U.S. SECURITIES AND EXCHANGE COMMISSION

FORM 20-F



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

For the fiscal year ended April 30, 2003 OR

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

For the transition period from ________ to ________

Commission File Number 0-21756

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

Canada 
(Jurisdiction of incorporation or organization)

Hangar #1, St. John's Airport 
P. O. Box 5188 
St. John's, Newfoundland 
Canada AlC 5V5
 (Address of principal executive offices)

Securities registered or to be registered pursuant to Section
12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act.

Class A Subordinate Voting Shares
(Title of Class)

Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act.

Class A Subordinate Voting Shares
(Title of Class)

The number of Class A Subordinate Voting Shares outstanding on
July 31, 2003, was 17,921,290.

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X      No

Indicate by check mark which financial statement item the
registrant has elected to follow.

Item 17         Item
18 X

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TABLE OF CONTENTS

|Item     |                                                                             
|-------- | ----------------------------------------------------------------------------
|         |                                                                             
|PART I   |                                                                             
|         |                                                                             
|1.       | IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                   
|2.       | OFFER
    STATISTICS AND EXPECTED TIMETABLE                                 
|3.       | KEY
    INFORMATION                                                         
|4.       | INFORMATION ON THE COMPANY                                                  
|5.       | OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS                            
|6.       | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                  
|7.       | MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                       
|8.       | FINANCIAL
    INFORMATION                                                   
|9.       | THE OFFER
    AND LISTING                                                   
|10.      | ADDITIONAL INFORMATION                                                      
|11.      | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                  
|12.      | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                      
|         |                                                                             
|PART II 
|         |                                                                             
|13.      | DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES                         
|14.      | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|15.      | CONTROLS
    AND PROCEDURES                                                 
|16A.     | AUDIT
    COMMITTEE FINANCIAL EXPERT                                        
|16B.     | CODE OF
    ETHICS                                                          
|16C.     | PRINCIPAL
    ACCOUNTANT FEES AND SERVICES                                  
|16D.     | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                  
|         |                                                                             
|PART III
|         |                                                                             
|17.      | FINANCIAL
    STATEMENTS                                                    
|18.      | FINANCIAL
    STATEMENTS                                                    
|19.      | EXHIBITS                                                                    

> All defined terms under Rule 4-10(a) of Regulation S-X shall have their
>   statutorily-prescribed meanings when used in this Annual Report.

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For purposes of this Annual Report, all references to dollar
amounts are expressed in Canadian dollars unless otherwise specified. On
September 12, 2003,
the noon buying rate in New York City for cable transfers in Canadian dollars as
certified for customs purposes by the Federal Reserve Bank was $0.7337U.S.
= $1.00 Canadian.

FORWARD LOOKING STATEMENTS

This Annual Report may contain projections and other forward
looking statements within the meaning of the "safe harbour" provision of the
United States Private Securities Litigation Reform Act of 1995. While these
projections and other statements represent our best current judgement, they are
subject to risks and uncertainties that could cause actual results to vary.
These statements may involve risks and uncertainties including but not limited
to, factors detailed in this Annual Report and in other filings with the SEC and
Canadian securities regulatory authorities. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual outcomes may vary materially from those indicated.



---

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Required.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Required.

ITEM 3. KEY INFORMATION

SELECTED FINANCIAL DATA

The following consolidated historical financial data as at
and for the fiscal years ended April 30, 2003, 2002, 2001, 2000, and 1999 for
CHC Helicopter Corporation ("CHC", "the Company", "the Corporation", "we",
"our", or "us") are derived from the audited consolidated financial statements
of CHC. The CHC consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles ("GAAP"),
which differ in certain respects from U.S. GAAP. For the reconciliation to U.S.
GAAP for the three most recently completed fiscal years, see Note 29 to the CHC
consolidated financial statements included elsewhere in this Annual Report.

---

The following data should be read in conjunction with "Operating and
Financial Review and Prospects" and the consolidated financial statements for
CHC included elsewhere in this Annual Report.

|                                        | As at and for the fiscal year ended April 30              
|--------------------------------------- | ----------------------------------------------------------
|                                        | 2003                                                      
|                                        | (1)                                                       
|                                        | (in millions of Canadian dollars except per share amounts)
|                                        |                                                           
|Amounts under Canadian GAAP             |                                                           
|Operating Data:                         |                                                           
|Revenue                                 | $722.4                                                    
|Operating
    expenses                  | 580.2                                                     
|Earnings
    before undernoted items    | 142.2                                                     
|Amortization                            | (22.6)                                                    
|Gain
    (loss) on disposal of assets   | 2.4                                                       
|Earnings
    from operations before     |                                                           
|asset impairment charge                 | 122.0                                                     
|Asset
    impairment charge             | (12.8)                                                    
|Earnings
    from operations            | 109.2                                                     
|Financing
    charges                   |                                                           
|Interest expense                        | (31.1)                                                    
|Other                                   | (3.7)                                                     
|Equity in
    earnings (loss) of        |                                                           
|associated companies                    | 2.3                                                       
|Earnings
    before undernoted items    |                                                           
|and income taxes                        | 76.7                                                      
|Debt
    settlement and restructuring   |                                                           
|costs                                   | (12.5)                                                    
|Gain on
    sale of operations and      |                                                           
|investments                             | -                                                         
|Earnings
    before income taxes and    |                                                           
|non-controlling interest                | 64.2                                                      
|Income
    taxes recovery (provision)   | 1.9                                                       
|Non-controlling interest                | -                                                         
|Net
    earnings                        | $ 66.1                                                    
|                                        |                                                           
|Per Share Data:                         |                                                           
|Basic
    earnings per share            | $3.19                                                     
|Diluted
    earnings per share          | 2.94                                                      
|Dividends
    per participating voting  |                                                           
|share                                   | 0.20                                                      
|Dividends
    (in U.S. $) per share (3) | 0.13                                                      
|                                        |                                                           
|Weighted
    average shares             |                                                           
|outstanding in (000)                    | 20,728                                                    
|                                        |                                                           
|Other Financial Data:                   |                                                           
|Revenue                                 |                                                           
|Helicopter operations                   | $653.0                                                    
|Repair and overhaul                     | 63.0                                                      
|Composites                              | 6.4                                                       
|Total revenue                           | $722.4                                                    

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|                                           | As at and for the
    fiscal year ended April 30          
|------------------------------------------ | ----------------------------------------------------------
|                                           | 2003                                                      
|                                           | (1)                                                       
|                                           | (in millions of Canadian dollars except per share amounts)
|                                           |                                                           
|Other Financial Data (cont'd):             |                                                           
|EBITDA
    (4)                             |                                                           
|Helicopter operations                      | $129.4                                                    
|Repair and overhaul                        | 37.4                                                      
|Composites                                 | (3.2)                                                     
|Corporate and overhead                     | (21.4)                                                    
|                                           |                                                           
|Total EBITDA                               | $142.2                                                    
|                                           |                                                           
|Helicopter operations EBITDA               |                                                           
|margin (5)                                 | 19.8%                                                     
|Total
    EBITDA margin (6)                | 19.7%                                                     
|Total
    capital expenditures (7)         | $44.7                                                     
|Ratio of
    earnings to fixed charges (8) | 2.2x                                                      
|                                           |                                                           
|Balance Sheet Data:                        |                                                           
|Working
    capital                        | $ 280.7                                                   
|Total
    assets                           | 1,145.6                                                   
|Total
    debt                             | 321.3                                                     
|Total
    liabilities                      | 731.3                                                     
|Capital
    stock                          | 237.0                                                     
|Shareholders' equity                       | 414.2                                                     
|                                           |                                                           
|Amounts under U.S. GAAP                    |                                                           
|Operating Data:                            |                                                           
|Revenue                                    | $722.4                                                    
|Amortization                               | 22.6                                                      
|Earnings
    from operations               | 123.3                                                     
|Financing
    charges                      | 23.0                                                      
|Net
    earnings                           | 87.3                                                      
|                                           |                                                           
|Per Share Data:                            |                                                           
|Basic
    earnings per share               | 4.21                                                      
|Diluted
    earnings per share             | 3.88                                                      
|Dividends
    per participating voting     |                                                           
|share                                      | 0.20                                                      
|Dividends
    (in U.S. $) per share (3)    | 0.13                                                      
|                                           |                                                           
|Weighted
    average shares                |                                                           
|outstanding in (000)                       | 20,728                                                    
|                                           |                                                           
|Other Financial Data:                      |                                                           
|Total
    EBITDA (4)                       | $143.5                                                    
|Total
    EBITDA margin (6)                | 19.9%                                                     
|                                           |                                                           
|Balance Sheet Data:                        |                                                           
|Working
    capital                        | $ 291.0                                                   
|Total
    assets                           | 1,124.8                                                   
|Total
    debt                             | 321.3                                                     
|Total
    liabilities                      | 740.1                                                     
|Capital
    stock                          | 237.0                                                     
|Shareholders' equity                       | 384.7                                                     

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1. The results for 1999
  include the repair and overhaul business of Vector Aerospace Corporation
  ("Vector") for the two months prior to the sale of 80% of Vector by us to the
  public in June 1998. Except for those two months, the fiscal periods presented do not include any operating results related to the
  repair and overhaul business of Vector, but instead include, for the period
  prior to September 30, 1999, the equity in Vector's earnings for our remaining
  20% investment in Vector, which was subsequently sold on that date. The fiscal
  2000 results include the results of Helicopter Services Group AS ("HSG") for
  the eight and one-half months subsequent to its acquisition by us on August
  11, 1999. The fiscal 2001 results include the results of the Canadian onshore
  helicopter operations for the six months preceding its disposition on October
  31, 2000. The prior years include those operations for twelve months.
2. Restated. See Note 4(a) to
  the Consolidated Financial Statements included elsewhere in this Annual
  Report.
3. Amounts have been converted
  to U.S. dollars at the average exchange rate for the period as provided below.
4. EBITDA generically means
  earnings before interest, taxes, depreciation and amortization. We define
  EBITDA as the difference between revenue and operating expenses as represented
  by "Earnings before undernoted items" on the Statement of Earnings. EBITDA is
  not intended to represent cash flows for the period, nor has it been presented
  as an alternative to either (i) net income in accordance with generally
  accepted accounting principles, as an indicator of operating performance or
  (ii) cash flows from operating, investing and financing activities in
  accordance with generally accepted accounting principles. EBITDA as presented
  may not be comparable to other similarly titled measures of other companies as
  it is susceptible to varying calculations. We have included these non-GAAP
  earnings measures because they are used by our management, investors, analysts
  and others as measures of our financial performance. See "Non-GAAP Earnings
  Measures" under Item 5 "Operating and Financial Review and Prospects" for
  additional disclosure regarding the use of non-GAAP earnings measures
  including a reconciliation of Net earnings from operations to the GAAP
  measure.

1. Helicopter operations
  EBITDA margin represents helicopter operations EBITDA as a percentage of
  helicopter operations revenue.
2. Total EBITDA margin
  represents EBITDA as a percentage of total revenue.
3. Total capital expenditures
  include all asset acquisitions, including aircraft, during the period.
4. For the purpose of this
  calculation "earnings" represents earnings from operations before under-noted
  items and income tax expense, plus fixed charges. Fixed charges consist of
  interest, whether expensed or capitalized, amortization of debt expense and an
  estimated portion of rentals representing interest expense.

EXCHANGE RATE DATA

The following table sets forth, for the periods indicated,
certain exchange rates based on the high and low noon buying rates in New York
City for cable transfers in foreign currencies as certified for customs purposes
by the Federal Reserve Bank of New York. The average exchange rate is based on
the average of the exchange rates on the last day of each month during such
periods. The rates quoted are the number of United States dollars per one
Canadian dollar.

|                                       |        | Year ended April 30, |       
|-------------------------------------- | ------ | -------------------- | ------
|                                       |        |                      |       
|                                       | 1999   | 2000                 | 2001  
|                                       | U.S.$  | U.S.$                | U.S.$ 
|                                       |        |                      |       
|                                       |        |                      |       
|Exchange
    rate at the end of period | 0.6860 | 0.6749               | 0.6510
|Average
    exchange rate during       | 0.6619 | 0.6801               | 0.6611
|period                                 |        |                      |       
|High
    exchange rate during period   | 0.7027 | 0.6969               | 0.6831
|Low
    exchange rate during period    | 0.6341 | 0.6607               | 0.6333

The following table sets forth, for the periods indicated,
the monthly high and low U.S. dollar exchange rates based on the high and low
noon buying rates in New York City for cable transfers in foreign currencies as
certified for customs purposes by the Federal Reserve Bank of New York. The
rates quoted are the number of United States dollars per one Canadian dollar.

|           |          | Month ended |         |          
|---------- | -------- | ----------- | ------- | ---------
|August 31, | July 31, | June 30,    | May 31, | April 30,
|2003       | 2003     | 2003        | 2003    | 2003     
|U.S.$      | U.S.$    | U.S.$       | U.S.$   | U.S.$    

|     |        |        |        |        |        |       
|---- | ------ | ------ | ------ | ------ | ------ | ------
|High | 0.7228 | 0.7481 | 0.7492 | 0.7437 | 0.6975 | 0.6822
|Low  | 0.7091 | 0.7085 | 0.7263 | 0.7032 | 0.6737 | 0.6709
|     |        |        |        |        |        |       

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We report our financial results in Canadian dollars and,
unless otherwise indicated, references herein to "dollars", "$" or "CDN" are to
Canadian dollars. Except where otherwise specifically noted, all amounts stated
in U.S. dollars are included for convenience and are stated as a matter of
arithmetical computation only. Except where otherwise specifically noted, U.S.
dollar amounts are based on the April 30, 2003 noon buying rate for cable
transfers of the Canadian dollar in New York City of U.S. $ 0.6975
as certified for customs purposes by the Federal Reserve Bank of New York. These
amounts should not be construed as representations that the Canadian dollar
amounts actually represent such U.S. dollar amounts or could be converted into
U.S. dollars at these rates. These rates differ from some of the rates used in
the preparation of our financial statements included in this Annual Report and
therefore U.S. dollar amounts used herein may differ from corresponding actual
U.S. dollar amounts that were translated into Canadian dollars in the
preparation of these financial statements. On September 12, 2003
the noon buying rate for a Canadian dollar was U.S. $ 0.7337.RISK FACTORSThis section is intended to be a summary of more detailed
discussions elsewhere in this Annual Report. The risks described below are not
the only ones we face. Additional risks may impair our business operations. Our
business, results of operations, or financial condition could be materially
adversely affected if any of these risks materialize.Our operations are largely dependent upon the level of activity in the oil
and gas industryApproximately 72.4% of revenue for our fiscal year ended
April 30, 2003 is attributable to helicopter support services for oil and gas
production and exploration companies. As such, our operations are largely
dependent upon the levels of activity in oil and natural gas exploration and
production. To varying degrees these activity levels are affected by trends in
oil and natural gas prices. Historically, the prices for oil and natural gas
have been volatile and are subject to wide fluctuations in response to changes
in the supply of and demand for oil and natural gas, market uncertainty and a
variety of additional factors beyond our control. We cannot predict future oil
and natural gas price movements. Any prolonged reduction in oil and natural gas
prices, however, could depress the level of helicopter activity in support of
exploration and production activity and, therefore, have a material adverse
effect on our business, financial condition and results of operations.
Companies in the oil and natural gas exploration and
production sector continually seek to implement measures aimed at greater cost
savings, including helicopter support operations. For example, companies are
beginning to reduce manning levels on both old and new installations by using
new technology to permit unmanned installations and reducing the frequency of
transportation of employees between offshore and onshore by increasing the
lengths of shifts onshore and offshore. The implementation of such measures
could reduce the demand for helicopter transportation services and have a
material adverse effect on our business, financial condition and results of
operations.Our overall operations are highly dependent upon the level of activity in the
North SeaApproximately 70% of our oil and gas based revenues for the
fiscal year ended April 30, 2003 were derived from our helicopter support
services to customers operating in the North Sea. If activity in oil and natural
gas exploration and production in the North Sea declines, our business,
financial condition and results of operations would be materially and adversely
affected. It is difficult to predict the level of activity in future periods
given the uncertain economic climate. During fiscal 2003, activity levels in the
North Sea decreased, due in part to the decision by a number of large oil and
gas producers to sell older assets in the North Sea to allow them to focus on
non-North Sea properties.

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Many of the markets in which we operate are highly competitive, which may
result in a loss of market share or a decrease in revenue or profit marginsThe markets in which we operate are highly competitive.
Contracting for helicopter services is usually done on the basis of competitive
bidding among those having the necessary equipment and resources. In our medium
and heavy helicopter operations, which comprise over 90% of our fleet, we
compete against a number of global helicopter operators including Offshore
Logistics Inc. ("OLOG"), which is the other major global commercial helicopter
operator, and numerous local and regional operators. In addition, many of our
customers in the oil and gas industry have the capability to perform their own
helicopter operations should they elect to do so.
Our main competitors within the repair and overhaul business
are the original equipment manufacturers of helicopters and their components. As
such, our main competitors are also our main parts suppliers, which could result
in our inability to obtain parts in a timely manner in required quantities at
competitive prices.We rely on a limited number of large, long-term offshore helicopter support
contracts and if some of these are discontinued, our revenues could sufferWe derive a significant amount of our revenue from long-term
offshore helicopter support contracts with oil and gas companies. A substantial
number of our long-term contracts contain provisions permitting early
termination by the customer. In addition, upon expiration of their term, these
contracts are subject to a bidding process that could result in the loss of
these contracts to competitors. The loss of one or more of these large contracts
could have a material adverse effect on our business, financial condition and
results of operations. During fiscal 2003, we were unsuccessful in renewing a
contract with bp to supply helicopter services in the northern North Sea.If we are unable to acquire the necessary aircraft, we may not be able to
take advantage of growth opportunitiesTo acquire new long-term contracts, we will require aircraft
configured for offshore flying. At April 30, 2003, we had commitments to take
delivery of five new Super Puma MkII aircraft and options to acquire two EC225
helicopters for use primarily in our European operations. We have some
flexibility built into the delivery schedule for these aircraft in order to
match acquisitions with new demand. During fiscal 2004, we expect to take
delivery of three Super Puma MkII aircraft.
We have also ordered four new S76C+ helicopters for our
international operations for delivery in December 2003. These aircraft will be
used in southeast Asia and in Africa to meet increased demand by customers for
newer medium aircraft. Existing aircraft will be re-deployed to other projects
in these markets. While up to now we have been able to acquire sufficient
aircraft, a lack of available aircraft or the failure of our suppliers to
deliver the aircraft we have ordered on a timely basis, could limit our ability
to take advantage of growth opportunities.Helicopter operations involve risks that may not be covered by our insurance
or may increase the cost of our insuranceOperation of helicopters involves some degree of risk.
Hazards, such as aircraft accidents, adverse weather and marine conditions,
collisions and fire, are inherent in furnishing helicopter services and can
cause personal injury and loss of life, severe damage to and destruction of
property and equipment, and suspension of operations. The loss of our liability
insurance coverage or the loss, expropriation or confiscation of, or severe
damage to, a large number of our helicopters could adversely affect our
operations and financial condition. As a result of these and other factors, we
may not be able to maintain adequate insurance in the future at rates we
consider reasonable. Furthermore, we are not insured for loss of profit or use
of our helicopters.

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If we are unable to maintain required government-issued licenses for our
operations, we will be unable to conduct helicopter operations in the applicable
countryUnited Kingdom(U.K.) and Norway

Approximately 61% of our revenue for our fiscal year ended
April 30, 2003 originated from helicopter services from U.K. and Norway based
operations. To operate helicopters in the U.K. and in the U.K. sector of the
North Sea, an operator must be licensed by the U.K. Civil Aviation Authority.
Under applicable European law, an operator must be "effectively controlled" and
"majority owned" by nationals of member states of the European Union (or the
European Economic Area) to maintain its license. Our U.K. operating subsidiary,
CHC Scotia Limited ("Scotia") has been licensed to operate helicopters by the
U.K. Civil Aviation Authority, on the basis that we are (and therefore Scotia
is) majority owned and controlled by European Nationals because Mr. Craig L.
Dobbin (Chairman and Chief Executive Officer of the Corporation), a citizen of
both Canada and the Republic of Ireland (a member state of the European Union)
holds a sufficient number of securities of CHC. However, the U.K. Secretary of
State (generally acting upon the advice of the U.K. Civil Aviation Authority)
may revoke the license held by Scotia or effectively require us to dispose of
our interests in Scotia if at any time we do not satisfy applicable nationality
requirements. In 1994, two U.K. competitors of CHC alleged that we did not
satisfy these requirements and that, as a result, Brintel Helicopters Limited ("Brintel"),
our only U.K. helicopter operation at the time, was not entitled to maintain its
operating license. Although discussions and correspondence with the European
Commission, the United Kingdom Department of Environment, Transport and the
Regions and the U.K. Civil Aviation Authority confirmed that the issuance of
ordinary shares to Mr. Dobbin in December 1997 allowed us to satisfy the
nationality requirements, this will not necessarily preclude further challenges
of Scotia's right to maintain its operating license on this or any other basis.
Further, Scotia's eligibility to maintain its license could be adversely
affected if Mr. Dobbin were to dispose of the shares he holds in CHC or if he
were to die and no alternative arrangement acceptable to the U.K. Civil Aviation
Authority were implemented. Our Danish and Irish subsidiaries are subject to
substantially the same European Union and European Economic Area nationality
requirements. The revocation of these licenses would have a material adverse
effect on our business, financial condition and results of operations.
Our Norwegian subsidiaries are subject to substantially the
same European Union and European Economic Area nationality requirements with
regard to ownership and control as are our U.K. subsidiaries. On May 9, 1999, in
response to objections initiated by the previous management of HSG, the
Norwegian Ministry of Transport confirmed in writing that it had adopted the
same position as the U.K. Civil Aviation Authority with regard to CHC's
satisfaction of the European Union (and European Economic Area) nationality
requirements and therefore would not challenge HSG's eligibility to hold
helicopter operating licenses in Norway after our acquisition of HSG. The
revocation of these licenses would have a material adverse effect on our
business, financial condition and results of operations.
We believe that we are currently "majority owned" and
"effectively controlled" within the meaning of European licensing requirements
notwithstanding the completion of our April, 2002 offering of 4.2 million Class
A subordinate voting shares (the "subordinate voting shares"). However, it may
be difficult to establish with certainty that we are majority owned by European
nationals, given the difficulty of establishing the beneficial ownership of
shares held through depositories and nominees.
Canada

The helicopter industry in Canada is regulated by the Canada
Transportation Agency and Transport Canada. Canadian charter helicopter
operations are conducted pursuant to the licenses issued by the Canada
Transportation Agency under the provisions of the Canada Transportation Act and
the air operator certificates issued by Transport Canada under the provisions of
the Aeronautics Act. One of our subsidiaries operates heavy helicopters off
Canada's east coast in support of the oil and gas industry. Our ability to
conduct our helicopter operating business in Canada is dependent on our ability
to maintain these licenses and certificates.
The Canada Transportation Act provides that a corporation must be controlled
in fact by, and at least 75% of the voting interests of a corporation must be
held by, Canadian citizens for the corporation to be eligible to continue to hold a license to carry on
certain types of transportation activities within Canada (including providing
commercial air services), unless an order from the Minister of Transport
(Canada) is obtained. Our ability to maintain our license would be adversely
affected if we were unable to satisfy this nationality requirement. In this
regard our Board of Directors may refuse to register a transfer of any share in
our capital to maintain compliance with Canadian ownership requirements.



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South Africa

South African law requires that at least 75% of the voting
rights of a holder of a domestic air services license must be held by residents
of the Republic of South Africa. Upon acquiring its interest in Court Air (Pty)
Ltd. ("Court Air"), HSG obtained a letter from the Ministry of Transport in
South Africa, confirming its approval of HSG's indirect acquisition of Court Air
on the basis that Court Air's immediate parent, Court Air Holdings (Pty) Ltd.,
was a South African registered company. Legal advice from our South African
counsel has confirmed that Court Air's licenses for helicopter operations in
South Africa should not be adversely affected by our acquisition of HSG, but
cautioned that there is some continuing risk that the South African Ministry of
Transport could reverse its prior decision. While no action with respect to
these licenses has been taken since our acquisition of HSG, any such reversal of
decision could materially and adversely affect our business, financial condition
and results of operations.
Australia

Civil aviation in Australia is governed by the Civil Aviation
Act, 1988, and regulations made thereunder. To operate an aircraft in Australia,
it must be registered with the Australian Civil Aviation Safety Administration
and a valid Certificate of Airworthiness must be obtained, be valid and in
effect. The operation of an aircraft for a commercial purpose into, out of or
within Australian territory can only be undertaken as authorized by an Air
Operators' Certificate. Our ability to offer our helicopter transportation
services in Australia is dependent on maintaining these certificates.
Other Countries

Our operations in other foreign countries are regulated to
various degrees by their governments and must be operated in compliance with
those regulations and, where applicable, in accordance with our international
air service license and air operator certificates. These regulations may require
us to obtain a license to operate in that country, may favor local companies or
require operating permits that can only be obtained by locally registered
companies and may impose other nationality requirements. Although we have
operated in most of these countries for several years, we cannot assure you as
to what foreign governmental regulations may be applicable in the future to our
helicopter operations.Our international operators may suffer due to political, economic and
regulatory uncertaintyA substantial portion of our revenue in recent years has been
attributable to operations outside North America and Europe. Approximately 25%
of revenue for our fiscal year ended April 30, 2003 was generated from these
operations. Risks associated with some of our international operations include
war and civil disturbances or other events that may limit or disrupt markets,
expropriation, international exchange restrictions and currency fluctuations,
changing political conditions and monetary policies of foreign governments. Any
of the events could materially adversely affect our ability to provide services
to our international customers. Certain of our helicopter leases and certain of
our loan agreements impose limitations on our ability, including requiring the
prior approval of the lessor or the lender, to locate particular helicopters in
certain countries. We cannot assure you that these limitations will not affect
our ability to allocate resources in the future.Fluctuations in currencies may make it more costly for us to pay our debtWe prepare our financial statements in Canadian dollars.
Because many of our revenues and expenses are incurred in currencies other than
Canadian dollars, including the U.S. dollar, the pound sterling, the Norwegian
kroner and the euro, we are exposed to exchange rate and currency risks. In
preparing our financial statements, we must convert all non-Canadian dollar
profits to Canadian dollars at varying rates of exchange. This may ultimately
result in a currency gain or loss at the end of each fiscal year, the outcome of
which we cannot predict. Furthermore, we may sometimes be required to make
capital expenditures, or payments on debt, from revenues earned in other
currencies. The same is true of expenses in pounds sterling, Norwegian kroner
and euros. To the extent that the currency of our revenues weakens relative to
the currency of our expenses, we are exposed to exchange rate losses.In general, our expenses exceed our revenues to a significant
extent in only two currencies, the Canadian dollar and the euro. We hedge our
exposure to losses from fluctuations in exchange rates where appropriate. Losses
from changes in the value of foreign currencies relative to the Canadian dollar
could materially affect our business, financial condition and results of
operations.

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The loss of key personnel could affect our growth and future successOur success has been dependent on the quality of our key
management personnel, including Craig L. Dobbin, our Chairman and Chief
Executive Officer, and Sylvain A. Allard, our President. The loss of Mr. Dobbin
or Mr. Allard, due to time constraints, illness or death, could have a material
adverse effect on our business. In addition, since we focus on independent
management teams at our divisions, loss of the services of other key management
personnel at our corporate and divisional headquarters without being able to
attract personnel of equal ability could have a material adverse effect upon us.We may experience work stoppages that could cause disruptions in our
operationsAt April 30, 2003, we employed 2,473 persons, consisting of
641 licensed pilots, 822 licensed aircraft maintenance engineers and 1,010
administrative and support personnel. Certain of our employees in the U.K.,
Australia and Norway are represented under collective bargaining agreements,
some of which will require renewal within the next 12 months. We cannot assure
you that we will not experience strikes, lockouts or other significant work
stoppages in the future or that our relationship with our employees will
continue to be good, either of which may adversely affect our business,
financial condition and results of operations.We are controlled by our principal shareholder who can determine the outcome
of matters to be decided by our shareholdersAs of July 31, 2003, Mr. Dobbin, directly and indirectly
through Discovery Helicopters Inc. and O.S. Holdings Inc., beneficially owned 7%
of our subordinate voting shares (which are entitled to one vote per share), 94%
of our Class B multiple voting shares ("multiple voting shares") (which are
entitled to 10 votes per share) and all of our ordinary shares (which are
entitled to one vote per 10 shares), representing in the aggregate 62% of the
voting power on matters put before our shareholders. Mr. Dobbin has advised us
that if we issue additional shares of voting securities, he intends to purchase,
through Discovery, sufficient voting shares to enable him to maintain control of
more than 50% of the voting power attached to all outstanding voting shares. As
a result, Mr. Dobbin would, subject to certain exceptions, continue to (1)
control the outcome of all matters requiring a majority vote of shareholders,
including the power to elect all of the directors but excluding those matters
that require an affirmative vote of the majority of disinterested minority
shareholders, (2) be able to prevent the approval of any matter requiring
shareholder approval and (3) be likely to determine the outcome of any matter
that under applicable corporate law would require a shareholders' resolution
passed by not less than two-thirds of the votes cast, such as the sale by us of
all or substantially all of our assets or an amalgamation with an unrelated
corporation.If our Norwegian operating subsidiaries incur substantial operating losses,
they may be subject to liquidation under Norwegian lawThe corporate law under which our Norwegian subsidiaries
operate differs from Canadian and U.S. law in a number of areas, including with
respect to corporate liquidation. Under Norwegian law, if the losses of any of
our Norwegian subsidiaries reduce that subsidiary's equity to an amount less
than 50% of its share capital or the equity of the subsidiary becomes inadequate
compared to the risks and the size of the subsidiary's business, the directors
of the subsidiary would be obligated by law to convene a general shareholders'
meeting to resolve to balance the amount of such equity and share capital by
either:
  increasing the equity in an
  amount sufficient to achieve such balance and to ensure that the equity of the
  subsidiary becomes adequate compared to the risks and the size of the
  subsidiary's business; orreducing the
  share capital to pay off losses in an amount sufficient to achieve such
  balance. 

To the extent reductions in the share capital of our
Norwegian subsidiaries as a result of operating losses are substantial, they
could ultimately result in liquidation, which would have a material adverse
effect on our business, financial condition and results of operations.

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ITEM 4. INFORMATION ON THE COMPANYHISTORY AND DEVELOPMENT OF THE COMPANYThe Company was organized as a corporation under the laws of
Canada pursuant to Articles of Incorporation dated February 18, 1987. The
Company's registered office is Hangar No. 1, St. John's Airport, P.O. Box 5188,
St. John's, Newfoundland, Canada, A1C 5V5 (telephone number 709 570 0700).
The Company was created in 1987 as a holding company to
combine the operations of Sealand Helicopters Limited and Toronto Helicopters
Limited (both of which were Canadian companies controlled by Mr. Craig L.
Dobbin, Chairman of the Board and Chief Executive Officer of the Company and a
principal shareholder) and to acquire Okanagan Helicopters Ltd., a Canadian
company that operated 125 helicopters at the time of its acquisition. Since its
formation, the Company has grown internally as well as through acquisitions, the
most significant of which were the acquisition in 1988 of the majority of the
assets of Ranger Helicopters Limited, which was then operating 37 helicopters;
the acquisition in 1989 of all the outstanding shares of Viking Helicopters
Limited, which was then operating 60 helicopters; the acquisition in 1993 and
1994 of all the outstanding shares of Brintel, which was then operating
approximately 25 heavy helicopters; and the acquisition in August 1999 of all
the outstanding shares of HSG, which was then operating 115 helicopters.PRINCIPAL CAPITAL EXPENDITURES AND DIVESTITURESThe Company has undergone significant restructuring in recent years.
On June 25, 1998, we sold the repair and overhaul segment of
our business (as then constituted) to Vector, a newly-created, then wholly-owned
subsidiary, in exchange for shares of Vector and a note payable by Vector. We
then sold 80% of the shares of Vector to the public through an initial public
offering for net proceeds of approximately $187 million. The note was paid in
fiscal 1999. We sold the remaining 20% of the shares of Vector to the public in
September 1999 through another public offering for net proceeds of approximately
$28.9 million.
On August 11, 1999, through a public tender offer in Norway
by our Norwegian subsidiary, Vinland Helicopters AS, we acquired shares of HSG
for a total purchase price of NOK 696.9 million (approximately $135.0 million).
These shares, when combined with the shares of HSG we already owned, gave us
ownership of approximately 91.3% of the outstanding shares of HSG. On September
30, 1999, we completed the purchase of the remaining shares of HSG through a
mandatory offer and compulsory acquisition for a purchase price of NOK 108.1
million (approximately $20.9 million). The aggregate purchase price of all the
shares of HSG acquired in earlier transactions, the tender offer and the
mandatory offer and compulsory acquisition was NOK 1,185.0 million ($229.5
million) including acquisition costs.
In August and September 1999, subsequent to the acquisition
of HSG, we sold seven heavy and two medium helicopters owned by HSG to OLOG for
gross proceeds of $51.7 million. We subsequently leased back three of the heavy
helicopters to continue performing a search and rescue contract in Ireland. On
September 30, 1999, we finalized the sale of two heavy helicopters owned by HSG
to General Electric Capital Services EEF Limited for proceeds of $27.2 million
in a sale-leaseback transaction.
On January 28, 2000, we sold our 33.3% interest in
Helicopteros SA, a Spanish company providing helicopter transportation services,
for net proceeds of approximately $6.8 million, which included the repayment of
an inter-company loan. The amount realized from the sale was approximately equal
to the book value of our ownership interest.
In April 2000, we sold our 46.7% ownership interest in
Airlift AS ("Airlift") to another major shareholder for a nominal amount.
Airlift is a Norwegian onshore helicopter service company that does not compete
in the Norwegian offshore helicopter market. We had acquired our ownership
interest in Airlift prior to our acquisition of HSG with the intention that we
would use Airlift to compete for Norwegian offshore oil and gas contracts.

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In May 2000, we sold certain primarily U.K. based non-oil and
gas related operations for total proceeds of approximately $74.3 million, which
included a two year 9% note for £ 2.0 million and an insurance receivable of £ 0.9
million. These operations included the scheduled passenger service at Penzance,
England; operations for the U.K. Ministry of Defense in Plymouth, England and
the Falklands; and light helicopter operations based in Cardiff, Wales for civil
police support services. We sold six heavy helicopters, two medium helicopters
and one light helicopter as part of this transaction. The book value of the
assets sold was approximately $31.0 million.
In May 2000, we also sold our Swedish subsidiary, Heliflyg AB
("Heliflyg"), for gross proceeds of $6.0 million, which was approximately equal
to the appraised value of its fleet and the fair market value of its other
assets. Heliflyg provided onshore helicopter services in Sweden through the
operation of two medium and 12 light helicopters, of which four were owned and
10 were leased. Heliflyg had a net asset book value at the time of sale of
approximately $5.0 million.
On June 30, 2000, we sold a Norwegian subsidiary,
Lufttransport AS ("Lufttransport"), for approximately $14.7 million.
Lufttransport provided onshore air ambulance services in Norway through the
operation of three medium helicopters, one light helicopter and ten fixed-wing
aircraft, of which seven fixed-wing aircraft were leased.
Effective October 31, 2000, we sold our Canadian onshore
helicopter operations and assets to a new company presently known as Canadian
Helicopters Limited ("CHL"). Under the terms of the sale we received gross
proceeds of $128.5 million for the assets and operations. We acquired a 45%
common equity interest in CHL for cash consideration of $4.5 million. The
remaining shares are owned by management of CHL and an equity investor. In
addition, we invested $15 million in CHL through preferred shares. In order to
facilitate debt financing for the new company on a timely basis, we advanced
$10.0 million to CHL as part of the syndication of its term debt. This loan has
been fully repaid.
We recorded an after-tax loss of $12 million on the sale of
our Canadian onshore helicopter business in fiscal 2001. In addition, we had a
write-off of goodwill of $9.1 million in fiscal 2001 recorded on the initial
acquisition of a portion of the operations that were sold.
Capital expenditures of $44.7 million were incurred during
the year ended April 30, 2003. Of this amount, $18.4 million related to aircraft
additions and modifications and $26.3 million related to other property and
equipment. Proceeds on disposal of capital assets were $74.9 million for the
year ended April 30, 2003.
Capital expenditures of $37.3 million were incurred during
the year ended April 30, 2002. Of this amount, $23.8 million related to aircraft
additions and modifications and $13.5 million related to other property and
equipment. Proceeds on disposal of capital assets were $49.8 million for the
year ended April 30, 2002.
Capital expenditures of $40.1 million were incurred during
the year ended April 30, 2001. Of this amount $29.1 million related to aircraft
additions and modifications and $11.0 million related to other property and
equipment. Proceeds on disposal of capital assets were $2.7 million for the year
ended April 30, 2001.

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BUSINESS OVERVIEWGeneralWe are a leading provider of helicopter transportation
services to the global oil and gas industry. We or our acquired operations have
been providing helicopter services for more than 50 years and we currently
operate in over 20 countries, with major operating units based in the U.K.,
Norway, South Africa, Australia and Canada. We principally provide helicopter
transportation services to the oil and gas industry for production and
exploration activities and to the emergency medical services and search and
rescue sectors. In general, we target opportunities where customers require
sophisticated helicopters operated by highly trained pilots, typically under
long-term contracts.
We are a market leader in most of the regions we serve, with
an established reputation for quality and reliable service. We are the largest
operator in the North Sea, one of the world's largest oil producing regions,
providing medium and heavy helicopter support to many of the world's major oil
companies. We also have operations principally servicing the oil and gas
industry in the Caspian Sea, South America, Africa, Southeast Asia and eastern
Canada.
In August 1999, we acquired HSG, a leading provider of
helicopter services in the Norwegian and U.K. sectors of the North Sea, with
operating subsidiaries in Australia and South Africa. Our acquisition of HSG
expanded our geographic presence and, we believe, enhanced our ability to
service our existing customers and potential new customers on a global basis.
CHC and HSG both derived a substantial portion of their revenues from the oil
and gas industry, but had limited geographic overlap in areas served, except in
the U.K. sector of the North Sea, where both CHC and HSG conducted operations.
Since the acquisition of HSG, all of our helicopter operations in the U.K.
sector of the North Sea have been combined and now operate as CHC Scotia
Limited.Competitive Strengths
We believe that we have the following competitive advantages in our industry:
  Global Geographic
  Coverage. We currently provide helicopter transportation services in
  over 20 countries on seven continents. Our company is managed on a
  decentralized basis with five divisions that are responsible for helicopter
  operations within their specific geographic areas. Our broad geographic
  coverage and decentralized management structure enable us to respond quickly
  and cost effectively to customer needs and new business opportunities while
  adhering to local market regulations and customs. Since new contract start-up
  costs, including equipment and crew transportation and base set-up costs, can
  represent a significant portion of operating expenses, our global network of
  bases allows us to reallocate equipment and crews efficiently and therefore to
  bid on new contracts at competitive rates.
  Long-Term Customer
  Relationships. We have worked successfully for many years with major
  oil and gas companies, some of which have been our customers for more than 20
  years. To ensure high levels of safety and quality from their helicopter
  service providers, major oil and gas companies conduct stringent safety and
  performance audits before such providers are permitted to bid on new projects.
  As a result of our focus on safety and flight training, our pilots' experience
  and the quality of our services, we have established long-term relationships
  with many of our customers and are consistently invited to bid on new
  projects. In addition to standard helicopter transportation services, certain
  of our customers rely on us for ancillary services, including our computerized
  logistics systems for crew scheduling, passenger handling services and various
  forms of record keeping, all of which help strengthen our customer
  relationships.
  Long-Term Contracts.
  We typically operate under long-term contracts with our customers, including
  many oil and gas companies. A substantial number of our long-term contracts
  contain provisions permitting early termination by the customer, although
  during the past five years, no customer has exercised that right. Although
  these contracts are subject to rebidding at the end of their terms, we believe
  that the incumbent service provider has a significant advantage in retaining
  the contract based on the existing relationship
  with the customer, detailed knowledge of the specific operating environment
  and an established base of equipment and personnel on site.



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Large and Diversified
  Fleet of Helicopters. To meet the diverse equipment requirements of
  our customers, we have assembled a large helicopter fleet that includes some
  of the most sophisticated helicopters in the world. Our fleet currently
  includes 13 of the 15 Super Puma MkIIs operated in our markets. The Super Puma
  MkII enables us to provide longer distance transportation services for oil and
  gas companies as they explore and produce at increasing distances offshore.
  The Super Puma MkII is frequently requested by our European clients and we
  believe that it is the most advanced civilian heavy helicopter in service.
  Significant Asset
  Value. Based on an independent appraisal as of April 2003, the
  aggregate estimated resale value of the aircraft we owned as of April 30, 2003
  was approximately $524 million. Since approximately 70% of a helicopter's
  value resides in its dynamic components, which are replaced or upgraded on a
  regular basis, older models of helicopters that have been upgraded are capable
  of meeting many of the same performance standards as newer models of these
  helicopters. As a result, as the price of new helicopters rises, older models
  of these helicopters that have been properly maintained and upgraded generally
  retain their value. Due to our practice of generally purchasing used
  helicopters and maintaining and upgrading them, and the active secondary
  helicopter market, we often receive prices in excess of the original purchase
  price when we sell helicopters as a part of optimizing our fleet mix. In the
  last five years, we have sold 40 helicopters in the ordinary course of
  business, which has resulted in an aggregate sales price of $11.7 million in
  excess of our purchase cost including the sale-leaseback of six Super Puma
  aircraft during fiscal 2003.
  In-house Repair and
  Overhaul. Through our facilities in Norway, we currently operate the
  only licensed commercial major component repair and overhaul facility in the
  world for the Eurocopter Super Puma helicopter, other than the original
  equipment manufacturer. We intend to continue to build this business in
  Europe, focusing on increasing our external work. To better serve our repair
  and overhaul customers, we have reorganized our Norwegian repair and overhaul
  business into a new company, Astec, which operates as a separate business. We
  previously started and developed the repair and overhaul businesses of Vector,
  which resulted in the sale to the public of 80% of Vector by us in June 1998
  and the sale of our remaining 20% interest in September 1999. See "Operating
  and Financial Review and Prospects-Gain on Sale of Operations and
  Investments."
  Low Cost Operator.
  We have achieved permanent cost savings with the integration of HSG into our
  operations. During fiscal 2003 we embarked on an internal cost review of our
  European operations and we continue to work on the development of a combined
  European structure. In addition, our in-house repair and overhaul capabilities
  give us a lower cost base on repair and overhaul services necessary to
  maintain the fleet. Furthermore, our broad network of regional bases allows us
  to efficiently utilize our existing helicopters to service contracts
  worldwide.
  Experienced
  Management Team. The members of our senior management team, including
  our executive management, the divisional presidents and managing directors,
  have an average of 20 years of experience in the helicopter operations
  industry. Our management team has introduced a series of strategic initiatives
  in recent years that have focused managers in each of our operating divisions
  on cost reduction and improved fleet utilization. In addition, we have
  successfully integrated 10 companies into our operations over the past 15
  years. 

Business Strategy

Our goal is to enhance our leadership position in the global
helicopter services industry by continuing to provide value added services to
our customers while maximizing cash flows. In pursuit of this goal, we intend to
focus on the following key initiatives:Continue to Build on Long-Term Oil and Gas Relationships. We
  intend to strengthen our long-term relationships with major oil and gas
  companies by continuing to provide a high level of customer service. We
  believe our focus on the oil and gas industry will allow us to continue to
  service the existing requirements of our customers and to obtain future
  contracts as our customers' exploration and production opportunities grow. In
  fiscal 2002 we saw continued growth in demand for helicopter services from our
  existing oil and gas customers, which we believe was due to the increase and stabilization of oil prices in 1999 and 2000. In fiscal
  2003 we experienced a decrease in activity levels in the North Sea, our
  largest offshore oil and gas market. We intend to continue to pursue new
  opportunities in developing oil and gas regions worldwide, including the
  remote North Sea, the Caspian Sea, offshore South America, west Africa,
  southeast Asia and eastern Canada. As a result of our long-term customer
  relationships, our equipment capabilities and broad geographic coverage, we
  expect to play a significant role in supporting the exploration and production
  activities in these regions.

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Continue to Expand
  Repair and Overhaul Business. Our license with Eurocopter allows us to
  provide repair and overhaul services worldwide for all Super Pumas, including
  the Super Puma MkII. With approximately 500 Super Pumas operating in the
  worldwide civilian and military markets, we believe there are significant
  growth opportunities for our repair and overhaul operations. In addition, our
  Turbomeca licenses for the repair and overhaul of Makila engines, which are
  used to power Super Pumas, also include civilian and military helicopters in
  regions outside of Scandinavia. The expiry of our non-compete agreement with
  Vector on June 25, 2003, also provides us with opportunities to compete in
  additional segments of the repair and overhaul market.
  Pursue Profitable New
  Business Beyond the Oil and Gas Sector. We continually pursue new
  business opportunities beyond the oil and gas sector that leverage our core
  competencies in helicopter services. In these markets, which include air
  ambulance and search and rescue, we believe we have a competitive advantage by
  virtue of our experience in servicing the oil and gas sector because of our
  ability to operate sophisticated twin-engine medium and heavy helicopters with
  highly-trained personnel in complex situations for large customers. Our air
  ambulance and search and rescue customers typically require the operator to
  meet stringent quality standards on a long-term basis, rather than evaluating
  a bid based on price alone.
  Continue to Focus on
  Third Party Training. Over the past 20 years we have established
  advanced flight training schools for training helicopter pilots and
  technicians for both civilian and military organizations. In addition to
  ensuring that all of our pilots are properly trained, these schools provide
  additional sources of relatively high margin revenue and enhance our global
  reputation for excellence in helicopter services. Some of these schools were
  sold as part of our sale of the Canadian onshore helicopter operations.
  However, we continue to operate a significant flight training facility in
  Norway and we intend to focus on increasing our training of third parties.
  

Industry
Helicopter Operations

The helicopters in use today may be divided into two general
categories. Single engine (light) aircraft, which have a passenger capacity of 3
to 6, operate under visual flight rules ("VFR") (daylight and good weather
flying only) and can be operated with one pilot. Given their low passenger
capacity and inability to fly in poor weather conditions, these aircraft are
generally limited to onshore operations. In recent years, we have sold most of
our operations and aircraft in this category and have only 11 light aircraft in
the current fleet. However, we retain a 43.5% interest in CHL, which operates in
Canada's onshore market primarily with light aircraft.
Twin-engine (heavy and medium size) aircraft have a capacity
of 9 to 26 passengers and can operate under instrument flight rules ("IFR")
(daytime and nighttime flying under a variety of weather conditions). The
greater passenger capacity, longer range, and ability to operate in adverse
weather conditions make these aircraft more suitable than single engine aircraft
for offshore support. The high cost of these larger aircraft and their limited
availability tend to lessen competition from smaller operators. We currently
operate 145 aircraft in this category (69 heavy and 76 medium aircraft).
Helicopters first came into widespread commercial use among
companies in the oil and gas industry for transporting personnel and supplies to
offshore oil rigs and remote onshore areas. Over the years, the use of
helicopters has expanded into many other areas where urgency or difficulty of
access justifies the cost of helicopter transportation. Although the oil and gas
industry still accounts for a substantial portion of the demand for helicopter
services worldwide, helicopters have been used for several decades for a variety
of purposes such as forestry, mining, emergency medical services, search and
rescue, construction, mapping and recreation.
Different helicopters are required to meet the diverse needs
of the industries served. Heavy to medium helicopters are generally utilized to
support the oil and gas, construction and forestry industries, and for emergency
medical services and search and rescue support. Heavy to medium helicopters are
also used for transporting larger numbers of passengers and supplies or for
lifting heavy weights. Typically equipped with IFR equipment, which allows for operation
during nighttime or in more adverse conditions, medium to heavy helicopters are
capable of long distance flights to offshore oil platforms. Where appropriate,
specialized equipment is installed for providing emergency medical service
support or for use in certain environments such as the North Sea. Light to
medium helicopters are used to support the utility and mining sectors, as well
as some areas of the construction and forestry industry, where transporting a
smaller number of passengers or slinging light loads is required. These
helicopters are generally operated during daylight hours and in relatively
stable weather conditions, and are equipped with only VFR equipment.
The level of worldwide offshore oil and gas exploration and
production has traditionally influenced demand for helicopter transportation
services. After a period of decline, there was an improvement and stabilization
in oil prices in 1999, which continued into 2001 and part of 2002. While oil and
gas prices remained stable in 2003, activity levels in the North Sea decreased.
This decrease was in part due to the decision by a number of large oil and gas
producers to sell older assets in the North Sea to allow them to focus on
non-North Sea properties. These asset sales may bring smaller oil and gas
companies into the North Sea who may reinvest in these older assets.
The following tables list our revenue for helicopter
operations, which does not include revenue from repair and overhaul, Composites
and flight training, by industry sector and geographic area and revenue for each
such sector or area as a percentage of total revenue from helicopter operations
for each of the fiscal years ended April 30, 2003, 2002, and 2001:
Revenue by Industry Sector
    
    2003
    
    
    2002
    
    
    2001($ in
    
    
    ($
    in
    
    
    ($ inmillions)
    %
    millions)
    
    %
    millions)
    %Oil and gas
    $523.0
    
    81.7
    $481.8
    
    85.7
    $411.3
    
    74.8Emergency
    MedicalServices/Search and Rescue
    57.1
    
    8.9
    37.8
    
    6.7
    47.0
    
    8.5Helicopter
    Service/Mining/Construction/Forestry/Passenger Transport andOther
    59.8
    
    9.4
    42.5
    
    7.6
    91.5
    
    16.7Total
    $639.9
    
    100%
    $562.1
    100%
    $549.8
    
    100%Revenue by Geographic Area
    
    2003
    
    
    2002
    
    
    2001($ in
    
    
    ($
    in
    
    
    ($ inmillions)
    %
    millions)
    
    %
    millions)
    %European
    OperationsNorway
    $186.0
    
    29.1
    $151.1
    
    26.9
    $140.0
    
    25.4U.K.
    269.7
    
    42.1
    244.2
    
    43.4
    202.3
    
    36.8Total
    455.7
    
    71.2
    395.3
    
    70.3
    342.3
    
    62.2International
    OperationsAustralia
    63.0
    
    9.8
    51.7
    
    9.2
    51.5
    
    9.4Africa
    33.7
    
    5.3
    25.7
    
    4.6
    26.0
    
    4.7Other International
    87.5
    
    13.7
    89.4
    
    15.9
    69.7
    
    12.7Total
    184.2
    
    28.8
    166.8
    
    29.7
    147.2
    
    26.8Canadian
    Operations (1)Eastern
    -
    
    -
    -
    
    -
    29.9
    
    5.4Western
    -
    
    -
    -
    
    -
    30.4
    
    5.6Total
    -
    
    -
    -
    
    -
    60.3
    
    11.0TOTAL
    $639.9
    
    100%
    $562.1
    100%
    $549.8
    
    100%(1) These amounts include revenues earned from our Canadian onshore
helicopter operations prior to their sale on October 31, 2000.
European Operations

We are one of the leading providers of helicopter services in
Europe. We provide offshore services to customers located primarily in the U.K.,
Norwegian and Danish sectors of the North Sea. We also provide helicopter
services (primarily search and rescue) in Ireland. Our primary European bases
are located in Aberdeen, Scotland and Stavanger, Norway, where we
conduct our operations in the U.K. and Norwegian sectors of the North Sea,
respectively. We currently operate 71 helicopters in Europe, including 39 Super
Pumas, the most modern heavy commercial helicopter currently servicing the major
oil and gas companies in the North Sea. We service the oil and gas companies
primarily by transporting personnel and supplies to and from oil platforms in
the North Sea.
  
Norwegian Operations: The Norwegian offshore oil and gas
sector is serviced by our subsidiary, CHC Helikopter Service AS. While the focus
on the oil and gas sector in Norway is substantially the same as in the U.K.,
differences in regulatory regimes and territorial issues make it more
appropriate to service the Norwegian sector of the North Sea from Norway.
Our Norwegian operations primarily service oil and gas
customers in the North Sea including Statoil, Phillips, bp and Norsk Hydro. In
the fiscal year ended April 30, 2003, we serviced seven major customers through
these operations.
We currently operate 28 helicopters in Norway consisting of
24 heavy helicopters, including 19 Super Pumas (of which eight are Super Puma
MkIIs) and four medium helicopters. Super Puma helicopters are frequently
requested by major oil and gas companies and, in our opinion, are currently in
short supply within both the new helicopter and helicopter resale markets.
During the year we were successful in negotiating a two-year
contract extension, to 2005, with bp to provide sole use services of a Super
Puma MkII helicopter and further support from our Super Puma fleet in Stavanger.
The extension was effective June 1, 2003 and will generate estimated revenue of
$42 million over the contract term. We believe we will continue to be a leader
in the Norwegian helicopter services market as a result of our long-term
relationships and our reputation for safe, high-quality service. The other major
helicopter service provider in the Norwegian sector of the North Sea is Norsk
Helicopters.
U.K. Operations: Our U.K. operations are operated by CHC
Scotia Limited with headquarters in Aberdeen, Scotland. CHC Scotia Limited was
formed by the combination of the significant U.K. operations of CHC and HSG
which was acquired by us in 1999. Our U.K. operations were historically provided
by Brintel, a company we acquired in 1994. HSG's U.K. operations were
historically provided by Bond Helicopters Ltd., a company HSG acquired in 1996.
Our U.K. operations primarily service oil and gas customers
in the U.K. sector of the North Sea, including operating subsidiaries of bp,
Mobil, Talisman and TotalFinaElf, some of which we have serviced for more than
10 years. Our U.K. operations also manage our operations in Denmark, where we
signed a long-term contract in 1999 with Maersk to provide offshore helicopter
support and in Ireland, where we perform search and rescue as well as oil
services work. In the fiscal year ended April 30, 2003, our U.K. operations
provided helicopter services to over 10 major customers.
We currently operate 43 helicopters in our U.K. operations,
primarily in the U.K. sector of the North Sea. Our U.K. fleet consists of 27
heavy helicopters and 16 medium helicopters, many of which are specially
equipped for the North Sea. Included in our heavy helicopter fleet are 20 Super
Pumas, including five Super Puma MkIIs.
During the year we were successful in being awarded the following contracts:
a five-year contract, to 2007, plus options for
  another five years for the sole use of two AS365N Dauphin helicopters based at
  Blackpool, England. This contract is in support of offshore operations for
  Centrica plc subsidiary Hydrocarbon Resources Limited and BHP Billiton.
  Estimated total revenues for the five-year period are $48 million.
  a seven-year contract renewal, to 2010, in
  support of bp's operations in the sourthern portion of the North Sea. The
  contract will be serviced through our fleet of S76 helicopters based at North
  Denes and Humberside, England.
  a multi-year contract with ExxonMobil to provide
  sole-use service of a new Super Puma MkII helicopter and sole-use service of a
  Super Puma AS332L out of Aberdeen, Scotland to support production and drilling
  operations in the northern sector of the North Sea.a
  four-year contract, to 2007, (plus two option years) for the support of
  TotalFinaElf's ("TFE") production and exploration activities in the North Sea.
  The contract is an extension of our long standing relationship with TFE.
  a
  two-year contract extension, to 2005, in support of Talisman's production and
  drilling operations in the North Sea.We believe we will continue to have opportunities to obtain
new contracts in the U.K. portion of the North Sea. The other major helicopter
service provider in the U.K. sector of the North Sea is Bristow Helicopters Ltd.
We were unsuccessful in renewing a contract with bp to supply
helicopter services in the northern North Sea. The current contract produced
revenues of $49.3 million in fiscal 2003, and expires on July 31, 2004.

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New Business Opportunities in Europe: There is the
potential for new oil and gas developments off the west coasts of Scotland and
Ireland, around the Shetland and Faroe Islands, and in the North Sea off the
northern coast of Norway. All of these opportunities are expected to lead to
additional helicopter service requirements. We believe we are well positioned to
compete for these new contracts as a result of: (1) our long-standing
relationships with many of the major oil and gas companies which are expected to
play a significant role in these projects; and (2) the need for our long-range
Super Puma MkII and EC225 helicopters to reach more remote regions.
International Operations

Our international operations provide helicopter services in
approximately 20 countries in Africa, Asia, the Middle East, South America and
offshore Canada, principally to customers in the oil and gas sector. We believe
that the valuable international experience we have gained over the last 50 years
enables us to draw upon our knowledge of local conditions to provide high levels
of customer service in diverse operating environments. Our international
operations consist of CHC International, based in Vancouver, Canada; CHC
Australia, based in Adelaide, Australia; and CHC Africa, based in Cape Town,
South Africa.
In some of the countries in which we operate, local
regulations impose certain nationality requirements. As a result, we are often
required to obtain a license to operate in that country in conjunction with a
local representative or local joint venture partner. Our representatives or
partners typically receive a small percentage of local revenues or a fixed fee
but generally do not provide any personnel or assume any of the liabilities
related to performance of the contract. We currently have representatives or
partners in a number of countries including Azerbaijan, Ecuador, Myanmar, Saudi
Arabia, Venezuela and Thailand. We believe we have a competitive advantage in
securing contracts in these areas due to our established local partnerships.
CHC International: CHC International provides helicopter
services through 18 bases in 14 countries around the world. These bases are
coordinated through our division based in Vancouver, Canada, which operates a
fleet of 31 aircraft, including eight heavy helicopters, 22 medium helicopters
and one fixed-wing aircraft. In the fiscal year ended April 30, 2003, CHC
International conducted business with 14 major oil and gas customers. They
include operating subsidiaries of Shell, bp, ExxonMobil, Unocal, Sable Offshore
Energy Inc., Chevron, Triton and TotalFinaElf. Our strong customer
relationships, established reputation and ability to operate in diverse
environments have proven to be extremely important in the international market.
We believe that our commitment to quality, safety and cost efficiency has made
us a respected service provider within the oil and gas industry. We have been
serving Unocal in Thailand for 29 years. Since our establishment in Azerbaijan
nine years ago, we have been working on long-term projects in the Caspian Sea
with a consortium led by bp and another consortium led by TotalFinaElf and
ExxonMobil, under contract until at least 2004. In the Philippines, we are under
contract until 2005, with an additional two-year option. We are also established
in Saudi Arabia, where we are currently providing services to the Arabian Oil
Company under contract until 2004 with opportunities for extensions. We are well
established on the east coast of Canada, having contracts with ExxonMobil. We
also maintain contracts for ongoing work in such countries as Malaysia and
Ecuador.
During the year we were awarded a five-year contract in
Malaysia, a new market, with Malaysian Helicopter Services in support of
Talisman Energy's operations. Also during the year in Thailand, we were awarded
medium term contracts with Chevron and PTTEP (the Thai Government Petroleum
Authority). We were also awarded a 30-month contract with AGIP Offshore in the
Persian Gulf. We were also awarded a two-year contract with the UN to support
the UN's monitoring, verification and inspection activities in Iraq. This
contract was terminated by the UN upon the commencement of war in Iraq in March
2003.
CHC Australia: Our Australian operations, as well as a
portion of our Southeast Asian operations, are conducted by CHC Australia,
principally located in Adelaide, Australia which operates a fleet of 32
helicopters, including five heavy, 20 medium and seven light helicopters. We are
a leading commercial helicopter operator in Australia. Our customers include
Newfield Australia and Phillips Petroleum, which, along with other oil and gas
companies, represents approximately 30% of our Australian revenues. In addition, we operate air ambulance services in
South Australia, Queensland, the Australian Capital Territory and Victoria,
perform search and rescue services for the Royal Australian Air Force, and
provide various functions supporting the utility and construction industries,
such as pipeline inspection. We have also been working with the United Nations
in East Timor since 1999 using three helicopters for personnel transportation
and medical evacuation. We also perform helicopter support services for police
forces in Victoria and South Australia.
  
During the year we were awarded a three-year contract extension, to 2006, for
the provision of services to Newfield Exploration in support of their offshore
operation in Darwin, Australia.
CHC Africa: Our African operations are headquartered in
Cape Town, South Africa, operating seven bases in six countries in Africa in
support of oil and gas exploration and mining activities, as well as emergency
medical and other services. With a fleet of 22 helicopters and two fixed-wing
aircraft, CHC Africa services a variety of customers, including Shell, bp,
ExxonMobil, BHP, Phillips Petroleum, DeBeers, Soekor, Energy Africa, the
government of South Africa and the city of Cape Town. At April 30, 2003, three
of CHC Africa's medium helicopters were leased to an operator in Brazil to
support the offshore oil and gas industry. In the first quarter of fiscal 2004,
the Brazilian operator crashed one of these aircraft. The aircraft was a total
loss. It was insured by the Brazilian operator with proceeds payable to us.
During the year we were awarded a three-year contract
renewal, to 2006, by DeBeers in support of their diamond mining operations off
the coast of Namibia. Total revenues over the contract term are estimated to be
$18.5 million.
New Business Opportunities for our International Operations:
Our geographic coverage enables us to serve multinational oil and gas customers
on a worldwide basis. We see potential growth opportunities through our
international operations in regions such as South America, West Africa,
Thailand, Brazil, Angola, Malaysia, India, the Philippines and offshore eastern
Canada. Each of the regions includes potential helicopter service contract
opportunities linked to oil and gas exploration and production projects.
Canadian Operations

Effective October 31, 2000, we sold our Canadian onshore
helicopter operations and assets to a new company presently known as CHL. Under
the terms of the sale we received gross proceeds of $128.5 million for the
assets and operations. We acquired a 45% common equity interest in CHL for cash
consideration of $4.5 million. The remaining shares are owned by management of
CHL and an equity investor. Management of CHL have subsequently earned
additional equity, thereby reducing our ownership to 43.5% at April 30, 2003. In
addition, we invested $15 million in CHL through preferred shares. To facilitate
debt financing for the new company on a timely basis, we advanced $10 million to
CHL as part of the syndication of its term debt. This loan was fully repaid in
fiscal 2003.
We retained operating leases for 11 S-76A aircraft involved
in CHL's air ambulance operations and retained ownership of three heavy and one
light aircraft. These aircraft were leased or sub-leased to CHL for the
remaining period of the existing leases (up to five years) with certain purchase
options in favour of CHL during the lease term. During fiscal 2003, CHL arranged
its own lease financing for these 11 S76A aircraft, thereby relieving us of any
commitments for CHL's air ambulance fleet.
The sale did not include our offshore oil and gas operations
on the east coast of Canada. These operations were retained by us and the
results of these operations are included in the international flying segment
results. CHL has agreed not to compete with us for offshore oil and gas work in
Canada until at least October 31, 2005.
Repair and Overhaul

All aircraft are required by their manufacturers and
government regulations to be serviced and overhauled on pre-determined hourly
intervals. The repair and overhaul of helicopters includes the repair and
overhaul of engines, components and accessories. The repair and overhaul process
includes the disassembly, cleaning, inspection, repair and reassembly of
engines, components and accessories, which have a limited time-life, including the testing of complete
engines. The choice of whether to perform a given task in-house or to contract
with a third party depends on the complexity and cost of the task and the
capabilities of the operator in question. Companies engaged in the repair and
overhaul business are required to obtain licenses from government regulatory
bodies and, in many cases, the manufacturers. Companies active in this industry
include the manufacturers of helicopters, components, and accessories, repair
facilities authorized by the manufacturers to repair and overhaul their
products, and small workshops not typically authorized by the manufacturers. The
low cost of transporting components relative to the total cost of the repair and
overhaul services has resulted in the development of a worldwide market for
repair and overhaul services.

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We currently operate the only licensed commercial major
component repair and overhaul facility in the world for the Eurocopter Super
Puma helicopter, other than the original equipment manufacturer. Our facility,
located in Stavanger, Norway, is also an authorized customer service facility
for Bell Helicopter Textron and has been designated by engine manufacturer
General Electric as an approved repair and overhaul facility for the GE CT-58
engine used in the Sikorsky S-61 helicopter and other types of aircraft. We also
operate an authorized customer service facility for Turbomeca's Makila engines,
which are used to power Super Pumas. In January 2000, we entered into an
agreement to expand our license with Eurocopter into a worldwide license for the
repair and overhaul of Super Puma major components and to include the Super Puma
MkII model in the license. In February 2001, we entered into an agreement with
Turbomeca to expand our licenses for the repair and overhaul of Makila engines
to include civilian and military helicopters in regions outside of Scandinavia.
In addition, our facility has been certified to repair and overhaul helicopters
by the joint European approval system for aircraft maintenance organizations and
is ISO-9001 certified. We have reorganized our European repair and overhaul
business into Astec, which operates as a separate business in Stavanger and
Aberdeen.
Our repair and overhaul facility includes a staff of highly
skilled mechanics and engineers with an average of approximately 15 years of
service. Repair and overhaul services provided by our facility include (1)
airframe inspections, designs and modifications, (2) engine overhauls, (3)
dynamic, hydraulic, mechanical, and other component overhauls, repairs and
testing, (4) avionics overhaul and repair, (5) other miscellaneous equipment
repair and maintenance and (6) logistical and technical support to helicopter
operators. These services are performed through numerous workshops at the
Stavanger, Norway facility, which include sheet metal, interior, and safety
equipment workshops and paint facilities in addition to engine and parts
workshops to provide customers with full service capabilities. Astec also
operates a repair and overhaul facility in Aberdeen, Scotland.
We have developed a unique "one stop shop" concept for
helicopter support whereby we directly support operators who are either setting
up a remote operation, or expanding into the Sikorsky S-61 or Super Puma
markets. The operator is able to choose from a range of products that are
available at a standard of expertise the customer may not otherwise be able to
support as a stand-alone unit. We are also becoming positioned to offer
comprehensive component repair and overhaul services for the Boeing Chinook
CH-47 heavy military helicopter.
Our repair and overhaul facilities currently provide a range
of helicopter support services for our own helicopter operations and for third
party military and commercial helicopter operators in the U.K., Spain, Denmark,
Ireland, Canada, Brazil, the Netherlands, Australia and Indonesia. Third party
customers include the Royal Norwegian Air Force, Royal Netherlands Airforce,
Swedish Airforce, Finnish Frontier Guard, German Border Guard, Brunei Shell,
Cougar Helicopters and Schreiner North Sea Helicopters.
We and Vector (and certain others) entered into a
non-competition agreement on June 25, 1998, in connection with the sale of the
repair and overhaul segment of our business at that time to Vector, whereby we
agreed that until June 25, 2003, we would not engage in certain repair and
overhaul activities that were competitive with certain activities of Vector. We
currently perform work for our own helicopters, third party work involving the
scope of services and customer base as they existed when we acquired HSG, and
continuation of, and any territorial expansion of, our licenses for repairing
and overhauling Eurocopter Super Puma helicopter components and their Turbomeca
Makila engines for third parties. With the expiry of the non-competition
agreement with Vector on June 25, 2003, we are now reviewing the options and
opportunities available.
CHC Composites Inc. ("Composites") is a subsidiary of ours
that manufactures composite aerospace components and bonded panels. Composites
was established in fiscal 1999 and commenced commercial production on May 1,
2002. During the year we were awarded a five-year contract, to 2008, with Aero
Vodochody of the Czech Republic for the manufacture of aerospace components for
the Sikorsky S76 helicopter. The contract will generate estimated annual
revenues of $5 million. Production is expected to commence before the end of
calendar 2003.Growth Opportunities: With approximately 500 Super Pumas
and other heavy helicopters operating in the worldwide civilian and military
markets, we believe there are significant growth opportunities for our repair
and overhaul operations.

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Flight Training

We operate an advanced flight training facility in Norway. This facility
provides additional revenue and enhances our global reputation for excellence in
helicopter services.
Our experienced instructors provide a wide variety of
training services to our employees as well as civil and military organizations
around the world. Technical ground school courses are taught to both pilots and
technicians. Our Norwegian flight training school is an approved Eurocopter
Training Centre for Puma/Super Puma type aircraft whose training programs are
approved by the Norwegian Civil Aviation Authority. Our Norwegian flight
training operations have two full flight simulators: the Sikorsky S-61N and the
Eurocopter Super Puma AS332L helicopters. To date the S-61N simulator has
accumulated more than 41,000 revenue hours (including almost 2,100 hours in
fiscal 2003) and the Super Puma simulator has exceeded 68,600 revenue hours
(including just over 3,600 hours in fiscal 2003). Both simulators are based in
Stavanger, Norway and are certified and approved by the Norwegian Civil Aviation
Authority as well as several other national aviation authorities. Since its
inception, this facility has trained more than 21,600 pilots and mechanics from
over 60 countries.
Seasonality

Following the completion of the sale of certain non-core
operations during fiscal 2001, our remaining operations are not significantly
affected by seasonal variations. In particular, the sale of the Canadian onshore
helicopter operations had a major impact on reducing seasonality. The Canadian
onshore operations typically produced significantly higher revenues and earnings
in the six-month period ended October 31 than in the remaining six months of the
fiscal year. The results of operations for the Canadian onshore helicopter
operations to October 31, 2000 are included in the consolidated financial
statements for fiscal 2001. Effective November 1, 2000 we commenced accounting
for the Canadian onshore helicopter operations as an equity investment.
Safety and Insurance

Operation of helicopters involves some degree of risk.
Hazards, such as aircraft accidents, collisions and fire, are inherent in
furnishing helicopter services and can cause personal injury and loss of life,
severe damage to and destruction of property and equipment, and suspension of
affected operations. We maintain a flight safety organization that is
responsible for ensuring compliance with safety standards within our
organization and the requisite proficiency among flight crews. Our safety
organization is responsible for training flight crews, conducting regular safety
audits and seminars for all flight personnel, and generally ensuring safe
operating techniques and standards consistent with Canadian and other government
regulations and customer requirements. In addition, Transport Canada conducts
safety audits to ensure that its standards are being met.
During the three fiscal years ended April 30, 2003, we experienced five
accidents outside of Canada involving serious injuries or significant property
damage.
On March 14, 2003, an S-76 aircraft experienced a total loss,
with only minor injuries to the crew. The aircraft, operating in Azerbaijan, was
on a training routine and experienced a hard landing, resulting in a fire in the
aircraft. No passengers were on the aircraft at the time.
On November 10, 2001, a Super Puma operating in the U.K.
rolled onto its side on the heli-deck of a drill ship after disembarking
passengers during regular crew change. The sudden, unexpected repositioning of
the ship in heavy seas caused the incident. Fortunately, there were no
fatalities, but the aircraft was deemed a total constructive loss and we
received insurance proceeds of $12.2 million based on the replacement value of
the aircraft. The incident is not expected to have any material impact on fleet
insurance rates, since the cause was not attributed to our operation of the
aircraft, and our insurers are pursuing a significant reimbursement from a third
party.
On December 29, 2000, a Bell 206 performing search and rescue
work in Africa lost its tail rotor effectiveness while involved in a
water-related life saving role. No one was injured. On April 20, 2000, one of
our onshore U.K. light helicopters crashed into a small building. No one was
injured, although the helicopter was damaged beyond repair. On June 5, 1999, an
S-76 in the Gulf of Thailand was involved in a tail rotor strike resulting in a
hard landing. There were no fatalities or injuries, but the aircraft sustained
significant damage.

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An incident occurred on September 8, 1997, when an HSG Super
Puma, on contract with Statoil, crashed into the sea over the Norne oil field,
resulting in the deaths of the two crew members and all ten passengers on board.
Claims arising in connection with the Norne accident have been divided into
three types: loss of hull, search and rescue costs and workers' compensation.
The claim for loss of hull was settled during 1997 for U.S. $11.8 million, with HSG and third party insurers each bearing some costs. The Norwegian workers
compensation board has paid NOK 2 million per person killed in the accident to
their respective families. HSG has not had to pay any amounts with respect to
liability claims arising under this accident and does not anticipate any future
claims at this time. In July 2003 we reached an agreement with the aircraft
manufacturer and our insurers under which the manufacturer will pay U.S. $6.25
million to settle this cost recovery claim. The net proceeds of this claim of
approximately U.S. $5.0 million will be allocated between us and our insurers.
We maintain liability insurance coverage against general and
aircraft liability, including personal injury, subject to a self-insured
retention. In addition, we have separate hull policies that generally insure
against physical loss of, or damage to, our helicopters in certain
circumstances, subject to a self-insured retention, including losses due to war,
expropriation, confiscation and nationalization. We are not insured for loss of
profit or use of our helicopters.
While we believe that we are adequately covered by insurance
in light of our historical need for insurance coverage, the loss of this
coverage or the loss, expropriation or confiscation of, or severe damage to, a
large number of our helicopters could adversely affect our operations and
financial condition. In addition, the events of September 11, 2001 caused a
worldwide increase in insurance rates, particularly, in the business in which we
operate and restricted the ability of operators to acquire war liability
coverage above certain limits. As a result of these and other factors, no
assurance can be given that we will be able to maintain adequate insurance in
the future at rates we consider reasonable.
Fleet

During fiscal 2003, we entered into, as lessee, seven
long-term aircraft operating leases, including sale-leaseback arrangements for
six aircraft we previously owned and the lease of one new Super Puma MkII to
support activity in the North Sea. Our fleet currently operates at close to full
capacity.Government Regulation
U.K. RegulationRequirements for Operating License
Our U.K. operating subsidiary, Scotia, has been issued an
operating license by the U.K. Civil Aviation Authority. Formerly, operating
licenses were held by two of our U.K. subsidiaries, Brintel and Scotia
(previously Bond Helicopters Limited), but as of June 30, 2000 the helicopter
operating business and assets of Brintel were transferred, for value, to Bond.
Bond was renamed CHC Scotia Limited and is now the only operating subsidiary in
the U.K. in our group, and therefore our only subsidiary holding a U.K.
operating license. Without this operating license, we would not be able to
operate helicopter services through our U.K. subsidiary. Under applicable
European law, all of our European subsidiaries that operate helicopter services
must be "effectively controlled" and "majority owned" by nationals of member
states of the European Union or the European Economic Area to maintain their
operating licenses. We are controlled by Mr. Craig L. Dobbin, a citizen of both
Canada and the Republic of Ireland (a member state of the European Union).
In January 1994, two competitors of Brintel (at that time the
only U.K. operating company in our group) complained to the European Commission
and the U.K. Civil Aviation Authority that the ownership structure of CHC and
Brintel did not comply with the requirements of European licensing regulations
and one competitor brought an application in the English courts for judicial
review of the U.K. authorities decision not to revoke Brintel's operating
license following the acquisition of Brintel by CHC. Subsequently, Brintel
received notice that, as a result of communications with the European
Commission, the U.K. Civil Aviation Authority believed that Brintel may not
satisfy the nationality requirements of applicable European law. The U.K. Civil
Aviation Authority subsequently informed the U.K. Secretary of State on December
4, 1997 that it had reason to believe that Brintel did not
comply with the ownership requirements of applicable European law. The U.K.
Secretary of State has the ability to direct the U.K. Civil Aviation Authority
to withdraw Brintel's operating license for failure to comply with such
requirements.
  
To resolve the ownership issues with the U.K. Civil Aviation
Authority and the European Commission, we entered into an agreement with the
U.K. Department of the Environment, Transport and the Regions to effect a
transaction that was approved by our shareholders on December 9, 1997. Pursuant
to that agreement, we created and issued 11 million ordinary shares, a new class
of restricted voting securities, to a corporation indirectly wholly-owned by Mr.
Dobbin for $33 million. We loaned that corporation the $33 million to purchase
the ordinary shares. The loan is secured by a lien on the ordinary shares. The
ordinary shares are entitled to one vote for every 10 ordinary shares held and
to dividends equivalent on a per share basis to any dividend paid on our
subordinate voting shares, but each dividend paid on the ordinary shares
requires prior minority shareholder approval.
In connection with these transactions, Mr. Dobbin and related corporations
entered into an agreement with us under which they agreed, among other things:not to
  directly or indirectly sell or transfer any of the ordinary shares, except for
  transfers that have been approved by a committee of independent directors of
  CHC; and
  not to take any action to cause or support our
  dissolution, liquidation or winding-up or other distribution of our assets
  unless the dissolution, liquidation or winding-up or other distribution has
  received minority shareholder approval. 

As a result of these transactions, we were advised by the
U.K. Civil Aviation Authority that it did not intend, in the absence of any
further change in circumstances or any information available to it, to take any
further action in relation to Brintel in the context of the ownership
requirements of applicable European licensing law. Although discussions and
correspondence with the European Commission, the U.K. Department of Environment,
Transport and the Regions and the U.K. Civil Aviation Authority confirmed that
the issuance of the ordinary shares to Mr. Dobbin in December 1997 allowed us to
satisfy the nationality requirements, this will not necessarily preclude further
challenges of Scotia's right to maintain its operating license on this or any
other basis. Further, Scotia's eligibility to maintain its license could be
adversely affected if Mr. Dobbin were to dispose of the shares he holds in CHC
or if he were to die and no alternative arrangement acceptable to the U.K. Civil
Aviation Authority were implemented. During fiscal 2002, Mr. Dobbin's five
children were granted Irish citizenship, thereby providing a further succession
alternative, which would ensure our long-term eligibility to operate in Europe.
While we do not believe this is probable, the revocation of the license would
have a material adverse effect on our business, financial condition and results
of operations.
Following our acquisition on August 11, 1999 of over 90% of
the shares of HSG, including its subsidiary Bond, which operated in the U.K., we
disclosed the details of the transaction to the U.K. Civil Aviation Authority
and obtained written confirmation from the U.K. Civil Aviation Authority that
the licensing of Bond would not be adversely affected by its acquisition by us.
Norwegian Regulation

Requirements for Operating License
Our Norwegian subsidiaries are, through Norway's status in
the European Economic Area, subject to substantially the same European Union
nationality requirements with regard to ownership and control as our U.K.
subsidiaries. On May 9, 1999, in response to objections initiated by the
previous management of HSG, the Norwegian Ministry of Transport confirmed in
writing that it had adopted the same position as the U.K. Civil Aviation
Authority with regard to our satisfaction of the European Union (and European
Economic Area) nationality requirements and therefore would not challenge HSG's
eligibility to hold helicopter operating licenses in Norway after our
acquisition of HSG. Although we have at this time no indication that we are in
breach of the applicable requirements and do not believe this to be the case,
there remains some risk that we could lose our own licenses to operate in
Norway, as well as the U.K., as a result of these or other regulations
promulgated in the European Union or affecting countries in the European Economic Area. While we do not believe this is probable, the
revocation of these licenses would have a material adverse effect on our
business, financial condition and results of operations.

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Canadian Regulation

Requirements for Operating License
The helicopter industry in Canada is regulated under the
provisions of the Canada Transportation Act (the "Transportation Act") and the
Aeronautics Act (Canada) (the "Aeronautics Act"). Under the Transportation Act,
a license must be obtained from the Canada Transportation Agency to provide air
services (including helicopter services) to the public. To obtain a license to
provide air service within Canada (a domestic air service license), an operator
must establish that it is "Canadian" within the meaning of the Transportation
Act (unless exempted from this requirement by order of the Minister of
Transport), that it holds the appropriate air operator certificate issued under
the Aeronautics Act, that it has specified liability insurance coverage and that
it meets the prescribed financial requirements with respect to the operation of
medium and/or large aircraft as defined. In order for a corporation to qualify
as "Canadian" within the meaning of the applicable parts of the Transportation
Act, the corporation must be controlled in fact by, and at least 75% of the
voting interests of such corporation must be owned and controlled by, Canadian
citizens, permanent residents of Canada within the meaning of the Immigration
and Refugee Protection Act (Canada) or other persons or entities that otherwise
qualify as "Canadian" pursuant to the provisions of the Transportation Act. Air
operator certificates are issued by Transport Canada pursuant to the Aeronautics
Act and related regulations and orders. To receive an air operator certificate,
an applicant must satisfy certain requirements with respect to its operations.
Holders of domestic air service licenses are required to
maintain a tariff setting out charges for their services. Although these tariffs
can be amended by the license holder, any person may object to the Canada
Transportation Agency with respect to tariff charges. The Canada Transportation
Agency may, upon receipt of such a complaint, reduce or disallow any such
charges. A domestic air service license holder may charge customers rates other
than those set out in the tariff by entering into a contract with such customers
whereby it is agreed that the terms of such contract are to be kept
confidential.
The Transportation Act also requires a helicopter operator to
obtain a license to operate an international air service (a service between
Canada and another country). The requirements for international air service
licenses are similar to those for domestic licenses.
We have a domestic air service license and an international
air service license. Our ability to conduct business is dependent on our ability
to maintain these licenses and our air operator certificates. The Canada
Transportation Agency may suspend or cancel the license of any license holder if
the Canada Transportation Agency has reasonable grounds to believe that the
holder has ceased to qualify for the issuance of a license or has contravened
any applicable provision of the Transportation Act. We no longer directly carry
on light helicopter operations in Canada, but we operate heavy helicopters off
Canada's east coast in support of the oil and gas industry.
Australian Regulation

Requirements for Operating License
The helicopter industry in Australia is regulated by various
authorities, the most significant of which is the Australian Civil Aviation
Safety Authority ("CASA"). Pursuant to the Civil Aviation Act, 1988, CASA is
primarily responsible for safety regulations for (1) civil air operations within
Australian territory and (2) Australian registered aircraft operating outside of
Australian territory.
To operate an aircraft in Australia, it must be registered
with CASA and a valid Certificate of Airworthiness must be obtained and be valid
and in effect. The operation of an aircraft for a commercial purpose into, out
of or within Australian territory can only be undertaken as authorized by an Air
Operators' Certificate. CHC Australia has been licensed by CASA to conduct
charter operations within, into, out of and outside of Australian territory and
to engage in the maintenance of aircraft and maintenance of aircraft components.

---

South African Regulation

Requirements for Operating License
Aviation services in South Africa are regulated under the Air
Services Licensing Act for domestic service and the International Air Services
Act for international services. Additionally, aircraft used in such services
must be registered under the Aviation Act, 1962. The Air Services Licensing
Council issues domestic licenses if satisfied that (a) the service will be safe
and reliable, (b) the applicant is a resident of South Africa or, if a
corporation is incorporated in South Africa and 75% of the voting rights are
held by South African residents, (c) the applicant will be in control of the
service and (d) the aircraft is registered in South Africa. Upon acquiring its
interest in Court Air (Pty) Ltd., HSG obtained a letter from the Ministry of
Transport in South Africa, confirming its approval of HSG's indirect acquisition
of Court Air on the basis that Court Air's immediate parent, Court Air Holdings
(Pty) Ltd., was a South African registered company. Legal advice from our South
African counsel has confirmed that Court Air's licenses for helicopter
operations in South Africa should not be adversely affected by our acquisition
of HSG, but cautioned that there is some continuing risk that the South African
Ministry of Transport could reverse its prior decision. No action with respect
to these licenses has been taken since our acquisition of HSG. While we do not
believe this is probable, any such action could materially and adversely affect
our business, financial condition and results of operations. There are also
requirements for an operating certificate, uninterrupted operation and
insurance. The requirements for an international license are similar, with an
additional requirement that the service can be operated within the structure of
existing air service in South Africa. The International Air Services Council may
also take into account the financial capability of the applicant, economic and
other national interests of South Africa and the effect on existing services.
Domestic fares are unregulated but international fares are governed by
international agreements between governments.
Black Empowerment
Black Empowerment legislation in South Africa requires that
we have a local partner that satisfies the black empowerment requirements in
order to be able to bid on contracts in South Africa. We are in discussions with
a prospective black empowerment partner regarding the entering into of an
agreement that would satisfy such requirements.
Other International Regulation

Helicopter operations in other foreign countries are
regulated to various degrees by their governments and must be operated in
compliance with those regulations. These regulations may require us to obtain a
license to operate in that country, may favor local companies or require
operating permits that can only be obtained by locally registered companies and
may impose other nationality requirements. To conduct helicopter operations in
these countries, we may operate in conjunction with a local representative or
joint venture partner. Our representatives or partners typically receive a small
percentage of local revenues or a fixed fee but generally do not provide any
personnel or assume any of the liabilities related to the performance of the
contract. We currently have representatives or partners in a number of countries
including Azerbaijan, Ecuador, Myanmar, Saudi Arabia, Venezuela and Thailand.
Environmental

Our operations sometimes involve the use, handling and
storage of material that may be classified as environmentally hazardous. Laws
protecting the environment have become more stringent in Canada and certain
other countries in recent years and may, in certain circumstances, impose
liability for environmental damage without regard to negligence or fault. These
laws also may expose us to liability for the conduct of, or conditions caused
by, others or for our acts that were in compliance with all applicable laws at
the time these acts were performed. We believe that ensuring compliance with
these environmental laws has not, to date, had a material adverse effect on our
financial position. We cannot, however, predict the likelihood of change to
these laws nor the impact of any change on our financial position.

---

ORGANIZATIONAL STRUCTUREAs of April 30, 2003, we had the following significant subsidiaries:

|                                                          |                   | Percentage     
|--------------------------------------------------------- | ----------------- | ---------------
|                                                          | Jurisdiction of   | Ownership      
|Company name                                              | Incorporation     | (common equity)
|CHC
    Helicopters International Inc.                    | Canada            | 100%           
|CHC
    Helicopters (Barbados) Limited                    | Barbados          | 100%           
|CHC
    Leasing (Barbados) Limited                        | Barbados          | 100%           
|Canadian
    Helicopters (U.K.) Limited                   | Scotland          | 100%           
|CHC
    Scotia Limited                                    | England and Wales | 100%           
|Vinland
    Denmark AS                                    | Denmark           | 100%           
|Vinland
    Helicopters AS                                | Norway            | 100%           
|Helicopter Services Group AS                              | Norway            | 100%           
|CHC
    Helikopter Service AS                             | Norway            | 100%           
|Astec
    Helicopter Services AS                          | Norway            | 100%           
|Integra
    Leasing AS                                    | Norway            | 100%           
|Heliwest
    AS                                           | Norway            | 100%           
|CHC
    Helicopters (Australia) (through Lloyd Helicopter |                   |                
|Services Pty. Ltd.)                                       | Australia         | 100%           
|CHC
    Helicopters (Africa) Pty. Ltd. (formerly Court    |                   |                
|Helicopters Pty. Ltd.)                                    | Africa            | 100%           
|Court
    Helicopters Limited (Mauritius)                 | Mauritius         | 100%           
|CHC
    Composites Inc.                                   | Canada            | 100%           
|CHC
    Denmark ApS                                       | Denmark           | 100%           
|CHC
    Ireland Limited                                   | Ireland           | 100%           
|                                                          |                   |                

---

PROPERTY, PLANT AND EQUIPMENT
Fleet

The composition of our fleet at April 30, 2003, and some of the
characteristics of the individual types of aircraft we own or lease are as
follows:

|                               |       |                 |        |                |                |       |        
|------------------------------ | ----- | --------------- | ------ | -------------- | -------------- | ----- | -------
|                               |       | Number in Fleet |        | Passenger      | Approximate   
|Fleet
    Composition          | Owned |                 | Leased | Type of Engine | Capacity       | Range
|                               |       |                 |        |                |                | (1)   | (2)    
|                               |       |                 |        |                |                |       |        
|Light
    Helicopters          |       |                 |        |                |                |       |        
|Bell 206
    Series            | `     | 7               |        | -              | Turbine        | 6     | 320 nm.
|Bell 407                       |       | 1               |        | -              | Turbine        | 6     | 328 nm.
|Eurocopter 350 Series          |       | 1               |        | -              | Turbine        | 5     | 273 nm.
|Eurocopter BO 105              |       | 1               |        | -              | Twin Turbine   | 4     | 307 nm.
|Eurocopter 355 Twin Star       |       | 1               |        | -              | Twin Turbine   | 4     | 360 nm.
|Total                          |       | 11              |        | -              |                |       |        
|                               |       |                 |        |                |                |       |        
|Medium
    Helicopters         |       |                 |        |                |                |       |        
|Bell 212
    Series            |       | 9               |        | 5              | Twin Turbine   | 14    | 238 nm.
|Bell 214                       |       | 1               |        | -              | Twin Turbine   | 19    | 418 nm.
|Bell 412                       |       | 5               |        | 2              | Twin Turbine   | 14    | 349 nm.
|Eurocopter 365 Series          |       | 13              |        | 3              | Twin Turbine   | 9     | 414 nm.
|Sikorsky
    S-76 Series       |       | 32              |        | 6              | Twin Turbine   | 9     | 407 nm.
|Total                          |       | 60              |        | 16             |                |       |        
|                               |       |                 |        |                |                |       |        
|Heavy
    Helicopters          |       |                 |        |                |                |       |        
|Eurocopter Super Puma 332L/L-1 |       | 21              |        | 11             | Twin Turbine   | 20    | 455 nm.
|Eurocopter Super Puma 332 MkII |       | -               |        | 13             | Twin Turbine   | 19    | 461 nm.
|Sikorsky
    S-61N             |       | 20              |        | 4              | Twin Turbine   | 26    | 125 nm.
|Total                          |       | 41              |        | 28             |                |       |        
|                               |       |                 |        |                |                |       |        
|                               |       |                 |        |                |                |       |        
|Fixed
    Wing Aircraft        |       |                 |        |                |                |       |        
|Twin
    Otter                 |       | -               |        | 1              | Twin Turboprop | 19    | 663 nm.
|Convair
    580                |       | 2               |        | -              | Twin Turboprop | 55    | 782 nm.
|Total                          |       | 2               |        | 1              |                |       |        
|TOTAL                          |       | 114             |        | 45             |                |       |        

(1) Excludes pilots and assumes standard seating of only one pilot. 
(2) Assumes no auxiliary fuel tanks and maximum payload.

Of our fleet of 159 aircraft, we owned 114, operated 36 under long-term
operating leases and operated nine under short-term operating leases at April
30, 2003.

Based on an appraisal as of April 2003 by an independent
helicopter valuation company, the aggregate estimated resale value of the
aircraft we owned at April 30, 2003 was approximately U.S. $365.5 million
($523.9 million). At April 30, 2003, we had spare parts and components with a
book value of approximately $92 million.

---

Facilities

At April 30, 2003, we operated from approximately 65
locations worldwide, including 19 in Europe, using facilities that include
hangars, supply and service centers, engineering support facilities and offices.
In Norway, the U.K., Canada and Australia, we generally own the hangars we use
in our helicopter operations, which are located primarily on leased airport
lands. We generally lease supply and service centers, engineering support
facilities and offices from third parties.
The principal properties from which we now conduct our operations are:

|                                |                                 | Buildings     | Owned or Leased/Lease
    Expiration Date
|------------------------------- | ------------------------------- | ------------- | -----------------------------------------
|Location                        | Operations                      | (Square Feet) | Land                                     
|                                |                                 |               |                                          
|St.
    John's, Newfoundland,   | Corporate Headquarters;         | 45,000        | Leased                                   
|Canada                          | Helicopter Operations           |               | August 31, 2011                          
|                                | Capability                      |               |                                          
|                                |                                 |               |                                          
|Richmond,
    British Columbia, | International
    Headquarters; | 29,000 (1)    | Leased                                   
|Canada                          | Helicopter Operations           |               | September 30, 2004                       
|                                |                                 |               |                                          
|Aberdeen,
    Scotland          | CHC Scotia;                     | 45,000        | Leased                                   
|                                | Helicopter Operations           |               | May 1, 2016                              
|                                | CHC Scotia;                     | 25,000        | Leased                                   
|                                | Terminal Building               |               | June 30, 2027                            
|                                |                                 |               |                                          
|Stavanger,
    Norway           | CHC Helikopter Service;         | 40,000        | Leased                                   
|                                | Helicopter Operations and       |               | March 31, 2012                           
|                                | Astec Headquarters              | 129,000       | Leased                                   
|                                | Repair and Overhaul             |               | March 31, 2012                           
|                                |                                 |               |                                          
|Cape
    Town, South Africa     | CHC Africa                      | 45,000        | Leased                                   
|                                | Helicopter Operations           |               | April 30, 2010                           
|                                |                                 |               |                                          
|Adelaide,
    Australia         | CHC Australia                   | 13,000        | Owned                                    
|                                | Helicopter Operations           |               |                                          

(1) Of the 29,000 square feet, 8,000 square feet is being leased by Vector
for the use of two engine test cells.

---

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSThis section should be read in conjunction with "Selected
Financial Data" and the consolidated financial statements of CHC included
elsewhere in this Annual Report. The consolidated financial statements of CHC
have been prepared in accordance with Canadian GAAP which differ in certain
respects from U.S. GAAP. For a discussion of the principal differences between
Canadian GAAP and U.S. GAAP, see "Principal Differences between Canadian and
U.S. GAAP," and Note 29 to the CHC consolidated financial statements included
elsewhere in this Annual Report.
We acquired HSG on August 11, 1999. Accordingly, the operating and financial
review for periods prior to that date do not reflect the significant impact of
our acquisition of HSG.OverviewWe are a major provider of helicopter transportation services
to the global oil and gas industry. We, through our subsidiaries, have been
providing helicopter services for more than 50 years and currently operate in
over 20 countries, with major operating units based in the U.K., Norway, South
Africa, Australia and Canada. We principally provide helicopter transportation
services to the oil and gas industry for production and exploration activities,
as well as emergency medical and search and rescue services ("EMS/SAR"). In
general, we target opportunities where customers require sophisticated
helicopters operated by trained and experienced pilots, typically under
long-term contracts.
We were created in 1987 as a holding company to combine the
operations of Sealand Helicopters Limited and Toronto Helicopters Limited (both
of which were Canadian companies controlled by Mr. Craig L. Dobbin, Chairman of
the Board and Chief Executive Officer of the Company and a principal
shareholder) and to acquire Okanagan Helicopters Ltd, also a Canadian company.
Since our formation, we have grown organically as well as through acquisitions,
the most significant of which were the acquisition in 1988 of the majority of
the assets of Ranger Helicopters Limited in Canada; the acquisition in 1989 of
all the outstanding shares of Viking Helicopters Limited in Canada; the
acquisition in 1993 and 1994 of all the outstanding shares of Brintel Holdings
Limited in the U.K.; and the acquisition in 1999 of all the outstanding shares
of HSG in Norway.
Our subordinate voting shares and multiple voting shares
currently trade on the Toronto Stock Exchange ("TSX") and effective October 11,
2002, the subordinate voting shares commenced trading on the New York Stock
Exchange.Business StrategyDuring fiscal 2000, we completed the acquisition of HSG. HSG
primarily provided helicopter services to the oil and gas industry in the U.K.,
Norway, Australia and Africa. During fiscal 2001, we continued our strategy of
positioning ourselves as a major provider of helicopter transportation services
to the global oil and gas industry by completing the sale of our non-oil and gas
related light and medium helicopter operations in Canada, the U.K., Norway and
Sweden. During the past several years, we have continued to strengthen our
position in the oil and gas industry through new contract awards, the renewal of
existing contracts and the expansion of our aircraft fleet and ground support
facilities.
In addition to helicopter operations and flight training
services, which represented 90.4% of our revenues for the year ended April 30,
2003 (fiscal 2002 - 92.9%), we provide repair and overhaul services for our own
aircraft and for third-party customers. Helicopters must be serviced or
overhauled at predetermined intervals based on flight hours. Therefore, our
repair and overhaul capabilities, which include the ability to service a number
of helicopter types, provide a diversified source of relatively stable revenue.
We believe that our repair and overhaul and flight training activities are
important in enhancing our worldwide reputation as a full-service helicopter
operator. In addition, our lower-cost in-house repair and overhaul services
provide us with a cost advantage over our competitors.
We believe that success as a provider of helicopter services to the global
oil and gas industry requires a modern fleet of aircraft configured for offshore
flying and maintained in accordance with maintenance standards established by
the aircraft manufacturers and aviation authorities, a global presence to allow
us to serve major oil and gas customers, a supply of trained and experienced
pilots, a continuous focus on safety in all of our activities and the ability to
finance growth as necessary. We believe, based on these factors, that we are
well positioned to continue to be a major provider of helicopter services to the
global oil and gas industry.

We also have a composites business ("Composites") in Canada
that manufactures composite airframe components for major airline and helicopter
manufacturers. We do not consider this business to be integral to our overall
strategy and are currently reviewing our strategic options for this business,
which may include a sale of all or part of the business.
In fiscal 2003, we achieved record net earnings from
operations for the fourth consecutive year. The following graph illustrates the
growth in net earnings from operations over the fiscal periods 1999 to 2003.

Non-GAAP Earnings Measures
      Our continuous disclosure documents may provide discussion and analysis
      of "EBITDA" and "Net earnings from operations". These earnings measures do
      not have standard definitions prescribed by generally accepted accounting
      principles in Canada ("Canadian GAAP") and therefore may not be comparable
      to similar measures disclosed by other companies. We have included these
      Non-GAAP earnings measures because they are used by management, investors,
      analysts and others as measures of our financial performance. The
      definitions of these Non-GAAP earnings measures are set forth below:
      EBITDAis defined as net
      earnings before interest, income taxes, non-cash items and large,
      non-recurring items. EBITDA is represented by "Earnings before undernoted
      items" on our Consolidated Statements of Earnings.
      Net earnings from operationsis defined as net earnings before large,
      non-recurring items. It is used as a measure of our ability to generate
      net earnings from normal, recurring operations.The
      table below provides a reconciliation of Net earnings from operations to
      the GAAP measure, Net earnings, and also provides details on the
      calculation of basic and diluted Net earnings from operations per share.



|Reconciliation of Non-GAAP Earnings Measures to GAAP Net Earnings
|-----------------------------------------------------------------
|(in thousands of Canadian dollars, except per share amounts)     
|                                                                 
|                                                                 
|                                                                 
|Earnings
    from operations before income taxes                 
|and debt
    settlement costs (from                              
|ConsolidatedStatement of Earnings)                               
|                                                                 
|Asset
    impairment charge (non-recurring item)                 
|                                                                 
|Applicable income taxes                                          
|(2003 -
    21.8%; 2002 - 17.3%)                                 
|                                                                 
|Net
    earnings from operations                                 
|Non-recurring items:                                             
|After-tax
    debt settlement costs ($12,464 less                
|taxes of
    $4,548)                                             
|After-tax
    asset impairment charge ($12,811                   
|less
    taxes of $2,872)                                        
|Tax
    recovery                                                 
|Net earnings                                                     
|                                                                 
|Net
    earnings from operations                                 
|Weighted
    average number of shares                            
|Basic net
    earnings from operations per share                 
|                                                                 
|                                                                 
|Net
    earnings from operations                                 
|Effect of
    potential dilutive securities                      
|                                                                 
|Weighted
    average number of shares (diluted)                  
|Diluted
    net earnings from operations per share               
|                                                                 

(1)

For the year ended April 30, 2003, revenue generated by
helicopter transportation services for the oil and gas industry was 72.4% of our
total revenue of $722.4 million, compared to approximately 78.0% for the
previous fiscal year.

The level of worldwide offshore oil and gas exploration and
production has traditionally influenced demand for helicopter transportation
services. While oil and gas exploration activity in our North Sea market
declined during fiscal 2003, industry analysts expect the activity level to
recover. Activity levels in our other international markets in fiscal 2003
remained consistent with levels experienced in the prior year.

We expect new exploration activity to occur in both producing
and non-producing regions of the remote North Sea and Caspian Sea, and offshore
South America, West Africa, Southeast Asia and Eastern Canada. We believe this
increase in activity will result in increased global demand for helicopter transportation services. While 14.2% of our revenue is derived from
exploration activity, 58.2% is derived from oil and gas production activity. The
latter is less affected by cyclical movements in oil and gas prices.

---

The following chart breaks down revenues for fiscal 2003 by industry sector.



The Business

Helicopter Operations

We contract with customers to provide aircraft for various
periods of time. For the year ended April 30, 2003, 74.8% of our revenue came
from long-term contracts with terms ranging from two to seven years. Such
contracts are ordinarily awarded following a competitive bidding process among
prequalified bidders. Contracts may be based on a fixed monthly fee with an
additional hourly charge for actual flight time, or solely on an hourly charge
for actual flight time.

Contracts for helicopter services in support of oil and gas
exploration activities are generally short-term, usually twelve months or less.
Contracts for transport of personnel and equipment to oil and gas production
sites are generally long-term. Typically, we supply crew and maintenance
personnel in addition to aircraft. However, we do have a limited number of
contracts under which we supply aircraft only, often in conjunction with repair
and overhaul and training services. We will continue to pursue this latter type
of contract in the future as such arrangements may allow us to partner with
other local operators to gain entry to new markets, thereby driving growth.

A substantial number of our long-term contracts contain
provisions permitting early termination by the customer without penalties.
However, with the exception of contracts that were transferred to another
operator due to the merging of oil and gas producers, during the last five years
no customer has exercised that right. At the expiration of a contract, our
customers typically solicit new bids for the next contract period. Contracts are
typically awarded based on a number of factors, including price, long-term
relationships, the safety record of the helicopter service provider and quality
of customer service. Generally, an incumbent operator has a competitive
advantage in the bidding process stemming from its relationship with the
customer, its knowledge of site characteristics, its understanding of the cost
structure for the specific operations and its proven ability to meet service
level requirements and provide the necessary aircraft.

Our contracts require that fuel be provided directly by the
customer or be charged directly to the customer based on the actual fuel costs
incurred by us. As a result, we have no significant exposure to changes in fuel
prices.

---

New contract start-up costs, including equipment and crew
transportation and base set-up costs, can represent a significant portion of
operating costs. We therefore believe that our global network of bases and
operating licenses give us a competitive advantage in bidding on new contracts
throughout most of the world. With more than 60 bases on seven continents, we
are positioned to meet the requirements of our customers in most regions within
short periods of time at competitive rates.
We have long-term working relationships with most of the
major oil and gas companies, including the operating subsidiaries of bp,
ExxonMobil, ConocoPhillips, Shell, Statoil, Norsk Hydro, TotalFinaElf, Talisman,
Chevron, Maersk and Unocal. Many of these have been customers of ours for more
than 20 years.
Safety is a primary focus in all activities performed by us.
We believe that we have one of the best safety records in the industry, as
evidenced by our low incident rate and the lowest insurance premiums among the
major providers of helicopter services to the offshore oil and gas industry.
Repair and Overhaul Services
Repair and overhaul services cover all major helicopter
components, including engines, rotor heads, gearboxes and blades. Contracts with
customers specify the extent of the services to be provided by us. Some
contracts cover all components on an aircraft, while others include only
specific components. Additionally, some of our contracts require customers to
pay for services on an hourly flying basis. Typically, a portion of the revenue
from these "power-by-the-hour" contracts is recognized on a monthly basis to
reflect ongoing services being provided, with the balance deferred and
recognized as the major repair and overhaul services are performed. While we are
licensed to provide repair and overhaul services on a range of aircraft, the
majority of our repair and overhaul revenue is derived from our major aircraft
type, the Super Puma.
As part of the sale of our previous repair and overhaul
business, Vector, in 1998, we entered into a five-year non-compete agreement
that expired on June 25, 2003. With the expiration of the non-compete agreement,
we are reviewing our options for the repair and overhaul of our medium aircraft
previously provided by Vector, including the possibility of performing a portion
or all of this work in our own repair and overhaul facilities.
Competitive Position

We are one of only two global providers of helicopter
transportation services to the offshore oil and gas industry. Both we and our
global competitor have a modern fleet of helicopters, a global presence,
long-term relationships with major oil and gas companies and a reputation for
providing safe, high-quality, reliable service. There are other competitors, but
they are smaller, regional operators. During 2003, a new competitor entered the
U.K. sector of the North Sea market. This competitor is establishing operations
in Aberdeen, Scotland and on August 1, 2004 is scheduled to commence providing
helicopter services that are currently performed by us under a long-term
contract that was not renewed by a customer of ours.
We have a significant market position in all global offshore
oil and gas markets, with the exception of the Gulf of Mexico, where we do not
have a presence. Our absence in that market stems from the fact that the oil and
gas companies operating in the Gulf of Mexico utilize primarily light and medium
helicopters under short-term contracts. We estimate that we have a market share
of approximately 65% in the combined Norwegian, U.K. and Danish sectors of the
North Sea, the world's largest area of offshore oil and gas development. We
believe we are well positioned to capitalize on growth opportunities in the
North Sea and elsewhere. As oil and gas wells are depleted, it is expected that
oil companies will go further offshore to develop deep-water reserves. Our
global presence, long-term customer relationships and modern fleet of aircraft
position us to participate in new oil and gas developments in most offshore oil
and gas regions.

---

At present, the limited supply of helicopters available for
use in the offshore oil and gas industry is a competitive advantage for us. In
our experience, the Super Puma is the aircraft most requested by the major oil
and gas companies operating in the North Sea, our major market, due to its
superior range and payload. At present, we and our major competitor operate in
excess of 95% of the worldwide fleet of commercial Super Pumas configured for
offshore work. The manufacturer of the Super Puma does not stock new aircraft.
The current lead-time to acquire a new Super Puma is approximately 24 months. At
present there is no substitute for the Super Puma in commercial operation that
is acceptable to major customers operating in the North Sea and certain other
regions where large numbers of passengers are transported long distances
offshore. A potential competitor to the Super Puma is the Sikorsky S92,
scheduled to enter commercial operation in 2005. We will consider adding the S92
to our fleet if customers request this aircraft type.
In our international markets, the primary aircraft are the
Sikorsky S76 and S61. We continue to upgrade our fleet to meet customer
requirements and will be taking possession of new S76C+ aircraft in fiscal 2004.
As oil and gas production and exploration in the international markets move
further offshore, there will be an increasing need for newer heavy aircraft in
these markets.
Our fleet includes the newest model of the Super Puma, the
MkII, the most advanced heavy aircraft in operation in our markets. At April 30,
2003, we were operating 13 MkII aircraft, while only two other MkII aircraft
were operating in our markets.
Our repair and overhaul facilities located in Norway and the
U.K. are the only commercial facilities in the world licensed to perform repair
and overhaul services on the Super Puma helicopter, other than the original
equipment manufacturer. In addition to providing repair and overhaul services
for our fleet of 45 Super Pumas, our facilities, experience and reputation
position us to increase our market share of repair and overhaul services for the
world's approximately 500 Super Pumas, of which 80% are employed in non-civil
and military operations.
Fleet

The helicopters in use today may be divided into two general categories:
single-engine (light) aircraft and twin-engine (heavy and medium size) aircraft.
Single-engine aircraft have a passenger capacity of 3 to 6,
operate under visual flight rules (daylight and good weather flying only) and
can be operated with one pilot. Given their low passenger capacity and inability
to fly in poor weather conditions, these aircraft are generally limited to
onshore operations. In recent years, we have sold most of our operations and
aircraft in this category, and have only 11 light aircraft in our current fleet.
However, we have a 43.5% interest in CHL, which operates in Canada's onshore
market primarily with light aircraft.
Twin-engine aircraft require two pilots, have a capacity of 9
to 26 passengers and can operate under instrument flight rules (daytime and
nighttime flying under a variety of weather conditions). The greater passenger
capacity, longer range and ability to operate in adverse weather conditions make
these aircraft more suitable than single-engine aircraft for offshore support.
The high cost of these larger aircraft and their limited availability tend to
lessen competition from smaller operators. We currently operate 145 aircraft in
this category (69 heavy and 76 medium aircraft).
At April 30, 2003 our fleet consisted of 159 aircraft, of
which 114 were owned and 45 leased. Of these, 71 operated in Europe (primarily
in the North Sea market) and the remainder were used in other international
markets. An additional 143 aircraft were operated by CHL.
Based on an independent appraisal, as at April 30, 2003 the
aggregate estimated resale value of the 114 aircraft owned by us was
approximately U.S. $365.5 million ($523.9 million). This appraisal indicates a
surplus of $185.1 million over the carrying value reflected in our balance
sheet. The appraisal surplus has decreased by $85.9 million since April 30,
2002. This decrease is primarily the result of the sale-leaseback of six Super
Puma aircraft during the year and the impact of foreign exchange rate
fluctuations on the translation of the aircrafts' appraised values and net book values
into Canadian dollars.
During fiscal 2003, we entered into seven long-term aircraft
operating leases, including sale-leaseback arrangements for six aircraft
previously owned by us and the lease of one new Super Puma MkII to support
activity in the North Sea. Our fleet currently operates at close to full
capacity.
Our fleet at April 30, 2003 (including owned and leased aircraft) was
comprised of the following aircraft by segment:

|Aircraft type                  |    | Europe | International | Total | Owned | Leased
|------------------------------ | -- | ------ | ------------- | ----- | ----- | ------
|Heavy                          |    |        |               |       |       |       
|Eurocopter Super Puma
    MkII | 13 | -      | 13            | -     | 13   
|Eurocopter Super Puma          | 26 | 6      | 32            | 21    | 11   
|Sikorsky
    S61               | 12 | 12     | 24            | 20    | 4    
|                               |    |        | 51            | 18    | 69    | 41    
|                               |    |        |               |       |       |       
|Medium                         |    |        |               |       |       |       
|Sikorsky
    S76               |    |        | 8             | 30    | 38    | 32    
|Bell 412                       |    |        | -             | 7     | 7     | 5     
|Bell 212                       |    |        | -             | 14    | 14    | 9     
|Eurocopter 365 Series          | 11 | 5      | 16            | 13    | 3    
|Other                          |    |        | 1             | -     | 1     | 1     
|                               |    |        | 20            | 56    | 76    | 60    
|Light                          |    |        |               |       |       |       
|Bell 206                       |    |        | -             | 7     | 7     | 7     
|Eurocopter AS350/355           | -  | 2      | 2             | 2     | -    
|Other                          |    |        | -             | 2     | 2     | 2     
|                               |    |        | -             | 11    | 11    | 11    
|Fixed-wing                     |    |        | -             | 3     | 3     | 2     
|Total                          |    |        | 71            | 88    | 159   | 114   
|                               |    |        |               |       |       |       

Approximately 70% of a helicopter's value resides in its
dynamic components. Since the components are overhauled, replaced or upgraded on
a regular basis pursuant to manufacturer and regulatory requirements, older
models of helicopters that have been upgraded are capable of meeting many of the
same performance standards as newer models. As a result, as the price of new
helicopters rises, older models of these helicopters that have been properly
maintained and upgraded generally retain their value. We typically receive sale
proceeds in excess of the original purchase price when we sell helicopters as
part of our ongoing program of optimizing our fleet mix to meet changing market
conditions.

Lease Obligations

We have entered into aircraft operating leases with
third-party lessors in respect of 45 aircraft included in our fleet at April 30,
2003. These leases have expiry dates ranging from June 2003 to June 2010. We
have the option of purchasing the aircraft at fair market value or agreed
amounts that do not constitute bargain purchase options, but have no commitment
to do so. The minimum lease payments under these aircraft operating leases for
the period 2004 to 2010 total $172.6 million.

In addition to aircraft operating leases, we have minimum lease payments of
$45.5 million for the same period related to operating lease commitments for
buildings and non-aircraft equipment.

---



For additional details on our lease obligations, see "Contractual
Obligations" and also Note 23 to the Consolidated Financial Statements included
elsewhere in this Annual Report.

We retained operating leases for 11 S76A aircraft in
connection with the sale of CHL during fiscal 2001. These leased aircraft were
sub-leased to CHL for the remaining period of the existing leases (up to five
years) with certain purchase options in favour of CHL during the lease terms.
During 2003, CHL arranged its own financing for these aircraft, thereby
relieving us of our commitment under the leases.

Commitments to Acquire New Aircraft

At April 30, 2003, we had commitments to take delivery of
five new Super Puma MkII aircraft and options to acquire two EC225 helicopters
for use primarily in our European operations. We have some flexibility built
into the delivery schedule for these aircraft in order to match acquisitions
with new demand. During fiscal 2004, we expect to take delivery of three Super
Puma MkII aircraft.

We have also ordered four new S76C+ helicopters for our
international operations for delivery in December 2003. These aircraft will be
used in southeast Asia and in Africa to meet increased demand by customers for
newer medium aircraft. Existing aircraft will be re-deployed to other projects
in these markets.

The approximate total value of our commitments for the nine
aircraft expected to be delivered in fiscal 2004 and 2005 is $153 million,
including $108 million for the seven aircraft expected to be delivered in fiscal
2004. The purchase prices of the aircraft are denominated in euros and U.S.
dollars. The amount that we will need to finance at the date of delivery may
differ from the amounts noted above due to changes in foreign exchange rates. We
have entered into foreign currency indemnity agreements which may reduce our
exposure to fluctuations in exchange rates (see "Financial Instruments"). We
intend to lease some of these aircraft under operating lease arrangements.

Sale of Non-Core Assets and Operations

During fiscal 2002 we sold our 49% equity investment in
Wiking Helikopter Service ("Wiking"), a German onshore helicopter company, for
total proceeds of $4.6 million. At the time of sale, Wiking owned two medium
aircraft. The impact of Wiking on our net earnings prior to the sale was
immaterial. The equity in earnings of associated companies recorded for Wiking
was $0.7 million in fiscal 2001 and nil for fiscal 2002.

Results of Operations

The following table sets forth, for the years indicated, the results of
operations as a percentage of revenues:

|                                                     | Year ended April
    30
|---------------------------------------------------- | -----------------------
|                                                     | (Restated) (1)         
|                                                     | 2003                   
|Revenue                                              | 100.0%                 
|Operating
    expenses                               | 80.3                   
|                                                     |                        
|Earnings
    before undernoted items ("EBITDA")      | 19.7                   
|Amortization                                         | (3.1)                  
|Gain on
    disposals of assets                      | 0.3                    
|Earnings
    from operations before asset impairment | 16.9                   
|charge                                               |                        
|Asset
    impairment charge                          | (1.8)                  
|Earnings
    from operations                         | 15.1                   
|Financing
    charges                                | (4.8)                  
|Equity in
    earnings of associated companies       | 0.3                    
|Debt
    settlement                                  | (1.7)                  
|                                                     |                        
|Earnings
    before income taxes                     | 8.9                    
|Income
    taxes recovery (provision)                | 0.3                    
|Net
    earnings                                     | 9.2                    

(1) See Note 4(a) to the Consolidated Financial Statements included elsewhere
in this Annual Report

---

Year Ended April 30, 2003 compared to Year Ended April 30, 2002
Revenue

Total revenue for fiscal 2003 increased $104.5 million, or
16.9%, to $722.4 million from $617.8 million in fiscal 2002. The following are
the primary reasons for the change in revenue:
The impact of new
contracts and price increases, partially offset by reduced flying hours,
resulted in an increase in revenue of $47.6 million. The level of interaction
between contract rates, flying hours, fixed monthly charges and aircraft mix
makes it difficult to more accurately quantify the impact of the individual
factors contributing to the revenue increase.
  The strengthening of European currencies against the Canadian
dollar was the predominant factor that contributed to the remaining revenue
increase of $56.9 million.The $104.5 million increase in total revenue was derived from
the oil and gas industry ($41.6 million), EMS/SAR ($19.2 million), repair and
overhaul ($19.4 million), composites manufacturing ($6.4 million), training
($3.1 million), and other ($14.8 million). A significant portion of the increase
in the other category relates to revenue earned in connection with modifications
made to aircraft as part of a new search and rescue contract.
The table below provides a summary of segment revenue by quarter
for fiscal 2002 and 2003:

|       |    | Revenue Summary
    by Quarter        |               |           
|------ | -- | ------------------------------------- | ------------- | ----------
|       |    | (in millions of
    Canadian dollars) |               |           
|       |    |                                       |               | Total     
|       |    |                                       |               | helicopter
|Period |    | Europe                                | International | operations
|F2002  | Q1 | $ 101.3                               | $ 36.9        | $138.2    
|       | Q2 | 107.8                                 | 38.9          | 146.7     
|       | Q3 | 95.6                                  | 44.9          | 140.5     
|       | Q4 | 102.1                                 | 46.7          | 148.8     
|       |    |                                       |               |           
|F2003  | Q1 | 118.0                                 | 45.8          | 163.8     
|       | Q2 | 125.4                                 | 44.5          | 169.9     
|       | Q3 | 116.2                                 | 46.4          | 162.6     
|       | Q4 | 108.6                                 | 48.0          | 156.6     

We derive our helicopter flying revenue from two types of
contracts. Approximately 60% of our fiscal 2003 flying revenue is derived from
hourly charges (including hourly charges on contracts that also have fixed
charges), and the remaining 40% is generated by fixed monthly charges. Because
of the significant fixed component, an increase or decrease in flying hours may
not result in a proportionate change in revenue. While flying hours may not
correlate directly with revenues, they remain a good measure of the level of
activity and fleet utilization. The following tables provide a quarterly summary
of our flying hours and flying revenue mix for fiscal 2002 and 2003.

|Flying Hours -
    Helicopter Operations
|----------------------------------------
|                                        
|Period                                  
|                                        
|F2002                                   
|                                        
|                                        
|                                        
|                                        
|F2003                                   
|                                        
|                                        
|                                        

---

We utilize primarily heavy aircraft in our European
operations and medium aircraft in our international operations. As illustrated
in the table below, the overall mix of revenue by aircraft type remained
constant in fiscal 2002 and 2003.

|                                      |        |             |       |        |  |        |             |      
|------------------------------------- | ------ | ----------- | ----- | ------ |  | ------ | ----------- | -----
|Flying Revenue
    Mix               
|(in millions of
    Canadian dollars)
|                                      |        | Fiscal 2003 |       |        |  |        | Fiscal 2002 |      
|                                      | Heavy  | Medium      | Light | Total  |  | Heavy  | Medium      | Light
|                                      |        |             |       |        |  |        |             |      
|Europe                                | $335.8 | $ 89.6      | $ -   | $425.4 |  | $299.0 | $ 75.9      | $ -  
|International                         | 50.7   | 118.4       | 8.0   | 177.1  |  | 47.7   | 109.6       | 7.8  
|Total
    flying                      |        |             |       |        |  |        |             |      
|revenue                               | $386.5 | $208.0      | $8.0  | $602.5 |  | $346.7 | $185.5      | $7.8 
|                                      |        |             |       |        |  |        |             |      
|Total %                               | 64.2%  | 34.5%       | 1.3%  | 100%   |  | 64.2%  | 34.4%       | 1.4% 
|                                      |        |             |       |        |  |        |             |      

We regularly compare our activity levels against available
industry data. Aberdeen Airport Ltd. reports monthly helicopter passenger
traffic for all helicopter operators in Aberdeen, Scotland, which is our largest
base as measured by the number of aircraft and revenue. The following table
provides a quarterly summary of all helicopter passenger traffic at Aberdeen
Airport for fiscal 2000 to 2003.

|      | Aberdeen Airport - Helicopter Passengers
|----- | ----------------------------------------
|      | Year ended April
    30                 
|      | 2003                                    
|      |                                         
|Q1    | 116,102                                 
|Q2    | 112,449                                 
|Q3    | 92,918                                  
|Q4    | 92,686                                  
|Total | 414,155                                 
|      | Source: Aberdeen Airport Ltd.           

The data in the above table shows a year-over-year decline in
activity in Aberdeen after a peak in 2002. It also demonstrates the low
seasonality in activity levels from quarter to quarter. While activity levels in
Aberdeen declined 11.5% in 2003 and our flying hours in Europe overall declined
by 7.2%, revenues from the European flying segment increased in 2003 by 15.1%.
The increase in revenues is partially the result of a portion of our revenues
being derived from fixed charges that are unaffected by flying activity, rate
increases on existing contracts and the impact of favourable foreign exchange
rate fluctuations.

Operating Expenses

Total operating expenses for fiscal 2003 increased $83.2
million, to $580.2 million, from $497.0 million for fiscal 2002. The
strengthening of the Norwegian kroner and pound sterling against the Canadian
dollar during the year accounted for approximately 40% of the increase in
operating expenses. Other major factors contributing to the increase in
operating expenses include an increase in compensation costs in Europe related
to new labour agreements entered into during fiscal 2002, and an increase in
operating expenses of $9.6 million related to Composites which commenced
commercial production in fiscal 2003. Operating expenses as a percentage of
revenue was 80.3%, which was just slightly less than the 80.4% in the prior
year.

EBITDA

EBITDA for fiscal 2003 increased $21.4 million, or 17.7%, to
$142.2 million from $120.8 million for fiscal 2002. The increase is comprised of
favourable foreign exchange rate fluctuations of $12.4 million, increased EBITDA
from new contracts and rate increases in the flying and repair and overhaul
segments of $9.8 million, and a reduction in Corporate and other costs of
$2.4 million. These increases were partially offset by EBITDA losses of $3.2
million in Composites. EBITDA as a percentage of revenue increased slightly to
19.7% from 19.6% in the prior year.

---

Amortization

Amortization for fiscal 2003 increased $4.0 million to $22.6
million from $18.6 million for fiscal 2002. Additional amortization of $1.5
million was the result of the commencement of amortization of the pre-operating
costs related to Composites and an additional $2.5 million increase related to
capital asset additions.
Gain on Disposals of Capital Assets

During fiscal 2003, we disposed of property and equipment for
net proceeds of $74.9 million (see "Investing Activities"), resulting in a net
recognized gain of $2.4 million and a net deferred gain of $13.5 million related
to the sale-leaseback of seven and the refinancing of one Super Puma aircraft.
The recognized gain of $2.4 million is comprised primarily of a gain from
insurance proceeds received for the total loss of an S76 aircraft supporting
operations in Azerbaijan.
Asset Impairment Charge

At April 30, 2003, we evaluated the recoverability from cash
flows of future operations of the carrying value of Composites' pre-operating
expenses, which had been previously deferred and recorded in other assets on our
balance sheet. We determined it appropriate to write off the entire $12.8
million book value of such pre-operating expenses at April 30, 2003 as an asset
impairment charge (Notes 2 and 9 to the Consolidated Financial Statements
included elsewhere in this Annual Report).
Financing Charges

Financing charges consisted primarily of interest on debt,
amortization of deferred financing costs and foreign exchange gains and losses
on operating activities, working capital revaluation, debt repayment and debt
revaluation. Financing charges for fiscal 2003 decreased $13.1 million, or
27.3%, to $34.9 million from $48.0 million for fiscal 2002. This decrease was
primarily the result of the redemption of 35% ($71.9 million) of our euro
denominated 11.75% senior subordinated notes in May 2002 using a portion of the
proceeds of our April 2002 equity issue. Lower interest rates on our
variable-rate senior credit facilities also contributed to the reduced financing
costs. The average interest rate on our variable-rate senior credit facilities
during fiscal 2003 was 5.3% compared to 6.7% in fiscal 2002. The reduction was
the result of lower LIBOR rates during the year and a continued reduction in the
margin paid by us. The margin changes as we satisfy certain ratios in connection
with our senior credit facilities. Effective the first quarter of fiscal 2004,
the margin above LIBOR or Bankers Acceptance will be 1.0% as compared to 2.0% at
May 1, 2002.

|                                                           | Financing Charges                      |                          
|---------------------------------------------------------- | -------------------------------------- | -------------------------
|                                                           | (in thousands of
    Canadian dollars) |                          
|                                                           |                                        | Year Ended
      April 30
|                                                           |                                        |                          
|                                                           |                                        | 2003                     
|Interest on debt
    obligations                           | $31,129                                | $42,300                  
|Amortization of deferred
    financing costs               | 3,222                                  | 3,889                    
|Foreign exchange loss
    (gain) from operating            |                                        |                          
|activities
    and working capital revaluation             | 3,337                                  | (1,063)                  
|Foreign exchange (gain)
    loss on debt repayment         | (499)                                  | 2,191                    
|Foreign exchange gain on
    revaluation of long-term debt | (770)                                  | (27)                     
|Other                                                      |                                        | (1,541)                  
|Total                                                      |                                        | $34,878                  

(1) See Note 4(a) to the Consolidated Financial Statements included elsewhere
in this Annual Report.

We capitalize interest on debt incurred to finance assets under construction.
During fiscal 2003, no financing costs were capitalized, compared to $1.0 million in fiscal 2002.



---

Equity in Earnings of Associated Companies

Equity in earnings of associated companies for fiscal 2003
increased by $1.2 million to $2.3 million, compared to $1.1 million for fiscal
2002. The increase was due primarily to the stronger performance of CHL.
Debt Settlement Costs

During fiscal 2003, we incurred debt settlement costs of
$12.5 million related to the redemption of a portion of our senior subordinated
notes. This was comprised of a premium of $8.4 million, amortization of deferred
financing costs of $3.3 million and a realized foreign exchange loss of $0.8
million. There were no debt settlement costs during fiscal 2002.
Income Taxes

Total income tax recovery for fiscal 2003 was $1.9 million, compared to total
income tax expense of $9.9 million recorded in fiscal 2002.
Income tax expense included in net earnings from operations
was $19.5 million for the year, compared to $9.9 million in 2002. The effective
income tax rate on earnings from operations in fiscal 2003 was 21.8%, compared
to 17.3% in fiscal 2002. The effective rate increased in fiscal 2003 as a result
of higher earnings in jurisdictions with higher tax rates. In addition, debt
reduction during the year reduced interest costs in Canada, our highest tax
jurisdiction.
During fiscal 2003 the following tax recoveries totalling
$21.4 million were recorded by us and have been excluded from the calculation of
income tax expense in determining net earnings from operations:
(i)
We had an income tax recovery
of $14.0 million related to our Australian operations. The government of
Australia has introduced legislation that provides wholly-owned corporate groups
with the option of consolidated income taxation from July 1, 2002. Our
Australian operations completed an analysis of this option and elected to file
its income tax returns under the new consolidation regime;

(ii)
We recorded an income tax
recovery of $2.9 million related to the asset impairment charge in Composites;
and,

(iii)
We recorded an income tax
recovery of $4.5 million related to debt settlement costs recorded on the
redemption of 35% of our senior subordinated notes.

We are subject to taxation in many jurisdictions throughout
the world. The future effective tax rate and tax liability will be affected by a
number of factors, such as the amount of taxable income in particular
jurisdictions, the tax rates in such jurisdictions, tax treaties between
jurisdictions, the extent to which funds are transferred between jurisdictions
and income is repatriated, and future changes in law. Generally, the tax
liability for each legal entity is determined on either (i) a non-consolidated
basis or (ii) a consolidated basis with other entities incorporated in the same
jurisdiction, in either case, without regard to the taxable losses of
non-consolidated affiliate entities. As a result, we may pay income taxes in
certain jurisdictions even though on an overall basis a net loss for the period
may be incurred.

Net Earnings

Net earnings for fiscal 2003 increased $18.8 million to $66.1
million from $47.3 million for fiscal 2002. The increase was the result of
revenue growth ($104.5 million), lower financing charges ($13.1 million), income
tax recoveries ($21.4 million) and other increases ($1.9 million), partially
offset by increased operating costs ($83.2 million), an asset impairment charge
($12.8 million), increased income taxes on net earnings from operations ($9.6
million), debt settlement costs ($12.5 million) and increased amortization ($4.0
million).

Earnings under Canadian GAAP differ from those under U.S.
GAAP. An explanation of the significant differences is provided in Note 29 to
the Consolidated Financial Statements included elsewhere in this Annual Report.



---

Quarterly InformationThe table below provides a summary of our revenue, net earnings and earnings
per share for each quarter in fiscal 2002 and 2003.

|                               | Revenue      | Net earnings | Net earnings per share
|------------------------------ | ------------ | ------------ | ----------------------
|Fiscal 2003                    | ($ millions) | ($ millions) | Basic                 
|Q1                             | $176.0       | $8.9         | $0.43                 
|Q2                             | 190.8        | 18.7         | 0.90                  
|Q3                             | 180.0        | 15.6         | 0.76                  
|Q4                             | 175.6        | 22.9         | 1.10                  
|Total                          | $722.4       | $66.1        | $3.19                 
|Fiscal 2002
    (Restated) (1) |              |              |                       
|Q1                             | $146.4       | $11.1        | $0.68                 
|Q2                             | 160.1        | 12.0         | 0.73                  
|Q3                             | 151.6        | 11.2         | 0.68                  
|Q4                             | 159.7        | 13.0         | 0.78                  
|Total                          | $617.8       | $47.3        | $2.87                 

(1)

Quarterly revenues in fiscal 2003 were favourably impacted by
foreign exchange of $15.2 million, $15.7 million, $16.7 million and $9.3 million
in quarters 1, 2, 3 and 4 respectively. In addition to the positive impact of
foreign currency during fiscal 2003, we also experienced real revenue growth of
$14.4 million, $15.0 million, $11.7 million and $6.6 million in quarters 1, 2, 3
and 4, respectively. There is some impact of seasonality in the results, but it
is not significant. Generally, the third quarter is most negatively impacted by
seasonality. The second quarter, which includes a portion of the summer period,
has historically been the strongest. Typically, our net earnings also follow
this pattern.

In fiscal 2003, our net earnings included several large,
unusual items that affected comparability. In Q1 2003, we incurred a pre-tax
$12.5 million cost related to the settlement of debt. In Q4 2003 we recorded an
income tax recovery of $14.0 million related to a change in tax law in
Australia. In addition, we also recorded a pre-tax asset impairment charge in
Composites of $12.8 million in the same quarter.

Review by Segment

The primary factor considered by us in identifying segments
is geographic coverage, which also impacts the nature of operations, the type of
contracts and the type of aircraft utilized. The European flying segment
includes primarily helicopter services to the oil and gas industry in the U.K.,
Norwegian and Danish sectors of the North Sea. In addition, the European flying
segment includes helicopter search and rescue operations in Europe.

The international flying segment includes the provision of
helicopter services for offshore oil and gas and EMS/SAR customers in Asia,
Africa, Australia, South America, the east coast of Canada and other locations
around the world.

The repair and overhaul segment includes helicopter repair and
overhaul facilities located in Norway and the U.K. that provide services to our
helicopter fleet and to third-party customers located in Europe, Asia and North
America.

The composites segment includes our composites manufacturing
operation in Gander, Canada. This operation was in the pre-operating phase in
fiscal 2002 and entered commercial production effective May 1, 2002.

The corporate and other segment includes the activities of our
corporate office in St. John's, Canada, other public-company related costs and
applicable consolidation eliminations.

---

The following tables set forth revenue and EBITDA by segment:

|                        | Year
      Ended April 30             
|----------------------- | --------------------------------------
|                        | 2003                                  
|Revenue                 | (in thousands of
    Canadian dollars)
|                        |                                       
|European
    flying     | $468,164                              
|International flying    | 184,784                               
|Helicopter operations   | 652,948                               
|Repair
    and overhaul | 62,989                                
|Composites              | 6,426                                 
|Total revenue           | $722,363                              
|                        |                                       
|                        | Year
      Ended April 30             
|                        | 2003                                  
|EBITDA                  | (in thousands of
    Canadian dollars)
|European
    flying     | $ 89,542                              
|International flying    | 39,867                                
|Helicopter operations   | 129,409                               
|Repair
    and overhaul | 37,390                                
|Composites              | (3,175)                               
|Corporate
    and other | (21,411)                              
|Total EBITDA            | $142,213                              

---

Europe

The European flying segment consists of major business units
in Aberdeen, Scotland and Stavanger, Norway, primarily serving the helicopter
transportation requirements of the offshore oil and gas industry in the North
Sea.



Revenue in fiscal 2003 was $468.2 million compared to $406.8
million in fiscal 2002. EBITDA in fiscal 2003 was $89.5 million, compared to
$74.6 million in fiscal 2002. Additional segmented information is contained in
Note 22 to the Consolidated Financial Statements included elsewhere in this
Annual Report.

Revenue increases totalling $13.4 million were attributable
to rate increases, new contracts and aircraft modifications for external
customers, partially offset by reduced flying activity in the North Sea. In
addition, revenue increased by $48.0 million as a result of more favourable
exchange rates for the pound sterling and Norwegian kroner.

---

The overall increase of $14.9 million in segment EBITDA resulted
from an increase of $5.8 million related to new contracts and rate increases on
existing contracts, and $9.1 million as the result of favourable foreign
exchange rates. EBITDA as a percentage of segment revenue was 19.1% in fiscal
2003, compared to 18.3% in fiscal 2002.
At April 30, 2003 there were 71 aircraft in this segment,
consisting of 51 heavy and 20 medium aircraft. Included in the heavy aircraft
were 13 Super Puma MkIIs and 26 Super Pumas.
At April 30, 2003, there were 1,058 employees in the segment
(2002 - 1,230), including 379 pilots, 294 engineers and 385 administrative and
support personnel. The primary reason for the decrease in the number of
employees was the transfer of some maintenance and related activities to our
repair and overhaul business.
Revenues were derived primarily from long-term contracts (77%).
Approximately 33% of fiscal 2003 segment revenues were from the provision of
dedicated aircraft to customers. The major customers in this segment remained
unchanged from fiscal 2002 and during fiscal 2003 included bp, ExxonMobil,
TotalFinaElf, Maersk, Statoil, Norsk Hydro, Phillips, Talisman, Saga,
Kerr-McGee, Conoco and the Irish Coast Guard.
During fiscal 2003, we were successful in renewing long-term
contracts in Europe with Centrica/BHP Billiton, bp, ExxonMobil, TotalFinaElf and
Talisman, representing total annual revenues of approximately $96 million.
However, we were unsuccessful in renewing a contract with bp for the provision
of helicopter services in the northern North Sea. The current contract with bp,
which produced revenues of $49.3 million in fiscal 2003, expires on July 31,
2004. This contract represented approximately 6.8% of our fiscal 2003 revenue.
During the year, we announced that we had embarked on an
internal cost review of our European operations. It was indicated that our U.K.
division had initiated a cost reduction program that would result in annualized
savings of $10.0 million. More than half of these cost reduction measures have
been implemented and completion is expected before the end of calendar 2003.
With regard to the combined European structure, we are still in consultation
with management and unions to develop a structure to yield more savings. We are
challenging management and unions to develop more flexible cost structures that
will improve our competitive position and ensure we can produce the overall
return on capital required to support investment in new aircraft in the North
Sea.
In fiscal 2004, long-term contracts with combined annual revenues of
approximately $43 million, representing 13.4% of total segment revenues from
long-term contracts or 9.2% of total fiscal 2003 segment revenues, will expire
and come up for renewal. The contract renewals for 2005 in the chart (above)
exclude the non-renewed bp contract noted earlier.

---

International

The International flying segment consists of major business units in
Vancouver, Canada; Adelaide, Australia; and Cape Town, South Africa serving
offshore oil and gas, EMS/SAR and other industries.



For fiscal 2003, revenues were $184.8 million, compared to
$167.4 million in the prior year. The net revenue increase of $17.4 million was
derived from increased flying activity and new contracts of $18.1 million. The
increase was partially offset by a decrease related to lower exchange rates for
the U.S. dollar and South African rand of $0.7 million.

The segment EBITDA increased by $0.9 million to $39.9 million
in fiscal 2003, compared to $39.0 million in 2002. EBITDA as a percentage of
revenue was 21.6% in fiscal 2003, compared to 23.3% in fiscal 2002. The major
factors contributing to the decrease in the EBITDA percentage in fiscal 2003
were the strengthening of the South African rand against the U.S. dollar
(virtually all of our revenue from our African operations is denominated in U.S.
dollars, while only a portion of our expenses is in U.S. dollars) and lower than
normal non-major maintenance costs in fiscal 2002.

---

At April 30, 2003, there were 88 aircraft in this segment,
consisting of 18 heavy, 56 medium and 11 light helicopters and three fixed-wing
aircraft. The fleet in the segment consists primarily of medium aircraft such as
the Sikorsky S76, but also includes a number of heavy aircraft, including the
Eurocopter Super Puma and the Sikorsky S61.
At April 30, 2003, there were 775 employees in the segment
(2002 - 729), including 249 pilots, 224 engineers and 302 administrative and
support personnel. Revenues in the segment were derived primarily from long-term
contracts (80%). Approximately 76% of revenues in the segment during the year
ended April 30, 2003 were from the provision of dedicated aircraft to customers.
The major customers in this segment did not change during the year and included ExxonMobil, Unocal, Chevron, Sable Offshore, bp, Shell, TotalFinaElf, Premier,
Phillips, Soekor, Sonair, De Beers, the Royal Australian Air Force, Victoria
Police, the United Nations, Talisman and Newfield.
During the year, we renewed and/or expanded oil and gas
contracts in Thailand and Namibia worth approximately $22.1 million annually. In
addition, we were awarded new long-term oil and gas contracts in Malaysia and
the Persian Gulf worth approximately $17.8 million annually. We did not lose any
major contracts in this segment during fiscal 2003. During fiscal 2004, major
long-term contracts with combined annual revenues of approximately $69 million,
representing 46.4% of all revenue from long-term contracts or 37.3% of total
fiscal 2003 segment revenues, will come up for renewal.

During the year, we were awarded a contract with the United
Nations to provide helicopter services for monitoring, verification and
inspection activities in Iraq. With the commencement of war in Iraq in late
fiscal 2003, this contract was terminated. Total revenue from this contract in
2003 was $2.3 million.

---

Repair and Overhaul

The repair and overhaul segment, operating as Astec
Helicopter Services ("Astec"), consists of a major facility located in Stavanger,
Norway and other facilities in Aberdeen, Scotland providing repair and overhaul
services for our fleet and for an external customer base in Europe, Asia and
North America.



For the year ended April 30, 2003, combined internal and
third-party revenues were $204.9 million, compared to $152.2 million last year.
Third-party revenues were $63.0 million, of which 40% was derived from long-term
contracts, compared to $43.6 million last year. Third-party revenue increases
totaling $19.4 million (44.5%) were derived from new business ($9.7 million) and
a higher exchange rate for the Norwegian kroner ($9.7 million). The increase in
internal revenues was partially due to Astec assuming responsibility for
maintenance on the U.K. fleet. This work was previously performed by the U.K.
flying division. The EBITDA percentage was 18.3% in 2003, compared to 20.4% in
2002. The decrease in the EBITDA percentage is primarily the result of the
addition of new lower-margin work from our U.K.-based operations and lower than
normal margins on major aircraft repair and rebuild projects for internal
customers.

---

Composites

Composites commenced commercial operations on May 1, 2002.
Revenues during fiscal 2003 were $6.4 million, primarily from a contract to
manufacture airframe components for a major regional jet manufacturer. Also
included in revenues is a $1.0 million grant from the Government of Newfoundland
and Labrador. This grant may be repayable if certain employment and other
targets are not achieved. During the fourth quarter of fiscal 2003, we announced
that we had been awarded a five-year contract with Aero Vodochody of the Czech
Republic to manufacture components for the S76 aircraft. The expected annual
revenue from this contract is $5.0 million. We are currently in the start-up
phase of this contract and are anticipating production to commence before the
end of calendar 2003.
During the year we announced that we would be exploring
strategic alternatives for Composites, including a sale of all or a portion of
the business, with the assistance of a financial advisor.
Corporate and Other

Corporate and other costs for fiscal 2003 were $21.4 million
compared to $23.8 million in fiscal 2002. The reduction of $2.4 million is due
primarily to reduced net compensation costs of $0.5 million, lower aviation and
other insurance costs of $1.7 million and lower travel expenses of $1.1 million,
partially offset by costs incurred in connection with our NYSE listing of $0.5
million and increases in other costs of $0.4 million.

Year Ended April 30, 2002 Compared to Year Ended April 30, 2001

Revenue

Total revenue for the year ended April 30, 2002 increased $24.0
million, or 4.0%, to $617.8 million from $593.8 million for the year ended April
30, 2001. The following are the primary reasons for the change in revenue:

1. Increased flying
activity, new contracts and price increases resulted in an increase in revenue
of $86.3 million.
2. The sale of non-core
operations in Norway, Sweden, Canada and the U.K. during the year ended April
30, 2001 accounted for a decrease of $68.0 million compared to the prior year.
3. More favourable exchange
rates for the Norwegian kroner, pound sterling, Australian dollar and South
African rand accounted for an increase of $5.7 million upon translation of
foreign subsidiary revenues to our reporting currency, the Canadian dollar.

During fiscal 2001 we disposed of non-core operations in Sweden,
the U.K., Norway and Canada. In order to provide a meaningful comparison of
quarterly revenues, the following table includes only revenue from continuing
operations. We have shown strong growth in revenue from continuing operations
during the year.

|Revenue Summary
    by Quarter - Continuing Operations
|------------------------------------------------------
|(in millions of
    Canadian dollars)                 
|                                                      
|Period                                                
|F2001                                                 
|                                                      
|                                                      
|                                                      
|                                                      
|F2002                                                 
|                                                      
|                                                      
|                                                      

We derive our helicopter flying revenues from two types of
contracts. Approximately 62% of our flying revenue for the year ended April 30,
2002 was derived from hourly charges, and the remaining 38% is generated by
fixed monthly charges. Because of the significant fixed component, an increase
or decrease in flying hours may not result in a proportionate change in revenue.
While flying hours may not correlate directly with revenues, they remain a good
measure of the level of activity and fleet utilization. The following tables
provide a quarterly summary of our flying hours from continuing operations and
the flying hour mix for fiscal 2001 and 2002.

|Flying Hours -
    Continuing Helicopter Operations
|---------------------------------------------------
|                                                   
|Period                                             
|                                                   
|F2001                                              
|                                                   
|                                                   
|                                                   
|                                                   
|F2002                                              
|                                                   
|                                                   
|                                                   



---





|              | Year-to-Date
    Flying Hour Mix
|------------- | --------------------------------
|              | April 30, 2002                  
|              | Heavy                           
|Europe        | 75%                             
|International | 23%                             
|Total         | 58%                             

We regularly compare our activity levels against available
industry data. The Aberdeen Airport reports monthly helicopter passenger traffic
for all helicopter operators in Aberdeen, Scotland, which is our largest base.
The following table provides a quarterly summary of all helicopter passenger
traffic at Aberdeen Airport for fiscal 2000 to 2002.

|                                        | Aberdeen Airport -
    Helicopter Passengers |        
|--------------------------------------- | -------------------------------------------- | -------
|                                        |                                              |        
|                                        | 2002                                         | 2001   
|Q1                                      | 121,868                                      | 103,874
|Q2                                      | 123,012                                      | 114,376
|Q3                                      | 114,606                                      | 104,381
|Q4                                      | 108,247                                      | 101,166
|Total                                   | 467,733                                      | 423,797
|Source:      
    Aberdeen Airport Ltd. |                                              |        

The data in the above table shows a significant
year-over-year growth in activity in Aberdeen and the low seasonality in
activity levels from quarter to quarter. The Aberdeen Airport data corroborate
our flying hour data, indicating strongest activity in the second quarter.

---

Operating Expenses

Total operating expenses for the year ended April 30, 2002
increased $19.7 million, to $497.0 million from $477.3 million for the year
ended April 30, 2001. Operating expenses as a percentage of revenue was 80.4%,
which was the same as the prior year. Operating expenses were impacted by
increases in pilot salaries in Europe, a significant portion of which were
retroactive to May 2001. In addition, we entered into nine aircraft operating
leases to support activity and revenue growth.
EBITDA

EBITDA for the year ended April 30, 2002 increased $4.3
million, or 3.7%, to $120.8 million from $116.5 million for the year ended April
30, 2001. Non-core operations in Norway, Sweden, the U.K., and Canada that were
sold in 2001 accounted for a $14.4 million reduction in EBITDA. We realized an
$18.7 million increase (16%) in EBITDA from rate increases, higher activity
levels and higher heavy aircraft utilization in all our markets.
EBITDA as a percentage of revenue remained consistent in the
year ended April 30, 2002 with the previous year at 19.6%. Rate increases from
existing contracts were offset by pilots' salary increases in the U.K. and
Norway, as well as increased aircraft lease costs to support revenue growth. In
addition, the results for the year ended April 30, 2001 included six months of
the Canadian flying operations during its peak season. EBITDA as a percentage of
revenue for the Canadian operations in the six-month period prior to the sale in
October 2000 was 22.4%.
Amortization

Amortization for the year ended April 30, 2002 decreased $1.4
million to $18.6 million from $20.0 million for the year ended April 30, 2001,
primarily due to asset sales. Capital assets increased by $27.0 million during
the year ended April 30, 2002, primarily due to helicopter component
betterments, major inspections, and additions to buildings and equipment.
Gain on Disposals of Capital Assets

During the year ended April 30, 2002 we disposed of property
and equipment (not otherwise sold as part of a business) for proceeds of $49.8
million, resulting in a net gain of $1.9 million. The net gain is comprised of a
$3.7 million gain from the net insurance proceeds following the rollover of an
aircraft on the deck of a drill ship, partially offset by losses on disposals of
buildings and other equipment. During the year ended April 30, 2001, we disposed
of property and equipment (not otherwise sold as part of a business) for
proceeds of $2.7 million.

---

Financing Charges

Financing charges were comprised primarily of interest on
debt and the amortization of deferred financing costs and deferred foreign
currency translation gains and losses. Financing charges for the year ended
April 30, 2002 decreased $8.4 million, or 14.9%, to $48.0 million from $56.4
million for the year ended April 30, 2001. This decrease was the result of debt
reduction arising in connection with asset sales during 2001, continued debt
reduction from cash flow generated during fiscal 2002, and lower interest rates.

|                                                                                                     | Financing Charges                       
|---------------------------------------------------------------------------------------------------- | ----------------------------------------
|                                                                                                     | (in thousands
      of Canadian Dollars)
|                                                                                                     |                                         
|                                                                                                     |                                         
|                                                                                                     |                                         
|Interest on debt
    obligations                                                                     | $42,300                                 
|Amortization of deferred
    financing costs                                                         | 3,889                                   
|Foreign exchange (gain)
    loss from operating                                                      |                                         
|activities
    and working capital revaluation                                                       | (1,063)                                 
|Foreign exchange loss on
    debt repayment                                                          | 2,191                                   
|Foreign exchange (gain)
    loss on revaluation
  of long-term debt                                  |                                         
|(27)                                                                                                 | 350                                     
|Other                                                                                                |                                         
|Total                                                                                                |                                         
|(1) See Note 4(a) to the Consolidated Financial Statements included elsewhere
in this Annual Report.

Our average interest rate for fiscal 2002 on the variable-rate senior credit
facility was 6.7% in fiscal 2002 compared to 9.0% in fiscal 2001.

We capitalize interest on debt incurred to finance assets under construction.
During the year ended April 30, 2002, financing costs of $1.0 million were
capitalized, compared to $1.1 million in fiscal 2001.

Equity in Earnings (Loss) of Associated Companies

Equity in earnings of associated companies for the year ended
April 30, 2002 increased by $1.5 million to $1.1 million from a loss of $0.4
million for the year ended April 30, 2001. The increase was primarily due to the
sale of the Canadian onshore helicopter operations in October 2000, the
remaining interest in which was accounted for as an equity investment for all of
fiscal 2002.

Debt Settlement and Restructuring Costs

During the year ended April 30, 2001, we incurred debt
settlement and restructuring costs of $18.6 million, related primarily to
financing costs and foreign currency translation losses on the settlement of the
tender credit facility on July 5, 2000, costs related to the settlement of
inter-company loans and costs related to the cancellation of an interest rate
swap. There were no debt settlement and restructuring costs during fiscal 2002,
other than those related to debt reduction included in financing charges.

Gain on Sale of Operations and Investments

During the year ended April 30, 2001 we reported a pre-tax
gain of $5.8 million from the sale of operations and investments. In May 2000 we
recorded a pre-tax gain of $28.8 million on the sale of primarily U.K.-based
non-oil and gas related operations. In May 2000, we also sold our Swedish
subsidiary, Heliflyg AB, recognizing a pre-tax gain of $1.3 million. On June 30,
2000, a pre-tax gain of $8.0 million was recorded on the sale of Lufttransport,
a Norwegian air ambulance service company. Finally, on October 31, 2000, we
recorded a pre-tax loss of $32.3 million on the sale of our Canadian onshore
helicopter operations and assets, including a goodwill write-off of $9.1
million.

---

Income Taxes

Income taxes for the year ended April 30, 2002 increased by
$15.8 million to an expense of $9.9 million, compared to a recovery of $5.9
million for the year ended April 30, 2001. The income tax expense in fiscal 2002
was comprised solely of income tax on earnings from operations. The income tax
recovery in fiscal 2001 was comprised of an income tax expense on earnings from
operations of $8.3 million; an income tax expense of $1.2 million on the sale of
operations and investments; an income tax recovery of $5.9 million related to
non-recurring debt settlement and restructuring costs; and an income tax
recovery of $9.5 million related to the recognition of future income tax rate
reductions in Canada to be phased in over the 2001 to 2004 income tax years.
This latter amount was recorded in accordance with the new future income tax
accounting standard in Canada.
The effective income tax rate on earnings from operations
(excluding equity in earnings of associated companies) was 17.3% during fiscal
2002 compared to 20.1% in the prior year. The lower rate in fiscal 2002 is the
result of changes in the mix of net earnings amongst the jurisdictions in which
we operate.
Net Earnings

Net earnings for the year ended April 30, 2002 increased
$13.5 million to $47.3 million from $33.8 million for the year ended April 30,
2001. The increase was primarily attributable to revenue growth and lower
financing charges and was partially offset by higher operating expenses, as
discussed above.
Earnings under Canadian GAAP differ from those under U.S.
GAAP. Explanation of the significant differences is provided in Note 29 to the
consolidated financial statements included elsewhere in this Annual Report.

|                               | Revenue      | Net earnings | Net earnings
      per share
|------------------------------ | ------------ | ------------ | ----------------------------
|                               | ($ millions) | ($ millions) | Basic                       
|Fiscal 2002(Restated) (1)      |              |              |                             
|Q1                             | $146.4       | $11.1        | $0.68                       
|Q2                             | 160.1        | 12.0         | 0.73                        
|Q3                             | 151.6        | 11.2         | 0.68                        
|Q4                             | 159.7        | 13.0         | 0.78                        
|Total                          | $617.8       | $47.3        | $2.87                       
|                               |              |              |                             
|Fiscal
    2001 (Restated) (1) |              |              |                             
|Q1                             | $160.3       | $27.6        | $1.80                       
|Q2                             | 165.6        | (14.6)       | (0.95)                      
|Q3                             | 131.6        | 14.5         | 0.91                        
|Q4                             | 136.3        | 6.3          | 0.39                        
|Total                          | $593.8       | $33.8        | $2.15                       

(1)

Review by Segment

The primary factor considered by us in identifying segments
is geographic coverage, which also impacts the nature of operations, the type of
contracts and the type of aircraft utilized. The European flying segment
includes primarily helicopter services to the oil and gas industry in the U.K.,
Norwegian and Danish sectors of the North Sea. In addition, the European flying
segment includes helicopter search and rescue operations in Norway and Ireland.

The International flying segment includes the provision of
helicopter services for offshore oil and gas, search and rescue and emergency
medical customers in Asia, Africa, Australia, South America, the East Coast of
Canada and other locations around the world.

---

The Repair and overhaul segment includes helicopter repair
and overhaul facilities located in Norway and the U.K., providing services to
our helicopter fleet and third-party customers located in Europe, Asia, and
North America.
The Canadian flying segment included onshore-based helicopter
operations for a wide range of customers in Canada. The operations included in
this segment were disposed of on October 31, 2000, but we retained a 45%
interest in CHL, the new company created to operate this business. Since
November 1, 2000 this investment has been accounted for on the equity basis.
The following table sets forth, for the years indicated, revenue by segment:
Revenue for the fiscal year ended April 30Segment
    2002
    2001
    2000(in thousands of Canadian dollars)European
    flying
    $406,767
    $351,315
    $320,715International flying
    167,437
    146,165
    102,124Canadian flying
    -
    62,002
    87,786Helicopter operations
    574,204
    559,482
    510,625Repair and overhaul
    43,612
    34,367
    23,424Total revenue
    $617,816
    $593,849
    $534,049

---

Europe
The European flying segment consists of major business units
in Aberdeen, Scotland and Stavanger, Norway, primarily serving the helicopter
transportation requirements of the offshore oil and gas industry in the North
Sea.



For the year ended April 30, 2002, revenues were $406.8
million, compared to $351.3 million in the prior year. Revenue increases of
$50.3 million were attributable to increased flying activity, new contracts and
rate increases in the North Sea. The additional $11.2 million realized from more
favourable exchange rates for the pound sterling and Norwegian kroner was
partially offset by a decrease of $6.0 million in revenue from operations that
were sold in fiscal 2001.

The segment EBITDA increase of $12.5 million can be
attributed to higher flying activity, increased heavy and medium aircraft
utilization and rate increases. EBITDA as a percentage of revenue was 18.3% in
fiscal 2002, compared to 17.7% in fiscal 2001.

During the year ended April 30, 2002 we reached agreements
with pilots unions in the U.K. and Norway. There was no immediate cost impact in
the U.K., but the strike action and work slowdowns in Norway reduced revenues
and EBITDA, as the segment was unable to meet all of the customers' flight
requirements. In addition, the segment incurred additional costs related to the
Norwegian agreement since the wage increases were retroactive to May 2001.

At April 30, 2002 there were 72 aircraft in this segment, consisting of 52
heavy and 20 medium aircraft. Included in the heavy aircraft were 12 Super Puma
MkIIs and 27 Super Pumas.

At April 30, 2002, there were 1,230 employees in the segment,
including 419 pilots, 285 engineers and 526 administrative and support
personnel. Revenues were derived primarily from long-term contracts (90%).
Approximately 36% of revenues in the segment were from the provision of
dedicated aircraft to customers during the year ended April 30, 2002. The major
customers in this segment during the year ended April 30, 2002 included bp,
ExxonMobil, TotalFinaElf, Maersk, Statoil, Norsk Hydro, Phillips, Talisman,
Saga, Conoco and the Irish Coast Guard.

We were awarded a new five-year Search and Rescue contract in
this segment for the Irish Coast Guard based in Waterford, Ireland. The contract
commenced in July 2002 and requires the dedicated use of one S61 and one back-up
aircraft.

During fiscal 2002, we did not lose any major contracts in
this segment. We were successful in renewing a 30-month contract with Kerr McGee
in the U.K., which calls for the conversion from the use of pooled aircraft to
the dedicated use of a newly acquired Super Puma MkII at higher rates. A
36-month contract worth approximately $27 million annually with Statoil in
Kristainsund, Norway was also renewed during the fiscal 2002 year. We also
renewed a contract with Marathon International Petroleum Ireland Limited in that
year. The five-year contract requires the sole use of an AS365 Dauphin out of
Cork, Ireland.

---

International

The International flying segment consists of major business units in
Vancouver, Canada; Adelaide, Australia; and Cape Town, South Africa serving
offshore oil and gas, EMS/SAR and other industries.



For the year ended April 30, 2002, revenues were $167.4 million
compared to $146.2 million in the prior year. The net revenue increase of $21.2
million was derived from increased flying activity and new contracts of $28.9
million. This increase was partially offset by a decrease related to lower
exchange rates for the Australian dollar and South African rand of $7.7 million.

The segment EBITDA increase of $8.2 million can be attributed to
increased flying revenue at higher rates of $9.0 million, partially offset by
the lower exchange rates on the Australian dollar and South African rand of $0.8
million. EBITDA as a percentage of revenue was 23.3% in fiscal 2002, compared to
21.1% in fiscal 2001.

At April 30, 2002 there were 88 aircraft in this segment,
consisting of 18 heavy, 56 medium, 11 light aircraft and three fixed-wing aircraft.



---

At April 30, 2002, there were 729 employees in the segment,
including 241 pilots, 213 engineers and 275 administrative and support
personnel. Revenues in the segment for the year ended April 30, 2002 were
derived primarily from long-term contracts (74%). Approximately 80% of revenues
in the segment during the year ended April 30, 2002 were from the provision of
dedicated aircraft to customers. The major customers in this segment during the
year ended April 30, 2002 included ExxonMobil, Unocal, ChevronTexaco, Sable
Energy, bp, Shell, Triton, TotalFinaElf, Premier, Soekor, De Beers, the Royal
Australian Air Force, Victoria Police, the United Nations and Newfield
Australia.
During fiscal 2002, we won new oil and gas contracts in East
Timor, Venezuela, Thailand and the Persian Gulf worth approximately $30 million
annually. We did not lose any major contracts in this segment during fiscal
2002. We renewed contracts in East Timor, Thailand, Equatorial Guinea, and
Bosnia worth approximately $38 million annually.
The fleet in the segment consists primarily of medium
aircraft such as the Sikorsky S-76, but also includes a number of heavy
aircraft, including the Eurocopter Super Puma and the Sikorsky S-61. Increased
flying activity during fiscal 2002, combined with new contracts, resulted in six
aircraft being added to the fleet.



---

Repair and Overhaul

The Repair and Overhaul segment consists of a major facility
located in Stavanger, Norway, and other facilities in Aberdeen, Scotland,
providing repair and overhaul services for our own fleet and for an external
customer base in Europe, Asia and North America.



For the year ended April 30, 2002, combined internal and
third-party revenues were $152.2 million, compared to $131.9 million in the
prior year. Third-party revenues for the year ended April 30, 2002 were $43.6
million compared to $34.4 million in the prior year. Third-party revenue
increases of $9.2 million were derived from new business of $7.1 million and a
higher exchange rate for the Norwegian kroner of $2.1 million. EBITDA growth and
margins improved primarily because of the increase in higher-margin third-party
work.

During 2001 we announced an expansion of our license
arrangements with Turbomeca for the repair and overhaul of various engine types
manufactured by Turbomeca. The expanded engine license enables us to provide
overhaul, repair and logistics requirements for the European fleet of Super Puma
helicopters, with the added capability of servicing other customers worldwide in
coordination with Turbomeca. This expanded on an existing license for the repair
and overhaul of engines in Scandinavia and within our own Super Puma fleet.

During fiscal 2002, approximately 28% of third-party segment revenues were
derived from long-term contracts.



---

Canada

The Canadian segment consisted of onshore helicopter
operations in Canada. These operations were sold effective October 31, 2000, but
we retained a 45% common equity interest. Revenue and EBITDA for the six-month
period prior to the sale on October 31, 2000 were $62.0 million and $13.9
million, respectively, resulting in EBITDA as a percentage of revenue of 22.4%.
Effective November 1, 2000 we began accounting for the Canadian onshore
helicopter operations as an equity investment. During fiscal 2002 equity
earnings of $0.5 million were reported compared to an equity loss of $1.6
million in fiscal 2001. The 2001 equity loss includes the third and fourth
quarters only, which are typically the worst quarters in this seasonal business.
Liquidity and Capital Resources
Operating Activities

For fiscal 2003, we generated cash flow from operations of
$87.3 million, up $22.3 million from the $65.0 million generated in fiscal 2002.
An increase in EBITDA of $21.4 million was the primary factor resulting in the
increase in cash generation. Cash flow from operations for fiscal 2002 of $65.0
million was up $17.2 million from the $47.8 million generated in fiscal 2001.
Increased earnings, combined with lower interest payments, partially offset by
an increase in taxes paid, accounted for the increase. In fiscal 2001, a net
income tax refund was received compared to a net payment of $5.1 million during
2002.
Working capital was $280.7 million at April 30, 2003,
compared to $199.7 million at April 30, 2002, an increase of $81.0 million. The
major factors resulting in the increase in working capital were an increase in
inventory of $40.5 million, a $93.0 million reduction in the current portion of
debt obligations and a $54.7 million reduction in cash. Cash was $58.1 million
at April 30, 2003, compared to $112.8 million at the end of the previous year.
The cash balance at April 30, 2002 included $80.3 million from the April 2002
equity issue that was used in May 2002 to redeem 35% of our senior subordinated
notes. The increase in inventory of $40.5 million was the result of changes in
foreign exchange rates and increased activity in the repair and overhaul
business during the year. Included in inventory are spare aircraft components of
$8.3 million that were transferred from a flying division (where they are
classified as fixed assets) to the repair and overhaul division (where they are
classified as inventory). Accounts receivable were $139.6 million at April 30,
2003, a $7.4 million decrease over the balance at the end of the previous year
primarily due to a general reduction in receivables levels of $14.3 million,
partially offset by the impact of foreign currency translation. The current
portion of long-term debt decreased by $93.0 million compared to the prior year.
The April 30, 2002 amount included 35% of the senior subordinated notes that
were redeemed in Q1 of fiscal 2003 and a short-term U.S. dollar denominated
facility.
Working capital was $199.7 million at April 30, 2002 compared
to $172.7 million at April 30, 2001. The increase of $27.0 million was due
primarily to inventory purchases required to support increased repair and
overhaul and flying operations. Cash was $112.8 million at April 30, 2002,
compared to $23.6 million at the end of the previous year. A portion of the cash
balance ($80.3 million) was subsequently used to redeem 35% of our senior
subordinated notes in May 2002. Accounts receivable were $147.0 million at April
30, 2002, a $9.3 million increase over the balance at the end of the previous
year, primarily due to increased activity levels. Inventory levels at April 30,
2001 were low as a result of asset sales but increased during 2002 to support
growth in helicopter flying and repair and overhaul activities. Payables and
accruals at April 30, 2002 were $140.4 million, a $3.3 million increase from the
balance at the end of the previous year. The current portion of long-term debt
increased by $95.7 million at April 30, 2002 compared to the prior year due to
the inclusion of 35% of the senior subordinated notes that were redeemed in May
2002 and a new U.S. dollar denominated facility.
We believe that we will be able to generate sufficient cash
flow to meet our current and future working capital, capital expenditure and
debt obligation requirements. As at April 30, 2003, we had unused credit
facilities of $69.8million and cash of $58.1 million, for a total of
$127.9 million, compared to a total of $110.7 million at April 30, 2002
(excluding cash of $80.3 million used to redeem a portion of our senior subordinated notes in May 2002).

---

Financing Activities

Total debt (net of cash) was $263.2 million at April 30, 2003,
compared to $311.9 million at April 30, 2002, a decrease of $48.7 million. Net
debt reductions of $66.6 million during the year were offset by the impact of
exchange rates on the translation of our foreign currency denominated debt of
$17.9 million. The improvement in our net debt position and the favourable
re-negotiation of our pricing for our senior credit facilities will result in a
further reduction in the margin over LIBOR and Bankers Acceptance on our senior
credit facilities to 1.0%, effective Q1 2004. This will reduce future interest
costs. At April 30, 2003, the margin was 1.125%.
Total debt (net of cash) was $311.9 million at April 30, 2002,
compared at $440.5 million at April 30, 2001. Net debt reductions of $145.0
million were offset by the impact of exchange rates on the translation of our
foreign denominated debt of $16.4 million. The improvement in our net debt
position resulted in a further reduction in the margin on our senior credit
facilities by 50 basis points, effective July 2002, thus reducing future
interest costs.

|Net Debt Position during Fiscal 2003
|------------------------------------
|(in thousands of Canadian dollars)  
|Opening balance                     
|May 1, 2002                         
|                                    
|$311,942                            
|                                    

As a result of debt reduction and increased EBITDA, the ratio
of total debt (net of cash) to EBITDA improved from 6.5:1 at April 30, 2000 to
1.85:1 at April 30, 2003. During fiscal 2000, we established a target of 3.5:1
for this ratio. The chart below provides a comparison of the reduction in net
debt and the net debt to EBITDA ratio over the last three fiscal years.



During fiscal 2003, we completed the sale-leaseback of six Super Puma AS332L
aircraft, generating net proceeds of $58.5 million that are reflected in the
reduction in net debt at April 30, 2003.

---

On March 11, 2003, we announced that a normal course issuer
bid had been approved by the TSX, allowing us to purchase, if considered
advisable, up to a maximum of 1,299,458 of our subordinate voting shares. Any
purchases under the normal course issuer bid are made in the open market through
the facilities of the TSX and all shares repurchased by us are cancelled. No
purchases have been made under the normal course issuer bid, which remains in
effect until March 11, 2004 or such earlier date as we may complete our
purchases.
In April 2002, we completed an equity offering of 4.2 million
subordinate voting shares, generating net proceeds of $113.9 million of which
$33.6 million was used to pay down credit facilities in April 2002. In May 2002,
we used the balance of these proceeds ($80.3 million) to redeem 35% of our
senior subordinated notes, including a premium of $8.4 million, as permitted by
the terms of the notes. These 11.75% notes were issued on July 5, 2000 at
98.825% of their face value for an effective yield of 12.0%.
On July 5, 2000 we established senior credit facilities with
a Canadian chartered bank. The senior credit facilities consisted of two term
loans and a revolving credit facility in an aggregate amount available of U.S.
$225.0 million. The total amount available was later reduced to U.S. $161.0
million, reflecting the asset sales completed during fiscal 2001. During fiscal
2001, as part of our foreign currency risk management strategy, we converted
U.S. $90.0 million and $38.5 million of the senior credit facilities to pounds
sterling. The total pound sterling debt at April 30, 2003 was £ 55.2 million. At
April 30, 2003, we had drawn $130.8 million of the senior credit facilities
(including letters of credit and guarantees), with $69.8 million remaining
available for future working capital requirements. The senior credit facilities
will mature on July 6, 2005. During fiscal 2003, a short-term U.S. dollar
denominated facility of U.S. $13 million was repaid.
The interest rate on the senior credit facilities decreases
as the ratio of total debt to EBITDA decreases. At April 30, 2003, the interest
rate was Bankers Acceptance or LIBOR plus a margin of 1.125%. Effective July 1,
2003, the margin will be reduced to 1.0% as a result of us achieving thresholds
established in the loan agreement.
To minimize the impact of foreign exchange on our cash flow,
we have denominated our debt in various currencies to more closely match net
operating cash flows with debt service obligations. At April 30, 2003, our net
debt was denominated in the following currencies:

|                          | Debt in           | Canadian   
|------------------------- | ----------------- | -----------
|                          | original currency | equivalent 
|Currency                  | (thousands)       | (thousands)
|U.K.
    pound sterling   | £  55,197         | $126,621   
|Euro                      | 94,250            | 151,111    
|Canadian
    dollar       | CDN 16,373        | 16,373     
|Norwegian
    kroner      | NOK 132,500       | 27,163     
|Cash (various currencies) | -                 | (58,104)   
|Total net debt            |                   | $263,164   

The terms of certain of our debt agreements and helicopter
lease agreements impose operating and financial limitations on us. Such
agreements limit, among other things, our ability to incur additional
indebtedness, create liens, make capital expenditures, sell or sublease assets,
engage in mergers or acquisitions and make dividend and other payments. Our
ability to comply with any of the foregoing limitations and with loan repayment
provisions will depend on future performance. This will be subject to prevailing
economic conditions and other factors, some of which may be beyond our control.
We were throughout fiscal 2003, and continue to be, in compliance with all
covenants and other conditions imposed by our debt and helicopter operating
lease agreements.

At April 30, 2003, we had 17.9 million subordinate voting
shares (2002 - 17.7 million) and 3.0 million multiple voting shares (2002 - 3.0
million) issued and outstanding. The increase in the subordinate voting shares
is due to the issuance of shares under the employee share purchase plan and the
employee stock option plan, share conversions and the conversion of a promissory
note, generating net proceeds of $0.6 million during fiscal 2003.

---

On February 22, 2000, as part of our financing arrangements
with the Bank, we issued warrants to the Bank to purchase up to a total of
1,754,475 subordinate voting shares exercisable at $3.70 per share. Three
separate warrants were issued to purchase 350,895 subordinate voting shares
exercisable from April 30, 2000; 701,790 subordinate voting shares (potentially
exercisable from July 31, 2000); and a further 701,790 subordinate voting shares
(potentially exercisable from October 31, 2000). On July 31, 2000, we received
confirmation from the Bank that all warrants, potentially exercisable on July
31, 2000 and October 31, 2000, were cancelled. In February 2001, the Bank
exercised its warrants to purchase 350,895 subordinate voting shares.
During the year ended April 30, 2001, we issued an additional
1.0 million subordinate voting shares related to the conversion of warrants, the
exercise of options, and the issue of shares under the employee share purchase
plan. Total proceeds from the issue of these shares were $4.6 million. April 30,
2002, we had 17.7 million subordinate voting shares (2001 - 13.4 million) and
3.0 million multiple voting shares (2001 - 3.0 million) issued and outstanding.
The increase in the subordinate voting shares is due primarily to the issuance
of 4.2 million shares as part of our equity offering on April 25, 2002. Shares
issued under the employee share purchase plan generated proceeds of $0.2 million
during the year ended April 30, 2002, compared to $0.2 million in 2001.
We paid a dividend of $0.20 per share or $4.0 million in fiscal 2003. No
dividends were paid during fiscal 2002.
Investing Activities

Capital expenditures of $44.7 million were incurred during
fiscal 2003. Of this amount, $18.4 million related to aircraft additions and
modifications and $26.3 million related to other property and equipment.
Included in aircraft additions and modifications are ongoing aircraft
modifications of $12.3 million and $6.1 million related to the re-build of a
Super Puma aircraft. The other property and equipment additions included $4.0
million for a new passenger terminal in Halifax, Canada, $4.0 million related to
the completion of a new passenger terminal in the U.K., $6.6 million related to
the purchase of major spares, $4.7 million for ground and other flying equipment
and $7.0 million related to the acquisition of new information technology
systems. All of these additions were funded through cash flow from operations.
Proceeds on disposal of capital assets were $74.9 million in fiscal 2003. The
proceeds were derived primarily from the sale-leaseback of six Super Puma AS332L
aircraft for $65.4 million and insurance proceeds of $4.5 million.
Capital expenditures of $37.3 million were incurred during
the year ended April 30, 2002. Of this amount, $23.8 million related to aircraft
additions and modifications and $13.5 million related to other property and
equipment. The other property and equipment additions included $5.9 million for
a new passenger terminal in Aberdeen. Proceeds on disposal of capital assets
were $49.8 million for the year ended April 30, 2002. The proceeds were derived
primarily from the sale-leaseback of aircraft of $25.7 million, insurance
proceeds of $12.2 million and the sale of two S-61s, one Bell 212, and four
light aircraft for proceeds of $8.0 million.
Capital expenditures of $40.1 million were incurred during
the year ended April 30, 2001. Of this amount, $29.1 million related to aircraft
additions and modifications and $11.0 million related to other property and
equipment. The other property and equipment additions included $1.6 million
related to the Composites facility. Proceeds on disposal of capital assets were
$2.7 million for the year ended April 30, 2001.
We spent $3.1million on
pre-operating costs during fiscal 2003, most of which related to the startup of
new contracts during the year.
We spent $7.4 million on pre-operating costs during the year
ended April 30, 2002, most of which related to the startup of our aerospace
composites and bonding facility in Canada, Composites. Pre-operating expenses of
$6.8 million were capitalized during the year ended April 30, 2001. Composites
completed its pre-operating phase as of April 30, 2002, and will commence
amortization of pre-operating costs in fiscal 2003, during which it expects to
generate revenues of approximately $9.0 million from existing contracts.

---

We had no material capital expenditure commitments at April
30, 2003, other than the commitments to take delivery of aircraft as discussed
above in "Commitments to Acquire New Aircraft". Aircraft and other assets
required to accommodate future growth will be purchased with funding from
operations and/or additional debt, or will be leased under operating lease
arrangements.
During the year ended April 30, 2001, we introduced an
Executive Share Purchase Plan, under which certain senior management can use
interest-free loans advanced by us to acquire our shares. The total amount
outstanding under these loans at April 30, 2003 was $3.4 million compared to
$3.5 million at April 30, 2002 and $3.8 million at April 30, 2001.
In order to facilitate debt financing for CHL on a timely
basis at the time of its sale in 2001, we advanced $10.0 million to CHL as part
of the syndication of its term debt. During 2003, this loan was refinanced by
CHL and we were repaid, with no impact on net earnings.
Financial Instruments

We periodically enter into interest rate swaps, forward foreign
currency contracts, equity forward pricing and other derivative instruments to
hedge our exposure to interest rate risk, foreign currency exchange rate risk
and stock price volatility. We do not enter into derivative transactions for
speculative or trading purposes.
The interest rate applicable to our senior credit facilities is
based on floating rates plus a predetermined margin. As at April 30, 2003,
$152.9 million of our total debt obligations were subject to floating interest
rates. To hedge a portion of this interest rate risk, we entered into an
interest rate swap agreement on £ 40.0 million of debt with a Canadian chartered
bank. The difference between the fixed and floating rates is settled quarterly
with the bank and recorded in financing charges. At April 30, 2003, the spot
rate was 3.62%, compared to a rate of 6.90% in the swap agreement, resulting in
a fair value of $(7.6) million.
We have also entered into a monthly forward foreign currency
contract to buy euros for pounds sterling and to sell U.S. dollars for Canadian
dollars to hedge the operating cash flows of certain of our U.K. and
international operations. The net foreign exchange gain related to these forward
foreign currency contracts is recorded in operations and totalled $0.7 million
in fiscal 2003. The fair value of these forward contracts at April 30, 2003 was
$0.8 million.
We have also entered into forward foreign currency indemnity
agreements to purchase euros for U.S. dollars to reduce our risk of exposure to
fluctuations in the euro-U.S. dollar exchange rate. In December 2002, a
euro-U.S. dollar indemnity agreement matured which had been designated as a
hedge related to the purchase of a helicopter that was concurrently sold and
leased back to us. The resultant foreign exchange gain was deferred and is being
amortized against lease expense over the term of the operating lease. At April
30, 2003, the deferred foreign exchange gain recorded in other liabilities as a
deferred gain on the sale-leaseback of aircraft was $2.1 million (net of
amortization of $0.1 million). The fair value of the remaining foreign currency
indemnity agreements at April 30, 2003 was $9.8 million.
In July 2002, we entered into a hedging agreement with a major
Canadian financial institution to hedge our stock appreciation rights plans
("SARs") using an equity forward price agreement to reduce volatility in cash
flow and earnings due to possible future increases in our share price. We accrue
the liability and related expense associated with SARs based on the difference
between the reference price and the hedged price. At April 30, 2003, the amount
recorded in current liabilities related to the SARs was $6.8 million.
The fair value of each of our financial instruments, including
the factors used in making this determination, are described in Note 18 to the
Consolidated Financial Statements included elsewhere in this Annual Report.

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Off-Balance Sheet ArrangementsWe have entered into guarantees and variable interest
arrangements that can broadly be considered as off-balance sheet arrangements.
The following is a summary of the significant off-balance sheet arrangements at
April 30, 2003:
(a)        Guarantees
We have given guarantees to certain lessors in respect of
    operating leases. If we fail to meet the senior credit facilities' financial
    ratios or breach any of the covenants of those facilities and, as a result,
    the senior lenders accelerate repayment of their debt, the leases provide
    for a cross-acceleration that could give the lessors and financial
    institutions the right to terminate the leases and require return of the
    aircraft and payment of the present value of all future lease payments and
    certain other amounts. If the realized value of the aircraft is insufficient
    to discharge the indebtedness due to those lessors in respect of the present
    value of the future lease payments, the financial institution could obtain
    payment of that deficiency from us under these guarantees.
    We have also provided limited guarantees to third parties
    under some of our operating leases in connection with a portion of the
    aircraft values at the termination of the leases. The leases have terms
    expiring between 2004 and 2010. Our exposure under the asset value
    guarantees, including guarantees in the form of junior loans, deferred
    payments and advance rentals, is approximately $36.4 million. The resale
    market for the aircraft types for which we have provided guarantees remains
    strong, and as a result, we do not anticipate incurring any liability or
    loss with respect to these guarantees.
    We have performance guarantees with two customers of a
    third-party lessee. These guarantees have been in effect since August 1995
    and November 1998 and relate to the provision of helicopter transportation
    services involving three heavy aircraft. In the event of non-performance by
    the third-party lessee, the guarantee may require us to continue the
    provision of services under the contract as we are the lessor to the
    third-party lessee of the three helicopters. The guarantees are currently
    being contested as we maintain that the contract renewals with the two
    customers by the third-party lessee were not made in accordance with the
    express terms of the contracts guaranteed by us.
    In addition, as at April 30, 2003 we have provided limited guarantees of
    approximately $47.1 million to third parties, principally related to our
    performance under long-term customer contracts.
(b)        Variable Interest Entities
At April 30, 2003 we operated 17 aircraft under operating
    leases with eight entities that would be considered variable interest
    entities ("VIEs") under U.S. GAAP. These leases have terms and conditions
    similar to those of our other operating leases over periods ending between
    2004 and 2010. Canadian guidance on this issue, "Accounting Guideline 15",
    is consistent with the provisions contained in U.S. GAAP with regard to the
    disclosure and consolidation requirements for VIEs.
    The VIEs are owned by independent third parties and we
    are not involved in the management or administration of these entities.
    During the year ended April 30, 2003, we made payments to these entities of
    approximately $18.5 million in accordance with the terms of our operating
    leases.
    U.S. GAAP per FASB Interpretation No. 46 ("FIN 46"), was
    effective for all VIEs created after January 31, 2003, and will be effective
    for those VIEs created prior to January 31, 2003 for our interim period
    commencing August 1, 2003. The Canadian guidance applies to all annual and
    interim periods beginning on or after November 1, 2004.
    Under both U.S. and Canadian GAAP, we will be required to consolidate
    those entities for which we are deemed to be the primary beneficiary.
    The fair market value of the 17 aircraft leased from the VIEs at April
    30, 2003, based on an independent appraisal, was $241.1 million. We have
    provided junior loans, advance rentals and asset value guarantees in
    connection with operating leases with these VIEs. We have also entered into
    remarketing agreements for the aircraft leased from the VIEs. Our maximum
    exposure to loss as a result of our interest in the VIEs is $19.4 million.
Contractual ObligationsThe following table contains a summary of our obligations and
commitments to make future payments under contracts, including debt, lease and
purchase agreements at April 30, 2003. Additional information is contained in
Notes 11 and 23 to the Consolidated Financial Statement included elsewhere in
this Annual Report.Payments due by period(in millions of Canadian dollars)Total
    Lessthan 1
    year
    1 - 3years
    3 - 5years
    More
    than5 yearsContractual
    obligationsLong-term debt
    $159.0
    $19.6
    $112.3
    $4.8
    $22.3Senior subordinated
    notes
    151.1
    -
    -
    151.1
    -Subordinated debentures
    11.1
    0.7
    1.5
    8.9
    -Operating lease
    (aircraft)
    172.6
    42.4
    66.2
    38.8
    25.2Operating lease (other)
    45.5
    6.0
    10.3
    8.2
    21.0New aircraft
    commitments
    152.6
    107.9
    44.7
    -
    -Total contractualobligations
    $691.9
    $176.6
    $235.0
    $211.8
    $68.5Defined Benefit Pension PlansApproximately one-third of our active employees are covered
by defined benefit pension plans. The plans in the U.K. are closed to new
members. At April 30, 2003, we had net unfunded deficits of $72.8 million
relating to defined benefit pension plans that are required to be funded,
compared to $2.3 million at April 30, 2002, an increase of $70.5 million. Of the
$72.8 million unfunded deficits at April 30, 2003, $55.7 million and $17.1
million were related to plans in the U.K. and Norway, respectively. In addition,
at April 30, 2003, we had a deficit of $34.4 million related to plans that do
not require funding, compared to a deficit of $29.3 million for those same plans
at April 30, 2002.
The unfunded deficits relating to funded and unfunded plans
increased by $70.5 million and $5.1 million, respectively, during fiscal 2003.
This has been the result of weak performance in the world's financial markets
and changes in actuarial assumptions as at April 30, 2003. Investment
performance has been at or near the relevant benchmarks for the type of
investments contained in our defined benefit plans.
Pension expense for fiscal 2003 was $16.1 million, compared
to $14.1 million for fiscal 2002. At April 30, 2003 we undertook a complete
review of the performance of the pension plans in 2003 and the appropriate
assumptions. This review, with the assistance of our actuaries, resulted in a
change in key assumptions, including the weighted average discount rate, rate of
compensation increase and long-term expected rate of return on plan assets from
6.53%, 2.63% and 7.22% respectively at April 30, 2002 to 5.78%, 3.37% and 6.89%,
respectively, at April 30, 2003. These assumption changes resulted in an
estimate of pension expense for fiscal 2004 of $27.4 million. The estimated
increase of $11.3 million from fiscal 2003 relates to a $5.7 million increase in
the amortization of net actuarial and experience losses and $5.6 million due to
assumption changes.
The following chart reflects the sensitivities associated with a change in
certain actuarial assumptions:
Impact on projected
    Impact on pensionChange in
    benefit obligation
    expenseActuarial assumption
    assumption
    ($ millions)
    ($ millions)Discount
    rate
    1%
    $67.3
    $5.2Rate of
    compensation increase
    1%
    39.7
    4.0Rate of
    return on plan assets
    1%
    no impact
    3.2While the asset mix varies in each plan, overall the asset
mix is 38.4% equities, 20.1% fixed income and 41.5% money market as at April 30,
2003. Our U.K. defined benefit plans contained equities comprising 84.2% of
their total plan assets. The Norwegian defined benefit plans contained a
significantly lower portion of their total plan assets in equities (8.7%), with
the remainder being held in fixed income and money market assets.SeasonalityFollowing the completion of the sale of non-core operations
during fiscal 2001, our remaining operations are not significantly seasonally
affected. See "Quarterly Information" for additional discussion on the impacts
of seasonality.Foreign CurrencyWe prepare consolidated financial statements in Canadian
dollars, as described in Note 1 to the Consolidated Financial Statements
included elsewhere in this Annual Report. A significant portion of our
operations has revenues and expenses that are denominated in foreign currencies
including the U.S. dollar, the U.K. pound sterling, the Norwegian kroner, the
euro, the Australian dollar and the South African rand.
Our overall approach to managing foreign currency exposures
includes identifying and quantifying our exposures and putting in place the
necessary financial instruments to manage the exposure. In managing this risk,
we use financial instruments including forwards, swaps and other derivatives. We
operate under a corporate policy that restricts us from using any financial
instrument for speculative purposes. The policy provides that we may participate
in derivative transactions only with Schedule 1 Canadian chartered banks or
other financial institutions with an "A" credit rating.
We have developed a risk management plan to mitigate
potential risks with respect to foreign currencies. The strategy is to match
cash inflows and outflows by currency, thereby minimizing net currency exposures
to the extent possible. This is accomplished by ensuring that customer
contracts, major expenditures and debt are denominated in the appropriate
currencies.
To mitigate the impact that weakening European currencies
could have on operating cash flows, we have denominated a significant portion of
our long-term debt in pounds sterling, euros and Norwegian kroner.
In addition, we entered into forward foreign currency
contracts and foreign currency indemnity agreements to hedge the impact of
fluctuations in foreign currency exchange rates on our cash flows. See
"Financial Instruments" for additional details.
We also have an accounting exposure to foreign currency
fluctuations on the translation of the financial statements of our foreign
subsidiaries into the reporting currency. Throughout fiscal 2003, most of the
major currencies in which our foreign operations financial statements are
denominated strengthened against the Canadian dollar (see Note 17 to the
Consolidated Financial Statements included elsewhere in this Annual Report) .
During fiscal 2003, revenues and EBITDA were favourably impacted by $56.9
million and $12.4 million respectively, as a result of translation of the
financial statements of foreign subsidiaries.
Approximately two-thirds of our revenues in the International
segment are denominated in U.S. dollars. During the fourth quarter of fiscal
2003, the U.S. dollar weakened against the Canadian dollar. Our financial
results were not significantly impacted in fiscal 2003 by this change due to
forward contracts to sell U.S. dollars that were entered into early in fiscal
2003. However, our revenues and net earnings could be significantly impacted in
fiscal 2004 if the U.S. dollar does not strengthen against the Canadian dollar.
The table in "Risks and Uncertainties" below provides information on the impact
of changes in the U.S. dollar and other exchange rates on our earnings.During fiscal 2001, we designated our euro and pound sterling
debt as a hedge of our net investment in foreign operations in the U.K. and
Norway (the "net investment hedge"). Gains and losses on this hedge are offset
against foreign currency translation adjustments on our net investment in
foreign operations, which are deferred as a separate component of shareholders'
equity until realized.Risks and UncertaintiesWe record transactions and prepare our financial statements
in Canadian dollars. For the year ended April 30, 2003, we maintained operations
in the U.K., Norway, Sweden, South Africa and Australia, with business also
conducted in other countries. These operations are considered financially and
operationally self-sustaining. Accordingly, our assets and liabilities are
translated into Canadian dollars at the year-end exchange rate. Revenue and
expense items are translated into Canadian dollars at average exchange rates for
the period. Because many of our revenues and expenses are generated in
currencies other than Canadian dollars, we are exposed to exchange rate and
currency risks.
To perform sensitivity analysis, we assess the risk of loss
in fair values due to the impact of hypothetical changes in interest rates and
foreign currency exchange rates on market sensitive instruments. Information
provided by the analysis does not necessarily represent the actual changes in
fair value that we would incur under normal market conditions because, of
necessity, all variables other than the specific market risk factor are held
constant.
The table below provides a summary of the impact on EBITDA
and net earnings of a one percent change in the exchange rate of our three major
operating currencies against the Canadian dollar. The table also provides the
impact on net earnings of a one percent change in the LIBOR rate.Foreign currency and
    
    
    Impact on 2003 netinterest rate
    
    Impact on 2003 EBITDA
    earningssensitivity analysis
    Change
    ($ millions)
    ($ millions)Exchange ratesU.K. pound sterling
    1%
    $0.6
    $0.3Norwegian kroner
    1%
    0.7
    0.2U.S. dollar
    1%
    0.6
    0.4Interest ratesLIBOR
    1%
    not applicable
    $1.3Interest rate swap
    1%
    not applicable
    0.9We have long-term debt denominated in foreign currencies as
detailed in Note 11 to the Consolidated Financial Statements included elsewhere
in this Annual Report. A one percent change in the euro, pound sterling and the
NOK foreign exchange rates against the Canadian dollar would have resulted in a
change in the fair value of our long-term debt denominated in these currencies
of $1.5 million, $1.3 million and $0.3 million, respectively, at April 30, 2003.
Our foreign currency denominated debt has been designated as a net investment
hedge. As a result, a change in the fair value of the debt would have no impact
on net earnings.
As at April 30, 2003, we were not exposed to market risk from changes in the
market value of our long-term investments as we did not hold any publicly-traded
long-term investments.Other Risks

Industry Exposure

During fiscal 2003, we derived 72.4% ($523.3 million) of our
revenues from the provision of helicopter transportation services to customers
in the offshore oil and gas industry. We believe the future demand for these
helicopter services and our competitive position will enable us to continue to
be a major provider of helicopter transportation services to the oil and gas
industry. However, a change in the demand for offshore oil and gas or the entry
of significant new competitors could have a material impact on our revenues from
our customers in the offshore oil and gas industry. Approximately 80.4% of our
revenues from customers in the oil and gas industry are derived from the more
stable oil and gas production activities, which tend to be less affected by
short-term fluctuations in oil and gas prices.

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Contract Loss

The potential cancellation or loss of contracts is a risk for
us. In fiscal 2003, revenue from one of our oil and gas customers, bp, totalled
$88 million generated by five contracts in our North Sea and international
operations expiring between fiscal 2003 and 2011. During fiscal 2003, we were
advised that we were unsuccessful in renewing the largest of these contracts,
which generated $49.3 million of revenue in fiscal 2003. This contract expires
on July 31, 2004. During fiscal 2004, we expect to have contracts with annual
revenues of $125 million, representing 25.5% of revenue from long-term contracts
or 17.3% of total fiscal 2003 revenue, come up for renewal. Our long-term
contracts greater than two years in duration, excluding the bp contract expiring
on July 31, 2004, total $491 million at April 30, 2003, and are expected to come
up for renewal as follows:



Aviation Licenses

Companies wishing to hold a license to operate helicopters in
Europe must be owned and controlled by a citizen of a country of the European
Union. Our ability to hold aviation licenses in Europe is contingent on our
controlling shareholder, Mr. Craig L. Dobbin, who is a citizen of both Canada
and the Republic of Ireland, a European Union member country, owning and
controlling us. As required by our senior credit facilities, we have developed a
proposal for steps that we may take so that our operating licenses in Europe are
not dependent on the citizenship of Mr. Craig L. Dobbin. The proposal must be
capable of being implemented within six months of a request by the lenders.
During fiscal 2002 Mr. Dobbin's five adult children were granted Irish
citizenship, thereby providing a further succession alternative to ensure our
long-term eligibility to operate in Europe.

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Application of Critical Accounting PoliciesThe preparation of our Audited Consolidated Financial
Statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the dates of the financial statements and the reported
amounts of revenue and expenses during the reporting periods. By their nature
these estimates are subject to measurement uncertainty. The effect on the
financial statements of changes in such estimates in future periods could be
material and would be accounted for in the period a change occurs. These
critical accounting policies and the alternatives have been reviewed with our
Audit Committee. The following are our key accounting policies and estimates:
i)           Recoverability of pre-operating expenses
The ability to defer pre-operating expenses is dependent
    on the future recoverability of the amounts from cash flows generated by the
    related commercial operations. If operations perform below anticipated
    recoverable levels, the portion of pre-operating expenses that cannot be
    recovered is expensed immediately when known. At April 30, 2003, management
    evaluated the recoverability from cash flows of future operations of the
    carrying value of pre-operating costs included in other assets related to
    Composites. We determined it appropriate to write down the entire book value
    of such pre-operating costs of $12.8 million as an asset impairment charge
    (see Notes 2 and 9 to the Consolidated Financial Statements included
    elsewhere in this Annual Report). At April 30, 2003, $3.4 million in
    unamortized pre-operating expenses related primarily to contract start-up
    costs remained in other assets on the balance sheet (2002 - $15.9 million).
ii)         Flying asset amortization
Flying assets are comprised of airframes and components.
    The airframes represent approximately 30% of the value of an aircraft and
    are amortized to amortization expense on a straight-line basis over their
    estimated useful life of 15 years. This amortization period may be
    conservative as airframes often have lives in excess of 15 years.
    The helicopter airframes and components are inspected,
    repaired and overhauled at pre-specified intervals. Such costs are
    capitalized to flying assets and are amortized to operating expense over
    their period of expected future benefit based on flight hours. This requires
    management to estimate the period of expected future benefit for each type
    of component and inspection. Such estimates are based on mandated inspection
    and overhaul intervals and on previous experience. These estimates could
    therefore vary materially from actual experience.
iii)         Carrying value of flying assets
At April 30, 2003, the appraised value of our flying
    assets exceeded the carrying value by $185.1 million. The recoverability of
    the book value of these assets is, in part, dependent on the estimates used
    in determining the expected period of future benefits over which to amortize
    flying assets. In addition, such recoverability is dependent on market
    conditions, including demand for certain types of aircraft and changes in
    technology arising from the introduction of newer, more efficient aircraft.
iv)         Defined benefit employee pension plans
We maintain both funded and unfunded defined benefit
    employee pension plans in the U.K., Norway and Canada for approximately
    one-third of our active employees and certain former employees. Several
    statistical and judgmental factors, which attempt to anticipate future
    events, are used in measuring our obligations under the plans and the
    related periodic pension expense. These factors include assumptions about
    the rate at which the pension obligations are discounted, the expected
    long-term rate of return on plan assets and the rate of future compensation
    increases. In addition, our actuaries use other assumptions such as
    withdrawal and mortality rates. The estimates and assumptions used may
    differ materially from actual results due to changing market and economic
    conditions, changing withdrawal rates and changing overall life spans of
    participants. These differences may have a material
    impact on the amount of pension expense recorded and on the carrying value
    of the plans' net assets or net liability position. Management reviews
    annually the assumptions used in measuring the pension plans' obligations to
    determine their appropriateness based on actual experience and current and
    anticipated market conditions.

---

v)         Effectiveness of foreign currency hedge
We have designated our euro denominated debt as a hedge
    of our Norwegian kroner ("NOK") denominated net investment in our
    self-sustaining foreign operations. As a result, translation losses of $15.4
    million (net of taxes of $3.8 million) as at April 30, 2003 (2002 - $1.8
    million) on the revaluation of this euro denominated debt have been recorded
    as a foreign currency translation adjustment in shareholders' equity. We
    believe, based on the stated policy of the Norwegian government, that the NOK will track the euro, and based on our experience, the euro debt is and
    will continue to be an effective hedge of the Norwegian operations. If
    circumstances change in the future, including the assumption that the NOK
    will track the euro, then the hedge may become ineffective. This would
    result in revaluation gains and losses on the euro denominated debt being
    charged to earnings in each period. At April 30, 2003, we determined that
    hedge accounting was still appropriate, but a portion of the hedge was
    deemed to be ineffective under U.S. GAAP (see Note 29 to the Consolidated
    Financial Statements included elsewhere in this Annual Report). As a result,
    a gain of $4.9 million was recognized in net earnings in fiscal 2003 under
    U.S. GAAP.
vi)        Utilization of income tax losses
We have accumulated $61.4 million and $13.6 million in
    non-capital and capital tax losses, respectively, as at April 30, 2003. The
    non-capital losses expire between fiscal 2006 and 2013, while the capital
    losses carry forward indefinitely. Management has determined that it is more
    likely than not that the benefit of all of these losses will be realized in
    the future, and accordingly has recorded future income tax assets of $22.7
    million related to these losses. This determination was based on assumptions
    regarding the reversal of existing future income tax liabilities and future
    earnings levels in the subsidiaries with accumulated losses, and an ability
    to implement routine tax planning measures. If, in the future, it is
    determined that it is more likely than not that all or part of the future
    tax assets will not be realized, a charge will be made to income in the
    period such determination is made.
vii)        Aircraft operating leases
Upon entering into a new aircraft leasing arrangement,
    management evaluates whether substantially all of the benefits and risks of
    ownership related to the aircraft have been transferred to the lessor in
    order to determine if the lease is classified and recorded as capital or
    operating. Currently, all of our aircraft leases are classified and recorded
    as operating leases. One of the criteria used in determining whether the
    benefits and risks have been transferred is whether the present value of the
    minimum lease payments is less than 90% of the fair value of the leased
    aircraft at the inception of the lease. Another criteria that is evaluated
    is whether there is a bargain purchase option at the end of the lease
    compared to the estimated fair market value of the aircraft at that time. At
    the time of entering into a new aircraft leasing arrangement we obtain an
    independent appraisal from a helicopter valuation company of the estimated
    fair value of the aircraft at the beginning and end of the lease term. These
    appraisals involve the use of estimates on current and future condition of,
    and demand for, the particular aircraft type. Different valuation companies
    may calculate different appraisal values for the same aircraft based on
    different assumptions used. The use of different estimates of fair market
    value based on the appraisals could result in a different lease
    classification. The appraised value of our fleet of leased aircraft as at
    April 30, 2003 was approximately $457 million (2002 - $410 million).
viii)     Variable interest entities
At April 30, 2003, we were leasing 17 aircraft from eight
    VIEs. During the year Canadian GAAP and U.S. GAAP were revised and now
    require us to assess each of these entities at each reporting date to ensure
    that it continues to satisfy the criteria for non-consolidation (see Note 24
    to the Consolidated Financial Statements included elsewhere in this Annual
    Report for transition provisions). In performing this assessment, we are
    required to make a number of estimates, including the range of possible
    outcomes at the end of the lease. In the case of our VIEs, these possible
    outcomes relate to the estimated asset values at the end of the lease. In
    addition to developing a range of possible outcomes, we are required to
    assign a probability to each potential outcome. The possible
    outcomes identified by us and the probabilities chosen can significantly
impact the assessment of whether a particular VIE is required to be consolidated
by us.



---

Principal Differences between Canadian GAAP and U.S. GAAPThe consolidated financial statements have been prepared in
accordance with Canadian GAAP, which differs in certain respects from U.S. GAAP.
Under U.S. GAAP, net earnings for the years ended April 30, 2003 and 2002 were
$87.3 million and $52.1 million, respectively, compared to net earnings of $66.1
million and $47.3 million, respectively, under Canadian GAAP. These differences
result primarily from the differing accounting treatments for (i) foreign
currency contracts, (ii) the ineffective portion of a net investment hedge,
(iii) the deferral of pre-operating expenses and (iv) income tax rate changes. A
description of the significant differences applicable to us and a reconciliation
of Canadian GAAP to U.S. GAAP are set out in Note 29 to the Consolidated
Financial Statements included elsewhere in this Annual Report.
Summary Financial Data - U.S. Dollars

Certain summary financial data from the Consolidated
Financial Statements, as detailed below, has been translated into U.S. dollars.
This translation is included solely as supplemental information for the
convenience of the reader. The data has been translated at the exchange rate at
April 30, 2003 of $1.4335 = U.S. $1.00.

|                                 | Financial Highlights                                  
|-------------------------------- | ------------------------------------------------------
|                                 | (in millions of U.S. dollars except per share amounts)
|                                 |                                                       
|                                 |                                                       
|                                 | Year Ended                                            
|                                 | April 30,                                             
|                                 | 2003                                                  
|                                 |                                                       
|Revenue                          | $503.9                                                
|EBITDA                           | 99.2                                                  
|Net
    earnings from operations | 48.8                                                  
|Net
    earnings                 | 46.1                                                  
|Cash flow
    from operations    | 60.9                                                  
|                                 |                                                       
|Per Share
    Information:       |                                                       
|Net
    earnings from operations |                                                       
|Basic                            | $2.36                                                 
|Diluted                          | 2.18                                                  
|Net
    earnings                 |                                                       
|Basic                            | 2.23                                                  
|Diluted                          | 2.05                                                  

(1) See Note 4(a) to the Consolidated Financial Statements included elsewhere
in this Annual Report.

Inflation

Although we believe that inflation has not had any material effect on
operating results, our business may be affected by inflation in the future.

Accounting Changes in 2003

Translation of foreign currencies

Effective May 1, 2002, we retroactively adopted, with restatement of
individual prior periods, the new Canadian accounting recommendations with
respect to foreign currency translation which conform substantially to U.S. GAAP. These recommendations
require that unrealized exchange gains and losses on the translation of
long-term debt that is not included in our net investment hedge be included in
earnings immediately. The impact of adopting these new recommendations was a
$0.5 million decrease in opening retained earnings at May 1, 2001, an increase
in other assets of $0.2 million as at April 30, 2002 and a decrease in financing
charges (net of taxes) of $0.7 million for fiscal 2002. As a result, May 1, 2002
opening retained earnings were increased by $0.2 million. During fiscal 2003, a
net gain of $0.8 million was recorded.

---



Stock-based compensation plans

Effective May 1, 2002, we retroactively adopted, without
restatement of prior periods, the new Canadian accounting recommendations with
respect to stock-based compensation. The recommendations require the use of a
fair value-based approach to accounting for specified stock-based compensation
awards, including our SARs. The impact of adopting the new recommendations
related to our SARs granted prior to May 1, 2002 was a charge against retained
earnings of $1.7 million, the recording of a long-term future income tax asset
of $1.0 million and an increase of $2.7 million in payables and accruals.

The recommendations require that compensation expense related
to share options be calculated under the fair value method or, where the fair
value method is not used, pro-forma disclosure of net earnings and earnings per
share had the fair value method been used is required. We account for share
capital options based on their intrinsic value at the date of grant, and
accordingly have not recognized compensation expense for our share option plan.

New Accounting Standards

During fiscal 2004, new accounting standards in Canada and the U.S. will
become effective for VIEs. A discussion of the anticipated impact on us is
included in "Off-Balance Sheet Arrangements".

Outlook

Activity levels in the North Sea, our major market, decreased
in 2003 compared to activity levels in 2001 and 2002. Industry analysts are
forecasting that activity levels will start to recover during the latter part of
calendar 2003.

The North Sea market is presently undergoing a transformation
as a number of major oil and gas companies are divesting older oil and gas
assets in order to focus on emerging oil and gas regions other than the North
Sea. A number of assets have been sold to smaller operators who intend to invest
in these assets, thereby extending their lives.

Activity in our international markets remains strong, with
significant opportunities for growth in Asia, South America, Africa and the east
coast of Canada. In addition, we are continuing to pursue opportunities to
extend our search and rescue services as an increasing number of countries
consider privatizing these services.

On July 31, 2004, our contract with bp in Aberdeen, Scotland
will expire, at which time a new helicopter service provider will assume
operation of the contract. We are working to re-deploy the aircraft currently
servicing the bp contract. While none of these aircraft have yet been committed
to new contracts, a number of potential opportunities exist in our international
operations outside the North Sea.

Approximately half of the long-term contracts in our
international segment are up for renewal during fiscal 2004. Many of these
contracts are with long-time customers. We expect that our superior service,
quality fleet and established infrastructure will result in the renewal of these
contracts.

In order to ensure that we can continue to offer superior
service to our current and future customers, we will continue to re-invest in
new aircraft during 2004. Three new Super Puma MkII aircraft will be added to
the fleet in fiscal 2004 to satisfy customer commitments in the North Sea under
long-term contracts renewed during fiscal 2003. In addition, we will take possession of
four new S76C+ medium aircraft in December 2003 to service our growing
international markets.

Our operations are primarily denominated in European and U.S. currencies.
Some of these currencies weakened against the Canadian dollar during the latter
part of fiscal 2003 and into fiscal 2004. The continuance of this trend could
have a significant negative impact on our earnings upon translation into
Canadian dollars.

A major focus during fiscal 2004 will be on implementing cost
reduction measures in our U.K. operations and completing the implementation of a
combined European structure to support our North Sea helicopter flying
operations.

Our focus in fiscal 2004 will be on continuing to meet demand
from customers for increased flying hours, negotiating price increases for
contracts that expire during the year and identifying new opportunities within
the core businesses that meet our investment targets.

While we now have a major position in most of the world's
major offshore oil and gas markets, we intend to continue to identify
opportunities to expand our global presence in order to position ourselves for
future growth in existing and emerging oil and gas markets. We will continue to
apply our rigorous evaluation process to ensure new opportunities fit with our
core businesses and satisfy our investment targets.

---

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

The following table sets forth certain information regarding
our directors and executive officers as of the date hereof. Our directors are
elected each year at the annual general meeting to serve a term of one year or
until a successor is elected or appointed.

|Name
    and Municipality                            | Age | Position                             
|---------------------------------------------------- | --- | -------------------------------------
|                                                     |     |                                      
|Craig L.
    Dobbin, O.C. (5)                        | 68  | Chairman
    of the Board and Chief  
|St.
    John's, Newfoundland, Canada                 |     | Executive
    Officer                
|Harry R.
    Steele, O.C. (2)                        | 74  | Director                             
|Dartmouth, Nova Scotia, Canada                       |     |                                      
|John J.
    Fleming, C.A.(1)(3)                      | 63  | Director                             
|Calgary,
    Alberta, Canada                         |     |                                      
|The
    Honourable Frank D. Moores, L.L.D. (1)(2)(4) | 70  | Director                             
|Elgin,
    Ontario, Canada                           |     |                                      
|Michael
    A. Wadsworth, Q.C (1)(3)                 | 60  | Director                             
|Toronto,
    Ontario, Canada                         |     |                                      
|The
    Honourable Brian V. Tobin                    | 49  | Director                             
|Ottawa,
    Ontario, Canada                          |     |                                      
|Craig C.
    Dobbin (5)                              | 38  | Director                             
|St.
    John's, Newfoundland, Canada                 |     |                                      
|Steven K.
    Hudson, FCA (2)                        | 45  | Director                             
|Toronto,
    Ontario, Canada                         |     |                                      
|Professor
    John J. Kelly, B.E., PhD (3)           | 68  | Director                             
|Dublin,
    Ireland                                  |     |                                      
|Sylvain
    A. Allard, M.B.A                         | 45  | President                            
|St.
    John's, Newfoundland, Canada                 |     |                                      
|Jo Mark
    Zurel, C.A                               | 39  | Senior
    Vice-President and Chief  
|St.
    John's, Newfoundland, Canada                 |     | Financial
    Officer                
|Derrick
    F. Sturge, FCA                           | 43  | Vice-President, Finance and Corporate
|St.
    John's, Newfoundland, Canada                 |     | Secretary                            
|Rick
    Green, C.G.A                                | 46  | Vice-President, Global Systems and   
|St.
    John's, Newfoundland, Canada                 |     | Solutions                            
|Jamie D.
    Roberts, C.A                            | 38  | Corporate
    Controller             
|St.
    John's, Newfoundland, Canada                 |     |                                      
|David R.
    Loveys, C.A                             | 47  | Corporate
    Treasurer              
|St.
    John's, Newfoundland, Canada                 |     |                                      

(1) Member of Audit Committee 
(2)

Craig L. Dobbin, O.C., has served as Chairman of the
Board since June 1987 and was Chief Executive Officer from June 1987 until
December 1, 1994. He was appointed Chief Executive Officer again on April 30,
1998.

Harry R. Steele, O.C., has served as a director since
1990. Mr. Steele is the Chairman of Newfoundland Capital Corporation Limited, a
communications company engaged in radio broadcasting, and for more than nine
years prior thereto, had been Chairman and Chief Executive Officer. Mr. Steele
is also a director of Dundee Bancorp Inc., Hollinger Canadian Newspapers G.P.,
Inc. and Halterm Income Fund.

---



John J. Fleming became a director during 1995. Since 1995
Mr. Fleming has been President and Chief Executive Officer of Bonanza Energy
Ltd., a Calgary-based investment company. Mr. Fleming also serves as President
and Chief Executive Officer of Transatlantic Petroleum Corp. Prior to 1995, Mr.
Fleming served as Chairman and Chief Executive Officer of Excel Energy Inc.,
Voyager Energy Inc., and the Bonanza Group of Companies. Mr. Fleming is a
director of a number of publicly listed companies that include Transatlantic
Petroleum Corp., Newfoundland Capital Corporation, Southwestern Resources Corp.,
Canabrava Diamond Corporation, Aurora Platinum Corp., and Rival Energy Ltd. He
has over thirty years experience in the oil, gas and financial management
business.

The Honourable Frank D. Moores, L.L.D., became a director
during 1995. Mr. Moores has served as a Member of Parliament, President of the
Progressive Conservative Party of Canada, Leader of the PC Party of Newfoundland
and Premier of the Province of Newfoundland. For more than the past seven years
Mr. Moores has been Chairman and Chief Executive Officer of SSF (Holdings) Inc.,
an investment management and consulting company.

Michael A. Wadsworth, Q.C., became a director during
1995. Mr. Wadsworth was a member of the Department of Foreign Affairs,
Government of Canada, from August 1989 until March 31, 1995, having served as
the Ambassador to Ireland from 1989 until October 1994. Since then he served as
an administrator in higher education at the University of Notre Dame, Notre
Dame, Indiana until 2000 and since October 2000 he has been a member of the law
firm of Stitt Feld Handy Group, Toronto, Ontario.

Craig C. Dobbin became a director during 1998. From
January 2002 until March 2003, he was a Vice-President of CHC Helicopter
Corporation. From 1999 to January 2002, he was Director of Marketing with CHC
Composites Ltd. From 1995 to 1999, he was the President of Seaforest Plantation
Co. Ltd., a cod aquaculture company. Since 1996, he has been General Manager of
Canadian Northern Outfitters, an executive wilderness retreat. From 1991 to
1993, he was employed as the marketing director for GPA Helicopters Limited (a
division of CHC) and from 1993 to 1995 he was Manager of Corporate Planning for
Air Atlantic Limited and subsequently served on the Board of Directors of Air
Atlantic (1995) Limited.

Steven K. Hudson, FCA became a director during 1999.
Since March 2003, Mr. Hudson has been the President and CEO of the Hair Club in
Boca Raton, Florida. Previously he was Managing Partner of Cameron Capital, a
private equity investing company. From 1999 to April 2002, he was a founding
partner and Executive Chairman of Borealis Capital, a leading Canadian firm in
alternative asset investing. His experience during the past 20 years includes
the creation and nurturing of successful financial services companies, including
Newcourt Credit Group in 1984, which was acquired by the CIT group in 1999. In
addition to his corporate track record, Mr. Hudson's past and current community
involvement includes Toronto's recent Olympic Bid, University Health Network
campaign, the Toronto Community Foundation and Ontario's Promise - The
Partnership for Children and Youth.

Professor John J. Kelly, B.E., PhD became a director
during 1999. He holds both a Bachelor of Engineering and a Ph.D. degree from
University College, Dublin. On graduation, he worked for a number of years in
the petroleum industry in the U.K. and in Ireland, after which he was appointed
to the staff of the School of Engineering in University College, Dublin, where
he served as Dean of Engineering, from 1979 to 1986, from 1986 to 1994 as
Registrar/Senior Vice-President of the University and Professor of Chemical
Engineering at the University until 2000. He was a Fulbright Scholar to the
University of Maryland, where he was Visiting Professor in its School of
Engineering. Professor Kelly was the director of the Fulbright Scholarship
Program between Ireland and the United States from 1996 to 2000, and acts as
Executive Secretary of the Ireland Canada University Foundation.

The Honourable Brian V. Tobin was first elected to the
House of Commons in 1980, was reelected in 1984, 1988 and 1993 and appointed
Minister of Fisheries and Oceans for Canada in November 1993. In 1996, Mr. Tobin
entered provincial politics as the sixth Premier of his native province,
Newfoundland and Labrador, a position he maintained until October 2000, at which
time he was elected to the Canadian Parliament and appointed Minister of
Industry. After 22 years in public life, Mr. Tobin retired from politics in January 2002. He is currently vice-chairman of the Board of
Directors of Kruger Inc., a privately held pulp and paper company, a director of
the Canadian Recording Industry Association, Clarke Inc., Grey Island Systems,
Rally Energy and Strategic Counsel of Fraser, Milner, Casgrain, a major Canadian
law firm and is senior advisor to Borealis Capital Corporation.

---



Sylvain A. Allard, M.B.A. has been employed by us for the
past 21 years starting as a pilot. After completion of his MBA at Concordia
University, he moved through increasingly responsible management positions
within our operating divisions. He has served as president of our eastern Canada
division, and most recently as president of our International division. On April
30, 1998, Mr. Allard was appointed to the position of President.

Jo Mark Zurel, C.A. was appointed to the position of
Senior Vice-President and Chief Financial Officer in January 2000. He has been
our Chief Financial Officer since June 1998 and was Secretary from June 1998
until January 2000. Prior to that, he had been Corporate Controller since May
1994. Before joining our company, he was a Senior Manager with Grant Thornton
(formerly Doane Raymond), a chartered accounting firm, where he worked for eight
years in both Newfoundland and Nova Scotia.

Derrick F. Sturge, FCA joined our company in March 2000
as Vice-President, Finance and was appointed as Assistant Corporate Secretary in
July 2001 and Corporate Secretary in August 2003. Prior to that, he had been
Vice-President and Chief Financial Officer with Voisey's Bay Nickel Company
Limited (a wholly-owned subsidiary of Inco Limited), a nickel, copper and cobalt
mining company, since October 1996. Previously he was Director, Rates and
Financial Planning, for Newfoundland and Labrador Hydro (which is engaged in
electricity generation, transmission and distribution) and in public accounting
with Touche Ross & Co. (now Deloitte & Touche).

Rick Green, C.G.A. has been employed by us for the past
16 years. He began as the Chief Accountant with a predecessor company, Sealand
Helicopters Limited, and moved through increasingly responsible positions within
the Corporation. In 1988 he was named Assistant Corporate Controller. In 1993 he
moved into an Internal Audit function until 1995 when he was appointed as
Vice-President, Finance in our International division. He remained in this
position until 2000 when he was appointed Vice-President, Planning and Control.
In May, 2003 he assumed the role of Vice-President, Global Systems and
Solutions.

Jamie D. Roberts, C.A. joined the Company as Corporate
Controller in July 2003. Prior to that he spent nine years as Senior
Vice-President, Finance with Persona Communications Inc., a cable television and
internet service provider. Previously he was employed in public accounting with
Deloitte & Touche.

David R. Loveys, C.A. joined our company on August 17,
1998, as Corporate Treasurer and Tax Manager. Prior to that, he spent 12 years
in various senior management positions with the Newtel Enterprises Limited group
of companies, and prior to that he worked for eight years with Deloitte & Touche,
a chartered accounting firm.

---



REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the financial reporting process
on behalf of the Board of Directors. In order to carry out this responsibility,
the Audit Committee, which consists entirely of "outside" directors, meets
quarterly to review the Corporation's financial statements and recommends their
approval to the Board of Directors. The Audit Committee also reviews, on a
continuing basis, any reports prepared by the Corporation's external auditors
relating to the Corporation's accounting policies and procedures, as well as its
internal controls. Financial information prepared for securities commissions and
similar regulatory bodies is also examined by the Audit Committee before filing.
The Audit Committee meets independently with management and the external
auditors to review the involvement of each in the financial reporting process.
These meetings are designed to facilitate any private communication with the
Audit Committee, which may be desired by any party. The Audit Committee
recommends the appointment of the Corporation's external auditors, who are
elected annually by the Corporation's shareholders. During the year ended April
30, 2003, the Audit Committee met six times.

In carrying out their responsibilities, the Audit Committee has:

- 

discussed with the external auditors
  the matters required by Canadian regulators in accordance with Section 5751 of
  the General Assurance and Auditing Standards of the Canadian Institute of
  Chartered Accountants "Communications with Those Having Oversight
  Responsibility for the Financial Reporting Process" and by U.S. regulators in
  accordance with the Statement on Auditing Standards No. 61 "Communication with
  Audit Committee" issued by the American Institute of Certified Public
  Accountants;

received written disclosures from
  the independent chartered accountants required by the U.S. Securities and
  Exchange Commission in accordance with the Independence Standards Board
  Standard No.1 "Independence Discussions with Audit Committees"; and,

discussed with the external auditors
  their independence.

In addition to its ongoing roles and responsibilities, during 2003 the Audit
Committee took the following actions:

1. Approved the creation of an internal audit
  function that will report to the President and the Audit Committee;
2. Approved a new policy
  "Approval of Audit and Non-Audit Services" to ensure that appropriate
  processes are in place to satisfy regulatory requirements. This policy will
  also allow the Audit Committee to monitor and control fees paid to the
  external auditors, so that the Audit Committee can assess whether the external
  auditors remain independent; and,
3. Approved a set of
  Disclosure Controls (including the creation of a Disclosure Committee
  comprised of members of the Corporation's management) that are to be reviewed
  annually by management in connection with the annual certification provided to
  United States securities regulators under the Sarbanes-Oxley Act of 2002
  ("SOX").

Submitted by the Audit Committee:

John J. Fleming, CA, Chair 
      The Honourable Frank D. Moores, L.L.D. 
      Michael A. Wadsworth, Q.C.

---



REPORT ON EXECUTIVE COMPENSATION

Since May 1, 1999, the Corporation's executive compensation
program has been administered by the Compensation Committee of the Board of
Directors. The Compensation Committee has, as a part of its mandate,
responsibility for determining the remuneration of the Corporation's executive
officers, which, throughout this report, includes the Named Executive Officers
(as defined below

Composition of the Compensation Committee

None of the members of the Compensation Committee is or has
been, an officer or an employee of the Corporation or any of our subsidiaries.
The Compensation Committee meets at least twice annually, and more often if
necessary.

The Corporation's Compensation Policy

The Corporation's compensation philosophy for executives continues to follow
three underlying principles:

(1)to provide a compensation program that
motivates executive officers to achieve their strategic goals;

(2) to be competitive with other leading North American and global companies
so as to attract and retain talented executives; and,

(3) to align the interests of its executive officers with the long-term
interests of the Corporation's shareholders through stock-related programs.

The remuneration of the executive officers of the Corporation consists of
three components: base salary, an annual incentive bonus program, and long-term
incentive programs which are stock-based. In 2003 total base salary for the
Named Executive Officers was $2,250,388 and compensation under the annual
incentive bonus program was $3,904,000, representing 173% of base salary (188%
for the CEO). The relative emphasis placed on compensation from base salary and
annual incentive bonus programs may vary from year-to-year as compensation from
the annual incentive bonus program can vary depending on performance of the
Corporation.

The Corporation's pay policy is to offer to its executive
officers, subject to performance, total compensation at or above the 75th
percentile of compensation paid by companies within a broad comparator group of
publicly-traded Canadian and U.S. corporations of similar magnitude and scope,
including, but not limited to, other oil and gas services and aerospace
companies and to provide additional performance based compensation where
expectations have been exceeded. The comparator group is reviewed periodically
by the Corporation's independent compensation consultant to ensure it remains
relevant for use by the Corporation.

Base salaries of the CEO and the other Named Executive
Officers of the Corporation are established between the median or average of
salary levels of executive positions of similar magnitude, scope and complexity
in comparable Canadian and U.S. companies, taking into account the individual
executive's responsibilities, experience, contribution and performance and are
established in conjunction with independent compensation consultants.

The annual incentive bonus and long-term incentive programs
of the Corporation are designed to reward individual performance and overall
corporate performance and to align the economic interests of the officers and
executives with those of the shareholders of the Corporation.

---



Annual Incentives

The annual bonus plan of the Corporation rewards the CEO and
other Named Executive Officers for the achievement by the Corporation of
financial performance goals and, in some cases, individual objectives.
Performance goals are set at the beginning of each year based on pre-determined
financial targets approved by the Board of Directors.

Operations

The annual corporate economic value added bonus plan (the "CEVA
Plan") is designed to reward superior performance for the benefit of the
Corporation's shareholders. It is necessary to achieve a certain minimum
threshold performance before any bonus is earned. Payments under the CEVA Plan
are determined based on a corporate economic value added formula. CEVA is
calculated as EBITDA (Earnings before Interest, Income Taxes, Depreciation and
Amortization) for the current fiscal year less a capital charge on certain net
assets employed. The bonus pool for the CEO and the other Named Executive
Officers under this plan increases each fiscal year by a percentage of CEVA
earned above a minimum target, as determined by the Board of Directors. The
annual payout is equal to 50% of the balance of each of the executive's bonus
pool, with the balance remaining in the pool. If CEVA is below the minimum
target, the bonus pool is reduced by the same formula. Because of the high goals
and thresholds necessary to earn a payment under the plan, when goals and
thresholds are achieved, rewards will be provided from the CEVA Plan that may be
above the median provided by a group of comparable companies. The formula used
to calculate bonuses for the Named Executive Officers under the CEVA Plan is the
same as that used to calculate bonuses for other corporate and divisional senior
management.

During fiscal 2001, upon the recommendation of the
Compensation Committee (following an independent review) the Board adopted a
Total Shareholder Return bonus plan (the "TSR Plan") for the Chairman and CEO,
and the other Named Executive Officers of the Corporation. This plan was
designed to provide a mechanism that closely aligns management incentives with
shareholder interests, and to emphasize the creation and enhancement of
shareholder value. The TSR Plan sets a minimum threshold of 12.5% of the opening
shareholders' equity for each fiscal year, which return is then notionally
deducted from net earnings for the fiscal year so that no TSR bonus is paid
unless this minimum return has been achieved for shareholders; the TSR Plan
bonus is equal to 10% of net earnings for the completed fiscal year in excess of
the minimum 12.5% return on opening shareholders' equity. In respect of fiscal
2003, the total TSR Plan bonus was $2,842,000. The TSR Plan bonuses are
allocated to the Named Executive Officers on the basis of a percentage based on
seniority. The percentage of the total TSR Plan bonuses allocated to the CEO
decreases as the total amount of the TSR Plan bonuses increases.

Corporate Development

The Compensation Committee may deem certain extraordinary
circumstances worthy of special recognition where significant benefits have
accrued to the Corporation. There were no Corporate Development bonuses paid or
payable with respect to the recently completed fiscal year. In the prior two
years such bonuses were paid in relation to acquisitions and the attainment of
certain targets related to such acquisitions.

Stock Option Plan

The Employee Share Option Plan is intended to serve as a
long-term incentive plan that will align the interests of management with the
interests of shareholders. Options do not generally vest fully on the date of
grant, with the vesting period determined by the Board of Directors. When
granting options, the Compensation Committee takes into account the number of
options already held by a participating executive (including those held by the
Chief Executive Officer). On May 1, 2002 stock options were issued to certain
individuals as detailed in "Option Grants During the Most Recently Completed
Fiscal Year".

The Corporation has adopted new guidelines for allocating Stock Options,
which address the vesting period, concentration of options, and the maximum
number of options to be granted per year.  Additional details of these guidelines can be found
below.

---

Pension Plans

The Corporation maintains a defined contribution retirement
plan (the "RPP") for senior executives, excluding our Chairman and Chief
Executive Officer. The Corporation contributes 6% of gross earnings up to
regulatory maximums on behalf of senior executives.
Under supplementary retirement plan agreements, the
President, Mr. Sylvain Allard, the Senior Vice-President & Chief Financial
Officer, Mr. Jo Mark Zurel, and the former Senior Vice-President & Corporate
Secretary, Mr. O. Noel Clarke may receive supplementary retirement benefits in
addition to the retirement benefits provided under the RPP. A special retiring
allowance has been provided for the Chairman and Chief Executive Officer. These
benefits are described under "Executive Retirement Plan and Retiring Allowance".
Submitted by the Compensation Committee:
    Steven K. Hudson, FCA, Chair 
    Harry R. Steele, O.C. 
    The Honourable Frank D. Moores, L.L.D.
COMPENSATION OF DIRECTORS

During fiscal 2003, the directors of the Corporation, other
than those employed by the Corporation, were paid fees (as described below) for
each Board and committee meeting attended and were reimbursed for their expenses
arising in connection with such meetings. Effective May 1, 2002, after
consideration of a report of an external independent compensation consultant and
on the recommendation of the Compensation Committee, the annual directors fees
were set at $40,000 per annum, the fee payable to Committee Chairs was set at
$10,000 per annum and fees for attendance were set at $2,000 per meeting. No
options were granted to directors during fiscal year 2003.
During fiscal 2001, the Board approved the establishment of a
Stock Appreciation Rights Plan for non-management directors under which the
Corporation may issue up to a maximum of 400,000 Stock Appreciation Rights ("SARs")
(representing approximately 2.5% of the issued capital of the Corporation at the
time). The SARs provide a potential payment to the recipient, which may be
realized only after vesting of the SAR, equal to the increase, if any, in the
market value of the Corporation's Class A Subordinate Voting Shares (determined
as the weighted average of trading prices for the five trading days immediately
preceding the exercise date) over the share price or "SAR grant value" on the
date of the original SAR grant. SARs generally vest on the date of issuance (as
to one-third of any such grant), and a further one-third vests on each of the
first and second anniversaries of the original SAR grant. SARs have a maximum
exercise period of ten (10) years following the date of issuance.
12,500 SARs were granted on October 19, 2000 to each director
at the time (other than the CEO) at a grant value of $11.15, and are exercisable
up to October 19, 2010. Additional SARs were issued on October 19, 2000 to
certain directors who did not hold any stock options, to fulfill commitments to
such directors, at prices reflecting CHC's stock price at the time such
commitment was made, as follows: 30,000 to each of John J. Kelly and Steven K.
Hudson at a grant value of $5.85 and 10,000 to Craig C. Dobbin at a grant value
of $9.00. All such additional SARs expire on April 25, 2010.
An additional 12,500 SARs were granted on August 1, 2001 to
each director at the time (other than the CEO) at a grant value of $16.94,
exercisable up to July 31, 2011. On October 10, 2001, upon his joining the Board
of Directors of the Corporation, 55,000 SARs were granted to Mr. Mark D. Dobbin
at a grant value of $15.01, exercisable up to October 9, 2011. On February 19,
2002, upon his joining the Board of Directors of the Corporation, 55,000 SARs
were granted to The Honourable Brian V. Tobin at a grant value of $20.50,
exercisable up to February 18, 2012. In each case the SARs granted in fiscal
2002 were at a grant value equal to the closing price of the Corporation's Class
A Subordinate Voting Shares on the day immediately preceding such grant in
accordance with the Stock Appreciation Rights Plan. No SARs were granted during
fiscal 2003.
At April 30, 2003 a total of 380,000 SARs had been granted to directors. Of
this total issuance, 237,497 SARs were vested at April 30, 2003, and 84,167 had
been exercised up to August 16, 2003.
MINIMUM SHARE OWNERSHIP

To ensure the interests of directors and senior management are aligned with
those of the shareholders, the Corporation has a Minimum Share Ownership
Guideline. Directors and senior management will be given three years to comply
with the following ownership guidelines:
a. directors are encouraged to maintain minimum share ownership in the
Corporation equal in value to the annual board fees; and,
b. the Named Executive Officers are encouraged to maintain minimum share
ownership in the Corporation equal in value to their base salary.
COMPENSATION TABLE

The remuneration paid to the Chief Executive Officer and the three other most
highly compensated executive officers (the "Named Executive Officers") for each
of the last three years ended April 30 is as follows:
Long-termcompensation awardssecurities underAnnual compensation
      
      options/SARs grantedBonus (1)Corporate
      Other annual
      Class A voting
      All otherYear
      Salary
      Operations
      Development
      compensation
      shares
      compensationName and principal
      position
      
      $
      $
      $
      $(2)
      #
      $(3)Craig L. Dobbin, O.C.
      2003
      1,040,388
      1,961,000  (5)
      -
      60,016
      259,995
      -Chairman & Chief
      Executive
      2002
      857,779
      1,902,000
      1,750,000 (4)
      96,421
      -
      -Officer
      2001
      659,400
      1,502,678
      1,750,000 (4)
      54,946
      -
      -Sylvain A. Allard
      2003
      550,000
      877,000  (5)
      -
      -
      118,750
      14,500President
      2002
      500,000
      866,000
      550,000 (4)
      62,806
      -
      13,5002001
      467,250
      624,916
      550,000 (4)
      -
      -
      13,500Jo Mark Zurel
      2003
      330,000
      533,000  (5)
      -
      -
      47,500
      14,500Senior Vice-President &
      Chief
      2002
      305,000
      525,000
      300,000 (4)
      -
      -
      13,500Financial Officer
      2001
      273,000
      373,076
      300,000 (4)
      -
      -
      13,500O. Noel Clarke
      2003
      330,000
      533,000  (5)
      -
      -
      73,694
      14,500Senior Vice-President &
      2002
      305,000
      525,000
      300,000 (4)
      -
      -
      13,500Corporate Secretary (6)
      2001
      273,000
      373,076
      300,000 (4)
      -
      -
      13,500Notes:
Bonuses are shown in the fiscal year to which payments relate.
  Other compensation and personal benefits amount to less
  than the lower of $50,000 and 10% of salary and bonus for all Named Executive
  Officers except the Chairman and Chief Executive Officer in each of the three
  fiscal years and the President in fiscal 2002. The amounts are the imputed
  interest benefits on loans, and vehicle benefits. For the Chairman and Chief
  Executive Officer in fiscal 2003, the amounts for the imputed interest on
  loans is equal to $31,108 and the vehicle benefit is equal to $28,908. For the
  President in fiscal 2002, the amounts for imputed interest benefits on loans
  is equal to $47,796 and the vehicle benefit is equal to $15,010.
  This consists of Corporation contributions to the RPP made on behalf of
  certain of the Named Executive Officers. Entitlements for Craig L. Dobbin are
  described under "Executive Retirement Plan and Retiring Allowance".
  These special transaction bonuses (Corporate Development)
  are related to the acquisition of HSG. The 2001 bonuses relate to the
  completion of certain major asset dispositions and the completion of permanent
  financing, which were achieved (and the special bonuses paid) in July 2000.
  The fiscal 2002 Corporate Development bonuses relate to the achievement of
  certain performance levels for the combined CHC-HSG operation, as established
  by the Compensation Committee and approved by the Board of Directors, which
  levels were achieved (and the special bonuses paid) in December, 2001.
  These amounts include: 
  a) regular performance bonus payments under the CEVA Plan, which is also used
  as an incentive for other senior managers; and, 
  b) the TSR Plan.The breakdown for
      fiscal 2003 is:CEVA
      TSRC.L. Dobbin
      $464,000
      $1,497,000S. A. Allard
      $272,000
      $605,000J.M. Zurel
      $163,000
      $370,000O.N. Clarke
      $163,000
      $370,000
  
  O. Noel Clarke was Senior Vice President & Corporate Secretary and an
  employee of the Corporation until August 8, 2003.
EMPLOYEE SHARE OPTION PLAN
Option Grants During the Most Recently Completed Fiscal Year

During the fiscal year ended April 30, 2003 669,939 options
to purchase Class A Subordinate Voting Shares of the Corporation were granted
under the Corporation's Employee Share Option Plan (the "Plan"). The following
table sets forth the options granted to each of the Named Executive Officers
during the year:Market Value ofClass ASubordinateNo. of Class A
      % of Total

      
      Voting SharesSubordinate
      Options

      
      Represented byName of Grantee
      Voting Shares
      Granted to

      
      Option on theand Position with
      Represented by
      Employees

      
      Date of theCorporation at
      Additional
      in Fiscal

      Exercise Price
      Grant(1)
      Expirationtime of Grant
      Options
      Year

      ($/Security)
      ($ / Security)
      DateCraig L. Dobbin,O.C., Chairman &Chief ExecutiveOfficer
      259,995
      38.8%
      $30.70
      $26.11
      April 30, 2012Sylvain Allard,President
      118,750
      17.7%
      $30.70
      $26.11
      April 30, 2012Jo Mark Zurel,Senior Vice-President & ChiefFinancial Officer
      47,500
      7.1%
      $30.70
      $26.11
      April 30, 2012O. Noel Clarke,Q.C., former SeniorVice-President &Corporate
      73,694
      11.0%
      $30.70
      $26.11
      April 30, 2012Secretary(1) Pursuant to option amending agreements, the
      exercise price with respect to these options was amended from $26.11 per
      option (the market value of the Class A Subordinate Voting Shares on the
      date of grant (May 1, 2002)) to $30.70 per option (the market value of
      such shares on September 25, 2002).All options granted on May 1, 2002 vest one-third on the date
of grant, one-third on the first anniversary of grant and one-third on the
second anniversary (except that the options granted to Craig L. Dobbin and O.
Noel Clarke were scheduled to vest as follows: Craig L. Dobbin, 120,661 on the
date of grant and 69,667 on each of the first and second anniversaries. O. Noel
Clarke, 42,028 on the date of grant, and 15,833 on each of the first and second
anniversaries).
Aggregated Option Exercises During the Most Recently Completed Fiscal Year
and Fiscal Year End Stock Option Values

The following table sets out the aggregate number of
outstanding options held by each of the Named Executive Officers who held
options at any time during the most recently completed fiscal year, together
with the value of such options at the end of the fiscal year. No Named Executive
Officer acquired any securities on exercise of options during the most recently
completed fiscal year. Amounts reported under "Value of unexercised in-the-money
options" represent the difference between (i) the market value as at April 30,
2003 of the Class A Subordinate Voting Shares for which such options were
granted having an exercise price less than such market value, and (ii) the
exercise price of such options. The closing trading price of a Class A
Subordinate Voting Share on the TSX on April 30, 2003 was $25.95.Options
      Options not
      Value ofSecurities
      
      exercisable
      exercisable
      unexercised in-acquired
      Aggregate
      (vested)
      (unvested)
      the-moneyType

      on
      value
      at April 30,
      at April 30,
      options April 30,of

      exercise
      realized
      2003
      2003
      2003Name
      Security

      #
      $
      #
      #
      $ (1)Craig L.
      Class
      -
      -
      887,623
      139,333
      14,489,706Dobbin, O.C.
      ASylvain Allard
      Class
      -
      -
      289,583
      79,167
      5,420,000AJo Mark Zurel
      Class
      -
      -
      135,833
      31,667
      2,602,000AO. Noel Clarke
      Class
      -
      -
      135,833
      31,667
      2,143,467A
      (1) Includes all options except those that were granted on May 1, 2002
      with exercise prices of $30.70 per share. All those options that were
      "in-the-money" at April 30, 2003 are exercisable.The Board has taken the following actions to revise its practices related to
the Plan:
Amended the Plan, to prohibit the future grant of options to
  non-management directors;
  Amended the Plan, to eliminate the ability of the Corporation to grant
  loans to facilitate the exercise of options;
  Developed a guideline for the allocation of stock options to be used in
  determining the size and allocation of future option grants. The guideline
  provides:The number of options granted to an individual is to be supported by
    reference to individual performance and/or the achievement of targets and
    objectives;
    The options granted should not vest immediately. Vesting should take
    place over a five-year period, at a rate determined by the Board upon
    recommendation from the Compensation Committee;
    The maximum options granted to any one individual should be restricted
    to 25% of the total options granted during the year; andThe maximum number of options granted in a given year should
    not exceed regulatory limits, and:
should not exceed the higher of 1% of the number of Class
      A Subordinate and Class B Multiple Voting shares outstanding and 20% of
      the total options available to be granted; and
      should not result in options outstanding that would
      represent more than 10% of the number of Class A Subordinate and Class B
      Multiple Voting shares then outstanding.

EXECUTIVE RETIRING PLAN AND RETIRING ALLOWANCE

Under supplementary retirement plan agreements ("SRPs") with
the Corporation, Mr. Sylvain Allard, Mr. Jo Mark Zurel and Mr. O. Noel Clarke
may be entitled to receive supplementary retirement benefits in addition to the
retirement benefits provided under the RPP. The aggregate target benefit
provided through the RPP, the SRPs and Canada Pension Plan ("CPP") benefits is
2% of the individual's highest three years average earnings including operations
bonuses ("average earnings"), but excluding special transaction bonuses
(corporate development) multiplied by years of credited service. The SRP benefit
formula is integrated with the formula under the CPP as well as the estimated
benefits under the RPP. The SRP provides benefits by multiplying the
participant's credited service by the sum of the following:0.5% of average earnings up
    to the CPP earnings limit at retirement;1% of average
    earnings above such CPP earnings limit up to the earnings for which the
    Canada Customs and Revenue Agency (the "CCRA") maximum contribution could be
    made under the RPP in the year of retirement; and,
      2% of average earnings in
    excess of the above CCRA earnings limits.

In addition, the SRP provides indexing on the supplementary
benefit equal to 75% of increases in the Consumer Price Index less 1% (subject
to a 4% annual maximum). The SRP also provides a 60% spousal death benefit and
if retirement occurs between ages 55 and 65 a bridge benefit equal to CPP
benefits. This SRP bridge benefit is also indexed and ceases at age 65 when CPP
benefits actually commence.
In normal circumstances, supplementary benefits under the SRP
vest after completion of 20 years of continuous service and are paid directly by
the Corporation rather than being pre-funded. However, upon a change in control
of the Corporation, SRP participants are immediately vested and the Corporation
is required to establish a retirement compensation arrangement (as defined under
the Income Tax Act (Canada)) to secure full funding for all SRP benefits through
the issuance of letters of credit. In the case of Mr. O. Noel Clarke, his
employment arrangements with the Corporation provided that he be credited with
10 years of continuous service for the purpose of his SRP in addition to actual
service since hiring.
The estimated credited years of service as of August 16, 2003 for Mr. Allard
is 20.3 years, Mr. Zurel is 9.3 years and Mr. Clarke is 13.5 years (inclusive of
his 10 years of additional service discussed above).
The approximate aggregate annual benefits payable to a participant under the
RPP and SRP are as follows:

Years of Credited
      ServiceRemuneration
      15
      20
      25
      30
      35$
      $
      $
      $
      $
      $400,000
      120,000
      160,000
      200,000
      240,000
      280,000600,000
      180,000
      240,000
      300,000
      360,000
      420,000800,000
      240,000
      320,000
      400,000
      480,000
      560,0001,000,000
      300,000
      400,000
      500,000
      600,000
      700,0001,200,000
      360,000
      480,000
      600,000
      720,000
      840,0001,400,000
      420,000
      560,000
      700,000
      840,000
      980,0001,600,000
      480,000
      640,000
      800,000
      960,000
      1,120,0001,800,000
      540,000
      720,000
      900,000
      1,080,000
      1,260,000


Effective June 4, 1991, as amended as of January 19, 1993,
the Corporation agreed to provide a retiring allowance (the "Retiring
Allowance") to Craig L. Dobbin, Chairman and Chief Executive Officer of the
Corporation, whereby Mr. Dobbin would be entitled upon retirement to receive an
annual retiring allowance in an amount equal to 66 2/3% of the average of the
three highest fiscal years of annual remuneration, including operations bonuses,
earned by him from the Corporation during his term as Chairman and Chief
Executive Officer. Performance measured bonuses, including bonuses under the TSR
Plan, are included for calculating annual remuneration for purposes of the
Retiring Allowance, but special transaction bonuses (corporate development)
generally are not.

The Retiring Allowance will continue during the lifetime of
Mr. Dobbin and, in the event of his death within 20 years of the commencement of
payments pursuant to such allowance, the payments shall continue to be made to a
beneficiary or beneficiaries named by Mr. Dobbin for the remaining balance of
the 20-year period. The Retiring Allowance may increase based upon annual
increases in the Consumer Price Index ("CPI"), however, any such increase shall
be limited to a maximum of 75% of any annual increase in the CPI less 1% and
further limited to a maximum increase of 4% of the Retiring Allowance in any one
year. Payment of the Retiring Allowance is subject to compliance by Mr. Dobbin
with certain non-competition and non-disclosure obligations. Assuming that Mr.
Dobbin retires at age 69, the estimated annual benefits payable to Mr. Dobbin
(based on his total annual remuneration to date) would be $1,760,721.

INDEBTEDNESS OF DIRECTORS AND OFFICERS

Effective July 30, 2002, in connection with section 402 of
SOX, the Corporation introduced a new policy with regard to loans to directors
and officers. The policy prohibits the Corporation from, directly or indirectly,
extending or maintaining credit, arranging for the extension of credit, or
renewing an extension of credit, in the form of a personal loan to or for any
director or officer. Irrevocable extensions of credit made to directors and
officers outstanding as of July 30, 2002 are exempted under the policy, but the
terms of this credit cannot be materially modified and credit cannot be renewed
after such date. In conjunction with this policy, the Corporation's Board on
March 2, 2003 approved a revision to the Employee Stock Option Plan, to
eliminate the granting of loans to facilitate the exercising of options.

Effective July 30, 2002 the Corporation had three types of
loans outstanding to officers of the Corporation that are exempted under the
policy and are described below. No new credit or any modification of the terms
of the credit granted at July 30, 2002 has been made.

Executive Share Purchase Loan Program

On July 21, 2000, the Board, on the recommendation of the
Compensation Committee and advice from independent compensation consultants,
approved a long term incentive program (the "A loan program") for certain
members of senior management to permit them to participate in future
appreciation of the shares of the Corporation and to bear the same risks as
other shareholders. The A loan program enabled eligible senior management to
receive interest free loans to finance purchases of Class A Subordinate Voting
Shares. The maximum amount of the loan available was based on a multiple of the
employee's base salary and ranged from 0.5 times base salary to a maximum of 2.0
times base salary, depending on position. The Chief Executive Officer was
eligible for the maximum multiple of 2.0 times base salary. Although
indebtedness is remaining outstanding under this program, no further loans are
being made under it. The outstanding loans are secured by the financed shares
(except in the case of certain executives of the Corporation where the Board, in
April 2002, approved the assignment of the shares or proceeds arising from
certain vested options to constitute security in the place of shares as security
for outstanding A loans, as detailed below), require minimum annual loan
repayments of 5% of the loan principal amount and are fully payable on
termination of employment or sale of the financed shares or the exercise of
share options taken as security and sale of shares arising therefrom, as the
case may be.

As at August 16, 2003, the aggregate indebtedness to the
Corporation under securities purchase programs by any current and former
officers, directors and employees of the Corporation or any of the Corporation's
subsidiaries (and their respective associates) was $3,078,082 (excluding the
"Ordinary Share Loan" to an entity owned by the Chief Executive Officer for the
acquisition of the Ordinary Shares, as described below). All such indebtedness
(other than the Ordinary Share Loan) was incurred pursuant to the A loan
program. The following table sets out the indebtedness to CHC of the directors
and senior officers of the Corporation or any of our subsidiaries (and their
respective associates) who held office at any time during fiscal 2003 under the
A loan program.

---



Name and principal
      position
      Involvement
      of issuer or
      subsidiary
      Largest
      amount
      outstanding
      during
      fiscal year
      2003
      $
      Amount outstanding
      as at
      August 16,
      2003
      $
      Financially
      assisted
      securities
      purchases
      during
      year 2003
      #
      Security for
      indebtednessCraig L. Dobbin,
      O.C., Chairman &
      Chief Executive
      Officer
      Lender
      1,256,000
      1,134,000
      -
      An assignment of the
      shares or proceeds of 243,543 vested options for Class A shares held by
      the executive, having an exercise price of $13.00 per share.Sylvain Allard
      President
      Lender
      798,200
      716,744
      -
      An assignment of the
      shares or proceeds of 50,000 vested options for Class A shares held by the
      executive, having an exercise price of $4.25 per share.Jo Mark Zurel
      Senior Vice-President
      & Chief Financial
      Officer
      Lender
      397,870
      356,947
      -
      An assignment of the
      shares or proceeds of 30,000 vested options for Class A shares held by the
      executive, having an exercise price of $4.25 per share.O. Noel Clarke
      
      Former Senior Vice-
      President &
      Corporate Secretary
      Lender
      391,154
      350,204
      -
      An assignment of the
      shares or proceeds of 30,000 vested options for Class A shares held by the
      executive, having an exercise price of $3.10 per share.JeremyLabuschagne
      Managing 
      Director,
      CHC Africa
      Lender
      66,094
      58,785
      -
      A first lien on the
      noted 
      sharesChristine BairdPresident, CHC
      Helicopters
      International
      Lender
      132,227
      74,233
      -
      A first lien on the
      noted 
      sharesRobert GosseFormer President,
      CHC Composites
      Lender
      103,319
      -
      -
      A first lien on the
      noted
 sharesCraig C. Dobbin
      Director
      Lender
      70,262
      -
      -
      A first lien on the
      noted 
      sharesNeil Calvert
      Managing Director
      CHC Europe
      Lender
      138,450
      -
      -
      A first lien on the
      noted 
      sharesJakob BaeManaging Director,
      CHC Helikopter
      Service
      Lender
      74,377
      66,547
      -
      A first lien on the
      notedsharesDavid DobbinFormer Vice 
      President
      (resigned effective
      July 14, 2003)
      Lender
      320,622
      320,622
      12,300
      A first lien on the noted 
      shares


Securities financed with and pledged for such loans are Class A Subordinate
Voting Shares, except as otherwise noted.

---



The Ordinary Share Loan Name and principal
      position
      Involvement
      of issuer or
      subsidiary
      Largest
      amount
      outstanding
      during
      fiscal year
      2003
      $
      Amount outstanding
      as at
      August 16,
      2003
      $
      Financially
      assisted
      securities
      purchases
      during
      year 2003
      #
      Security for
      indebtednessO.S. Holdings Inc.
      Lender
      33,000,000
      33,000,000
      -
      A lien in
      CHC's
   favour on the
   purchased Ordinary
   Shares, together
   with certain other
   security (see below)


On December 9, 1997, the Corporation issued 11,000,000
Ordinary Shares to O.S. Holdings Inc. for an aggregate consideration of
$33,000,000 (the "Ordinary Share Loan"). O.S. Holdings Inc. is a corporation
wholly owned by 10644 Newfoundland Inc. ("Holdco"), which is a corporation
wholly owned by Craig L. Dobbin, the Chairman and Chief Executive Officer. On
December 9, 1997, the Corporation made a loan to O.S. Holdings Inc. of
$33,000,000 to enable it to purchase these Ordinary Shares. The loan is
repayable upon demand and does not bear interest unless the principal amount
thereof (or the lesser portion demanded) has not been repaid within two business
days following demand therefore, after which time the principal amount thereof
(or the portion demanded) would bear interest at a rate equal to the Canadian
"prime rate" plus 5%. These Ordinary Shares were issued to give effect to an
undertaking provided by the Corporation to U.K. regulatory authorities in
connection with the foreign ownership requirements of European legislation
applicable to the Corporation's then U.K. operating subsidiary, Brintel
Helicopters Limited ("Brintel"). The issuance of Ordinary Shares to O.S.
Holdings Inc. was intended to increase the amount of equity share capital of the
Corporation held by European nationals (Mr. Dobbin, the sole shareholder of
Holdco, is a citizen of both Canada and the Republic of Ireland) and to
establish that Brintel was entitled to maintain its operating license. The
transaction involving the issuance of the Ordinary Shares (including the making
of the loan) was approved by shareholders of the Corporation at a meeting held
on December 9, 1997.

The loan is secured by a lien in the Corporation's favour
over the Ordinary Shares. Further, Holdco has guaranteed the obligations of O.S.
Holdings Inc. to the Corporation and has pledged the shares of O.S. Holdings
Inc. owned by it in favour of the Corporation as security for such guarantee.
Craig L. Dobbin has guaranteed the obligations of each of O.S. Holdings Inc. and
Holdco to the Corporation and has pledged the shares of Holdco owned by him in
favour of the Corporation as security for such guarantee. The Corporation's
recourse against Mr. Dobbin in connection with the repayment of the loan and
such guarantee is limited to the realization of the shares of Holdco held by
him.

Indebtedness of Directors, Executive Officers and Senior Officers other than
under Securities Purchase Programs

There was no indebtedness other than under securities purchase programs to
the Corporation by all current and former officers, directors and employees of
the Corporation (and their respective associates) as at August 16, 2003. The
following table sets out the indebtedness to the Corporation or any of its
subsidiaries of directors, executive officers and senior officers of the
Corporation, and their respective associates, who held office at any time during
the 2003 fiscal year:

Name and principal
      position
      Involvement of
      issuer or
      subsidiary
      Largest amount
      outstanding during
      fiscal year 2003
      $
      Amount outstanding
      as at August 16 2003
      $Craig L. Dobbin, O.C.
      Lender
      500,000
      -Chairman and Chief
      Executive
      OfficerSylvain Allard
      President
      Lender
      38,500
      -


The loan disclosed above to Mr. Sylvain Allard was provided to assist in
relocation of his residence. This loan was non-interest bearing and was repaid
during the year.

On July 21, 2000, the Compensation Committee established a
policy for senior executives, pursuant to which the Chief Executive Officer
could obtain advances against future remuneration of up to $500,000; the
President was eligible to obtain advances up to $250,000; and each of the two
Senior Vice Presidents was eligible to obtain advances up to $150,000. These
advances were interest-bearing at the "prime rate" and were repayable within six
months following the fiscal year in which such loans were advanced. The loan
disclosed above to Mr. Craig Dobbin was provided under this facility. All
advances under this facility have been repaid and no further loans may be made
under this facility.

DIRECTORS AND OFFICERS INSURANCE

The Corporation has purchased and maintains a policy of
insurance for the benefit of directors and officers as permitted by the CBCA and
the Corporation's by-laws. The policy insures directors and officers, in their
capacities as directors and officers of the Corporation, or in their capacities
as directors and officers of other corporations where they have acted in that
capacity at the request of the Corporation, against certain liabilities incurred
by them, except where the liability relates to the failure by the director or
officer to act honestly, in good faith and with a view to the best interests of
the Corporation or the other corporation, as the case may be.

The policy obtained provides for $50,000,000 of coverage for
directors and officers of the Corporation on an aggregate basis. Such policy is
subject to a deductible of $50,000 per incident. The cost of coverage for 2003
on an aggregate basis was $97,000.

---

EMPLOYEES

All pilots and aircraft maintenance engineers are required to
be licensed by regulatory authorities in the country in which they work. To
obtain a pilot's license, each pilot must complete and pass practical flight and
written examinations. In addition, IFR pilots must have passed IFR practical
flight and written examinations. To obtain an aircraft maintenance engineer's
license, an engineer must have completed a minimum of three to four years of
training and passed a written examination. The following table provides employee
data for each of our major segments at April 30, 2003, 2002 and 2001.

Year ended April 302003
      2002
      2001CanadaAdministrative and
      supportpersonnel
      
      
      155
      202
      133EuropePilots
      
      
      392
      419
      396Maintenance engineers
      
      294
      285
      239Administrative and
      supportpersonnel
      
      
      387
      526
      5081,073
      1,230
      1,143InternationalPilots
      
      
      249
      241
      215Maintenance engineers
      
      224
      213
      226Administrative and
      supportpersonnel
      
      
      302
      275
      224775
      729
      665Repair and OverhaulMaintenance engineers
      
      304
      232
      190Administrative and
      supportpersonnel
      
      
      166
      144
      138470
      376
      3282,473
      2,537
      2,269


The two-year union contract with the Norwegian pilots expired
April 30, 2003. We are currently in negotiations with the Norwegian pilots and
have a tentative three-year agreement which is subject to union ratification.
Approximately 450 of our repair and overhaul employees at Astec (in Norway and
the U.K.) are represented by unions with collective agreements extending to
April 30, 2004 and April 30, 2005. Engineers and ground staff at CHC HS have a
two-year collective agreement extending to October 2004.

In the U.K., we have collective agreements with our pilot
workforce and separately with our engineers and other ground staff, covering the
period from May 1, 2002 to June 30, 2005. Similarly, in Denmark, we have
multi-year collective agreements with our pilots and separately with our
engineers extending to May 2005. In Ireland, we have collective pay agreements
in place with our pilots and aircrewmen covering the period May 1, 2003 to April
30, 2006. A pay and conditions review, effective from May 1, 2003 is currently
ongoing with the engineers. In Australia, negotiations are currently in progress
for a renewed collective agreement with our pilots to May 2005. Our 3-year union
agreement with crewmen in Australia expires in December 2003. Our engineers'
agreement in Australia was renewed for 3 years, expiring August 31, 2005.
Employees at other helicopter operations are not unionized.

We are currently negotiating the first collective agreement with the
employees at Composites.

SHARE OWNERSHIP

Share ownership information is included under Item 7.

---



ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

PRINCIPAL SHAREHOLDERS

As at July 31, 2003, there were 17,921,290 Class A subordinate voting shares,
2,953,495 Class B multiple voting shares and 11,000,000 ordinary shares issued
and outstanding.

The following table sets forth information as at July 31,
2003 with respect to the beneficial ownership of our Class A subordinate voting
shares, Class B multiple voting shares and ordinary shares by (1) each
shareholder known by us to be the beneficial owner of more than 5% of our
subordinate voting shares, multiple voting shares or ordinary shares, or to be
the beneficial owner of a number of shares of any class or classes of stock that
collectively carry more than 5% of the votes attributed to all our outstanding
voting securities; (2) all executive officers and directors who are the
beneficial owners of more than 1% of our subordinate voting shares; and (3) all
other executive officers or directors as a group.

Name of beneficial
      owner
      
      Beneficial
      ownership(1)
      
      Percent of class(1)Subordinate
      voting
      shares
      Multiple
      voting
      shares
      Ordinary
      shares
      
      Subordinate
      voting
      shares
      Multiple
      voting
      shares
      Ordinary
      sharesDiscovery Helicopters Inc. (2) (3)
      
      1,946,270
      2,777,716
      -
      
      10.5%
      94.0%
      -FMR
      Corp.(4)
      
      3,132,770
      -
      -
      
      17.5%
      -
      -O.S.
      Holdings Inc. (5)
      
      -
      -
      11,000,000
      
      -
      -
      100%Craig
      L. Dobbin (1)(6)(9)
      
      957,289
      -
      -
      
      5.1%
      -
      -Sylvain
      Allard (1)(9)
      
      441,617
      -
      -
      
      2.4%
      -
      -Noel
      Clarke (1)(9)
      
      236,112
      -
      -
      
      1.3%
      -
      -Jo Mark
      Zurel (1)(9)
      
      207,964
      -
      -
      
      1.2%
      -
      -Other
      (13 persons) (1)(7)(8)(9)
      
      423,826
      -
      -
      
      2.3%
      -
      -


1. Includes shares beneficially owned by the listed person. If
  a person has the right to acquire beneficial ownership of any shares by
  exercise of options by October 31, 2003, those shares are deemed beneficially
  owned by that person and are deemed to be outstanding solely for the purpose
  of determining the percentage of the shares that the person owns. Those shares
  are not included in the computations for any other person.
2. Discovery Helicopters Inc. is a holding company, all of the
  voting shares of which are owned by Craig L. Dobbin. The business address of
  Discovery is P.O. Box 1303, St. John's, Newfoundland, Canada A1C 5N5. The
  shares owned by Discovery represent 59.8% of the votes attached to all our
  outstanding voting securities.
3. Includes 689,655 subordinate voting shares that may be
  acquired upon the conversion of a $5,000,000 convertible loan at a price of
  $7.25 per share. Also includes 556,615 subordinate voting shares that were
  lent by Discovery to a third party pursuant to a borrowing agreement.
  Discovery will not exercise control or direction over such shares until they
  are returned.
4. As of June 30, 2003 based on the most recent publicly available
  information.
5. O.S. Holdings Inc. is a holding company wholly owned
  indirectly by Craig L. Dobbin. The business address of O.S. Holdings Inc. is
  P.O. Box 1303, St. John's, Newfoundland, Canada A1C 5N5. The shares owned by O.S. Holdings Inc. represent 2.3% of the votes attached to all our outstanding
  voting securities.
6. These shares may be acquired upon the exercise of options
  granted with prices ranging from $4.30 to $30.70. The shares granted pursuant
  to the full exercise of these options represent 1.9% of the votes attached to
  all our outstanding voting securities.
7. Includes 163,001 subordinate voting shares that may be acquired upon the
  exercise of options granted and excludes securities owned by Discovery and O.S.
  Holdings Inc.
8. Directors and officers who individually own less than 1%
  (Duane Clarke, Craig C. Dobbin, Joanne Dominie, John Fleming, Rick Green,
  Steven K. Hudson, John Kelly, David Loveys, Candace Moakler, Frank Moores,
  Harry Steele, Derrick Sturge, Michael Wadsworth).
9. Beneficial ownership does not include the non-vested
  subordinate voting share options, exercisable at $26.11 and $30.70 per share.
  As at July 31, 2003, non-vested subordinate voting share options are owned by
  the following

Craig
      L. Dobbin
      69,667Sylvain
      Allard
      39,583Noel
      Clarke
      15,833Jo Mark
      Zurel
      15,833Other
      (6 persons)
      30,000Total
      170,916


---



RELATED PARTY TRANSACTIONS

In the normal course of business, we enter into transactions with related
parties.

During fiscal 2003, $1.3 million (2002 - $2.0 million; $2001 - $0.1 million)
was paid to CHL in which we have a 43.5% equity investment. These amounts
related to the provision of helicopter flying services.

During fiscal 2003 $19.5 million (2002 - $21.2 million; 2001
- $18.6 million) was paid to Vector and its subsidiaries whose Chairman and
Chief Executive Officer was also a director of ours during the year. The amounts
paid were for repair and overhaul services and information technology support.
On June 25, 2003 the five year non-compete agreement between us and Vector
expired. With this expiration we are reviewing our options for the repair and
overhaul of our medium aircraft previously provided by Vector, including the
possibility of performing a portion or all of this work in our own repair and
overhaul facilities.

During fiscal 2000, in connection with securing tender credit
facilities, we received an unsecured, subordinated, convertible 12% loan from an
affiliate of the controlling shareholder in the amount of $5.0 million. This
loan is subordinated to our senior credit facilities and senior subordinated
notes. The loan is convertible into Class A subordinate voting shares at $7.25
per share. The estimated value of the loan proceeds attributable to the
conversion feature of $951,000 was allocated to contributed surplus. The
equivalent reduction in the carrying value of the loan is amortized to earnings
over the term of the loan. Interest expense of $689,000 (2002 - $676,000; 2001 -
$674,000), including amortization of the above noted discount, was recorded on
the loan during the year.

Fees of $15,000 (2001 - $85,000) primarily in connection with
special consulting projects, were paid during fiscal 2002 to certain directors
or entities in which certain directors are partners or employees. Rent and usage
fees of $610,000 (2002 - $533,000; 2001 - $596,000) were paid during the year to
companies affiliated with the controlling shareholder. Interest revenue of
$28,000 was earned in 2001 on a demand loan to the controlling shareholder that
was repaid during 2001. These transactions are recorded at their exchange
amounts.

After acquisition of the initial 25% of HSG on March 11,
1999, we arranged for a third party to acquire a further 5% of HSG on March 25,
1999. The third party's agreement to acquire these shares and to enter into a
put and call agreement (whereby we could acquire the shares purchased by the
third party and it could sell such shares to us at their original cost plus
certain agreed transaction fees and interest, or an amount totaling
approximately $8.7 million) was conditional upon the guarantee of our purchase
obligations by Mr. Dobbin personally and also by Discovery Helicopters Inc.,
supported by a security agreement from Discovery, a first lien over $6.5 million
in marketable securities owned personally by Mr. Dobbin. The acquisition of
these shares in March 1999 brought our interest in HSG to 30%, which facilitated
our eventual acquisition of 100% of HSG. In fiscal 2001, $2.7 million was paid
to Discovery in respect of these guarantees and security pledges. This
consideration was approved by our Board of Directors after receipt of an
independent fairness opinion from KPMG, which was commissioned by the
independent directors, and has been included in the acquisition cost of the HSG
shares.

We have utilized Vector since 1998 for certain repair and
overhaul services at competitive rates. As part of the sale of our repair and
overhaul business to Vector in 1998, Vector also acquired our management
information systems operations. Pursuant to an information services agreement
entered into between us and Vector, Vector agreed to provide us with certain
management information services until June 24, 2003. We have utilized Vector for
such services since 1998 and believe that such services were provided at or
below market rates. Mark D. Dobbin, the Chairman and Chief Executive Officer of
Vector was a director of ours during the year.

For information regarding loans between us and senior management and
enterprises that directly or indirectly control us, see item 6: Directors,
Senior Management and Employees.

---

ITEM 8. FINANCIAL INFORMATIONFinancial statements are included under Item 18.ITEM 9. THE OFFER AND LISTINGLISTING DETAILSOn October 7, 1991, our outstanding Class A subordinate
voting shares and multiple voting shares were listed on the Toronto Stock
Exchange ("TSX") under the stock symbols FLY.A. and FLY.B., respectively. As of
July 31, 2003, 12 registered holders of record in the United States held
2,840,189 subordinate voting shares (or 15.8% of the subordinate voting shares)
and 1 registered holder of record in the United States held 41,005 multiple
voting shares (or 1.4% of the multiple voting shares).
The following table sets forth, for the quarters indicated, the high and low
sales prices and volumes of trading of the subordinate voting shares and the
multiple voting shares as reported on the TSX.
Class A subordinate
      voting shares
      Class B multiple
      voting sharesHigh
      Low
      Volume
      High
      Low
      VolumeFiscal 2003First
      quarter
      $ 35.50
      $ 26.00
      5,997,140
      $ 34.50
      $26.01
      17,031Second
      quarter
      36.05
      28.50
      3,084,666
      36.00
      29.00
      6,202Third
      quarter
      33.65
      23.40
      5,849,134
      33.50
      24.00
      10,363Fourth
      quarter
      27.59
      21.64
      3,782,342
      27.15
      21.80
      13,655Fiscal 2002First
      quarter
      $23.25
      $15.50
      6,628,568
      $23.50
      $17.00
      10,546Second
      quarter
      18.75
      12.25
      2,296,816
      19.50
      14.95
      24,400Third
      quarter
      18.80
      13.80
      2,792,307
      18.50
      14.00
      4,096Fourth
      quarter
      30.00
      17.86
      6,026,654
      30.00
      18.50
      13,835
The following table sets forth, for the fiscal years indicated, the high and
low sales prices and volumes of trading of the subordinate voting shares and the
multiple voting shares as reported on the TSX.
Class A subordinate
      voting shares
      Class B multiple
      voting sharesHigh
      Low
      Volume
      High
      Low
      Volume1999
      $14.00
      $2.75
      13,686,832
      $14.00
      $3.25
      22,2772000
      5.40
      3.00
      10,946,186
      5.50
      3.00
      26,7712001
      17.80
      3.75
      12,671,544
      15.00
      4.25
      438,7512002
      30.00
      12.25
      17,744,345
      30.00
      14.00
      52,8772003
      36.05
      21.64
      18,713,282
      36.00
      21.80
      47,251
The following table sets forth, for the months indicated the high and low
sales prices and volumes of trading of the subordinate voting shares and the
multiple voting shares as reported on the TSX.
Class A subordinate
      voting shares
      Class B multiple
      voting sharesHigh
      Low
      Volume
      High
      Low
      VolumeMarch
      2003
      $25.10
      $21.64
      1,464,500
      $24.85
      $22.00
      9,300April
      2003
      27.59
      23.80
      1,196,400
      27.00
      24.30
      2,800May
      2003
      26.90
      25.40
      1,623,700
      26.80
      25.50
      4,500June
      2003
      27.95
      25.55
      1,524,200
      28.00
      26.04
      18,300July
      2003
      26.20
      24.75
      739,900
      26.50
      25.00
      10,200August
      2003
      27.98
      24.00
      1,003,800
      28.50
      24.81
      2,300
On August 29, 2003 the closing price of the subordinate voting shares on the
TSX was $27.50.
Effective October 11, 2002 the subordinate voting shares
commenced trading on the New York Stock Exchange ("NYSE") under the stock symbol
FLI. Prior to October 11, 2002 the subordinate voting shares traded on the
Nasdaq National Market ("Nasdaq"). The following table sets forth for the
quarters indicated, the high and low sales price in U.S. Dollars and volumes of
trading of the subordinate voting shares on the NYSE and Nasdaq.
High
      Low
      VolumeFiscal 2003First
      quarter
      $23.29
      $16.32
      1,738,600Second
      quarter
      22.94
      17.86
      657,400Third
      quarter
      21.34
      15.49
      632,600Fourth
      quarter
      19.00
      14.75
      255,700Fiscal 2002First
      quarter
      $15.32
      $10.16
      4,370,700Second
      quarter
      12.45
      7.72
      970,200Third
      quarter
      11.84
      8.53
      721,300Fourth
      quarter
      19.25
      10.51
      1,171,700
The following table sets forth in U.S. Dollars for the fiscal years
indicated, the high and low sales prices and volumes of trading of the
subordinate voting shares as reported on the NYSE and Nasdaq.
High
      Low
      Volume1999
      $10.38
      $1.88
      352,3752000
      4.06
      1.69
      767,6002001
      11.65
      2.50
      2,971,6102002
      19.25
      7.72
      7,233,9002003
      23.29
      14.75
      3,284,300High
      Low
      VolumeMarch
      2003
      $16.97
      $14.75
      162,100April
      2003
      19.00
      16.22
      69,900May
      2003
      19.57
      18.05
      50,200June
      2003
      20.90
      18.81
      65,200July
      2003
      19.54
      17.59
      50,800August
      2003
      19.87
      17.30
      87,900The closing price on August 29, 2003 as reported on the
      NYSE was U.S. $19.83.ITEM 10. ADDITIONAL INFORMATIONARTICLES OF INCORPORATION AND BY-LAWSThe Company was incorporated under the Canada Business Corporations Act and
its corporation number is 222233-7.
On August 23, 2002 the Board of Directors approved certain
amendments to By-Law No. 1, the by-law relating generally to the transaction of
the business and affairs of the Corporation (the "Old ByLaw") by adopting
Amended and Restated By-Law No. 1 (the "New By-Law"). Shareholders confirmed the
New By-Law at the annual general meeting held on September 26, 2002. The New
By-Law superceded and replaced the Old By-Law that had been previously enacted
on February 18, 1987. The Board of Directors made certain additional amendments
to the New By-law, effective September 4, 2003 to provide that the board may, if
the articles so provide, appoint one or more additional directors (subject to
the maximum number authorized by the articles) to hold office for a term
expiring no later than the close of the next annual meeting of shareholders, but
the total number of directors appointed may not exceed one third of the number
of directors elected at the previous annual meeting of shareholders. If the
amendments to the New By-law are not confirmed by the shareholders at the
shareholders' meeting scheduled for October 28, 2003 (or any adjournment
thereof), the amendments will cease to be effective. The text of the New ByLaw,
as amended, is attached hereto under Item 19: Exhibits.
With respect to the directors of the Company, the Canada
Business Corporations Act and bylaws of the Company require a director to
refrain from voting (except in certain limited cases) on any material contract
or transaction whether made or proposed with the Company to which the director
is a party and to disclose in writing to the Company the nature and extent of
his interest in such contract or transaction. The by-laws of the Company also
provide that the directors shall be compensated for their services as the Board
from time to time may authorize. The Board is given general authority to borrow
monies on behalf of the Company and to pledge assets of the Company, and to
delegate such powers from time to time to any officer of the Company. The
Articles and by-laws of the Company do not contain any mandatory age limit
requirement for a director's retirement or a minimum number of shares to be held
by a director. Directors may be elected for terms of up to three years.
Cumulative voting is not provided for in the Company's Articles or by-laws.
The Company's issued and outstanding shares consist of
subordinate voting shares, multiple voting shares and ordinary shares. The
subordinate voting shares and the multiple voting shares participate equally in
the payment of dividends if and when declared by the Company's Board of
Directors. The ordinary shares are entitled to dividends equivalent on a per
share basis to any dividend paid on the Company's subordinate voting shares and
multiple voting shares, subject to prior minority shareholder approval.
Subordinate voting shares carry the right to one vote per share, the multiple
voting shares carry the right to 10 votes per share, and the ordinary shares
carry the right to one vote per 10 shares. The ordinary shares are also
redeemable at the option of the Company at the subscription price thereof in
certain circumstances. The Company also has the right, subject to the approval
of the Toronto Stock Exchange, to purchase the ordinary shares at their fair
market value. The subordinate voting shares, the multiple voting shares and the
ordinary shares share equally on a share for share basis in the property and
assets of the Company upon liquidation or winding up.
If an offer is made to purchase multiple voting shares such
that under the take-over bid provisions of applicable securities legislation,
the same offer must be made to all or substantially all holders of multiple
voting shares who are in a Canadian province or territory to which the
requirements apply and the offeror does not concurrently make an identical offer
to purchase the subordinate voting shares, then each outstanding subordinate
voting share may be converted into a multiple voting share at the option of the
holder thereof and sold pursuant to the offer for the multiple voting shares,
except in certain circumstances. At any time, a holder of multiple voting shares
may convert such shares into subordinate voting shares on a one-for-one basis.
Generally, the articles of the Company would have to be amended to change the
rights attached to the Company's shares. Such an amendment would have to be
approved by shareholders of the Company by a majority of two-thirds of the votes
cast. Certain amendments to the articles, such as an amendment that would change
the rights attached to a class of shares, would require that the amendment be
approved by a majority of two-thirds of the votes cast by holders of that class
voting separately as a class.
Under the Company's by-laws, the annual meeting of
shareholders shall be held on such date and time as the Board, or the Chairman
of the Board, or the President in the absence of the Chairman of the Board, may
from time to time determine. The Board shall also have the power to call a
special meeting of shareholders at any time. The only persons entitled to be
present at a meeting of shareholders are those persons entitled to vote at such
meetings, the directors and auditors of the Company and any others who are
entitled or required under any provisions of the Canada Business Corporation
Act, the articles or bylaws of the Company to be present at the meeting. Any
other person may be admitted to the shareholder meeting only on the invitation
of the Chairman of the meeting or with consent of the meeting.
For purposes of complying with the Canada Transportation Act,
the Articles include a provision that allows the directors of the Company to
refuse to permit registration of any transfer or transfers of voting shares of
the Company if such transfer would result in persons other than Canadians (as
defined in the Canada Transportation Act) owning or controlling more than 25% of
(a) the outstanding voting shares of the Company or (b) the votes attached to
all outstanding voting shares of the Company.
TAXATION

The following discussion is a summary of the principal
Canadian federal income tax considerations generally applicable under the Income
Tax Act (Canada) (the "Canadian Act") to holders of subordinate voting shares
who, at all relevant times, for purposes of the Canadian Act, deal at arm's
length with us, are not resident or deemed to be resident in Canada at any time,
hold the subordinate voting shares as capital property, do not hold or use, and
are not deemed to hold or use, subordinate voting shares in connection with a
trade or business carried on, or deemed to be carried on, in Canada, and in the
case of insurers who carry on an insurance business in Canada and elsewhere, do
not hold subordinate voting shares that are "designated insurance property" as
defined in the Canadian Act or that are effectively connected with an insurance
business carried on in Canada (the "Holders"). Certain persons who carry on, or
are deemed to carry on, business in Canada, including certain financial
institutions, registered securities dealers and corporations controlled by one
or more of the foregoing, will generally be precluded from treating subordinate
voting shares as capital property under the Canadian Act.
This summary is based on the current provisions of the
Canadian Act, the regulations thereunder in force as of the date of this Annual
Report, specific proposals (the "Tax Proposals") to amend the Canadian Act or
the regulations thereunder publicly announced by the Minister of Finance prior
to the date of this Annual Report, the current provisions of the Canada-United
States Income Tax Convention (1980) (the "Treaty"), and on the current
administrative practices and policies published by the Canada Customs and
Revenue Agency. This summary is not exhaustive of all possible Canadian federal
income tax consequences and does not, apart from the Tax Proposals, take into
account or anticipate any changes in law, whether by legislative, governmental
or judicial action, nor does it take into account income tax laws or
considerations of any province or territory of Canada or any jurisdiction other
than Canada. Prospective investors and holders of subordinate voting shares are
urged to consult their own tax advisors with respect to the Canadian federal
income tax consequences set forth below and any other federal, provincial,
state, local or foreign tax consequences to them of holding and disposing of
subordinate voting shares.
Disposition of a Subordinate Voting Share

A Holder who disposes of a subordinate voting share will not
be subject to tax pursuant to the Canadian Act on a capital gain realized on the
disposition unless the subordinate voting share is "taxable Canadian property"
of the Holder within the meaning of the Canadian Act and no relief is afforded
under any applicable tax treaty. Subordinate voting shares will generally not be
taxable Canadian property to a Holder provided such subordinate voting share is
listed on a prescribed stock exchange within the meaning of the Canadian Act on
the date of disposition, and provided such Holder, or persons with whom such
Holder did not deal at arm's length (within the meaning of the Canadian Act), or
any combination thereof, did not own 25% or more of the issued shares of any
class or series of the Company at any time within five years immediately
preceding the date of disposition. For purposes of the 25% calculation at any
particular time in respect of a particular Holder, options in respect of such
shares, including warrants, held by the Holder and persons with whom the Holder
does not deal at arm's length will be treated as if exercised. As of the date of
this Annual Report, the Class A subordinate voting shares are listed on the TSX,
a prescribed stock exchange for purposes of the Canadian Act. Subordinate voting
shares may be deemed taxable Canadian property of a Holder who receives such
subordinate voting shares in exchange for other taxable Canadian property.
If a subordinate voting share constitutes or is deemed to
constitute taxable Canadian property of a Holder, provided such Holder is a
resident of the United States for purposes of the Treaty, the Treaty will
generally exempt such a Holder from Canadian tax in respect of the disposition
of a subordinate voting share provided its value is not derived principally from
real property (including resource property) situated in Canada. This relief
under the Treaty may not be available to a Holder who had a permanent
establishment or fixed base available to such Holder in Canada during the 12
months immediately preceding the disposition of the subordinate voting share.
Dividends

Any dividends (including stock dividends) paid or credited,
or deemed under the Canadian Act to be paid or credited, on subordinate voting
shares will be subject toCanadian withholding tax under the Canadian Act
at the rate of 25% on the gross amount of the dividends. Generally, the rate of
this withholding tax will be reduced under applicable tax treaties. In the case
of dividends paid to a Holder who is a resident of the United States and
beneficial owner of such dividends for purposes of the Treaty, the Canadian
withholding tax rate is generally 15%.
THE FOREGOING DISCUSSION OF CANADIAN FEDERAL INCOME TAXATION
IS OF A GENERAL AND SUMMARY NATURE ONLY AND IS NOT INTENDED TO BE, NOR SHOULD IT
BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR HOLDER OF SUBORDINATE
VOTING SHARES. ACCORDINGLY, HOLDERS OF SUBORDINATE VOTING SHARES SHOULD CONSULT
THEIR OWN TAX ADVISORS AS TO THE TAX CONSEQUENCES OF RECEIVING DIVIDENDS FROM US
OR DISPOSING OF THE SUBORDINATE VOTING SHARES.
The documents referenced in this Annual Report may be
inspected at our head office at:
Hangar #1, St. John's Airport 
P.O. Box 5188 
St. John's, NL, Canada 
A1C 5V5
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We record our transactions and prepare our financial
statements in Canadian dollars. For the year ended April 30, 2003, we maintained
operations in the U.K., Norway, South Africa and Australia, with business also
conducted in other countries. These operations are considered financially and
operationally self-sustaining. Accordingly, our assets and liabilities are
translated into Canadian dollars at the year-end exchange rate. Revenue and
expense items are translated into Canadian dollars at the average annual
exchange rate. Because many of our revenues and expenses occur in currencies
other than Canadian dollars, we are exposed to exchange rate and currency risks.
To perform sensitivity analysis, we assess the risk of loss
in fair values due to the impact of hypothetical changes in interest rates and
foreign currency exchange rates on market-sensitive instruments. Information
provided by the analysis does not necessarily represent the actual changes in
fair value that we would incur under normal market conditions because, of
necessity, all variables other than the specific market risk factor are held
constant. The results of sensitivity analysis at April 30, 2003 follow.
Foreign Currency Exchange Rate Risk

A 10% change in the exchange rate of the euro, Norwegian
kroner and pound sterling against the Canadian dollar, with all other variables
remaining constant, would have resulted in a $30.5 million change in the fair
market value of our long-term debt at April 30, 2003. Our euro and pound
sterling debt are designated as a hedge of our net investment in foreign
operations in the U.K. and Norway. As a result, gains and losses on this debt
are offset against foreign currency translation adjustments on our net
investment in foreign operations that are deferred as a separate component of
shareholders' equity until realized under Canadian GAAP. Under U.S. GAAP, the
related translation adjustments and the foreign currency translation gains and
losses of the debt designated as a hedge are included in the determination of
comprehensive earnings. If the debt were not designated as a hedge of our net
investment, the impact of a change in foreign currency rates would directly
impact the current year's earnings under both Canadian and U.S. GAAP. A 1%
movement in the foreign currency rates of our three major operating currencies
(the pound sterling, the Norwegian kroner and the U.S. dollar)
against the Canadian dollar would have resulted in a $2.0 million change in EBITDA and a $0.9 million change in net earnings from our self-sustaining
foreign subsidiaries upon the translation of their income statement from their
reporting currencies to Canadian dollars for the year ended April 30, 2003.
Interest Rate Risk

We are also exposed to market risk from changes in interest
rates, related primarily to variable interest rates on long-term debt. During
the year ended April 30, 2001, we entered into an interest rate swap agreement
to fix the interest costs on £ 40.0 million of our senior credit facilities. A 1%
change in variable interest rates on long-term debt (i.e. from 5% to 6%), with all other variables
remaining constant, would result in a $2.2million change in interest expense for the
year ended April 30, 2003. Such a change in interest rates would not have a
material impact on the fair value of the related long-term debt.
Equity Price Risk

As of April 30, 2003, we were not exposed to market risk from changes in the
market value of long-term investments, as we did not hold any publicly traded
long-term investments.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIESNot applicable.
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESNone.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDSNone.ITEM 15. CONTROLS AND PROCEDURESAs of September 12, 2003, an evaluation was performed under
the supervision and with the participation of the Company's management,
including the CEO and CFO, of the effectiveness of the design and operation of
the Company's disclosure controls and procedures. Based on that evaluation, the
Company's management, including the CEO and CFO, concluded that the Company's
disclosure controls and procedures were effective as of September 12, 2003.
There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect internal controls subsequent to
September 12, 2003.ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERTNot required.ITEM 16B. CODE OF ETHICSNot required.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICESFor the years ended April 30, 2003 and 2002, amounts paid by the Corporation
in connection with services provided by its auditors, Ernst & Young LLP ("E&Y"),
were as follows:
2003
      2002($ millions)Audit
      Services
      $0.9
      $1.0Audit-Related Services
      -
      0.2Tax
      Services
      1.2
      1.4Other
      Services
      -
      0.1Total
      $2.1
      $2.7
Audit Services - consists of the work necessary for the
external auditor to render an opinion on the consolidated financial statements
of the Corporation and the financial statements of its subsidiaries. In both
fiscal 2002 and 2003 audit services consisted of services provided by E&Y in
connection with expressing an opinion on the Corporation's consolidated
financial statements and also on the financial statements of the Corporation's
subsidiaries in jurisdictions where such audits are required by companies
legislation or where such audits are required under other agreements.
Audit-Related Services - consists principally of the review
of prospectuses, offering memoranda, registration statements, issuance of
consent letters to underwriters and audits and due diligence of certain
businesses acquired or to be sold. The audit-related services in fiscal 2002
consisted of services provided by E&Y in connection with the preparation of a
prospectus for an equity issue. There were no audit-related services in fiscal
2003.
Tax Services - consists of fees paid in connection with tax
compliance, tax planning, tax outsourcing, and tax advice provided to the
Corporation and its subsidiaries. Tax services in both years include fees paid
to E&Y in connection with ongoing tax planning and other initiatives being
considered by the Corporation. In both fiscal 2002 and fiscal 2003 tax services
included $0.3 million for tax outsourcing services provided by E&Y. In fiscal
2003 tax services included fees paid in connection with a transfer pricing
study. In fiscal 2002 tax services included fees related to two major projects -
transfer pricing and cash repatriation.
Other Services - includes services that are not audit, audit-related, or tax
services, but which are not prohibited by SEC.
The Audit Committee has considered whether the provision of
services other than audit services is compatible with maintaining the auditors'
independence and concluded that the level of services provided during 2003 would
not impact the independence of the auditors. During the year, the Audit
Committee adopted a policy that prohibits the Corporation from engaging the
auditors for "prohibited" categories of non-audit services and requires
pre-approval of the Audit Committee for other permissible categories of
non-audit services, such categories as determined by SEC rules. To facilitate
the pre-approval of audit and non-audit services between meetings of the
Committee, the Audit Committee has detailed procedures that permit this
responsibility to be delegated to the Chair of the Committee, who will report on
any amounts pre-approved at the next meeting of the Committee.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEESNot required.PART III
ITEM 17. FINANCIAL STATEMENTSThe financial statements and supplementary information
required to be filed under this item are presented in
this Annual Report on Form 20-F, and are incorporated herein by reference. See
the index to the financial statements under item 18 below.ITEM 18. FINANCIAL STATEMENTSContents
Auditors' ReportConsolidated Balance SheetsConsolidated Statements of EarningsConsolidated Statements of Shareholders' EquityConsolidated Statements of Cash FlowsNotes
      to the Consolidated Financial Statements

---

AUDITORS' REPORT

To the Shareholders of
CHC Helicopter Corporation

We have audited the consolidated balance sheets of CHC
Helicopter Corporationas at April 30, 2003 and 2002 and the consolidated
statements of earnings, shareholders' equity and cash flows for the three years
ended April 30, 2003, 2002 and 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with Canadian and
United States generally accepted auditing standards. Those standards require
that we plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.
In our opinion, these consolidated financial statements
present fairly, in all material respects, the financial position of the Company
as at April 30, 2003, and 2002 and the results of its operations and its cash
flows for the three year period ended April 30, 2003, 2002, and 2001 in
accordance with Canadian generally accepted accounting principles.







|St.
    John's, Canada, |                      
|----------------------- | ---------------------
|June 4,
    2003.       | Chartered Accountants

---





|                                                      |   |           |            |          
|----------------------------------------------------- | - | --------- | ---------- | ---------
|CHC Helicopter Corporation                            |   |           |            |          
|Consolidated Balance Sheets                           |   |           |            |          
|As at
    April 30 (in thousands of Canadian dollars) |   |           |            |          
|Incorporated under the laws of Canada                 |   |           |            |          
|                                                      |   |           | (Restated 
|                                                      |   |           | Note 4(a))
|                                                      |   | 2003      | 2002      
|Assets (Note 11)                                      |   |           |            |          
|Current
    assets                                    |   |           |            |          
|Cash and
    cash equivalents (Note 5)                | $ | 58,104    | $          | 112,838  
|Receivables (Note 9)                                  |   | 139,587   |            | 146,972  
|Future
    income tax assets (Note 19)                |   | 11,001    |            | 9,206    
|Inventory                                             |   | 214,656   |            | 174,150  
|Prepaid
    expenses                                  |   | 18,449    |            | 15,323   
|                                                      |   | 441,797   |            | 458,489  
|Property
    and equipment, net (Note 7)              |   | 537,318   |            | 544,169  
|Investments (Note 8)                                  |   | 21,043    |            | 18,717   
|Other
    assets (Note 9)                             |   | 127,535   |            | 133,143  
|Future
    income tax assets (Note 19)                |   | 17,877    |            | 9,733    
|                                                      | $ | 1,145,570 | $          | 1,164,251
|                                                      |   |           |            |          
|Liabilities and shareholders' equity                  |   |           |            |          
|Current
    liabilities                               |   |           |            |          
|Payables
    and accruals                             | $ | 136,743   | $          | 140,403  
|Income
    taxes payable                              |   | 3,993     |            | 4,985    
|Current
    portion of debt obligations (Note 11)     |   | 20,369    |            | 113,387  
|                                                      |   | 161,105   |            | 258,775  
|Long-term
    debt (Note 11(a))                       |   | 139,374   |            | 167,202  
|Senior
    subordinated notes (Note 11(b))            |   | 151,111   |            | 133,034  
|Subordinated debentures (Note 11(c))                  |   | 10,414    |            | 11,157   
|Other
    liabilities (Note 13)                       |   | 59,299    |            | 51,398   
|Future
    income tax liabilities (Note 19)           |   | 210,036   |            | 209,933  
|Shareholders' equity                                  |   | 414,231   |            | 332,752  
|                                                      | $ | 1,145,570 | $          | 1,164,251
|                                                      |   |           |            |          

Commitments, guarantees
      and contingent liabilities (Notes 13, 23, 25 and 26)On
      behalf of the Board:Director
      DirectorSee accompanying notes


---





CHC Helicopter CorporationConsolidated Statements of EarningsYear ended April 30 (in
      thousands of Canadian dollars, except per share amounts)(Restated
      (RestatedNote 4 (a))
      Note 4(a))2003
      2002
      2001Revenue
      $722,363
      $617,816
      $593,849Operating expenses
      580,150
      496,993
      477,300Earnings before undernoted
      items
      142,213
      120,823
      116,549Amortization
      (22,585)
      (18,622)
      (19,980)Gain on
      disposals of assets
      2,413
      1,859
      998Earnings from operations
      before assetimpairment charge
      122,041
      104,060
      97,567Asset
      impairment charge (Notes 2(i) and 9(ii))
      (12,811)
      -
      -Earnings from operations
      109,230
      104,060
      97,567Financing charges (Note 11)
      (34,878)
      (47,979)
      (56,380)Equity
      in earnings of associated companies
      2,340
      1,111
      (416)Earnings before undernoted
      itemsand income taxes
      76,692
      57,192
      40,771Debt
      settlement (Notes 11(b) and 12)
      (12,464)
      -
      (18,643)Gain on
      sale of operations and investments (Note 6)
      -
      -
      5,761Earnings before income
      taxes
      64,228
      57,192
      27,889Income
      taxes recovery (provision) (Note 19)
      1,905
      (9,900)
      5,913Net earnings
      $ 66,133
      $ 47,292
      $33,802Earnings per share (Note 20)Basic
      $3.19
      $2.87
      $2.15Diluted
      $2.94
      $2.62
      $2.01See accompanying notes


---





CHC Helicopter CorporationConsolidated Statements of Shareholders'
      EquityYear ended April 30 (in
      thousands of Canadian dollars, except per share amounts)(Restated(Restated
      Note 4(a)Note 4 (a))
      and (c))2003
      2002
      2001Retained earnings,
      beginning of yearas originally stated
      $ 117,280
      $70,704
      $49,350Retroactive application of change in accountingpolicy
      with restatement of prior periods (Note 4(a))
      180
      
      (536)
      (2,418)Retroactive application of change in accountingpolicy
      without restatement of prior periods(Notes
      4(b) and (c))
      (1,715)
      
      -
      (8,870)Retained earnings,
      beginning of yearas restated
      115,745
      70,168
      38,062Net
      earnings
      66,133
      47,292
      33,802Dividends paid (Note 14)
      (4,016)
      
      -
      (1,696)Retained earnings, end of
      year
      177,862
      117,460
      70,168Capital
      stock (Note 14)
      236,962
      236,007
      119,493Contributed surplus (Note 14)
      3,291
      3,291
      3,291Foreign
      currency translation adjustment (Note 17)
      (3,884)
      (24,006)
      (37,525)Total shareholders' equity
      $414,231
      $332,752
      $155,427Dividends paid per participating voting share
      $ 0.20
      $
      -
      $0.11


See
accompanying notes

---



CHC Helicopter CorporationConsolidated Statements of Cash FlowsYear ended April 30 (in
      thousands of Canadian dollars)(Restated(Restated
      Note 4(a)Note 4 (a))
      and (c))2003
      2002
      2001Operating activitiesNet
      earnings
      $ 66,133
      $ 47,292
      $33,802Non-operating items and items not involving cash:Amortization
      22,585
      18,622
      19,980Gain on
      disposals of assets
      (2,413)
      (1,859)
      (998)Asset
      impairment charge
      12,811
      -
      -Equity
      in earnings of associated companies
      (2,340)
      (1,111)
      416Income
      taxes (Note 16)
      (12,125)
      4,811
      (3,653)Financing charges
      168
      3,334
      2,165Debt
      settlement
      12,464
      -
      18,643Defined
      benefit pension plans
      (10,934)
      (4,003)
      (15,412)Other
      909
      (2,037)
      (1,370)Gain on
      sale of operations and investments
      -
      -
      (5,761)Cash flow from operations
      87,258
      65,049
      47,812Change
      in non-cash working capital (Note 21)
      (26,492)
      (15,561)
      (30,363)60,766
      49,488
      17,449Financing activitiesLong-term debt proceeds
      118,154
      100,748
      543,172Long-term debt repayments
      (241,320)
      (156,295)
      (114,693)Debt
      settlement
      (9,136)
      -
      (574,392)Dividends paid
      (4,016)
      -
      (1,696)Capital
      stock issue
      596
      114,504
      4,662Deferred financing costs
      -
      -
      (3,749)Government grants received
      -
      -
      614(135,722)
      58,957
      (146,082)Investing activitiesProperty and equipmentAdditions
      (44,669)
      (37,307)
      (40,105)Helicopter major inspections
      (13,384)
      (9,913)
      (6,055)Helicopter components, net (Note 7)
      4,042
      (11,268)
      3,580Proceeds from disposal
      74,865
      49,758
      2,723Long-term receivables
      7,386
      (2,342)
      3,839Pre-operating expenses
      (3,113)
      (7,419)
      (6,795)Other
      (6,622)
      (499)
      522Net
      proceeds on disposal of operationsand
      investments (Note 6)
      -
      -
      169,60118,505
      (18,990)
      127,310Effect
      of exchange rate changes oncash
      and cash equivalents
      1,717
      (167)
      228Change
      in cash and cash equivalents during the year
      (54,734)
      89,288
      (1,095)Cash and cash equivalents,
      beginning of year
      112,838
      23,550
      24,645Cash and cash equivalents,
      end of year
      $ 58,104
      $112,838
      $23,550See accompanying notes


---



CHC Helicopter Corporation
Notes to the Consolidated Financial Statements

1.     Summary of significant accounting policies

Basis of presentation

CHC Helicopter Corporation (the "Company") is a leading
provider of helicopter transportation services to the global oil and gas
industry. The Company currently operates in over 20 countries, with major
operating units in Norway, the United Kingdom, South Africa, Australia and
Canada. The Company principally provides helicopter transportation services to
the oil and gas industry for production and exploration activities as well as
emergency medical and search and rescue services.

The consolidated financial statements include the accounts of
the Company and its direct and indirect controlled subsidiaries. They have been
prepared by management in accordance with Canadian generally accepted accounting
principles and are in accordance with generally accepted accounting principles
in the United States ("U.S. GAAP") except as described in Note 29.

Foreign currency translation

Balance sheet and income statement transactions denominated
in other than the functional currency of the operating divisions are translated
into the divisions' functional currency at the rate of exchange at the beginning
of the month in which the transaction occurred except for material transactions
which are translated at the spot foreign exchange rate. At each balance sheet
date foreign denominated monetary assets and liabilities are revalued at the
foreign exchange rate in effect at such date.

The Company's foreign subsidiaries are financially and
operationally self-sustaining. Accordingly, the current rate method is used for
the translation of their financial statements to Canadian dollars upon
consolidation. Under this method, the assets and liabilities of these
subsidiaries are translated at the rate of exchange in effect at the balance
sheet date. Revenue and expense items are translated at the average annual
exchange rate. Exchange gains or losses arising from the current rate method of
translation are deferred in a separate component of shareholders' equity. Such
gains or losses are included in the determination of net earnings when there is
a reduction in the net investment in the foreign subsidiary as a result of a
dilution or sale of part or all of the Company's interest in the foreign
subsidiary or as a result of capital transactions including dividend
distributions and capital restructuring.

The Company has certain foreign denominated long-term debt
that has been designated an effective hedge of certain of its self-sustaining
foreign subsidiaries. Upon translation of such debt into Canadian dollars, any
gains or losses are also deferred in a separate component of shareholders'
equity to be recognized in net earnings when there is a reduction in the net
investment in the subsidiaries.

Inventory

Inventory, consisting primarily of aircraft parts, is valued
at the lower of average cost and replacement cost. The cost of overhauled
inventory includes the cost of raw materials, direct labour and related
overhead.

Property and equipment

Property and equipment includes flying assets, facilities and equipment that
are amortized over their estimated useful lives under the following methods:

a)         Flying assets

1. Airframes represent approximately 30% of the value of an aircraft and
  are amortized on a straight-line basis to amortization expense over their
  estimated useful life of 15 years. At pre-determined intervals, as specified
  by the manufacturer, airframes require major inspections. The cost of these
  major inspections is capitalized and amortized to operating expense over their
  expected period of future benefit based on flight hours.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

1. Summary of significant accounting policies
(cont'd)

1. Components comprise 70% of the value of an aircraft and
  consist of major components (i.e. engine, rotorheads, gearboxes and blades)
  and non-major components. The major components are required to be inspected
  and overhauled at intervals as specified by the original equipment
  manufacturer and aviation regulatory authorities. Costs incurred to perform
  these inspections and major repairs and overhauls are capitalized and
  amortized to operating expense to their residual value over their expected
  period of future benefit based on flight hours. Non-major repair and
  maintenance costs are expensed as incurred.

b)         Facilities and equipment

Facilities are comprised of hangers, heliports and other
  buildings housing base operations and administrative support. Equipment
  includes training, repair and overhaul, manufacturing and base equipment and
  vehicles. Such facilities and equipment are amortized on a declining balance
  or straight-line basis at rates ranging from 5% to 20%.

Investments

Long-term investments through which the Company exerts
significant influence over the investee are accounted for by the equity method.
Under this method, the investment is initially recorded at cost and the carrying
value is adjusted thereafter to include the Company's pro-rata share of post
acquisition earnings of the investee. All other long-term investments are
carried at cost and income on these investments is recognized only to the extent
of dividends received. When there has been a decline in the value of an
investment that is other than a temporary decline, the investment is written
down to estimated net realizable value.

Pre-operating expenses

The Company defers expenses net of incremental revenues
related to the operations of new businesses and customer contracts in the period
prior to the new business or contract being capable of consistently providing
its intended product and/or service. Deferral occurs where the expenses are
related directly to placing the new business or new contract into commercial
service, are incremental in nature and are considered by management to be
recoverable from the future operations and conditions of the new business or
contract. Deferral ceases at the earlier of the achievement of a specified
commercial activity level, the passage of a specified period of time or at the
start of the new contract. Amortization of the deferred expenses related to the
operations of new businesses is based on their expected period of benefit, not
exceeding five years. Amortization of deferred expenses related to new contracts
is amortized over the contract term. Management periodically evaluates the
recoverability of the deferred expenses from future cash flows from operations
to determine whether any write down of such deferred expenses to net recoverable
amounts is required.

Government assistance

Government assistance relating to the acquisition of facilities and equipment
is deferred and amortized over the life of the assets to which they relate.
Government assistance relating to operations is recorded as revenue in the same
period as the related expense.

Revenue recognition

Revenue from helicopter operations is recognized based on the
terms of customer contracts that generally provide for revenue on the basis of
hours flown at contract rates or fixed monthly charges or a combination of both.

Training revenue is recognized based on the terms of customer contracts that
generally provide for revenue on the basis of training hours provided.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

1. Summary of significant accounting policies
(cont'd)

Revenue from engine and component repair and overhaul and
composites manufacturing operations is recognized on the percentage of
completion basis and is measured on the basis of the sales value of the actual
costs incurred and work performed. Customers are invoiced in advance for repair
and overhaul services performed under "power by the hour" ("PBH") contracts.
Typically, a portion of this revenue is recognized on a monthly basis to reflect
ongoing services provided with the balance recognized when the major repair and
overhaul activities are completed. Any loss on repair and overhaul and
composites manufacturing contracts is recognized into earnings immediately when
known.

Future income taxes

The Company uses the liability method of accounting for
income taxes. Under the liability method, future income tax assets and
liabilities are determined based on temporary differences between the financial
reporting and tax bases of assets and liabilities and are measured using tax
rates substantially enacted at the balance sheet date. The effect of changes in
income tax rates on future income tax assets and liabilities is recognized in
income in the period that the change becomes substantially enacted.

Pension costs and obligations

The Company has defined contribution and defined benefit
pension plans covering substantially all of its employees. In valuing accrued
obligations for its defined benefit plans, the Company uses the projected
benefit method prorated on service and best estimate assumptions. Pension plan
assets are carried at market values. Actuarial and experience gains and losses,
prior service costs, plan amendments and transition amounts are amortized on a
straight-line basis over the expected average remaining service life of the plan
participants.

Stock-based compensation plans

The Company accounts for share options based on their
intrinsic value at the date of grant with pro-forma disclosure of net earnings
and earnings per share had the fair value method been used. Therefore, the
issuance of share options by the Company is treated as a capital transaction for
accounting purposes and accordingly does not give rise to compensation expense
in the consolidated financial statements (Notes 4 and 15).

The Company uses the fair value based approach to account for
specified stock-based compensation awards issued under the Company's Stock
Appreciation Rights Plan and Long-Term Incentive Plan ("SARs plans") resulting
in the recording of compensation expense in the consolidated financial
statements. Compensation expense related to SARs is recognized, based on graded
vesting, as the amount by which the quoted market value of the Company's shares
exceeds the value as specified under the SARs plans. Changes in the market value
of the shares between the date of grant of the SARs and the current reporting
date result in an increase or decrease in compensation expense in the period
(Notes 4 and 10). During the year the Company entered into an equity forward
price agreement with a major Canadian financial institution to hedge the
Company's SARs to reduce any volatility in cash flow and earnings due to future
increases in the Company's share price.

Financial instruments

The Company periodically enters into derivative financial
instruments such as foreign forward exchange contracts, interest rate swaps and
equity forward price agreements to manage foreign exchange risks, interest rate
risks and stock price volatility. Gains and losses on financial instruments
designated as hedges are recognized in earnings in the same period as the
underlying transactions. Gains and losses on financial instruments not
designated as hedges are recognized in earnings when the underlying contracts
mature. Payments and receipts under interest rate swaps and equity forward price
agreements are recognized as adjustments to interest expense and compensation
expense, respectively.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

1.     Summary of significant accounting policies
(cont'd)

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and with
banks and investments in money market instruments with original maturities of
less than 90 days that are readily convertible to known amounts of cash and are
subject to an insignificant risk of a material change in value.

---

2. Accounting estimates and measurement uncertainty

The preparation of these consolidated financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and the reported amounts of
revenue and expenses during the reporting periods. By their nature these
estimates are subject to measurement uncertainty. The effect on the financial
statements of changes in such estimates in future periods could be material and
would be accounted for in the period the change occurs. The following are
significant areas in which management makes significant accounting estimates:

i)           Recoverability
of pre-operating expenses

> The ability to defer pre-operating expenses is dependent on
>   the future recoverability of the amounts from cash flows generated by the
>   related commercial operations. If operations perform below anticipated
>   recoverable levels the portion of pre-operating expenses that cannot be
>   recovered is expensed immediately when known. At April 30, 2003 management
>   evaluated the recoverability from cash flows of future operations of the
>   carrying value of pre-operating expenses. Management determined that all $12.8
>   million of such costs related to the composites manufacturing business carried
>   on by its wholly-owned subsidiary, CHC Composites Inc. ("Composites") should
>   be written off and recorded as an asset impairment charge (Note 9). At April
>   30, 2003, $3.4 million in unamortized pre-operating expenses related to new
>   contract awards remained in other assets on the balance sheet.

ii)          Flying asset
amortization

> Flying assets are comprised of airframes and components.
>   The airframes represent approximately 30% of the value of an aircraft and are
>   amortized on a straight-line basis over their estimated useful lives of 15
>   years. While the amortization period does not exceed the useful lives of the
>   airframes it may be conservative as airframes may have actual useful lives in
>   excess of 15 years.
>   The helicopter airframes and components are inspected,
>   repaired and overhauled at pre-specified intervals. Such costs are capitalized
>   to flying assets and are amortized to operating expenses over their period of
>   expected future benefit based on flight hours. This requires management to
>   estimate the period of expected future benefit for each type of component and
>   inspection. Such estimates are based on mandated inspection and overhaul
>   intervals and on previous experience and could vary materially from actual
>   experience resulting in over or under amortization of capitalized costs.

iii)         Carrying value of flying
assets

> At April 30, 2003 the appraised value of the Company's
>   flying assets exceeded the carrying value by $185.1 million (unaudited). The
>   recoverability of the book value of these assets is, in part, dependent on the
>   estimates used in determining the expected period of future benefits over
>   which to amortize flying assets. In addition, such recoverability is dependent
>   on market conditions including demand for certain types of aircraft and
>   changes in technology arising from the introduction of newer, more efficient
>   aircraft.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

2.     Accounting estimates and measurement uncertainty
(cont'd)

iv)       
Defined benefit employee pension plans

> The Company maintains both funded and unfunded defined
>   benefit employee pension plans in the U.K., Norway and Canada for
>   approximately one-third of its active employees and certain former employees.
>   Several statistical and judgmental factors, which attempt to anticipate future
>   events, are used in measuring the Company's obligations under the plans and
>   the related periodic pension expense. These factors include assumptions about
>   the rate at which the pension obligation is discounted, the expected long-term
>   rate of return on plan assets and the rate of future compensation increases.
>   In addition, the Company's actuaries use other assumptions such as withdrawal
>   and mortality rates. The estimates and assumptions used may differ materially
>   from actual results due to changing market and economic conditions, changing
>   withdrawal rates, and changing overall life spans of participants. These
>   differences may have a material impact on the amount of pension expense
>   recorded and on the carrying value of prepaid pension costs and accrued
>   pension obligations. Management reviews annually the assumptions used in
>   measuring the pension plan obligations to determine their appropriateness
>   based on actual experience and current and anticipated market conditions.

v)          Effectiveness of
foreign currency hedge

> The Company has designated its euro denominated debt as a
>   hedge of its Norwegian kroner ("NOK") denominated net investment in its
>   self-sustaining foreign operations. As a result, translation losses of $15.4
>   million (net of taxes of $3.8 million) as at April 30, 2003 (2002 - $ 1.8
>   million translation losses, net of taxes $NIL; 2001 - $5.3 million translation
>   gains, net of taxes $NIL) on the revaluation of this euro denominated debt
>   have been recorded as a foreign currency translation adjustment in
>   shareholders' equity. The Company believes, based on the stated policy of the
>   Norwegian government, that the NOK will track the euro, and based on the
>   Company's experience, the euro debt is and will continue to be an effective
>   hedge of the Norwegian operations. If circumstances change in the future,
>   including the assumption that the NOK will track the euro, then the hedge may
>   become ineffective. This would result in revaluation gains and losses on the
>   euro denominated debt being charged to earnings in each period.

vi)         Utilization of income tax
losses

> The Company has accumulated $61.4 million and $13.6 million
>   in non-capital and capital tax losses, respectively, as at April 30, 2003. The
>   non-capital losses expire between fiscal 2006 and 2013, while the capital
>   losses carry forward indefinitely. Management has determined that it is more
>   likely than not that the benefit of all of these losses will be realized in
>   the future and, accordingly, has recorded future tax assets of $22.7 million
>   related to these losses. This determination was based on assumptions regarding
>   the reversal of existing future tax liabilities and future earnings levels in
>   the subsidiaries with accumulated losses, and on an ability to implement
>   routine tax planning measures. If, in the future, it is determined that it is
>   more likely than not that all or part of the future tax assets will not be
>   realized, a charge will be made to earnings in the period such determination
>   is made.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

2.     Accounting estimates and measurement
uncertainty (cont'd)

vii)        Aircraft
operating leases

> Upon entering into a new aircraft leasing arrangement,
>   management evaluates whether substantially all of the benefits and risks of
>   ownership related to the aircraft have been transferred to the lessor in order
>   to determine if the lease is classified and recorded as capital or operating.
>   Currently, all of the Company's aircraft leases are classified and recorded as
>   operating leases. One of the criteria in determining whether the benefits and
>   risks have been transferred is whether the present value of the minimum lease
>   payments is less than 90% of the fair value of the leased aircraft at the
>   inception of the lease. Another criteria that is evaluated is whether there is
>   a bargain purchase option at the end of the lease compared to the estimated
>   fair market value of the aircraft at that time. At the time of entering into a
>   new aircraft leasing arrangement the Company obtains an independent appraisal
>   from a helicopter valuation company of the estimated fair value of the
>   aircraft at the beginning and end of the lease term. These appraisals involve
>   the use of estimates on current and future condition of, and demand for, the
>   particular aircraft type. Different valuation companies may calculate
>   different appraisal values for the same aircraft based on different
>   assumptions used. The use of different estimates of fair market value based on
>   the appraisals could result in a different lease classification. The appraised
>   value of the Company's fleet of leased aircraft as at April 30, 2003 was
>   approximately $457 million and $410 million at April 30, 2002 (unaudited).

viii)        Variable
interest entities

> At April 30, 2003 the Company was leasing seventeen aircraft
>   from eight variable interest entities. During the year Canadian and U.S. GAAP
>   were revised and now require the Company to assess each of these entities at
>   each reporting date to ensure that it continues to satisfy the criteria for
>   non-consolidation (see Note 24 for transition provisions). In performing this
>   assessment, the Company is required to make a number of estimates including
>   the range of possible outcomes at the end of the lease. In the case of the
>   Company's variable interest entities, these possible outcomes relate to the
>   estimated asset values at the end of the lease. In addition to developing a
>   range of possible outcomes, the Company is required to assign a probability to
>   each potential outcome. The possible outcome identified by the Company and the
>   probabilities chosen can significantly impact whether a particular variable
>   interest entity is required to be consolidated by the Company.

---

3. Comparative figures

Certain comparative figures have been reclassified to conform to
the current year's presentation.

---

4.     Changes in accounting policies

a)     Translation of foreign currencies

> Effective May 1, 2002 the Company retroactively adopted, with
>   restatement of individual prior periods, the new Canadian accounting
>   recommendations with respect to foreign currency translation which conform
>   substantially to U.S. GAAP. These recommendations require that unrealized
>   exchange gains and losses on the translation of long-term debt that has not
>   been designated as a hedge of the Company's net investment in self-sustaining
>   foreign operations be included in earnings immediately. The impact of adopting
>   these new recommendations was a $2.4 million and $0.5 million decrease in
>   opening retained earnings at May 1, 2000 and May 1, 2001 respectively, an
>   increase in other assets of $0.2 million as at April 30, 2002 and a decrease
>   in financing charges (net of taxes) of $0.7 million for fiscal 2002. As a
>   result, May 1, 2002 opening retained earnings were increased by $0.2 million.
>   In fiscal 2001, the impact was an increase in financing charges of $0.4
>   million (net of taxes) and a decrease in debt settlement costs (net of taxes)
>   of $2.3 million.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

4.     Changes in accounting policies (cont'd)

b)     Stock-based compensation plans

> Effective May 1, 2002 the Company retroactively adopted,
>   without restatement of prior periods, the new Canadian accounting
>   recommendations with respect to stock-based compensation. The recommendations
>   require the use of a fair value based approach to account for specified
>   stock-based compensation awards which include the Company's SARs plans. The
>   impact of adopting the new recommendations related to the Company's SARs
>   granted prior to May 1, 2002 was a charge against retained earnings of $1.7
>   million, the recording of a long-term future income tax asset of $1.0 million
>   and an increase of $2.7 million in payables and accruals.
>   The recommendations require that compensation expense
>   related to share options be calculated under the fair value method or, where
>   the fair value method is not used, pro-forma disclosures of net earnings and
>   earnings per share had the fair value method been used is required. The
>   Company accounts for share options based on their intrinsic value at the date
>   of grant and accordingly has not recognized compensation expense for such
>   share options.

c)     Future income taxes

> The CICA issued a new accounting recommendation with
>   respect to future income taxes which was adopted by the Company effective May
>   1, 2000. Under the new standard, future tax benefits and obligations are
>   determined based on differences between the financial reporting and tax bases
>   of assets and liabilities and measured using the tax rates substantively
>   enacted at the balance sheet date.
>   The Company adopted the future income tax standard
>   retroactively without restatement of prior years' financial statements. As a
>   result, at May 1, 2000 the Company increased property and equipment by $32.8
>   million, reduced shareholders' equity by $8.9 million and increased net future
>   tax liabilities by $41.7 million.
>   During the third quarter of 2001, the Company recorded an
>   income tax recovery of $9.5 million related to future income tax rate
>   reductions. These rate reductions will be phased in over the 2001 to 2004
>   income tax years. In accordance with the new CICA accounting recommendation
>   with respect to income taxes, these rate reductions are reflected in earnings
>   when they are substantively enacted. Other than the $9.5 million recovery of
>   income taxes related to the Canadian tax rate reductions, the impact of the
>   adoption of the new accounting standard for the year was not significant.

d)     Employee future benefits

> The Company adopted, on a prospective basis, the CICA's new
>   accounting recommendations with respect to employee future benefits, effective
>   May 1, 2000. The adoption of this standard had no significant impact on the
>   Company's results or financial position.

e)     Earnings per share

> The Company adopted the CICA's new accounting
>   recommendations with respect to earnings per share, effective February 1,
>   2001, whereby the Company has changed from the imputed earnings to the
>   treasury stock method of accounting for diluted earnings per share. This
>   policy has been applied retroactively.

---

5. Cash and cash equivalents

At April 30, 2003 cash includes funds restricted for current taxes withheld
and payable and other current obligations totalling $11.4 million (2002 - $10.8
million).

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

6. Gain on sale of operations and investments

During the year ended April 30, 2001, the Company sold four
non-core operations for total net proceeds of $169.6 million, resulting in a
pre-tax gain of $5.8 million. The operations disposed of include certain U.K.
based non-oil and gas related operations; a wholly-owned onshore helicopter
services company, Heliflyg AB; Lufttransport AS, a wholly-owned fixed-wing air
ambulance service company; and Canadian onshore helicopter operations and
assets.

---

7. Property and equipment

The capital cost and related accumulated amortization of the Company's flying
assets, facilities and equipment are as follows:

2003
      2002Flying
      assetsCost
      $577,683
      $597,636Accumulated amortization of airframes
      (47,668)
      (44,753)530,015
      552,883Accumulated net amortization of helicopter majorinspections and major component repair and overhaul costs
      (81,408)
      (82,233)448,607
      470,650FacilitiesCost
      72,641
      62,669Accumulated amortization
      (13,961)
      (8,649)58,680
      54,020EquipmentCost
      63,220
      45,462Accumulated amortization
      (33,189)
      (25,963)30,031
      19,499$537,318
      $544,169


Operating expenses include the amortization of major
component repair and overhaul costs of $114.3 million (2002- $120.3 million;
2001 - $136.4 million) while related actual expenditures for such costs during
the year were $110.3 million (2002 - $131.6 million; 2001 - $132.8 million). The
net amortization over expenditure of $4.0 million (2002 - net expenditure over
amortization of $11.3 million; 2001 - net amortization over expenditure of $3.6
million) is reported in investing activities in the consolidated statements of
cash flows.

---

|8. Investments                                                | 2003    | 2002   
|------------------------------------------------------------- | ------- | -------
|                                                              |         |        
|Long-term
    investments, at equity                          |         |        
|Canadian
    Helicopters Limited (2003 - 43.5%, 2002 - 44.5%) | $ 5,759 | $ 3,420
|Long-term
    investments, at cost                            |         |        
|Canadian
    Helicopters Limited, preferred shares            | 15,000  | 15,000 
|Other                                                         | 284     | 297    
|                                                              | $21,043 | $18,717

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

|                                                         |          |           
|-------------------------------------------------------- | -------- | ----------
|9. Other assets                                          |          | (Restated 
|                                                         |          | Note 4(a))
|                                                         | 2003     | 2002      
|Prepaid
    pension costs (Note 27) (i)                  | $ 83,961 | $ 69,155  
|Pre-operating expenses (ii)                              | 3,412    | 15,947    
|Deferred
    financing costs, less accumulated           |          |           
|amortization of $9.6 million (2002 - $7.6 million) (iii) | 9,176    | 15,053    
|Aircraft
    operating lease junior loans (iv)           | 15,758   | 14,276    
|Loan
    receivable from equity investee (v)             | -        | 8,571     
|Advance
    rentals (vi)                                 | 5,593    | 3,298     
|Note
    receivable (vii)                                | -        | 5,252     
|Employee
    stock purchase loans (viii)                 | 3,437    | 3,517     
|Norway
    public pension scheme prepayments             | 4,875    | 3,441     
|Other                                                    | 1,323    | 1,221     
|                                                         | 127,535  | 139,731   
|Less:
    current portion included with receivables      | -        | (6,588)   
|                                                         | $127,535 | $133,143  

1. Prepaid pension costs represent accumulated contributions
  paid by the Company into its defined benefit employee pension plans in excess
  of the accumulated current and prior years' benefit pension expense (Note 27).
2. The pre-operating expense balance as of April 30, 2003 consists primarily
  of costs incurred in the startup phase of new contract awards. These costs are
  being amortized over the term of the contract. The Company has determined that
  the pre-operating expenses are recoverable from future cash flows to be
  generated from the contracts. 
  During the year, the Company expensed $2.5 million (2002 - $0.9 million; 2001
  - $1.4 million) related to the amortization of pre-operating expenses. In
  addition, the Company recorded a $12.8 million asset impairment charge related
  to pre-operating expenses in Composites (Note 2).
3. Deferred financing costs (net of accumulated amortization)
  include $8.3 million (2002 - $13.3 million) in legal, bank and other fees
  directly related to long-term financing activities as well as $0.9 million of
  debt discount (2002 - $1.8 million) related to the Company's euro denominated
  senior subordinated notes. These costs are being amortized to financing
  charges over the term of the related debt obligations with $3.1 million
  amortized in fiscal 2003 (2002 - $3.8 million; 2001 - $2.9 million). In
  addition, $3.1 million in deferred financing costs were written off upon the
  settlement of certain debt (2002 - $NIL; 2001 - $4.6 million) (Note 12).
4. The aircraft junior loans are loans with lessors for the
  financing of 12 aircraft under operating leases as at April 30, 2003. Such
  loans bear interest at 5.25% to 5.75% (2002 - 5.50% to 5.70%) with principal
  and accrued interest due at maturity. These loans mature between February 2005
  and November 2008. Under the lease agreements, when the aircraft are sold by
  the lessors at the end of the lease terms, if the proceeds received are
  greater than the estimated residual value of the aircraft at that time, the
  loans may be fully recoverable. As at April 30, 2003, no allowance has been
  recorded on these loans as management currently believes that the aircraft
  will realize their estimated residual value upon sale at the end of the lease
  terms.
5. The loan receivable from equity investee was repaid in December 2002.
6. The advance rentals are up-front rental payments made on aircraft leased
  under operating leases. These rentals are being amortized over the related
  lease terms. Under the terms of certain of the lease agreements if the lessor
  procures a buyer for the aircraft at the end of the lease term for proceeds
  greater than the estimated residual value of the aircraft at termination of
  the leases, the advance rental payments may be fully recovered by the Company.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

9. Other assets (cont'd)

1. The note receivable was repaid in May 2002.
2. The employee stock purchase loans are non-interest bearing
  full recourse loans and have as collateral a pledge of the related shares
  purchased. At April 30, 2003 the fair market value of the pledged shares was
  $12.8 million. Payments equal to 5% of the original loan principal are
  required on each loan anniversary date with the balance payable on the tenth
  anniversary. Upon termination of employment, the loans are required to be
  repaid within 60 days.

---

10.    Stock appreciation rights and long-term incentive plans
("SARs Plans")

AtApril 30, 2003 the Company had 323,619 (2002 -
332,946) SARs vested and unexercised at reference prices ranging from $4.30 to
$20.55 per unit. At the date of exercise, cash payments will be made to the
holders based on the difference between the market value of the Company's Class
A subordinate voting shares on the Toronto Stock Exchange ("TSX") and the
reference price. The Company also had an additional 182,622 units that had been
granted but not vested at April 30, 2003 with reference prices ranging from
$4.30 to $26.11 per unit. It is anticipated that these units will vest during
fiscal 2004 and 2005.

Compensation expense in respect of SARs for the year ended
April 30, 2003 was $5.0 million (2002 - $3.6 million; 2001 - $2.5 million). At
April 30, 2003 the Company's current liability in respect of SARs was $6.8
million (2002 - $5.6 million) based on graded vesting.

SARs granted by the Company must be exercised within ten years of the date
they vest. The SARs that have vested at April 30, 2003 have expiry dates in
2010-2012.

---



CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

|11.                                 | Debt obligations                  |               |          |          |         
|----------------------------------- | --------------------------------- | ------------- | -------- | -------- | --------
|                                    |                                   |               |          |          |         
|a)                                  | Long-term debt                    |               |          |          |         
|                                    |                                   | Principal     |          |          |         
|                                    |                                   | repayment     | Maturity |          |         
|Interest rates                      | terms                             | dates         | 2003     | 2002    
|Senior credit facilities            |                                   |               |          |         
|                                    |                                   |               |          |          |         
|Non-revolving credit
    facilities |                                   |               |          |         
|                                    |                                   |               |          |          |         
|U.K. LIBOR + 1.125%                 | Quarterly and                     | July 2005     | $125,785 | $155,004
|(2002 - 2%)                         | at maturity                       |               |          |         
|                                    |                                   |               |          |          |         
|U.S. LIBOR + 1.125%                 | At maturity                       | December 2002 | -        | 20,380  
|(2002 - 2%)                         |                                   |               |          |         
|                                    |                                   |               |          |          |         
|Other term loans                    |                                   |               |          |         
|                                    |                                   |               |          |          |         
|7.00% (2002 - 7.85%)                | Semi-annually                     | November 2018 | 27,163   | 26,404  
|                                    |                                   |               |          |          |         
|12% unsecured,
    subordinated,    | At maturity                       | December 2010 | 4,323    | 4,233   
|                                    | convertible note due to an        |               |          |          |         
|                                    | affiliate
    of the controlling  |               |          |          |         
|                                    | shareholder (Notes 14 and
    28) |               |          |         
|                                    |                                   |               |          |          |         
|5.75% convertible
    promissory    | On demand                         | -             | -        | 392     
|                                    | note
    (Note 14)                |               |          |          |         
|                                    |                                   |               |          |          |         
|Non-interest bearing                | Monthly                           | February 2009 | 893      | 967     
|                                    |                                   |               |          |          |         
|5.75%                               | At maturity                       | January 2008  | 836      | 833     
|Total long-term debt                |                                   |               | 159,000  | 208,213 
|Less:                               | current
    portion               |               |          | (19,626) | (41,011)
|                                    |                                   |               |          |          |         
|                                    |                                   |               |          | $139,374 | $167,202

The applicable variable interest rates at April 30, 2003 were: U.S. LIBOR -
1.31% (2002 - 1.84%; 2001 - 4.76%) and U.K. LIBOR - 3.62% (2002 - 4.07%; 2001 -
5.52%).

The terms of certain of the Company's debt agreements and
helicopter lease agreements impose operating and financial limitations on the
Company. Such agreements limit, among other things, the Company's ability to
incur additional indebtedness, create liens, make capital expenditures, sell or
sublease assets, engage in mergers or acquisitions and make dividend and other
payments. During the year, the Company was in compliance with all covenants and
other conditions imposed by its debt and helicopter lease agreements.

During the year the Company's 5.75% demand, convertible, promissory note with
a Canadian chartered bank was fully converted into 105,000 Class A subordinated
voting shares (Note 14).

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

11.     Debt obligations (cont'd)

Collateral

As collateral for certain term loans the Company has provided
specific charges on real estate and other assets with net book values of $21.2
million as at April 30, 2003. As collateral for the senior credit facilities,
the Company has provided a $750.0 million debenture, providing a fixed charge
over all material freehold and leasehold real property and all aircraft, a
floating charge over all other property and a general assignment of book debts.

Repayment requirements

Principal repayment requirements related to the long-term debt over the next
five years are as follows:

|2004 | $19,626
|---- | -------
|2005 | 19,674 
|2006 | 92,615 
|2007 | 2,059  
|2008 | 2,765  







b)     Senior subordinated notes

The Company's $151.1 million (94.3
million) (2002 - $204.7 million (€ 145.0 million)) senior subordinated notes bear
interest at 11.75% per annum, payable semi-annually on January 15 and July 15,
and are due July 2007.

The senior subordinated notes and the guarantees of this debt
by certain of the Company's subsidiaries are senior subordinated indebtedness
and rank behind all of the Company's existing and future senior indebtedness
including borrowings under the senior credit facilities (Note 11(a)). The senior
subordinated notes rank equally with other senior subordinated indebtedness and
rank senior to other subordinated indebtedness. The guarantees of the senior
subordinated notes rank behind all existing and future guarantor senior
indebtedness of the guarantor subsidiaries, including guarantees of borrowings
under the senior credit facilities.

The Company may redeem the senior subordinated notes in whole
or in part at any time on or after July 15, 2004 at a redemption price ranging
from 105.875% to 100% of the principal amount of the senior subordinated notes
being redeemed. In addition, at any time prior to July 15, 2003, the Company
could redeem up to 35% of the original principal amount of the senior
subordinated notes, within 90 days of one or more public equity offerings, with
the net proceeds of such offerings at a redemption price equal to 111.75% of the
principal amount provided that immediately after giving effect to such
redemption at least 65% of the original principal amount of the senior
subordinated notes remained outstanding. In May 2002, with partial proceeds from
its equity offering in April 2002, the Company repaid € 50.8 million ($71.9
million) of its 11.75% senior subordinated notes at an 11.75% premium or € 6.0
million ($8.4 million). This repayment represented 35% of the original principal
amount of the senior subordinated notes.

c)     Subordinated debentures

The Company's $11.2 million (2002 - $11.9 million)
subordinated debentures bear interest at 8% per annum, payable semi-annually on
April 30 and October 31, and are due August 2007. The debentures are
subordinated to all senior indebtedness including the senior credit facilities
(Note 11(a)) and the senior subordinated notes (Note 11(b)). The Company may
redeem the debentures at any time at a redemption price ranging from 101.6% to
100% of the principal amount of the debentures being redeemed. The trust
indenture governing the subordinated debentures requires mandatory sinking fund
payments and equivalent subsequent redemptions of subordinated debentures of
$743,000 on August 31 of each of the next four years. The sinking fund payment
required on August 31, 2003 is included in current portion of debt obligations.
The Company has pledged its shares of CHC Helicopter Holdings Limited, a
wholly-owned subsidiary, as collateral for the debentures.

---



11.     Debt obligations (cont'd)

Foreign currency

Total debt obligations denominated in foreign currencies and the Canadian
dollar equivalent are as follows:

|                                           |          |         
|------------------------------------------ | -------- | --------
|                                           | 2003     | 2002    
|                                           |          |         
|Euro debt€94,250 (2002 -€145,000)          | $151,111 | $204,667
|Pound
    sterling debt £ 55,197           |          |         
|(2002 -£68,241)                            | 126,621  | 155,837 
|U.S.
    dollar debt (2002 - U.S. $13,250) | -        | 20,772  
|Norwegian
    kroner debt NOK 132,500      |          |         
|(2002 -
    NOK 141,500)                   | 27,163   | 26,404  
|                                           | $304,895 | $407,680



|Financing charges                                          |          |            |          
|---------------------------------------------------------- | -------- | ---------- | ---------
|                                                           |          | (Restated  | (Restated
|                                                           |          | Note 4(a)) | Note 4(a)
|                                                           | 2003     | 2002       | 2001     
|                                                           |          |            |          
|Interest
    on debt obligations                           | $31,129  | $42,300    | $53,625  
|Amortization of deferred financing costs                   | 3,222    | 3,889      | 2,911    
|Foreign
    exchange loss (gain) from operating activities |          |            |          
|and
    working capital revaluation                        | 3,337    | (1,063)    | 662      
|Foreign
    exchange (gain) loss on debt repayment         | (499)    | 2,191      | 188      
|Foreign
    exchange gain on revaluation of long-          |          |            |          
|term debt                                                  | (770)    | (27)       | 350      
|Other                                                      | (1,541)  | 689        | (1,356)  
|                                                           | $ 34,878 | $47,979    | $56,380  

During fiscal 2002 approximately $1.0 million of interest was
capitalized related to funds used to construct certain facilities. Such interest
was capitalized during the period preceding the date the assets were capable of
operation at pre-determined capacity levels. No interest was capitalized during
fiscal 2003.

|Current portion of debt
    obligations                    |         |         
|---------------------------------------------------------- | ------- | --------
|                                                           | 2003    | 2002    
|The
    current portion of debt obligations is as follows: |         |         
|Current
    portion of long-term debt                      | $19,626 | $41,011 
|Current
    portion of senior subordinated notes           | -       | 71,633  
|Current
    portion of subordinated debentures             | 743     | 743     
|                                                           | $20,369 | $113,387

---



12.     Debt settlement

During the year ended April 30, 2003 the Company incurred $12.5 million of
debt settlement costs related to the redemption in May 2002 of 35% of its 11.75%
senior subordinated notes (Note 11(b)).

During the year ended April 30, 2001, the Company incurred
$18.6 million of debt settlement costs related to the refinancing of tender
credit facilities, the early repayment of certain inter-company loans and the
early termination of an interest rate swap agreement.

---

|13.                                                    | Other liabilities |         |        
|------------------------------------------------------ | ----------------- | ------- | -------
|                                                       |                   | 2003    | 2002   
|                                                       |                   |         |        
|Deferred revenue (i)                                   | $ 9,360           | $16,605
|Deferred government
    assistance (ii)                | 4,783             | 6,392  
|Accrued pension
    obligation (Note 27) (iii)         | 16,150            | 12,364 
|Deferred gains on
    sale-leasebacks of aircraft (iv) | 22,380            | 10,571 
|Insurance claims accrual
    (v)                       | 6,626             | 5,466  
|                                                       |                   |         |        
|                                                       |                   | $59,299 | $51,398

1. Deferred revenue at April 30, 2003 includes $6.2 million
  (2002 - $12.0 million) of billings to customers for repair and overhaul
  services to be performed in future periods under PBH contracts. A significant
  number of the Company's repair and overhaul contracts require customers to pay
  for services on an hourly flying basis. A portion of this PBH revenue is
  recognized on a monthly basis to reflect ongoing services being provided, with
  the balance deferred in other liabilities to be recognized in earnings when
  the services are performed.
2. The Government of Newfoundland and Labrador has provided
  Composites with financial assistance to partially offset construction costs of
  plant and equipment and operating costs. The assistance for construction costs
  is not repayable but is subject to specified conditions that, if not met,
  could result in the conversion of the assistance to fully paid common shares
  of Composites. The assistance for operating costs is subject to specified
  conditions that, if not met, could result in repayment of the assistance.
  During fiscal 2003, the Company recognized in earnings $1.0 million in
  government assistance to partially offset operating costs at Composites (2002
  - $NIL; 2001 - $0.6 million). At April 30, 2003 government assistance of $4.8
  million relating to plant and equipment has been deferred in other
  liabilities.
3. The Company has entered into unfunded supplementary
  retirement pension plan agreements with certain of its executives. The accrued
  benefit obligation included in other liabilities at April 30, 2003 was $12.1
  million (2002 - $9.2 million). In addition, in Norway the Company has an
  unfunded early retirement pension plan. The accrued pension obligation related
  to this unfunded plan and related amounts included in other liabilities at
  April 30, 2003 was $4.1 million (2002 - $3.2 million).
4. The deferred gains arising from certain aircraft
  sale-leaseback transactions are being amortized over the lease terms. During
  fiscal 2003, eight aircraft were disposed of at amounts greater than book
  value resulting in deferred gains of $13.5 million for the year. Deferred gain
  amortization of $1.8 million (2002 - $0.5 million; 2001 - $0.1 million) was
  recorded as a reduction of operating lease expense during the year. On some
  leases a portion of the proceeds are deferred as part of the sale-leaseback
  transaction agreement and have been netted against the deferred gains for the
  purpose of calculating the amount of the gain to be amortized. Under these
  lease agreements, if the aircraft are sold by the lessors at the termination
  of the leases for proceeds greater than the estimated residual value of such
  aircraft, the deferred payments may be fully paid to the Company.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

13.     Other liabilities (cont'd)

1. The insurance claims accrual relates solely to the
Company's reinsurance subsidiary, CHC Reinsurance S.A.. The amount represents
reinsurance premiums received but unearned, accruals for losses that have been
reported but not yet paid, losses that have been incurred but not yet reported
and a general reserve to cover catastrophic loss to the reinsurance subsidiary.
The reinsurance subsidiary reinsures death and disability benefits and loss of
license insurance for the Company's Norwegian helicopter and repair and overhaul
divisions and for certain other external parties.

---

14.     Capital stock and contributed surplus

Capital stock

Authorized:

Unlimited number of each of the following: 
 
First preferred shares, issuable
in series 
 
Second preferred shares, issuable in series 
 
Class A subordinate voting
shares 
 
Class B multiple voting shares 
 
Ordinary shares

|Issued:                               | Number of shares | Consideration
|------------------------------------- | ---------------- | -------------
|                                      | 2003             | 2002         
|                                      |                  |              
|Class A
    subordinate voting shares | 17,918           | 17,689       
|Class B
    multiple voting shares    | 2,955            | 2,978        
|Ordinary
    shares                   | 11,000           | 11,000       
|Share
    loan                        | -                | -            
|                                      |                  |              
|                                      |                  |              
|Contributed surplus                   |                  |              



|Class
    A subordinate voting shares | 2003  | 2002  | 2001 
|------------------------------------- | ----- | ----- | -----
|that
    would be issued upon         |       |       |      
|conversion of the following:          |       |       |      
|                                      |       |       |      
|Class B
    multiple voting shares    | 2,955 | 2,978 | 2,975
|Stock
    options                     | 1,996 | 1,427 | 1,493
|Convertible debt                      | 690   | 795   | 795  

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

|                                                            |             |          |             |         
|----------------------------------------------------------- | ----------- | -------- | ----------- | --------
|14.     
    Capital stock and contributed surplus (cont'd) |             |          |            
|                                                            |             |          |             |         
|Capital stock transactions                                  |             |          |             |         
|                                                            |             |          | Class A     |         
|                                                            |             |          | subordinate |         
|                                                            | Class A     | Class B  | voting      |         
|                                                            | subordinate | multiple | share       |         
|                                                            | voting      | voting   | purchase    | Ordinary
|Number
    of shares                                        | shares      | shares   | warrants    | shares  
|                                                            |             |          |             |         
|Balance, April 30, 2000                                     | 12,429      | 2,975    | 964         | 11,000  
|                                                            |             |          |             |         
|Shares
    issued to employees for cash                     |             |          |             |         
|Share
    option plan                                       | 20          |          |             |         
|Share
    purchase plan                                     | 23          |          |             |         
|Warrant
    exercise                                        | 928         |          | (928)       |         
|Warrant
    expiry                                          |             |          | (36)        |         
|                                                            |             |          |             |         
|Balance, April 30, 2001                                     | 13,400      | 2,975    | -           | 11,000  
|                                                            |             |          |             |         
|Shares
    issued for cash                                  | 4,200       |          |             |         
|Shares
    issued to employees for cash                     |             |          |             |         
|Share
    option plan                                       | 66          | 13       |             |         
|Share
    purchase plan                                     | 13          |          |             |         
|Share
    conversions                                       | 10          | (10)     |             |         
|                                                            |             |          |             |         
|Balance, April 30, 2002                                     | 17,689      | 2,978    | -           | 11,000  
|                                                            |             |          |             |         
|Shares
    issued to employees for cash                     |             |          |             |         
|Share
    option plan                                       | 91          |          |             |         
|Share
    purchase plan                                     | 10          |          |             |         
|Share
    conversions                                       | 23          | (23)     |             |         
|Conversion of 5.75% convertible                             |             |          |             |         
|promissory note (Note 11)                                   | 105         |          |             |         
|                                                            |             |          |             |         
|Balance, April 30, 2003                                     | 17,918      | 2,955    | -           | 11,000  

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

|                                                           |             |          |            
|---------------------------------------------------------- | ----------- | -------- | -----------
|14.    
    Capital stock and contributed surplus (cont'd) |             |          |            
|                                                           |             |          |            
|                                                           |             |          | Class A    
|                                                           |             |          | subordinate
|                                                           | Class A     | Class B  | voting     
|                                                           | subordinate | multiple | share      
|                                                           | voting      | voting   | purchase   
|Stated value                                               | shares      | shares   | warrants   
|                                                           |             |          |            
|Balance, April 30, 2000                                    | $94,809     | $19,029  | $1,054     
|                                                           |             |          |            
|Shares
    issued to employees for cash                    |             |          |            
|Share
    option plan                                      | 85          |          |            
|Share
    purchase plan                                    | 175         |          |            
|Warrant
    exercise                                       | 5,395       |          | (993)      
|Warrant
    expiry                                         |             |          | (61)       
|Value of
    conversion feature on                         |             |          |            
|subordinated note (Note 28 (a))                            |             |          |            
|                                                           |             |          |            
|Balance, April 30, 2001                                    | 100,464     | 19,029   | -          
|                                                           |             |          |            
|Shares
    issued for cash, net of share                   |             |          |            
|issue
    costs                                            | 115,899     |          |            
|Shares
    issued to employees for cash                    |             |          |            
|Share
    option plan                                      | 400         |          |            
|Share
    purchase plan                                    | 215         |          |            
|                                                           |             |          |            
|Balance, April 30, 2002                                    | 216,978     | 19,029   | -          
|                                                           |             |          |            
|Equity
    offering costs                                  | (130)       |          |            
|Shares
    issued to employees for cash                    |             |          |            
|Share
    option plan                                      | 449         |          |            
|Share
    purchase plan                                    | 246         |          |            
|Share
    conversions                                      | 214         | (214)    |            
|Conversion of 5.75% convertible                            |             |          |            
|promissory note (Note 11)                                  | 390         |          |            
|                                                           |             |          |            
|Balance, April 30, 2003                                    | $218,147    | $18,815  | $-         

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

14.     Capital stock and contributed surplus (cont'd)

During the year a normal course issuer bid was filed by the
Company allowing it to purchase up to a maximum of 1,299,458 of its Class A
subordinate voting shares (representing 10% of the public float of such shares
as of February 28, 2003). Any purchases under the normal course issuer bid are
made in the open market through the facilities of the TSX and all shares
repurchased by the Company are cancelled. Under the normal course issuer bid the
Company had not purchased any Class A subordinate voting shares as at April 30,
2003. The normal course issuer bid remains in effect until March 11, 2004, or
such earlier date as of when the Company has purchased the maximum number of
shares.

In January 2003, the Company's 5.75% demand, convertible,
promissory note with a Canadian chartered bank in the principal amount of U.S.
$250,000 ($389,875) was fully converted into 105,000 Class A subordinate voting
shares (Note 11).

In April 2002, the Company issued 4,200,000 Class A
subordinate voting shares for net proceeds of $113,889,000. The stated value
increase in share capital for this transaction includes the tax effect related
to the tax deductibility of the expenses incurred in the offering.

During 2002, 13,000 Class B multiple voting share options were exercised for
nominal consideration. As a result of this exercise, no Class B multiple voting
share options remain outstanding.

During fiscal 2001, 577,348 of the Class A subordinate voting
share purchase warrants were exercised at $9.375 less the $4.00 special dividend
paid to these warrant holders, resulting in net proceeds to the Company of
$5.375 per warrant or $3.1 million. The remaining 35,696 warrants expired in
December 2000.

The Class A subordinate voting shares carry the right to one
vote per share and the Class B multiple voting shares carry the right to 10
votes per share. Each single Class B multiple voting share may be converted into
a single Class A subordinate voting share at the option of the shareholder. In
all other respects the Class A subordinate voting shares rank equally and
ratably with the Class B multiple voting shares.

The Company has issued 11,000,000 ordinary shares to a
company owned by its majority shareholder for subscriptions of $33.0 million.
Concurrently, to fund the subscriptions for the ordinary shares, the Company
made a non-interest bearing loan to the purchaser, payable on demand and the
Company has a lien on the ordinary shares issued. The ordinary shares entitle
the holder thereof to (i) one vote for every 10 ordinary shares held; (ii)
dividends equivalent on a per share basis to any dividend paid on the Company's
Class A subordinate voting shares and Class B multiple voting shares, subject to
prior minority shareholder approval; and (iii) receive a share of the residue of
the Company, on a liquidation or winding-up, equal, on a share for share basis,
to the amount received by a holder of a Class A subordinate voting share or a
Class B multiple voting share. The ordinary shares are redeemable at the option
of the Company at the subscription price thereof in certain circumstances.

Declaration of dividends is restricted by covenants contained
in some of the Company's debt agreements. The payment of dividends during fiscal
2003 at $0.20 (2002 - $NIL; 2001 - $0.11) per participating voting share
totaling $4.0 million (2002 - $NIL; 2001 - $1.7 million) was in compliance with
these convenants.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

15.     Share option plan

The Company accounts for share options based on their
intrinsic value at the date of grant. If the fair value method had been used to
account for share options issued during the year ended April 30, 2003 the
pro-forma impact on net earnings and earnings per share would have been as
follows:

|                               | Year          
|------------------------------ | --------------
|                               | Ended         
|                               | April 30, 2003
|                               |               
|Net
    earnings               |               
|As
    reported                | $66,133       
|Pro-forma                      | 61,050        
|                               |               
|Basic
    earnings per share   |               
|As
    reported                | $3.19         
|Pro-forma                      | 2.95          
|                               |               
|Diluted
    earnings per share |               
|As
    reported                | $2.94         
|Pro-forma                      | 2.72          

The Black-Scholes option pricing model was used to fair value the options
using the following estimates and assumptions:

|Expected
    life           | 5 years
|--------------------------- | -------
|Expected
    dividend yield | 0.6%   
|Risk-free
    interest rate | 5.0%   
|Stock
    volatility        | 40.0%  

During the year the Company increased its reserve of Class A
subordinate voting shares for an employee share option plan under which share
options may be granted to certain officers and employees, from 2,247,165 to
3,500,000 shares. The options may be exercised within a period of 10 years from
the date of grant at exercise prices representing the share market value at the
date of grant. The options granted prior to May 1, 2002 vested at the grant
date. During fiscal 2003, 549,939 and 120,000 options were granted at an average
exercise price of $30.70 and $26.11, respectively, with 274,773 of such options
vesting at the date of grant and 197,583 options to vest at each of the two
subsequent anniversary dates. As at April 30, 2003 total outstanding options
were 1,995,706 (2002 - 1,426,427; 2001 - 1,492,595) with 1,607,206 being
exercisable (2002 - 1,426,427; 2001 - 1,492,595).

---



15.     Share option plan (cont'd)

A summary of recent share option activities is as follows:

|                                                                    | 2003                                                                            
|------------------------------------------------------------------- | --------------------------------------------------------------------------------
|                                                                    | Number
    of
    options -
    Exercise
    price
    range
    $1.10
    $1.38
|                                                                   
|                                                                   
|                                                                    |                                                                                 
|Class Asubordinate
    voting share
    options                     |                                                                                 
|                                                                    |                                                                                 
|                                                                    |                                                                                 
|Beginning of year                                                   | 11                                                                              
|                                                                    |                                                                                 
|Granted                                                             | -                                                                               
|                                                                    |                                                                                 
|Expired                                                             | -                                                                               
|                                                                    |                                                                                 
|Exercised                                                           | (11)                                                                            
|                                                                    |                                                                                 
|End of
    year                                                     | -                                                                               
|                                                                    |                                                                                 
|Weightedaverage
    contractual life
    of options
    outstanding
|                                                                    |                                                                                 
|                                                                    |                                                                                 
|                                                                    |                                                                                 
|-                                                                   |                                                                                 



|                                                | 2002                                                                            
|----------------------------------------------- | --------------------------------------------------------------------------------
|                                                | Number
    of
    options -
    Exercise
    price
    range
    $1.10
    $1.38
|                                               
|                                               
|Class Asubordinate
    voting share
    options |                                                                                 
|                                                |                                                                                 
|                                                |                                                                                 
|Beginning of
    year                           | 22                                                                              
|                                                |                                                                                 
|Exercised                                       | (11)                                                                            
|                                                |                                                                                 
|End of
    year                                 | 11                                                                              
|                                                |                                                                                 
|Weighted average contractual life of options    |                                                                                 
|outstanding                                     | 4.4 years                                                                       

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

|15.     
    Share option plan (cont'd)                             |                                                                                  |                                             |                                                                         |                                             |                                                                              |                                            
|------------------------------------------------------------------- | -------------------------------------------------------------------------------- | ------------------------------------------- | ----------------------------------------------------------------------- | ------------------------------------------- | ---------------------------------------------------------------------------- | -------------------------------------------
|                                                                    | 2001                                                                            
|                                                                    | Number
    of
    options -
    Exercise
    price
    range
    $1.10
    $1.38 | Weighted
    average
    exercise
    price | Numberof
    options-Exercise
    price
    range
    $3.10 -
    $4.30 | Weighted
    average
    exercise
    price | Numberof
    options -
    Exercise
    price
    range
    $6.25-
    $9.00 | Weighted
    average
    exercise
    price
|                                                                   
|                                                                   
|Class Asubordinate
    voting share
    options                     |                                                                                  |                                             |                                                                         |                                             |                                                                              |                                            
|                                                                    |                                                                                  |                                             |                                                                         |                                             |                                                                              |                                            
|                                                                    |                                                                                  |                                             |                                                                         |                                             |                                                                              |                                            
|Beginning of year                                                   | 22                                                                               | $1.12                                       | 946                                                                     | $4.16                                       | 545                                                                          | $8.94                                      
|                                                                    |                                                                                  |                                             |                                                                         |                                             |                                                                              |                                            
|Exercised                                                           | -                                                                                | -                                           | (20)                                                                    | 4.28                                        | -                                                                            | -                                          
|                                                                    |                                                                                  |                                             |                                                                         |                                             |                                                                              |                                            
|End of
    year                                                     | 22                                                                               | $1.12                                       | 926                                                                     | $4.16                                       | 545                                                                          | $8.94                                      
|                                                                    |                                                                                  |                                             |                                                                         |                                             |                                                                              |                                            
|Weightedaverage
    contractual life
    of options
    outstanding
|                                                                    |                                                                                  |                                             |                                                                         |                                             |                                                                              |                                            
|                                                                    |                                                                                  |                                             |                                                                         |                                             |                                                                              |                                            
|5.4 years                                                           |                                                                                  | 7.7 years                                   |                                                                         | 6.3 years                                   |                                                                              | 7.2 years                                  

---

16.     Supplemental cash flow information

Cash interest paid during fiscal 2003 was $37.5 million (2002
- $44.6 million; 2001 - $54.2 million) while cash taxes paid (received) were
$10.2 million (2002 - $5.1 million; 2001 - $(2.3) million). The adjustment to
net earnings related to income taxes to arrive at cash flow from operations on
the statements of cash flows is calculated as the income taxes recovery
(provision) adjusted for cash taxes paid. Accordingly, it includes the impact of
changes in current as well as long-term income tax assets and liabilities.

---

|17.     
    Foreign currency               | 2003      | 2002      | 2001     
|------------------------------------------- | --------- | --------- | ---------
|                                            |           |           |          
|Foreign currency translation
    adjustment |           |           |          
|Balance,
    beginning of year              | $(24,006) | $(37,525) | $(48,453)
|Translation adjustment during year          | 20,122    | 13,519    | 10,928   
|                                            |           |           |          
|Balance,
    end of year                    | $ (3,884) | $(24,006) | $(37,525)

The foreign currency translation adjustment represents the
unrealized gain or loss on the Company's net investment in self-sustaining
foreign operations. The change in the foreign currency translation adjustment
during the year results primarily from fluctuations in the Canadian dollar
against other foreign currencies and changes in the size of the Company's net
investment in foreign operations.

---



17.     Foreign currency (cont'd)

The Company's pound sterling debt of £ 55.2 million and euro
debt of € 94.3 million as at April 30, 2003 have been designated as hedges of the
Company's net investment in its U.K. and Norwegian self-sustaining foreign
operations. The net foreign exchange loss of $21.1 million net of taxes of $5.6
million, (2002 - $7.5 million, net of taxes $NIL; 2001 - gain of $5.4 million,
net of taxes $NIL) on the revaluation and repayment of these loans at April 30,
2003 has been recorded in the foreign currency translation adjustment in
shareholders' equity.

The Company reviews the effectiveness of these hedges at each
interim period and at year-end to ensure that the hedges continue to be
effective by monitoring the relative changes in the currencies in which the debt
and net investment are denominated against the Canadian dollar.

Year-end exchange rates

Balance sheet accounts denominated in foreign currencies and translated at
year-end exchange rates have been translated to Canadian dollars at the
following rates:

|                        | 2003  | 2002  | 2001 
|----------------------- | ----- | ----- | -----
|                        |       |       |      
|U.S.
    dollar         | $1.43 | $1.57 | $1.54
|U.K.
    pound sterling | 2.29  | 2.28  | 2.20 
|Norwegian
    kroner    | 0.21  | 0.19  | 0.17 
|South
    African rand  | 0.20  | 0.15  | 0.19 
|Australian dollar       | 0.90  | 0.84  | 0.78 
|Euro                    | 1.60  | 1.41  | 1.36 

Income statement accounts denominated in foreign currencies have been
translated at the following annual average exchange rates:

|                        | 2003  | 2002  | 2001 
|----------------------- | ----- | ----- | -----
|                        |       |       |      
|U.K.
    pound sterling | $2.40 | $2.25 | $2.22
|Norwegian
    kroner    | 0.21  | 0.18  | 0.17 
|South
    African rand  | 0.16  | 0.16  | 0.20 
|Australian dollar       | 0.87  | 0.81  | 0.83 

---

18.     Financial instruments

The carrying values of the primary financial instruments of
the Company, with the exception of the Company's senior subordinated notes and
subordinated debentures, substantially approximate fair value due to the
short-term maturity and/or other terms of those instruments.

The fair value of the senior subordinated notes and subordinated debentures
is based on quoted market prices. The fair value of these debt instruments,
including the current portion, is as follows:

|                              | April 30, 2003 | April 30,
    2002
|----------------------------- | -------------- | ------------------
|                              | Fair           | Carrying          
|                              | value          | value             
|                              |                |                   
|Senior
    subordinated notes | $167,733       | $151,111          
|Subordinated debentures       | 11,380         | 11,157            

---



18.     Financial instruments (cont'd)

The nature, terms, maturity, notional amount and fair market value of the
Company's derivatives used in risk management activities as at April 30, 2003
are as follows:

April 30,
      2003
      Contract
      Fair marketDerivative instrument
      Maturity
      Notional amount
      spot rate
      rate
      valueForward
      contracts
      May 2003
      U.S. $2,800
      US$-CDN$ 1.4335
      US$-CDN$ 1.5556
      $
      342to sell
      U.S. dollars for
      June 2003
      U.S. $2,800
      US$-CDN$ 1.4335
      US$-CDN$ 1.5569
      
      345Canadian dollarsForward
      contract tobuy
      euros for pounds sterling
      May 2003
      €1,000
      €-
      £  0.6989
      €-
      £  0.6466
      
      120Foreign
      currency indemnity
      June 2003
      €11,250
      €
      - US $1.1185
      €- US $0.9789
      2,251agreements to buy euros
      Dec 2003
      €11,157
      €- US $1.1185
      €- US $0.8843
      3,745for
      U.S. dollars
      Sept 2003
      €11,157
      €- US $1.1185
      €- US $0.8818
      3,785Interest rate swap
      Sept 2005
      £ 40,000
      3.62%
      6.90%
      (7,580)Equity
      price forward
      July 2003
      585,000 units
      $25.95 per unit
      $25.99 per unit
      
      (23)Total
      $2,985


The Company periodically enters into interest rate swaps,
forward foreign currency contracts, equity forward pricing agreements and other
derivative instruments to hedge the Company's exposure to interest rate risk,
expected future cash flows from operations and anticipated transactions in
currencies other than the Canadian dollar and stock price volatility. The
Company does not enter into derivative transactions for speculative or trading
purposes.

The Company's interest rate applicable to its senior credit
facilities is based on floating rates plus a predetermined margin. As at April
30, 2003, $152.9 million of the Company's total debt obligations were subject to
floating interest rates (Note 11). To hedge a portion of this interest rate
risk, the Company has entered into an interest rate swap agreement on £ 40.0
million with a Canadian chartered bank. The difference between the fixed and
floating rates is settled quarterly with the bank and recorded in financing
charges.

The Company has also entered into a monthly forward foreign
currency contract to buy euros for pounds sterling and for the sale of U.S.
dollars for Canadian dollars to hedge the operating cash flows of certain of the
Company's U.K and international operations. The net foreign exchange gain
related to these forward contracts is recorded in operations and totaled $0.7
million in fiscal 2003.

The Company has also entered into foreign currency indemnity
agreements to purchase euros for U.S. dollars to reduce the Company's risk of
exposure to fluctuations in the euro-U.S. dollar exchange rate. In December
2002, a euro-U.S. dollar indemnity agreement matured which had been designated
as a hedge related to the purchase of a helicopter that was concurrently sold
and leased back to the Company. The resultant foreign exchange gain was deferred
and is being amortized against lease expense over the term of the aforementioned
helicopter operating lease. At April 30, 2003, the amount of this deferred
foreign exchange gain recorded in other liabilities as a deferred gain on
sale-leaseback of aircraft was $2.1 million (net of amortization of $0.1
million).

In July 2002, the Company entered into a hedging agreement
with a major Canadian financial institution to hedge the Company's SARs using an
equity forward price agreement to reduce volatility in cash flow and earnings
due to possible future increases in the Company's share price. The Company
accrues the liability and related expense associated with SARs based on the
difference between the reference price and the hedged price. At April 30, 2003
the amount recorded in current liabilities related to SARs was $6.8 million.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

19.     Future income taxes

Future income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

The tax effects of temporary differences that give rise to significant
portions of future income tax assets and future income tax liabilities are
presented below:

|                                            |            | (Restated 
|------------------------------------------- | ---------- | ----------
|                                            |            | Note 4(a))
|Future income tax
    liabilities (assets)  | 2003       | 2002      
|                                            |            |           
|Property
    and equipment                  | $158,940   | $150,345  
|Long-term
    investments                   | 19,572     | 19,494    
|Pension
    and other employee benefits     | 17,176     | 14,986    
|Deferred
    capital gains                  | 27,843     | 22,994    
|Losses
    carried forward                  | (22,720)   | (17,543)  
|Deferred
    costs                          | (6,015)    | 959       
|Long-term
    debt                          | (6,256)    | 5,954     
|Other                                       | (7,382)    | (6,195)   
|                                            |            |           
|Net
    future income tax liabilities       | $181,158   | $190,994  
|                                            |            |           
|Distributed as follows:                     |            |           
|Current
    future income tax assets        | $ (11,001) | $ (9,206) 
|Long-term
    future income tax assets      | (17,877)   | (9,733)   
|Long-term
    future income tax liabilities | 210,036    | 209,933   
|                                            |            |           
|                                            | $181,158   | $190,994  

The Company's income taxes recovery (provision) is comprised as follows:

|                                             |   | 2003     |   | 2002     | 2001    
|-------------------------------------------- | - | -------- | - | -------- | --------
|                                             |   |          |   |          |         
|Current
    income taxes provision           |   |          |   |          |         
|Canada                                       | $ | (4,504)  | $ | (2,679)  | $5,488  
|Foreign                                      |   | (5,518)  |   | (9,328)  | (8,409) 
|                                             |   | (10,022) |   | (12,007) | (2,921) 
|Future
    income taxes recovery             |   |          |   |          |         
|Canada                                       |   |          |   |          |         
|Recovery
    related to origination and      |   |          |   |          |         
|reversal
    of temporary differences        |   | 15,223   |   | 9,935    | 14,709  
|Benefit
    resulting from tax rate change   |   | -        |   | -        | 9,549   
|                                             |   | 15,223   |   | 9,935    | 24,258  
|Foreign                                      |   |          |   |          |         
|Provision
    related to origination and     |   |          |   |          |         
|reversal
    of temporary differences        |   | (17,272) |   | (7,828)  | (15,424)
|Benefit
    resulting from change in tax law |   | 13,976   |   | -        | -       
|                                             |   | 11,927   |   | 2,107    | 8,834   
|                                             |   |          |   |          |         
|Income
    taxes recovery (provision)        | $ | 1,905    |   | $(9,900) | $5,913  

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

19.     Future income taxes (cont'd)

As the Company operates in several tax jurisdictions, its
income is subject to various rates of taxation. The income taxes recovery
(provision) differs from the amount that would have resulted from applying the
Canadian statutory income tax rates to earnings before taxes as follows:

|                                                                  |          |            |           
|----------------------------------------------------------------- | -------- | ---------- | ----------
|                                                                  |          | (Restated  | (Restated 
|                                                                  |          | Note 4(a)) | Note 4(a))
|                                                                  | 2003     | 2002       | 2001      
|                                                                  |          |            |           
|Earnings
    before income taxes                                  | $64,228  | $57,192    | $27,889   
|Combined
    Canadian federal and provincial                      |          |            |           
|statutory
    income tax rate                                     | 39%      | 41%        | 43%       
|                                                                  |          |            |           
|Income
    taxes provision calculated at statutory rate           | (25,049) | (23,449)   | (11,992)  
|                                                                  |          |            |           
|(Increase) decrease in
    income taxes provision resulting from: |          |           
|Rate
    differences in various jurisdictions                     | 15,401   | 16,087     | 17,193    
|Effect of
    future tax rate reductions                          | -        | -          | 9,549     
|Effect of
    change in tax law                                   | 13,976   | -          | -         
|Non-deductible items                                              | (1,759)  | (2,045)    | (6,746)   
|Large
    corporations tax and capital tax                        | (406)    | (435)      | (932)     
|Other
    foreign taxes paid                                      | (2,138)  | (1,500)    | (1,314)   
|Non-taxable portion of capital gains                              | 56       | 1,412      | 1,071     
|Non-taxable equity income                                         | 456      | 456        | (179)     
|Other                                                             | 1,368    | (426)      | (737)     
|Income
    taxes recovery (provision)                             | $ 1,905  | $ (9,900)  | $5,913    

During the year the Company recorded a $14.0 million future
foreign income tax recovery related to its Australian operations due to a change
in tax law. Australian tax legislation now provides wholly-owned corporate
groups with the option of filing consolidated tax returns and the Company's
Australian operations will be electing to do so. The $14.0 million benefit is
the result of tax effecting the increase in the tax bases of the assets of each
of the subsidiaries in the consolidated Australian group.

Tax losses

The Company has accumulated approximately $61.4 million in
non-capital tax losses of which $57.5 million is available to reduce future
Canadian income taxes otherwise payable and the remainder is available to reduce
future income taxes otherwise payable in foreign jurisdictions. If unused, these
losses will expire as follows:

> 2006
>       $ 2,5932007
>       17,1652008
>       2,5202009
>       12,1732010-2011
>       23,0412013
>       3,864$61,356

The Company has also accumulated approximately $13.6 million in capital tax
losses of which $10.0 million is available to reduce future capital gains
realized in Canada and the remainder is available to reduce future capital gains
realized in foreign jurisdictions.

The benefit anticipated from the utilization of these losses has been
recorded as a future income tax asset.

---



20.     Per share information

Net earnings per share have been calculated based on the sum
of the weighted average number of Class A subordinate voting shares and Class B
multiple voting shares outstanding of 20,728,016 for the year (2002 -
16,464,261; 2001 - 15,728,817).

2003Net
      earnings
      Weightedaverage
      number of
      shares
      Earnings
      per
      shareBasic
      
      
      $66,133
      20,728
      $3.19Effect of
      potentialdilutive
      securities:Share options
      -
      1,103Convertible
      debt
      478
      76266,611
      22,593Add back anti-dilutiveimpact
      -
      28Diluted
      
      
      $66,611
      22,621
      $2.94(RestatedNote 4(a))
      2002Net
      earnings
      Weightedaverage
      number
      of
      shares
      Earnings
      per
      shareBasic
      
      
      $ 47,292
      16,464
      $2.87Effectof potentialdilutive securities:Share options
      -
      1,020Convertible debt
      516
      795Diluted
      
      
      $47,808
      18,279
      $2.62


---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

|    |                                    |                              |                                              |                      
|--- | ---------------------------------- | ---------------------------- | -------------------------------------------- | ---------------------
|20. | Per share information
    (cont'd) |                              |                                              |                      
|    |                                    | (RestatedNote 4(a))
    2001 |                                              |                      
|    |                                    |                              |                                             
|    |                                    |                              |                                             
|    |                                    | Net
    earnings             | Weightedaverage
    number
    of
    shares | Earnings
    pershare
|    |                                    |                              |                                              |                      
|    | Basic                              | $ 33,802                     | 15,729                                       | $2.15                
|    |                                    |                              |                                              |                      
|    | Effect of
    potential            |                              |                                              |                      
|    | dilutive
    securities:           |                              |                                              |                      
|    | Share
    options                  | -                            | 530                                          |                      
|    | Convertible debt                   | 296                          | 508                                          |                      
|    | Warrants                           | -                            | 228                                          |                      
|    |                                    |                              |                                              |                      
|    | Diluted                            | $34,098                      | 16,995                                       | $2.01                

Per share amounts are calculated using the treasury stock
method. Under this method, the proceeds from the exercise of options are assumed
to be used to repurchase the Company's shares on the open market. The difference
between the number of shares assumed purchased and the number of options assumed
exercised is added to the actual number of shares outstanding to determine
diluted shares outstanding for purposes of calculating diluted earnings per
share. Therefore, the number of shares in the diluted earnings per share
calculation will increase as the average share price increases.

---

21.     Change in non-cash working capital

|                          | 2003      | 2002      | 2001     
|------------------------- | --------- | --------- | ---------
|                          |           |           |          
|Receivables               | $ 14,314  | $ 2,962   | $(26,944)
|Inventory                 | (17,977)  | (20,810)  | (8,449)  
|Prepaid
    expenses      | (3,527)   | 2,955     | 713      
|Payables
    and accruals | (19,302)  | (668)     | 4,317    
|                          | $(26,492) | $(15,561) | $(30,363)

---

22.     Segment information

The Company provides services across different geographic
areas to many customers. Approximately 72% (2002 - 78%; 2001 - 69%) of the
Company's revenues in fiscal 2003 were derived from customers involved in oil
and gas production and exploration. In fiscal 2003 revenue from one oil and gas
customer of the Company represented $87.9 million (2002 - $96.7 million; 2001 -
$77.0 million) from five (2002 - six; 2001 - five) contracts expiring from
fiscal 2003 to 2011, of which $79.7 million (2002 - $88.0 million; 2001 - $71.0
million) was earned in the European flying segment and $8.1 million (2002 - $8.7
million; 2001 - $6.0 million) was earned in the international flying segment.
Due to long-standing relationships and contractual arrangements with these
customers and the general creditworthiness of the customers, the Company does
not consider the credit risk related to these customers to be unreasonable.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

22.     Segment information (cont'd)

The international flying segment includes primarily
helicopter services for offshore oil and gas, search and rescue and emergency
medical customers in Asia, Africa, Australia, South America, the east coast of
Canada and other locations around the world.

The repair and overhaul segment includes helicopter repair
and overhaul facilities located in Norway and the U.K., which provide services
to the Company's helicopter fleet and third-party customers located in Europe,
Asia, and North America.

The composites manufacturing segment includes composite and
metal parts manufacturing operations in Canada. These operations were in the
pre-operating phase in fiscal 2002 and entered commercial production effective
May 1, 2002.

The corporate and other segment includes corporate head office activities and
applicable consolidation eliminations.

The Canadian flying segment included onshore based helicopter operations to a
wide range of customers in Canada. The operations included in this segment were
disposed of on October 31, 2000.

The accounting policies of the segments are the same as those described in
the summary of significant accounting policies.

|                                         | 2003    
|---------------------------------------- | --------
|                                         | European
|                                         | flying  
|                                         |         
|Revenue from external
    customers      | $468,164
|Inter-segment revenues                   | 17,338  
|Segment earnings before
    interest,    |         
|taxes, depreciation and
    amortization | 89,542  
|Amortization                             | 12,128  
|Segment earnings from
    operations     | 77,414  
|Segment assets                           | 488,138 
|Segment capital asset
    expenditures   | 24,335  
|Segment helicopter major
    inspections | 9,278   
|Segment helicopter
    components, net   | (3,079) 

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

22.     Segment information (cont'd)

|                                   |          |          |            |            |            |           |          |           |          |       
|---------------------------------- | -------- | -------- | ---------- | ---------- | ---------- | --------- | -------- | --------- | -------- | ------
|                                   | 2002    
|                                   | European | Int'l    | Repair and |            |            | Corporate |          |          
|                                   | flying   | flying   | overhaul   | Composites | and other  |           | Total   
|                                   |          |          |            |            |            |           |          |           |          |       
|Revenue from external customers    | $406,767 | $167,437 | $ 43,612   | $          | -          | $         | -        |           | $617,816
|Inter-segment revenues             | 14,774   | 217      | 108,589    |            | -          |           | 2,342    |           | 125,922 
|Segment earnings before interest,  |          |          |            |            |            |           |          |           |          |       
|taxes,
    depreciation and        |          |          |            |            |            |           |          |           |          |       
|amortization                       | 74,633   | 38,986   | 31,015     |            | -          | (23,811)  |          | 120,823  
|Amortization                       | 10,520   | 3,546    |            | 935        |            | -         |          | 3,621     |          | 18,622
|Segment earnings from operations   | 64,113   | 35,440   | 30,080     |            | -          | (25,573)  |          | 104,060  
|Segment assets                     | 524,726  | 276,224  | 178,584    |            | 33,627     | 151,090   |          | 1,164,251
|Segment capital asset expenditures | 21,116   | 11,690   | 4,335      |            | 166        |           | -        |           | 37,307  
|Segment helicopter major           |          |          |            |            |            |           |          |           |          |       
|inspections                        | 5,264    | 4,649    |            | -          |            | -         |          | -         |          | 9,913 
|Segment helicopter components,     |          |          |            |            |            |           |          |           |          |       
|net                                | 5,843    | 5,425    |            | -          |            | -         |          | -         |          | 11,268
|                                   |          |          |            |            |            |           |          |           |          |       
|                                   | 2001    
|                                   | Canadian | European | Int'l      | Repair and |            | Corporate |         
|                                   | flying   | flying   | flying     | overhaul   | Composites | and other | Total   
|                                   |          |          |            |            |            |           |          |           |         
|Revenue from external customers    | $62,002  | $351,315 | $146,165   | $34,367    | $          | -         | $-       | $593,849 
|Inter-segment revenues             | -        | 9,193    | -          | 97,504     |            | -         | -        | 106,697  
|Segment earnings before interest,  |          |          |            |            |            |           |          |           |         
|taxes,
    depreciation and        |          |          |            |            |            |           |          |           |         
|amortization                       | 13,857   | 62,065   | 30,822     | 24,917     |            | -         | (15,112) | 116,549  
|Amortization                       | 1,315    | 9,615    | 3,470      |            | 2,398      |           | -        | 3,182     | 19,980  
|Segment earnings from operations   | 12,542   | 52,450   | 27,352     | 22,519     |            | -         | (17,296) | 97,567   
|Segment assets                     | 1,542    | 536,907  | 237,448    | 113,140    | 24,400     | 82,851    | 996,288 
|Segment capital asset expenditures | 1,024    | 16,487   | 18,393     |            | 2,606      | 1,569     | 26       | 40,105   
|Segment helicopter major           |          |          |            |            |            |           |          |           |         
|inspections                        | -        | 4,856    | 1,199      |            | -          |           | -        | -         | 6,055   
|Segment helicopter components,     |          |          |            |            |            |           |          |           |         
|net                                | (2,201)  | (2,750)  | 1,371      |            | -          |           | -        | -         | (3,580) 



|Geographic information         |           |           |               |           |         
|------------------------------ | --------- | --------- | ------------- | --------- | --------
|                               |           |           |               | Property 
|                               | Revenues  |           | and equipment
|                               | 2003      | 2002      | 2001          | 2003      | 2002    
|                               |           |           |               |           |         
|Canada                         | $ 30,015  | $ 21,732  | $ 83,426      | $ 85,969  | $ 83,381
|United
    Kingdom and Ireland | 248,386   | 222,572   | 170,758       | 89,637    | 150,375 
|Norway,
    Sweden, Denmark    | 233,144   | 186,419   | 170,327       | 189,412   | 159,253 
|Asia,
    Australia, Africa    | 149,388   | 137,823   | 129,854       | 138,748   | 122,126 
|Other
    European countries   | 32,926    | 29,328    | 26,433        | 7,731     | 15,245  
|Other
    foreign countries    | 28,504    | 19,942    | 13,051        | 25,821    | 13,789  
|                               |           |           |               |           |         
|Consolidated total             | $ 722,363 | $ 617,816 | $ 593,849     | $ 537,318 | $544,169

Revenues are attributed to countries based on location of customer for repair
and overhaul services and location of service for flying revenue.

---



23.     Commitments

The Company has entered into aircraft operating leases with
third-party lessors in respect of 45 aircraft included in the Company's fleet at
April 30, 2003. At inception the Company's aircraft leases had terms not
exceeding 7.5 years. At April 30, 2003 these leases had expiry dates ranging
from 2003 to 2010. The Company has an option to purchase the aircraft at fair
market value or agreed amounts that do not constitute bargain purchase options
but has no commitment to do so.

In evaluating whether an aircraft lease is classified and
recorded as operating or capital, the Company determines whether substantially
all of the benefits and risks of ownership are retained by the lessor. All of
the Company's aircraft leases are classified as operating leases. In determining
whether the present value at the beginning of the lease term of the minimum
lease payments is less than 90% of the fair value of the leased aircraft, the
Company includes in its minimum lease payments minimum rentals over the lease
term (excluding any renewal options) and any guarantee by the Company of the
residual value of the leased aircraft including guarantees in the form of junior
loans, deferred payments, and advance rentals (Note 25).

The Company has commitments with respect to operating leases
for aircraft, buildings and equipment. Total rentals paid in fiscal 2003 were
$53.0 million (2002 - $50.6 million; 2001 - $45.0 million). The minimum lease
rentals required under such leases were $218.1 million as at April 30, 2003 and
are payable as follows:

|                   | Aircraft         | Building and equipment | Total           
|------------------ | ---------------- | ---------------------- | ----------------
|                   | operating leases | operating leases       | operating leases
|                   |                  |                        |                 
|2004               | $ 42,352         | $ 5,966                | $               
|2005               | 35,721           | 5,399                  |                 
|2006               | 30,542           | 4,883                  |                 
|2007               | 22,264           | 4,104                  |                 
|2008               | 16,528           | 4,096                  |                 
|and
    thereafter | 25,214           | 21,054                 |                 
|                   | $172,621         | $45,502                | $218,123        

At April 30, 2003, the Company had deposits with a major
helicopter manufacturer related to the delivery of five new Super Puma MkII
aircraft through to fiscal 2005. The Company has some flexibility built into the
delivery schedule for these aircraft in order to match acquisitions with new
demand. The Company plans to acquire these aircraft through operating leases.
During fiscal 2004 the Company expects to take delivery of three Super Puma MkII
aircraft. The total approximate list price of the five aircraft is $110 million
(€ 68 million).

The Company has also ordered and made deposits on four new
S76C+ helicopters for its international operations for delivery in December
2003. The total approximate list price of these aircraft is $43 million (U.S.
$30 million). Where possible, the Company intends to acquire these aircraft
through operating leases.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial Statements

24.     Variable interest entities

At April 30, 2003 the Company operated seventeen aircraft
under operating leases with eight entities that would be considered variable
interest entities ("VIEs") under U.S. GAAP. These leases have terms and
conditions similar to those of the Company's other operating leases over periods
ranging from 2004 to 2010. Canadian guidance on this issue (Accounting Guideline
15) is consistent with the provisions contained in U.S. GAAP with regard to the
disclosure and consolidation requirements for VIEs.

U.S. GAAP (Per FASB Interpretation No. 46 ("FIN 46")), was
effective for all VIEs created after January 31, 2003 and will be effective for
those VIEs created prior to January 31, 2003 for the Company's interim period
commencing August 1, 2003. The Canadian guidance applies to all annual and
interim periods beginning on or after January 1, 2004.

Included in the seventeen aircraft leased from VIEs at April
30, 2003 are four aircraft leased from a VIE that was created subsequent to
January 31, 2003. The Company has concluded it is not the primary beneficiary of
this VIE and that it is not required to consolidate this VIE in its consolidated
financial statements.

The remaining thirteen aircraft are leased from seven VIEs
created on or before January 31, 2003. The application of GAAP in effect for
these VIEs had no impact on the Company's financial statements. The Company will
complete an analysis of the effects of FIN 46 to these VIEs prior to August 1,
2003 based on the terms and conditions then in effect and account for them
accordingly. Based on the analysis completed to date, the Company does not
anticipate that the application of FIN 46 and Accounting Guideline 15 to these
VIEs will have any significant impact on the Company's financial statements.

The fair market value of the seventeen aircraft leased from
the VIEs at April 30, 2003, based on an independent appraisal, was $241.1
million (unaudited). The Company has provided junior loans, advance rentals and
asset value guarantees in connection with operating leases with these VIEs. The
Company has also entered into remarketing agreements for the aircraft leased
from the VIEs. The Company's maximum exposure to loss related to the junior
loans, advance rentals and asset value guarantees as a result of its involvement
with the VIEs is $19.4 million.

---

25.     Guarantees

The Company has given guarantees to certain lessors in
respect of operating leases. If the Company fails to meet the senior credit
facilities' financial ratios or breaches any of the covenants of those
facilities and, as a result, the senior lenders accelerate their debt, the
leases provide for a cross-acceleration that could give the lessors and
financial institutions the right to terminate the leases and require return of
the aircraft and payment of the present value of all future lease payments and
certain other amounts. If the realized value of the aircraft is insufficient to
discharge the indebtedness due to those lessors in respect of the present value
of the future lease payments, the financial institution could obtain payment of
that deficiency from the Company under these guarantees.

The Company has provided limited guarantees to third-parties
under some of its operating leases in connection with a portion of the aircraft
values at the termination of the leases. The leases have terms expiring between
2004 and 2010. The Company's exposure under the asset value guarantees including
guarantees in the form of junior loans, deferred payments and advanced rentals
is approximately $36.4 million. The resale market for the aircraft types for
which the Company has provided guarantees remains strong, and as a result, the
Company does not anticipate incurring any liability or loss with respect to
these guarantees.

The Company has performance guarantees with two customers of a third-party
lessee. These guarantees have been in effect since August 1995 and November 1998
and relate to the provision of helicopter transportation services involving
three heavy aircraft. In the event of non-performance by the third-party lessee,
the guarantee may require the Company to continue the provision of services
under the contract as it is the lessor to the third-party lessee of the three
helicopters. The guarantees are currently being contested as the Company
maintains that the contract renewals with the two customers by the third-party
lessee were not made in accordance with the express terms of the contracts
guaranteed by the Company.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

25.     Guarantees (cont'd)

At April 30, 2003 the Company has provided additional limited guarantees of
approximately $47.1 million to third parties, principally related to the
performance of the Company under long-term customer contracts.

---

26.        Contingent liabilities

Petitions have been filed against subsidiaries for
unspecified damages concerning helicopter accidents in prior years. It is
management's opinion that damages for which the Company may become responsible,
if any, will be covered by the Company's insurance and will therefore not have a
material effect on the financial condition or results of operations of the
Company.

---

27.         Employee pension plans

The Company maintains defined contribution employee pension plans in
Canada, the U.K., Australia and South Africa for approximately one-half of the
Company's active employees and certain former employees. The Company's
contributions to the defined contribution plans are based upon percentages of
gross salaries. The Company's contributions to the defined contribution plans
expensed during fiscal 2003 were $3.5 million (2002 - $2.8 million; 2001 - $3.1
million).

The Company also maintains both funded and unfunded defined
benefit plans in Canada, the U.K. and Norway for approximately one-third of the
Company's active employees. Funded plans require the Company to make cash
contributions to the plan in order that there will be sufficient assets to
discharge the plans' benefit obligations as they become due. Unfunded plans do
not require contributions to be paid into the plan by the Company. Rather, the
Company pays the benefit obligations directly as they are due.

The consolidated changes in the benefit obligations and fair values of assets
for the defined benefit plans during fiscal 2003 are as follows:

|                                                 | 2003     | 2002    
|------------------------------------------------ | -------- | --------
|Change in benefit
    obligations                |          |         
|                                                 |          |         
|Benefit
    obligations, beginning of year       | $344,102 | $291,708
|Current
    service cost                         | 13,692   | 15,005  
|Interest
    cost                                | 24,791   | 18,802  
|Amendments                                       | -        | 5,113   
|Net
    actuarial and experience losses          | 36,793   | 3,175   
|Benefits
    paid                                | (12,922) | (12,578)
|Plan
    transfers                               | 1,067    | 1,309   
|Foreign
    exchange rate changes                | 16,379   | 21,568  
|Benefit
    obligations, end of year             | $423,902 | $344,102
|                                                 |          |         
|Change in plan assets                            |          |         
|                                                 |          |         
|Fair
    value of plan assets, beginning of year | $312,484 | $290,869
|Actual
    return on plan assets                 | (28,144) | (5,868) 
|Employer
    contributions                       | 22,337   | 14,362  
|Participant contributions                        | 3,085    | 2,244   
|Benefits Paid                                    | (11,715) | (12,074)
|Plan transfers                                   | 1,067    | 2,135   
|Foreign exchange rate changes                    | 17,560   | 20,816  
|Fair value of plan assets, end
    of year       | $316,674 | $312,484

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

27.     Employee pension plans (cont'd)

The tables below detail as at April 30, by funded and
unfunded plans, the funded status and net amount recognized on the Company's
balance sheet as prepaid pension costs reported in other assets of $84.0 million
(Note 9) (2002 - $69.2 million) and accrued benefit obligations included in
other liabilities of $16.2 million (Note 13) (2002 - $12.4 million). Included in
the amount recorded as prepaid pension costs in other assets are guarantee
deposits in one of the Company's defined benefit plan funds of $2.8 million
(2002- $2.5 million).

|                                     |                      |          |                |          
|------------------------------------ | -------------------- | -------- | -------------- | ---------
|                                     | As at April 30, 2003
|                                     | Funded plans         |          |               
|                                     | Surplus              | Deficit  | Unfunded plans | Total    
|                                     |                      |          |                |          
|Benefit
    obligations              | $-                   | $389,503 | $34,399        | $423,902 
|Fair
    value of plan assets        | -                    | 316,674  | -              | 316,674  
|                                     |                      |          |                |          
|Funded status                        | -                    | (72,829) | (34,399)       | (107,228)
|                                     |                      |          |                |          
|Unrecognized net actuarial           |                      |          |                |          
|and
    experience losses            | -                    | 151,859  | 13,579         | 165,438  
|Unrecognized prior service costs     | -                    | 1,975    | 3,417          | 5,392    
|Unrecognized transition amounts      | -                    | 189      | 1,253          | 1,442    
|Pension
    guarantee deposits       | -                    | 2,767    | -              | 2,767    
|Amount
    recognized in other       |                      |          |                |          
|assets
    Note 9 (other liabilities |                      |          |                |          
|Note 13)
    on the balance sheet    | $-                   | $83,961  | $(16,150)      | $67,811  
|                                     |                      |          |                |          
|                                     | As at April 30, 2002
|                                     | Funded plans         |          |               
|                                     | Surplus              | Deficit  | Unfunded plans | Total    
|                                     |                      |          |                |          
|Benefit
    obligations              | $120,806             | $194,001 | $29,295        | $344,102 
|Fair
    value of plan assets        | 122,115              | 190,369  | -              | 312,484  
|                                     |                      |          |                |          
|Funded status                        | 1,309                | (3,632)  | (29,295)       | (31,618) 
|                                     |                      |          |                |          
|Unrecognized net actuarial           |                      |          |                |          
|and
    experience losses            | 32,224               | 34,292   | 12,867         | 79,383   
|Unrecognized prior service costs     | -                    | 2,113    | 2,565          | 4,678    
|Unrecognized transition amounts      | -                    | 309      | 1,499          | 1,808    
|Pension
    guarantee deposits       | -                    | 2,540    | -              | 2,540    
|Amount
    recognized in other       |                      |          |                |          
|assets
    Note 9 (other liabilities |                      |          |                |          
|Note 13)
    on the balance sheet    | $33,533              | $35,622  | $(12,364)      | $56,791  

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

27.     Employee pension plans (cont'd)

The significant weighted average actuarial assumptions adopted in measuring
the Company's defined benefit pension plan obligations as at April 30 are as
follows:

|                                  | 2003  | 2002 
|--------------------------------- | ----- | -----
|Discount
    rate                 | 5.78% | 6.53%
|Rate of
    compensation increase | 3.37% | 2.63%

The significant weighted average actuarial assumptions adopted in measuring
the Company's net defined benefit pension plan expense during the year are as
follows:

|                                                                          | 2003     | 2002     | 2001    
|------------------------------------------------------------------------- | -------- | -------- | --------
|Discount
    rate                                                         | 6.59%    | 6.27%    | 6.16%   
|Expected
    long-term rate of return on plan assets                      | 7.27%    | 7.22%    | 7.04%   
|                                                                          |          |          |         
|The Company's net defined
    benefit pension plan expense is as follows: |          |         
|                                                                          |          |          |         
|                                                                          | 2003     | 2002     | 2001    
|Current
    service cost                                                  | $13,692  | $15,005  | $14,194 
|Interest
    cost                                                         | 24,791   | 18,802   | 16,848  
|Expected
    return on plan assets                                        | (24,945) | (21,359) | (19,988)
|Amortization of net actuarial and experience losses                       | 4,550    | 3,045    | 601     
|Amortization of prior service costs                                       | 638      | 497      | 418     
|Amortization of transition amounts                                        | 413      | 376      | 373     
|Participant contributions                                                 | (3,085)  | (2,244)  | (2,729) 
|                                                                          |          |          |         
|Net
    defined benefit pension plan expense                              | $ 16,054 | $14,122  | $9,717  

---

28.     Related party transactions

Related party transactions occurring during the year consisted of the
following:

1. During fiscal 2000, in connection with securing tender
  credit facilities, the Company received an unsecured, subordinated,
  convertible 12% loan from an affiliate of the controlling shareholder in the
  amount of $5.0 million. This loan is subordinated to the Company's senior
  credit facilities and its senior subordinated notes (Note 11). The loan is
  convertible into Class A subordinate voting shares at $7.25 per share. The
  estimated value of the loan proceeds attributable to the conversion feature of
  $951,000 was allocated to contributed surplus. The equivalent reduction in the
  carrying value of the loan is amortized to earnings over the term of the loan.
  Interest expense of $689,000 (2002 - $676,000; 2001 - $674,000), including
  amortization of the above noted discount, was recorded on the loan during the
  year.
2. During fiscal 2002, fees of $15,000 (2001 - $85,000),
  primarily in connection with special consulting projects, were paid to certain
  directors or entities in which certain directors are partners or employees.
  Rent and usage fees of $610,000 (2002 - $533,000; 2001 - $596,000) were paid
  during the year to companies affiliated with the controlling shareholder.
  Interest revenue of $28,000 was earned in 2001 on a demand loan to the
  controlling shareholder that was repaid during 2001. These transactions are
  recorded at their exchange amounts.
3. During fiscal 2003, $1.3 million (2002 - $2.0 million; 2001 - $0.1
  million) was paid to Canadian Helicopters Limited, in which the Company has a
  43.5% equity investment. These amounts related to the provision of helicopter
  flying services to the Company.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

28.     Related party transactions (cont'd)

1. During the year $19.5 million (2002 - $21.2 million; 2001 -
  $18.6 million) was paid to Vector Aerospace Corporation ("Vector") and its
  subsidiaries whose Chairman and Chief Executive Officer was also a director of
  the Company during the year. The amounts paid were for repair and overhaul
  services and information technology support. On June 25, 2003, the five year
  non-compete agreement between Vector and the Company expired. With this
  expiration the Company is reviewing its options for the repair and overhaul of
  its medium aircraft previously provided by Vector, including the possibility
  of performing a portion or all of this work in the Company's own repair and
  overhaul facilities.

---

29.        Reconciliation to accounting principles generally
accepted in the United States

In certain respects, Canadian generally accepted accounting principles
("Canadian GAAP") differ from U.S. GAAP.

If U.S. GAAP were employed the consolidated statements of earnings for the
years indicated would be adjusted as follows:

|                                                     |          | (Restated  | (Restated 
|---------------------------------------------------- | -------- | ---------- | ----------
|                                                     |          | Note 4(a)) | Note 4(a))
|                                                     | 2003     | 2002       | 2001      
|                                                     |          |            |           
|Net
    earnings according to Canadian GAAP          | $66,133  | $47,292    | $33,802   
|                                                     |          |            |           
|Pre-operating expenses (1)                           | 12,725   | (6,337)    | (3,700)   
|Gain on
    sale of assets/amortization expense (2)  | (40)     | (40)       | 16        
|Ineffective portion of net investment hedge (3)      | 4,853    | -          | -         
|Effect of
    foreign currency contracts (4)         | 11,895   | -          | -         
|Internal
    use software expenses (5)               | (766)    | -          | -         
|Decrease
    (increase) in income tax expense (6)    | (4,803)  | 11,198     | (9,302)   
|Other                                                | (2,715)  | -          | -         
|Net
    earnings according to U.S. GAAP              | 87,282   | 52,113     | 20,816    
|Other
    comprehensive earnings, net of income tax  |          |            |           
|Foreign
    currency translation adjustment (7)      | 20,122   | 13,519     | 10,928    
|Ineffective portion of net investment hedge (3)      | (3,892)  | -          | -         
|Minimum
    pension liability adjustment (8)         | (28,036) | (3,384)    | (4,918)   
|Interest
    rate swap adjustment (9)                | (4,741)  | 192        | -         
|Foreign
    currency cash flow hedge adjustment (10) | 509      | -          | -         
|                                                     |          |            |           
|Comprehensive earnings according to U.S. GAAP        | $71,244  | $62,440    | $26,826   
|                                                     |          |            |           
|Earnings per share according to U.S. GAAP            |          |            |           
|Basic                                                | $4.21    | $3.17      | $1.32     
|Diluted                                              | $3.88    | $2.88      | $1.24     

1. Under Canadian GAAP, pre-operating expenses of new
  operations and contracts meeting certain criteria are to be deferred and
  amortized over the expected period and pattern of benefit of the deferred
  expenditures not exceeding five years relating to pre-operating expenses of
  new operations and the contract term for new contracts. Under U.S. GAAP, these
  pre-operating expenses are charged to earnings as incurred. During the year,
  under Canadian GAAP, $12.8 million of deferred pre-operating expenses were
  written off and expensed to earnings. Under U.S. GAAP, these pre-operating
  costs were expensed to earnings in previous years when incurred and are
  therefore reversed from earnings in 2003.

---



29.        Reconciliation to accounting principles generally accepted in the United
States (cont'd)

1. Under U.S. GAAP the Company would account differently for certain property
  and equipment acquisitions and this difference is being amortized to income
  over the life of the related asset.
2. Under U.S. GAAP there is an ineffective portion of the Company's effective
  euro denominated debt hedge of its NOK denominated self-sustaining foreign
  operations. This ineffective portion is reallocated from other comprehensive
  earnings to net earnings.
3. Under U.S. GAAP any gains or losses related to the settlement of or change
  in fair value of outstanding derivative instruments that do not qualify for
  hedge accounting are to be recognized into earnings immediately. As a result,
  the gain on settlement of one of these contracts during the year and the gain
  on the variation in fair value of certain outstanding foreign currency
  contracts held at April 30, 2003 were recognized in earnings immediately under
  U.S. GAAP.
4. Under U.S. GAAP certain costs incurred to acquire or develop internal use
  software do not qualify for capitalization. $0.8 million of the software
  development costs incurred during the year, while qualifying for
  capitalization under Canadian GAAP, are required to be expensed as a period
  cost under U.S. GAAP.
5. The adjustment represents the income tax effect of the reconciling items
  in determining net earnings according to U.S. GAAP. In addition, for U.S. GAAP
  purposes changes in income tax rates are recorded in income when such rates
  are enacted. For Canadian GAAP purposes changes in income tax rates are
  recorded when substantially enacted. In fiscal 2002 income tax expense was
  reduced by $9.5 million under U.S. GAAP to reflect changes in enacted tax
  rates. For Canadian GAAP purposes, the impact of the change was recorded in
  2001 when rates became substantially enacted. For U.S. GAAP purposes, the 2001
  income tax expense has been increased by $9.5 million to reverse the impact of
  changes in substantially enacted tax rates.
6. Under Canadian GAAP, foreign currency translation adjustments related to
  self-sustaining subsidiaries arising on consolidation are included as a
  separate component of shareholders' equity until realized. Under U.S. GAAP,
  the related translation adjustments are included in other comprehensive
  earnings. Under U.S. GAAP, the foreign currency translation gain or loss on
  the revaluation of foreign currency denominated debt designated as effective
  hedges of the Company's net investment in its U.K. and Norwegian
  self-sustaining operations (Note 17) at April 30, 2001, 2002 and 2003 is
  included in other comprehensive earnings, whereas under Canadian GAAP it is
  included as a separate component of shareholders' equity until realized.
7. Under U.S. GAAP, if the accrued benefit obligation related to defined
  benefit pension plans exceeds the fair value of plan assets, then an
  additional minimum liability shall be recognized with an equal amount to be
  recognized as an intangible asset, provided that the intangible asset
  recognized shall not exceed the amount of unrecognized prior service cost. Any
  excess of the additional minimum liability over the unrecognized prior service
  cost is recorded as a separate component of other comprehensive earnings net
  of income taxes as a minimum pension liability adjustment.
8. Under U.S. GAAP, when an interest rate swap hedges a variable rate
  instrument, the change in the fair value of the swap is recorded in other
  comprehensive earnings net of income taxes.
9. Under U.S. GAAP, the change in the fair value of foreign currency
  contracts qualifying as effective cash flow hedges is recorded in other
  comprehensive earnings net of income taxes.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

29. Reconciliation to accounting principles generally accepted in the United
States (cont'd)

b) Consolidated balance sheets

If U.S. GAAP were employed, the consolidated balance sheets as at the dates
indicated would be adjusted as follows:

|                                                 | April 30, 2003
|------------------------------------------------ | --------------
|                                                 |               
|                                                 |               
|                                                 |               
|Current
    assets (1)                           | $             
|Property
    and equipment, net (2)              |               
|Long-term
    investments                        |               
|Other
    assets (3)                             |               
|Long-term
    future income tax assets (5)       |               
|                                                 | $1,145,570    
|                                                 |               
|Current
    liabilities (5)                      |               
|Long-term
    debt                               |               
|Senior
    subordinated notes                    |               
|Subordinated debentures                          |               
|Other
    liabilities (4)                        |               
|Future
    income tax liabilities (5)            |               
|Shareholders' equity                             |               
|Class A
    subordinate voting shares            |               
|Class B
    multiple voting shares               |               
|Contributed surplus                              |               
|Accumulated other
    comprehensive earnings (6) | -             
|Retained
    earnings                            |               
|                                                 |               
|                                                 | $1,145,570    

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

29.        Reconciliation to accounting principles generally accepted in the United
States (cont'd)

|                                             |                   |           |             |            |      |         
|-------------------------------------------- | ----------------- | --------- | ----------- | ---------- | ---- | --------
|                                             | (Restated Note 4)
|                                             | April 30, 2002   
|                                             |                   | Canadian  |             |            |      | U.S.    
|                                             |                   | GAAP      | Adjustments |            | GAAP
|                                             |                   |           |             |            |      |         
|Current
    assets (1)                       | $                 | 458,489   | $           | (187)      | $    | 458,302 
|Property
    and equipment, net (2)          |                   | 544,169   |             | 2,146      |      | 546,315 
|Long-term
    investments                    |                   | 18,717    |             | -          |      | 18,717  
|Other
    assets (3)                         |                   | 133,143   |             | (13,191)   |      | 119,952 
|Long-term
    future income tax assets       |                   | 9,733     |             | -          |      | 9,733   
|                                             |                   |           |             |            |      |         
|                                             | $1,164,251        | $(11,232) | $1,153,019 
|                                             |                   |           |             |            |      |         
|Current
    liabilities                      | $                 | 258,775   | $           | -          | $    | 258,775 
|Long-term
    debt                           |                   | 167,202   |             | -          |      | 167,202 
|Senior
    subordinated notes                |                   | 133,034   |             | -          |      | 133,034 
|Subordinated debentures                      |                   | 11,157    |             | -          |      | 11,157  
|Other
    liabilities (4)                    |                   | 51,398    |             | 10,868     |      | 62,266  
|Future
    income tax liabilities (5)        |                   | 209,933   |             | (5,823)    |      | 204,110 
|Shareholders' equity                         |                   | 332,752   | (332,752)   |            | -   
|Class A
    subordinate voting shares        |                   | -         |             | 217,068    |      | 217,068 
|Class B
    multiple voting shares           |                   | -         |             | 19,029     |      | 19,029  
|Contributed surplus                          |                   | -         |             | 3,291      |      | 3,291   
|Accumulated other comprehensive earnings (6) |                   | -         |             | (32,116)   |      | (32,116)
|Retained
    earnings                        |                   | -         |             | 109,203    |      | 109,203 
|                                             |                   |           |             |            |      |         
|                                             | $1,164,251        | $         | (11,232)    | $1,153,019

1. Current assets have been adjusted for the effect of the
  adjustment for U.S. GAAP purposes of the impact in the change of the fair
  value of derivatives maturing within the next twelve months as described in
  Notes 29(a)(4) and (10).
2. Property and equipment have been adjusted for the effect of
  the adjustment for U.S. GAAP purposes of amortization as described in Note
  29(a)(2) and the effect of expensing certain software development costs as
  described in Note 29(a)(5).
3. Other assets have been adjusted at each balance sheet date
  for the effect of the adjustment for U.S. GAAP purposes of pre-operating
  expenses and minimum pension liability which are described in Notes 29(a)(1)
  and (8).
4. Other liabilities have been adjusted at each balance sheet
  date for the effect of the adjustment for U.S. GAAP purposes of minimum
  pension liability, the fair value of derivatives maturing in more than 12
  months and the immediate recognition into earnings of the gain on settlement
  of a foreign currency contract which are described in Notes 29(a)(4),(8) and
  (9).
5. Current and long-term future income tax liabilities and assets have been
  adjusted for income taxes as described in Note 29(a)(6) and for tax on items
  described in Notes 29(a)(8),(9) and (10).
6. Accumulated other comprehensive earnings have been adjusted
  at each balance sheet date for the effect of the adjustments for U.S. GAAP
  purposes of foreign currency translation, minimum pension liability, the
  interest rate swap and effective foreign currency cash flow hedges, all of
  which are included in other comprehensive earnings as described in Notes
  29(a)(7),(8),(9) and (10).

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

29.        Reconciliation to accounting principles generally accepted in the United
States (cont'd)

|c)       Other required
    disclosures   | 2003     | 2002     |        
|----------------------------------------- | -------- | -------- | -------
|                                          |          |          |        
|Receivables - trade                       | $120,865 | $122,086 |        
|Allowance for doubtful
    accounts       | (3,757)  | (687)    |        
|                                          |          |          |        
|Net trade receivables                     | $117,108 | $121,399 |        
|                                          |          |          |        
|Payables - trade                          | $ 34,140 | $ 56,631 |        
|Accruals                                  | 98,847   | 75,204   |        
|Interest accrual                          | 5,756    | 8,568    |        
|                                          |          |          |        
|Total payables and
    accruals           | $138,743 | $140,403 |        
|                                          |          |          |        
|                                          |          |          |        
|                                          | 2003     | 2002     | 2001   
|Cash flow from
    operations:            |          |          |        
|Canadian GAAP                             | $ 87,258 | $ 65,049 | $47,812
|Pre-operating expenses
    (1)            | 12,725   | (6,337)  | (3,700)
|Internal use software
    expenses (2)    | (766)    | -        | -      
|Other                                     | (2,715)  | -        | -      
|                                          |          |          |        
|Cash flow from
    operations - U.S. GAAP | $ 96,502 | $ 58,712 | $44,112

1. Under Canadian GAAP, pre-operating expenses
of new operations and contracts meeting certain criteria are to be deferred and
amortized over the expected period and pattern of benefit of the deferred
expenditures. These expenses are classified in investing activities on the
statements of cash flows. Under U.S. GAAP, these pre-operating expenses are
charged to earnings and cash flow from operations as incurred.
2. Under U.S. GAAP certain costs
incurred to acquire or develop internal use software do not qualify for
capitalization and are required to be charged to earnings and cash flow from
operations as incurred.

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

29.       Reconciliation to accounting principles generally accepted in the United
States (cont'd)

d)        New United States
accounting statements adopted

Effective May 1, 2001, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities", as amended by SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective Date
of FASB Statement No. 133", and SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities". Under these new standards, all
derivatives, whether designated in hedging relationships or not, are required to
be recorded in the balance sheet at fair value. A derivative must be designated
and effective in a hedging relationship in order to qualify for hedge
accounting. At April 30, 2003, the Company had outstanding cash flow and net
investment hedges as defined by these standards. A cash flow hedge is a hedge of
the exposure in variability in expected future cash flows that is attributable
to a particular risk such as a forecasted purchase or sale. If a derivative is
designated as a cash flow hedge, the effective portions of the change in the
fair value of the derivative are recorded in other comprehensive earnings and
are only recognized in earnings when the hedged item affects earnings.
Ineffective portions of changes in the fair value of the derivatives designated
as hedges are recognized in earnings.

The Company has entered into an interest rate swap agreement
to manage interest rate risk exposure, which has been designated as a cash flow
hedge of a portion of its variable-rate debt. The interest rate swap agreement
utilized by the Company effectively modifies the Company's exposure to interest
risk by converting a portion of the Company's variable-rate debt to fixed rate.
The change in the fair value of the swap is recorded in other comprehensive
earnings.

With respect to foreign currencies, the Company, by virtue of
its international operations, conducts business in a number of foreign
currencies other than the Canadian dollar. The Company's primary exchange risk
is to changes in the value of the pound sterling, United States dollar, the
euro, and the Norwegian kroner, the currencies in which a substantial portion of
the Company's costs are incurred, relative to the Canadian dollar. The Company
reduces the impact of this risk by entering into forward contracts, which
typically do not extend beyond one year. The effective portions of the change in
the fair value of the forward contracts are recorded in other comprehensive
earnings and are recognized in earnings when the hedged item affects earnings.

The Company has also designated its euro and pound sterling
denominated debt as a hedge of its net investments in self-sustaining foreign
operations. The foreign currency translation gain or loss on the revaluation of
these loans is included in other comprehensive earnings. The ineffective portion
of the Company's effective euro denominated debt hedge of its NOK denominated
self-sustaining foreign operations is reallocated from other comprehensive
earnings to net earnings.

In August 2001, the FASB issued SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets", which supercedes FASB No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of". This new Statement also supercedes certain aspects of
Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations
- Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions", with
regard to reporting the effects of a disposal of a segment of a business. The
new rule requires operating losses from discontinued operations to be reported
in future periods, as incurred. In addition, businesses below the operating
segment level may qualify for discontinued operations treatment. The Company
adopted the provisions of the Statement as of May 1, 2002. Adoption of the
Statement will primarily affect the Company if and when qualifying future
business dispositions occur.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities". This Statement nullifies Emerging Issues Task
Force ("EITF") No. 88-10, "Costs Associated with Lease Modification or
Termination", and EITF No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (Including Certain
Costs Incurred in a Restructuring)". This Statement requires a liability for a
cost associated with an exit or disposal activity to be recognized and measured
initially at its fair value in the period in which the liability is incurred.
The Company adopted the provisions of this Statement as of January 1, 2003.
Adoption of this Statement will primarily affect the Company when it is involved
in any exit or disposal activities.

---



29.        Reconciliation to accounting principles generally accepted in the United
States (cont'd)

In November 2002, the FASB issued Interpretation No. 45
"Guarantor's Accounting and Disclosure Requirements for Guarantees of the
Indebtedness of Others" effective for disclosures of guarantees in financial
statements of interim or annual periods ending after December 15, 2002 and
prospectively for initial recognition and measurement of guarantees issued or
modified after December 31, 2002. The Company adopted this Interpretation during
its third quarter ended January 31, 2003. As at April 30, 2003, since the
adoption of this Interpretation, the Company had not entered into any new
guarantee or indemnity arrangements that would be required to be recognized at
fair value in its financial statements under U.S. GAAP.

In January 2003, the FASB issued Interpretation No. 26
"Consideration of Variable Interest Entities". This interpretation was effective
for all VIEs created after January 31, 2003, and will be effective for those
VIEs created prior to January 31, 2003 for the Company's interim period
commencing August 1, 2003. The impact on the Company upon the adoption of this
interpretation is described in Note 24.

New accounting standards

In June 2001, the FASB issued SFAS No. 143, "Accounting for
Asset Retirement Obligations". This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The Company adopted SFAS No.
143 as of May 1, 2003. The adoption of this Statement is not expected to have a
material impact on the Company's financial position or results of operations.

---

30.        Supplemental guarantor financial
information

Certain of the Company's subsidiaries (collectively, the
"Guarantors") have guaranteed the Company's obligations to pay principal and
interest with respect to the senior subordinated notes. Separate financial
statements of the guarantors are not presented as the Company believes the
summarized financial information which follows is more meaningful in
understanding the financial position of the Guarantors. There are no significant
restrictions on the ability of the Guarantors to make distributions to the
Company.

The Company accounts for its investments in subsidiaries by
the cost method for internal financial statement purposes and in the following
summarized financial information. U.S. GAAP was employed in the preparation of
the summarized financial information.

|                                    | As
    at and for the year ended April 30, 2003
|----------------------------------- | -----------------------------------------------
|                                    | CHC Helicopter                                 
|                                    | Corporation                                    
|Current assets                      | $ (18,982)                                     
|Non-current
    assets              | 468,283                                        
|Total assets                        | $449,301                                       
|                                    |                                                
|Current
    liabilities             | $ 26,374                                       
|Non-current
    liabilities         | 280,523                                        
|Equity                              | 142,404                                        
|Total
    liabilities and equity    | $449,301                                       
|                                    |                                                
|Revenue                             | $913                                           
|Earnings (loss)
    from operations | 1,793                                          
|Net (loss)
    earnings             | 26,235                                         

---

CHC Helicopter Corporation
Notes to the Consolidated Financial StatementsApril 30, 2003,
2002 and 2001 
(Tabular amounts in thousands unless otherwise noted, except per share amounts)

30. Supplemental guarantor financial information (cont'd)

|                                    | As at and
    for the year ended April 30, 2002
|----------------------------------- | -----------------------------------------------
|                                    | CHC
    Helicopter                             
|                                    | Corporation                                    
|                                    |                                                
|Current assets                      | $                                              
|Non-current assets                  |                                                
|Total assets                        | $592,470                                       
|                                    |                                                
|Current liabilities                 | $119,955                                       
|Non-current liabilities             |                                                
|Equity                              |                                                
|Total liabilities                   |                                                
|and equity                          | $592,470                                       
|                                    |                                                
|Revenue                             | $                                              
|(Loss)
    earnings from operations | (4)                                            
|Net earnings (loss)                 |                                                
|                                    |                                                
|                                    |                                                
|                                    | As at and
    for the year ended April 30, 2001
|                                    | CHC
    Helicopter                             
|                                    | Corporation                                    
|                                    |                                                
|Revenue                             | $                                              
|Earnings
    (loss) from operations | 19                                             
|Net (loss) earnings                 |                                                

---



|ITEM 19. EXHIBITS
|-----------------
|                 
|1.1.             
|                 
|                 
|1.2.             
|                 
|4.1              
|                 
|                 
|4.2              
|                 
|4.3              
|                 
|4.4              
|                 
|4.5              
|                 
|4.6              
|                 
|4.7              
|                 
|                 
|4.8              
|                 
|4.9              
|                 
|                 
|4.10             
|                 
|                 
|4.11             
|                 
|                 
|7.1              
|                 
|8.1              
|                 
|12.1             
|                 

|12.2 | Section
    302 Certification by Chief Financial Officer                            
|---- | ------------------------------------------------------------------------------------
|     |                                                                                     
|13   | Section
    906 Certification by Chief Executive Officer and Chief Financial Officer

---



Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant certifies that it meets all of the
requirements for filing on Form 20-F and has duly caused this Annual Report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: September 17, 2003.

| | CHC HELICOPTER CORPORATION                                                    
| | ------------------------------------------------------------------------------
| | BY:Derrick F. Sturge, FCA 
       Vice-President Finance & Corporate Secretary

---



EXHIBIT 4.6CHC HELICOPTER CORPORATION
EMPLOYEE SHARE OPTION PLAN

CHC HELICOPTER CORPORATION

EMPLOYEE SHARE OPTION PLAN (as amended and restated as of
March 3, 2003)

1. Purpose

The purpose of the Plan is to encourage participants to
promote the financial interests, growth and development of the Corporation by
providing them with the opportunity through share options to acquire a
proprietary interest in the Corporation; to recognize the contribution of
participants to the success of the Corporation and to encourage participants to
remain in the service of the Corporation.

2. Definitions

Wherever used in the Plan, unless there is something in the
subject matter or context inconsistent therewith, the following words and terms
shall have the respective meanings ascribed to them as follows:

"Board of Directors" means the board of directors of the Corporation;
    "Chairman" means the chairman of the Board of Directors; "Chief Executive
    Officer" means the chief executive officer of the Corporation;

"Class B Shares" means the Class B multiple voting shares in the capital
    stock of the Corporation;

"Compensation Committee" means the committee of the Board
    of Directors, which may be the executive committee of the Board of
    Directors, appointed from among their number to administer the Plan;

"Corporation" means CHC Helicopter Corporation, a
    corporation incorporated under the laws of Canada, and any successor or
    continuing corporation resulting from the amalgamation of the Corporation
    with any other company or resulting from any other form of corporate
    reorganization;

"director" means an individual who is a duly elected director of the
    Corporation;

"employee" means an individual who is an officer or a
    bona fide, regular, full-time employee of the Corporation or any Subsidiary
    and is determined by the Compensation Committee upon the advice of the
    Chairman and Chief Executive Officer to be eligible to participate in the
    Plan;

"insider" means: (a) an insider as defined in the Securities Act
    (Ontario), other than a person who falls within that definition solely by
    virtue of being a director or senior

---

officer of a subsidiary of the Corporation; and (b) an associate of any
    person who is an insider by virtue of (a);
    "non-management director" means an individual who is a duly elected
    director of the Corporation, but is not an employee of the Corporation;
    "Option" or "Options" means an option or options to purchase authorized
    but unissued Shares granted or issued pursuant to the Plan;
    "Option Agreement" means the written agreement between
    the Corporation and an optionee relating to an Option granted under the
    Plan, which agreement shall contain such terms and conditions as may be
    provided by the Compensation Committee upon the advice of the Chairman and
    Chief Executive Officer. The terms and conditions of each Option Agreement
    need not be identical;
    "Optioned Shares" means the Shares reserved for issue under the Plan;
    "optionee" means anemployee who has been granted an option or options
    pursuant to the Plan;
    "outstanding issue" means the total number of Shares plus
    Class B Shares issued and outstanding at the date of calculation (excluding
    any such shares issued pursuant to share compensation arrangements during
    the 12-month period prior to the date of calculation);
    "Plan" means this amended and restated CHC Helicopter Corporation
    Employee Share Option Plan, as it may from time to time be amended;
    "Shares" means the Class A subordinate voting shares in the capital stock
    of the Corporation;
    "Subsidiary" means any corporation of which shares
    carrying more than 50% of the votes attached to all outstanding voting
    shares are owned, directly or indirectly, by or for the Corporation,
    provided that the ownership of such shares confers the right to elect at
    least a majority of the board of directors of such corporation and includes
    any corporation in like relation to a Subsidiary;The masculine gender shall include the feminine gender and the singular shall
include the plural and vice versa unless the context otherwise requires.
    3. Number of Shares Available Under Plan
(a) Options may be granted by the Corporation from time to
time to optionees. The current maximum number of Shares issuable pursuant to the
Plan from and after January 1, 1996 is set out in Appendix A. Subject to the
limitations set out in paragraph 3(b) and subject to any required shareholder
and regulatory approvals, the Board of Directors may from time to time in its
discretion amend the Plan to change the maximum number of Shares issuable
pursuant to the Plan.
(b) Notwithstanding anything else in the Plan, at no time shall:

(i) the aggregate number of Optioned Shares (subject to
  adjustment as provided in subparagraphs 5(h) and (i)), together with the
  number of Shares and Class B Shares reserved for issuance under any other
  share compensation arrangements of the Corporation, result in the number of
  Shares reserved for issuance pursuant to stock options exceeding 20% of the
  outstanding issue;
  (ii) the number of Optioned Shares reserved for issuance to
  any one person (subject to adjustment as provided in subparagraphs 5(h) and (i)),
  exceed 5% of the outstanding issue on the date of the most recent grant of
  Options to such person;
  (iii) the aggregate number of Shares issued within a
  one-year period pursuant to the exercise of Options, together with the number
  of Shares and Class B Shares issued within such period under any other share
  compensation arrangements of the Corporation, exceed 20% of the outstanding
  issue;
  (iv) the aggregate number of Optioned Shares reserved for
  issuance to insiders of the Corporation, together with the number of Shares
  and Class B Shares reserved for issuance to such persons under any other share
  compensation arrangements of the Corporation, exceed 10% of the outstanding
  issue;
  (v) the aggregate number of Shares issued within a one-year
  period to insiders of the Corporation pursuant to the exercise of Options,
  together with the number of Shares and Class B Shares issued within such
  period to such persons under any other share compensation arrangements of the
  Corporation, exceed 10% of the outstanding issue; or
  (vi) the aggregate number of Shares issued within a
  one-year period to any one insider of the Corporation and that insider's
  associates (as defined in the Securities Act (Ontario)) pursuant to the
  exercise of Options, together with the number of Shares and Class B Shares
  issued within such period to such persons under any other share compensation
  arrangements of the Corporation, exceed 5% of the outstanding issue.(c) For the purposes of clauses (b)(iv), (v) and (vi), Shares
issued or Options granted to a person prior to the person becoming an insider
may be excluded in determining the number of Shares issuable to insiders.
(d) If any Option granted under the Plan shall terminate,
expire or, with the consent of the optionee, be cancelled as to any Shares, new
Options may thereafter be granted covering such Shares.
    4. Administration
(a) This Plan shall be administered and interpreted by the
Compensation Committee provided, however, that the Board of Directors may
exercise any powers reserved herein for the Compensation Committee.
(b) Subject to the provisions of the Plan, the Compensation Committee, upon
the advice of the Chairman and Chief Executive Officer, shall have the power to:

(i) determine and designate from time to time those optionees to whom
  Options are to be granted and the number of Shares to be optioned to each such
  optionee; and
  (ii) determine the time or times when, and the manner in which each Option
  shall be exercisable and the duration of the exercise period.(c) Effective March 3, 2003 the Plan has been amended to make
non-management directors of the Corporation ineligible to receive Options
granted under the Plan. Options granted to non-management directors prior to
this date will continue to be administered in accordance with the terms and
conditions of the Option Agreement and this Plan.
(d) An optionee may, if the optionee is otherwise eligible,
be granted an additional Option or Options under the Plan or any other option or
purchase plans of the Corporation if the Compensation Committee shall so
determine.
(e) The Compensation Committee may interpret the Plan,
prescribe, amend and rescind any rules and regulations necessary or appropriate
for the administration of the Plan, and make such other determinations and take
such other action as it deems necessary or advisable. Without limiting the
generality of the foregoing sentence, the Compensation Committee may, in its
discretion, treat all or any portion of any period during which an optionee is
on an approved leave of absence from the Corporation or a Subsidiary as a period
of employment of such optionee by the Corporation or such Subsidiary, as the
case may be, for the purpose of accrual of such optionee's rights under Options.
Any interpretation, determination or other action made or taken by the
Compensation Committee shall be final, binding and conclusive.
    5. Terms and Conditions
Each Option granted under the Plan shall be evidenced by an
agreement, in a form approved by the Board of Directors, which shall be subject
to the following express terms and conditions and to such other terms and
conditions as the Board of Directors may deem appropriate:
(a) Option Period. Each Option Agreement shall specify the
period for which the Option thereunder is exercisable (which in no event shall
exceed ten years from the date of grant) and shall provide that the Option shall
expire at the end of such period.
(b) Option Price. The option price per Share shall be
determined by the Compensation Committee at the time any Option is granted, but
in no event shall such price be less than the price of the last board lot of
Shares sold on The Toronto Stock Exchange on the last business day prior to the
day the Option is granted on which a board lot of Shares traded on The Toronto
Stock Exchange.
(c) Exercise of Option. The Compensation Committee may
determine and impose conditions and restrictions on the exercise of Options and
such conditions and restrictions may relate to, without limiting the generality
of the foregoing, the length of time an optionee has been employed by the
Corporation or the financial performance and condition of the Corporation. An
Option, or any portion thereof, may be exercised by delivering to the
Corporation a written

notice of exercise specifying the number of Shares with respect to which the
Option is being exercised and accompanied by payment in full of the option price
of the Shares.

(d) Payment of Option Price Upon Exercise. The purchase price
of the Shares for which an Option shall be exercised shall be paid in cash or by
certified cheque to the Corporation at the time of exercise.

(e) Exercise in the Event of Death or Termination of
Employment or Directorship. The Options granted under the Plan shall expire on
the date so established by the Compensation Committee but in no event later than
the tenth anniversary of the date the Option was granted. In the event of
termination of employment or directorship as a result of retirement, disability
or death, the optionee or his legal heirs, as the case may be, may exercise any
outstanding Options, for four years after such date of termination, or until the
normal expiry date of such Options, if earlier. In the event of termination of
employment for any other reason except cause, the employee may continue to
exercise any outstanding Options, to the extent they were exercisable on the
date of termination, for 60 days following such termination, or until the normal
expiry date of such Options, if earlier. In the event of termination of
employment for cause, any outstanding Options will expire on the date of such
termination. In the event of a director ceasing to be a director for any reason
other than as a result of retirement, disability or death, the director may
continue to exercise any outstanding Options, to the extent they were
exercisable on the date of termination of directorship, for one year following
such termination, or until the normal expiry date of such Options, if earlier.
Notwithstanding this provision, the Board of Directors may, subject to any
required approval of The Toronto Stock Exchange, approve a more liberal
treatment of outstanding Options in individual cases involving termination of
employment or directorship.

(f) Non Transferability. No Option granted under the Plan
shall be transferable or assignable other than by will or by the laws of descent
and distribution. During the lifetime of the optionee, an Option shall be
exercisable only by such optionee.

(g) Investment Representation and Regulation

(1) Each Option Agreement may contain an agreement that,
    upon demand by the Compensation Committee for such representation, the
    optionee (or any person acting under subparagraph 5(e)) shall deliver to the
    Compensation Committee at the time of any exercise of an Option (i) a
    written representation that the Shares to be acquired upon such exercise are
    to be acquired for investment and not for resale or with a view to the
    distribution thereof and (ii) an indemnification in favour of the
    Corporation in the event of any violation by such person of any law
    governing such Shares. Upon such demand, delivery of such representation
    prior to the delivery of any Shares issued upon exercise of an Option and
    prior to the expiration of the Option period shall be a condition precedent
    to the right of the optionee or such other person to purchase any Shares.

(2) Each Option shall be subject to the requirement that
    if at any time the Compensation Committee shall determine, in its
    discretion, that the registration, qualification or other approval of or in
    connection with the Plan or the Shares covered thereby is necessary or
    desirable under any provincial or federal law, then such Option may not be
    exercised, in whole or in part, unless and until such registration,
    qualification or approval shall have been obtained free of any condition not
    acceptable to the

---

Compensation Committee. The optionee shall, to the extent
    applicable, cooperate with the Corporation in relation thereto and shall
    have no claim or cause of action against the Corporation or any of its
    officers or directors as the result of any failure by the Corporation to
    take any steps to obtain any such registration, qualification or approval.
    (3) The granting of Options and the issuance of Shares
    under the Plan shall be carried out in compliance with applicable statutes
    and with regulations of governmental authorities and applicable stock
    exchanges.(h) Corporate Reorganization. In the case of a proposed
merger, amalgamation, offer to purchase all of the outstanding Shares or Class B
multiple voting shares of the Corporation or other corporate arrangement or
reorganization, the Board of Directors may, in a fair and equitable manner,
determine the manner in which all unexercised Options granted under the Plan
shall be treated including, without limitation, requiring acceleration of the
time for the exercise of such options by optionees.
(i) Alterations in Shares. In the event of any subdivision,
redivision, consolidation or change of Shares into a greater or lesser number of
Shares, the Corporation shall deliver at the time of an Option being exercised
pursuant to the terms of the Option Agreement, such greater or lesser number of
Shares as would result from said subdivision, redivision, consolidation or
change had such Option been exercised before such subdivision, redivision,
consolidation or change.
(j) Liquidation. In the event the shareholders of the
Corporation shall adopt a plan of complete liquidation, all Options shall become
immediately exercisable in full, notwithstanding that they were initially
granted on an instalment basis.
(k) No Rights as Shareholder. No optionee shall have any
rights as a shareholder with respect to any Shares subject to his Option prior
to the date of issuance to such optionee of a certificate or certificates for
such Shares.
(l) Dividends. Dividends will not be paid on Optioned Shares until the Option
to purchase Shares has been exercised and a certificate representing such Shares
has been issued.
(m) No Rights to Continued Employment or Directorship. This
Plan and any Option granted under the Plan shall not confer upon any optionee
any right with respect to continuance of employment or directorship with the
Corporation or any Subsidiary, nor shall they interfere in any way with the
right of the Corporation or any Subsidiary by which an optionee is employed to
terminate such optionee's employment at any time in accordance with applicable
law, or the right of shareholders to elect and remove directors.
(n) Provincial Stock Savings Plans. If the Shares issuable
upon the exercise of Options to optionees who are residents of a particular
province qualify in any period for purposes of a provincial stock savings plan
under the applicable provincial taxation legislation of such province, the
Corporation shall so notify all such resident optionees, whereupon any such
optionee who wishes to deposit pursuant to the applicable provincial taxation
legislation some or all of the Shares issued to such optionee in such period
under the Plan, shall so indicate in writing at the time of exercise of an
Option or any part thereof.

6. Amendment and Discontinuance
The Board of Directors may discontinue the Plan at any time,
except that such discontinuance may not alter or impair any Option previously
granted to an optionee under the Plan. The Board of Directors may from time to
time, subject to any required shareholder and regulatory approvals, amend the
Plan and the terms and conditions of any Options thereafter to be granted. The
Board of Directors, with the consent of the affected optionee and subject to any
required shareholder and regulatory approvals, may from time to time amend the
Plan and the terms and conditions of any Options which may have been theretofore
granted.
    7. Proceeds from Sales of Shares
Any cash proceeds from the sale of Shares issued upon
exercise of the Options shall be added to the general funds of the Corporation
and shall thereafter be used from time to time for such corporate purposes as
the Board of Directors may determine.
    8. Previously Issued Options
Options outstanding as of the date hereof to purchase Class B
multiple voting shares of the Corporation, which were previously granted or
issued pursuant to the Plan (including any predecessor to the Plan), shall be
governed by the Plan, mutatis mutandis, on the same terms and conditions
as Options to purchase Shares.

APPENDIX A

CHC HELICOPTER CORPORATION EMPLOYEE SHARE OPTION PLAN

Maximum Number of Shares which may be Issued

|Maximum   |                           | Date approved             | Date approved       
|--------- | ------------------------- | ------------------------- | --------------------
|Number    | Date set by
    Directors | by
    TSE                | by

    Shareholders
|1,110,184 | September 13,
    1995    | January 29, 1996          | Not required        
|2,247,165 | August 11, 1997           | August 18, 1997           | October 8, 1997     
|3,500,000 | April 10, 2002            | May 1, 2002
    (verbal), | September 26, 2002  
|          |                           | confirmed by
    letter   |                     
|          |                           | May 13, 2002              |                     

---



EXHIBIT 7.1

FIXED CHARGE COVERAGE RATIOYear
    ended April 302003
    2002 (1)
    2001 (1)
    2000 (1)
    1999 (1)Earnings
    (2)
    $ 76.7
    $ 57.2
    $ 40.7
    $26.1
    $18.8Fixed
    chargesInterest
    expense
    31.1
    42.3
    53.6
    51.3
    
    17.6Other
    3.7
    5.7
    2.8
    (3.3)
    
    0.7Capitalized
    interest
    -
    1.0
    1.1
    -
    
    -Estimated
    interest portion of lease
    27.7
    27.5
    25.6
    15.1
    
    4.1expenseTotal fixed
    charges
    62.5
    76.5
    83.1
    63.1
    
    22.4Gross
    earnings
    $139.2
    $133.7
    $123.8
    $ 89.2
    $ 41.2Fixed
    charge coverage ratio
    2.2x
    1.7x
    1.5x
    1.4x
    
    1.8xGross lease
    expense
    $ 46.2
    $ 45.9
    $ 42.6
    $ 25.2
    $
    6.860% of
    lease expense
    $ 27.7
    $ 27.5
    $ 25.6
    $ 15.1
    $
    4.1


1. Restated - See Note 4(a) and (c) to the Consolidated
  Financial Statements included elsewhere in this Annual Report.
2. For the purpose of this calculation, earnings is defined as
  earnings before large, non-recurring items and income taxes and is represented
  by "Earnings before undernoted items and income taxes" on our Consolidated
  Statements of Earnings.

---



EXHIBIT 8.1

SIGNIFICANT
    SUBSIDIARIESAs of April
    30, 2003, we had the following significant subsidiaries:PercentageJurisdiction of
    OwnershipCompany Name
    Incorporation
    (common equity)CHC Helicopters
    International Inc.
    Canada
    100%Atlantic Turbines Inc.
    Canada
    100%CHC Helicopters
    (Barbados) Limited
    Barbados
    100%CHC Leasing (Barbados)
    Ltd.
    Barbados
    100%Canadian Helicopters
    (U.K.) Limited
    Scotland
    100%CHC Scotia Limited
    England and
    100%WalesVinland Denmark AS
    Denmark
    100%Vinland Helicopters AS
    Norway
    100%Helicopter Services
    Group AS
    Norway
    100%CHC Helikopter Service
    AS
    Norway
    100%Astec Helicopter
    Services AS
    Norway
    100%Integra Leasing AS
    Norway
    100%Heliwest AS
    Norway
    100%CHC Helicopters
    (Australia)(through Lloyd
    Helicopter Services Pty. Ltd.)
    Australia
    100%CHC Helicopters
    (Africa) Pty. Ltd.(formerly Court
    Helicopters Pty. Ltd.)
    Africa
    100%Court Helicopters
    Limited (Mauritius)
    Mauritius
    100%CHC Composites Inc.
    Canada
    100%CHC Denmark ApS
    Denmark
    100%CHC Ireland Limited
    Ireland
    100%


---



EXHIBIT 12.1

CERTIFICATION

I, Craig L. Dobbin, certify that:

1. I have reviewed this annual report on Form 20-F of CHC
  Helicopter Corporation;
2. Based on my knowledge, this annual report does not contain any
  untrue statement of a material fact or omit to state a material fact necessary
  to make the statements made, in light of the circumstances under which such
  statements were made, not misleading with respect to the period covered by
  this  report;
3. Based on my knowledge, the financial statements, and other
  financial information included in this report, fairly present in all
  material respects the financial condition, results of operations and cash
  flows of the company as of, and for, the periods presented in this
  report;

The company's other certifying officer and I are responsible
  for establishing and maintaining disclosure controls and procedures (as
  defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
  over financial reporting  (as defined in Exchange Act Rules
  13a-15(f) and 15d-15(f)) for the company and have:

1. Designed such disclosure controls and procedures, or caused
    such disclosure controls and procedures to be designed under our
    supervision, to ensure
    that material information relating to the company, including its
    consolidated subsidiaries, is made known to us by others within those
    entities, particularly during the period in which this report is
    being prepared;
2. Designed such internal control over financial reporting, or
    caused such internal control over financial reporting to be designed under
    our supervision, to provide reasonable assurance regarding the reliability
    of financial reporting and the preparation of financial statements for
    external purposes in accordance with generally accepted accounting
    principles;
3. Evaluated the effectiveness of the company's disclosure
    controls and procedures and presented in this report our conclusions about
    the effectiveness of the disclosure controls and procedures, as of the end
    of the period covered by this report based on such evaluation; and
4. Disclosed in this report any change in the company's
    internal control over financial reporting that occurred during the period
    covered by the annual report that has material affected, or is reasonably
    likely to materially affect, the company's internal control over financial
    reporting; and

The company's other certifying officer and I have disclosed,
  based on our most recent evaluation of internal control over financial
  reporting, to the company's auditors and the audit
  committee of the company's board of directors:

1. All significant deficiencies and material weaknesses in the design or operation of
    internal control over financial reporting which are reasonably likely to
    adversely affect the company's ability to
    record, process, summarize and report financial information; and
2. Any fraud, whether or not material, that involves management
    or other employees who have a significant role in the company's internal
    control over financial reporting.

|Date:
    September 17, 2003 |                                                        
|---------------------------- | -------------------------------------------------------
|                             | Craig L. Dobbin 
    Chairman & Chief Executive Officer

---



EXHIBIT 12.2

CERTIFICATION

I, Jo Mark Zurel, certify that:

1. I have reviewed this annual report on Form 20-F of CHC
  Helicopter Corporation;
2. Based on my knowledge, this annual report does not contain any
  untrue statement of a material fact or omit to state a material fact necessary
  to make the statements made, in light of the circumstances under which such
  statements were made, not misleading with respect to the period covered by
  this  report;
3. Based on my knowledge, the financial statements, and other
  financial information included in this report, fairly present in all
  material respects the financial condition, results of operations and cash
  flows of the company as of, and for, the periods presented in this
  report;
4. The company's other certifying officer and I are responsible
  for establishing and maintaining disclosure controls and procedures (as
  defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
  over financial reporting  (as defined in Exchange Act Rules
  13a-15(f) and 15d-15(f)) for the company and have:Designed such disclosure controls and procedures, or caused
    such disclosure controls and procedures to be designed under our
    supervision, to ensure
    that material information relating to the company, including its
    consolidated subsidiaries, is made known to us by others within those
    entities, particularly during the period in which this report is
    being prepared;
    Designed such internal control over financial reporting, or
    caused such internal control over financial reporting to be designed under
    our supervision, to provide reasonable assurance regarding the reliability
    of financial reporting and the preparation of financial statements for
    external purposes in accordance with generally accepted accounting
    principles;
    Evaluated the effectiveness of the company's disclosure
    controls and procedures and presented in this report our conclusions about
    the effectiveness of the disclosure controls and procedures, as of the end
    of the period covered by this report based on such evaluation; and
    Disclosed in this report any change in the company's
    internal control over financial reporting that occurred during the period
    covered by the annual report that has material affected, or is reasonably
    likely to materially affect, the company's internal control over financial
    reporting; and
5. Designed such disclosure controls and procedures, or caused
    such disclosure controls and procedures to be designed under our
    supervision, to ensure
    that material information relating to the company, including its
    consolidated subsidiaries, is made known to us by others within those
    entities, particularly during the period in which this report is
    being prepared;
6. Designed such internal control over financial reporting, or
    caused such internal control over financial reporting to be designed under
    our supervision, to provide reasonable assurance regarding the reliability
    of financial reporting and the preparation of financial statements for
    external purposes in accordance with generally accepted accounting
    principles;
7. Evaluated the effectiveness of the company's disclosure
    controls and procedures and presented in this report our conclusions about
    the effectiveness of the disclosure controls and procedures, as of the end
    of the period covered by this report based on such evaluation; and
8. Disclosed in this report any change in the company's
    internal control over financial reporting that occurred during the period
    covered by the annual report that has material affected, or is reasonably
    likely to materially affect, the company's internal control over financial
    reporting; and
9. The company's other certifying officer and I have disclosed,
  based on our most recent evaluation of internal control over financial
  reporting, to the company's auditors and the audit
  committee of the company's board of directors:All significant deficiencies and material weaknesses in the design or operation of
    internal control over financial reporting which are reasonably likely to
    adversely affect the company's ability to
    record, process, summarize and report financial information; and
    Any fraud, whether or not material, that involves management
    or other employees who have a significant role in the company's internal
    control over financial reporting.
10. All significant deficiencies and material weaknesses in the design or operation of
    internal control over financial reporting which are reasonably likely to
    adversely affect the company's ability to
    record, process, summarize and report financial information; and
11. Any fraud, whether or not material, that involves management
    or other employees who have a significant role in the company's internal
    control over financial reporting.

|Date:
    September 17, 2003 |                                                                      
|---------------------------- | ---------------------------------------------------------------------
|                             | Jo Mark
    Zurel
    Senior Vice-President & Chief Financial Officer

---

EXHIBIT 13

CERTIFICATION 
OF 
CHIEF EXECUTIVE OFFICER 
AND 
CHIEF FINANCIAL OFFICER 
PURSUANT TO 18 U.S.C. 1350, 
AS ADOPTED PURSUANT TO 
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Craig L. Dobbin, certify, pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the
Annual Report on Form 20-F of CHC Helicopter Corporation for the fiscal year
ended April 30, 2003 fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934 and that information contained in
such Annual Report on Form 20-F fairly presents, in all material respects, the
financial condition and results of operations of CHC Helicopter Corporation.

Date: September 17,
      2003
      By:Craig L. Dobbin 
      Chairman & 
      Chief Executive Officer


I, Jo Mark Zurel, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report on Form
20-F of CHC Helicopter Corporation for the fiscal year ended April 30, 2003
fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and that information contained in such Annual Report on
Form 20-F fairly presents, in all material respects, the financial condition and
results of operations of CHC Helicopter Corporation.

Date: September 17,
      2003
      By:Jo
      Mark Zurel
      Senior Vice President & 
      Chief Financial Officer