14,459** |   | $      | 9,245 |   |
|     Finished                goods                    |   |     | **11,014** |   |   | 7,831 |   |
|     Supplies                and                other |   |     | **1,794**  |   |   | 3,802 |   |
|                                                                     |   | **$**    | **27,267** |   | $      | 20,878 |   |

| **Prepaids                  and other**                                                                                        |   |   |        |   |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|
|     Insurance                                                                                              |   | **$**  | **4,608**   |   | $      | 4,518 |   |
|     Rent                                                                                                   |   |   | **2,112**   |   |   | - |   |
|     Security                deposits                                                                       |   |   | **1,721**   |   |   | 1,554 |   |
|     Transportation                                                                                         |   |   | **-**       |   |   | 864 |   |
|     Other                                                                                                  |   |   | **4,417**   |   |   | 5,655 |   |
|                                                                                                                           |   |   | **$12,858** |   |   | $12,591 |   |
| **Accrued                liabilities**                                                                                         |   |   |        |   |   |   |   |
|     Accrued                payroll, commission and benefits                                                |   | **$**  | **71,155**  |   | $      | 66,281 |   |
|     Accrued                interest                                                                        |   |   | **4,447**   |   |   | 2,528 |   |
|     Liabilities                recognized in connection with Resolve disposal                (note 4)      |   |   | **3,387**   |   |   | - |   |
|     Customer                advances                                                                       |   |   | **2,363**   |   |   | 15,667 |   |
|     Liabilities                recognized in connection with business acquisitions                (note 3) |   |   | **-**       |   |   | 3,128 |   |
|     Deferred                lease                inducements                                               |   |   | **1,868**   |   |   | 1,572 |   |
|     Other                                                                                                  |   |   | **24,865**  |   |   | 24,348 |   |
|                                                                                                                           |   | **$**  | **108,085** |   | $      | 113,524 |   |

| **7.** | **Other                receivables** |
|--------|--------------------------------------|

|                                                                                                     |   | **2006** |      | 2005   |   |
|----------------------------------------------------------------------------------------------------------|--------|----------|-----------|--------|--------|
| Interest-bearing                notes due from purchasers of disposed subsidiaries                       |   | **$**    | **4,676** |   | $      | 4,611 |   |
| Interest-bearing                loans due from minority shareholders                of subsidiaries      |   |     | **1,384** |   |   | 1,894 |   |
| Franchisee                and customer receivables, certain of which                are interest bearing |   |     | **2,251** |   |   | 572 |   |
|                                                                                                     |   | **$**    | **8,311** |   | $      | 7,077 |   |

| **8.** | **Fixed                assets and other assets** |
|--------|--------------------------------------------------|

|                                                |   |   |   | Accumulated                   |   |     |   |
|-----------------------------------------------------|--------|--------|--------|-------------------------------|--------|----------|--------|
| **2006**                                            |   |   |   | depreciation                / |   | **Net**  |   |
|                                                |   | Cost   |   | amortization                  |   | **2006** |   |
| **Fixed                assets**                     |   |   |   |                          |   |     |   |   |   |   |
| Land                                                |   | $      | 1,915  |                          | $      | -        |   | **$** | **1,915** |   |
| Buildings                                           |   |   | 6,886  |                          |   | 1,781    |   |   | **5,105** |   |
| Vehicles                                            |   |   | 17,519 |                          |   | 10,004   |   |   | **7,515** |   |
| Furniture                and equipment              |   |   | 27,477 |                          |   | 16,574   |   |   | **10,903** |   |
| Computer                equipment and software      |   |   | 29,836 |                          |   | 15,911   |   |   | **13,925** |   |
| Leasehold                improvements               |   |   | 13,268 |                          |   | 3,898    |   |   | **9,370** |   |
|                                                |   | $      | 96,901 |                          | $      | 48,168   |   | **$** | **48,733** |   |
| **Other                assets**                     |   |   |   |                          |   |     |   |   |   |   |
| Available-for-sale                equity securities |   | $      | 18,845 |                          | $      | -        |   | **$** | **18,845** |   |
| Equity                investments                   |   |   | 4,965  |                          |   | -        |   |   | **4,965** |   |
| Financing                fees                       |   |   | 3,237  |                          |   | 1,094    |   |   | **2,143** |   |
| Other                                               |   |   | 955    |                          |   | -        |   |   | **955** |   |
|                                                |   | $      | 28,002 |                          | $      | 1,094    |   | **$** | **26,908** |   |

----

|                                             |   |   |    | Accumulated                     |   |         |   |
|--------------------------------------------------|--------|--------|---------|---------------------------------|--------|--------------|--------|
| 2005                                             |   |   |    | depreciation                  / |   | Net          |   |
|                                             |   |   | Cost    |                            |   | amortization |   |   | 2005 |   |
| **Fixed                  assets**                |   |   |    |                            |   |         |   |   |   |   |
| Land                                             |   | $      | 2,303   |                            | $      | -            |   | $ | 2,303 |   |
| Buildings                                        |   |   | 8,855   |                            |   | 1,813        |   |   | 7,042 |   |
| Vehicles                                         |   |   | 15,277  |                            |   | 8,794        |   |   | 6,483 |   |
| Furniture                  and equipment         |   |   | 57,795  |                            |   | 38,869       |   |   | 18,926 |   |
| Computer                  equipment and software |   |   | 36,937  |                            |   | 22,943       |   |   | 13,994 |   |
| Leasehold                  improvements          |   |   | 15,892  |                            |   | 7,399        |   |   | 8,493 |   |
|                                             |   | $      | 137,059 |                            | $      | 79,818       |   | $ | 57,241 |   |
| **Other                  assets**                |   |   |    |                            |   |         |   |   |   |   |
| Equity                  investments              |   | $      | 4,652   |                            | $      | -            |   | $ | 4,652 |   |
| Financing                  fees                  |   |   | 4,115   |                            |   | 2,365        |   |   | 1,750 |   |
| Other                                            |   |   | 283     |                            |   | -            |   |   | 283 |   |
|                                             |   | $      | 9,050   |                            | $      | 2,365        |   | $ | 6,685 |   |

| **9.** | **Intangible                assets** |
|--------|--------------------------------------|

| **2006**                                               |   | Gross                carrying amount |   | Accumulated                amortization |   | **Net****2006** |   |
|--------------------------------------------------------|--------|--------------------------------------|--------|-----------------------------------------|--------|-----------------|--------|
|                                                   |   |                                 |   |                                    |   |            |   |   |   |   |
| Customer                lists and relationships        |   | $                                    | 25,663 |                                    | $      | 3,758           |   | **$** | **21,905** |   |
| Franchise                rights                        |   |                                 | 23,685 |                                    |   | 4,068           |   |   | **19,617** |   |
| Trademarks                and trade names:             |   |                                 |   |                                    |   |            |   |   |   |   |
|     Indefinite                life |   |                                 | 15,446 |                                    |   | -               |   |   | **15,446** |   |
|     Amortized                      |   |                                 | 12,517 |                                    |   | 2,181           |   |   | **10,336** |   |
| Management                contracts and other          |   |                                 | 5,618  |                                    |   | 2,354           |   |   | **3,264** |   |
| Brokerage                backlog                       |   |                                 | 15,829 |                                    |   | 15,622          |   |   | **207** |   |
|                                                   |   | $                                    | 98,758 |                                    | $      | 27,983          |   | **$** | **70,775** |   |

| **2005**                                               |   | Gross                carrying amount |   | Accumulated                amortization |   | Net2005                 |   |
|--------------------------------------------------------|--------|--------------------------------------|--------|-----------------------------------------|--------|-------------------------|--------|
|                                                   |   |                                 |   |                                    |   |                    |   |
| Customer                lists and relationships        |   | $                20,868              |   | $                3,094                  |   | $                17,774 |   |
| Franchise                rights                        |   |                                 | 20,940 |                                    |   | 3,183                   |   |   | 17,757 |   |
| Trademarks                and trade names:             |   |                                 |   |                                    |   |                    |   |   |   |   |
|     Indefinite                life |   |                                 | 11,165 |                                    |   | -                       |   |   | 11,165 |   |
|     Amortized                      |   |                                 | 12,517 |                                    |   | 1,748                   |   |   | 10,769 |   |
| Management                contracts and other          |   |                                 | 3,357  |                                    |   | 1,290                   |   |   | 2,067 |   |
| Brokerage                backlog                       |   |                                 | 10,626 |                                    |   | 8,735                   |   |   | 1,891 |   |
|                                                   |   | $                                    | 79,473 |                                    | $      | 18,050                  |   | $ | 61,423 |   |

----

|                                            |   | Amount |   | Estimated                weighted average amortization period in years |   |
|-------------------------------------------------|--------|--------|--------|------------------------------------------------------------------------|--------|
|                                            |   |   |   |                                                                   |   |   |   |
| Customer                lists and relationships |   | $      | 7,561  |                                                                   |   | 9.8 |   |
| Trademarks                and trade names       |   |   | 4,281  |                                                                   |   | Indefinite |   |
| Brokerage                backlog                |   |   | 5,203  |                                                                   |   | 0.5 |   |
| Franchise                rights                 |   |   | 2,744  |                                                                   |   | 29.5 |   |
| Management                contracts and other   |   |   | 2,073  |                                                                   |   | 1.0 |   |
|                                            |   | $      | 21,862 |                                                                   |   | - |   |

| 2007 |   | $      | 5,795 |   |
|------|--------|--------|-------|--------|
| 2008 |   |   | 4,182 |   |
| 2009 |   |   | 4,119 |   |
| 2010 |   |   | 4,045 |   |
| 2011 |   |   | 3,765 |   |

| **10.** | **Goodwill** |
|---------|--------------|

|                                                                                                                |   |   | Residential                Property Management |   |   | Commercial                Real Estate Services |   |   | Integrated                Security Services |   |   | Property                Improvement Services |   |   | Business                Services |   |   | Consolidated |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|----------------------------------------------|--------|--------|----------------------------------|--------|--------|--------------|--------|
|                                                                                                                     |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |                             |   |   |         |   |
| Balance,                March 31, 2004                                                                                   |   | $      | 63,469                                         |   | $      | -                                              |   | $      | 27,638                                      |   | $      | 38,458                                       |   | $      | 56,014                           |   | $      | 185,579      |   |
| Goodwill                resulting from adjustments                to purchase price                allocations           |   |   | 831                                            |   |   | -                                              |   |   | 25                                          |   |   | 389                                          |   |   | (707                             | )      |   | 538          |   |
| Goodwill                resulting from contingent                acquisition payments                                    |   |   | 1,628                                          |   |   | -                                              |   |   | 1,966                                       |   |   | 3,798                                        |   |   | -                                |   |   | 7,392        |   |
| Goodwill                resulting from purchases                of minority shareholders’                interests |   |   | -                                              |   |   | -                                              |   |   | -                                           |   |   | 1,876                                        |   |   | -                                |   |   | 1,876        |   |
| Goodwill                acquired during year                                                                             |   |   | 5,727                                          |   |   | 39,005                                         |   |   | -                                           |   |   | 917                                          |   |   | -                                |   |   | 45,649       |   |
| Goodwill                disposed during year                                                                             |   |   | (1,989                                         | )      |   | -                                              |   |   | -                                           |   |   | (4,435                                       | )      |   | -                                |   |   | (6,424       | )      |
| Foreign                exchange                                                                                          |   |   | -                                              |   |   | (43                                            | )      |   | 57                                          |   |   | -                                            |   |   | 1,916                            |   |   | 1,930        |   |
| Balance,                March 31, 2005                                                                                   |   |   | 69,666                                         |   |   | 38,962                                         |   |   | 29,686                                      |   |   | 41,003                                       |   |   | 57,223                           |   |   | 236,540      |   |
| Goodwill                resulting from adjustments                to purchase price                allocations           |   |   | (190                                           | )      |   | 78                                             |   |   | -                                           |   |   | (315                                         | )      |   | -                                |   |   | (427         | )      |
| Goodwill                resulting from contingent                acquisition payments                                    |   |   | 1,035                                          |   |   | -                                              |   |   | -                                           |   |   | 1,575                                        |   |   | -                                |   |   | 2,610        |   |
| Goodwill                resulting from purchases                of minority shareholders’                interests |   |   | 681                                            |   |   | 4,084                                          |   |   | 373                                         |   |   | 222                                          |   |   | -                                |   |   | 5,360        |   |
| Goodwill                acquired during year                                                                             |   |   | 105                                            |   |   | 8,983                                          |   |   | -                                           |   |   | 952                                          |   |   | -                                |   |   | 10,040       |   |
| Goodwill                disposed during year                                                                             |   |   | -                                              |   |   | (364                                           | )      |   | -                                           |   |   | (192                                         | )      |   | (58,044                          | )      |   | (58,600      | )      |
| Foreign                exchange                                                                                          |   |   | -                                              |   |   | 124                                            |   |   | 19                                          |   |   | -                                            |   |   | 821                              |   |   | 964          |   |
| **Balance,                March 31, 2006**                                                                               |   | **$**  | **71,297**                                     |   | **$**  | **51,867**                                     |   | **$**  | **30,078**                                  |   | **$**  | **43,245**                                   |   | **$**  | **-**                            |   | **$**  | **196,487**  |   |

----

| **11.** | **Long-term                debt** |
|---------|-----------------------------------|

|                                                                                                                                                       |   |   | **2006**    |   |   | 2005    |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|---------|--------|
|                                                                                                                                                       |   |   |        |   |   |    |   |
| Revolving                credit facility                                                                                                                   |   | **$**  | **-**       |   | $      | 59,374  |   |
| 8.06%                Senior Notes                                                                                                                          |   |   | **85,714**  |   |   | 100,000 |   |
| 6.40%                Senior Notes                                                                                                                          |   |   | **50,000**  |   |   | 50,000  |   |
| 5.44%                Senior Notes                                                                                                                          |   |   | **100,000** |   |   | -       |   |
| Adjustment                to Senior Notes resulting from interest rate swaps (note                16)                                                      |   |   | **-**       |   |   | 283     |   |
| Capital                leases bearing interest ranging from 5% to 10%, maturing at various                dates                through                2010 |   |   | **5,324**   |   |   | 3,948   |   |
| Other                long-term debt bearing interest at 4% to 10%, maturing at various                dates                through 2010                    |   |   | **7,648**   |   |   | 6,410   |   |
|                                                                                                                                                       |   |   | **248,686** |   |   | 220,015 |   |
| Less:                current portion                                                                                                                       |   |   | **18,646**  |   |   | 18,206  |   |
|                                                                                                                                                       |   | **$**  | **230,040** |   | $      | 201,809 |   |

----

| 2007       |   | $      | 18,646  |   |
|------------|--------|--------|---------|--------|
| 2008       |   |   | 19,234  |   |
| 2009       |   |   | 15,953  |   |
| 2010       |   |   | 15,441  |   |
| 2011       |   |   | 14,975  |   |
| Thereafter |   |   | 164,437 |   |

| **12.** | **Capital                    stock** |
|---------|--------------------------------------|

|                                           |   |   | *Subordinate                    Voting Shares* |   |   | *Multiple                    Voting Shares* |   |   | Total         |   |   | Total   |   |
|------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|---------------|--------|--------|---------|--------|
|                                           |   |   | Number                                         |   |   | Amount                                      |   |   | Number        |   |   | Amount  |   |   | Number |   |   | amount |   |
|                                           |   |   |                                           |   |   |                                        |   |   |          |   |   |    |   |   |   |   |   |   |   |
| Balance,                    March 31, 2004     |   |   | 28,174,036                                     |   | $      | 68,184                                      |   |   | 1,325,694     |   | $      | 373     |   |   | 29,499,730 |   | $ | 68,557 |   |
| Balance,                    March 31, 2005     |   |   | 28,867,094                                     |   |   | 73,169                                      |   |   | 1,325,694     |   |   | 373     |   |   | 30,192,788 |   |   | 73,542 |   |
| **Balance,                    March 31, 2006** |   |   | **28,730,094**                                 |   |   | **75,314**                                  |   |   | **1,325,694** |   |   | **373** |   |   | **30,055,788** |   |   | **75,687** |   |

|   | On                    December 15, 2004, the Company completed a 2 for 1 stock split                    effected in                    the form of a stock dividend. All stock balances for all periods                    presented                    have been retroactively adjusted to reflect the stock split.                    During the                    year ended March 31, 2006, the Company repurchased 571,650 (2005                    - 218,072                    and 2004 - nil) Subordinate Voting Shares under a Normal Course                    Issuer Bid                    filed with the Toronto Stock Exchange, which allowed the Company                    to                    repurchase up to 5% of its outstanding shares on the open market                    during a                    twelve-month period. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                    Company’s contributed surplus account relates to stock option accounting                    under SFAS 123. Contributed surplus is credited at the time stock                    option                    compensation is recorded. As stock options are exercised, contributed                    surplus is reduced and capital stock is                    credited. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                    Company has $1,635 (C$2,309) (2005 - $2,148 (C$3,034)) of interest                    bearing                    loans receivable related to the purchase of 440,000 Subordinate                    Voting                    Shares (2005 - 730,000 shares). The loans, which are collateralized                    by the                    shares issued, have a ten-year term from the grant date; however,                    they are                    open for repayment at any time. The maturities of these loans                    are as                    follows, for the years ending March                    31. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2007   |   | $      |  403 |   |
|--------|--------|--------|-----------|--------|
| 2008   |   |   | 467       |   |
| 2009   |   |   | 765       |   |
|   |   | $      | 1,635     |   |

|   | Pursuant                    to an agreement approved in February 2004, the Company agreed                    that it will                    make a payment to its Chief Executive Officer (“CEO”) upon the arm’s                    length sale of control of the Company or upon a distribution                    of the                    Company’s assets to shareholders. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | The                Company has a stock option plan for certain officers and key full-time                employees of the Company and its subsidiaries, other than its CEO.                Options                are granted at the market price for the underlying shares on the                date of                grant. Each option vests over a four-year term and expires five years                from                the date granted and allows for the purchase of one Subordinate Voting                Share. At March 31, 2006, there were 1,716,350 options outstanding                to 34                individuals at prices ranging from $6.15 to $23.76 per share, expiring                on                various dates through March 2011. As at March 31, 2006, there were                no                options available for future grants. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                number of Subordinate Voting Shares issuable under options and the                average                option prices per share are as                follows: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                 |   | *Shares                  issuable under options* |          | *Weighted                  average price per share* |   |
|------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|---------------|-----------------------------------------------------|--------|
|                                                                                                 |   | **2006**                                         |          | 2005                                                |   | 2004 |   | **2006** |   | 2005 |   | 2004 |   |
| Shares                  issuable under options                  - Beginning of                  year |   |                                             | **1,844,000** |                                                |   | 2,288,630 |   |   | 3,565,980 |   | **$** | **10.83** |   | $ | 8.01 |   | $ | 7.98 |   |
| Granted                                                                                              |   |                                             | **328,000**   |                                                |   | 496,500 |   |   | 266,000 |   |   | **19.96** |   |   | 13.63 |   |   | 8.00 |   |
| Exercised                  for cash                                                                  |   |                                             | **(434,650**  | **)**                                               |   | (911,130 | ) |   | (1,171,350 | ) |   | **8.60** |   |   | 6.42 |   |   | 6.27 |   |
| Expired                  or forfeited                                                                |   |                                             | **(21,000**   | **)**                                               |   | (30,000 | ) |   | (372,000 | ) |   | **9.38** |   |   | 10.43 |   |   | 11.83 |   |
|                                                                                                 |   |                                             |          |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares                  issuable under options                  - End of year                        |   |                                             | **1,716,350** |                                                |   | 1,844,000 |   |   | 2,288,630 |   | **$** | **13.74** |   | $ | 10.83 |   | $ | 8.01 |   |
| Options                  exercisable - End                  of year                                  |   |                                             | **885,075**   |                                                |   | 915,500 |   |   | 1,335,866 |   |   |   |   |   |   |   |   |   |   |

|   | The                options outstanding as at March 31, 2006 to purchase Subordinate                Voting                Shares are as follows: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |  |   |  |
|--------|--------|--|--------|--|

|                                    |   |   | *Options                outstanding* |   |   | *Options                exercisable*                              |
|-----------------------------------------|--------|--------|--------------------------------------|--------|--------|-------------------------------------------------------------------|
| Range                of exercise prices |   |   | NumberOutstanding                    |   |   | Weighted                average remaining contractual life (years | ) |   | Weighted                average exercise price |   |   | Number                exercisable |   |   | Weighted                average exercise price |   |
|                                    |   |   |                                 |   |   |                                                              |   |   |   |   |   |   |   |   |   |   |
| $6.15                - $10.70           |   |   | 495,300                              |   |   | 1.99                                                              |   | $ | 8.43 |   |   | 317,500 |   | $ | 8.63 |   |
| $11.02                - $13.43          |   |   | 616,800                              |   |   | 1.80                                                              |   |   | 12.33 |   |   | 465,150 |   |   | 12.62 |   |
| $17.29                - $23.76          |   |   | 604,250                              |   |   | 4.38                                                              |   |   | 20.48 |   |   | 102,425 |   |   | 19.49 |   |
|                                    |   |   | 1,716,350                            |   |   | 2.86                                                              |   | $ | 13.74 |   |   | 885,075 |   | $ | 12.43 |   |

----

|                                                                                                                           |   |   | **2006**   |   |   | 2005   |   |   | 2004   |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                                           |   |   |       |   |   |   |   |   |   |   |
| Net                earnings as reported                                                                                        |   | **$**  | **69,497** |   | $      | 23,207 |   | $      | 19,024 |   |
| Deduct:                Stock-based compensation expense determined                under fair value method, net of income taxes |   |   | **(738**   | **)**  |   | (1,826 | )      |   | (2,158 | )      |
| Pro                forma net earnings                                                                                          |   | **$**  | **68,759** |   | $      | 21,381 |   | $      | 16,866 |   |
|                                                                                                                           |   |   |       |   |   |   |   |   |   |   |
| Pro                forma net earnings per share:                                                                               |   |   |       |   |   |   |   |   |   |   |
|     Basic                                                                                                  |   | **$**  | **2.28**   |   | $      | 0.72   |   | $      | 0.59   |   |
|     Diluted                                                                                                |   |   | **2.18**   |   |   | 0.68   |   |   | 0.58   |   |
|                                                                                                                           |   |   |       |   |   |   |   |   |   |   |
| Reported                net earnings per share:                                                                                |   |   |       |   |   |   |   |   |   |   |
|     Basic                                                                                                  |   | **$**  | **2.30**   |   | $      | 0.78   |   | $      | 0.67   |   |
|     Diluted                                                                                                |   |   | **2.21**   |   |   | 0.74   |   |   | 0.65   |   |
|                                                                                                                           |   |   |       |   |   |   |   |   |   |   |
| Assumptions:                                                                                                                   |   |   |       |   |   |   |   |   |   |   |
|     Risk-free                interest rate                                                                 |   |   | **4.7**    | **%**  |   | 3.2    | %      |   | 3.0    | %      |
|     Expected                life                in years                                                   |   |   | **4.4**    |   |   | 4.4    |   |   | 4.4    |   |
|     Volatility                                                                                             |   |   | **30**     | **%**  |   | 30     | %      |   | 30     | %      |
|     Dividend                yield                                                                          |   |   | **0.0**    | **%**  |   | 0.0    | %      |   | 0.0    | %      |

| **13.** | **Income                taxes** |
|---------|---------------------------------|

|                                                                                                                                        |   |   | **2006**   |   |   | 2005   |   |   | 2004   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|
| Income                tax expense using combined statutory rate of approximately 36%                (2005                - 40%; 2004 - 40%) |   | **$**  | **20,632** |   | $      | 11,394 |   | $      | 9,844  |   |
| Non-deductible                expenses                                                                                                      |   |   | **137**    |   |   | 1,217  |   |   | 1,181  |   |
| Reduction                in tax liability of prior years                                                                                    |   |   | **-**      |   |   | (1,133 | )      |   | -      |   |
| Foreign                tax rate reduction                                                                                                   |   |   | **(3,561** | **)**  |   | (4,464 | )      |   | (3,841 | )      |
| Provision                for income taxes as reported                                                                                       |   | **$**  | **17,208** |   | $      | 7,014  |   | $      | 7,184  |   |

|                         |   |   | **2006**   |   |   | 2005   |   |   | 2004   |   |
|------------------------------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|
|                         |   |   |       |   |   |   |   |   |   |   |
| Canada                       |   | **$**  | **5,238**  |   | $      | (4,966 | )      | $      | 420    |   |
| United                States |   |   | **39,742** |   |   | 30,627 |   |   | 24,190 |   |
| Foreign                      |   |   | **12,143** |   |   | 2,828  |   |   | -      |   |
| Total                        |   | **$**  | **57,123** |   | $      | 28,489 |   | $      | 24,610 |   |

----

|                                                 |   |   | **2006**   |   |   | 2005   |   |   | 2004   |   |
|------------------------------------------------------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|
|                                                 |   |   |       |   |   |   |   |   |   |   |
| Current                                              |   |   |       |   |   |   |   |   |   |   |
|     Canada                       |   | **$**  | **2,370**  |   | $      | 4,553  |   | $      | 1,486  |   |
|     United                States |   |   | **14,792** |   |   | 8,479  |   |   | 6,043  |   |
|     Foreign                      |   |   | **4,482**  |   |   | 834    |   |   | -      |   |
|                                                 |   |   | **21,644** |   |   | 13,866 |   |   | 7,529  |   |
| Deferred                                             |   |   |       |   |   |   |   |   |   |   |
|     Canada                       |   |   | **(1,778** | **)**  |   | (2,890 | )      |   | 165    |   |
|     United                States |   |   | **(2,378** | **)**  |   | (3,962 | )      |   | (510   | )      |
|     Foreign                      |   |   | **(280**   | **)**  |   | -      |   |   | -      |   |
|                                                 |   |   | **(4,436** | **)**  |   | (6,852 | )      |   | (345   | )      |
| Total                                                |   | **$**  | **17,208** |   | $      | 7,014  |   | $      | 7,184  |   |

|                                                                                        |   | **2006** |       | 2005   |   |
|---------------------------------------------------------------------------------------------|--------|----------|------------|--------|--------|
| Deferred                income tax assets                                                   |   |     |       |   |   |   |   |
|     Expenses                not                currently deductible     |   | **$**    | **4,374**  |   | $      | 4,282 |   |
|     Provision                for                doubtful accounts       |   |     | **831**    |   |   | 2,136 |   |
|     Inventory                and                other reserves          |   |     | **326**    |   |   | - |   |
|     Loss                carry-forwards                                  |   |     | **4,381**  |   |   | 8,992 |   |
|                                                                                        |   |     | **9,912**  |   |   | 15,410 |   |
| Deferred                income tax liabilities                                              |   |     |       |   |   |   |   |
|     Depreciation                and amortization                        |   |     | **29,822** |   |   | 29,695 |   |
|     Investments                                                         |   |     | **3,953**  |   |   | - |   |
|     Prepaid                and other expenses deducted for tax purposes |   |     | **666**    |   |   | 320 |   |
|     Unrealized                foreign exchange gains                    |   |     | **493**    |   |   | - |   |
|     Financing                fees                                       |   |     | **219**    |   |   | 107 |   |
|                                                                                        |   |     | **35,153** |   |   | 30,122 |   |
| Net                deferred income tax liability                                            |   | **$**    | **25,241** |   | $      | 14,712 |   |

----

| **14.** | **Earnings                per share** |
|---------|---------------------------------------|

|                                                                                                                      |   |   | **2006**   |   |   | 2005   |   |   | 2004   |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                                      |   |   |       |   |   |   |   |   |   |   |
| Net                earnings from continuing operations                                                                    |   | **$**  | **28,034** |   | $      | 15,390 |   | $      | 14,649 |   |
| Dilution                of net earnings resulting from assumed exercise                of stock options in subsidiaries   |   |   | **(1,253** | **)**  |   | (569   | )      |   | -      |   |
| Net                earnings from continuing operations for diluted earnings                per share calculation purposes |   | **$**  | **26,781** |   | $      | 14,821 |   | $      | 14,649 |   |
|                                                                                                                      |   |   |       |   |   |   |   |   |   |   |
| Net                earnings                                                                                               |   | **$**  | **69,497** |   | $      | 23,207 |   | $      | 19,024 |   |
| Dilution                of net earnings resulting from assumed exercise                of stock options in subsidiaries   |   |   | **(1,253** | **)**  |   | (569   | )      |   | -      |   |
| Net                earnings for diluted earnings per share calculation purposes                                           |   | **$**  | **68,244** |   | $      | 22,638 |   | $      | 19,024 |   |

|                                                                                                                            |   |   | **2006**       |   |   | 2005       |   |   | 2004       |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------|--------|--------|------------|--------|--------|------------|--------|
|                                                                                                                            |   |   |           |   |   |       |   |   |       |   |
| Shares                issued and outstanding at beginning of year                                                               |   |   | **30,192,788** |   |   | 29,499,730 |   |   | 28,328,380 |   |
| Weighted                average number of shares:                                                                               |   |   |           |   |   |       |   |   |       |   |
|     Issued                during the year                                                                   |   |   | **137,943**    |   |   | 381,309    |   |   | 241,324    |   |
|     Repurchased                during the year                                                              |   |   | **(160,040**   | **)**  |   | (103,665   | )      |   | -          |   |
|                                                                                                                            |   |   |           |   |   |       |   |   |       |   |
| Weighted                average number of shares used in computing                basic earnings per share                      |   |   | **30,170,691** |   |   | 29,777,374 |   |   | 28,569,704 |   |
| Assumed                exercise of stock options, net of shares assumed                acquired under the Treasury Stock Method |   |   | **725,286**    |   |   | 689,597    |   |   | 621,952    |   |
| Number                of shares used in computing diluted earnings per                share                                     |   |   | **30,895,977** |   |   | 30,466,971 |   |   | 29,191,656 |   |

| **15.** | **Other                supplemental information** |
|---------|---------------------------------------------------|

|                                                   |   |   | **2006**      |   |   | 2005    |   |   | 2004    |   |
|--------------------------------------------------------|--------|--------|---------------|--------|--------|---------|--------|--------|---------|--------|
| **Products                and services segmentation**  |   |   |          |   |   |    |   |   |    |   |
| Revenues                                               |   |   |          |   |   |    |   |   |    |   |
|     Products                       |   | **$**  | **153,861**   |   | $      | 142,371 |   | $      | 108,983 |   |
|     Services                       |   |   | **914,273**   |   |   | 509,005 |   |   | 332,350 |   |
| Total                                                  |   |   | **1,068,134** |   |   | 651,376 |   |   | 441,333 |   |
|                                                   |   |   |          |   |   |    |   |   |    |   |
| Cost                of revenues                        |   |   |          |   |   |    |   |   |    |   |
|     Products                       |   | **$**  | **94,621**    |   | $      | 86,215  |   | $      | 67,721  |   |
|     Services                       |   |   | **589,659**   |   |   | 336,569 |   |   | 248,537 |   |
| Total                                                  |   |   | **684,280**   |   |   | 422,784 |   |   | 316,258 |   |
|                                                   |   |   |          |   |   |    |   |   |    |   |
| **Franchised                operations**               |   |   |          |   |   |    |   |   |    |   |
| Revenues                                               |   | **$**  | **88,531**    |   | $      | 79,541  |   | $      | 64,947  |   |
| Operating                earnings                      |   |   | **16,728**    |   |   | 15,574  |   |   | 11,369  |   |
| Initial                franchise fee revenues          |   |   | **3,482**     |   |   | 3,459   |   |   | 4,467   |   |
|                                                   |   |   |          |   |   |    |   |   |    |   |
| **Cash                payments made during the year**  |   |   |          |   |   |    |   |   |    |   |
| Income                taxes                            |   | **$**  | **25,179**    |   | $      | 16,854  |   | $      | 13,388  |   |
| Interest                                               |   |   | **12,481**    |   |   | 11,073  |   |   | 5,156   |   |
|  **Non-cash                financing activities** |   |   |          |   |   |    |   |   |    |   |
| Increases                in capital lease obligations  |   | **$**  | **3,284**     |   | $      | 1,986   |   | $      | 1,352   |   |
|                                                   |   |   |          |   |   |    |   |   |    |   |
| **Other                expenses**                      |   |   |          |   |   |    |   |   |    |   |
| Rent                expense                            |   | **$**  | **26,762**    |   | $      | 14,104  |   | $      | 7,173   |   |

----

| **16.** | **Financial                instruments** |
|---------|------------------------------------------|

**Concentration      of credit risk**

**Interest      rate risk**

*Accounting      for Derivative Instruments and Hedging Activities.*

----

**Fair      values of financial instruments**

|                                      |   |   |  **2006**                     |   |   |  2005                    |   |
|-------------------------------------------|--------|--------|------------------------------------|--------|--------|-------------------------------|--------|
|                                      |   |   | **Carrying                amount** |   |   | **Fair                value** |   |   | Carrying                amount |   |   | Fair                value |   |
| Mortgage                loans receivable  |   | **$**  | **6,874**                          |   | **$**  | **6,874**                     |   | $ | - |   | $ | - |   |
| Other                receivables          |   |   | **8,311**                          |   |   | **8,311**                     |   |   | 7,077 |   |   | 7,067 |   |
| Long-term                debt             |   |   | **248,686**                        |   |   | **267,166**                   |   |   | 219,732 |   |   | 236,491 |   |
| Interest                rate swaps        |   |   | **57**                             |   |   | **57**                        |   |   | 283 |   |   | 283 |   |
| Foreign                exchange contracts |   |   | **-**                              |   |   | **-**                         |   |   | 200 |   |   | 200 |   |

| **17.** | **Commitments                and contingencies** |
|---------|--------------------------------------------------|

|   | **(a)** | **Lease                commitments** |
|--------|---------|--------------------------------------|

| Year                ending                March 31 |   |   |   |   |
|----------------------------------------------------|--------|--------|--------|--------|
| 2007                                               |   | $      | 24,721 |   |
| 2008                                               |   |   | 21,449 |   |
| 2009                                               |   |   | 16,852 |   |
| 2010                                               |   |   | 13,286 |   |
| 2011                                               |   |   | 11,444 |   |
| Thereafter                                         |   |   | 24,017 |   |

|   | **(b)** | **Minority                shareholder agreements** |
|--------|---------|----------------------------------------------------|

|   | **(c)** | **Contingencies** |
|--------|---------|-------------------|

| **18.** | **Related                party transactions** |
|---------|-----------------------------------------------|

----

| **19.** | **Segmented                information** |
|---------|------------------------------------------|

*Operating      segments*

| 2006                                                                        |   |   | Residential                  Property Management |   |   | Commercial                  Real Estate Services |   |   | Integrated                  Security Services |   |   | Property                  Improvement Services |   |   | Corporate |   |   | Consolidated |   |
|-----------------------------------------------------------------------------|--------|--------|--------------------------------------------------|--------|--------|--------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|------------------------------------------------|--------|--------|-----------|--------|--------|--------------|--------|
|                                                                        |   |   |                                             |   |   |                                             |   |   |                                          |   |   |                                           |   |   |      |   |   |         |   |
| Revenues                                                                    |   | $      | 346,133                                          |   | $      | 438,434                                          |   | $      | 149,063                                       |   | $      | 134,136                                        |   | $      | 368       |   | $      | 1,068,134    |   |
| Depreciation                  and amortization                              |   |   | 5,618                                            |   |   | 11,388                                           |   |   | 2,655                                         |   |   | 3,749                                          |   |   | 168       |   |   | 23,578       |   |
| Operating                  earnings                                         |   |   | 25,767                                           |   |   | 25,079                                           |   |   | 5,005                                         |   |   | 22,016                                         |   |   | (12,641   | )      |   | 65,226       |   |
| Other                  income, net                                          |   |   |                                             |   |   |                                             |   |   |                                          |   |   |                                           |   |   |      |   |   | 3,776        |   |
| Interest                  expense, net                                      |   |   |                                             |   |   |                                             |   |   |                                          |   |   |                                           |   |   |      |   |   | (11,879      | )      |
| Income                  taxes                                               |   |   |                                             |   |   |                                             |   |   |                                          |   |   |                                           |   |   |      |   |   | (17,208      | )      |
| Minority                  interest                                          |   |   |                                             |   |   |                                             |   |   |                                          |   |   |                                           |   |   |      |   |   | (11,881      | )      |
| Net                  earnings from continuing                  operations   |   |   |                                             |   |   |                                             |   |   |                                          |   |   |                                           |   |   |      |   |   | 28,034       |   |
| Net                  earnings from discontinued                  operations |   |   |                                             |   |   |                                             |   |   |                                          |   |   |                                           |   |   |      |   |   | 41,463       |   |
| Net                  earnings                                               |   |   |                                             |   |   |                                             |   |   |                                          |   |   |                                           |   |   |      |   | $      | 69,497       |   |
| Total                  assets                                               |   | $      | 150,641                                          |   | $      | 211,321                                          |   | $      | 85,479                                        |   | $      | 114,188                                        |   | $      | 149,375   |   | $      | 711,004      |   |
| Total                  additions to long-lived                  assets      |   |   | 10,400                                           |   |   | 36,799                                           |   |   | 2,809                                         |   |   | 9,909                                          |   |   | 546       |   |   | 60,463       |   |

----

| 2005                                                                    |   |   | Residential                Property Management |   |   | Commercial                Real Estate Services |   |   | Integrated                Security Services |   |   | Property                Improvement Services |   |   | Corporate |   |   | Consolidated |   |
|-------------------------------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|----------------------------------------------|--------|--------|-----------|--------|--------|--------------|--------|
|                                                                    |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   |         |   |
| Revenues                                                                |   | $      | 275,229                                        |   | $      | 120,535                                        |   | $      | 143,160                                     |   | $      | 111,779                                      |   | $      | 673       |   | $      | 651,376      |   |
| Depreciation                and Amortization                            |   |   | 5,170                                          |   |   | 9,868                                          |   |   | 2,819                                       |   |   | 3,071                                        |   |   | 179       |   |   | 21,107       |   |
| Operating                earnings                                       |   |   | 18,917                                         |   |   | 1,276                                          |   |   | 7,468                                       |   |   | 16,796                                       |   |   | (9,151    | )      |   | 35,306       |   |
| Other                income, net                                        |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | 375          |   |
| Interest                expense                                         |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | (7,192       | )      |
| Income                taxes                                             |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | (7,014       | )      |
| Minority                interest                                        |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | (6,085       | )      |
| Net                earnings from continuing                operations   |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | 15,390       |   |
| Net                earnings from discontinued                operations |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | 7,817        |   |
| Net                earnings                                             |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   | $      | 23,207       |   |
| Total                assets                                             |   | $      | 150,080                                        |   | $      | 100,634                                        |   | $      | 86,598                                      |   | $      | 107,063                                      |   | $      | 12,060    |   | $      | 456,435      |   |
| Discontinued                operations                                  |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | 170,293      |   |
|                                                                    |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | 626,728      |   |
| Total                additions to long-lived assets                     |   |   | 21,412                                         |   |   | 77,255                                         |   |   | 3,684                                       |   |   | 10,437                                       |   |   | 357       |   |   | 113,145      |   |

| 2004                                                                      |   |   | Residential                Property Management |   |   | Commercial                Real Estate Services |   |   | Integrated                Security Services |   |   | Property                Improvement Services |   |   | Corporate |   |   | Consolidated |   |
|---------------------------------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|----------------------------------------------|--------|--------|-----------|--------|--------|--------------|--------|
|                                                                      |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   |         |   |
| Revenues                                                                  |   | $      | 228,790                                        |   | $      | -                                              |   | $      | 122,748                                     |   | $      | 89,361                                       |   | $      | 434       |   | $      | 441,333      |   |
| Depreciation                and amortization                              |   |   | 4,219                                          |   |   | -                                              |   |   | 1,948                                       |   |   | 2,270                                        |   |   | 149       |   |   | 8,586        |   |
| Operating                earnings                                         |   |   | 15,515                                         |   |   | -                                              |   |   | 6,481                                       |   |   | 12,669                                       |   |   | (7,032    | )      |   | 27,633       |   |
| Other                income, net                                          |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | 1,116        |   |
| Interest                expense                                           |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | (4,140       | )      |
| Income                taxes                                               |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | (7,184       | )      |
| Minority                interest                                          |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | (2,777       | )      |
| Net                earnings from continuing                operations     |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | 14,648       |   |
| Net                loss from discontinued                 operations |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | 4,376        |   |
| Net                earnings                                               |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   | $      | 19,024       |   |
| Total                assets                                               |   | $      | 110,439                                        |   | $      | -                                              |   | $      | 75,198                                      |   | $      | 102,802                                      |   | $      | 4,437     |   | $      | 292,876      |   |
| Discontinued                operations                                    |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | 144,677      |   |
|                                                                      |   |   |                                           |   |   |                                           |   |   |                                        |   |   |                                         |   |   |      |   |   | 437,553      |   |
| Total                additions to long-lived assets                       |   |   | 6,566                                          |   |   | -                                              |   |   | 2,953                                       |   |   | 19,966                                       |   |   | 340       |   |   | 29,825       |   |

----

*Geographic      information*

|                                   |   |   | **2006**    |   |   | 2005    |   |   | 2004    |   |
|----------------------------------------|--------|--------|-------------|--------|--------|---------|--------|--------|---------|--------|
|                                   |   |   |        |   |   |    |   |   |    |   |
| **United                State****s**   |   |   |        |   |   |    |   |   |    |   |
| Revenues                               |   | **$**  | **685,921** |   | $      | 473,027 |   | $      | 81,437  |   |
| Total                long-lived assets |   |   | **230,811** |   |   | 244,447 |   |   | 204,715 |   |
|                                   |   |   |        |   |   |    |   |   |    |   |
| **Canada**                             |   |   |        |   |   |    |   |   |    |   |
| Revenues                               |   | **$**  | **233,342** |   | $      | 132,998 |   | $      | 359,896 |   |
| Total                long-lived assets |   |   | **56,037**  |   |   | 85,009  |   |   | 68,408  |   |

|                                   |   |   |        |   |   |   |   |   |   |   |
|----------------------------------------|--------|--------|-------------|--------|--------|--------|--------|--------|--------|--------|
| **Other**                              |   |   |        |   |   |   |   |   |   |   |
| Revenues                               |   | **$**  | **148,871** |   | $      | 45,351 |   | $      | -      |   |
| Total                long-lived assets |   |   | **29,147**  |   |   | 25,748 |   |   | -      |   |

|                                   |   |   |          |   |   |    |   |   |    |   |
|----------------------------------------|--------|--------|---------------|--------|--------|---------|--------|--------|---------|--------|
| **Consolidated**                       |   |   |          |   |   |    |   |   |    |   |
| Revenues                               |   | **$**  | **1,068,134** |   | $      | 651,376 |   | $      | 441,333 |   |
| Total                long-lived assets |   | **$**  | **315,995**   |   | $      | 355,204 |   | $      | 273,123 |   |

| **20.** | **Impact                of recently issued accounting                standards** |
|---------|----------------------------------------------------------------------------------|

*Share-Based      Payment*

*Accounting      for Changes and Error Corrections a replacement of APB Opinion No. 20 and SFAS      No. 3*

----

*Accounting      for Servicing of Financial Assets, an amendment of SFAS No. 140*
*Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities*

| **21.** | **Subsequent                event** |
|---------|-------------------------------------|